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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Core Scientific Inc | NASDAQ:CORZ | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.12 | 3.75% | 3.32 | 3.32 | 3.33 | 3.39 | 3.21 | 3.26 | 775,869 | 17:32:53 |
Core Scientific, Inc. (NASDAQ: CORZ), a leader in high-performance, net carbon neutral blockchain infrastructure and software solutions, reported its consolidated financial results for the fiscal year ended December 31, 2021.
This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20220329005911/en/
Fiscal Year 2021 Financial Highlights (Compared to Fiscal Year 2020)
“Our team produced strong results in 2021, highlighted by revenue of $544.5 million, net income of $47.3 million and adjusted EBITDA of $238.9 million,” said Mike Levitt, Core Scientific Chief Executive Officer. “Our total hashrate increased from less than 3.0 EH/s at year end 2020 to 13.5 EH/s at year end 2021. This market-leading growth generated over 5,700 self-mined bitcoins in 2021. In the first two months of 2022 our total hashrate grew to 15.9 EH/s and we self-mined over 2,000 bitcoins. Across our business we are executing our plans effectively and remain well positioned to continue expanding our capacity and creating shareholder value.”
FISCAL YEAR 2021 FULL YEAR FINANCIAL RESULTS
Total revenue increased by $484.2 million or 803%, to $544.5 million in 2021 from $60.3 million in 2020.
Total hosting revenue increased by $37.7 million, or 91%, to $79.3 million in 2021 from $41.6 million in 2020. The increase was driven by the execution of new customer hosting contracts for miners deployed during the year ended December 31, 2021.
Total equipment sales increased by $235.6 million, or 1,871%, to $248.2 million in 2021 from $12.6 million in 2020. The increase was driven by higher demand for new generation mining equipment.
Digital asset mining income increased by $210.8 million, or 3,440%, to $216.9 million in 2021 from $6.1 million in 2020. The year over year growth in mining income was driven by an increase in our self-mining hash rate and higher bitcoin prices. Our self-mining hash rate increased by 1,772%, to 6.6 EH/s in 2021 from 0.35 EH/s in 2020. The total number of bitcoins awarded in 2021 (excluding 1,746 of bitcoins mined by Blockcap prior to its acquisition on July 30, 2021) was 4,0233 compared to 3283 in 2020. The average price of bitcoin in 2021 was $47,437 compared to $14,357 in 2020, an improvement of 230%.
Cost of revenue increased by $254.7 million or 500%, to $305.6 million in 2021 from $50.9 million in 2020. The increase was primarily attributable to an increase in the cost of equipment sold of $166.8 million, higher power consumption driven by increases in both our self-mining and hosted fleet of $53.4 million, increased depreciation expense of $21.3 million driven by the deployment of self-mining units, facilities depreciation of $1.9 million, higher personnel and facilities operating costs driven by the opening and expansion of our data centers of $7.2 million and stock-based compensation of $4.1 million. As a percentage of total revenue, cost of revenue totaled 56% and 84% for the year ended December 31, 2021 and 2020, respectively.
Gross profit increased by $229.5 million, or 2,443%, to $238.9 million in 2021 from $9.4 million in 2020. The increase in gross profit was driven primarily by a $163.6 million increase in gross profit for the mining segment, which had a gross margin of 77% in 2021 compared to 51% in 2020. Also contributing to the increase in gross profit was a $65.9 million increase in gross profit for the Equipment Sales and Hosting Segment, which had a gross margin of 22% in 2021 compared to 12% in 2020, driven by higher margins on equipment sales.
Operating income increased $137.8 million to $131.5 million in 2021 from an operating loss of $6.3 million in 2020. The increase in operating income was predominantly due to the $229.5 million increase in gross profit described above, primarily offset by $46.0 million of higher general and administrative expenses, which was driven by $29.8 million of higher stock-based compensation expense, and $37.2 million of higher impairments of digital currency assets, which was driven by a change we made to our digital asset investment policy in the second half of 2021 to begin holding a more significant portion of our digital assets mined on our balance sheet.
Net income increased $59.5 million to $47.3 million in 2021 from a net loss of $12.2 million in 2020. The increase in net income was due to the $137.8 million increase in operating income described above, primarily offset by $41.3 million of non-operating expenses related to our convertible notes, consisting of $25.3 million of interest expense and $16.0 million of other fair value adjustments, a $14.6 million increase in interest expense from other financing arrangements, including a senior secured credit facility and several equipment financing agreements for which the proceeds were used to acquire self-mining equipment and to fund the build out of our hosting and self-mining facilities, and a $6.7 million increase in loss from debt extinguishments due to the payoff of senior secured loans in April 2021.
Adjusted EBITDA increased $232.9 million to $238.9 million in 2021 from $6.1 million in 2020. The increase was due to higher gross profit, excluding depreciation and amortization, partially offset by higher operating expenses, excluding share-based compensation and depreciation and amortization.
As of December 31, 2021, cash and cash equivalents were $117.9 million and restricted cash was $13.8 million.
As of December 31, 2021, the Company had a total Bitcoin balance of 5,296. The carrying value of our mined digital assets was $234.3 million, which reflects impairment charges of $37.2 million year-to-date.
OUTLOOK
In 2022, the Company expects to achieve total hashrate of between 40 EH/s and 42 EH/s, with total power between 1,200 MW and 1,300 MW.
The foregoing estimates are forward-looking and reflect management's view of current and future market conditions, subject to certain risks and uncertainties and general economic and business conditions in the United States and elsewhere in the world. Investors are reminded that actual results may differ materially from these estimates.
DAILY PRODUCTION REPORTING
Core Scientific anticipates providing daily bitcoin production beginning early in April 2022 via www.corescientific.com.
CONFERENCE CALL AND WEBCAST
In conjunction with this release, Core Scientific, Inc. will host a conference call today, Tuesday, March 29, 2022, at 4:30 pm Eastern Time that will be webcast live. Mike Levitt, Chief Executive Officer, Michael Trzupek, Chief Financial Officer and Steven A. Gitlin, Senior Vice President Investor Relations, will host the call.
Investors may dial into the call by using the following telephone numbers, 1 (844) 200-6205 (U.S. toll-free), 1 (646) 904-5544 (U.S. local) or 1 (929) 526-1599 (international) and providing the access code 892840 five to ten minutes prior to the start time to allow for registration.
Investors with Internet access may listen to the live audio webcast via the Investor Relations page of the Core Scientific, Inc. website, http://investors.corescientific.com. Please allow 15 minutes prior to the call to download and install any necessary audio software. A replay of the audio webcast will be available for one year.
A supplementary investor presentation for the full fiscal year 2021 can be accessed at https://investors.corescientific.com/investors/events-and-presentations/default.aspx.
AUDIO REPLAY
An audio replay of the event will be archived on the Investor Relations section of the Company's website at http://investors.corescientific.com and via telephone by dialing 1 (866) 813-9403 (U.S. toll free), 1 (929) 458-6194 (U.S. local) or 44 (204) 525-0658 (all other locations) and entering Access Code 892840.
ABOUT CORE SCIENTIFIC
Core Scientific is one of the largest publicly traded, net carbon-neutral blockchain infrastructure providers and miners of digital assets in North America. Core Scientific has operated blockchain infrastructure in North America since 2017, using its facilities and intellectual property portfolio that has grown to more than 70 patents or applications for digital asset hosted mining and self-mining. Core Scientific operates data centers in Georgia, Kentucky, North Carolina, North Dakota and Texas, and expects to commence operations in Oklahoma in the second half of 2022. Core Scientific’s proprietary Minder® fleet management software combines the Company’s hosting expertise with data analytics to deliver maximum uptime, alerting, monitoring and management of all miners in the Company’s network. To learn more, visit www.corescientific.com.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this press release may constitute “forward-looking statements” for purposes of the federal securities laws. Our forward-looking statements include, but are not limited to, statements regarding our and our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “will,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this press release may include, for example, statements about:
These forward-looking statements are based on information available as of the date of this press release, and current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
You should read this press release with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this press release and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and such statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely upon these statements.
Core Scientific, Inc.
Consolidated Balance Sheets
(in thousands, except par value)
(Unaudited)
December 31,
2021
2020
Assets
Current Assets:
Cash and cash equivalents
$ 117,871
$ 8,671
Restricted cash
13,807
50
Accounts receivable, net of allowance of $— and $620, respectively
1,382
792
Accounts receivable from related parties
300
315
Deposits for equipment
358,791
54,818
Digital currency assets
234,298
63
Prepaid expenses and other current assets
30,111
6,210
Total Current Assets
756,560
70,919
Property, plant and equipment, net
597,304
85,244
Goodwill
1,055,760
58,241
Intangible assets, net
8,195
6,674
Other noncurrent assets
21,045
4,499
Total Assets
$ 2,438,864
$ 225,577
Liabilities, Redeemable Preferred Stock and Stockholders’ Equity
Current Liabilities:
Accounts payable
$ 11,617
$ 3,057
Accrued expenses and other
67,862
3,585
Deferred revenue
63,417
38,113
Deferred revenue from related parties
72,945
6,730
Capital lease obligations, current portion
28,452
2,146
Notes payable, current portion
75,996
16,016
Total Current Liabilities
320,289
69,647
Capital lease obligations, net of current portion
62,145
2,263
Notes payable, net of current portion (includes $557,007 and $— at fair value)
652,213
19,864
Other noncurrent liabilities
18,531
103
Total Liabilities
1,053,178
91,877
Contingently redeemable preferred stock; $0.00001 par value; 50,000 shares authorized; 6,766 shares issued and outstanding at December 31, 2021 and 2020, respectively; $45,164 total liquidation preference for both December 31, 2021 and 2020
44,476
44,476
Stockholders’ Equity:
Common stock; $0.00001 par value; 300,000 and 200,000 shares authorized at December 31, 2021 and 2020, respectively; 169,719 and 98,607 shares issued and outstanding at December 31, 2021 and 2020, respectively
2
1
Additional paid-in capital
1,379,606
163,967
Accumulated deficit
(27,432
)
(74,744
)
Accumulated other comprehensive loss
(10,966
)
—
Total Stockholders’ Equity
1,341,210
89,224
Total Liabilities, Redeemable Preferred Stock and Stockholders’ Equity
$ 2,438,864
$ 225,577
Core Scientific, Inc.
Consolidated Statements of Operations
(in thousands, except per share amounts)
(Unaudited)
Year Ended December 31,
2021
2020
Revenue:
Hosting revenue from customers
$ 62,350
$ 34,615
Hosting revenue from related parties
16,973
6,983
Equipment sales to customers
138,376
11,193
Equipment sales to related parties
109,859
1,402
Digital asset mining income
216,925
6,127
Total revenue
544,483
60,320
Cost of revenue:
Cost of hosting services
77,678
36,934
Cost of equipment sales
177,785
11,017
Cost of digital asset mining
50,158
2,977
Total cost of revenue
305,621
50,928
Gross profit
238,862
9,392
(Loss) gain on legal settlements
(2,636
)
5,814
Gain from sales of digital currency assets
4,814
69
Impairment of digital currency assets
(37,206
)
(4
)
Operating expenses:
Research and development
7,674
5,271
Sales and marketing
4,062
1,771
General and administrative
60,604
14,556
Total operating expenses
72,340
21,598
Operating income (loss)
131,494
(6,327
)
Non-operating expenses, net:
Loss on debt from extinguishment
8,016
1,333
Interest expense, net
44,354
4,436
Other non-operating expenses, net
16,049
110
Total non-operating expense, net
68,419
5,879
Income (loss) before income taxes
63,075
(12,206
)
Income tax expense
15,763
—
Net income (loss)
$ 47,312
$ (12,206
)
Deemed dividend from common to preferred exchange
—
(10,478
)
Net income (loss) attributable to common stockholders
$ 47,312
$ (22,684
)
Net income (loss) per share
Basic
$ 0.37
$ (0.23
)
Diluted
$ 0.32
$ (0.23
)
Weighted average shares outstanding:
Basic
129,527
98,492
Diluted
145,802
98,492
Core Scientific, Inc.
Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
Year Ended December 31,
2021
2020
Cash flows from Operating Activities:
Net income (loss)
$ 47,312
$ (12,206
)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization
33,362
9,403
Stock-based compensation
38,937
3,037
Digital asset mining income
(216,925
)
(6,127
)
Deferred income taxes
9,528
—
Loss on legal settlements
2,636
—
Loss on debt extinguishment
8,016
1,333
Fair value adjustment on convertible notes
31,217
—
Amortization of debt discount and debt issuance costs
1,374
1,300
Losses on disposals of property, plant and equipment
118
2
Gain from sales of digital currency assets
—
—
Impairments of digital currency assets
37,206
4
Provision for doubtful accounts
—
616
Changes in working capital components:
Accounts receivable, net
(7,421
)
(1,303
)
Accounts receivable from related parties
16
(243
)
Digital currency assets
24,011
6,090
Deposits for equipment for sales to customers
(244,399
)
(54,736
)
Prepaid expenses and other current assets
(34,076
)
(2,353
)
Accounts payable
(21,991
)
(1,770
)
Accrued expenses and other
56,200
1,625
Deferred revenue
184,340
30,009
Other noncurrent assets and liabilities, net
(6,196
)
1,554
Net cash used in operating activities
(56,735
)
(23,765
)
Cash flows from Investing Activities:
Purchases of property, plant and equipment
(365,210
)
(13,668
)
Cash acquired (paid) in acquisitions
704
(1,568
)
Deposits for self-mining equipment
(59,275
)
—
Other
(59
)
92
Net cash used in investing activities
(423,840
)
(15,144
)
Cash flows from Financing Activities:
Proceeds from issuances of common stock options and warrants
513
2,642
Issuances of debt
670,750
45,178
Principal payments on debt
(57,049
)
(7,097
)
Payment for transaction cost
(10,682
)
—
Net cash provided by financing activities
603,532
40,723
Increase in cash, cash equivalents, and restricted cash
122,957
1,814
Cash, cash equivalents and restricted cash—beginning of period
8,721
6,907
Cash, cash equivalents and restricted cash—end of period
$ 131,678
$ 8,721
Core Scientific, Inc.
Segment Results
(in thousands)
(Unaudited)
Year Ended December 31,
2021
2020
Equipment Sales and Hosting Segment
Revenue:
Hosting revenue
$ 79,323
$ 41,598
Equipment sales
248,235
12,595
Total revenue
327,558
54,193
Cost of revenue:
Cost of hosting services
77,678
36,934
Cost of equipment sales
177,785
11,017
Total Cost of revenue
$ 255,463
$ 47,951
Gross profit
$ 72,095
$ 6,242
Gross margin4
22
%
12
%
Mining Segment
Digital asset mining income
$ 216,925
$ 6,127
Total revenue
216,925
6,127
Cost of revenue
50,158
2,977
Gross profit
$ 166,767
$ 3,150
Gross margin4
77
%
51
%
Consolidated
Consolidated total revenue
$ 544,483
$ 60,320
Consolidated cost of revenue
$ 305,621
$ 50,928
Consolidated gross profit
$ 238,862
$ 9,392
Consolidated gross margin4
44
%
16
%
Core Scientific, Inc. and Subsidiaries Non-GAAP Financial Measures (Unaudited)
Adjusted EBITDA is a non-GAAP financial measure defined as our net income or (loss), adjusted to eliminate the effect of (i) interest income, interest expense, and other income (expense), net; (ii) provision for income taxes; (iii) depreciation and amortization; (iv) stock-based compensation expense; and (v) certain additional non-cash and non-recurring items. For additional information, including the reconciliation of net income (loss) to Adjusted EBITDA, please refer to the table below. We believe Adjusted EBITDA is an important measure because it allows management, investors, and our board of directors to evaluate and compare our operating results, including our return on capital and operating efficiencies, from period-to-period by making the adjustments described above. In addition, it provides useful information to investors and others in understanding and evaluating our results of operations, as well as provides a useful measure for period-to-period comparisons of our business, as it removes the effect of net interest expense, taxes, certain non-cash items, variable charges, and timing differences. Moreover, we have included Adjusted EBITDA in this press release because it is a key measurement used by our management internally to make operating decisions, including those related to operating expenses, evaluate performance, and perform strategic and financial planning.
The above items are excluded from our Adjusted EBITDA measure because these items are non-cash in nature, or because the amount and timing of these items is unpredictable, not driven by core results of operations and renders comparisons with prior periods and competitors less meaningful. However, you should be aware that when evaluating Adjusted EBITDA, we may incur future expenses similar to those excluded when calculating these measures. Our presentation of this measure should not be construed as an inference that its future results will be unaffected by unusual or non-recurring items. Further, this non-GAAP financial measure should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. We compensate for these limitations by relying primarily on GAAP results and using Adjusted EBITDA on a supplemental basis. Our computation of Adjusted EBITDA may not be comparable to other similarly titled measures computed by other companies because not all companies calculate this measure in the same fashion. You should review the reconciliation of net income (loss) to Adjusted EBITDA below and not rely on any single financial measure to evaluate our business. The following table presents a reconciliation of net income (loss) to Adjusted EBITDA for the years ended December 31, 2021 and 2020:
The following tables reconcile the Non-GAAP Financial Measures to the most directly comparable U.S. GAAP financial performance measure, which is net income (loss), for the periods presented (in thousands):
Year Ended December 31,
2021
2020
Net income (loss)
$ 47,312
$ (12,206
)
Adjustments:
Interest expense, net
44,354
4,436
Income tax expense
15,763
—
Depreciation and amortization
33,362
9,403
Loss on debt from extinguishment
8,016
1,333
Stock-based compensation expense
38,937
3,037
Loss on legal settlements
2,636
—
Fair value adjustment on convertible notes
16,047
—
Gain from sales of digital currency assets
(4,814
)
(69
)
Impairment of digital currency assets
37,206
4
Losses on disposals of property, plant and equipment
118
2
Other non-cash and non-recurring items
3
111
Adjusted EBITDA
$ 238,940
$ 6,051
1 Adjusted EBITDA is a non-GAAP financial measure. For a reconciliation of Adjusted EBITDA to the most directly comparable U.S. GAAP financial measures, please refer to the “Non-GAAP Financial Measures” section of this press release. 2 Includes 1,746 of bitcoin mined by Blockcap during 2021 prior to being acquired on July 30, 2021. 3 The total number of bitcoin awarded on a combined self-mining basis for December 31, 2021 was 5,769 compared to 1,281 for the year ended December 31, 2020. 4 Gross margin is calculated as gross profit as a percentage of total revenue.
https://www.linkedin.com/company/corescientific/ https://twitter.com/core_scientific
View source version on businesswire.com: https://www.businesswire.com/news/home/20220329005911/en/
Investors: Steven Gitlin ir@corescientific.com
Media: press@corescientific.com
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