Core Scientific, Inc. (CORZ) | The Buildout — AI Infrastructure
The Verdict
Core Scientific supplies the physical infrastructure layer underneath AI compute. It designs, builds, and operates large-scale purpose-built data centers and is deliberately converting its power-rich mining portfolio into ready-for-service, high-density colocation. The AI build-out depends on adding data halls quickly; Core Scientific's role is to take power, long-lead equipment, and construction capacity and turn them into billable megawatts for GPU-dense tenants.
| Market Cap | — |
| Revenue (TTM) | $440M |
| Revenue Growth | +26.4% |
| EBITDA Margin (TTM) | -20.0% |
| Net Debt | $2.5B |
| Earnings Beats | 3 of 7 |
| P/E (TTM) | — |
| EV/EBITDA (TTM) | — |
What We Like
- CoreWeave contract is 590 MW across five sites; 243 MW were billing as of May 6, 2026, with management equating that to more than $350M of annualized colocation GAAP revenue.
- Colocation segment gross margin rose from 5% in Q1 2025 to 57% in Q1 2026; management raised its CoreWeave cash gross margin target to 80–85%.
- $3.3B project bond closed May 6, 2026 with net proceeds around $2.9B, and management says most proceeds can fund projects outside the CoreWeave collateral box.
- 10-Q shows 685 MW of unleased customer power capacity at March 31, 2026 and a total forward pipeline of 4.5 GW, including 1.5 GW expansion plans at Muskogee and Pecos.
- Post-quarter AMD partnership announced July 28, 2026 has potential for up to 2.5 GW, anchored by ~530 MW across five sites and more than $14B potential base contracted revenue.
What We’re Watching
- No signed non-CoreWeave lease as of May 6, 2026; first hyperscaler exclusivity expired without a deal, and management said it is 'not satisfied'.
- Roughly $2B of planned 2026 capex and ~1 GW of pre-building sit ahead of contracts.
- May bond added $3.30B secured notes; the 10-Q warns of increased vulnerability, substantial cash debt service, and possible dilution through convertible notes.
- Q1 2026 included a $266.5M PP&E impairment and a $13.6M loss on disposal of PP&E.
The thesis has strengthened on execution and financing but remains unproven on diversification. Delivery milestones have been met, margins are expanding, and the bond gives funded pre-build capacity; whether AMD or a named hyperscaler converts into definitive contracted revenue is the next open question.
Earnings
Q1 2026 total revenue was $115.2M with consolidated gross margin of 25.8%. Colocation revenue reached $77.5M, up from $8.6M a year earlier, while GAAP net loss was $347.2M after a $266.5M property and equipment impairment.
| Metric | Q2 FY2026 | Q1 FY2026 | Q2 FY2025 | YoY |
|---|---|---|---|---|
| Revenue | $164M | $115M | $79M | +108.9% |
| Gross margin | 42.7% | 25.8% | 6.4% | +3630bps |
| EBITDA | −$57M | −$4M | −$5M | +1079.2% |
| EPS | $-3.55 | $-1.08 | $-2.95 | +20.6% |
| Billable colocation capacity | 243 MW | 225 MW | n/a | — |
Our colocation revenue scaled to a level sufficient to cover operating costs and begin expanding margins.— Jim Nygaard, Chief Financial Officer, May 6, 2026 earnings call
Management tone: Management shifted from projecting a near-term new-customer sign to saying it was actively engaged with multiple hyperscalers after exclusivity expired. It remained direct about the missed goal and brownfield construction difficulty, but reframed the stalled exclusivity as a demand signal rather than explaining why the deal failed.
Management Guidance
No formal full-year revenue or EPS guidance was issued. Management's milestone guide includes more than 450 MW of CoreWeave billing by the end of summer 2026, full 590 MW by early 2027, roughly $2B of 2026 capex, about $700M for the Hunt County and Polaris acquisitions, pre-building about 1 GW of new billable capacity, and wind-down of Bitcoin mining to one or two sites by year-end 2026.
Trajectory
Revenue is accelerating in the audited spine, moving from $81M in Q3 FY2025 to $115M in Q1 FY2026 and $164M in Q2 FY2026. Gross margin has expanded from 4.7% in Q3 FY2025 to 42.7% in Q2 FY2026. The driver is the CoreWeave billing ramp, while mining winds down; operating results still include large transition items such as a $13.6M PP&E disposal loss and $8.7M of colocation organizational and site startup costs in Q1 2026.
The Model
The model projects FY+1 revenue of $630M and EBITDA of $180M, a 28.6% margin, anchored by the CoreWeave billing ramp toward the full 590 MW. FY+2 revenue is projected at $1,007M with EBITDA of $574M, a 57.0% margin, as planned non-CoreWeave capacity begins delivering from the 4.5 GW pipeline.
| Metric | FY2025 | Next FY (E) | Following FY (E) |
|---|---|---|---|
| Revenue | $319M | $630M | $1.0B |
| YoY Growth | — | +97.5% | +59.8% |
| EBITDA | −$57M | $180M | $574M |
| EBITDA Margin | -17.8% | 28.6% | 57.0% |
Projections are the median of 5 independent model runs.
No formal full-year revenue or EPS guidance was issued. Management's milestone guide includes more than 450 MW of CoreWeave billing by the end of summer 2026, full 590 MW by early 2027, roughly $2B of 2026 capex, about $700M for the Hunt County and Polaris acquisitions, pre-building about 1 GW of new billable capacity, and wind-down of Bitcoin mining to one or two sites by year-end 2026.
What Could Go Right — and Wrong
- CoreWeave billing reaches more than 450 MW by end of summer 2026 and full 590 MW by early 2027.
- A named non-CoreWeave lease is signed and financed, reducing single-tenant concentration.
- The AMD partnership converts to definitive 15-year contracts across its initial ~530 MW and the larger up-to-2.5 GW path.
- The 80–85% CoreWeave cash gross margin target holds as more capacity bills.
- Non-CoreWeave site RFS milestones—Auburn H2 2026, Pecos within 12 months, Muskogee/Hunt/Dalton III H2 2027—stay on schedule.
- No new customer signs; the first exclusivity expiration pattern repeats across Pecos and Muskogee.
- Pre-building roughly 1 GW ahead of contracts leaves unleased capacity if demand softens.
- CoreWeave's SPV assignment or any change in the tenant relationship hits 100% of colocation revenue and bond collateral.
- Debt service on $3.30B secured notes consumes cash and limits flexibility; the 10-Q also flags possible dilution through convertible notes.
- Mining wind-down produces further impairments or stranded-asset costs beyond the Q1 $266.5M charge.
Looking Ahead
The next twelve months are defined by two tracks. The CoreWeave track aims for more than 450 MW billing by the end of summer 2026 and the full 590 MW by early 2027. The diversification track includes the post-quarter AMD framework, 685 MW of unleased capacity at March 31, and first non-CoreWeave-ready capacity such as Auburn's first 10 MW in H2 2026 and Pecos RFS within twelve months from May 2026; conversion into named, financed leases is the central proof.
- End of summer 2026CoreWeave >450 MW billable — Tests whether the next ~200 MW converts to billing on schedule.
- Mid-2026Denton campus completion — Final delivery phase for the largest CoreWeave site.
- H2 2026Auburn first 10 MW — First non-CoreWeave-ready capacity reached.
- Q2 2026Muskogee Phase 1 full delivery — 70 MW CoreWeave facility expected to reach full delivery in Q2 2026.
- Early 2027Full 590 MW CoreWeave — Completes the contracted CoreWeave AI factory portfolio.
- H2 2027Muskogee first non-CoreWeave building — First 82.5 MW non-CoreWeave building initial delivery expected H2 2027.
Financials
Annual Summary
| Metric | FY2024 | FY2025 | TTM | YoY |
|---|---|---|---|---|
| Revenue | $511M | $319M | $440M | -37.5% |
| Gross Margin | 18.9% | 11.9% | 28.3% | 700bps |
| EBITDA | $101M | −$57M | −$1.6B | -156.4% |
| EBITDA Margin | 19.8% | -17.8% | -20.0% | 3,759bps |
| Net Income | −$1.3B | −$293M | −$1.4B | +77.7% |
| Free Cash Flow | −$52M | −$461M | −$1.5B | — |
| Net Cash | — | — | — | — |
Key Ratios (Trailing)
- P/E TTM—
- EV/EBITDA TTM—
- EV/Revenue TTM—
- Price/FCF TTM—
- Gross Margin (TTM)28.3%
- EBITDA Margin (TTM)-20.0%
- Net Margin (TTM)-325.9%
- ROIC-107.5%
- SBC / Revenue21.3%
The Company
Core Scientific designs, builds, and operates large-scale, purpose-built data centers for high-density colocation and digital asset mining, with a deliberate pivot toward AI and HPC workloads. Its colocation segment provides space, power, cooling, facilities operations, security, and other services to third-party customers running machine-learning and AI workloads. The 10-K says the company intends to convert every megawatt in its portfolio to high-density colocation over the next three years.
Operationally, the company runs three segments—Colocation, Digital Asset Self-Mining, and Digital Asset Hosted Mining. Its 10-K power table spans facilities across Texas, Oklahoma, Georgia, North Carolina, Kentucky, North Dakota, and Alabama. The Q1 2026 10-Q records 1,275 MW of total leasable customer power capacity, with 590 MW leased to CoreWeave and 685 MW unleased; the company is now pre-building capacity ahead of leases at Pecos, Muskogee, Hunt County, Dalton Phase III, and Auburn.
Business Segments
Competitive Landscape
The company's 10-K names Aligned Data Centers and Applied Digital Corporation as competitors in the high-density colocation market.
- Aligned Data CentersNamed in the 10-K as a high-density colocation competitor; no further discussion in the supplied material.
- Applied Digital CorporationNamed in the 10-K as a miner converting to high-density colocation and as a self-mining/hosting competitor.
Supply Chain
Core Scientific sits at the physical infrastructure layer: downstream of power, electrical equipment, cooling, networking, and construction, and upstream of chips and cloud. Its core product is billable high-density colocation megawatts.