Core Scientific (CORZ) 4th Annual Needham Virtual Crypto Conference summary

Strategic transformation and operational progress

• Completed Chapter 11 process in January 2024, emerging as a restructured company with a focus on both Bitcoin mining and high-performance computing (HPC).

• Signed a major contract with CoreWeave for 382 MW of IT load, with an additional 118 MW under negotiation.

• Retrofitting five sites for HPC, while maintaining three sites for Bitcoin mining and developing new capacity to offset downtime.

• Transitioning away from Bitcoin hosting, with all hosting contracts expected to roll off by early 2025.

• Ordered 15 exahash of Block chips to drive efficiency gains and future-proof mining operations.

Financial structure and contract dynamics

• CoreWeave provides the majority of CapEx for the HPC deal, reducing debt burden and enabling high returns on invested capital.

• Evaluating future financing options, including traditional debt markets, as the business model shifts toward a standard data center approach.

• Cash margins for HPC expected between 75% and 80% after CapEx credits are paid, with detailed cost breakdowns available in investor materials.

• CoreWeave's capital for the current contract is secured in escrow, ensuring project execution.

Market positioning and competitive landscape

• Early mover advantage in securing a large-scale, official HPC agreement, with operational know-how from retrofitting and close collaboration with NVIDIA and CoreWeave.

• Main competitors in HPC are traditional data center firms like Switch, Digital Realty, and QTS, not other Bitcoin miners.

• Plans to diversify client base in 2024 to reduce concentration risk.

• Actively recruiting talent from traditional data center companies to strengthen operational capabilities.