Core Scientific (CORZ) Q3 2024 earnings summary

Executive summary

• Achieved full 500 MW IT load contract with CoreWeave, securing a 12-year, $8.7B HPC hosting deal and expanding digital infrastructure to over 1,200 MW contracted capacity.

• Reallocated 100 MW from bitcoin mining to HPC hosting, optimizing operations and diversifying the client base.

• Completed major site expansions, including 100 MW at Pecos, TX, and 72 MW at Denton, and secured a new Alabama data center (11 MW, expandable to 66 MW).

• Strengthened capital structure via $460M convertible note, refinancing debt, reducing interest rates from up to 12.5% to 3%, and eliminating restrictive covenants.

• Emerged from Chapter 11 bankruptcy in January 2024, eliminating substantial debt and restructuring capital.

Financial highlights

• Q3 2024 revenue: $95.4M, down 16% year-over-year; net loss: $455.3M, mainly due to a $408.5M non-cash mark-to-market adjustment on warrants and contingent value rights.

• Adjusted EBITDA for Q3: $10.1M (11% margin), down $18M year-over-year; cash and equivalents: $253M at quarter end.

• Digital asset self-mining revenue for Q3: $68.1M; hosted mining: $16.9M; HPC hosting: $10.3M.

• Gross margin for Q3: 0%; self-mining margin: -9%; hosted mining: 29%; HPC hosting: 13%.

• Total assets: $921.9M; total liabilities: $1.65B as of September 30, 2024.

Outlook and guidance

• Targeting further growth in HPC hosting, with plans to contract remaining 118 MW and diversify client base.

• Pursuing expansion to over 1.2 GW of critical IT load by 2027, leveraging existing and new sites.

• No new Bitcoin mining fleet investment until Block ASIC chips arrive in H2 2025; planning 2025 miner refresh and hash rate expansion.

• Projecting $500M+ annual GAAP gross profit at full run rate for initial 500 MW HPC contract.