CORZ — Core Scientific, Inc.

Core Scientific, Inc. Q1 2026 Earnings Call Summary

1. Key Financial Results and Metrics:

• Colocation Revenue: Scaled to cover operating costs, now generating over $350 million in annualized GAAP revenue from 243 megawatts of billable capacity.
• Capital Raise: Closed a $3.3 billion financing at a 7.75% interest rate, with net proceeds of approximately $2.9 billion available for growth initiatives.
• SG&A Expenses: First quarter SG&A on a cash basis was just over $30 million, expected to remain stable with potential for opportunistic investments.
• Gross Profit Margin: Increased target for CoreWeave contract gross profit margin to 80%-85%, up from 75%-80%.

2. Strategic Updates and Business Highlights:

• Infrastructure Expansion: Developing one of the largest multisite AI infrastructure buildouts, with 245 megawatts currently earning revenue and an additional 200 megawatts expected soon.
• Site Development: Active projects in Pecos, Muskogee, Hunt, Dalton Phase III, and Auburn, with a focus on high-density colocation and behind-the-meter power solutions.
• Customer Engagement: Strong demand from hyperscalers, chip makers, AI labs, and Neo Cloud providers, with ongoing discussions and increased engagement noted since the beginning of the year.

3. Forward Guidance and Outlook:

• Capacity Growth: Expecting to deliver over 450 megawatts billable by summer 2026 and a total of 590 megawatts by early 2027.
• Capital Expenditures: Projecting approximately $2 billion in capital expenditures for 2026, including significant investments in new project developments.
• Market Positioning: Confident in the ability to secure new contracts with capacity available for delivery starting in early 2027.

4. Bad News, Challenges, or Points of Concern:

• Bitcoin Mining Transition: The company is winding down its Bitcoin mining operations, which may impact revenue streams as it shifts focus to colocation.
• Exclusivity Expiration: The exclusivity agreement with a hyperscaler expired without a contract, though three other hyperscalers have shown interest in the same sites.
• Labor Market Constraints: Labor availability remains a challenge in the construction market, although proactive measures are being taken to secure necessary resources.

5. Notable Q&A Insights:

• Hyperscaler Engagement: Discussions with hyperscalers are ongoing, with the company feeling more confident about securing contracts compared to previous quarters.
• Behind-the-Meter Solutions: The company is exploring both ownership and partnership models for behind-the-meter power solutions, with a focus on low-emission technologies.
• Competitive Advantage: Core Scientific's experience in building data centers and the ability to showcase active construction sites provide a competitive edge in negotiations.
• Market Dynamics: The company noted that hyperscalers are becoming more selective in choosing development partners, emphasizing the importance of proven execution capabilities.

Overall, Core Scientific is positioned for growth with strong demand for its services, significant capital backing, and a strategic focus on expanding its infrastructure while transitioning away from Bitcoin mining. However, challenges related to labor availability and the expiration of exclusivity agreements remain areas to monitor.