Core Scientific Announces June 2024 Production and Operations Updates

Rhea-AI Summary

Core Scientific (Nasdaq: CORZ), a leading provider of digital infrastructure for bitcoin mining and hosting services in North America, announced key operational updates for June 2024. They secured HPC hosting contracts with CoreWeave for 270 MW of infrastructure, potentially generating over $4.7 billion in revenue over 12 years. The company mined 430 bitcoin in June, totaling 4,506 BTC for the year.

Additionally, they expanded their Denton, TX data center by 72 MW, increasing their total operational infrastructure to 832 MW. Plans to complete 100 MW of infrastructure at their Pecos, TX data center are underway. In total, Core Scientific operated 205,000 bitcoin miners, with an energized hash rate of 24.6 EH/s across its seven data centers.

The company earned nearly $31.6 million from bitcoin sales in June and continues to engage with potential clients for its remaining 230 MW of infrastructure. These developments align with their strategy to leverage high-power digital infrastructure in response to growing AI-driven data center demand.

Positive

• Secured HPC hosting contracts worth $4.7 billion over 12 years.
• Completed 72 MW expansion at Denton, TX data center, increasing total operational infrastructure to 832 MW.
• Earned 430 bitcoin in June, totaling 4,506 BTC for the year.
• Generated approximately $31.6 million from bitcoin sales in June.

Negative

• Decreased self-mined bitcoin from 447 in May to 430 in June.
• Reduced total energized hash rate from 26.1 EH/s in May to 24.6 EH/s in June.
• Lowered hosting bitcoin earned by clients from 128 BTC in May to 110 BTC in June.

Financial Analyst

Securing hosting contracts worth $4.7 billion over 12 years is noteworthy for Core Scientific. These agreements signify a solid revenue stream, diversifying the company's income beyond bitcoin mining. The guaranteed revenue over an extended period provides financial stability and predictability, beneficial for long-term planning and investments.

However, the company's reliance on significant contracts with a single client, CoreWeave, implies concentration risk. If CoreWeave faces financial difficulties or market challenges, Core Scientific's revenue stream could be impacted. Ensuring diversification across multiple clients would be prudent.

In Q2, Core Scientific earned 1,680 self-mined bitcoin and generated $116.8 million from bitcoin sales. This indicates a steady operational performance despite fluctuating bitcoin prices. The expansion to 832 MW at the Denton data center also shows proactive growth management, preparing for increased demand in HPC and bitcoin mining.

Short-term, investors can expect stable revenue from the hosting contracts. Long-term, the company's success will hinge on sustaining client relationships and managing operational costs effectively, especially given the energy-intensive nature of bitcoin mining.

Tech Expert

The company's focus on high-performance computing (HPC) hosting aligns well with current industry trends. With the rise of AI, machine learning and other data-intensive applications, the demand for HPC services is skyrocketing. Securing 270 MW for HPC hosting indicates Core Scientific is positioning itself as a key player in this expanding market.

Additionally, improvements in miner energy efficiency to 23.6 joules per terahash are significant. These optimizations not only enhance the company's mining economics but also demonstrate a commitment to sustainability in an industry often criticized for its high energy consumption.

The proactive infrastructure expansions in Texas further support this strategy. Increasing operational capacity enables the company to accommodate more clients and enhance service reliability, fundamental for HPC applications that require consistent and robust performance.

Moving forward, Core Scientific's ability to innovate and maintain cutting-edge technologies will be crucial. Staying ahead in the rapidly evolving tech landscape will ensure they can provide top-tier services and retain their competitive edge.

Market Research Analyst

Core Scientific's expansion into HPC hosting represents a strategic diversification from the volatile bitcoin mining sector. Hosting services, especially in HPC, are less susceptible to the fluctuations in cryptocurrency markets. This reduces the company's overall risk profile and attracts a broader range of investors.

The completion of a 72 MW expansion at the Denton data center and the start of a 100 MW project at Pecos, Texas, highlight the company's commitment to scaling its operations. These projects not only increase capacity but also signal confidence in future growth prospects.

However, it's essential to watch the competitive landscape. With rising demand for HPC services, more players are likely to enter the market. Core Scientific's success will depend on its ability to differentiate itself through service quality, reliability and technological innovations.

In the short term, these developments are positive, providing new revenue streams and operational efficiencies. Long-term, maintaining market leadership in both bitcoin mining and HPC hosting will be key to sustained growth and profitability.

Secured High-Performance Computing (HPC) Hosting Contracts with CoreWeave for 270 MW of Infrastructure, Representing Total Revenue Opportunity of More than $4.7 Billion over 12-Year Terms

Earned 430 Self-Mined Bitcoin for a Total of 4,506 Bitcoin Year-to-Date and 1,680 in the Second Quarter; Clients Earned an Estimated 110 Bitcoin at Our Data Centers in June

Completed 72 MW Expansion at Denton, TX Data Center, Increasing Operational Infrastructure to 832 MW, and Began Project to Complete 100 MW of Partially Built Infrastructure at Pecos, TX Data Center

AUSTIN, Texas--(BUSINESS WIRE)-- Core Scientific, Inc. (Nasdaq: CORZ) ("Core Scientific" or “the Company”), one of the largest owners and operators of high-powered digital infrastructure for bitcoin mining and hosting services in North America, today released unaudited production and operations updates for June 2024.

Core Scientific is one of the largest owners and operators of high-powered digital infrastructure for bitcoin mining and hosting services in North America (Photo: Business Wire)

“In June, we secured HPC hosting contracts for a total of 270 MW of our infrastructure, representing cumulative potential revenue of more than $4.7 billion over the 12-year terms,” said Adam Sullivan, Core Scientific’s Chief Executive Officer. “These agreements mark the beginning of a significant expansion of our hosting business and demonstrate the value of our high-power digital infrastructure. We continue to engage with multiple potential clients on our remaining 230 MW of infrastructure available for HPC hosting, including our initial client, CoreWeave, which retains a time-limited, non-exclusive option on the remaining capacity. We also continue to evaluate site acquisition opportunities to expand our footprint beyond the 1.2 GW of power we have currently contracted.”

“To support our HPC hosting and bitcoin mining businesses we completed a 72 MW expansion of our Denton, Texas data center to house relocated bitcoin miners from data centers designated for HPC hosting. We also improved our average self-miner energy efficiency to 23.6 joules per terahash, supporting favorable mining economics in this post-halving environment. By levering the talent and experience of our expert data center team at a time when the growth of artificial intelligence is driving unprecedented high-power data center demand, we believe that we can maximize the value of our digital infrastructure portfolio and create significant value for our shareholders,” Mr. Sullivan added.

Key Metrics Summary (unaudited)

Metric	June 2024	May 2024	April 2024	Second Qtr. 2024
Self-Mining Bitcoin Earned1	430	447	803	1,680
Hosting Bitcoin Earned by Clients2	110	128	265	503
Average Self-Mined Bitcoin Earned/Day	14.3	14.4	26.8	18.5
Self-Mining Energized Hash rate3	19.4	20.4	20.4	-
Hosting Energized Hash rate4	5.2	5.7	6.3	-
Total Energized Hash rate	24.6	26.1	26.7	-
Bitcoin Sold5	479	453	847	1,779
Bitcoin Sales Proceeds ($USD)	Appx. $31.6 million	Appx. $29.4 million	Appx. $55.8 million	Appx. $116.8 million
Average Self-Mining Fleet Efficiency (J/TH)6	23.61	24.23	25.78	-

Data Centers

As of month-end, the Company operated approximately 205,000 bitcoin miners in our data centers for both self-mining and hosting, representing a total energized hash rate of 24.6 EH/s at its seven data centers in Georgia, Kentucky, North Carolina, North Dakota and Texas.

Self-Mining

Core Scientific earned 430 bitcoin in June from its owned fleet of miners. As of month end, the Company operated approximately 164,000 owned bitcoin miners, representing approximately 80% of the bitcoin miners operating in its data centers and a total energized hash rate of 19.4 EH/s. To support the expansion of the Company’s HPC hosting business, bitcoin miners will be migrated from data centers designated for HPC hosting to bitcoin mining data centers. As of the end of June, approximately 1 EH/s of miners were in migration.

Hosting Services for Bitcoin Mining

In addition to its self-mining fleet, Core Scientific provided data center hosting services, technology and operating support for approximately 42,000 hosted, client-owned bitcoin miners, representing approximately 20% of the bitcoin miners operating in the Company’s data centers as of June 30, 2024. Client-owned bitcoin miners earned an estimated 110 bitcoin in June, including bitcoin rewards paid to the Company pursuant to proceeds sharing agreements.

Hosting Services for High-Performance Computing

Core Scientific’s 16 MW leased data center in Austin, Texas continued normal operations during the month of June. The Company secured two significant HPC hosting agreements with CoreWeave in June: a 200 MW agreement with total potential revenue over the life of its 12-year contracts of $3.5 billion, and a 70 MW agreement with total potential revenue of $1.225 billion over the life of its 12-year contracts.

Grid Support

In June, the Company implemented its post-halving strategy to maximize profitability by curtailing mining operations across portions of its fleet based on miner efficiency, hash price and power prices. This strategy reduced the consumption of power at its data centers on several occasions and delivered 23,366 megawatt hours to local grid partners.

Infrastructure Expansion

Core Scientific completed a 72 MW infrastructure expansion project at its Denton, Texas data center, increasing its total operational infrastructure to 832 MW. The Company also began a project to complete 100 MW of partially built infrastructure at its Pecos, Texas data center. These expansions will house bitcoin miners relocated from sites scheduled for modification to support HPC hosting.

Upcoming Events and Conferences

Bitcoin 2024 in Nashville, TN July 25-27, 2024 @ Booth #711

Additional Information

To learn more about Core Scientific’s HPC expertise and compelling market opportunity, view the Company’s June 2024 Investor and Analyst Day presentation here and access the accompanying audio webcast here.

ABOUT CORE SCIENTIFIC

Core Scientific is one of the largest owners and operators of high-powered digital infrastructure for bitcoin mining and hosting services in North America. Transforming energy into high value compute with superior efficiency at scale, we employ our own large fleet of computers (“miners”) to earn bitcoin for our own account and provide hosting services for large bitcoin mining and high-performance computing clients at our eight operational data centers in Georgia (2), Kentucky (1), North Carolina (1), North Dakota (1) and Texas (3). We derive the majority of our revenue from earning bitcoin for our own account (“self-mining”). To learn more, visit www.corescientific.com.

FORWARD LOOKING STATEMENTS AND EXPLANATORY NOTES

This press release contains “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to, statements regarding projections, estimates and forecasts of revenue and other financial and performance metrics, projections of market opportunity and expectations, the Company’s ability to scale and grow its business, source clean and renewable energy, the advantages and expected growth of the Company and the Company’s ability to source and retain talent. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as “aim,” “estimate,” “plan,” “project,” “forecast,” “goal,” “intend,” “will,” “expect,” “anticipate,” “believe,” “seek,” “target” or other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. All forward looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including: our ability to earn digital assets profitably and to attract customers for our hosting capabilities; our ability to maintain our competitive position as digital asset networks experience increases in total network hash rate; our ability to raise additional capital to continue our expansion efforts or other operations; our need for significant electric power and the limited availability of power resources; the potential failure in our critical systems, facilities or services we provide; the physical risks and regulatory changes relating to climate change; potential significant changes to the method of validating blockchain transactions; our vulnerability to physical security breaches, which could disrupt our operations; a potential slowdown in market and economic conditions, particularly those impacting the blockchain industry and the blockchain hosting market; the identification of material weaknesses in our internal control over financial reporting; price volatility of digital assets and bitcoin in particular; the “halving” of rewards available on the Bitcoin network, or the reduction of rewards on other networks, affecting our ability to generate revenue as our customers may not have an adequate incentive to continue mining and customers may cease mining operations altogether; the potential that insufficient awards from digital asset mining could disincentivize transaction processors from expending processing power on a particular network, which could negatively impact the utility of the network and further reduce the value of its digital assets; the requirements of our existing debt agreements for us to sell our digital assets earned from mining as they are received, preventing us from recognizing any gain from appreciation in the value of the digital assets we hold; potential changes in the interpretive positions of the SEC or its staff with respect to digital asset mining firms; the increasing likelihood that U.S. federal and state legislatures and regulatory agencies will enact laws and regulations to regulate digital assets and digital asset intermediaries; increasing scrutiny and changing expectations with respect to our ESG policies; the effectiveness of our compliance and risk management methods; the adequacy of our sources of recovery if the digital assets held by us are lost, stolen or destroyed due to third-party digital asset services; the effects of our emergence from bankruptcy on our financial results, business and business relationships; and our substantial level of indebtedness and our current liquidity constraints affecting our financial condition and ability to service our indebtedness. Any such forward-looking statements represent management’s estimates and beliefs as of the date of this press release. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change.

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¹ Self-Mining Bitcoin Earned represents bitcoin rewards earned by bitcoin miners owned and operated by Core Scientific
² Hosting Bitcoin Earned represents estimated bitcoin rewards earned by client-owned miners installed and operated by Core Scientific in our data centers, including bitcoin rewards earned by clients and paid to the Company pursuant to proceeds sharing agreements
³ Self-Mining Energized Hash Rate represents the total rated capacity of all Company-owned bitcoin miners installed and operating in Core Scientific’s data centers. Includes previous generation miners removed to accommodate new miners and then re-deployed opportunistically to exploit favorable mining economics.
⁴ Hosting Energized Hash Rate represents the total rated capacity of all hosted bitcoin miners owned by clients, installed and operated by Core Scientific in our data centers
⁵ Bitcoin Sold represents all bitcoin sold by the Company during the period, including self-mined and proceeds sharing rewards.
⁶ Average Self-Mining Fleet Efficiency (J/TH) represents the weighted average power consumption in Joules per terahash based on the actual efficiency of each model of miner operating in Core Scientific’s owned self-mining fleet˙

View source version on businesswire.com: https://www.businesswire.com/news/home/20240705879056/en/

Investors:

ir@corescientific.com

Media:

press@corescientific.com

Source: Core Scientific, Inc.

FAQ

What are the financial implications of Core Scientific's HPC hosting contracts announced in June 2024?

Core Scientific secured HPC hosting contracts totaling 270 MW with CoreWeave, representing a potential revenue opportunity of over $4.7 billion over 12 years.

How much bitcoin did Core Scientific mine in June 2024?

Core Scientific mined 430 bitcoin in June 2024.

What was the total operational infrastructure of Core Scientific after the June 2024 expansion?

After the June 2024 expansion, Core Scientific's total operational infrastructure increased to 832 MW.

How much revenue did Core Scientific generate from bitcoin sales in June 2024?

Core Scientific generated approximately $31.6 million from bitcoin sales in June 2024.

What was Core Scientific's total energized hash rate for June 2024?

Core Scientific's total energized hash rate for June 2024 was 24.6 EH/s.