CORZ

Core Scientific, Inc. (CORZ) - Q2 2026 10-Q Summary

Business Context and Reporting Period

This report covers the quarterly period ended June 30, 2026. Core Scientific, Inc. is transitioning from a digital asset mining company to a high-density colocation (HDC) provider for AI and high-performance computing (HPC) workloads. As of June 30, 2026, the company operated 11 facilities across seven U.S. states with approximately 2.1 GW of gross utility power capacity. The company's revenue is currently heavily concentrated with a single colocation customer, CoreWeave.

Key Financial Metrics

Note: Net loss is significantly impacted by non-cash charges, primarily the change in fair value of warrant liabilities.

Material Changes vs. Prior Period

• Revenue Mix Shift: Colocation revenue surged to $136.7 million in Q2 2026 (83% of total), compared to $10.6 million in Q2 2025. Conversely, digital asset self-mining revenue declined to $21.5 million due to reduced hash rate and lower Bitcoin prices.
• Debt Restructuring: In May 2026, the company issued $3.3 billion of 7.75% Senior Secured Notes due 2031. Proceeds were used to repay a $1.0 billion Term Loan Facility and fund a debt service reserve account.
• Impairments and Losses: The YTD 2026 results include a $266.5 million impairment charge on mining-related assets (recognized in Q1) and a $41.9 million loss on contract termination with Block, Inc. in Q2.
• Warrant Liability Volatility: The change in fair value of warrants and contingent value rights resulted in a non-cash loss of $1.05 billion for Q2 2026 and $1.08 billion for YTD 2026, driving the reported net loss.

Guidance, Outlook, and Risks

• Strategic Outlook: Management expects colocation revenue to continue growing as contracted capacity (590 MW leased, 395 MW billable as of June 30) is commissioned. The company is actively winding down self-mining operations, with hosted mining expected to conclude by December 31, 2026.
• Recent Developments: On July 27, 2026, the company signed lease agreements with AMD for 377 MW and Neocloud for 152 MW, with potential for up to 2.5 GW of additional capacity. A warrant for 30 million shares was issued to AMD.
• Customer Concentration Risk: Approximately 77% of YTD 2026 revenue was derived from a single customer (CoreWeave). The company faces execution risk in diversifying its customer base.
• Internal Control Weakness: The company disclosed a material weakness in internal controls regarding the accounting for demolition and impairment of assets during facility conversions. This weakness remains unremediated as of June 30, 2026.
• Liquidity: The company holds $1.77 billion in cash and equivalents and $654.4 million in deferred revenue. Management believes liquidity is sufficient for the next 12 months despite $1.0 billion in committed construction expenditures.

Investor Verification Checklist

• Warrant Liability Valuation: Verify the assumptions used to value the $1.97 billion in warrant liabilities, as fluctuations here drive the majority of the reported net loss.
• CoreWeave Contract Performance: Monitor the billing commencement of the remaining 195 MW of leased capacity and the financial health of the single major customer.
• Debt Service Timing: Confirm the "First Installment Payment Date" for the $3.3 billion Senior Secured Notes, as principal amortization is contingent on rent commencement and revenue credit abatement.
• Internal Control Remediation: Track progress on the remediation plan for the material weakness in accounting for property, plant, and equipment conversions.
• Capital Expenditure Funding: Assess the ability to fund the $1.0 billion in construction commitments, noting that only $264 million is expected to be passed through to customers.