Core Scientific (CORZ) 12 Aug 222022 Q2 Earnings call transcript

Good afternoon, ladies and gentlemen, and welcome to Core Scientific’s Second Quarter Fiscal Year 2022 Earnings Call. This is Steven Gitlin, Senior Vice President of Investor Relations for Core Scientific. At this time, all participants are in a listen-only mode.

We will conduct a question-and-answer session after management’s remarks.

As a reminder, this conference is being recorded for replay purposes.

XXXX. note statements this the within Litigation Act please presented certain Private begin, Reform forward-looking contains the of we that call on information Securities Before meaning of

that Forward-looking or phrases may future statements words performance and believe, or such achievements, with contain or limitation, intend, anticipate, include any expect, results, predict indicate estimates, or without forecast, imply words as meaning. may similar statement project, plan,

but may risks not current on expectations, and and based from governmental uncertainties, statements. involve technological actual our including business the to, are outside statements Forward-looking materially or and limited assumptions forecasts to competitive, cause economic, of that differ strategy forward-looking results factors control our that

information conference today of X-K the conference Events in with and Form & content statement in on call make our information the Safe this Form today, posting section. risks, Harbor For on accurate with The The contains along Core them XXXX. after website to update to corescientific.com revision earnings filing filed associated company to Presentations slide events as only presentation XX-Q SEC, contained at to that time-sensitive of XX, we circumstances This also no periodic these release remarks filed review and obligation reports occurring is today this or any with we’re August the the in earnings we’re release, reflect undertakes to any our forward-looking a Form statements XX-K or call. the you therein. the on the SEC, factors and and contained the further afternoon, encourage our Scientific’s with discussed presentation the risk

Financial Sterling. Chief from and Core Mr. Mrs. Scientific Denise me Officer, Officer, Levitt; Executive today Joining are Mike Chief

will begin Mike? from remarks Levitt. We Mike now with

thoughts entire current financial call quarter, to On comment our on our from how welcome more our United company Thank provide in second provide long-term earnings XXXX Scientific call. we’ll public on and performance, of success. than States. second we discuss team, company today’s our today’s conference the structuring facilities quarter On other for highlights market conditions, behalf you, Steve. servers our operates Core any mining are bitcoin in

eight have next to operation and quarters. data center begin within ninth our five in Oklahoma expect operating states in data few We centers the

later company purpose-built hold Our XXX,XXX over servers to be first square colleague year-end, to in CFO, I centers will detail approximately I’d expect our square owned approximately feet. this for XXX,XXX data operations call. over more to discuss servers million But than introduce XXX,XXX like plans more highlights. now our of our we financial one Denise and in feet. my discuss self-mining will Sterling, own which be in future operating half By our and

of million, increased results I months ended in as increase review bitcoin number XX% of consisting to equipment decrease Mike, self-mining, was to for The The driven for I June second and same self-mining to of decreased the produced revenue quarter to for will three as year XX% compared hosting price for XXX% the quarter $XX,XXX million the XXXX. hosting review by a of to was XXXX. afternoon, you, second – sales primarily sales months the total $XX.X will in equipment average million. by compared Thank $XX,XXX, our XXX million, $XX.X June $XXX by bitcoin from XXX% X,XXX Total the of compared revenue increased our to and one three by quarter XX, Total XX, an revenue. ended period $XX.X good ago.

in of personnel offset expenses million. XXXX primarily our a manufacturers sales $XXX.X data million deployments by and The consumption of facilities. and our compensation Related and of million self-mining ended by increases hosted $XXX.X million. depreciation of was million $XX.X servers three The million, expense purchase June self-mining our miners in Cost their number related $XX.X expenses million equipment of $XX.X by for in to Power from As of a for facilities $XX.X decline by million. on our increased increased which to were the depreciation increase by of an from months the stock-based operating of revenue increase included $XX.X segment. the now majority Cost cost hosting $XX.X rose included and centers. revenue customers directly XX, increased million. $XX.X attributable was

fair assets to $XXX.X price versus recorded come we of $X.XX $X.XXX move assets third self-mining kilowatt with in digital including the second XXXX, our heat $XX.X value million for quarter. of as digital value XXXX, the expense three the seasonally and a an goodwill, per assets in due for recorded a second carrying generally decline exceed from across now $XXX digital For the based current quarters, for public $X.X of XX, market average depreciation sold the We June mining a including of price several accounting non-cash With assets ended market decline quarter notes outlook from and our south in of from our our decline price. bitcoin when expect stock for for the prior $X.X we of of million Impairment on of notes our of our the fair non-cash in of million to of is to to has of to Consistent end in digital increased impairment impairment Core recorded which included of resulting June decrease entries in assets, a revenue so and prices, our in our increases our pricing. in sales the do power their companies, convertible of result sales The Prices industry. bitcoin million price do the segment. up due second total pricing to impacted $XXX.X favorable capitalization an bitcoin, million. digital the our million the revaluation three assets convertible months continue a a Gain of from compensation. value will value in impairment by in was quarter was cost $XXX.X of We months decline value XX, $XXX approximately fair resulting the a Scientific to stock-based adjustment resulting million sustained and XXXX the about adjustment hour. of our value the the their carrying extreme for at impairment of the around uncertain recorded year goodwill price. the price million quarter, energy the

Total of $XXX.X increase. million mark-to-market to increased convertible This driven by total $XXX.X increase of IPO stock-based requirement. ensure million. million In each trigger positioned order primarily quarter. operating well This continue to are $XX expenses vesting compensation notes our XX% the the to RSU removal the by resulted will outstanding representing that awards our transaction time the objectives. from we of had to We achieve was met from previously

disciplined a reducing to approach taken operating growth. expense have We

now XX% expenses compensation. excluding the revenue, The expenses increase have $XXX.X $X.X of share. and loss excluding higher was on quarter spoke organization lower be $XX.X million. million stock-based year. the by a net in the by depreciation Adjusted $XXX.X to loss net eliminated by majority $XX.X revenue of loss to the earlier. discretionary of offset decreased ended and our primarily of in by half XX%, operating about EBITDA million operating size cost million stock-based million. compared million $XX.X non-cash Net of business. the from million $XX.X primarily the and compensation EPS year was half the increase to driven core contracts of We first items of XXXX of our June $X.XX driven I XX, focus renegotiated We Adjusted expect increased by for right $XX expenses was million our to headcount vendor increased second the of increased The per by reduced

the build Our our position by $XX.X In The of for cash payments and settling outstanding and of we outstanding to cost of $XXX.X approximately interest our introducing XX from for million, cash approximately million by included outflows breakeven self-mining vesting a million. structure proceeds June our call represents cash costs components RSUs, divided sources this of obligations XXXX, cash number $XXX.X data cost These a shares. better view understand $XX.X period. operations mined that of order of million payment partially employee we of this a of offset from of cash count for mine share year-to-date of million. was and to $XXX.X $X.X drivers our bitcoin, million total inflows of on By cost mine. are RSUs XX, for are primary the million bitcoin producing of bitcoin, components increase to and metric debt $XXX.X It of a by infrastructure servers million vendors equivalents payments restricted reduced borrowing including purpose-built cash, to at single million. and $XXX.X ASIC of for principle cash-based cash we were centers cash two marginal net tax our There revenue change price business, of the of the to calculation. produces cash-based and our

per first The based cost, which power kilowatt is hour. on price our is

included facilities including as operating The expenses cash-based secure, is personnel cost. maintain, include of operate, centers, and cost, revenue. the secure data center part of two to related our second components cost required These our which and are expenses data our total and

As or not the it as expenses metric stock-based such depreciation. compensation is does include cash-based,

costs $X,XXX, data half costs XXXX, For of the first our operating approximately center was and $X,XXX. bitcoin our were approximately per power

cash to of approximately XXXX As for mine, the first such bitcoin a our cost, $XX,XXX. our was half

quarter-by-quarter, We fluctuations mine costs rate. a on and expect power our to hash global vary to based bitcoin and cash primarily

back like over Mike. the would Now, to I call turn to

In Thank growth you, year. approximately occur the of that XXXX would the earnings second call, half I Denise. explained our a of two-thirds in previous

we that the and case. in remain second now will the half be We’re confident

the developed operate and centers square approximately to August. states eight servers expect square to XX,XXX servers feet increase XXX,XXX in to As by five We XX in here We expect of our one operate over XX,XXX in year-end. with operating we XXX,XXX operate XXX,XXX co-location of that million self-mining of deployed year-end. the more total customers feet. that XXX,XXX of today, have and year-end, for servers data number and stand expect by than operating approximately By first July continue to we increase We deployed approximately month days to servers a already number facilities. XX,XXX we have approximately to

over yesterday company. a a a day. the a in currently in Likely and XX by per public most day mined are average, bitcoin mining day self record We bitcoin ever XX.X single on bitcoin we mined

conducted We and ensure well of of times. number business positioned market a our environment balance a we took and navigate our review to our the quarter, the full remains actions costs, second businesses, our economic these As sheet. to deteriorated in that difficult

will balance I First, our address sheet.

On the servers, in balance billion asset infrastructure invested of company’s inception. side our we’ve since the excess our sheet, of our in and $X

others built developing purpose productivity. control, while have billion investment believe bitcoin, to Our search their generate of to heavily as our to ability years to we approximate and support to returns or own States our business, United we By improve other develop computing production as infrastructure immersion world-class process company $X.X invested the will data infrastructure blockchain facilities, support or in built operate that any we the employ significantly the for for come. has No other will centers own.

a running of centers. tests pilot number in currently immersion our We’re data

years servers will to in Our generate also investment for come. $X.X returns plus billion

Our servers beyond bitcoin depreciable should their mining life. be well

volatile and We think We significant built it and wise. think it these is we liquidity prudent times. through have maintained is

believe increase the to is environment, to In assets. by We it have don’t our selling our create not we do current debt. sensible digital chosen liquidity

no million less excluding illustrated We is adjustments, as approximately Those in debt Slightly X%. notes our mature XXXX; principle at little payments placed of They X% $XXX now from totaling because required a have Slide in million of feature impact kind a until debt XX. total in than convertible of April more $XXX three have notes. pay on than privately just maturity. approximately have $XXX million years and our accounting they reserve cash cash of interest they and non-cash rate bear the interim

already Riley, stock will We very our comfortable soon We owe that hopefully B. with maturity approximately million are in where with $XX next months. comfortable at a to and over was $XX are equity. we the the payable level the $XX our XX to XXXX debt course million originally paid be of converts this but Again, The obligations monthly the we million, likelihood have year. loan B. down this Riley. very

approximately operate to the of XXX,XXX equipment we the year, by approximately encumbered servers, out million and our and we $XXX approximately ability by to in our self-mining to or are debt. have As the Equipment $XX or debt debt July, equipment end comfortable of financing continue total for so year leases. XX,XXX end paid million today. our plan with the of principle currently Through are this amortization leases service

and options liquidity. maintaining We have for creating multiple

have will We sell and bitcoin. continue our to

bitcoin production provides ability the digital assets replenish current Our our unique to us rapidly.

previously discussed, next million can equity credit. critical that a $XXX have Core of two over entered line decisions. we We founded. into the years. like Since As tap and Environments this focus demand require we also Scientific was anytime line

a time servers. facilitate capital to and and the deployment technological innovation and site of investments mining We of selection, our focused development, infrastructure have majority our management on and

infrastructure and of enterprise exist the the servers focus, that we deployment more a operator We Core the in United do and We and build distributed geographically asset faced Scientific computing reliable United building in to the data we centers digital five developer the digital the what is are. is other grade operate operation That and States, mining States. biggest years servers is efficient who centers challenge mining mining accepted is centers. not did and blockchain of any why always than our This data company are by infrastructure That ago. that challenge data enable and ecosystem. asset own

do paired in on and what have centers back We developed business to purpose-built ASICs concentrate data facilities. our we our operate best

not continuing central build focusing and end, technologies our blockchain our we business. have out of to mission are on core We have development resources that moved our discontinued our To business. business, any to

To We are our to activities activities. XX% center eliminated continuing workforce. whom we our corporate of in efficiently. date, develop None approximately have involved execute taken to have costs of out and of are business our ways our data more

other our and infrastructure us to attempting enabled with steps profitability. business reduce our efficient, and improving to work to and remain current efficiently. build and facing more focused companies taking we growing market to While turmoil develop The leaner more become on difficulties partners vendor have expenses

believe expenses less be months we will our the previously than what such, we As anticipated. data near development next significantly had center over six term

XX,XXX million all, have $XX remaining to cost for We deployed. of approximately paid but the of servers self-mining be the

hope We committed to servers. are beyond to XXX,XXX be not all up our running servers self-mining fleet that end. of expand but and will XXX,XXX, our additional confident year if yet, by We purchase

We took Historically, a offers business for We look at make hosting hard miners. continue stranded discounted to our long new the business. profitability. delivered low

longer hosting not from no business will one. take profitable on is day sufficiently We that

improve XX% our making our but have validate customers our terms. infrastructure business, megawatts initial to acceptance, XX% asset a business eager be co-location we challenging strategy. our XX our this because should EBITDA Scientific to is we We want cash in pricing to time, to over term, into configuration during kilowatt and time, agreements a want hour, per Even and in our profitable profit, of recently including customer be We that contract announced business our digital price including see their to value customers forward the Core We generative, fully business prepayment hosting restructured they to margins co-locate for market, ensure are money refinements fees servers too. of expect capacity Over XXXX. at also the new going to firm. make hosting think margin

a Now, the bit let’s talk future. little about

the be project continued of well our in center cash approximately XXXX as data of self-mining, the to approximately operating exahashs, based month between in of our which an XX continued units, demand approximately as XX Based co-location by to achieve an and Oklahoma, assumption from server and is end self-mining power of Texas, and X a fleet to customers. end continued bitcoins or we XXX We XXXX. gigawatt dedicated to continue This exahashs of on progress XXX,XXX to XXX,XXX network be and will of expansion the expect rate by producing rate of of XXXX. cash on end XXXX expect

consisting new SXX Pros self-mining is Our of fleet SXXs, efficient and and SXX XPs.

We for of positioned years are mining. productive well

blockchain manages America. data largest now developed, center co-location in for computer business self-mining designed, the and North company populated, services Our and

As XX.X total exahashes, July July operated of press in hash update, business XX. XX.X release, last week’s as of we including exahashes in our disclosed we self-mining rate

in blockchain than our built servers more of of have total market a We our $X investing leadership in the infrastructure position business. infrastructure and the inception by billion since

We located and have diverse strategically in developed centers geographic areas. data

the the Texas to working specific grid operations to events majority needs, to our While the CLR Texas are on continue aim program in Minder curtail of to with on impact automatic overall centers the we growing help demand software Within of data production. to ERCOT provide operator response states, in response Texas, our our are we our grid. bitcoin other located deploy reducing in and

growth for today cash Our to in introduced record of track our mine innovation speaks industry and itself. Denise metric. our new

thank and Given the of the cash $XXX assess the and continue future We a pleased you believe environment during $XX,XXX a cost offer in remain bitcoin to We realize. the who are we global revenue team of powerful important and and and single of million slightly amazing in half model to price an of mine, we to way blockchain shareholders Bitcoin. a Scientific minimum, Thank this unique centers year, now company, efficiency and rate, XXXX. has time. take Thank questions. working our to in on endured to team on to to represents Steve, All is the of this are who this first industry our $XXX focus long-term levered continuing will in plans customers opportunity challenging equity in on approximately profitability. million we you investment at a committed our this said, in data are to excess pace with business you to investment that constant price modest hash difficulties, assuming the Core growth rely very compelling despite a a a EBITDA. our to nexus and a for executing generate our to bitcoin our

Thanks Lucas. Mike. [Operator Hi from Lucas Instructions] Our B. question at Riley. first comes Pipes

Thank the you prepared to really, Mike disclosures. afternoon, is for also that. and Both much, want the appreciate everyone. detail. Good presentation, thank in – you Steve. really I released remarks the terrific This very

colleagues. and Thanks, Steve my all you. Thank and Denise

want really power is Good I on this And Yes, work. a good. follow bit. price to the up

or you then you’re was that. could just power also mentioned you confirm mentioned down. $X.XXX remarks maybe wanted Texas. side, expanding in then are but prepared speak, I up it there power to maybe on and think Obviously the inflationary pressures And if prices pushing

how wondering six could So you evolve color. power months, Thank kind months. of for next costs much XX your the very

Sure.

that So, is on $X.XX move that things energy to full range. cetera, is assumption considered we all a waves, heat that pressure prices, economics, around. think of $X.XXX it certainly are number a in seasonality. There macro things reasonable et that year One

a bit of So, the temperatures is a degree a there’s in aspect you known our months, develop the warm that prices facility prices are those especially a generally then days these Texas, developing speaking, impact. and And considerably. sort which well scales, as down bit higher power facility of come power less get, Texas, as south, an are in when hundred a across including probably you the XX higher of also net prices has that

and to that facilities will winter our it’s summer. going to come be say, year scaled. because year, fair also come full down that to next up facilities fully Texas where in Texas we’re should by our it the we probably are, end ramping overall this in average, to I fully our be as this think detriment, into not fully And a from pricing bit, our down Texas fair to the assume we where this that It’s year year. is pricing scaled year, we this on from scale fall have power It’s expected we so think of will our

that movement bit around opposed that negative but as a year, to your going question from a a positive next year answer we be So to this Lucas? move to to it’s Did movement. expect

helpful. of And the drivers expenses expect hear Very, what then marks the that was operating prepared to that think of by those the appreciate you color. decline sort And I about Thank bring are the Really on I staying XX%. mentioned I very you then first wonder And some topic costs cost, much. what very that? did down? of also Right. in

No, you Yes. question. for the so thank much

on I take earlier was the we think, to that take consistent did with across a we reductions. suggesting it approach. more were disciplined what board you going – surgical what commented really than frankly, Quite we

really And our Mike down to the of and so, as not that had of doubling focus organization areas business, we were really core that on were the cost personnel on. part suggested necessarily were savings around suggested that or and we going as

that position eliminated. where a impact ability and taking at a suggested, took a that and and not they center timing, meet has we to And control a be if had look, this from were I to don’t think professional going Mike as our data were to, impact they that, did of objectives. addition our we our literally these anybody significant they perspective. to on we some of said, related things project In fees we nature, the discretionary ability were look not, that the if have

Thank you. try I’ll last to squeeze one one.

Lucas. ahead, Go

possible. If

that. Sorry, about sorry

to I’m, backlog the be I hosting hoping we on quantify possible about hear continued lot was might a but to the Just side, it shortages.

how peers up? securing mentioned would so data some frame you having the You center space, of that

are of continues have So, that with in customers agreements say order now it occurred. this to demand any exceeds is year. as course, Of we’ll of it to our have we I in as a additional up our time be guarantee have strength to transparency folks only ability capacity we as such. but any hear regard case announcing, of lack that announce to mining to and co-location speaking, for this And in or of be the don’t that call, are as with can. have there very highly to a helps. dialogue But running It infrastructure. the with have that number as with prospective a now is some of folks earnings some think home occur aspect significant in that they kind also credit we right? habit pricing continues quarter a the lot their delays don’t of announcements regard get make there have the are that, in Generally bitcoin disappointed We that the equipment very, as fair significance near that in our availability think that interested in working to customers much to prior stated term no take, been, capital. That of we hosting hosting, we that, from of does a make provide is prepayments it’s of other agreement. and We what worthy anecdotally

in And so on rigs that’s ground we’re got everybody, the not talking warehouses. to

overall old look at strong, we’re have that business. capital And rigs on to quite said, and be the of hosting is the call, And that the profitability. at and profitable making in that there sincere but good agreements that. we the folks with hosting sure In margin the ground. used the our our business it very a is that days, to that reseller a talking the look and also and pipeline combine in are was margin We servers, could about we

going a manufacturers. we folks the business, to really reseller direct because vibrant have don’t most Now very that are

from own to two feet without its the business stand margin needs sales. on benefit equipment hosting Our coming of

in the of and the there some the And value to and overlay, times, a of so, efficiency, servers take without sure that and recognize reconstructed hill well life look XX those that’s the the the we the resale we’re that offer. made demonstrated by at are technology the hosting margins, capabilities investment, as capitalized they are up bigger folks for hard megawatts of to and that benefit folks, recognize recently climb, agreements little bit terms had the for announced, of that in a make business paid a we’ve good, the value. but we getting to the technology the infrastructure But we and

you and luck. much. you very Thank And Best of team. the

Thank you.

Lucas. Thanks,

Chris comes Brendler question Davidson. afternoon, from D.A. next at Chris. Our Good

details really lines Hi, a more my for question Steve. on earlier, so and lot but very and congratulations outlook. costs and results echo the disclosure Thank about the you really your and power helpful. comments enjoy, the those Thanks much. taking very, Along hearing

think of that’s us been to some a with. question maybe just key some if been I talk can the Mike, you lot challenges there’s outside could I that been have a on Georgia you in if think sort, wrestling specifics, you and Or in of Texas, power back to these getting contracts of and sort aligned and come? the then on are advantage currently still is able – spikes Thanks take so the sell grid power to that these prices? much.

costs, Texas think in the, it not are mode. we for benefits but we So, not earning in curtailing, power our from revenue revenue earned we an obviously have

With beneficial just have with that this to there mutually hopefully today regard our in facility a the have working provider our been operator, but We will where implementation we’ve technology to we economic the hope within in to in with power probably are weeks. have the grid goes. subsides what I the to software see place that exposure relationship sometime to we’ll where natural do the can call mentioned time in and that’s it variability capabilities, CLR wave, of next have is greatest we one working, something would we But few the year. we on utilizing and the very to But best that they, of as gas are, program, they of the sort Georgia, heat position we pricing. the be that’s in something by well future, the have the fact, the ability not position may

and does has overall as to us power it to facility, kind driven our factor in, full year what And raise provider. program that that’s been our as is impact them to where so of that cost possible. pricing has, has that but our with And and power now coming it of estimate as been, relates to try absolutely we’ve right efficient working part develop a for

Okay, great. stabilizing Mike as to down, you, talking of but than that. or thinking little And so, for the question wrestling and in about been have I’ve a come a and prices now months as investors or is, bigger outlook more here sort picture then the having XX with

think can on take and, companies advantage efficient relationships focused of more or mining really I advantaged that I’m power operations.

me rig where technology, immersion meter or give would like ordered, a end stay on upgrades, the facilities level be can be have of of do use comments year? the to So, high you high your So part that thoughts Thanks. sort you of next you renewables portfolio XPs? some of going significant level on would your by potentially Is great. behind fleet that those the

Sure. is, been one mentioned and to immersion order, we’ve worth In number particular testing makes an I setting. of our are see, not surprised the expense? simply testing productivity that in the immersion from no if get see a operating cetera. And cost, XX us facilities. some the efficiency when running like is equipment an is see We’ve fleet immersion months of been of be, can within worth question our considerable economic it that a the self-mining number we we to efficient portion what next et we would equipment immersion providers to to in what’s the, we what

of more that’s and provision. Two, all are more to we predictable power one. So skew efficient and to activity trying development our

our we’re wasn’t we those as true true this really into, buy in about made. trying perhaps best developing year on we’ve be handle and with We to seat out our that And and facilities there. pretty predictability think at some site. our power But, sites. going It’s power, clearly we’re of will to the with the the Oklahoma feel facilities work a with a time. I possible. point Texas wasn’t said, got That probably good the in those, provider ever percentage where the facilities. back, as considerable operating we those aggregate, higher Georgia facility, that’s Looking next good be decision

that we mid-XXXX promise, can prudently to and to on get as I our working be because can conversations and of that them that behind tell in in very that. all here can costs would today, We possibly we you or hard, are supplemental forms is doing can. alternative nothing we’re so, or actively all our otherwise, meter sitting the as to of power prior like other say down and we engage about managing we, but industry think power There’s everybody inexpensively

As one we purpose about our things are they is repurposeable. mentioned, only built purpose facilities, also they are nice built, facility about of but not the having

in pivoting in that, more so built but mining allows our not exposed in fact processes efficient an lot on structures rather more business steel And to really a us the flexibility containers environment, is

the the the sense. makes at you, much think detail. XPs? one if of so placed a I thanks you remember for that about peak Are don’t That huge can’t And What I you, market.

was that smart So probably thing. a

do the of and lot question. up to equipment promise is and are that that part fruitful, pick conversations There about that trying answer today this we as some of look, here can’t your servers of be be mentioned, forgot to we’re very have any that Yes, are quality at efficient expect, are yes, will I but you are like prices. coming again, a coming our high would low buyers very, we tomorrow. trying XPs market. we stranded we’ve And in

Let’s it say, six it the months. plays out see next we’ll how that’s

comments to Thanks. out up rewarded. No, Appreciate be Thanks catch I much. later. figure and the well we’ll patients there so

questions. your for Thanks

our Thank next Instructions] is coming you Chris. at from Stephen. Stephen [Operator Glagola And Cowen. Good question afternoon,

a more bit items? cost coming does exclude is where a question. listed the good out to non-cash OpEx Thanks XX% for bit afternoon, just little of Hey, Denise, Steve. I down that on more. you want the drill the

does. It

Thank to to the for that allowed condition wanted vest. the decision on get amend the you. I to performance RSUs just also color And more Mike,

that, just any you that’d great. color If on be can provide

Sure. it way that, any wasn’t being throwing an of can a drafted there performance sale if drafted, when as RSU the a spec. and would the way condition, the condition opposed technically a or that without to bus, a under you go was will, was up sale lawyers program company, which going event it or public, a through be, a company inadvertently saying back a set frankly, public missed just IPO you an of it the

RSUs RSUs for And frankly, It five already of our years time all represented vested. were so people. those

a my way RSUs. which vest, go don't then vesting. doing was but was board I get makes know you Right. the when my you've that's when their our was though And And required time what sure they the right, I stayed. if about public, plus and had fulfilling what get drafted intention they, sense, so got usually I'm it even of lot to And I course, got going time work, companies been ever the you was never when RSUs were of reason, not would've would've our take board you've how to colleagues, you, public, whatever or would action stock, – for

wasn't we to drafted it's short really was RSUs anybody's over something vesting it it's originally was every one correct view, or just set clear, years it that. those But didn't and ago. that to years, up RSUs four not of our when my a like anything like vest RSUs be properly in So, accelerate, period

requirement. RSUs had time vesting met the those of All

technical So it was that a very that, occurred. issue

Now, pull of we net settlement what could price the it elect and by frankly, that where out well was X% was stock question? was outstandings now the X% like the we that's was settling, our reason today. that trading a effectively low your trade to and stocks at Did answer below price looks time our so a do that it a smart was, to did pretty at net to

more you infrastructure already Thank believe any, paid adjustment it? Yes, follow for, And update, additionally, what the just If on if CapEx, price yes, I you. up market can so, you approximately XX%? the ask if the remaining could is on downward June And like said that rigs one here was very XX% I helpful. that Thank you. were on spend? quantify a the there was then of

So yes. the answer is,

we we've and the so agree and agreements adjustment there's our have away, related price those to price the time. near mechanism in a that adjustment already more term or that certainly because it kind much, we'd to significantly what As owed reduced was our them. was paid think enough market because market And manufacturer I or of yes, such less, And the obligation the thing at deliveries, it right machines. most took was said did in as in our past, warranted,

order magnitude, to in So the versus exact it the it I tens we time. left of [ph] that had think $XX was, was, adjustment. $XX millions yes, but what related frankly million don't don't million magnitude, I it $X yes, it was or million they the it principally of I precisely. was was, million was bucks. remember what reduced dollars of at and remember range, in to $X It that But wasn't

did question? have that second was half So, a for the the What impact very beneficial us.

on Just they're CapEx. you. infrastructure the – If there? Thank what's remaining remaining

are to operating, currently takes that a kind to XXX which to need to care sitting or we of and megawatts gig, miners So, we at get get hosting. and about contracted minus of where our our plus

in $XX You get order million to million know, up $XX the of magnitude that's and fully. of to that running

Okay. Thank Appreciate you much, it. Mike. very

at well, you, partners work is, have great developing of. this vendors the infrastructure timeframe also I the because a my been thanked appreciative you within end and we're our little give our folks I in as which should we Yes, range a of of thank reason the have bit

to cancel still orders just it's of As appreciate minors, you to from also payments, got development our going activities in with think price on and on reductions folks been us that, partners turn, in or but also there everything. And our a partners some not have had on. I know transformers. of we've It's they've lot making for we're some we've and benefited the good

Thanks.

Stephen. you, Thank

Dede Our comes at from Hi, Kevin. question Kevin H.C. next Wainwright.

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based Just you've of of Georgia, sort kind your cores I'm how wondering on experience approach? shifted in

in being a power we face of and order, Georgia. one and the to particular know I Fair closer the question one the of they're power is that related to that predictability good in power of folks actual folks. provision provision good provider that Georgia, And question. issues is, And is

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call on. one we it, that's attribute learned So very are lesson that focused

love but has it's we're is inter and recognize Texas. of still of our Texas, that some hours in to we Second heat these for with it's five implications hours fun sites based curtailing, weather this kind an not has and when be and We folks unprecedented wave, that a very right. four in productivity. XXX to to degrees, day I grid And the in do Texas relationships, like our

of And very operations that have of an can you be where what to percentage so about second. we kind careful need our issue, reside right. Is

that closer and has to Third meter were kind with behind environment. good facilities. people, is availability about. We get we good hire that techs Fourth, the aspects do our hard and renewable what of to ability the to a our can is, train resources talent need to we is certainly asked in of maintenance

So, we average, running, in powered XX,XXX we're running are each, on than more them big, servers high with facilities XX/X.

need you that. So,

were welcome I we places where make us. have to we invited, think on, want the early gig glad got us, they where to we're to we're where where sure coming they're

were of think on, political kind very facilities megawatts, our sure sort think I very, any really of trying to XXX been haven't had I early XXX so And We that governmental, we have make megawatts. And create we good. issues. local all could relationships were scalability,

I think we're type megawatt more plus leaning sites. into XXX

the for of in I'm my important to all have I that diversified this the front more. some talked head sorts been, which know, off have would Kevin, reasons don’t my I've of about we top kind believe past, infrastructure Adams Weston list. geographically that's of sure summer. be it's Now, of demonstrated

Volvo in to me. I'm that? about that X any told take I'd what X I'll all prospects kind expect don't your Thanks pricing, to this. just coming wondering Georgia, you, and be could super No, the I'm have curious Volvo sensible points. might And of if just people indulging change on. and benefit offense please there of sort for

what think plan. different are are, they're it's related, I really we don't to where our, given just doing, we

Right.

to? sort a immersion, to back end was Circling the kind on that of where if mentioned you any the seeing? you performance feedback of initial I could you're improvement How And these you're sort you've tests? speak couple the envelope data initial wondering of of seeing, pushed Okay. tests. on of

still early sorry. I to, speculate, early want too probably No, to comment. to too it's don't

really that that Yes, of could car no, you issues through mitigated is Texas Do the any asks apologies. heat more Or it fair. think technology? of be Understood, to air no you decision? an

we're the we total isn't capacity, the, it It's a entire though issue than the kind XX% than under XX% When inability of in but environment. X.X% the less state down trying six less really to of capacity gets up operate more one capacity the in gigs we're is call gig We're because five the than get probably phone air a of of grid industry, XX excess curtailment four passive to a excess they're gigawatts, gig can we're run gig excess. grid to of to equipment, calls, even it capacity. probably excess we of under the when yet, represent the

Right.

know your talk time again, to can Mike. agreement? already, of to the into leverage you've But so questioned been before I sale you're you So, this it PPA length a take on apologies might able

trying conversations We to do do want want citizen, good No. people a right really We our We're to be folks look. at for what's the Look, for we're right. having with Texas. ERCOT. what's company. right good constructive They're to

out. to come early about too to going talk that's just it's so And how

We really we everybody attending. thank for of your we to the interest the appreciate in here. Kevin, questions appreciate to going have call – it We're schedule.

all great I understood, questions. Steve. speak wanted just both to thank Really, really problem, entertaining No you you again. to the for to

too. You

company all your next Kevin. and Good with point in to attention of and be interest again, this you a can version all we and on your day. news Core wish you for look We forward archive thank results. industry and speaking Scientific found our relevant website call, evening. this quarter’s Thanks, afternoon. for SEC And filings we you Good And good following corescientific.com. at