Core Scientific(US:CORZ)2023-11-04 00:54Financial Performance - Total revenue for the three months ended September 30, 2023, was $112.9 million, a decrease of 30.6% compared to $162.6 million for the same period in 2022[164]. - Total revenue for the nine months ended September 30, 2023, was $360.5 million, down 30.6% from $519.1 million for the same period in 2022[165]. - Total revenue decreased by $49.7 million or 31%, to $112.9 million for the three months ended September 30, 2023, from $162.6 million for the same period in 2022[240]. - Total revenue for the company declined by 31% to $112.9 million in Q3 2023 from $162.6 million in Q3 2022[262]. - For the nine months ended September 30, 2023, consolidated total revenue decreased by 31% to $360.5 million compared to $519.1 million in the same period of 2022[283][287]. Operating Losses and Net Losses - Operating losses for the three months ended September 30, 2023, were $12.0 million, significantly improved from an operating loss of $401.4 million in the same period of 2022[164]. - Net losses for the three months ended September 30, 2023, were $41.1 million, compared to $434.8 million for the same period in 2022[164]. - The company had an operating income of $5.0 million for the nine months ended September 30, 2023, compared to an operating loss of $1.5 billion for the same period in 2022[165]. - Net losses for the nine months ended September 30, 2023, were $50.8 million, a significant reduction from $1.7 billion for the same period in 2022[165]. - Loss before income taxes improved by 90% to $41.0 million in Q3 2023, compared to a loss of $424.2 million in Q3 2022[262]. Adjusted EBITDA - Adjusted EBITDA for the three months ended September 30, 2023, was $27.9 million, an increase of 55.3% from $17.9 million in the same period of 2022[164]. - Adjusted EBITDA for the nine months ended September 30, 2023, was $113.0 million, compared to $170.1 million in the same period of 2022[216]. Revenue Breakdown - Total revenue primarily consists of hosting operations, equipment sales, and digital asset mining income, with hosting revenue based on electricity consumption contracts[223]. - Hosting revenue from customers decreased by $8.7 million or 24%, to $27.0 million for the three months ended September 30, 2023, from $35.7 million for the same period in 2022[241]. - Hosting revenue from related parties decreased by $6.4 million or 69%, to $2.8 million for the three months ended September 30, 2023, from $9.2 million for the same period in 2022[242]. - Digital asset mining revenue for the nine months ended September 30, 2023, was $278.1 million, while the end of period digital assets totaled $559,000[195]. - Digital asset mining revenue increased by $2.6 million or 3%, to $83.1 million for the three months ended September 30, 2023, from $80.5 million for the same period in 2022[239]. Cost and Expenses - Total cost of revenue decreased by $92.2 million or 49%, to $97.5 million for the three months ended September 30, 2023, from $189.6 million for the same period in 2022[239]. - Operating expenses decreased by $22.8 million or 46%, to $26.8 million for the three months ended September 30, 2023, from $49.6 million for the same period in 2022[239]. - Total operating expenses decreased by 46% to $26.8 million in Q3 2023 from $49.6 million in Q3 2022[262]. - Total operating expenses decreased by $132.2 million or 63%, to $78.1 million for the nine months ended September 30, 2023, from $210.4 million in 2022[271]. Impairments and Gains - The company recorded a $20.8 million gain on extinguishment of debt after transferring miners back to NYDIG, fully extinguishing the NYDIG Loan[176]. - Gain from sales of digital assets decreased by $10.7 million to $0.4 million for the three months ended September 30, 2023, from $11.0 million in the same period of 2022, with proceeds of $88.1 million against a carrying value of $88.5 million[247]. - Impairment of digital assets decreased by $7.3 million to $0.7 million for the three months ended September 30, 2023, from $8.0 million in the same period of 2022[248]. - Impairment of goodwill and other intangibles decreased by $268.5 million to nil for the three months ended September 30, 2023, from $268.5 million in the same period of 2022[249]. Cash and Liquidity - Cash and cash equivalents increased by 165% to $42.1 million as of September 30, 2023, compared to $15.9 million at the end of 2022[294]. - The company has $35.0 million of undrawn borrowing capacity under the Replacement DIP Facility as of September 30, 2023[288]. - Net cash provided by operating activities was $43.4 million for the nine months ended September 30, 2023, down from $89.2 million in the same period of 2022[297]. Market and Operational Strategy - The business strategy focuses on increasing self-mining capacity and entering strategic colocation opportunities to enhance revenue and profitability[189]. - The company faces significant competition in acquiring new miners and securing low-cost electricity, impacting its operational strategy[210]. - The cost of new mining equipment has become unpredictable due to market fluctuations, with recent declines in digital asset values leading to excess supply[208]. - The next bitcoin halvening is anticipated to occur in early 2024, reducing the mining reward from 6.25 bitcoin per block[205]. Other Notable Events - The company filed for Chapter 11 bankruptcy on December 21, 2022, and continues to operate under the jurisdiction of the Bankruptcy Court[166]. - The company remains classified as an "emerging growth company" under the JOBS Act, allowing it to take advantage of certain reporting exemptions until February 12, 2026, or until it no longer qualifies[309][310]. - There were no material changes to critical accounting policies and estimates during the nine months ended September 30, 2023[307].