Core Scientific Inc ((CORZ)) has held its Q4 earnings call. Read on for the main highlights of the call.
Core Scientific Inc’s recent earnings call painted a picture of both promise and challenge. The company celebrated significant achievements, such as a landmark HPC hosting contract and an improved capital structure, which signal a strategic pivot towards becoming a leading data center business. However, these positive developments were counterbalanced by revenue declines, increased net loss, and operational delays, reflecting transitional hurdles as the company positions itself for future growth.
Landmark HPC Hosting Contract
Core Scientific announced a groundbreaking 12-year agreement with CoreWeave, with a total revenue potential of $8.7 billion. This contract is expected to generate approximately $725 million per year once fully operational, marking a significant increase from the company’s total revenue of just over $500 million in 2024.
Expansion of HPC Infrastructure
The company has expanded its HPC infrastructure by reallocating resources from Bitcoin mining operations, enlarging existing sites, and acquiring new ones. By the end of the year, Core Scientific boasted over 1,300 megawatts of contracted power, underscoring its commitment to growing its data center capabilities.
Improved Capital Structure
Core Scientific made strides in improving its capital structure by reducing total debt by $270 million through a Chapter 11 debt restructuring. Additionally, the company completed a $625 million convertible note offering at a 0% interest rate, entering 2025 with over $830 million in cash.
Strategic Hires
To bolster its leadership and execution capabilities, Core Scientific has hired top-tier data center professionals with proven track records. These strategic hires are expected to significantly strengthen the company’s operational performance.
Decline in Revenue and Bitcoin Mining
The earnings call revealed a 33% year-over-year decline in total revenue and a 29% drop in digital asset self-mining revenue. This decline was attributed to a decrease in Bitcoin earned, although it was partially offset by a 130% increase in Bitcoin prices.
Net Loss and Operating Expenses
Core Scientific reported a net loss of $265 million for Q4 2024, compared to a net loss of $195.7 million the previous year. Operating expenses also increased to $43.6 million from $30 million, highlighting the financial challenges faced by the company.
Delayed HPC Deployment
The company faced delays in the deployment of a 40-megawatt building, now expected to be completed by early 2026 due to permitting and supply chain challenges. This delay impacts the planned ramp schedule, presenting an operational hurdle.
Forward-Looking Guidance
Looking ahead, Core Scientific is focused on expanding its HPC hosting capacity and diversifying its customer base. The company aims to achieve substantial growth through its significant contract with CoreWeave, which promises a total revenue potential of $8.7 billion over 12 years. Core Scientific plans to expand its Denton site by nearly 100 megawatts and reduce its largest customer’s share of total critical IT load to less than 50% by the end of 2028. With $830 million in cash and a reduced debt load, the company is well-positioned to execute its growth strategy.
In conclusion, Core Scientific’s earnings call highlighted both the opportunities and challenges facing the company. While the strategic shift towards HPC hosting and improved capital structure are promising, the revenue declines and operational delays underscore the transitional hurdles. As the company navigates these challenges, its focus on growth and diversification remains clear.