Csquare (NYSE: CSQR) revenue jumps 25.6% but IPO costs widen its net loss

What happened

Csquare, Inc. (NYSE: CSQR) grew third-quarter revenue 25.6% to $302.3 million and raised its 2026 Adjusted EBITDA outlook.

The data center operator still lost $88.1 million, against a $29.8 million loss a year earlier. Growth has not yet reached GAAP profit.

This was the first full report after the July IPO. Csquare sold 50.0 million shares at $21.00 each, and the underwriters bought another 7.499 million shares on July 27. Net proceeds, after underwriting discounts and commissions, repaid about $1.1 billion of debt.

Key numbers

Metric	Latest	Change	Source
Q3 total revenue	$302.3 million	from $240.8 million, +25.6%	SEC 8-K, Exhibit 99.1
Q3 Adjusted EBITDA	$132.1 million	from $91.6 million, +44.3%	SEC 8-K, Exhibit 99.1
Q3 Adjusted EBITDA margin	47.8%	from 40.5%, +7.3 percentage points	Calculated from SEC 8-K, Exhibit 99.1
Q3 net loss	$88.1 million	from $29.8 million	SEC 8-K, Exhibit 99.1
IPO net proceeds	$1.16 billion		SEC 8-K, Exhibit 99.1
Long-term debt, net (Sept. 30, 2026 vs. Dec. 31, 2025)	$3.84 billion	from $4.76 billion, -19.2%	Calculated from SEC 8-K, Exhibit 99.1 balance sheet

Read more: Csquare (CSQR) company research

Where the growth came from

Revenue a year earlier was $240.8 million, so the quarter added $61.57 million. Colocation led in dollars, up 26.7% to $227.0 million. Metered power grew fastest, up 80.7% to $26.1 million. Interconnection fell 7.0% to $24.3 million. Revenue excluding metered power rose 22.1% to $276.2 million, slower than the total because metered power grew faster.

Bookings reached $66.1 million, which the company calls a record and its 14th straight quarter of sequential growth. The figure was $49.5 million a year earlier on an annualized basis. Csquare entered the fourth quarter with about $114 million of contracted annualized revenue backlog. About $104 million of that is expected to start within twelve months.

Capacity is tight by the company's own count. It has 428 MW contracted against 397 MW of sellable power, after commissioning about 12 MW in the quarter. Net revenue churn was 1.9%, the same as a year earlier.

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Why the loss widened

Adjusted EBITDA, the company's non-GAAP measure, rose 44.3% to $132.1 million from $91.6 million. Its margin widened to 47.8% from 40.5%. The filing says that margin excludes metered power revenue.

Below that line, costs piled up. Csquare says the net loss mainly reflects $58.6 million of IPO-related transaction and compensation costs plus higher interest expense. Interest expense was $71.4 million versus $59.7 million. Selling, marketing, general and administrative costs rose to $85.6 million from $20.0 million. The company swung to an operating loss of $14.6 million from operating income of $26.4 million.

Funds from operations, another non-GAAP measure, turned negative at $3.2 million, versus positive $33.2 million a year earlier. The filing ties higher interest to the 2021 ABS Notes assumed in the 2025 Portfolio Acquisition and to additional ABS notes issued late in 2025.

Why it matters

The IPO changed the balance sheet more than the income statement. Long-term debt, net of deferred financing costs, fell to $3.84 billion on Sept. 30 from $4.76 billion on Dec. 31, 2025, a drop of $912.89 million. Total stockholders' equity was $697.3 million, against a deficit of $126.7 million at year-end.

Cash is thinner. Cash and equivalents were $34.7 million, down from $140.2 million at year-end, with another $209.3 million restricted. Nine-month operating cash flow was $103.4 million, down from $118.9 million a year earlier. Purchases of property and equipment rose to $442.6 million from $150.8 million.

OptimistFi has argued that common-equity value depends on proving the assets can produce durable cash flow before the liabilities absorb the upside. The debt paydown and margin gain help that argument. The quarterly loss and heavy capital spending keep it unproven.

What the updated outlook says

Csquare now expects 2026 Adjusted EBITDA of $490 million to $500 million, up from $460 million to $480 million. Revenue guidance narrowed to $1.14 billion to $1.16 billion from $1.13 billion to $1.17 billion.

Recurring capital spending is now expected at $50 million to $60 million, down from $55 million to $65 million. Growth capital spending is guided to $620 million to $640 million, a tighter band than the prior $610 million to $660 million. In the quarter, the company invested $149 million in growth at an average build multiple of approximately 4x, plus about $16 million in recurring capital.

What's next

Csquare holds a conference call and webcast at 5:00pm ET on Nov. 9 to discuss the results. The next quarterly report is the cleaner test.

A net loss that narrows once IPO-related costs fall away would strengthen the case, as would bookings that extend the current streak. Another loss of this size without comparable one-time costs would weaken it. So would Adjusted EBITDA that falls short of the raised outlook.

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