Core Scientific, Inc.

Greetings and welcome to the Core Scientific Third Quarter Fiscal Year 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce to your host, Steve Glitten, Senior Vice President President and Director of Investor Relations. Thank you, Steve. You may begin.

Good afternoon, ladies and gentlemen, and welcome to Core Scientific's third quarter fiscal year 2024 earnings call. This is Stephen Gitlin, Senior Vice President of Investor Relations for Core Scientific. At this time, all participants are in a listen-only mode. We will conduct a question and answer session after management's remarks. As a reminder, this conference is being recorded for replay purposes. Before we begin, please note that on this call, certain information presented contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, any statement other than historical or current facts that predict or indicate future events or trends, forecasts, performance, or achievements, and may contain words such as believe, anticipate, expect, estimate, intend, project, plan, or words or phrases with similar meaning. Forward-looking statements are based on current expectations, forecasts, and assumptions that involve risks and uncertainties that may cause actual results to differ materially. For further information on these risks and uncertainties, we encourage you to review the risk factors discussed in the company's annual report on Form 10-K filed with the Securities Exchange Commission and the special note regarding forward-looking statements contained in the company's current report on Form 8-K filed today and the earnings release and slide presentation contained therein. Today's presentation is available on our website at CoreScientific.com in the events and presentation section. The content of this conference call contains information that is accurate only as of today, November 6, 2024. The company undertakes no obligation to update statements made today to reflect events or circumstances occurring after today. Joining me today from Core Scientific, our CEO, Mr. Adam Sullivan, and Chief Financial Officer, Mrs. Denise Sterling. We will now begin with remarks from Adam Sullivan.

Thank you, Steve. And good afternoon. Last quarter, I summarized the progress we have made during this transformational year for Core Scientific. This quarter, I'm delighted to report that our progress continues. We have substantial momentum going into the remainder of the year with our improved position for growth and value creation, and we see favorable market fundamentals driving strong demand for high power data center infrastructure. I'll begin today's call with a summary of our recent achievements before briefly highlighting our third quarter financial performance. Denise will then review our third quarter financials, providing more details on the significant improvement in our capital structure before I describe our plans for the balance of the year and beyond. We will then take your questions. Our progress during and after the third quarter is highlighted on slide four. Notably, CoreWeave exercised its final two options for an additional 232 megawatts, contractually committing to all 500 megawatts of critical IT load we offered and achieving the first of our three 2024 catalysts we described last quarter. Additionally, we made meaningful progress to expand our capacity through new site acquisition and existing site expansions. With the CoreWeave commitment secured, I'm happy to announce that we have allocated an additional 100 megawatts of our infrastructure that was previously designated for Bitcoin mining to HPC. increasing our total capacity for HPC hosting to approximately 570 megawatts of critical IT load. With respect to new site acquisitions, we leased with an option to buy an existing data center in Alabama with 11 megawatts of critical IT load. This site has the potential to support an additional 55 megawatts of critical IT load. To consolidate and strengthen our Bitcoin mining business, we completed a 100 megawatt expansion at our Pecos, Texas Bitcoin mining data center to house our miners. We also completed significant miner migrations and began partial demolition at two of our data centers tapped for HPC hosting during the quarter. From a capital structure perspective, we completed a successful $460 million convertible node offering that enabled us to refinance our debt, increase cash on the balance sheet, and effectively put our Chapter 11 debt structure behind us. Slide five summarizes our revised allocation of infrastructure with the addition of the new Alabama data center. Slide six highlights our strategic, operational, and financial results in the third quarter. Starting with strategic updates, Our $460 million convertible note offering in August enabled us to improve our capital structure significantly by paying off debt, eliminating restrictions and covenants, and reducing our interest rate. The offering also gave us the ability to add cash to our balance sheet to finance operations and support the acquisition of new sites to expand our HVC hosting capacity. On the operational front, we earned 1,115 Bitcoin in the third quarter and generated total revenue of $95 million. Our diversification to HPC hosting showed positive momentum as third quarter revenue included $10.3 million from that segment. Gross loss of $0.2 million in the quarter and operating loss was $41 million, reflecting lower post-having hash price and higher operating expenses. And on financials, Our $455 million net loss was driven mainly by the significant quarter-over-quarter appreciation in share and warrant prices that required us to make mark-to-market adjustments to the value of our equity and adjusted EBITDA with $10 million in the third quarter. Denise will explain these in more detail shortly. To summarize our third quarter, we made great progress on our HBC hosting business and strengthened our balance sheet, even as we faced challenging Bitcoin mining economics in the first full quarter since the April halving. We are excited to build on this momentum. We are expanding our portfolio of powered digital infrastructure as illustrated on slide seven, which reflects our updated data centers, including our Austin and Alabama sites. We also include the contracted gross capacity of each site, which adds up to more than 1,200 megawatts. Now I'd like to turn the call over to Denise Sterling, our CFO, for more details on our financial performance and positioning. Denise?