Core Scientific, a cryptocurrency mining company, has reported a decline in year-on-year revenues in its Q4 2023 results, as well as a significant reduction in net losses. The company’s shares fell by 4% in after-hours trading.
According to the earnings release on March 12, Core Scientific’s total revenue for last year was $502.4 million, which is a decrease of $137.9 million from $640 million in 2022. The drop in yearly revenue was attributed to the company exiting the mining rig sales business and an increase in the global Bitcoin hash rate in 2023.
In the fourth quarter of 2023, the net revenue was $141.9 million, which is an increase of $20.7 million from Q4 2022. Additionally, the company reported a significant improvement in yearly net losses, with only $246.5 million in 2023 compared to a net loss of $2.14 billion in 2022. In Q4 2023, net losses totaled $195.7 million, narrowing from $434.9 million in Q4 2022.
Core Scientific went through a bankruptcy crisis and a 13-month restructuring process to resolve $400 million in debt caused by declining Bitcoin prices, rising energy costs, and debt tied to the bankrupt crypto lender Celsius. It was relisted on the NASDAQ on January 23.
The company also reported that it mined a total of 13,762 BTC last year, which is the largest amount mined by any publicly traded mining firm in the United States.
On March 12, Core Scientific’s shares saw a drop of nearly 4.6%, ending the day at $3.54 per share. The drop continued in after-hours trading, falling an additional nearly 4% to around $3.40.
However, a spokesperson for Core Scientific stated that the company is not overly concerned about the market’s response to its Q4 earnings. They pointed out that publicly traded Bitcoin miners have experienced dampened price action in recent weeks.
Shares in other publicly traded Bitcoin miners, such as Marathon Digital and Riot Blockchain, have also seen significant declines in the past month.
According to Blockware Solutions’ head analyst, Mitchell Askew, the drop in miner share prices may be due to investors growing wary of deploying capital into these firms before the Bitcoin halving event, which cuts the rewards paid to miners in half.
In January, Cantor Fitzgerald released a report stating that several Bitcoin mining firms may struggle to stay profitable following the halving. However, at Bitcoin’s current price of $72,000, none of the firms listed in the report will be in the red after the halving, assuming there are no significant changes in the hash rate and the price of Bitcoin remains above $62,000.
Core Scientific’s spokesperson stated that the company is well positioned heading into the halving. They mentioned that the company has been updating its mining rigs and focusing on increasing its hash rate utilization.
Several analysts have become bullish on Core Scientific, reflecting a wider trend of renewed market appetite for crypto mining companies. Capital market firm HC Wainright upgraded their rating of Core Scientific from “neutral” to “buy,” and investment banking research firm Compass Point also upgraded their rating and set a price target of $8.50.
Overall, Core Scientific remains optimistic about its future prospects in the crypto mining industry.