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Call sheet · Q1'24

Core Scientific (CORZ)

Q1'24 earnings call · held May 8, 2024 · compared with the Q4'23 call · management-credibility review
7/12
Disclosure score
1 high, 4 medium, 3 low flags
Financial quality
Bottom line
CORZ revealed HPC hosting economics that could generate $500M+ in annual gross profit if they convert 500MW as claimed, but they're demanding 100% prepayment from clients which screams either massive negotiating leverage or hidden balance sheet stress. The bitcoin mining business is crushing it with 46% gross margins and market-leading production, yet management spent most of the call pivoting to their HPC dreams without a single signed contract beyond CoreWeave. The binding constraint isn't demand or bitcoin economics; it's their ability to fund growth without external capital while debt covenants prevent them from holding any bitcoin. As Sullivan admitted: 'We're waiting to make countercyclical miner purchases,' translation: we're cash constrained despite the rosy headline numbers. My view changes if they sign 100MW+ of HPC contracts in Q2 with prepayment terms intact.

The 30-second version

  • HPC hosting economics reveal $1M+ annual gross profit per megawatt at 75-80% margins, making bitcoin mining look like the appetizer
  • Q1 bitcoin production of 2,825 BTC crushed it, but management is already pivoting the narrative to 'balanced portfolio' between mining and HPC
  • Management now requires 100% prepayment for HPC conversions, signaling either balance sheet constraints or extreme negotiating leverage

What changed this quarter

MetricQ4'23Q1'24Change
Revenue$134.5M (Q4 2023)$179.3M (+49% YoY)+33% QoQ acceleration
Digital Asset Mining Revenue$105.5M$150.0M (+53% YoY)+42% QoQ surge on BTC price
Hosting Revenue$29.0M$29.3M (+30% YoY)Flat QoQ
Net Income-$246.5M (FY2023)$210.7MSwung to massive profit
Adjusted EBITDA$40.3M (Q1 2023)$88.0M+118% YoY explosion
Gross Margin~25% (FY2023 mining)43% total, 46% mining+1800 bps improvement
Bitcoin Mined13,762 (FY2023 total)2,825 in Q1On pace for record year
Self-Mining Hashrate25.2 EH (Feb 2024)Not disclosed for March 31Metric disappeared
Cash & Equivalents$50M (Dec 31)$98M + $16M restricted+96% QoQ build
Total Debt$998M (Dec 31)$608M-$390M reduction

Accountability tracked

7 new promises made4 narrative shifts flagged6 prior promises scored
Inside the full report
The complete write-up covers the full promise ledger with kept/missed calls, disclosure-quality scoring, the metrics-vanished check, verification items, and the questions to ask next quarter.
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Scores, kept-promise rates, and flags on this site reflect the author's opinion, applying a stated methodology to statements management made on public earnings calls. Informational and educational purposes only - not investment advice, a recommendation, or an offer to buy or sell any security. Sources believed reliable but not guaranteed; the author may hold positions in the securities discussed.

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