Core Scientific Inc ((CORZ)) has held its Q1 earnings call. Read on for the main highlights of the call.
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Core Scientific Inc’s recent earnings call paints a picture of a company in transition, navigating both opportunities and challenges. The sentiment expressed during the call was mixed, with optimism for future growth driven by strategic positioning in the high-density infrastructure market. However, this optimism is tempered by current financial pressures, including declining revenues and negative EBITDA, alongside the absence of new customer signings.
Strong Demand for High-Density Infrastructure
Core Scientific reported sustained demand for high-density infrastructure, fueled by AI workloads. The company is experiencing a growing sales pipeline that includes a mix of hyperscale and large enterprise customers, indicating a robust market interest in their offerings.
Significant Progress in CoreWeave Contracts
The company has made notable advancements in its contracts with CoreWeave, building out 570 megawatts of total billable capacity. The Denton facility plays a pivotal role in this effort, with the first tranche of 8 megawatts expected this month, followed by an additional 40 megawatts by the quarter’s end.
Innovative Contract Structure with CoreWeave
CoreWeave’s funding of nearly all capital investments on deployments allows Core Scientific to maintain a light balance sheet leverage. This innovative contract structure provides the company with the flexibility to use debt strategically for future growth.
Expanding Data Center Capacity
Core Scientific is planning to expand its data center capacity significantly, aiming to add approximately 300 megawatts of billable capacity across existing sites by the end of 2027. Additionally, the company targets an extra 400 megawatts through new site development over the next three years.
Decline in Revenue and Bitcoin Production
The company reported a total revenue of $79.5 million for the quarter, marking a 16% sequential decline. This drop was primarily due to mining disconnections and relocations, resulting in a decrease in Bitcoin production from 974 in the previous quarter to 719 in the first quarter.
No New Customer Signings Yet
Despite an expanding sales pipeline, Core Scientific has yet to secure new customer signings. This highlights potential challenges in converting pipeline opportunities into confirmed contracts.
Negative Adjusted EBITDA
Core Scientific reported a negative adjusted EBITDA of $6.1 million, underscoring the financial challenges it faces amid its transition from Bitcoin mining to data center operations.
Forward-Looking Guidance
Looking ahead, Core Scientific aims to deliver 250 megawatts of billable capacity for CoreWeave by the end of 2025 and 590 megawatts by early 2027. The company is also targeting the addition of approximately 300 megawatts of billable capacity across existing sites by the end of 2027, with an additional 400 megawatts through new site development over the next three years. The strategic focus includes diversifying its customer base, executing on CoreWeave contracts, and expanding data center capacity both organically and through targeted mergers and acquisitions.
In summary, Core Scientific Inc’s earnings call reflects a company at a crossroads, with strong strategic positioning in the high-density infrastructure market but facing significant financial challenges. The mixed sentiment highlights optimism for future growth, driven by strategic partnerships and expansion plans, tempered by current financial pressures and the need to convert pipeline opportunities into tangible contracts.