Core Scientific (CORZ) Q1 FY26 earnings call: guidance and Q&A

Why did the exclusivity with one hyperscaler expire, and what does it mean for the attractiveness of Pecos and Muskogee, given other hyperscalers are now engaging?

Adam Sullivan stated that the sites remain incredibly attractive, and three hyperscalers immediately engaged after the exclusivity expired. While the exact reasons for the expiration are unclear, the company felt it was the best time to re-engage the market due to strong demand and competitive dynamics.

“I mean, those sites, as you mentioned, are incredibly attractive, both Pecos and Muskogee, given their ability to scale, represent tremendous opportunity for hyperscaler. As we noted in the prepared remarks, three hyperscalers immediately engaged.”

asked by Brett Knoblauch · answered by Adam Sullivan

Is the company closer to securing a second tenant today compared to three months ago, given the AI market momentum and available capacity?

Adam Sullivan confirmed they are closer, highlighting the unique position of having five sites with first data halls ready for service in 2027 and active conversations with all major hyperscalers, chip makers, AI labs, and Neo-clouds.

“I mean when you look across our site portfolio, we have five sites with first data halls RFS in 2027. It's an incredibly unique position given the different size and scale and geography spread that we have inside our portfolio.”

asked by Brett Knoblauch · answered by Adam Sullivan

Regarding the three hyperscalers now in conversation, was there prior dialogue, or is the process starting anew?

Adam Sullivan clarified that relationships with these groups are not new, as they were already engaged on other sites. This allowed for immediate re-engagement on Pecos and Muskogee once the exclusivity expired.

“I mean our relationship with these groups is not new. We are engaged with them on other sites. So this was just really bringing back both Pecos and Muskogee back to the table.”

asked by John Todaro · answered by Adam Sullivan

Are there limits on how much CapEx will be deployed for site development before a lease is secured?

Adam Sullivan stated the guardrail is to take the first data hall to full Ready-for-Service (RFS), which involves securing labor, trades, and long-lead equipment. This strategy aims to leverage progress to drive customer engagement.

“I mean the way we're thinking about it right now is we want to take the first data hall to full RFS. And as part of that, that means we're securing the labor, securing the trades, we're securing long lead equipment.”

asked by John Todaro · answered by Adam Sullivan

When might a new contract be signed, and what are the current pricing trends for new contracts?

Adam Sullivan expressed high confidence in current customer conversations, noting that the value of their assets has increased. He indicated that pricing for new contracts is firming up due to inflation in labor and equipment costs.

“I mean I think you could expect to see pricing continue to firm up. Really, that's the result of both labor and equipment continuing to inflate. And so what you're just seeing is a similar move in pricing.”

asked by Timothy Horan · answered by Adam Sullivan

What were the biggest lessons learned from the CoreWeave build-out, particularly regarding brownfield vs. greenfield development, and how does this create a competitive advantage?

Matt Brown stated that brownfield conversions were much more difficult and unpredictable than anticipated, leading to a focus on greenfield sites with standardized designs for future builds. He emphasized that the experience from five CoreWeave sites, including 150+ design changes, provides a competitive advantage by allowing them to avoid past mistakes and be more predictable.

“I think the thing that was much more difficult than we certainly gave a credit for was the -- was actually executing on brownfield conversions, which is why everything you see that we're doing forward is actually a greenfield site with a very highly standard basis design that allows us to get kind of leverage over our supply chain and be super predictable in terms of our delivery dates.”

asked by Jon Hickman · answered by Matt Brown

What is the company's new approach to exclusivity agreements, and would they announce future exclusivity deals?

Adam Sullivan explained they've shifted to a milestone-based exclusivity method to ensure the pace of negotiations. This allows them to bring a site back to market if milestones are not met. He noted they would not necessarily announce interim exclusivity agreements between quarters.

“But really, what we've migrated to here is moving to a milestone arrangement method, which allows us to ensure that the cadence is moving at the pace that we would expect it to in a deal that would move towards closing.”

asked by Nick Giles · answered by Adam Sullivan

Are hyperscalers becoming more selective in their development partners, and how does this influence demand or deal timing, despite Core Scientific's strong position and execution track record?

Adam Sullivan confirmed that the hyperscaler whose exclusivity expired is still interested. He highlighted Core Scientific's unique differentiator: their experience building 590 MW of critical IT load across five sites, which positions them uniquely in the industry for developing this type of infrastructure.

“I mean I think the interesting part about this is the exclusivity that expired, that customer is still at the table and still interested in those sites. So, I think you are seeing that broadly across the market.”

asked by Stephen Glagola · answered by Adam Sullivan