Bitcoin miner Core Scientific reports $805 million net loss in Q2

U.S. publicly-traded bitcoin miner Core Scientific reported a net loss of $804.9 million in the second quarter of 2024, compared to a net loss of $9.3 million for the same period in the prior year. 

According to its latest financial report filed Wednesday, these staggering losses were primarily driven by mandatory $796 million “non-cash mark-to-market adjustments” to its warrants and contingent value rights due to its rising stock price. Core Scientific issued these over-the-counter traded CVRs to debt holders during its Chapter 11 bankruptcy process in 2024.

It mined 1,680 bitcoin (~$92 million) during the quarter—a significant decrease from previous quarters due to the halving and increased competition—at an average cost of $29,900 per coin.

“We are pleased with the company’s performance, especially in light of the halving and 68% increase in the network hashrate,” Chief Financial Officer Denise Sterling said Wednesday on the earnings call. 

Operating expenses increased by $4.3 million while operating income decreased to $6.6 million from $9.5 million compared to the second quarter of 2023. 

However, the firm’s revenue increased to $141.1 million, up from $126.9 million in Q2 of 2023. The mandatory conversion of its warrants and CRVs removed $260 million in debt from its balance sheet. CEO Adam Sullivan noted the company’s total debt has dropped by about 60% since the start of the year. 

Core’s stock (ticker CORZ) rose 1.13% to $9.82 following the earnings release.

Core Scientific is undergoing a strategy shift in the post-halving world. The firm is aggressively building out its infrastructure, including expanding its Denton, Texas, data center to approximately 830 megawatts. Additionally, it signed an agreement to purchase and deploy next-generation mining chips from Jack Dorsey’s Block (formerly Square).

The company is also hedging the growing risks of bitcoin mining by expanding its high-performance computing business. On Tuesday, it announced that it expanded its deal to supply computing power to AI firm CoreWeave.

“We’re building a portfolio that is attractive to these end clients,” Sullivan said on the earnings call, noting it is looking to diversify its client base. “We have a great story right now. We’re on the leading edge of both bitcoin mining and HPC — two of the highest growth industries.”