Core Scientific, Inc./tx (CORZ)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Unless the context otherwise requires, all references in this section to “we,” “us,” “our,” the “Company,” “Core Scientific,” or “Core” refer to Core Scientific, Inc. and its subsidiaries.

The following Management's Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to promote understanding of the results of operations and financial condition of the Company. This MD&A is provided as a supplement to, and should be read in conjunction with, our unaudited condensed consolidated financial statements and the accompanying notes to the unaudited condensed consolidated financial statements (Part I, Item 1 of this Form 10-Q) as well as the financial and other information included in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the Securities and Exchange Commission on March 2, 2026. This section generally discusses the results of operations for the three and six months ended June 30, 2026, compared to June 30, 2025.

As discussed in the section titled “Cautionary Note Regarding Forward-Looking Statements,” the following discussion and analysis contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed in the section titled “Risk Factors” under Part I, Item 1A in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the Securities and Exchange Commission on March 2, 2026.

Overview

Core Scientific, Inc. is a leader in designing, building and operating large-scale purpose-built data centers for HDC services. We develop and operate facilities serving AI and HPC related workloads and are a provider of digital infrastructure to our third-party customers. The majority of our revenue is derived from HDC service.

Our strategic objective is to maximize the value of our large-scale data center infrastructure portfolio by converting power capacity across our facilities into long-term contracted HDC revenue streams. We believe this strategy enhances the predictability of future cash flows, reduces the relative contribution of bitcoin market volatility to our operating results, and increases the long-term value of our infrastructure platform relative to its historical use in digital asset mining operations.

In 2024, we announced our first HDC contract with CoreWeave, a provider of HPC services, which was subsequently expanded to approximately 590 MW of leased customer power capacity across five sites. As of June 30, 2026, approximately 395 MW has commenced billing. During the six months ended June 30, 2026, certain CoreWeave license agreements were assigned to a special purpose vehicle financing structure while CoreWeave remained a primary obligor under the agreements. See “Strategic Transition to High-Density Colocation Services” below for a more detailed discussion of this arrangement and the associated risks. While our current colocation revenue remains concentrated with a single customer, we believe our available unleased power capacity provides a meaningful opportunity to diversify our customer base over time.

As of June 30, 2026, we controlled approximately 2.1 GW of gross utility power capacity, or approximately 1.3 GW of total leasable customer power capacity across 11 data centers in seven U.S. states including Alabama (1), Georgia (2), Kentucky (1), North Carolina (1), North Dakota (1), Oklahoma (1), and Texas (4). We continue to develop, convert and expand most of our facilities to support AI and HPC workloads while pursuing additional land and power opportunities to expand our data center footprint.

We expect colocation revenue to increase as additional contracted capacity is commissioned and delivered to our existing customer and as we add new customer relationships over time. We continue to operate a self-mining fleet at two facilities and provide hosted mining services to one remaining customer. Our hosted mining operations are expected to conclude by December 31, 2026, while we continue to wind down our self-mining operations.

2026 Highlights:

•On July 28, 2026, we announced a strategic commercial relationship with AMD with the potential to support up to 2.5 GW of leasable capacity, anchored by a 15-year agreement for approximately 530 MW across five sites.

•On May 6, 2026, our indirect wholly-owned subsidiary, Core Scientific Finance completed a $3.3 billion offering of 7.75% Senior Secured Notes due 2031 (the "Senior Secured Notes”). The net proceeds were used to fund a debt service reserve account and to repay in full and terminate our Term Loan Facility. The Senior Secured Notes and related guarantees are secured by first-priority liens, among other things, on substantially all assets of Core Scientific Finance and its subsidiary guarantors, which own or operate our specified data center development projects. For additional details, see Note 7 — Debt to our condensed consolidated financial statements.

29

•Billable customer power capacity of 395 MW as of June 30, 2026, against 590 MW of leased customer power capacity, with the remaining 195 MW in various stages of construction and commissioning.

•On May 5, 2026, we closed on the acquisition of land and related electrical power in Hunt County, Texas for approximately $233 million in cash, which is expected to support approximately 430 MW of gross power capacity, with an approved ERCOT interconnection ramp schedule. For additional details, see Note 3 — Asset Acquisition to our condensed consolidated financial statements.

•In May 2026, we announced our entry into an agreement and plan of merger to acquire Polaris DS LLC, for approximately $421 million in cash, subject to certain adjustments. The acquisition will add approximately 40 additional acres adjacent to our existing data center operating in Muskogee, Oklahoma, and will provide up to 440 MW of gross utility power capacity. The transaction is expected to close in the third quarter of 2026. For additional details, see Note 10 — Commitments and Contingencies to our condensed consolidated financial statements.

These operational milestones, together with the strategic financing and portfolio developments outlined above, drove the financial results for the three and six months ended June 30, 2026, which are summarized below.

Financial Results:

•Total revenue for the three and six months ended June 30, 2026 was $164.2 million and $279.4 million, respectively, compared to $78.6 million and $158.2 million for the three and six months ended June 30, 2025.

◦Colocation revenue was $136.7 million and $214.2 million for the three and six months ended June 30, 2026, respectively, compared to $10.6 million and $19.1 million for the three and six months ended June 30, 2025, respectively. The increase in colocation revenue was driven by incremental billable customer power capacity delivered to our customer.

◦Digital asset self-mining revenue was $21.5 million and $51.6 million for the three and six months ended June 30, 2026, respectively, compared to $62.4 million and $129.6 million for the three and six months ended June 30, 2025, respectively. The decrease reflected a reduction in bitcoin mined of 53% and 49% for the three and six months ended June 30, 2026, respectively, compared to the three and six months ended June 30, 2025, as well as a decline in the average bitcoin price of 27% and 23% for the same periods, respectively.

◦The increase in colocation revenue and corresponding decline in self-mining revenue reflects the continued execution of our strategy to reallocate power capacity from digital asset mining to long-term contracted colocation services.

•Net loss for the three and six months ended June 30, 2026 was $1.2 billion and $1.5 billion, respectively, compared to $936.8 million and $360.5 million for the three and six months ended June 30, 2025, respectively. Net loss for the three and six months ended June 30, 2026 was primarily driven by the change in fair value of warrants. Net loss for the six months ended June 30, 2026 was also impacted by a $266.5 million impairment charge on mining-related property, plant and equipment recognized during the first quarter of 2026.

•Adjusted EBITDA was $41.1 million and $50.0 million for the three and six months ended June 30, 2026, respectively, compared to $28.5 million and $26.7 million for the three and six months ended June 30, 2025, respectively. Adjusted EBITDA is a non-GAAP financial measure. See “Key Business Operating Metrics and Non-GAAP Financial Measures” below for our definition and reconciliation to net loss.

•Capital expenditures were $954.2 million for the six months ended June 30, 2026, of which $180.9 million was funded by CoreWeave pursuant to its existing colocation service agreement with the Company.

•Cash and cash equivalents and digital assets totaled $1.8 billion as of June 30, 2026.

Recent Developments

On July 27, 2026, the Company entered into Lease Agreements (collectively, the “AMD Leases”) with Advanced Micro Devices, Inc. (“AMD”) for an aggregate of 377 MW of critical IT capacity at the Company’s Pecos, TX; Muskogee, OK; and Hunt County, TX sites; and Lease Agreements (the “Neocloud Leases,” and collectively with the AMD Leases, the “Leases”) with a Neocloud (“Neocloud”), for 152 MW of critical IT capacity at the Company’s Auburn, AL and Dalton Phase 3, GA sites. Each of the Leases is for a fifteen year term with three five-year options. The AMD Leases provide AMD a reservation of capacity right to lease from the Company at certain times and under certain circumstances an additional 1,925 MWs of critical IT capacity through December 28, 2028.

30

In connection with the Neocloud Leases, each of the Company, Neocloud and AMD has entered into a Credit Support Agreement with respect to each Neocloud Lease: (i) establishing protections for AMD equipment held within the applicable Neocloud Lease premises, (ii) providing AMD the right, but not the obligation, to cure certain defaults of Neocloud under the applicable Neocloud Lease, and (iii) establishing AMD’s rights and obligations in the event of certain material defaults by a Neocloud with respect to the applicable Neocloud Lease. Each Credit Support Agreement will terminate automatically upon earliest to occur of the expiration of the applicable Neocloud Lease, specified circumstances relating to the insolvency or default of Neocloud, and 15 years from the effective date of the applicable Neocloud Lease. In addition, AMD may terminate the applicable Credit Support Agreement upon the Company’s breach of a material representation, subject to a specified cure period.

In addition, the Company issued to AMD a warrant (the “Warrant”) to purchase up to 30 million shares (the “Warrant Shares”) of the Company’s common stock, par value $0.00001 per share (“Common Stock”) at an exercise price of $23.47 per share, which represents the volume-weighted average price of the Company’s Common Stock on the Nasdaq Global Select Market for the five trading days prior to execution of the Leases.

The Warrant is exercisable immediately, subject to satisfaction of the vesting conditions therein, and will terminate on July 27, 2031. The Warrant Shares will vest at a rate of 12,222 shares per each one megawatt (“MW”) of critical IT load contemplated by the Leases. As a result of the Leases executed on July 27, 2026, an aggregate of approximately 6.5 million Warrant Shares vested and became exercisable.

The Warrant was issued, and the Warrant Shares are expected to be issued, in reliance on the exemption from registration purs

[Excerpt truncated for page length; source filing is linked above.]

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Unless the context otherwise requires, all references in this section to “we,” “us,” “our,” the “Company,” “Core Scientific,”

or “Core” refer to Core Scientific, Inc. and its subsidiaries.

The following Management's Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is

intended to promote understanding of the results of operations and financial condition. This MD&A is provided as a supplement to,

and should be read in conjunction with, our consolidated financial statements and the accompanying Notes to Financial Statements

(Part II, Item 8 of this Form 10-K). This section generally discusses the results of operations for 2025 compared to 2024. For

discussion related to the results of operations and changes in consolidated financial condition for 2024 compared to 2023 refer to

Part II, Item 7. — “Management's Discussion and Analysis of Financial Condition and Results of Operations” in our fiscal year 2024

Annual Report on Form 10-K, which was filed with the SEC on February 20, 2025.

Unless otherwise indicated, references to “2025” and “2024” in this MD&A refer to the years ended December 31, 2025

and 2024, respectively.

As described in Note 3 — Restatement of Previously Issued Financial Statements in Part II, Item 8 to the consolidated

financial statements included in this Annual Report, during the preparation of the consolidated financial statements for the year ended

December 31, 2025, the Company identified errors in its previously issued consolidated financial statements related to the accounting

for property, plant and equipment demolished in connection with the conversion of certain facilities from digital asset mining

operations to high-density colocation infrastructure. The Company is concurrently filing an amended Annual Report on Form 10-K/A

for the year ended December 31, 2024 and amended Quarterly Reports on Forms 10-Q/A for the quarterly periods ended March 31,

2025, June 30, 2025, and September 30, 2025. The discussion that follows presents 2024 comparative data on an as-restated basis.

As discussed in the section titled “Cautionary Note Regarding Forward-Looking Statements,” the following discussion and

analysis contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they never

materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking

statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those

discussed in the section titled “Risk Factors” under Part I, Item 1A in this Annual Report on Form 10-K.

Overview

Core Scientific, Inc. (“we,” “us,” “our,” the “Company,” “Core Scientific,” or “Core”) designs, builds and operates large-scale

purpose-built data centers that support high-density colocation services and digital asset mining for both our own account and to a

lesser extent, third-party customers. Our data centers are optimized for power-intensive, mission-critical computing workloads, with a

focus on artificial intelligence (“AI”) and other high-performance computing (“HPC”) applications.

In 2024, the Company announced its first high-density colocation contract with CoreWeave, Inc. (“CoreWeave), a  provider of

high-performance computing (“HPC”) services, which subsequently had been expanded to 590 megawatts (“MW”) of leased customer

power capacity over the exercise of several contractual options. We believe leveraging our existing infrastructure for high-density

colocation services will provide more stable and predictable revenue streams, and represents substantially less risk over time than our

traditional hosted bitcoin mining or self-mining operations.

We are constructing, refurbishing, reallocating or converting our ten facilities in Alabama (1), Georgia (2), Kentucky (1), North

Carolina (1), North Dakota (1), Oklahoma (1), and Texas (3) to support artificial intelligence related workloads, in support of our

existing colocation customer, but also to support our commitment to meeting the growing demand for high-density colocation

solutions and diversifying our customer base. This will be done as circumstances allow and in a manner designed to retain access to

electrical power under our control, maximize the value of our digital asset mining equipment to third parties, and fulfill existing

obligations to suppliers and customers. We intend to convert every megawatt in our portfolio to high-density colocation infrastructure

over the next three years. In addition to converting our existing portfolio, we are actively pursuing the acquisition of new sites,

including land and power capacity, to expand our data center footprint beyond our current facilities.

Currently, the vast majority of our revenue is from mining bitcoin for our own account (“self-mining”). We will continue to

mine digital assets and manage our self-mining fleet with a focus on power expense coverage and cash generation while we convert

our data centers for alternative high-density colocation service business opportunities. We expect to increase revenue derived from

high-density colocation (“HDC”) services as capacity gets delivered to our current end customer as well as when we sign and begin

generating revenue from new colocation customers.

50

As of December 31, 2025, we operated a diversified portfolio of ten data centers across seven U.S. states, representing

approximately 1.4 gigawatts (“GW”) of gross utility power capacity, or approximately 920 megawatts (“MW”) of total leasable

customer power capacity. We continue to be in active discussions with both our existing and future potential utility providers

regarding additional power allocations.

During 2025, total revenue decreased to $319.0 million from $510.7 million, primarily due to lower digital asset self-mining

revenue and digital asset hosted mining revenue as we shifted capital and infrastructure toward colocation, partially offset by higher

colocation revenue from incremental billable customer power capacity. Operating loss increased to $245.6 million in 2025 from

$142.1 million in 2024. Net loss was $288.6 million in 2025 and included significant non-cash items, including changes of $33.1

million in the fair value of warrants and contingent value rights. Adjusted EBITDA decreased to $29.7 million in 2025 from $157.4

million in 2024. Adjusted EBITDA is a non-GAAP financial measure. See “Key Business Operating Metrics and Non-GAAP

Financial Measures” below for our definition of, and additional information related to Adjusted EBITDA.

Developments During 2025

On July 7, 2025, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with CoreWeave, Inc.

(“CoreWeave”) pursuant to which CoreWeave would acquire the Company in an all-stock transaction, subject to stockholder approval

and other customary closing conditions. On October 30, 2025, the Company terminated the Merger Agreement in accordance with its

terms following Company stockholder rejection of the terms of the Merger Agreement at a special meeting of stockholders on that

date.

The Company incurred $21.6 million of advisory, legal, and other professional or consulting fees related to the proposed

transaction which are reflected in our results of operations for the year ended December 31, 2025. Other than these costs, the

termination of the Merger Agreement did not result in any termination fees and did not have a material impact on the Company’s

financial position or results of operations.

Our Business Model

Business Overview

As a large-scale owner and operator of high-power digital infrastructure, we generate revenue primarily through (i) Colocation

services (ii) Digital Asset Self‑Mining, and (iii) Digital Asset Hosted Mining services. We are in the process of reallocating significant

portions of our infrastructure and capital from bitcoin mining to HDC services for AI and HPC workloads.

We focus primarily on contracting our digital infrastructure for Colocation, mining bitcoin, and enhancing efficiencies in our

operations. In self‑mining, we earn bitcoin by operating our owned mining fleet through mining pool arrangements, and in hosted

mining and colocation we earn fees for providing infrastructure, power and related services to third parties.

Our data centers house bitcoin mining computers and will increasingly house specialized compute accelerators, including

graphics processing units (“GPUs”). These facilities leverage our specialized design and construction capabilities by employing high-

density, innovative engineering, power designs and modular construction. For digital asset mining, our proprietary thermodynamic

structural design manages heat and airflow to deliver reliable operations to us and our customers. As part of our go-forward strategy,

we are in the process of converting our entire data center portfolio to support our high-density Colocation operations for AI and HPC

workloads.

Business Strategy

Our strategy is to grow our revenue and profitability by converting and expanding our large-scale data center infrastructure

portfolio to deliver high-density colocation services for artificial intelligence and HPC workloads. We plan to develop and bring

online the infrastructure required to meet our existing contractual commitments to our high-density colocation customer, expand our

infrastructure portfolio by securing additional land and power at new and existing sites, and sign additional colocation customers to

diversify our revenue base.

Our customer strategy targets hyperscale cloud-based providers, neoclouds, and enterprises, including customers we believe

have significant data center infrastructure needs that have not yet been outsourced or will require additional data center space and

power to support their growth and their increasing reliance on technology infrastructure in their operations.

51

Segments

We have three operating segments: “Colocation,” consisting of providing high-density colocation services to customers

employing AI and HPC related workloads, “Digital Asset Self-Mining,” consisting of performing digital asset mining for our own

account, and “Digital Asset Hosted Mining,” consisting of providing hosting services to third parties for digital asset mining. Prior to

April 1, 2024, we operated primarily in the Digital Asset Self-Mining and Digital Asset Hosted Mining segments.

Our Colocation segment provides space, power, cooling, facilities operations, security and other services to third-party

customers to support workloads for machine learning and artificial intelligence.

Our Digital Asset Self-Mining operation segment generates revenue from the deployment and operation of our own large fleet

of miners within our owned digital infrastructure as part of a pool of users that process transactions conducted on one or more

blockchain networks. In exchange for this activity, we receive digital assets in the form of bitcoin.

Our Digital Asset Hosted Mining operation segment generates revenue from recurring hosting services, which are generally

priced based on power usage and other service components. Our Digital Asset Hosted Mining operation segment provides a full suite

of services to our digital asset mining customers. We provide deployment, monitoring, troubleshooting, optimization and maintenance

of our customers’ digital asset mining equipment and provide necessary electrical power, repair and other infrastructure services

necessary for our customers to operate, maintain and efficiently mine digital assets. We do not currently expect to further expand our

Digital Asset Hosted Mining operations in future years.

Mining Equipment

On July 5, 2024, we entered into an arrangement with Block,

[Excerpt truncated for page length; the complete text is on the linked full-MD&A page.]