CoreWeave (NASDAQ:CRWV) reported third-quarter financial results on Tuesday. The transcript from the company’s third-quarter earnings call has been provided below.
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View the webcast at https://events.q4inc.com/attendee/800897744
Summary
CoreWeave’s revenue reached $3.7 billion, up 168% year-over-year and surpassing guidance. Adjusted operating income was $379 million, exceeding prior guidance.
The company reported a revenue backlog of approximately $133 billion and grew active power to over 1.7 gigawatts, doubling since the start of the year.
CoreWeave raised its full-year 2026 revenue guidance to $13 to $13.3 billion and adjusted operating income guidance to $1.275 to $1.375 billion.
The company plans to finance its growth mainly through customer prepayments, delayed draw term loans and operating cash flow, avoiding unsecured debt due to high yields.
CoreWeave introduced CoreWeave Forge to enhance AI development capabilities, with 70% of new cloud customers being Forge customers.
Management highlighted the strategic focus on international expansion, entering new markets like Indonesia and India and increasing its footprint in Europe.
The company expects adjusted net loss to reduce significantly in 2027 and to become adjusted net income positive in the first half of 2028.
Full Transcript
OPERATOR
Good afternoon and welcome to CoreWeave’s third quarter 2026 earnings call. After today’s prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to CoreWeave. Please go ahead.
Michael Intrator (Chief Executive Officer)
Good afternoon everyone and thank you for joining us. CoreWeave delivered an exceptional third quarter. Revenue is growing rapidly, margins are rising faster than planned, customer demand remains extremely strong, and our newest contracts are among the most profitable ones we have ever underwritten. Our original fleet of cloud infrastructure is recontracting at premiums, producing cash flow in excess of what we assumed when we made those early investments.
And our funding is anchored by secured lending, customer prepayments and operating cash flows. Together, this momentum leaves our business resilient and well positioned to navigate the current environment. Now the specifics: revenue reached 3.7 billion, up 168% year over year and above the high end of our guidance; we added more than 1 billion, quarter over quarter. Adjusted operating income reached 379 million, well above our 200 to 260 million guidance, with margins moving into the low double digits a quarter earlier than planned. Revenue backlog grew to approximately 133 billion and we grew active power to more than 1.7 gigawatts, doubling our active footprint since the start of the year.
Last quarter we talked about the operating leverage that would emerge as our infrastructure reached scale and we diversified our business across short and long term contracts. This quarter you can see that progress in our results and the guidance we’ve provided. We also talked about the conviction behind CoreWeave that AI would become part of how organizations across the economy work and that the people building that future would need a different kind of cloud. That conviction is becoming more tangible every quarter. Our customers are using AI to advance biological research, support patient care, develop autonomous systems and help people learn. Our AI cloud platform gives them the ability to pursue those ambitions and bring their useful applications into everyday life.
Powering these promising ideas requires the tools to build and deploy AI on reliable compute at attractive economics. Our job is to provide that foundation and earn compelling returns on our capital. Given the recent volatility in the capital markets, I want to explain how these fit together. The value we deliver to customers earns their long term commitments to CoreWeave. Those commitments underpin our financing approach and disciplined investment allows us to keep expanding the platform our customers depend on while compounding shareholder value. Underneath it all is one central principle. At every decision we look for the optimal economic choice: how we fund, what we charge, and how fast we build.
Building an AI cloud at hyperscale requires substantial capital and disciplined execution. We understood that at CoreWeave’s inception and designed our business model and financing strategy around the long term customer contracts that capital would serve. This strategy allows us to evaluate every new source of capital, choosing to pursue the opportunities that optimize returns depending on market conditions. At the end of Q3, our weighted average cost of debt across our entire business was 7.9%, down 250 basis points year over year.
Looking ahead, we will not use the unsecured debt market to fund our business at current yields, nor do we need to. Consistent with our historical approach, we expect to finance the majority of the remaining CapEx needed to deliver our backlog through delayed draw term loans matched to specific customer contracts. Through 2027, more than 75% of committed CapEx is tied to investment grade and enterprise customers, with the remainder tied to the world’s leading AI labs and AI-native companies. The pricing of these facilities reflects the underlying customer commitments and our proven ability to deliver. They can finance anywhere from 70 to 100% of the associated CapEx and since our IPO have priced somewhere from 225 to 550 basis points above SOFR, with high quality investment grade customers at the tight end of that range and AI labs towards the wide end.
Today that translates to less than 10% at the high end based on current rates. These facilities allow us to draw capital as the equipment is purchased and delivered. The cash flow from those contracts pays interest and repays the principal over the contract term while generating additional cash flow for CoreWeave. As planned, we have already paid down more than 4 billion of debt through this mechanism. This includes paying down nearly half of our first two delayed draw term loans which are our most expensive facilities.
For the facilities funding long term commitments, by the time the customer contract ends, the debt is repaid and the infrastructure is owned free and clear by CoreWeave. That paid off infrastructure is becoming a meaningful source of capital in its own right. More of it comes off contract every year and generates revenue without new investment. The equipment is bought, the data centers are built. That lowers our capital intensity as we grow. We also have several other material sources of capital including prepayments. We take an economic approach to prepayments, weighing the impact to pricing against the cost of financing.
In the past that has led us to the unsecured debt markets. In the current environment, prepayments are more attractive. This year we have collected prepayments on 70% of our deals with customers, funding up to 100% of the contract value upfront. In the next three months alone we will collect approximately 9 billion in prepayments and deposits from signed customer contracts. This includes more than 3 billion that relate to recontracting existing cloud infrastructure which we sold at meaningful premiums to their original price.
We also expect EBITDA less interest, which excludes the benefit of prepayments, to more than double in 2027, increasing our ability to internally fund capital needs. Further, OEM financing supports additional deployments, particularly as an efficient means to fund capacity serving short term opportunities. Taken together, we expect these sources to fund the significant majority of our capital needs through 2027 with only a limited amount expected to be raised at the parent company level.
Our spending discipline matters just as much as our access to capital. Beyond our contracted commitments, our success-based CapEx model allows us to adjust the pace of our investment based on customer demand for CoreWeave Cloud and supply constraints including regulatory impacts and the capital markets. That is a risk mitigant. We commit the large majority of our capital only once the contracts and infrastructure are in place. Nitin will address this in more detail shortly.
Now let me connect that financing model to the economics you are seeing in our results. As more contracted infrastructure enters service, revenue grows against investments we have already made and each new deployment becomes a smaller share of a much larger business. That is the operating leverage we described last quarter. Adjusted operating margin was approximately 1% in Q1, 5% in Q2 and exceeded 10% in Q3. The economics of new business are strengthening as well.
In July we increased pricing across SKUs by approximately 25%, followed by another 10% increase later in the quarter. Pricing has continued to move higher in Q4, more than offsetting cost increases. We are also allocating more capacity to short term opportunities where the pricing justifies it. Selling capacity at more than 40 million per megawatt annually while pricing for new infrastructure on four and five year contracts is moving to 20 to 25 million per megawatt.
Long term commitments provide the visibility that supports our build out. Short term contracts let us respond to a strong pricing environment and earn premium returns. We weigh that trade off contract by contract, assessing the full economics of an investment, the revenue it can earn, the cost of operating it and the cost of financing it. Strong demand gives us choices in how we best create durable value. We see the same strength in our prior generation fleet. In Q3, pricing for Amperes and Hoppers increased 30 to 50% quarter over quarter and at prices above their original contracts. Different workloads require different combinations of performance and cost. Earlier generations continue to offer compelling economics, particularly when they are part of a reliable, scaled cloud. We are signing multi year commitments extending beyond the GPUs’ depreciable lives, driving margins even higher in their later years as price and operating costs remain fixed but depreciation dissipates.
More than 130,000 GPUs come off contract in 2027, as do another approximately 170,000 GPUs in 2028. We already have a robust pipeline of customers competing for this capacity. At current pricing levels, 2027 renewals would generate approaching 4 billion of incremental annualized revenue with no additional CapEx required. This grows to nearly 10 billion of annualized incremental revenue when including 2028 renewals. Furthermore, if data center construction across the sector were to slow, installed compute becomes scarcer and the knock-on effect is that GPU pricing may stay higher for longer.
In that scenario being first matters; our installed base comes off contract fully paid years ahead of most others in the market. We’re well positioned across a range of market conditions. If the industry builds quickly, we grow with it. If supply is delayed, our installed, paid-off fleet becomes more valuable. We do not build our plan on that scenario. The plan rests on contracted demand, success-based CapEx, and the contracts we are already signing.
Last quarter I described how training, inference, evaluation and improvement are becoming a continuous AI development loop. An application in production generates information about where it works and where it falls short. Developers use that information to improve it, test the changes and put a better application back into use. That process requires sophisticated software that helps people learn from each experiment and highly dependable cloud infrastructure throughout the life of the application.
This is what CoreWeave does best. We deliver a unified platform that makes hundreds of thousands of GPUs work together as a high performance, full stack cloud, integrating networking, cooling, orchestration and observability. This is why customers choose CoreWeave for their most important workloads. In September, we introduced CoreWeave Forge to bring our AI development capabilities together in one environment. We are making the products and services we developed alongside leading AI labs accessible to enterprise customers so they too can build leveraging their own expertise and data. In Q3, 70% of the new cloud customers we added were already Forge customers. Wave is one example of how our relationship expands as the work becomes more demanding.
They began using our software and development tools to experiment and assess model performance and now use CoreWeave Cloud to train their family of world models for autonomous driving. The Chan Zuckerberg Initiative is using CoreWeave for computational biology research. Hippocratic AI is training and deploying agents to support patient communication and care navigation. These are efforts to understand disease more deeply and help people get the information and support they need through their care.
In engineering, our teams work with organizations including Nissan and Aston Martin Aramco Formula One to shorten testing cycles and reduce the data required to reach target accuracy. The broader promise of physical AI is to help engineers develop better systems and bring useful capabilities into the real world sooner. MasterClass uses Forge to evaluate conversations with its teaching agents and improve the experiences they run on CoreWeave Cloud.
The opportunity is to make learning more responsive to the individual, with help available when a person needs it. These customers are doing the scientific, clinical, engineering and educational work that combines human discovery with AI. CoreWeave gives them a platform on which they can pursue it at scale and speed. That is why both the platform and the infrastructure of our AI cloud matters. The distance between a promising idea and a useful application depends in part on whether people can run the experiments, evaluate the results, and afford to serve the application reliably. More than half of our new customers this year came from industries outside AI labs and technology, and 10% of Fortune 500 companies are now CoreWeave customers. The number of organizations committing more than 100 million to CoreWeave Cloud increased more than 2.5 times year over year.
As customers find more valuable uses for AI, they need more from the platform. That broadens our opportunities and deepens our relationships. We have 10 times as much qualified demand as available capacity through the end of 2027, and demand for 2028 is already several times larger than our available capacity. And even before we have brought it formally to market, we now have more than 1.7 gigawatts of active power. We continue to expect to reach more than 1.85 gigawatts of active power by year end.
We also do not see material risks to our 2027 deliveries based on ongoing construction at fully permitted sites. This year we made international expansion a strategic priority. Among our 4.6 gigawatts of contracted power, we now have more than 1.3 gigawatts outside of the US spanning Canada, Europe and Asia, built where our customers asked us to be present. In Q3 we entered new markets like Indonesia and India while growing our footprint in Denmark and Spain. Our global AI backbone connects our infrastructure across all regions and gives customers consistent performance, software and reliability regardless of where their compute infrastructure is located.
Our focus remains on delivering the capacity customers have committed to use and earning strong returns on every deployment. Before I turn it over to Nitin, let me return to where I started. We built CoreWeave to be an enduring business. We are growing profitably on an operating basis and at scale. Our financing strategy will continue to link capital to committed customer contracts, underpinned by attractive returns and drawn from a broad and diverse set of sources. Tying these together allows us to calibrate our pace of investment to customer demand, the regulatory landscape and the capital markets.
We are delivering capacity ahead of plan and the value of that capacity is increasing. With our original fleet recontracting at a premium, we continue to work to earn the trust of the communities where we invest and the customers we serve. And our cloud platform combines leading price, performance and reliability with the innovation, software and development tools enterprises depend on to accelerate their AI strategies. We have reached an inflection point with our business becoming increasingly durable.
While the fundamentals accelerate, we are confident in our ability to deliver for the customers, shareholders and the communities we are partnering with for the long term. With that, here’s Nitin.
OPERATOR
We will now begin the question and answer session. Please limit yourself to one question and one follow up. If you would like to ask a question, please press star-1 on your telephone keypad. To withdraw your question, press star-1 again. Please pick up your handset when asking a question. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Gabriela Borges with Goldman Sachs.
Gabriela, your line is open. Please go ahead.
Gabriela Borges (Analyst at Goldman Sachs)
Hey, good afternoon and thanks for all the incremental detail that you shared here, Mike. I want to start with a high-level industry question, which is all of the supply-demand data points that you shared sound very attractive. One of the concerns that I hear from investors is there are a wall of new supply coming online in the industry in the next one to two years and we don’t have perfect visibility into the demand algorithm. So we could have a debate around when supply-demand normalizes, whether it’s next year or five years from now.
My question for you is, walk us through the implications for the CoreWeave model, if and when the industry gets into a period of normalized or oversupply. Thank you.
Michael Intrator (Chief Executive Officer)
Thank you for the question and thank you for everyone who’s come to the quarterly call. It was an extraordinary quarter for us and we’re absolutely excited to share the results. With regards to your question, you know, the concept that there is infrastructure coming to market faster than demand has grown has been a prevailing view that has existed now for several years. And what we have seen, and what I think you’re seeing across the board from other providers of infrastructure, from other consumers of infrastructure, is that the demand for compute is growing faster than the capacity to deliver that infrastructure. And that is being echoed by the expansion of the margins that we are seeing on each additional contract.
And so, yes, you’re correct, there is a significant amount of infrastructure that is coming to market. But the proliferation of this technology, the diffusion of this technology across the economy, is outpacing the ability of that infrastructure to be able to deliver the tokens, to be able to deliver the infrastructure and the clusters to be able to train and deliver infrastructure. We are largely sold out through 2027. There is overwhelming demand for that.
And we are also sold out through 2028. We’re not sold out through 2028, but any infrastructure that we have placed on the market has been sold. And so we have significant demand that we could deliver that infrastructure into.
Gabriela Borges (Analyst at Goldman Sachs)
That all makes sense. And then my follow-up for you is, I really like this 20 to 25 updated megawatt data point. My question is, on the contracts that you’ve already signed at committed megawatt monetization prices, how do you manage the risk between when you lock in that number on the revenue monetization side versus the cost side of the equation, which can sometimes be ephemeral and/or move up in the period of time between when you contract the megawatts with the customer versus when you actually bring it online?
How do you manage that disconnect and timing? Thank you for the detail. I appreciate the updates.
OPERATOR
Your next question comes from the line of Brad Zelnick with Deutsche Bank. Brad, your line is open. Please go ahead.
Brad Zelnick (Analyst at Deutsche Bank)
Great. Thank you so much and a lot of great disclosure and a lot of comforting details. I wanted to ask how, if at all, does some of the recent concerns in credit markets across the industry impact your approach to contracting new capacity beyond 2027? Perhaps, you know, as we think around time to power, customer types, duration, and when you line up the funding.
Michael Intrator (Chief Executive Officer)
Yeah, thank you for the question. And it’s a great opportunity for us to clarify that we haven’t brought 2028 to market because we are waiting for that to season further with regards to how we think about power and capacity on an ongoing basis. We have a number of levers that we use to ensure that we are staying in sync with the demand signals that we have. And you can see that in the pipeline of power that we’re bringing to market, the timing of that power relative to where we’re providing guidance on what demand looks like.
And so we’re not getting out too far on the curve in terms of where we’re locking in power because we’re trying to coordinate our roadmap for capacity with the roadmap of the clients. One of the things that you’ll hear us speak about again and again and again is our focus on maintaining a broad, diversified client base, which allows us to have incredibly accurate information flow in terms of who’s going to need compute, when, how much compute they need across multiple industries. Whether it’s the AI labs, whether it’s robotics, whether it’s the, you know, the S&P 500 clients. It’s a really, really robust information flow that’s coming across our desk as we think about how we’re going to enter into power contracts on a go-forward basis.
Brad Zelnick (Analyst at Deutsche Bank)
Thank you, that’s helpful. And Mike, if I could just ask a follow-up for you. You know, with some of the less established AI clouds going through various growing pains out there, does this potentially present opportunity for you ahead, like either in terms of customer choice, consolidation, or pricing power that you have? Thanks again.
Michael Intrator (Chief Executive Officer)
Yeah, so I think that’s also a great question. Right. One of the things that we have done is we have gotten to scale. And with that we have positioned ourselves very well to be able to take advantage of this market that’s going through a degree of volatility. At the end of the day, an AI cloud is a combination of a software layer that allows people to effectively manage their infrastructure as well as an infrastructure build in and of itself. And what we believe is that, you know, we have done a wonderful job, probably the best in the market, delivering the software layer that’s required.
And as far as the infrastructure goes, that is a scale game. That is a game where you’re going to need to get to material scale in order to be an effective player. We’ve known that since the beginning. We have built our business around that concept in terms of matching our long-term contracts with a diversified group of buyers. As we sit here and try to continue to drive to scale, the end result is our software is the best solution and the hardware is available at scale. Both of those give us an opportunity to be very selective about which clients we want to work with, which clients we want to pull onto our infrastructure and partner with as they begin their AI journey or as they continue to scale it.
Brad Zelnick (Analyst at Deutsche Bank)
Thank you very much.
OPERATOR
Your next question comes from the line of Samik Chatterjee with JP Morgan. Samik, your line is open. Please go ahead.
Samik Chatterjee (Analyst at JPMorgan)
Great. Thank you. Thanks for taking my questions. Michael, Nitin, strong margins in the quarter. You’re guiding to also significant acceleration or improvement in the margins into the next quarter as well. I was just wondering if you can sort of flesh out the role that the short-term contracts are playing in this margin upside that you’re seeing. You historically talked about also bringing capacity earlier in the quarter that tends to drive margin upside.
But how should we think about maybe execution versus the contribution from shorter-term contracts in terms of the upside on margin both in the third quarter and going into the fourth quarter guide? And I have a follow-up.
Michael Intrator (Chief Executive Officer)
One of the things that we think about a lot here is we really like the stability associated with the long-term contracts, we really like the margin additions that come with the short-term contracts, and we really like the ability to deliver compute through our services like managed inference. And all three of those are growing very rapidly and all three of those provide an incredible opportunity for us to build and scale our business. We think that, you know, our ability to provide additional volume into the short-term business, additional volume into our managed inference product is a function of the scale of the business that we have built on the back of the long-term contracts. And so you’ll continue to see us work through the process of how we’re going to allocate this valuable infrastructure across the three main vectors of opportunity that are in front of us.
Samik Chatterjee (Analyst at JPMorgan)
And Michael, a lot of concerns recently following the elections about what the regulatory environment or regulatory pressures in the U.S. would mean. Any way to sort of help us with how you’re thinking about things, particularly as you look at your long-term plans for 2030, sort of 8 gigawatts, and what role maybe your international expansion plays too, given this current sort of macro backdrop that you have? Thank you.
Michael Intrator (Chief Executive Officer)
So to begin with, we do not anticipate any impact from the seismic regulatory shift that’s occurred. We believe that, based on the permitting status as well as the construction status of the data centers that our backlog is going to go into, we are very comfortable with our pipeline, and so that’s a high-level comment. We believe that what has occurred is a statement around how you build. We want to build responsibly. It’s been a hallmark of how we’ve entered communities early, how we’ve worked with the communities that host our data centers, how we go about building and interfacing and being good neighbors.
And so we think that that is an opportunity for us to continue to scale our business within the new political reality that exists. And as you correctly identified, CoreWeave made it a priority to begin to scale our footprint globally, and we have added an additional 1.3 gigawatts outside of the US. You saw us enter Indonesia; you saw us begin our voyage in India, in Spain, in Denmark, in Canada. All of these locations are an opportunity for us to build a diversified portfolio of infrastructure that is required by our clients, but also provides us the ability to build infrastructure in communities that are excited about us coming and expanding our footprint with them.
OPERATOR
Your next question comes from the line of Karl Keirstead with UBS. Karl, your line is open. Please go ahead.
Karl Keirstead (Analyst at UBS)
Okay, thanks very much. Mike, you made a comment about a desire to diversify your client base. I think as everybody on the call hears the Frontier Labs signal a desire to lease and stand up their own compute going forward, I think we’d all love a little bit of color on how CoreWeave is going to react to that and the pace at which you would like CoreWeave to allocate incremental capacity to non-lab, specifically enterprise customers. So perhaps you could articulate that planned mix shift and tie it maybe to the growth in the backlog that you saw in the third quarter and offer a little color on what the customer composition of that backlog growth looked like. Thanks so much.
Michael Intrator (Chief Executive Officer)
Yeah. One of the things that you hear me talk about, almost regardless of what part of the business we’re talking, what we’re focused on, is the concept of diversifying our customer concentration, our data center concentration, so forth and so on. Look, you know, it’s pretty incredible that CoreWeave gets to stand in front of you guys and say, hey, 10% of the Fortune 500 are CoreWeave customers. Ten percent of our backlog is from financial services.
Like, there is real diversification there. More than half of the new customers that we added this year are not within the AI space. You know, it’s really been a focus of ours, as we’ve understood right from the beginning, that in order to build a cloud you have to be able to open up and address the long tail of enterprise clients that are going to need this type of infrastructure, that are going to need the type of software that we can provide through Forge as they begin to build out the tools that they need in order to be able to build and grow their business.
And so, you know, we see that we’re going to have long-term relationships with the AI labs, we’re going to have long-term relationships with the clouds, the hyperscale clouds, we’re going to have long-term relationships with the social media companies. But we’ve also made it a priority across the company to really begin to build out and diversify those types of companies that are running on our infrastructure.
Nitin
Karl, just to add, Forge is a great vehicle for us to make entry into the enterprise customer base, and we are already seeing growth. Great results come out of that. In Q3, 70% of our new cloud customers that we added were already Forge customers. Forge is how enterprise customers start to begin to deploy infrastructure, and that’s a great opportunity for us to make headway into the enterprise market.
Karl Keirstead (Analyst at UBS)
Okay, thank you both. I’ll leave it at one question, give some room to others. Thank you.
OPERATOR
Your next question comes from the line of Ben Reitzes with Melius Research. Ben, your line is open. Please go ahead.
Ben Reitzes (Analyst at Melius Research)
Hey Mike and team. Thank you. Nice to be speaking with you. Hey Mike, you know, you gave a lot of detail. I do know that you guys reached out to Texas, the new governor-elect there, and was just wondering if you could clarify how that went and also what your exposure is there. I know you mentioned that you don’t see any delays. I was wondering what gave you that conviction, maybe after that reach-out, just a little more specific, and what your exposure is to that state.
I have a quick follow-up.
Michael Intrator (Chief Executive Officer)
Sure. So within Texas specifically, the overwhelming majority of our power is either online or fully permitted and under construction. And that is where our statement around, you know, that we do not believe that, or do not anticipate, impact to the data centers that will ultimately host the backlog that we’ve brought to market. Having said that, we also believe that it’s important to establish relationships with new governors that come in or new politicians, new regulators that are going to be in charge of or in oversight of their jurisdictions, just like we had with politicians and governors and other regulators that sit over infrastructure historically. And so, you know, our letter, my letter to her, was to reach out and say, hey, you know, we are nonpartisan. We are looking to continue to build our infrastructure.
We are a good operator, and we are ready to work with you and the communities which host our facilities. And we’re excited about that.
Ben Reitzes (Analyst at Melius Research)
Okay, thanks, Mike. And then just, you know, I may have missed it, but just a little more color on whether you’ve received your Vera Rubins and ramping them, and maybe even the Vera CPU racks, and how important that was for the raised guidance, you know, in the near term and even through your ARR next year. Thanks.
Michael Intrator (Chief Executive Officer)
Yeah, so I’ll start it out here, right. You know, CoreWeave was very proud to be the first company, first cloud, to bring the Vera Rubin online and to deliver it to Cognition, which was the first client in the world to have Vera Rubin in production. That was really exciting. It was really exciting for Cognition. It was really exciting, you know, I think for the space at large. You know, it’s the introduction of a new, incredibly powerful architecture that will be one of the defining components of the next leg of artificial intelligence.
You know, we’re also very excited about deploying the Vera CPU independently. We think that it’s got a tremendous amount of opportunity to serve parts of the AI infrastructure space that is really exciting and growing incredibly rapidly. And so we’re there. It’s a big part of what we’re going to be building over the next several years. I think it’s a big part of what everyone is going to be building over the next several years, and it was our privilege to be the first ones to actually bring it online and deliver it into production.
Nitin
And Ben, to answer your second question, around the contribution around what drove the performance this quarter as well as our raised guidance for next quarter. As I mentioned, three things drove our quarter. First, we continue to convert contracted power to active power and revenue-generating capacity at a very rapid pace. Second, the demand and the pricing environments are strengthening, and that is helping us kind of realize better returns on our investments.
And third is that our platform adoption is continuing and broadening across the domain, with our customers across different industries using a wider range of our products and services. All three vectors contributed to this quarter as well as are expected to contribute further as we raised our guidance for Q4 as well.
Ben Reitzes (Analyst at Melius Research)
Thanks, Nitin.
OPERATOR
Your next question comes from the line of Amit Daryanani with Evercore ISI. Amit, your line is open. Please go ahead.
Amit Daryanani (Analyst at Evercore ISI)
Perfect. Thanks a lot, and thanks for all the details as well. I have two hopefully quick ones. The first is, you folks cited 40 million of annual revenue per megawatt on short-term contracts versus 20 to 25 on the longer term on a comparable hardware utilization basis. How do the returns differ after financing costs? And then, Mike, maybe you can just talk about what portion of capacity are you comfortable having on shorter-term contracts?
Nitin
Yeah, so as Mike mentioned, look, our business is built on the three fundamental elements of the predictable cash flows for long-term committed customer contracts, the premium products in terms of the higher stack services like managed inference, as well as these short-dated customer contracts. When you look at our business, we manage that effectively in terms of looking at each opportunity, understanding the returns it will generate, the cost of financing that infrastructure, and the demand environment for each one of those vectors.
That is how we internally allocate capacity when we think about the returns. Of course, when you’re looking for shorter-duration contracts, they kind of pay back capex in a much faster duration, somewhere in the tune of 16 to 18 months. And when you look at the longer-dated customer contracts, they pay back hardware capex somewhere in the domain of one to two years at the current pricing levels that we are seeing for long-dated customer contracts.
Michael Intrator (Chief Executive Officer)
The other piece of it that is actually really interesting is that with the initial contracts coming to a conclusion, like we said earlier, 130,000 GPUs are coming off contract in 2027, and then an additional 170,000 are coming off contract in 2028. Those GPUs are going to make exceptionally great opportunities for us to be able to monetize into short-term contracts. I’d also like to highlight all of that infrastructure has been fully paid off at the end of their initial contract.
That was the construction of the delayed draw loans, and so they are fully amortized and give us the opportunity to really have a meaningful impact on cash flow.
Amit Daryanani (Analyst at Evercore ISI)
Absolutely. And maybe just on that topic, I think you said initially it’s 4 billion of incremental revenues from renewed contracts in ’27, 10 billion in ’28. Is that just a total revenue contribution, or is that the uplift you expect, and is this something they’ve already renewed or you expect to do them? Just any color on that, because those numbers seem very powerful and you certainly have a lot of EBITDA margins with those.
Nitin
Yeah, those are outside our revenue backlog that you see, because that is for contracted capacity today. As we recontract this capacity, that is the available opportunity at the current pricing levels for the arrangement to be generated against that infrastructure, which, as you highlighted, is deployed infrastructure for which we do not have incremental capex.
Michael Intrator (Chief Executive Officer)
For clarity, I want to make sure that it’s understood that in our $9 billion prepayment and deposit there is in excess of $3 billion that was prepayment for existing infrastructure that has been fully paid off. And so that’s $3 billion that comes into the company that doesn’t require any debt service whatsoever, and it’s for infrastructure that has already run through a full cycle within the DDTLs in the initial contracts. That makes it so powerful.
Amit Daryanani (Analyst at Evercore ISI)
Perfect. Thank you very much.
OPERATOR
This concludes the Q and A session. I will now turn the call back to Michael Intrator for closing remarks.
Michael Intrator (Chief Executive Officer)
Before we sign off, I want to thank our team, customers and partners for their trust in CoreWeave and their commitment to what we are building together. None of these achievements would have been possible without you. I am incredibly proud of what we have accomplished and for what comes next as we build the essential cloud for AI. Thank you all for joining today. We appreciate your support and we look forward to updating you on our progress in the quarters to come.
OPERATOR
This concludes today’s call. Thank you for attending. You may now disconnect.
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