Fiscal First Quarter 2024 Highlights
- Generated net income of $210.7 million, including a gain on
extinguishment of prior obligations of $143.8 million
- Produced adjusted EBITDA of $88.0 million
- Strengthened the balance sheet, ending the quarter with $98.1
million in cash and cash equivalents
- Earned 2,825 self-mined bitcoin, more than any other publicly
listed miner in North America
- Operated total hash rate of 25.5 EH/s, consisting of 19.3 EH/s
self-mining and 6.2 EH/s hosting
- Owned and managed approximately 745 megawatts of
infrastructure, the largest owned infrastructure footprint among
publicly listed miners in North America
- Improved average actual self-mining fleet energy efficiency to
26.85 joules per terahash
Core Scientific, Inc. (NASDAQ: CORZ), a leader in
bitcoin mining, specializing in application-specific digital
infrastructure for emerging high-value compute, today announced
financial results for the fiscal first quarter of 2024. Net income
was $210.7 million, as compared to a net loss of $0.4 million for
the same period in 2023. Total revenue was $179.3 million, as
compared to $120.7 million for the same period last year. Operating
income was $55.2 million, as compared to $7.6 million for the same
period in 2023. Adjusted EBITDA was $88.0 million, as compared to
$40.3 million for the same period in the prior year.
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Core Scientific is a leader in bitcoin
mining, specializing in application-specific digital infrastructure
for emerging high-value compute (Photo: Business Wire)
“We delivered outstanding results in the first quarter, earning
more bitcoin than any other publicly traded bitcoin miner,
strengthening our balance sheet by paying down debt and improving
our cash position, and improving our fleet efficiency with the
deployment of new generation miners,” said Adam Sullivan, Core
Scientific Chief Executive Officer. “By taking full advantage of
favorable market fundamentals and by focusing on productivity and
efficiency, we generated strong financial performance that
demonstrates our ability to create value for our shareholders.”
“Our 745 megawatts of operational, high-power data center
infrastructure forms the basis of our competitive advantage. We
believe this advantage places us in a unique position where bitcoin
mining serves as the platform on which to build an alternative
compute hosting business at a time when the demand for high-power
data center capacity is strong and growing.”
“We are in regular discussion with customers to evaluate the
potential of transforming more than 500 megawatts of our
operational infrastructure and contracted power to host
high-performance computing. With our existing access to a total of
1.2 gigawatts of power and with new, more energy efficient bitcoin
miners on the horizon, we plan to expand our bitcoin mining hash
rate as we build a high-performance computing offering. We are well
positioned to take advantage of two very attractive markets,” added
Mr. Sullivan.
Fiscal First Quarter Financial and Operational
Achievements
- Total revenue of $179.3 million, an increase of $58.6 million
over first quarter 2023
- Net income of $210.7 million, an improvement of $211.1 million
over first quarter 2023
- Operating income of $55.2 million, an increase of $47.6 million
over first quarter 2023
- Adjusted EBITDA of $88.0 million, an improvement of $47.7
million over first quarter 2023
- Cash and cash equivalents of $98.1 million as of March 31,
2024
- Retired $19 million in obligations shortly after quarter
end
- Expanded hosting offering by delivering 16 MW of infrastructure
to high-performance compute customer more than 30 days ahead of
schedule
- Completed deployment of 28,400 new S19j XP miners
- Deployed first shipment of approximately 2,500 S21 miners
- Completed all 2024 payments due on miners ordered for
deployment this year
- Expanded operational infrastructure by 21 MW at Pecos, Texas
site
Fiscal First Quarter 2024 Financial Results (Compared to
Fiscal First Quarter 2023)
Total revenue for the fiscal first quarter of 2024, was $179.3
million, and consisted of $150.0 million in digital asset mining
revenue and $29.3 million in hosting revenue.
Digital asset mining revenue in excess of mining cost of revenue
for the fiscal first quarter of 2024 was $68.4 million (46% gross
margin), as compared to $25.4 million (26% gross margin) for the
same period in the prior year, an increase of $43.0 million.
Digital asset mining revenue increased $51.9 million driven by a
134% increase in the price of bitcoin and a 20% increase in our
self-mining hash rate, partially offset by the increase in the
global hash rate of approximately 73%, leading to a 34% decrease in
bitcoin received from self-mining. Digital asset mining cost of
revenue consists primarily of direct production costs of mining
operations, including electricity costs, and data center operating
costs, including salaries, stock-based compensation, and
depreciation of property, plant and equipment. The increase in
digital asset mining cost of revenue for the fiscal first quarter
of 2024 is primarily driven by an increase in depreciation expense
resulting from the deployment of approximately 18,000 new
generation self-miners.
Hosting revenue in excess of hosting cost of revenue for the
fiscal first quarter of 2024, was $9.3 million (32% gross margin),
as compared to $6.4 million (28% gross margin) for the same period
in the prior year, an increase of $2.8 million. Hosting costs
consisted primarily of direct electricity costs and data center
operating costs. The increase in Hosting revenue in excess of
hosting cost of revenue was primarily due to an increase in revenue
of $6.7 million driven by the onboarding of new digital asset
mining clients, partially offset by increased proceeds sharing
costs of $2.6 million associated with the Company entering proceed
sharing contracts with digital asset mining customers beginning in
the second fiscal quarter of 2023 and increased depreciation
expense of $1.1 million.
Operating expenses for the fiscal first quarter of 2024 totaled
$16.9 million, as compared to $24.2 million for the same period in
the prior year. The decrease of $7.3 million was primarily
attributable lower stock-based compensation of $13.3 million due to
forfeitures during the current quarter and no new equity awards
granted during fiscal year 2023, partially offset by a $3.4 million
increase in personnel and related expenses and a $1.7 million
increase in advisor fees related to the reorganization and incurred
during the fiscal first quarter.
Net income for the fiscal first quarter of 2024 was $210.7
million, as compared to a net loss of $0.4 million for the same
period in the prior year. Net income for the fiscal first quarter
of 2024 increased by $211.1 million driven primarily by a decrease
of $143.0 million in reorganization items, net, which included
gains on extinguishment of pre-emergence obligations of $143.8
million and lower Chapter 11 financing costs of $11.1 million,
partially offset by a $12.8 million increase in reimbursed claimant
professional fees, and a $60.1 million mark-to-market adjustment on
our warrants and other contingent value rights.
Non-GAAP Adjusted EBITDA for the fiscal first quarter of 2024
was $88.0 million, as compared to Non-GAAP Adjusted EBITDA of $40.3
million for the same period in the prior year. This $47.7 million
increase was driven by a $58.6 million increase in total revenue
and a $1.1 million decrease in impairment of digital assets,
partially offset by a $4.4 million increase in cash operating
expenses, a $4.1 million increase in cash cost of revenue, a $3.0
million increase in realized losses on energy derivatives, and a
$0.5 million decrease in gain from sales of digital assets.
CONFERENCE CALL AND LIVE WEBCAST
In conjunction with this release, Core Scientific, Inc. will
host a conference call today, Wednesday, May 8, 2024, at 4:30 pm
Eastern Time that will be webcast live. Adam Sullivan, Chief
Executive Officer, Denise Sterling, Chief Financial Officer and
Steven A. Gitlin, Senior Vice President Investor Relations, will
host the call.
Investors may dial into the call by using the following
telephone numbers: +1 (833) 470-1428 (U.S. toll free) and +1 (404)
975-4839 (U.S. local) and providing the Access Code 159022 five to
ten minutes prior to the start time to allow for registration.
Investors with Internet access may listen to the live audio
webcast via the Investor Relations page of the Core Scientific,
Inc. website, http://investors.corescientific.com or at
https://events.q4inc.com/attendee/954677374. Please allow 10
minutes prior to the call to download and install any necessary
audio software. A replay of the audio webcast will be available for
one year.
A supplementary investor presentation for the fiscal first
quarter 2024 may be accessed at
https://investors.corescientific.com/investors/events-and-presentations/default.aspx.
AUDIO REPLAY
An audio replay of the event will be archived on the Investor
Relations section of the Company's website at
http://investors.corescientific.com and via telephone by dialing +1
(866) 813-9403 (U.S. toll free) or +1 (929) 458-6194 (U.S. local)
and entering Access Code 713825.
ABOUT CORE SCIENTIFIC
Core Scientific is one of the largest bitcoin miners and hosting
solutions providers for bitcoin mining in North America.
Transforming energy into high-value compute with superior
efficiency at scale, we employ our own large fleet of computers
(“miners”) to earn bitcoin for our own account and provide hosting
services for large bitcoin mining customers at our seven
operational data centers in Georgia (2), Kentucky (1), North
Carolina (1), North Dakota (1) and Texas (2). We derive the
majority of our revenue from earning bitcoin for our own account
(“self-mining”). To learn more, visit www.corescientific.com.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This press release 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 ability to scale
and grow its business, source clean and renewable energy, the
advantages and expected growth of the Company and the Company’s
ability to source and retain talent. You can identify
forward-looking statements by the fact that they do not relate
strictly to historical or current facts. These statements may
include words such as “aim,” “estimate,” “plan,” “project,”
“forecast,” “goal,” “intend,” “will,” “expect,” “anticipate,”
“believe,” “seek,” “target” or other similar expressions that
predict or indicate future events or trends or that are not
statements of historical matters. All forward-looking statements
are subject to risks and uncertainties that may cause actual
results to differ materially, including: our ability to earn
digital assets profitably and to attract customers for our hosting
capabilities; our ability to maintain our competitive position as
digital asset networks experience increases in total network hash
rate; our ability to raise additional capital to continue our
expansion efforts or other operations; our need for significant
electric power and the limited availability of power resources; the
potential failure in our critical systems, facilities or services
we provide; the physical risks and regulatory changes relating to
climate change; potential significant changes to the method of
validating blockchain transactions; our vulnerability to physical
security breaches, which could disrupt our operations; a potential
slowdown in market and economic conditions, particularly those
impacting the blockchain industry and the blockchain hosting
market; the identification of material weaknesses in our internal
control over financial reporting; price volatility of digital
assets and bitcoin in particular; the “halving” of rewards
available on the Bitcoin network, or the reduction of rewards on
other networks, affecting our ability to generate revenue as our
customers may not have an adequate incentive to continue mining and
customers may cease mining operations altogether; the potential
that insufficient awards from digital asset mining could
disincentivize transaction processors from expending processing
power on a particular network, which could negatively impact the
utility of the network and further reduce the value of its digital
assets; the requirements of our existing debt agreements for us to
sell our digital assets earned from mining as they are received,
preventing us from recognizing any gain from appreciation in the
value of the digital assets we hold; potential changes in the
interpretive positions of the SEC or its staff with respect to
digital asset mining firms; the increasing likelihood that U.S.
federal and state legislatures and regulatory agencies will enact
laws and regulations to regulate digital assets and digital asset
intermediaries; increasing scrutiny and changing expectations with
respect to our ESG policies; the effectiveness of our compliance
and risk management methods; the adequacy of our sources of
recovery if the digital assets held by us are lost, stolen or
destroyed due to third-party digital asset services; the effects of
our emergence from bankruptcy on our financial results, business
and business relationships; and our substantial level of
indebtedness and our current liquidity constraints affecting our
financial condition and ability to service our indebtedness. Any
such forward-looking statements represent management’s estimates
and beliefs as of the date of this press release. While we may
elect to update such forward-looking statements at some point in
the future, we disclaim any obligation to do so, even if subsequent
events cause our views to change.
Although the Company believes that in making such
forward-looking statements its expectations are based upon
reasonable assumptions, such statements may be influenced by
factors that could cause actual outcomes and results to be
materially different from those projected. The Company cannot
assure you that the assumptions upon which these statements are
based will prove to have been correct. Additional important factors
that may affect the Company’s business, results of operations and
financial position are described from time to time in the Company’s
Annual Report on Form 10-K for the year ended December 31, 2023,
Quarterly Reports on Form 10-Q and the Company’s other filings with
the Securities and Exchange Commission. The Company does not
undertake any obligation to update or revise any forward-looking
statement, whether as a result of new information, future events or
otherwise, except as may be required by applicable law.
Core Scientific, Inc.
Consolidated Balance
Sheets
(in thousands, except par
value)
(Unaudited)
March 31, 2024
December 31,
2023
Assets
Current Assets:
Cash and cash equivalents
$
98,125
$
50,409
Restricted cash
16,151
19,300
Accounts receivable
1,107
1,001
Digital assets
—
2,284
Prepaid expenses and other current
assets
27,937
24,022
Total Current Assets
143,320
97,016
Property, plant and equipment, net
575,969
585,431
Operating lease right-of-use assets
77,766
7,844
Intangible assets, net
2,136
2,247
Other noncurrent assets
14,777
19,618
Total Assets
$
813,968
$
712,156
Liabilities and Stockholders’
Deficit
Current Liabilities:
Accounts payable
$
16,165
$
154,751
Accrued expenses and other current
liabilities
68,221
179,636
Deferred revenue
9,250
9,830
Operating lease liabilities, current
portion
2,619
77
Finance lease liabilities, current
portion
3,018
19,771
Notes payable, current portion
23,333
124,358
Contingent value rights, current
portion
15,539
—
Total Current Liabilities
138,145
488,423
Operating lease liabilities, net of
current portion
69,022
1,512
Finance lease liabilities, net of current
portion
1,170
35,745
Convertible and other notes payable, net
of current portion
556,573
684,082
Contingent value rights, net of current
portion
29,062
—
Warrant liabilities
327,465
—
Other noncurrent liabilities
11,040
—
Total liabilities not subject to
compromise
1,132,477
1,209,762
Liabilities subject to compromise
—
99,335
Total Liabilities
1,132,477
1,309,097
Commitments and contingencies
Stockholders’ Deficit:
Preferred stock; $0.00001 par value;
2,000,000 shares authorized; none issued and outstanding
—
—
Common stock; $0.00001 par value;
10,000,000 shares authorized at March 31, 2024 and December 31,
2023; 182,237 and 386,883 shares issued and outstanding at March
31, 2024 and December 31, 2023, respectively
2
36
Additional paid-in capital
1,891,011
1,823,260
Accumulated deficit
(2,209,522
)
(2,420,237
)
Total Stockholders’ Deficit
(318,509
)
(596,941
)
Total Liabilities and Stockholders’
Deficit
$
813,968
$
712,156
Core Scientific, Inc.
Consolidated Statements of
Operations
(in thousands, except per
share amounts)
(Unaudited)
Three Months Ended March
31,
2024
2023
Revenue:
Digital asset mining revenue
$
149,959
$
98,026
Hosting revenue from customers
29,332
18,909
Hosting revenue from related parties
—
3,720
Total revenue
179,291
120,655
Cost of revenue:
Cost of digital asset mining
81,564
72,676
Cost of hosting services
20,081
16,198
Total cost of revenue
101,645
88,874
Gross profit
77,646
31,781
Gain from sales of digital assets
543
1,064
Impairment of digital assets
—
(1,056
)
Change in fair value of energy
derivatives
(2,218
)
—
Losses on disposal of property, plant and
equipment
(3,820
)
—
Operating expenses:
Research and development
1,799
1,415
Sales and marketing
982
1,008
General and administrative
14,143
21,764
Total operating expenses
16,924
24,187
Operating income
55,227
7,602
Non-operating (income) expenses, net:
Loss (gain) on debt extinguishment
50
(20,761
)
Interest expense, net
14,087
157
Reorganization items, net
(111,439
)
31,559
Change in fair value of warrant and
contingent value rights
(60,114
)
—
Other non-operating expense (income),
net
1,746
(3,069
)
Total non-operating (income) expenses,
net
(155,670
)
7,886
Income (loss) before income taxes
210,897
(284
)
Income tax expense
206
104
Net income (loss)
210,691
(388
)
Net income (loss) per share:
Basic
$
0.91
$
—
Diluted
$
0.78
$
—
Weighted average shares outstanding:
Basic
230,954
375,419
Diluted
282,531
375,419
Core Scientific, Inc.
Segment Results
(in thousands, except
percentages)
(Unaudited)
Three Months Ended March
31,
2024
2023
Mining Segment
(in thousands, except
percentages)
Digital asset mining revenue
$
149,959
$
98,026
Cost of digital asset mining
81,564
72,676
Mining gross profit
$
68,395
$
25,350
Mining gross margin
46
%
26
%
Hosting Segment
Hosting revenue
$
29,332
$
22,629
Cost of hosting services
20,081
16,198
Hosting gross profit
$
9,251
$
6,431
Hosting gross margin
32
%
28
%
Consolidated
Consolidated total revenue
$
179,291
$
120,655
Consolidated cost of revenue
$
101,645
$
88,874
Consolidated gross profit
$
77,646
$
31,781
Consolidated gross margin
43
%
26
%
Core Scientific, Inc. and
Subsidiaries
Non-GAAP Financial
Measures
(Unaudited)
Adjusted EBITDA is a non-GAAP financial
measure defined as our net income or (loss), adjusted to eliminate
the effect of (i) interest income, interest expense, and other
income (expense), net; (ii) provision for income taxes; (iii)
depreciation and amortization; (iv) stock-based compensation
expense; (v) Reorganization items, net; (vi) change in fair value
of energy derivatives; (vii) change in the fair value of warrant
and contingent value rights and (viii) certain additional non-cash
or non-recurring items, that do not reflect the performance of our
ongoing business operations. For additional information, including
the reconciliation of net income (loss) to Adjusted EBITDA, please
refer to the table below. We believe Adjusted EBITDA is an
important measure because it allows management, investors, and our
Board of Directors to evaluate and compare our operating results,
including our return on capital and operating efficiencies, from
period-to-period by making the adjustments described above. In
addition, it provides useful information to investors and others in
understanding and evaluating our results of operations, as well as
provides a useful measure for period-to-period comparisons of our
business, as it removes the effect of net interest expense, taxes,
certain non-cash items, variable charges, and timing differences.
Moreover, we have included Adjusted EBITDA in this earnings release
because it is a key measurement used by our management internally
to make operating decisions, including those related to operating
expenses, evaluate performance, and perform strategic and financial
planning.
The above items are excluded from our
Adjusted EBITDA measure because these items are non-cash in nature
or because the amount and timing of these items are not related to
the current results of our core business operations which renders
evaluation of our current performance, comparisons of performance
between periods and comparisons of our current performance with our
competitors less meaningful. However, you should be aware that when
evaluating Adjusted EBITDA, we may incur future expenses similar to
those excluded when calculating this measure. Our presentation of
this measure should not be construed as an inference that its
future results will be unaffected by unusual or non-recurring
items. Further, this non-GAAP financial measure should not be
considered in isolation from, or as a substitute for, financial
information prepared in accordance with accounting principles
generally accepted in the United States (“GAAP”). We compensate for
these limitations by relying primarily on GAAP results and using
Adjusted EBITDA on a supplemental basis. Our computation of
Adjusted EBITDA may not be comparable to other similarly titled
measures computed by other companies because not all companies
calculate this measure in the same fashion. You should review the
reconciliation of net loss to Adjusted EBITDA below and not rely on
any single financial measure to evaluate our business.
The following table reconciles the
non-GAAP financial measure to the most directly comparable U.S.
GAAP financial performance measure, which is net loss, for the
periods presented (in thousands):
Three Months Ended March
31,
2024
20231
Reconciliation of Net income (loss) to
Adjusted EBITDA
(Unaudited)
Net income (loss)
$
210,691
$
(388
)
Adjustments:
Interest expense, net
14,087
157
Income tax expense
206
104
Depreciation and amortization
28,996
20,094
Stock-based compensation expense
(1,060
)
12,273
Unrealized fair value adjustment on energy
derivatives
(797
)
—
Losses on exchange or disposal of
property, plant and equipment
3,820
—
Advisor fees
1,687
—
Loss (gain) on debt extinguishment
50
(20,761
)
Reorganization items, net
(111,439
)
31,559
Change in fair value of warrant and
contingent value rights
(60,114
)
—
Other non-operating expenses (income),
net
1,746
(3,069
)
Other
123
368
Adjusted EBITDA
$
87,996
$
40,337
1 Certain prior year amounts have been
reclassified for consistency with the current year
presentation.
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