Core Scientific, Inc. (NASDAQ:CORZ) Q4 2024 Earnings Call Transcript February 26, 2025 4:30 PM ET Company Participants Jon Charbonneau - Vice President, Investor Relations Adam Sullivan - CEO, President & Director Denise Sterling - Chief Financial Officer Conference Call Participants Darren Aftahi - Roth MKM Jon Petersen - Jefferies Joe Flynn - Compass Point Research Brett Knoblauch - Cantor Fitzgerald Greg Lewis - BTIG George Sutton - Craig Hallum Stephen Glagola - JonesTrading John Todaro - Needham & Comp ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-40046 Core Scientific, Inc. (Exact name of registrant as specified in its charter) Delaware 86-1243837 (State or ot ...

Core Scientific, Inc. (CORZ) came out with a quarterly loss of $0.01 per share versus the Zacks Consensus Estimate of a loss of $0.10. This compares to loss of $0.20 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 90%. A quarter ago, it was expected that this company would post a loss of $0.11 per share when it actually produced a loss of $0.13, delivering a surprise of -18.18%.Over the last four quarters, the company has surp ...

Fourth Quarter Fiscal 2024 Earnings Presentation Adam Sullivan, CEO Denise Sterling, CFO February 26, 2025 FORWARD-LOOKING STATEMENTS This presentation contains "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to, statements regarding projections, estimates and forecasts of revenue and other financial and performance metrics, projections of market opportunity and expectations, the Company's abil ...

Financial Performance - Net loss for Q4 2024 was $265.5 million, compared to a net loss of $195.7 million in Q4 2023, primarily due to a $224.7 million non-cash mark-to-market adjustment[2][9] - Total revenue for Q4 2024 was $94.9 million, down from $141.9 million in Q4 2023, with digital asset self-mining revenue at $79.9 million[2][4] - Adjusted EBITDA for Q4 2024 was $13.3 million, a decrease of $43.4 million from $56.7 million in Q4 2023[2][10] - Operating loss for Q4 2024 was $39.8 million, a decrease of $43.7 million compared to an operating income of $3.9 million in Q4 2023[2][8] - Net loss for the full fiscal year 2024 was $1.3 billion, a decrease of $1.1 billion from the previous year, primarily due to a $1.4 billion non-cash mark-to-market adjustment[18] - Consolidated total revenue for the year ended December 31, 2024, was $510.7 million, a slight increase from $502.4 million in 2023[35] Revenue Breakdown - Digital asset self-mining revenue was $79.9 million, down 29% from $112.2 million year-over-year[33] - Digital asset hosted mining revenue from customers fell to $6.5 million in Q4 2024, down 78% from $29.8 million in Q4 2023[35] - Digital asset self-mining gross profit for the full fiscal year 2024 was $94.4 million, with a gross margin of 23%, compared to $98.6 million and 25% in the prior year[14] - Consolidated gross profit for Q4 2024 was $4.8 million, down 88% from $39.3 million in Q4 2023, resulting in a gross margin of 5%[35] Costs and Expenses - The average cash cost to self-mine one bitcoin was $51,035, with 974 self-mined bitcoins earned in Q4 2024[3][4] - Operating expenses rose to $43.6 million in Q4 2024, up from $30.0 million in Q4 2023[33] - Research and development expenses were $5.0 million, compared to $1.9 million in the same quarter last year[33] - The total cost of digital asset self-mining for the year ended December 31, 2024, was $314.3 million, an increase from $291.7 million in 2023[35] - Employee compensation in the digital asset self-mining segment increased to $10.4 million in Q4 2024, up from $4.4 million in Q4 2023[35] Assets and Liabilities - Total current assets increased significantly to $904.0 million from $97.0 million in the previous year[31] - Cash and cash equivalents increased to $836.2 million from $50.4 million year-over-year[31] - Total liabilities increased to $2.4 billion, up from $1.3 billion in the previous year[31] - The company has a substantial accumulated deficit of $3.7 billion as of December 31, 2024[31] Strategic Developments - The company increased its total portfolio capacity to 1,300 MW of powered infrastructure by year-end 2024 through strategic site acquisitions and expansions[3] - The company secured $625 million through a convertible note offering with favorable 0% interest terms, strengthening its balance sheet[3] - The HPC hosting segment generated $8.5 million in revenue for Q4 2024, with a gross profit of $744, marking the first revenue reported in this segment[35]

Group 1 - Core Scientific (NASDAQ: CORZ) has appreciated over 60% since August last year, indicating strong market performance [1] - The company's heavy reliance on Bitcoin mining introduces volatility risks, which are critical for investors to consider [1] - The analyst emphasizes a moderate approach to investment, focusing on capital preservation and strategic direction [1] Group 2 - The analyst has a diverse background in IT and investment, with 25 years of experience, which informs their insights [1] - The research includes themes such as automated supply chains, Generative AI, and the deflationary nature of software, showcasing a broad industry focus [1] - The analyst has experienced significant losses during the 2008/2009 financial crisis, leading to a more cautious investment strategy [1]

Financial Data and Key Metrics Changes - Total revenue for Q3 2024 was $95 million, with a gross loss of $0.2 million and an operating loss of $41 million, reflecting lower post-halving hash prices and higher operating expenses [17][18] - The net loss for Q3 2024 was $455 million, significantly higher than the $41 million net loss in the same period last year, primarily due to a $408.5 million non-cash mark-to-market adjustment [31][32] - Adjusted EBITDA for Q3 2024 was $10 million, a year-over-year decrease of $18 million [32] Business Line Data and Key Metrics Changes - Digital asset self-mining revenue decreased by 18% year-over-year to $68.1 million, driven by a 62% decrease in the number of Bitcoin earned due to the April halving [21][22] - HPC hosting revenue was $10.3 million, exceeding costs of revenue by $1.3 million, resulting in a GAAP gross margin of 13% [24] - Digital asset self-mining segment gross margin was negative 9%, while HPC hosting had a non-GAAP gross margin of 27% when excluding direct pass-through power costs [29][26] Market Data and Key Metrics Changes - The company operated approximately 175,000 miners in its self-mining fleet, with a self-mining to hosted mining mix of 89% to 11% [33] - Power costs decreased to $0.038 per kilowatt hour from $0.045 per kilowatt hour year-over-year [30] Company Strategy and Development Direction - The company is focusing on expanding its HPC hosting business, with plans to secure additional power from local grid partners and acquire new sites [48][49] - The company aims to convert existing sites to HPC hosting, targeting a total HPC hosting capacity of over 1 gigawatt by the end of 2027 [52] - The company has secured a contract with CoreWeave valued at up to $8.7 billion over 12 years, indicating strong demand for high-powered data center infrastructure [59] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about favorable market fundamentals driving strong demand for data center infrastructure [9] - The company anticipates improvements in margins over time as it increases critical IT load without incurring additional operating costs [28] - Management highlighted the potential for significant value creation in HPC hosting and the Bitcoin mining business as market conditions improve [60] Other Important Information - The company completed a $460 million convertible note offering, which significantly improved its capital structure and eliminated previous debt restrictions [14][35] - The company expects to begin delivery of powered infrastructure for HPC hosting by the end of the first half of 2025 [54] Q&A Session Summary Question: Are there conversations with potential customers for the 100 megawatts allocated to HPC? - Management confirmed that conversations began earlier in the year and are ongoing, indicating a competitive process for the capacity [63] Question: What drove the higher-than-expected HPC revenue? - The CFO explained that a one-time adjustment for early delivery contributed to the higher revenue [66] Question: What is the plan for construction and leasing for the 100-megawatt transition? - Management stated that they aim to secure a client and contract before incurring capital expenditures [68] Question: Any updates on expanding power capacity at existing HPC sites? - Management indicated potential for an additional 300 megawatts across existing sites, with ongoing discussions [73] Question: Thoughts on the implications of the Presidential Election for the Bitcoin mining industry? - Management noted that strong support for Bitcoin and energy production from political figures could serve as tailwinds for the industry [75] Question: What are the potential deal structures for new sites? - Management indicated a focus on single-tenant buildings and build-to-suit arrangements for new clients [78] Question: How has the market changed regarding rental rates since the CoreWeave deal? - Management noted that lease rates have increased due to strong demand and clients covering some capital expenditures [82] Question: What is the competitive landscape for new sites? - Management highlighted strong demand and ongoing discussions with multiple clients, indicating a competitive process [88] Question: Will the new block chips require significant retrofitting of existing facilities? - Management stated that the new block chips will primarily focus on refreshing the existing fleet without significant infrastructure changes [100] Question: What is the status of supply chain issues? - Management expressed confidence in overcoming supply chain challenges and securing necessary components [108]

Revenue Performance - Total revenue decreased by $17.6 million or 16%, to $95.4 million for the three months ended September 30, 2024, from $112.9 million for the same period in 2023[79]. - Digital asset self-mining revenue decreased by $14.9 million or 18%, to $68.1 million for the three months ended September 30, 2024, primarily due to a 62% decrease in bitcoin mined[80]. - Total digital asset hosted mining revenue from customers decreased by $10.1 million or 38%, to $16.9 million for the three months ended September 30, 2024, driven by the termination of contracts with several customers[81]. - Consolidated total revenue for the three months ended September 30, 2024, was $95.4 million, a decrease from $112.9 million in the same period of 2023, reflecting a decline of approximately 15%[105]. - Digital asset self-mining revenue was $68.1 million for the three months ended September 30, 2024, down 18% from $83.1 million in the prior year[141]. - Total revenue for the three months ended September 30, 2024, was $95.4 million, a decrease of 15.5% from $112.9 million for the same period in 2023[141]. Operating Loss and Expenses - Operating loss increased to $41.2 million for the three months ended September 30, 2024, compared to a loss of $12.0 million for the same period in 2023[77]. - Total operating expenses increased by $13.5 million or 51%, reaching $40.3 million for the three months ended September 30, 2024, compared to $26.8 million in the same period last year[142]. - The company reported total operating expenses of $40.3 million for the three months ended September 30, 2024, a 51% increase from $26.8 million in the same period of 2023[133]. - Total operating expenses for the nine months ended September 30, 2024, were $88,655,000, up from $78,112,000 in the same period in 2023, reflecting a 13% increase[111]. Net Loss - Net loss was $455.3 million for the three months ended September 30, 2024, compared to a net loss of $41.1 million for the same period in 2023[77]. - For the three months ended September 30, 2024, the company reported a net loss of $455.3 million, compared to a net loss of $41.1 million for the same period in 2023[100]. - The net loss for the nine months ended September 30, 2024, was $1,049,464, compared to a net loss of $50,794 for the same period in 2023[166]. - The company reported a net loss of $455.3 million for the three months ended September 30, 2024[160]. Segment Performance - The Digital Asset Self-Mining segment revenue decreased to $68.1 million for the three months ended September 30, 2024, down from $83.1 million in the same period of 2023, reflecting a decline of approximately 18%[105]. - The Digital Asset Hosted Mining segment generated revenue of $16.9 million for the three months ended September 30, 2024, down from $29.8 million in the same period of 2023, representing a decline of approximately 43%[105]. - The HPC Hosting segment reported revenue of $10.3 million for the three months ended September 30, 2024, marking its first revenue contribution as a new segment[105]. - The gross profit for the Digital Asset Self-Mining segment was a loss of $6.4 million for the three months ended September 30, 2024, compared to a gross profit of $10.5 million in the same period of 2023[105]. Cash and Assets - Cash and cash equivalents rose significantly to $253.0 million as of September 30, 2024, compared to $50.4 million as of December 31, 2023[138]. - Total current assets increased to $277.9 million as of September 30, 2024, from $97.0 million as of December 31, 2023[138]. - Total liabilities increased to $1.65 billion as of September 30, 2024, from $1.31 billion as of December 31, 2023[138]. - Unrestricted cash and cash equivalents increased to $253.0 million as of September 30, 2024, compared to $50.4 million as of December 31, 2023[205]. Tax and Valuation - The company's estimated annual effective income tax rate for fiscal 2024 is 0.0%, significantly lower than the U.S. federal statutory rate of 21.0% due to various adjustments[95]. - The effective income tax rate for the three months ended September 30, 2024, was (0.3)%, compared to (0.7)% for the same period in 2023[151]. - The company has a full valuation allowance on its net deferred tax asset, indicating it is not expected to realize such asset in the near future[95]. Research and Development - Research and development expenses increased by $588 thousand or 26%, to $2.8 million for the three months ended September 30, 2024[86]. - Research and development expenses increased to $6,814,000 for the nine months ended September 30, 2024, from $5,308,000 in the same period in 2023, marking a 28% increase[111]. - Research and development expenses rose by $1.5 million or 28% to $6.8 million for the nine months ended September 30, 2024, driven by increased payroll and benefits[243]. Stock and Equity - The Company has authorized the issuance of up to 10 billion shares of New Common Stock and 2 billion shares of Preferred Stock[120]. - The Company adopted an equity-based management incentive plan allowing for the grant of up to 40 million shares of Common Stock[123]. - The company had approximately $125.6 million of unrecognized stock-based compensation expense related to RSUs as of September 30, 2024[147]. - Stock-based compensation expense for the three months ended September 30, 2024, was $20.5 million, up from $14.9 million in the prior year[148]. Bankruptcy and Reorganization - The company emerged from bankruptcy on January 23, 2024, after confirming its Plan of Reorganization[189]. - The company emerged from bankruptcy on January 16, 2024, following the confirmation of its Plan of Reorganization[256]. - Reorganization items, net for the nine months ended September 30, 2024, included professional fees and other bankruptcy-related costs totaling $21.5 million, compared to $62.97 million for the same period in 2023[263]. Depreciation and Property - Depreciation expense for the three months ended September 30, 2024, was $28.5 million, compared to $24.0 million for the same period in 2023, representing an increase of approximately 18.8%[268]. - For the nine months ended September 30, 2024, depreciation expense was $86.6 million, up from $64.7 million in 2023, indicating a year-over-year increase of approximately 33.8%[268]. - The Company’s total property, plant, and equipment, net, after accounting for accumulated depreciation, was $396,574 thousand as of September 30, 2024, compared to $401,522 thousand at the end of 2023[268].

Third Quarter Fiscal 2024 Earnings Presentation Adam Sullivan, CEO Denise Sterling, CFO November 6, 2024 2 FORWARD-LOOKING STATEMENTS This presentation contains "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to, statements regarding projections, estimates and forecasts of revenue and other financial and performance metrics, projections of market opportunity and expectations, the Company's abil ...

Financial Performance - Net loss for the fiscal third quarter of 2024 was $455.3 million, compared to a net loss of $41.1 million for the same period in 2023, representing an increase of $414.1 million[11]. - Total revenue for the fiscal third quarter of 2024 was $95.4 million, a decrease of $17.6 million compared to $112.9 million in the third quarter of 2023[5]. - Adjusted EBITDA for the fiscal third quarter of 2024 was $10.1 million, down from $27.8 million in the same period last year, a decrease of $17.6 million[13]. - Operating loss for the fiscal third quarter of 2024 was $41.2 million, an increase of $29.2 million over the same period in 2023[5]. - Basic net loss per share was $1.17, compared to a loss of $0.11 per share in Q3 2023[33]. - The company reported a gross loss of $156 thousand for the quarter, compared to a gross profit of $15.419 million in Q3 2023[33]. - Consolidated gross loss was $156, compared to a gross profit of $15,419 in Q3 2023, indicating a significant decline in profitability[35]. - Adjusted EBITDA for Q3 2024 was $10,132, down from $27,758 in Q3 2023[38]. - The net loss for Q3 2024 was $455,259, compared to a net loss of $41,146 in the same quarter last year[38]. Revenue Breakdown - Digital asset self-mining revenue for the fiscal third quarter of 2024 was $68.1 million, while hosted mining revenue was $16.9 million, and HPC hosting revenue was $10.3 million[6]. - Digital asset self-mining revenue was $68.138 million, down from $83.056 million year-over-year[33]. - Digital asset hosted mining revenue from customers was $16.878 million, a decline from $27.020 million in the same quarter last year[33]. - Digital asset self-mining gross loss was $6,417, compared to a gross profit of $10,453 in the same quarter last year[35]. - Digital asset hosted mining revenue decreased by 43% to $16,878 from $29,848 year-over-year[35]. - HPC hosting revenue was $10,338, with a gross margin of 13%[35]. Operational Metrics - The company contracted approximately 500 megawatts of critical IT load, expected to generate total potential revenue of approximately $8.7 billion over 12-year contracts[3]. - The company operated a total hash rate of 23.4 EH/s, consisting of 20.4 EH/s from self-mining and 3.0 EH/s from hosting[5]. - The company improved its average actual self-mining fleet energy efficiency to 24.5 joules per terahash[5]. - Digital asset hosted mining gross margin improved to 29% from 17% year-over-year[35]. Assets and Liabilities - Total current assets increased to $277.856 million from $97.016 million at the end of Q4 2023[32]. - Total liabilities rose to $1.651 billion, compared to $1.309 billion at the end of Q4 2023[32]. - Cash and cash equivalents increased significantly to $253.019 million from $50.409 million at the end of Q4 2023[32]. - The company ended the quarter with cash and cash equivalents of $253.0 million as of September 30, 2024[5]. Adjustments and Other Notes - The company reported a significant adjustment of $408,520 in the fair value of warrants and contingent value rights for Q3 2024[38]. - Operating expenses for the fiscal third quarter of 2024 totaled $40.3 million, compared to $26.8 million for the same period in the prior year, an increase of $13.5 million[10]. - Operating expenses totaled $40.348 million, up from $26.805 million in the same quarter last year[33].