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01/10 17:00
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call revealed mixed signals: a significant partnership expansion with CoreWeave and strong cash position were positive, but declining revenue and increased net losses were concerning. Q&A highlighted management's confidence in overcoming permitting and design challenges, yet some responses lacked clarity, raising uncertainties. Despite positive long-term contracts, immediate financial performance and operational hurdles suggest a neutral impact on stock price.
Total Revenue Q4 2024 $94.9 million, down 33% year-over-year due to operational hurdles and a decline in Bitcoin mining revenue.
Adjusted EBITDA Q4 2024 $13.3 million, no year-over-year change mentioned.
Digital Asset Self-Mining Revenue Q4 2024 $79.9 million, down 29% year-over-year, driven by a decrease in Bitcoin earned (974 Bitcoin vs. 3,042 a year ago), partially offset by a 130% increase in Bitcoin price.
Digital Asset Hosted Mining Revenue Q4 2024 $6.5 million, down from $30 million in Q4 2023, due to the sunset of hosted mining contracts.
HPC Hosting Revenue Q4 2024 $8.5 million, with 16.5 megawatts of critical IT load contracted.
Average Annual Fleet-Wide Power Rate 2024 $0.04 per kilowatt hour, better than the target guidance of $0.042 to $0.044.
Average Fleet-Wide Power Rate Q4 2024 $0.037 per kilowatt hour.
Gross Margins Q4 2024 2% for digital asset self-mining, 36% for digital asset hosting, and 9% for HPC hosting.
Non-GAAP Cash Gross Margin Q4 2024 16% for HPC hosting.
Operating Expenses Q4 2024 $43.6 million, up from $30 million in the prior year.
Net Loss Q4 2024 $265 million, compared to a net loss of $195.7 million in the prior year.
Direct Cash Cost to Self-Mine a Bitcoin Q4 2024 $51,035.
Total Cash-Based Hash Cost Q4 2024 Approximately $0.033 per tera hash.
Total Debt Balance at End of 2023 Approximately $1 billion, reduced by $270 million during 2024.
Equitized Secured Convertible Notes $260 million through mandatory conversion.
Convertible Note Offering August 2024 $460 million at reduced interest rates from over 12% to 3%.
Convertible Note Offering December 2024 $625 million at a 0% interest rate.
Cash Position Entering 2025 Over $830 million.
Pro Forma Fully Diluted Share Count February 20, 2025 Approximately 501 million shares.
Statutory Effective Tax Rate 2025 22%.
Net Operating Loss Carry-Forwards More than $300 million.
HPC Hosting Contract: Signed a 16-megawatt agreement with CoreWeave, with total revenue potential of $8.7 billion over 12 years.
HPC Infrastructure Expansion: Expanded HPC infrastructure capacity to over 1,300 megawatts, including a 100-megawatt expansion at the Denton site.
New Facility in Auburn, Alabama: Signed a lease-to-buy agreement at the Aubix facility, currently with 11 megawatts of critical IT load.
Customer Diversification: In active discussions with new HPC customers, aiming to reduce reliance on CoreWeave to below 50% of critical IT load by 2028.
HPC Capacity Expansion: Expect to deliver approximately 250 megawatts of HPC capacity to CoreWeave by the end of 2025.
Operational Efficiency: Achieved a fleet-wide power rate of $0.04 per kilowatt hour, below target guidance.
Balance Sheet Improvement: Reduced total debt by $270 million and entered 2025 with over $830 million in cash.
Strategic M&A: Pursuing acquisitions of stabilized data center assets to enhance revenue predictability.
Focus on HPC: Shifting focus from Bitcoin mining to HPC hosting, with no further CapEx planned for Bitcoin mining in 2025.
Competitive Pressures: The company is experiencing heightened scrutiny from potential customers due to increased competition in the HPC market, with new entrants making ambitious capacity promises without tangible power agreements.
Regulatory Issues: The company has to navigate operational hurdles related to regulatory compliance, particularly in relation to power agreements and capacity expansions.
Supply Chain Challenges: There are potential delays in expanding HPC capacity due to the complexity of projects and the need for design enhancements, which may affect delivery timelines.
Economic Factors: The company faces economic uncertainties that could impact demand for its services, particularly in the context of fluctuating Bitcoin prices and the overall market for digital assets.
Debt Management: The company has a significant debt load of approximately $1 billion, which poses risks related to financial stability and operational flexibility.
Customer Diversification: The company aims to diversify its customer base but has not yet signed new large HPC hosting customers, which could limit growth opportunities.
Operational Hurdles: The company faced operational challenges due to the Bitcoin halving and the shutdown of mining sites to accommodate new HPC contracts.
HPC Contract with CoreWeave: Signed a 16-megawatt agreement with CoreWeave, with total revenue potential of $8.7 billion over 12 years, approximately $725 million per year once fully online.
Infrastructure Expansion: Expanded HPC infrastructure capacity to over 1,300 megawatts, including a 100-megawatt expansion at the Denton site.
Customer Diversification: Active discussions with new customers to diversify HPC customer base, aiming for CoreWeave to represent less than 50% of critical IT load by 2028.
Strategic M&A: Pursuing M&A opportunities to acquire stabilized data center assets or projects with strategic customer contracts.
2025 Revenue Expectations: Expect to deliver approximately 250 megawatts of HPC capacity to CoreWeave by the end of 2025, with full 590 megawatts online by early 2027.
CapEx for HPC Expansion: Funding $1.5 million in capital expenditures per megawatt for the new agreement with CoreWeave.
Future Capacity Expansion: Aiming to add 300 megawatts of capacity across existing sites by the end of 2027 and approximately 400 megawatts of new capacity over the next three years.
Tax Rate and NOLs: Modeling a statutory effective tax rate of 22% in 2025, with over $300 million in net operating loss carry-forwards to reduce future cash taxes.
Shareholder Return Plan: Core Scientific announced a significant expansion of its relationship with CoreWeave, adding approximately 70 megawatts of critical IT load, which represents approximately $1.2 billion in additional contracted revenue over a 12-year term. The total contracted value with CoreWeave now exceeds $10 billion, covering roughly 590 megawatts of critical IT load once fully online.
Share Repurchase Program: None
Dividend Program: None
The earnings call reveals several negative aspects: a sequential revenue decline, negative EBITDA, and reduced Bitcoin production. Despite a strong liquidity position and potential growth opportunities, concerns about supply chain disruptions, economic factors, and competitive pressures persist. The Q&A highlights unclear responses on critical issues like credit enhancements and CapEx changes. The lack of a share repurchase program and a negative trend in financial performance overshadow the optimistic guidance, leading to a likely negative market reaction.
The earnings call revealed mixed signals: a significant partnership expansion with CoreWeave and strong cash position were positive, but declining revenue and increased net losses were concerning. Q&A highlighted management's confidence in overcoming permitting and design challenges, yet some responses lacked clarity, raising uncertainties. Despite positive long-term contracts, immediate financial performance and operational hurdles suggest a neutral impact on stock price.
The earnings call shows a mixed sentiment. Strong positive indicators include higher than expected HPC revenue and ongoing expansion plans, which suggest growth potential. However, uncertainties in financing structures, unclear management responses, and potential supply chain issues for 2026 components create concerns. The lack of clarity on the separation of business segments and Alabama site specifics further adds to the uncertainty. These mixed signals indicate a neutral sentiment, suggesting the stock price may remain stable in the short term, with potential for both positive and negative fluctuations.
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