10-Q · May 6, 2026
Core Scientific, Inc. reported Q1 2026 results with total revenue of $115.2 million, a significant increase of 45% from $79.5 million in Q1 2025, but sustained a net loss of $347.2 million due to substantial impairment…
Earnings analysis · 10-Q
CORZ earnings analysis
Filed July 28, 2026 · Our reading of the company's report
The latest report
Core Scientific's operating transition accelerated in Q2: revenue reached $164.2 million, up from $78.6 million a year earlier, as colocation revenue rose to $136.7 million and gross margin expanded to 42.7%. However,…
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Core Scientific's operating transition accelerated in Q2: revenue reached $164.2 million, up from $78.6 million a year earlier, as colocation revenue rose to $136.7 million and gross margin expanded to 42.7%. However, GAAP profitability remains highly volatile, with a $1.2 billion net loss and negative $723.3 million calculated six-month free cash flow amid $954.2 million of capex. Liquidity improved substantially to $1.77 billion of cash, but the company now carries approximately $4.4 billion of debt and remains dependent on CoreWeave for approximately 77% of first-half revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
Reported figures
- Earnings per share
- $-3.32
What stood out
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Revenue more than doubled as colocation ramped
Q2 revenue rose 109% year over year to $164.2 million from $78.6 million and 43% sequentially from $115.2 million in Q1 2026. Gross margin expanded to 42.7% from 6.4% in Q2 2025, driven by the colocation ramp.
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Colocation became the core earnings driver
Colocation revenue grew to $136.7 million from $10.6 million a year ago, and colocation gross profit increased to $80.0 million from $1.1 million. Billable capacity reached 395 MW at June 30, 2026, with 195 MW of the 590 MW contracted capacity still under construction or commissioning.
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Adjusted EBITDA improved despite GAAP loss
The company generated $41.1 million of adjusted EBITDA in Q2, up from $28.5 million in Q2 2025. This improvement occurred despite a GAAP net loss of $1.2 billion, which included a $1.05 billion warrant and contingent-value-right fair-value loss.
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Liquidity expanded and operating cash flow turned positive
Cash and equivalents increased to $1.77 billion at June 30, 2026 from $311.4 million at December 31, 2025. Six-month operating cash flow was positive $230.9 million versus negative $11.0 million a year earlier.
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Post-quarter leases broaden contracted demand
The July 27 AMD and Neocloud leases cover 529 MW of critical IT capacity under 15-year terms; AMD also has rights to reserve an additional 1,925 MW through December 28, 2028. The arrangement initially vested approximately 6.5 million warrant shares at a $23.47 exercise price.
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Power footprint expanded materially
Gross utility power capacity increased to 2,115 MW at June 30, 2026 from 1,426 MW at December 31, 2025. The company also acquired Hunt County land and power rights for $232.5 million, supporting approximately 430 MW of gross capacity.
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Capital intensity remains extremely high
Six-month capex reached $954.2 million, including $180.9 million funded by CoreWeave; calculated free cash flow was negative $723.3 million. The company has approximately $1.0 billion of future cash commitments, substantially due within 12 months.
What to watch
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Single-customer revenue concentration
A newly added risk factor highlights that colocation revenue remains concentrated in one counterparty: CoreWeave represented approximately 77% of total revenue for the six months ended June 30, 2026. Failure to add customers could constrain growth and leave revenue exposed to a single customer's demand and credit profile.
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Leverage and debt-service obligations increased
A newly added debt risk follows the financing transformation: aggregate principal debt was approximately $4.4 billion at June 30, 2026, including $3.30 billion of 7.75% senior secured notes. The notes begin semiannual interest payments on November 15, 2026 and carry principal amortization tied to lease commencement milestones.
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Material weakness remains unremediated
Disclosure controls were ineffective at June 30, 2026 because an internal-control material weakness remained unremediated. The weakness previously resulted in material PP&E and impairment misstatements and restatement of annual and interim financial statements; management targets remediation only after its December 31, 2026 assessment.
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Mining wind-down remains exposed to bitcoin economics
Self-mining revenue fell 66% to $21.5 million from $62.4 million, reflecting a 53% decline in bitcoin mined and a 27% decline in average bitcoin price. Mining economics also drove a $266.5 million first-half impairment charge, while the company held 848 bitcoin worth $50 million at June 30, 2026.
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Construction execution and tariff exposure
New-site construction faces cost and timing exposure: approximately $1.0 billion of future cash expenditures were committed at June 30, 2026, with substantially all expected within 12 months. Management said tariffs raised costs for certain non-customer-funded equipment and materials, while some equipment lead times exceed 12 months.
Management's outlook
No formal revenue or EPS guidance was provided in the 10-Q. Management expects colocation revenue to increase as contracted capacity is commissioned: 395 MW was billable against 590 MW leased at June 30, 2026; hosted mining is expected to conclude by December 31, 2026 and self-mining is being wound down.
Earlier filings 1
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.