> ## Content Index > Fetch the complete content index at: https://www.sotkn.com/llms.txt > Use this file to discover other available public pages before exploring further. # Take-or-Pay vs Purchase Commitment: What's the Difference? - URL: https://www.sotkn.com/explained/take-or-pay-vs-purchase-commitment/ - Published: 2026-11-09T01:15:08.000Z - Updated: 2026-11-09T01:15:08.000Z - Description: A take-or-pay contract is a customer's promise to pay for reserved capacity whether or not every hour is used. A purchase commitment is a buyer's promise to pay a supplier later. Same words in a footnote can be opposite sides of the invoice. - Author: Sean - Tags: #desk-explained, Versus EXPLAINED · Versus · Last reviewed: 9 Nov 2026 · Next review: after CoreWeave’s third-quarter 2026 Form 10-Q and Microsoft’s fiscal 2027 Form 10-K A take-or-pay contract is a customer’s promise to pay for a block of capacity whether or not every hour is used. A purchase commitment is a buyer’s promise to pay a supplier for goods, equipment, or energy later. The phrases meet in the footnotes. They are opposite sides of the invoice. The seller’s cheque and the buyer’s cheque can share a word in a footnote and still pay different firms. Delivery is where both of them stick. ## What is a take-or-pay contract? CoreWeave’s Form 10-Q for the quarter ended 30 June 2026 says it sells access either through committed contracts, which are take-or-pay, or on-demand, which are pay-as-you-go. A committed contract has a set term. It starts on a fixed date, or when CoreWeave delivers the capacity named in the contract. In each of the three months ended 30 June 2026 and 30 June 2025, committed contracts were 98% of revenue. Take-or-pay is the business. Revenue in the three months to 30 June 2026 was $2.575 billion. The customer pays for the reserved block once that start has arrived, including hours left idle. The same filing says these contracts typically include a prepayment before the customer gets access. At each of 31 December 2025, 2024, and 2023, the weighted-average prepayment on active contracts was 15% to 25% of total contract value. That is a year-end history in the risk factors, not a balance at 30 June 2026. Deferred revenue, the billings already in the door for a service not yet performed, was $9.7 billion at 30 June 2026 and $8.2 billion at 31 December 2025\. In the six months to 30 June 2026, revenue recognised from the deferred revenue that opened that half was $554 million. That is under 7% of the $8.2 billion opening balance (our arithmetic: 554 ÷ 8,200). Most of the prepay was still waiting. Remaining performance obligation is the transaction price, net of estimated credits, delivery slips, and capacity CoreWeave has the right to resell, on performance not yet delivered. It includes billed and unbilled amounts. At 30 June 2026, unsatisfied RPO was $103.7 billion: 41% expected over the 24 months ending 30 June 2028, 39% in months 25 to 48, and the rest in months 49 to 78\. The rest is 20 percentage points (our arithmetic: 100 − 41 − 39). Month 78 falls in December 2032 (our arithmetic: 78 months after 30 June 2026). Customers A and B were each 32% of accounts receivable at 30 June 2026\. One buyer’s delay moves a large share of the bill. ## What is a purchase commitment? A purchase commitment is the buyer’s side of a future supply contract. Microsoft’s Form 10-K for the year ended 30 June 2026 prints it in millions. Purchase commitments were $169,008 million in fiscal 2027, $25,052 million thereafter, and $194,060 million in total. Fiscal 2027 ends 30 June 2027\. Our arithmetic: 169,008 ÷ 194,060 = 87.1% of the line falls in that next fiscal year. The addends match the printed total. Footnote (d) says the line primarily relates to datacenters and includes open purchase orders and take-or-pay contracts that are not presented as construction commitments. Construction commitments are a separate $34,566 million. They sit outside the $194.060 billion. Microsoft’s Form 10-Q for the quarter ended 30 September 2026 does not reprint the dollar table, so 30 June 2026 is the latest total in print. Amazon’s Form 10-Q as of 30 September 2026 uses a later date and a different label. It lists principal contractual commitments and leaves out open orders for normal operations that are generally cancellable. Two lines are unconditional purchase obligations, and the filing says both are not reflected on the consolidated balance sheets. Property and equipment is $159,640 million. Variable prices are counted only at the minimum, and kit already received on payment terms of up to a year is accounts payable. The other line, $94,759 million, covers energy, digital content, and software licences. Variable deals and deals awaiting a regulator are counted only at a minimum or a termination penalty. Energy contracts with no fixed or minimum volume are left out, so this line is a floor, and it is not energy alone. Our arithmetic adds the two off-balance-sheet rows: 159,640 + 94,759 = 254,399 million, or $254.399 billion. The filing keeps them separate. The sum is ours. The clocks inside Amazon’s table diverge. Equipment shows $13,955 million in the three months to 31 December 2026 and $63,900 million in calendar 2027, together $77,855 million, or 48.8% of that line (our arithmetic: 13,955 + 63,900 = 77,855, then 77,855 ÷ 159,640). The energy, content, and software line shows $51,454 million after 2030, or 54.3% of that line (our arithmetic: 51,454 ÷ 94,759). Equipment is a near cheque. Those other minimums run long. ## What is the difference between them? One is a sale the seller has not finished. The other is a purchase the buyer has not received. Each figure below stays with the company and the date that printed it. | | Take-or-pay | Purchase commitment | | -------------------- | ---------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | | **What it is** | Customer pays for reserved capacity, used or idle, once the contract has started | Buyer promises to pay suppliers for equipment, energy, or other supplies later | | **Whose books** | The seller’s revenue contract | The buyer’s commitments table | | **When money moves** | On a fixed date, or when the seller delivers the named capacity. A prepay can sit in deferred revenue | When the supplier delivers. Until then Amazon says the obligation is not on the balance sheet | | **Printed figure** | CoreWeave, 30 June 2026: 98% of quarterly revenue; $103.7 billion unsatisfied RPO; $9.7 billion deferred revenue | Microsoft, 30 June 2026: $194.060 billion, including supplier take-or-pay. Amazon, 30 September 2026: $159.640 billion of equipment and $94.759 billion of energy, content, and software, both off the balance sheet | | **Who gets paid** | The neocloud, after the start | The supplier, after delivery | | **Stuck step** | Delivering the capacity so the unbilled book can become revenue | The supplier still has to deliver | | **Clock** | 41% of CoreWeave RPO by 30 June 2028; a tail to December 2032 | 87.1% of Microsoft’s line is due in fiscal 2027\. Amazon’s equipment line is heavy through 2027; 54.3% of the other line sits after 2030 | *Dates, filings, and the arithmetic are in the sections above. Who gets paid and the stuck step are our read.* ## Who gets paid — and where is the stuck step? Our read: take-or-pay pays the neocloud after the contract starts, idle hours included. The stuck step is that start — a fixed date, or delivery of the named capacity. Until then the unbilled part of the $103.7 billion is a promise. The $9.7 billion of deferred revenue has been billed or collected and still waits on performance. Six months converted $554 million of the balance that opened the half. A purchase commitment pays the supplier when the supplier delivers. Until that delivery, Amazon leaves the obligation off the balance sheet. Microsoft’s printed clock is shorter: $169.008 billion of its purchase-commitment line falls in fiscal 2027. The neocloud’s path from RPO to revenue runs through the hall and the GPUs. The buyer’s path from a purchase commitment to a running cluster runs through the supplier. With two customers each at 32% of CoreWeave’s receivables, one slip moves a large bill. Delivery, not the signature, releases the cash. ## Why do the filings use the same words? A take-or-pay clause can face either way. When a hyperscaler promises a power seller or a server vendor a minimum, that promise is a purchase commitment on the hyperscaler’s books and can be take-or-pay revenue on the supplier’s. When a customer promises a neocloud a minimum GPU block, the neocloud calls it take-or-pay, and the customer may call the same promise a purchase commitment or, once it is a cloud contract, remaining performance obligation. Microsoft keeps construction out of the purchase-commitment line and keeps supplier take-or-pay inside it. By September 2026 Amazon had split equipment away from energy, content, and software. The footnote, not the row label, says what was counted. ## What would change this read? - **Committed revenue slips.** CoreWeave’s third-quarter 2026 Form 10-Q was not on file on 9 November 2026\. The latest 10-Q was filed on 12 August 2026\. If the next one shows committed contracts well below 98% of revenue, take-or-pay is giving way to on-demand. - **Microsoft splits the line.** If the fiscal 2027 Form 10-K pulls supplier take-or-pay out of purchase commitments, or the share due in the next fiscal year moves far from 87.1%, the buyer’s mix has changed. The September 2026 10-Q did not replace the 30 June table. - **The obligation moves onto the balance sheet.** If Amazon records these purchase obligations as liabilities before delivery, the “signed, and not yet a liability” description no longer matches the filing. Received kit on long payment terms is already accounts payable. ## Common misconceptions - **People assume take-or-pay and a purchase commitment are the same line, because Microsoft’s footnote uses both phrases.** Actually Microsoft is describing contracts it must pay. CoreWeave is describing contracts its customers must pay it. - **People assume a signed purchase commitment is revenue, or a cloud backlog.** Actually it is an obligation to spend. Revenue and RPO face the customer. Purchase commitments face the supplier. - **People assume take-or-pay cash arrives when the contract is signed.** Actually CoreWeave’s committed contracts generally start on a date or at delivery. Prepayments sit in deferred revenue — $9.7 billion at 30 June 2026 — until the service is performed. - **People assume Amazon’s $94.759 billion line is the AI equipment bill.** Actually property and equipment is its own $159.640 billion line, energy contracts with no minimum volume are excluded, and the $94.759 billion also includes content and software licences. ## FAQ **What is the difference between a take-or-pay contract and a purchase commitment?** A take-or-pay contract is a customer’s promise to pay for reserved capacity whether or not it is used. A purchase commitment is a buyer’s promise to pay suppliers for goods, equipment, or energy later. **Is Microsoft’s take-or-pay the same as CoreWeave’s take-or-pay?** No. Microsoft’s 10-K uses “take-or-pay” for contracts it must pay, inside its purchase-commitment line. CoreWeave uses “take-or-pay” for contracts its customers must pay, which becomes revenue once the capacity is delivered or the fixed start date arrives. **When does a take-or-pay GPU contract start billing?** CoreWeave says committed contracts generally start on a fixed date or when it delivers the capacity named in the contract. The bill does not wait on the customer using every hour. It does wait on that start. **Are purchase commitments on the balance sheet?** Amazon’s 10-Q as of 30 September 2026 says its unconditional purchase obligations for property and equipment, and a separate line for energy, content, and software, are not reflected on the consolidated balance sheets. Microsoft lists its purchase commitments in a payments table and does not use that sentence. **Does a signed purchase commitment count as revenue?** No. It is an obligation to spend. Revenue is what a cloud operator recognises when it performs the service. CoreWeave’s $103.7 billion of unsatisfied RPO at 30 June 2026 is undelivered customer performance. **Why is deferred revenue smaller than remaining performance obligation?** At 30 June 2026 CoreWeave’s deferred revenue was $9.7 billion and its unsatisfied RPO was $103.7 billion. RPO includes billed and unbilled amounts, net of estimated credits, delays, and capacity the company can resell. Most of the book was still unbilled. **Is this a list of stocks to buy or sell?** No. This page explains two contract types and where the money goes. It does not rank companies or give buy or sell calls. Not investment advice. Do your own research. ## Related terms Related: [take-or-pay GPU contracts](https://www.sotkn.com/explained/take-or-pay-gpu-contracts-explained/); [purchase commitments](https://www.sotkn.com/explained/purchase-commitment-explained/); [RPO vs take-or-pay](https://www.sotkn.com/explained/rpo-vs-take-or-pay/); [remaining performance obligation](https://www.sotkn.com/explained/remaining-performance-obligation-explained/); [total contract value](https://www.sotkn.com/explained/total-contract-value-explained/); [what a neocloud is](https://www.sotkn.com/explained/neocloud-explained/). ## Markets and stack doors Layer: [Neoclouds](https://www.sotkn.com/stack/neoclouds/). The buyer side of the same invoice sits with [Hyperscalers](https://www.sotkn.com/stack/hyperscalers/). Markets: [United States](https://www.sotkn.com/markets/us/). [Get the Wire](https://www.sotkn.com/#/portal/signup) — short notes when offtake, backlog, and supplier commitments move. Not investment advice. Do your own research. **How we check this** CoreWeave’s contract wording, the 98% share, revenue, the prepayment range, deferred revenue, the $554 million, RPO and its bands, and the two 32% customers come from its Form 10-Q for the quarter ended 30 June 2026, filed 12 August 2026\. Microsoft’s purchase-commitment table and the separate construction line come from its Form 10-K for the year ended 30 June 2026\. Its Form 10-Q for the quarter ended 30 September 2026 does not reprint that table. Amazon’s two purchase lines, their timing, the exclusions, and the off-balance-sheet statement come from its Form 10-Q as of 30 September 2026\. Figures marked as our arithmetic use those printed inputs. Who gets paid and the stuck step are our read. The featured photograph was made for this page. Not investment advice. Do your own research. **Last reviewed:** 9 Nov 2026 · **Next review:** after CoreWeave’s third-quarter 2026 Form 10-Q and Microsoft’s fiscal 2027 Form 10-K Spot an error? [Tell us](mailto:sean@thekopinotes.com) and we will correct it and note the change here. [Our editorial standards →](https://www.sotkn.com/editorial-standards/) ## Sources 1. [CoreWeave — Form 10-Q for the quarter ended 30 June 2026 (filed 12 August 2026)](https://www.sec.gov/Archives/edgar/data/1769628/000176962826000366/crwv-20260630.htm?ref=sotkn.com) — take-or-pay committed contracts, 98% of quarterly revenue, $2.575 billion revenue, prepayment history, deferred revenue, RPO, and receivable concentration. 2. [Microsoft — Form 10-K for the year ended 30 June 2026](https://www.sec.gov/Archives/edgar/data/789019/000119312526323660/msft-20260630.htm?ref=sotkn.com) — purchase commitments of $169,008 million, $25,052 million, and $194,060 million, including datacenter open orders and take-or-pay, separate from $34,566 million of construction commitments. 3. [Microsoft — Form 10-Q for the quarter ended 30 September 2026](https://www.sec.gov/Archives/edgar/data/789019/000119312526436133/msft-20260930.htm?ref=sotkn.com) — does not reprint the purchase-commitment dollar table. 4. [Amazon — Form 10-Q for the quarter ended 30 September 2026](https://www.sec.gov/Archives/edgar/data/1018724/000101872426000040/amzn-20260930.htm?ref=sotkn.com) — $159,640 million of property-and-equipment purchase obligations and $94,759 million for energy, content, and software, both not on the consolidated balance sheets, with the exclusions described above. S [**Sean**](https://www.sotkn.com/author/sean/) Writes Second Order by TKN — a plain-English map of AI infrastructure and semiconductors for non-specialist investors. Focus: who gets paid, where money sticks, and which step is stuck. Covers AI infrastructure, semiconductors, and second-order stack reads. [Author page →](https://www.sotkn.com/author/sean/) · [Editorial standards →](https://www.sotkn.com/editorial-standards/)