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Core Scientific, Inc./tx (CORZ)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 revenue fell to $79.5M from $179.3M YoY and $94.9M in Q4 2024, while Adjusted EBITDA swung to $(6.1)M from $13.3M in Q4 and $88.0M in Q1 2024; reported net income of $580.7M was driven by a non-cash $621.5M mark-to-market gain on warrants/CVRs as the stock fell during the quarter .
  • Management reaffirmed the AI colocation pivot: “on track to deliver 250MW of billable capacity to CoreWeave by the end of this year,” with 8MW at Denton targeted by end of May and ~40MW by end of Q2; they “anticipate entering 2026 with annualized colocation revenue of approximately $360 million” .
  • Mix shift pressure: self-mining revenue fell 55% YoY and consolidated gross margin fell to 10% (from 43% YoY), reflecting the Bitcoin halving and site conversions to colocation; SG&A rose on start-up and stock comp .
  • Catalysts into Q2–Q4: staged Denton turn-ups (8MW then ~40MW), continued CoreWeave deliveries toward 250MW by YE25, and potential new enterprise/hyperscale wins (50–100MW deal sizes) to diversify beyond CoreWeave .
  • Consensus estimates from S&P Global were unavailable at the time of analysis; therefore, we cannot assess beats/misses versus Street numbers (S&P Global consensus unavailable).

What Went Well and What Went Wrong

  • What Went Well

    • Clear AI infrastructure execution: “This quarter marks an inflection point… delivering infrastructure at scale,” with Denton 8MW this month and ~40MW by quarter-end and 250MW by YE25 .
    • Attractive CoreWeave contract structure (take-or-pay, fixed price; CoreWeave funding virtually all CapEx, with liens on assets), supporting high incremental margins and capital-light growth; $104M Core Scientific capex only tied to the new 70MW expansion .
    • Ample liquidity and balance sheet runway: $697.9M cash and $80.6M digital assets at quarter-end (total $778.6M “cash and cash equivalents and digital assets”), aiding organic and inorganic growth .

  • What Went Wrong

    • Core operations weakened; total revenue fell 56% YoY to $79.5M, consolidated gross margin contracted to 10% (from 43% YoY), and Adjusted EBITDA dropped to $(6.1)M, pressured by the halving and migration to colocation .
    • SG&A stepped up to $40.1M (+$23.2M YoY) on stock-based comp, non-capitalizable colocation start-up costs, and headcount; operating loss widened to $(42.6)M from $55.2M operating income a year ago .
    • Sequential softness and disclosure shift: sequential revenue down 16%, with BTC mined at 719 vs 974 in Q4 as conversions progressed; company will stop publishing monthly BTC production, pivoting to construction updates—potentially a concern for BTC-focused holders .

Financial Results

MetricQ1 2024Q4 2024Q1 2025
Total Revenue ($M)$179.3 $94.9 $79.5
Gross Margin %43% 5% 10%
Operating (Loss) Income ($M)$55.2 $(39.8) $(42.6)
Net Income ($M)$210.7 $(265.5) $580.7
Diluted EPS ($)$0.78 $(0.60) $1.25
Adjusted EBITDA ($M, non-GAAP)$88.0 $13.3 $(6.1)
Cash & Equivalents ($M)$98.1 $836.2 $697.9

Segment breakdown (YoY)

SegmentQ1 2024Q1 2025
Self-Mining Revenue ($M)$149.959 $67.179
Self-Mining Gross Profit ($M)$68.395 $6.009
Self-Mining Gross Margin %46% 9%
Hosted Mining Revenue ($M)$29.332 $3.773
Hosted Mining Gross Profit ($M)$9.251 $1.737
Hosted Mining Gross Margin %32% 46%
Colocation Revenue ($M)—$8.573
Colocation Gross Profit ($M)—$0.467
Colocation Gross Margin %—5% (8% license)

KPIs (sequential)

KPIQ4 2024Q1 2025
Bitcoin Self-Mined (BTC)974 719
Avg Self-Mining Energized Hash Rate (EH/s)20.1 (self-mining 19.1) 18.1
Cash Cost per BTC – Total ($)$51,035 $56,627 (Power $42,178; Ops $14,449)
Cash-Based Hash Cost ($/TH/day)~0.031 in Q3; 0.03–0.04 context$0.032 (0.024 power, 0.008 ops)
Cash & Equivalents ($M)$836.2 $697.9
Deferred Revenue ($M)$18.1 $60.9
Warrant Liabilities ($M)$1,097.3 $421.9

Notes: Reported net income in Q1 2025 reflects non-cash mark-to-market adjustments on warrants/CVRs due to share price movement, not operating improvement .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
CoreWeave Deliveries2025Deliveries staged toward 500MW through 2026 On track to deliver 250MW billable by YE25; 8MW in May and ~40MW by end of Q2 at Denton Maintained timeline; added near-term milestones
CoreWeave Total ContractedThrough 2027~500MW (12-yr contracts; $8.7B potential) ~590MW after $1.2B Denton expansion; $10.2B potential Raised
Colocation Run-Rate RevenueEntering 2026Not previously quantified~$360M annualized entering 2026 New
2025 Effective Tax RateFY 20252024 modeled ~23% 22% 2025 Lowered
CoreWeave Capex StructureOngoingClient funds virtually all CapEx; take-or-pay Structure affirmed; CORZ to fund $104M for added 70MW; client funds rest Maintained/updated
Disclosure cadence2025Monthly BTC production updates (historical) Ceasing monthly BTC production reporting; shifting to monthly construction updates Changed

Earnings Call Themes & Trends

TopicQ3 2024 (Q-2)Q4 2024 (Q-1)Q1 2025 (Current)Trend
AI/Colocation buildoutFully contracted ~500MW; path to >1.0GW by 2027 Continued execution; 16MW Austin online On track for 250MW in 2025; Denton 8MW then ~40MW in Q2; “one of the largest GPU clusters” Accelerating
Customer diversificationSeeking new clients; 100MW reallocated to HPC New Alabama site for multi-tenant prospects Pipeline includes 50–100MW enterprise deals; target CoreWeave <50% capacity by 2028 Building
Supply chain & tariffsWatching switchboards/STS/gensets constraints —Tariffs likely lift CapEx 5–10% and lease rates near-term; equipment for ’25 largely secured Manageable; pricing up
Financing & leverage$460M 3% converts; debt refi $625M 0% converts; cash $836M YE Liquidity ~$780M (cash+BTC); net debt/Adj. EBITDA target ~4x over time Improved flexibility
BTC mining economicsCash cost/BTC $42.4k in Q3 Cash cost/BTC ~$51.0k Cash cost/BTC ~$56.6k; 719 BTC mined vs 974 Q4 Tougher post-halving

Management Commentary

  • CEO (press release): “We have transformed vision into execution, delivering infrastructure at scale and positioning ourselves at the center of one of the most important shifts in modern computing” .
  • CEO (call): “This is a take-or-pay fixed price contract… CoreWeave is funding virtually all of the CapEx associated with these deployments,” underscoring capital-light growth .
  • COO (call): “Denton… will deliver 260MW… we expect to deliver the first tranche of 8MW… and an additional 40MW by the end of the second quarter,” highlighting project pace .
  • CFO (call): “We had approximately $780 million of liquidity, including cash, cash equivalents, and Bitcoin… over time, we believe our net debt to adjusted EBITDA leverage can… trend toward ~4x,” and will hedge BTC exposure .

Q&A Highlights

  • Diversification timeline and sizes: Large enterprise deals of 50–100MW are moving faster than hyperscale, with acceptable credits (>$75B mkt caps) and better returns; aim to reduce CoreWeave to <50% by 2028 .
  • Tariffs and pricing: Management expects tariffs to push CapEx up 5–10% and industry lease rates higher; CORZ expects to manage costs via its supply chain .
  • Deal structures: Future contracts will blend NRC (upfront) and MRC (monthly) economics, with clients increasingly funding part of CapEx; traditional project finance for the rest .
  • CoreWeave concentration: Not viewed as a deterrent; execution at Denton and large-scale GPU deployments expected to build broader customer confidence .
  • CapEx escrow mechanics: CoreWeave’s escrow was eliminated for efficiency; CORZ still only pays vendors after receiving funds per contract .

Estimates Context

  • Street consensus: S&P Global consensus estimates for Q1 2025 and Q2 2025 were unavailable at the time of analysis; we cannot assess revenue/EPS beats or misses versus Street (S&P Global consensus unavailable).
  • Implications: Given the non-cash warrant/CVR gain driving GAAP EPS, investors will likely emphasize revenue quality, colocation ramp cadence, Adjusted EBITDA trajectory, and construction milestones rather than GAAP EPS in the near term .

Key Takeaways for Investors

  • Investment narrative shift: CORZ is transitioning from Bitcoin miner to AI colocation platform with take-or-pay, largely client-funded contracts that support structurally higher margins over time .
  • 2025 execution path: Watch Denton turn-ups (8MW, then ~40MW in Q2) and progress toward 250MW delivered by YE25; each milestone should de-risk the $360M 2026 colocation run rate .
  • Pipeline leverage: Large enterprise opportunity (50–100MW) may diversify customer base and enhance returns; monitor new site announcements and signed offtakes in 2025 .
  • Financial optics: Q1 GAAP net income is not reflective of operating performance (driven by $621.5M non-cash fair value gain); focus on Adjusted EBITDA and segment margins as colocation scales .
  • BTC mining headwinds: Post-halving economics and conversions reduced BTC output and raised cash cost/BTC; the business is being deemphasized while AI colocation scales .
  • Balance sheet capacity: ~$698M cash, $80.6M digital assets, shrinking warrant liabilities, and access to converts give CORZ flexibility to fund targeted M&A and organic site expansions .
  • Disclosure shift: Expect monthly construction updates (not BTC production) aligning disclosures with the AI colocation thesis; near-term stock catalysts likely tied to delivery milestones and new customer signings .

Supporting Documents and Press Releases

  • Q1 2025 press release and 8-K: revenue/margins, non-cash gains, liquidity, segment detail .
  • Q1 2025 call transcript: strategy, Denton timeline, pipeline, financing, BTC metrics .
  • Q4 2024 results: sequential comps; BTC cost, cash at YE .
  • Q3 2024 8-K/presentation: initial 500MW contract, timeline, costs, supply chain context .
  • CoreWeave expansion (Feb 26, 2025): 70MW Denton add; total ~590MW, ~$10.2B potential .