Can Core Scientific’s Business Pay For Its Spending?
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Core Scientific (CORZ) has constructed five data center campuses for its colocation customer CoreWeave and is currently building sites for AMD. Its capital spending has surged in the last twelve months, reaching a staggering $1.78 billion, compared to just $146 million in the previous period.
How Big Is Core Scientific’s Spending Bill?
In the last year, Core Scientific's capital spending was 301.4% of its sales, a significant increase from 30.2% in the previous twelve months. This spending continues to rise, with a 121.2% increase from the same quarter a year earlier to Q2 FY2026.
Can Core Scientific Pay For It?
The company's spending far exceeds its business revenue. In the quarter ending September 2026, capital spending reached 828.2% of cash generated by the business, a notable jump from 185.5% in the previous quarter.
| Fiscal quarter | Capital spending | Cash from business | Cash left over | |---|---|---|---| | Q2 FY2025 | $121 million | $34.0 million | -$87.2 million | | Q3 FY2025 | $244 million | $132 million | -$113 million | | Q4 FY2025 | $289 million | $158 million | -$132 million | | Q1 FY2026 | $389 million | $250 million | -$139 million | | Q2 FY2026 | $565 million | -$18.9 million | -$584 million | | Q3 FY2026 | $541 million | $65.3 million | -$475 million |
The cash left after spending has consistently fallen below zero in the last four quarters, indicating a concerning financial gap.
Funding the Buildout
Core Scientific's cash position, while substantial, is outweighed by its debt. It holds $804 million in cash and short-term investments compared to $4.30 billion in total debt. The company plans to finance the remaining AMD site construction through project bonds and expects an additional $650 million in cash from warrant exercises in early 2027.
What Has The Spending Bought So Far?
Despite a 22.9% sales growth over three years, Core Scientific's capital spending of $2.34 billion surpasses the $294 million increase in annual business revenue. It would take approximately eight years for the extra cash to offset the spending, considering the current trajectory.
What Must Go Right For Core Scientific?
Management aims to exit Bitcoin mining in Q4 and focus on colocation services in 2027. The first AMD sites are expected to come online in Pecos in the first half of 2027, requiring substantial upfront investment before generating revenue. Core Scientific's priority for early 2027 is securing project financing for these sites.