U.S. publicly-traded bitcoin miner Core Scientific reported a net loss of $804.9 million in the second quarter of 2024

U.S. publicly-traded bitcoin miner Core Scientific reported a net loss of $804.9 million in the second quarter of 2024, compared to a net loss of $9.3 million for the same period in the prior year.

These staggering losses were primarily driven by mandatory $796 million “non-cash mark-to-market adjustments” to its warrants and contingent value rights (CVRs) due to its rising stock price, according to its latest financial report filed Wednesday with the Securities and Exchange Commission. Core Scientific issued these over-the-counter traded CVRs to debt holders during its Chapter 11 bankruptcy process in 2024.

The company mined 1,680 bitcoin (~$92 million) during the quarter — a significant decrease from previous quarters due to the halving and increased competition — at an average cost of $29,900 per coin.

“We are pleased with the company’s performance, especially in light of the halving and 68% increase in the network hashrate,” Chief Financial Officer Denise Sterling said Wednesday on the earnings call.

Core Scientific’s operating expenses increased by $4.3 million, while operating income decreased to $6.6 million from $9.5 million compared to the second quarter of 2023.

However, the firm’s revenue increased to $141.1 million, up from $126.9 million in Q2 of 2023. The mandatory conversion of its warrants and CRVs removed $260 million in debt from its balance sheet. CEO Adam Sullivan noted the company’s total debt has dropped by about 60% since the start of the year.

Core’s stock (ticker: CORZ) rose 1.13% to $9.82 following the earnings release.

Core Scientific is also shifting its strategy in the post-halving world. The firm is aggressively building out its infrastructure, including expanding its Denton, Texas, data center to approximately 830 megawatts. It also signed an agreement to purchase and deploy next-generation mining chips from Jack Dorsey’s Block (formerly Square).

The company is hedging the growing risks of bitcoin mining by expanding its high-performance computing business. On Tuesday, it announced that it expanded its deal to supply computing power to AI firm CoreWeave.

“We’re building a portfolio that is attractive to these end clients,” Sullivan said on the earnings call, noting it is looking to diversify its client base. “We have a great story right now. We’re on the leading edge of both bitcoin mining and HPC — two of the highest growth industries.”

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