Core Scientific (CORZ), a cryptocurrency mining company, released its Q4 2023 results, revealing a decline in year-on-year revenues and a significant reduction in net losses. As a result, the company’s shares dropped by 4% in after-hours trading.
According to the earnings release on March 12, Core Scientific reported a total revenue of $502.4 million for the previous year, marking a decrease of $137.9 million from the $640 million earned in 2022. The decline in revenue was attributed to the company’s exit from the mining rig sales business and the increase in the global Bitcoin hash rate in 2023.
In Q4 2023, the net revenue reached $141.9 million, showing an increase of $20.7 million compared to Q4 2022. Additionally, Core Scientific reported a significant improvement in net losses, with only $246.5 million for 2023, down from $2.14 billion in 2022. In Q4 2023, net losses amounted to $195.7 million, narrowing from $434.9 million in Q4 2022.
Core Scientific faced a financial crisis and underwent a 13-month restructuring process to address $400 million in debt caused by declining Bitcoin prices, rising energy costs, and debt tied to the bankrupt crypto lender Celsius. After emerging from bankruptcy, the company was relisted on the NASDAQ on Jan. 23.
In 2023, Core Scientific mined a total of 13,762 Bitcoin, making it the largest amount mined by any publicly traded mining firm in the United States.
The company’s shares experienced a drop of nearly 4.6% on March 12, ending the day at $3.54 per share. The decline continued in after-hours trading, falling by an additional nearly 4% to around $3.40.
Despite the market’s tepid response to its Q4 earnings, a spokesperson for Core Scientific expressed little concern and attributed the subdued price action to the overall performance of publicly traded Bitcoin miners in recent weeks. Other mining companies, such as Marathon Digital and Riot Blockchain, have also seen declines in their share prices.
Analysts suggest that the drop in miner share prices may be due to investors’ caution ahead of the Bitcoin halving event, which reduces the rewards paid to miners. A report by Cantor Fitzgerald warned that several mining firms might struggle to stay profitable after the halving. However, with Bitcoin’s current price of $72,000, assuming no significant changes in the hash rate and that the price remains above $62,000 after the halving in late April, none of the listed firms in the report will be in the red.
Core Scientific’s spokesperson stated that the company is well-positioned for the halving and has been updating its mining rigs with new models. Some analysts have turned bullish on Core Scientific, reflecting a broader trend of renewed market interest in crypto mining companies amid the recent surge in cryptocurrency prices. Capital market firm HC Wainright upgraded its rating of CORZ from “neutral” to “buy,” and investment banking research firm Compass Point also upgraded its rating and set a price target of $8.50.