AUSTIN, Texas - Core Scientific, Inc. (NASDAQ:CORZ), a prominent player in the bitcoin mining sector, has announced the initiation of a 72-megawatt capacity expansion at its Denton, Texas data center. This development is part of a broader strategy to complete 372 megawatts of partially built infrastructure across the company's Texas facilities.
The completion of this project, expected by the end of the second quarter of 2024, will increase the operational infrastructure at the Denton data center to 197 megawatts and the total Company-owned infrastructure to 817 megawatts.
Adam Sullivan, CEO of Core Scientific, emphasized the strategic benefits of owning and controlling infrastructure, including the ability to expand mining capacity and deploy upgrades to their proprietary mining technology stack. He also highlighted the company’s readiness to adapt to alternative forms of compute when opportunities arise.
The expansion is set to deliver more than 20 additional exahash of mining hash rate at an average incremental cost of around $200,000 per megawatt. This cost is touted to be less than half of what new construction or asset acquisition would require.
Core Scientific currently operates 125 megawatts of bitcoin mining at its Denton data center and 71 megawatts at its Pecos, Texas location. The company's data centers, which represent over 500 megawatts of operational bitcoin mining infrastructure, are also qualified to host alternative forms of compute. This flexibility is due to the design of their facilities, their proximity to major metropolitan areas, and access to high bandwidth telecommunications infrastructure.
The company claims that the cost to convert some of its bitcoin mining infrastructure to alternative compute hosting is lower than for new construction, and completion times could be up to 50% faster, providing financial benefits to high-performance computing hosting clients.
This announcement comes as Core Scientific continues to establish itself as a significant bitcoin miner and hosting solutions provider in North America. The company's revenue primarily comes from self-mining activities at its seven operational data centers across the United States.
The details of this expansion are based on a press release statement from Core Scientific, Inc.
InvestingPro Insights
As Core Scientific, Inc. (NASDAQ:CORZ) embarks on its ambitious expansion plan, the company's financial metrics shed light on its current market position and future prospects. With a market capitalization of $502.6 million, Core Scientific's valuation reflects a challenging period, characterized by a negative P/E ratio of -5.20 and an adjusted P/E ratio for the last twelve months as of Q4 2023 at -6.04. These figures highlight the market's sentiment towards the company's profitability challenges.
The company's revenue for the last twelve months as of Q4 2023 stands at $502.4 million, with a notable gross profit margin of 24.57%. Despite this, the revenue growth during this period has declined by -21.54%, indicating some headwinds in the company's financial performance. Nonetheless, Core Scientific has demonstrated a strong free cash flow yield, as per InvestingPro Tips, which might be an attractive point for investors looking for potential cash generation.
InvestingPro Tips also reveal that analysts are anticipating a sales decline in the current year, which could be a concern for investors banking on growth. Additionally, Core Scientific does not pay a dividend, which may influence investment decisions for income-focused shareholders. For those interested in a deeper analysis, there are 6 additional InvestingPro Tips available, which could provide further insights into Core Scientific's financial health and operational strategies.
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