Release Date: February 26, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Core Scientific Inc (NASDAQ:CORZ) secured a landmark HPC contract with Coreweave, offering a total revenue potential of $8.7 billion over 12 years.
• The company expanded its HPC infrastructure capacity significantly, ending the year with over 1,300 megawatts of contracted power.
• Core Scientific Inc (NASDAQ:CORZ) improved its balance sheet by reducing total debt by $270 million through Chapter 11 debt restructuring.
• The company completed a $625 million convertible note offering at a 0% interest rate, enhancing its financial flexibility.
• Core Scientific Inc (NASDAQ:CORZ) is actively diversifying its customer base and is in discussions with multiple hyperscale providers and large enterprises.

Negative Points

• Total revenue for the fourth quarter was $94.9 million, down 33% year over year.
• Digital asset self-mining revenue declined by 29%, driven by a significant decrease in Bitcoin earned.
• The company experienced a net loss of $265 million for the fourth quarter, compared to a net loss of $195.7 million in the prior year.
• There were delays in the expansion of capacity due to permitting challenges and supply chain issues.
• Core Scientific Inc (NASDAQ:CORZ) faces heightened scrutiny and competition from new market entrants, impacting customer acquisition timelines.

Q & A Highlights

• Warning! GuruFocus has detected 8 Warning Signs with CORZ.

Q: Can you provide more details about the permitting process and the timeline for the Alabama site expansion? A: The permitting process involved additional steps due to a major design adjustment aimed at optimizing efficiency and scale. We are confident in the current schedule as construction is underway. For the Alabama site, we are confident in securing additional megawatts and will deploy significant capital once customer contracts are secured, with limited CapEx until then. Adam Sullivan, CEO

Q: Regarding the expansion with Coreweave, will the rents remain the same despite the upfront payment instead of a CapEx credit? A: Yes, after the initial two years, the contracts will be identical from a rate perspective. Adam Sullivan, CEO

Q: What are the milestones needed to reduce Coreweave's share of critical IT load to less than 50% by 2028? A: We are expanding existing sites and acquiring new ones to secure more contracts. Our focus is on building blue-chip assets with blue-chip clients to achieve this goal. Adam Sullivan, CEO

Q: How are you addressing the challenges in finalizing data center designs and capacity expansion? A: We faced incremental permitting challenges due to design changes for new GPU models and supply chain constraints. We have adjusted designs to fit available equipment and are confident in meeting delivery schedules. Adam Sullivan, CEO

Q: How do you view the trade-off between revenue diversification and capital intensity with Coreweave versus other customers? A: We aim for long-term growth and revenue diversification to improve credit ratings and create a stable, free cash-flowing business. This approach will help us achieve investment-grade status and strengthen our company. Adam Sullivan, CEO

For the complete transcript of the earnings call, please refer to the full earnings call transcript.