Core Scientific, Inc. (CORZ) Cash Flow Statement

The gap between net income and operating cash flow is stark: in 2026Q2, a $1.2B net loss was accompanied by only -$18.9M operating cash flow, while in 2025Q1, a $576M net profit produced -$45M OCF. This suggests that reported earnings are significantly distorted by non-cash items such as impairments or fair value adjustments, which may not reflect underlying cash generation. Investors should monitor the sustainability of these adjustments, as they obscure the true cash-generating ability of the business.

FCF margins have deteriorated from -5.4% in 2024Q1 to -3.6% in 2026Q2, but the absolute FCF deficit has widened dramatically due to escalating capital expenditures. The company is investing heavily in infrastructure, likely for AI data centers, but this has not yet translated into positive FCF. The trajectory suggests that the company is in a heavy investment phase, and investors should assess whether future cash flows will justify the current capital outlays.

The dramatic increase in CapEx, particularly in 2026Q2, suggests that Core Scientific is aggressively expanding its physical capacity, likely for high-performance computing or AI hosting. However, this growth capex is not yet generating proportional revenue, as evidenced by the negative FCF. The capital intensity is rising, and the company's ability to convert these investments into cash flows will be critical. Depreciation and amortization have remained relatively stable, implying that the new assets are not yet fully depreciated, which may understate future maintenance capex needs.

The large positive working capital changes in 2024Q3 and 2025Q3 suggest that the company is either delaying payments or collecting receivables faster, which temporarily boosts operating cash flow. However, the negative change in 2026Q2 indicates a reversal, possibly due to increased inventory or slower collections. This volatility makes it difficult to assess the underlying efficiency of the company's working capital management, and investors should monitor whether these swings are driven by operational needs or strategic timing.

The absence of shareholder returns, combined with significant acquisition spending, suggests that management is prioritizing expansion over returning capital to shareholders. The $232.5M acquisition in 2026Q2 is a notable deployment, but its return on investment is uncertain given the company's negative net income. This strategy may be justified if the acquisitions enhance long-term cash generation, but it also increases financial risk, especially given the company's already strained balance sheet.

The cumulative gap between net income and operating cash flow is approximately -$3.4B, indicating that reported losses are not fully reflected in cash outflows, likely due to non-cash charges such as impairments or fair value adjustments. This divergence suggests that the company's earnings are heavily influenced by non-operating items, and the actual cash burn may be less severe than net income suggests. However, the persistent negative FCF indicates that the company is still consuming cash, and investors should be cautious about the sustainability of this trend.