Core Scientific, a cryptocurrency mining company, experienced a decline in its year-on-year revenues in the fourth quarter of 2023, but also saw a significant reduction in net losses. As a result, its shares fell 4% during after-hours trading.
According to a recent earnings release on March 12, Core Scientific reported total revenue of $502.4 million for the previous year, which was a decrease of $137.9 million compared to the $640 million earned in 2022. The decline in revenue was attributed to the company’s exit from the mining rig sales business and an increase in the global Bitcoin hash rate in 2023.
However, the company did see an improvement in its net revenue for the fourth quarter of 2023, which amounted to $141.9 million, an increase of $20.7 million from the same period in 2022. Additionally, Core Scientific reported a significant decrease in its yearly net losses, totaling $246.5 million for 2023, compared to a net loss of $2.14 billion in 2022. In the fourth quarter of 2023, net losses narrowed to $195.7 million, down from $434.9 million in the fourth quarter of 2022.
Core Scientific recently relisted on the NASDAQ on January 23 after successfully emerging from a bankruptcy crisis and completing a 13-month restructuring process to resolve $400 million in debt. This debt was primarily caused by declining Bitcoin prices, rising energy costs, and debt associated with the bankrupt crypto lender Celsius.
In terms of mining operations, Core Scientific reported that it mined a total of 13,762 BTC in 2023, making it the largest amount mined by any publicly traded mining firm in the United States.
Despite these achievements, Core Scientific’s shares experienced a drop of nearly 4.6% on March 12, closing at $3.54 per share. This decline continued in after-hours trading, with the shares falling an additional nearly 4% to approximately $3.40.
However, a spokesperson for Core Scientific stated that the company was not overly concerned about the market’s response to its Q4 earnings. They pointed out that publicly traded Bitcoin miners had been experiencing dampened price action over the past few weeks.
Other publicly traded Bitcoin miners, such as Marathon Digital and Riot Blockchain, have also seen declines in their share prices recently. This trend may be attributed to investors becoming cautious about investing in mining firms ahead of the Bitcoin halving event, which cuts the rewards paid to miners in half.
A report released by Cantor Fitzgerald on January 26 suggested that several Bitcoin mining companies could struggle to remain profitable following the halving. However, with Bitcoin’s current price at $72,000, the firms listed in the report are expected to be profitable after the halving, assuming there are no significant changes in the hash rate and Bitcoin’s price remains above $62,000.
Core Scientific’s spokesperson claimed that the company was well-positioned for the halving and highlighted their efforts to update mining rigs and increase their hash rate utilization.
Despite the recent decline in share prices, several analysts have expressed a bullish outlook on Core Scientific and other crypto mining companies. Capital market firm HC Wainright upgraded their rating of Core Scientific from “neutral” to “buy,” while 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, as demonstrated by the positive market sentiment and the company’s efforts to adapt to market conditions.