Core Scientific, Inc./tx (CORZQ)·Q2 2024 Earnings Summary

Executive Summary

• Q2 2024 revenue was $141.1M with consolidated gross margin of 28%; adjusted EBITDA was $46.0M, broadly stable YoY despite halving-related volume pressure .
• Reported net loss of $804.9M driven by a non-cash $796.0M mark-to-market on warrant and contingent value right liabilities tied to a quarter-over-quarter increase in equity value; underlying operating income was $6.6M .
• Strategic pivot accelerated: commenced HPC hosting operations (Austin, 16MW), generated $5.5M HPC revenue at 11% gross margin, and contracted an aggregate 382MW HPC capacity with ~$6.7B total potential revenue over 12 years .
• Deleveraging inflection: $26.4M of converts voluntarily equitized in Q2; mandatory conversion in early July equitized ~$233.6M more, removing ~$260M of debt from the balance sheet .
• Key near-term catalysts: HPC ramp timeline (382MW staged through 2026), capex credit mechanics and pass-through power economics, and continued self-mining efficiency/ASIC refresh amid post-halving economics .

What Went Well and What Went Wrong

What Went Well

• HPC commercialization underway: “commencing HPC hosting operations and revenue generation at our 16-megawatt Austin data center,” and signing “long-term contracts to host 382 megawatts…represent[ing] total potential revenue of approximately $6.7 billion over 12 years” .
• Operational resilience post-halving: earned 1,680 self-mined bitcoin with cash cost per BTC at ~$29,879 and cash-based hash cost of ~$0.030/TH, reflecting effective power and operational cost management .
• Balance sheet progress: convert equitization and warrant pathway reduce debt and highlight deleveraging potential; cash and equivalents of $96.1M at quarter-end .

What Went Wrong

• Headline GAAP optics: $804.9M net loss driven by a $796.0M non-cash mark-to-market on warrants/CVRs, overshadowing positive operating trends and adjusted EBITDA .
• Halving headwinds: Bitcoin mined declined YoY due to halving and higher network difficulty, compressing self-mining gross margin from 31% to 28% despite higher BTC prices and hash rate .
• Operating expense pressure from new business ramp: total OpEx rose to $31.4M (+$4.3M YoY), including $4.6M of HPC startup costs; sales and marketing more than doubled YoY .

Financial Results

Consolidated Performance vs Prior Periods

YoY and QoQ Comparison (Selected Items)

Segment Breakdown – Q2 2024

Key KPIs and Balance Sheet Snapshots

Note: Estimates from S&P Global were unavailable for CORZQ in our data pipeline at the time of writing; see Estimates Context section below.

Guidance Changes

Management did not provide formal revenue/EPS margin guidance ranges in Q2 materials. Instead, operational targets and HPC staged delivery milestones were outlined .

Earnings Call Themes & Trends

Management Commentary

• “We continue to demonstrate progress…successfully navigating the April halving…converting $260 million in convertible notes…commencing HPC hosting operations…signing long-term contracts to host 382 megawatts…[with] total potential revenue of approximately $6.7 billion over 12 years.” — Adam Sullivan, CEO .
• “Our highly experienced digital infrastructure team is preparing to modify several of our data centers to support HPC hosting…address supply chain challenges…[and] continue discussions…to contract our remaining 118 megawatts of infrastructure for HPC hosting.” — Adam Sullivan, CEO .
• Non-GAAP Adjusted EBITDA was $46.0M, roughly flat YoY; GAAP net loss was driven by the “net $796.0 million mark-to-market adjustment” on warrants and CVRs tied to stock price increase .

Q&A Highlights

• Topics addressed (per company materials and publicly available transcript sources): HPC contract economics (capex credit mechanics, 50% hosting fee repayment, pass-through power), staged MW energization in 2024–2026, and Austin 16MW ramp .
• Capital structure and deleveraging: convert mandatory conversion mechanics and subsequent warrant exercise scenarios; focus on reducing secured debt balances .
• Halving impact and fleet strategy: post-halving cash cost per BTC, ASIC refresh (Block 3nm supply for up to 15EH/s) and self-mining procurement plans (10–15K self-miners in 2H24) .

Note: Full Q2 call transcript was not available in our internal document catalog; highlights reflect the company’s press release/presentation and publicly available transcript sources .

Estimates Context

• Wall Street consensus (S&P Global) for Q2 2024 EPS, revenue, and EBITDA was unavailable for CORZQ in our SPGI mapping at the time of analysis; therefore, comparisons to consensus cannot be made. Values retrieved from S&P Global were unavailable due to data mapping constraints.
• Implications: Absent formal consensus anchors, investors should focus on sequential trajectory (Q1 to Q2) and YoY trends, and monitor sell-side revisions as HPC ramps and warrant/CVR mark-to-market noise normalizes .

Key Takeaways for Investors

• HPC is becoming a second growth engine: contracted 382MW with multi-year revenue visibility ($6.7B over 12 years) and attractive contribution margin once capex credits are repaid; watch energization cadence and margin normalization to ~80% after credit repayment .
• Separate optics from fundamentals: the outsized GAAP net loss was non-cash and tied to liability revaluation; adjusted EBITDA and operating income demonstrated resilient underlying performance in a post-halving quarter .
• Post-halving economics require efficiency: cash cost per BTC rose to ~$29.9K; continued ASIC refresh and site optimization remain critical to preserving self-mining margins .
• Deleveraging trajectory is improving: convert equitization materially reduced debt; monitor potential warrant exercises and required debt pay-downs to further strengthen the balance sheet .
• Near-term trading lens: headlines around GAAP losses may create volatility; positive catalysts include HPC deliveries, self-miner procurement in 2H24, and any further debt reduction .
• Medium-term thesis: balanced business mix (self-mining + HPC) can diversify revenue and cash flow quality; power pass-through structure mitigates commodity risk for HPC while providing recurring income .
• Watch KPIs quarterly: BTC mined, fleet J/TH, cash-based hash cost, and HPC MW energized are the metrics most likely to shift investor narrative and valuation multiples in coming quarters .