Business Context and Reporting Period
Company: Core Scientific, Inc. (CORZ)
Filing Type: Form 10-K (Annual Report)
Period Ended: December 31, 2025
Business Overview: Core Scientific designs, builds, and operates large-scale data centers for high-density colocation (HDC) services and digital asset mining. The company is executing a strategic transition from a primary focus on Bitcoin self-mining to high-density colocation for AI and High-Performance Computing (HPC) workloads. As of December 31, 2025, the company owned or leased ten data centers across seven U.S. states with approximately 1.4 GW of gross utility power capacity. The company emerged from Chapter 11 bankruptcy in January 2024.
Key Financial Metrics
| Metric | 2025 | 2024 |
|---|---|---|
| Total Revenue | $319.0 million | $510.7 million |
| Net Loss | $(288.6) million | $(1,437.9) million |
| Adjusted EBITDA | $(29.7) million | $157.4 million |
| Operating Loss | $(245.6) million | $(142.1) million |
| Cash and Cash Equivalents | $311.4 million | $836.2 million |
| Digital Assets (Fair Value) | $222.0 million | $23.9 million |
| Total Debt (Principal) | $1.09 billion | $1.12 billion |
| Capital Expenditures | $729.0 million | $95.0 million |
Note: 2024 comparative data has been restated to reflect corrections regarding the accounting for property, plant, and equipment.
Material Changes vs. Prior Period
- Revenue Decline: Total revenue decreased 37.5% to $319.0 million, driven primarily by a 44% drop in Digital Asset Self-Mining revenue ($229.2M vs. $408.7M) due to reduced hash rate and the Bitcoin halving, partially offset by a 168% increase in Colocation revenue ($65.4M vs. $24.4M).
- Improved Net Loss: Net loss narrowed significantly to $288.6 million from $1.44 billion in 2024. The 2024 loss was heavily impacted by a $1.37 billion non-cash increase in the fair value of warrants and contingent value rights, which was absent in 2025.
- Capital Intensity: Capital expenditures surged to $729.0 million in 2025 (from $95.0 million in 2024) to fund the conversion of mining facilities into high-density colocation infrastructure.
- Asset Impairment: Impairment charges for property, plant, and equipment dropped to $11.4 million in 2025 from $122.9 million in 2024, reflecting a lower volume of assets committed to demolition in the current period.
- Bitcoin Holdings: The company increased its Bitcoin holdings to 2,537 coins (valued at $222.0 million) as it shifted from a policy of immediate liquidation to holding assets for strategic sale.
Guidance, Outlook, Risks, and Unusual Items
Outlook and Strategy
Management intends to convert every megawatt in its portfolio to high-density colocation infrastructure over the next three years. Revenue from colocation is expected to grow as billable capacity is delivered to customers, primarily CoreWeave, which currently accounts for 100% of Colocation segment revenue. The company expects to monetize substantially all Bitcoin holdings in 2026 to fund capital expenditures.
Unusual Items
- Merger Termination: The company incurred $21.6 million in advisory and legal fees related to a proposed merger with CoreWeave, which was terminated in October 2025 following shareholder rejection.
- Restatement: The company restated prior financial statements due to errors in accounting for assets committed to demolition during facility conversions.
Material Risks
- Customer Concentration: The high-density colocation business is 100% dependent on a single customer (CoreWeave).
- Internal Control Weakness: The company identified a material weakness in internal controls over financial reporting regarding the accounting for asset demolition and impairment. KPMG issued an adverse opinion on internal controls.
- Liquidity and Debt: The company carries approximately $1.09 billion in debt, including $460 million in 2029 Convertible Notes and $625 million in 2031 Convertible Notes. Failure to raise additional capital could delay expansion.
- Bitcoin Volatility: Self-mining profitability remains highly sensitive to Bitcoin price fluctuations and network difficulty.
Investor Verification Checklist
- Restatement Impact: Verify the full extent of the restatement on prior periods and the specific remediation steps taken for the identified material weakness in internal controls.
- Colocation Revenue Ramp: Monitor the timeline for converting remaining mining capacity to billable colocation capacity and the diversification of the customer base beyond CoreWeave.
- Liquidity Position: Assess the sufficiency of the $311.4 million cash balance and expected Bitcoin sales to cover the $729 million+ capital expenditure run rate and debt service obligations.
- Bitcoin Treasury Strategy: Confirm the execution of the plan to sell Bitcoin holdings in 2026 and the impact of price volatility on the timing and proceeds of these sales.
- Debt Covenants: Review the terms of the 2029 and 2031 Convertible Notes for potential conversion triggers or repurchase obligations that could strain liquidity.