Core Scientific, Inc. (CORZZ) Q1 2026 Earnings Call Summary

1Key Financial Results and Metrics

Colocation Revenue: Achieved a billable capacity of 243 megawatts, translating to over $350 million in annualized GAAP revenue.

SG&A Expenses: First quarter SG&A on a cash basis was just over $30 million, expected to remain stable with potential for opportunistic growth investments.

CoreWeave Contract Margin: Increased target cash gross profit margin from 75%-80% to 80%-85% based on improved visibility into cost structures.

Capital Raise: Closed a $3.3 billion project bond financing at a 7.75% interest rate, netting approximately $2.9 billion for future growth initiatives.

2Strategic Updates and Business Highlights

Infrastructure Development: Core Scientific is advancing its infrastructure with five operational sites and plans to scale capacity significantly, including a pathway to 1.5 gigawatts at Muskogee and a similar expansion at Pecos.

Customer Engagement: Engaged with multiple hyperscalers and emerging customer segments, including chip makers and AI labs, with increased conversations since the beginning of the year.

Operational Milestones: Successfully transitioned Marble, NC, and Dalton, GA, facilities into operations, adding significant billable capacity.

Power Strategy: Focus on behind-the-meter solutions to enhance resilience and reduce supply chain risks, with construction underway for natural gas infrastructure.

3Forward Guidance and Outlook

Capacity Expansion: Expect 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 investments in new project developments and acquisitions.

Customer Contracts: Confident in the ability to secure new customer contracts, with readiness timelines for capacity delivery expected to be attractive to potential clients.

4Bad News, Challenges, or Points of Concern

Bitcoin Mining Transition: The company is winding down its Bitcoin mining operations, which may impact revenue as it transitions to high-density colocation.

Exclusivity Expiration: The expiration of exclusivity agreements with hyperscalers raised questions about deal timing and customer selection, although immediate re-engagement with other hyperscalers occurred.

Labor Market Constraints: Labor availability remains a challenge in the construction market, potentially impacting development timelines.

5Notable Q&A Insights

Hyperscaler Engagement: The expired exclusivity did not deter interest; multiple hyperscalers are now engaged with the Pecos and Muskogee sites.

Pricing Trends: Pricing for new contracts is expected to firm up due to rising labor and equipment costs.

Behind-the-Meter Solutions: Deployment timelines for behind-the-meter power solutions are projected at 12-14 months, with costs comparable to grid power.

Competitive Advantage: Core Scientific's experience and proactive development strategy position it favorably against competitors, particularly in securing contracts with hyperscalers and other large clients. Overall, Core Scientific is executing a robust growth strategy in the high-density colocation market, with strong customer demand and significant operational advancements, despite facing challenges related to transitioning from Bitcoin mining and labor market constraints.