Core Scientific, Inc./tx Q1 FY2025 earnings call

Diversifying Customer Base: There's strong, sustained demand for high-density infrastructure across customers, with a growing pipeline including hyperscale and large enterprise customers. Pipeline includes non-hyperscale deals ranging from 50 megawatt to 100 megawatt customers. Executing on CoreWeave Contracts: Made significant progress on 570 megawatts of billable capacity for CoreWeave across four locations. Denton facility is a key project, with first tranche 8 megawatts expected this month and additional 40 megawatts by end of quarter. CoreWeave contract is a take-or-pay fixed price contract with shared execution risk, funding most CapEx. Expanding Data Center Capacity: Confident in adding ~300 megawatts of billable capacity across existing sites by end of 2027 and targeting ~400 megawatts of buildable capacity through new site development over next three years. Also focused on strategic M&A aligning with core competencies. Construction Update: Progress on 570 megawatts of billable capacity for CoreWeave, with Denton facility making significant progress; secured equipment for 2025 delivery goals and insulated from global tariff impacts. Financials: As of end of first quarter, ~$780 million liquidity including cash, cash equivalents, and bitcoin. Plan to utilize traditional project financing structures, aiming for net debt to adjusted EBITDA leverage toward ~4 times. Shifted focus from monthly Bitcoin production reports to CoreWeave construction progress.

Total revenue for the first quarter was $79.5 million, down 16% sequentially. Adjusted EBITDA was negative $6.1 million. The sequential revenue decline was primarily due to mining disconnections and relocations as the company continued converting sites to support high-density colocation. Mining earnings in the first quarter were 719 Bitcoin compared to 974 in the fourth quarter. The colocation segment is the focus moving forward, with the company's strategic priorities centered around diversifying the customer base, executing CoreWeave contracts, and expanding data center capacity.

Construction Timeline: Confident in hitting milestones: 250 megawatts by end of 2025, inclusive of Austin, and 590 megawatts by early 2027. Customer Base Diversification: Aim to have Core represent less than 50% of billable capacity by end of 2028. Capital Allocation: Prioritize investments in capacity development, new sites, and strategic M&A, evaluating projects based on strategic merit, location, power availability, etc. Bitcoin: Focus on optimizing mining operations during transition, with ability to hedge Bitcoin exposure.

Market Fluctuations: Uncertainty in demand for AI infrastructure, though management sees sustained demand. Tariffs: Impact on CapEx requirements for new builds, though company believes supply chain team can manage. Contract Execution: Risks related to meeting milestones and contract terms with customers, though CoreWeave contract has shared execution risk.

Q: Given credit enhancements in leases, any guarantees from CoreWeave’s end customer or step-in rights?

A: Adam mentioned contract terms outlined in investor report, valuing CoreWeave contracts highly as commercial counterparty.

Q: Color on colocation initial CapEx and North Dakota remaining 100 megawatts?

A: Matt said Grand Forks site is preparing for build-out and expansion, acquiring land adjacent to existing site to tap into power infrastructure for high-density co-location facility.

Q: Positive on large enterprise opportunity vs hyperscalers, what changed?

A: Adam said aggregate hyperscaler demand consistent, but large enterprise conversations ramped up as they develop AI use cases and realize existing infrastructure not meeting needs.

Q: Construction milestones and monthly updates?

A: Matt said updates will provide color on ready for service dates and key project milestones as they approach commissioning and handover dates.

Q: Confidence in hitting construction timeline, what changed?

A: Adam said getting closer to commissioning dates of first building gives confidence to execute on future buildings.

Q: CapEx arrangement change clarity?

A: Jim said CapEx arrangement remains same, replicating structure where payments to contractors made after receiving funds from CoreWeave.

Q: Project milestones for 300 megawatts from existing sites?

A: Adam said in discussions with utilities, confident in ability to get 300 megawatts of billable capacity, with potential to expand sites and bring new customers.

Q: Terms on new deals vs CoreWeave deal?

A: Adam said CoreWeave contract unique, new deals evaluated on NRC and MRC components, excited about large enterprise return profiles.

Q: Conversations with customers changed due to tariffs and market dynamics?

A: Adam said tariffs cause uptick in CapEx requirements, lease rates likely to increase; large enterprises have quickened pace of demand discussions.

Q: IP developed with CoreWeave, proprietary?

A: Adam said Core Scientific and CoreWeave have tight collaboration, learning experiences will widen competitive advantage.

Q: M&A targets and acquisition criteria?

A: Matt said evaluating opportunities in new generation of data center capacity, focusing on continuing lead in GPU deployment platform.

Q: Digital asset mining exit plan and long lead time items?

A: Adam said digital asset mining hosting contracts will roll off in 2025; Matt said 2025 equipment secured, 2026 equipment procurement underway with good read-through on availability and cost.

Q: CoreWeave concentration deterrent for other hyperscale customers?

A: Adam said execution will breed confidence, and company's large-scale GPU deployment will gain hyperscaler confidence.

Q: Grand Forks site enterprise demand?

A: Matt said interest in Grand Forks site ranges from enterprises to content providers and hyperscalers.