Core Scientific(US:CORZ)2024-08-09 03:54Financial Data and Key Metrics Changes - Total revenue for Q2 2024 was $141 million, with $111 million from digital asset self-mining, $25 million from digital asset hosted mining, and $5.5 million from HPC hosting [16][17] - Gross profit increased by 5% to $39 million, while operating income declined by 31% to $7 million [16] - Net loss for Q2 2024 was $804.9 million, significantly higher than the $9.3 million loss in the same period last year, primarily due to non-cash mark-to-market adjustments [27] - Adjusted EBITDA was $46 million, reflecting a 2% year-over-year increase [17][29] Business Line Data and Key Metrics Changes - Digital asset self-mining revenue increased by 14% year-over-year, driven by a 134% increase in bitcoin prices and a 28% increase in self-mining hash rate [18] - HPC hosting revenue of $5.5 million exceeded costs by $0.6 million, resulting in a GAAP gross margin of 11% [20] - The self-mined to hosted mining mix was 79% to 21% as of June 30, 2024 [30] Market Data and Key Metrics Changes - Power costs decreased to $0.0402 per kilowatt hour from $0.0425 in the prior year [25] - The company anticipates average power costs in 2024 to be between $0.042 and $0.044 per kilowatt hour [29] Company Strategy and Development Direction - The company is transitioning to HPC hosting while maintaining its position as a leading bitcoin mining company, with a focus on operational efficiency and cost management [14][42] - Core Scientific aims to expand its hosting business and diversify its client base, targeting both brownfield and greenfield opportunities [47][66] - The company plans to acquire 10,000 to 15,000 additional bitcoin miners in 2024 to enhance its self-mining fleet [35] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to execute its strategy and achieve significant revenue from HPC hosting contracts, projecting $6.7 billion in total revenue over 12 years [38][44] - The company is focused on improving its capital structure and reducing debt, with a significant reduction in secured convertible notes [34][68] - Management highlighted the importance of site selection and relationships with local utilities as key factors for future growth [92][94] Other Important Information - The company completed 72 megawatts of infrastructure at its Denton, Texas site, bringing total operational infrastructure to approximately 830 megawatts [11] - Stock price appreciation allowed for the conversion of $260 million in secured convertible notes, significantly reducing debt [12][33] Q&A Session Summary Question: Insights on funding for new HPC or bitcoin mining sites - Management indicated that contracts with CoreWeave open up various funding opportunities and that they are targeting less expensive sites for expansion [58][59] Question: Competitive dynamics in the HPC site selection market - Management noted competition from major players like Equinix and Digital Realty but emphasized their focus on brownfield opportunities [66] Question: Thoughts on leverage and balance sheet changes - Management stated that they are comfortable with their current capital structure but are evaluating opportunities to strengthen it as they grow [68][70] Question: Status of remaining 112 megawatts of data center capacity - Management confirmed ongoing discussions with CoreWeave and emphasized the importance of client diversification [72][74] Question: Impact of delays in black well shipments on delivery timelines - Management is closely monitoring the situation and is focused on executing facility deliveries alongside GPU shipments [76] Question: Supply and demand imbalances for energy - Management described the current market as tight, requiring expertise in site selection and negotiations [78][80] Question: International expansion plans - Management confirmed they are considering international opportunities but are currently focused on domestic negotiations [102][104]