CoreWeave, Inc. Q3 FY2026 earnings call

• Revenue & Margin Growth: Revenue grew rapidly to $3.7 billion (+168% YoY). Adjusted operating margins expanded into the low double digits (10%) five percentage points ahead of plan, driven by operating leverage as infrastructure scales.
• Capacity Expansion: Active power footprint doubled to more than 1.7 gigawatts since the start of the year, with expectations to reach over 1.85 gigawatts by year-end. More than 850 megawatts were brought online year-to-date.
• Backlog Strength: Revenue backlog grew to approximately $133 billion (+138% YoY). Demand for 2028 capacity already exceeds available supply before formal market introduction.
• Financing Strategy: Weighted average cost of debt decreased to 7.9% (-250 bps YoY). The company prioritizes asset-level secured lending (Delayed Draw Term Loans) matched to customer contracts, avoiding unsecured debt at current yields. Prepayments are utilized aggressively, with ~$9 billion expected in the next three months.
• International Expansion: Strategic focus on global presence increased non-US contracted power to more than 1.3 gigawatts, spanning Canada, Europe, Asia (including Indonesia and India), Denmark, and Spain.
• Product Innovation: Introduction of 'CoreWeave Forge' unified AI development environment. In Q3, 70% of new cloud customers were existing Forge users, indicating strong cross-selling success.
• Customer Diversification: Over half of new customers added this year are outside the AI lab sector, including enterprise clients in financial services, healthcare (Hippocratic AI), biology (Chan Zuckerberg Initiative), and automotive (Nissan, Aston Martin).
• Infrastructure Economics: Older generation GPUs (Amperes/Hoppers) are recontracting at premiums (30-50% increases) above original contract prices. Fully paid-off infrastructure coming off contract in 2027/2028 offers significant incremental revenue potential without additional CapEx.

CoreWeave reported total revenue of $3.7 billion for the third quarter of 2026, representing a 168% year-over-year increase and exceeding the high end of guidance. Adjusted operating income reached $379 million with an adjusted operating margin of 10%, up from 5% in Q2 and 1% in Q1. The company generated $2 billion in operating cash flow. While specific product segment breakdowns (e.g., compute vs. software) are not detailed in absolute terms within the transcript, the revenue is driven by three primary vectors: long-term committed customer contracts, premium short-term/spot market opportunities, and managed services (such as managed inference). Short-term contracts command higher pricing power (up to $40 million per megawatt annually) compared to long-term contracts ($20-25 million per megawatt), contributing significantly to the margin expansion.

• Full Year 2026 Revenue: Raised to $13.0 - $13.3 billion.
• Full Year 2026 Adjusted Operating Income: Raised to $1.275 - $1.375 billion (midpoint up 26%).
• Full Year 2026 CapEx: Raised to $37 - $39 billion (low end raised from $35 billion) due to accelerated deployment.
• Fourth Quarter Interest Expense: Expected to be $1.05 - $1.15 billion.
• 2026 Exit ARR: Raised to $20 - $21 billion.
• 2027 Outlook: Expects adjusted net loss to reduce meaningfully; targets adjusted net income positivity in H1 2028 and full-year 2028. Capital deployment remains flexible based on demand and financing terms.
• Capital Raises: Expects to raise less than $5 billion in incremental parent-level capital through 2027, relying primarily on asset-level debt, prepayments, and OEM financing.

• Macroeconomic & Regulatory Uncertainty: Acknowledges dynamic macro environment and recent political/regulatory shifts (e.g., Texas governor-elect interactions), though management expresses confidence in permitting status and community relations.
• Supply Chain & Construction Delays: While currently confident in 2027 deliveries, risks exist regarding regulatory impacts and construction timelines, mitigated by maintaining fully permitted sites.
• Interest Rate Volatility: Rising interest rates increase financing costs; however, the company hedges this by tying most debt to specific customer contracts and utilizing prepayments.
• Market Saturation/Oversupply: Potential industry-wide oversupply could pressure pricing, though management argues demand growth outpaces supply proliferation.
• Customer Concentration/Retention: Dependence on large enterprise and AI lab commitments; failure to renew or secure future contracts could impact backlog monetization.

Q: Goldman Sachs asked about the implications of potential industry oversupply on CoreWeave's model.

A: Management stated that while supply is increasing, demand for compute is growing faster, leaving them sold out through 2027 and largely sold out through 2028. They emphasized that demand is translating into pricing power, with short-term contracts reaching $40M/MW and long-term contracts $20-25M/MW. Management chose patience over volume to optimize economic output for existing infrastructure.

Q: Deutsche Bank inquired how credit market concerns affect contracting beyond 2027 and funding alignment.

A: CEO Mike Intrator explained they have not yet brought 2028 capacity to market, waiting to season it further. They maintain diversified client bases (AI labs, S&P 500, robotics) for accurate demand forecasting, allowing them to coordinate power contracting with client roadmaps rather than betting on speculative long-term curves. They also highlighted their superior software layer as a competitive moat against less established clouds.

Q: JPMorgan asked about the role of short-term contracts in margin upside and regulatory risks impacting 2030 plans.

A: CFO Nitin Agrawal attributed margin outperformance to execution, favorable pricing, and premium product sales. CEO Intrator noted they balance long-term stability with short-term margin additions and managed services. Regarding regulation, he expressed no anticipated impact from recent shifts, citing robust permitting and responsible community engagement. He highlighted international expansion (1.3GW outside US) as a strategy to diversify geographic risk and capture global demand.

Q: UBS asked about reacting to Frontier Labs building their own compute and shifting mix toward enterprise customers.

A: Management confirmed diversification is a priority, noting 10% of Fortune 500 are customers and >50% of new customers are non-AI labs. 'CoreWeave Forge' serves as the entry vehicle for enterprises, with 70% of new cloud customers in Q3 being Forge users. This platform allows enterprises to deploy infrastructure using CoreWeave’s tools, deepening relationships beyond pure commodity compute.

Q: Evercore ISI asked about returns on short-term vs. long-term contracts and the source of $4B/$10B incremental revenue projections.

A: CFO Agrawal explained short-term contracts pay back CapEx in 6-18 months, while long-term take 1-2 years. CEO Intrator clarified the $4B (2027) and $10B (2028) figures represent incremental annualized revenue from 130k+ and 170k+ GPUs coming off contract, respectively. Since this infrastructure is fully paid off, these revenues generate high-margin cash flow without new Capex or debt service, significantly boosting profitability.