Core Scientific, Inc. — financial distress indicators
Financial-health summary
Core Scientific, Inc.'s reported numbers place it in the 'Watch' financial-health band (distress score 41/100). The main indicators are liabilities exceed assets (negative equity), revenue collapse and losses in each of the last 3 years. In its favour: operating cash flow is positive over the latest 12 months.
Stress by dimension
Share price — last 12 months
Indicators behind the score
Each red flag shows the evidence from the company’s own filings and the financial or legal principle behind it. Points add to the 0–100 score.
Total liabilities are 1.46× total assets.
Balance-sheet insolvency test: debts exceeding the fair value of assets is the statutory definition of 'insolvent' in 11 U.S.C. §101(32).
Revenue changed -38% year over year.
A >30% sales drop typically breaches leverage covenants and starves fixed-cost coverage.
Net income negative in 3 of 3 fiscal years. Partly offset by positive operating cash flow and net cash.
Persistent losses erode equity and the capacity to absorb shocks.
Operating margin fell from 3% to -70% in two years.
Sharp margin compression signals loss of pricing power or cost control.
Revenue vs net income
Cash generation
Debt vs cash vs equity
✅ Mitigating factors
- Operating cash flow is positive over the latest 12 months.
📰 Recent news scan
- IREN Drops 4% as SemiAnalysis Flags Its Canadian Data Centers; Core Scientific Pulls Back 2%Yahoo Finance · 2026-10-08
- IREN Falls 7% as Financing-Heavy Data Center Names Sell Off Apart From Their Sector Fund; TeraWulf and Core Scientific Drop 5%Yahoo Finance · 2026-10-07
- Wells Fargo keeps AI/HPC operators Overweight ahead of debt raisesYahoo Finance · 2026-10-07
- B. Riley tightens HPC estimates, favors Core Scientific and TeraWulfYahoo Finance · 2026-10-07
- Applied Digital Falls 4% Ahead of Earnings Despite Its First International Data Center Deal; IREN and Core Scientific Also Drop 4%Yahoo Finance · 2026-10-07
- TeraWulf Slides 5% Despite Doubling Muskie Power Contract to 1 Gigawatt; Core Scientific Drops 3%, Riot EasesYahoo Finance · 2026-10-05
⚖️ U.S. legal pathway — Title 11, U.S. Code
Which chapter would apply?
- Chapter 11 — reorganisation. Management usually stays in control as debtor-in-possession; the automatic stay (§362) halts collection; a plan must meet the best-interests test (§1129(a)(7)) and the absolute priority rule (§1129(b)) — creditors are paid before shareholders, who are frequently wiped out.
- Chapter 7 — liquidation. A trustee sells assets and distributes proceeds by statutory priority (§§507, 726).
- Subchapter V (“Chapter 5”) is a fast track for small-business debtors under a statutory debt cap, but SEC-reporting companies are excluded (§101(51D)) — so it rarely applies to listed companies.
What typically triggers a filing
- Payment default or covenant breach lenders will not waive; a debt maturity that cannot be refinanced.
- Auditor going-concern doubt (ASC 205-40 / PCAOB AS 2415) — often itself a default trigger in loan agreements.
- Creditors can force a case with an involuntary petition (§303) if debts are not paid as they come due.
- Delisting after sustained sub-$1 prices or equity deficits cuts off equity funding.
Transactions shortly before filing can be clawed back (preferences — 90 days, §547; fraudulent transfers — 2 years, §548).
Frequently asked questions
What do Core Scientific, Inc.'s financial-health indicators show?
As of 2026-10-08, Core Scientific, Inc.'s public financial data places it in the 'Watch' band with a distress score of 41/100, driven by liabilities exceed assets (negative equity), revenue collapse and losses in each of the last 3 years. This is a statistical screen of reported numbers — it does not mean the company is insolvent, has defaulted or will enter insolvency proceedings.
What is Core Scientific, Inc.'s financial distress score?
41/100 ('Watch').
What works in Core Scientific, Inc.'s favour?
Operating cash flow is positive over the latest 12 months.
How are shareholders treated if a company enters insolvency?
In a Chapter 11 reorganisation the absolute priority rule pays secured lenders, then unsecured creditors, before shareholders — so existing shares are usually cancelled or heavily diluted. In Chapter 7 the company is liquidated and shareholders rarely recover anything.
Other IT & Software companies with distress indicators
- Cyabra, Inc. (CYAB)Very weak 100/100
- Exyn Technologies, Inc. (EXYN)Very weak 100/100
- The OLB Group, Inc. (OLB)Very weak 100/100
- Roadzen, Inc. (RDZN)Very weak 100/100
- Rekor Systems, Inc. (REKR)Very weak 100/100
- Veea Inc. (VEEA)Very weak 100/100
Methodology
Score = capped sum of rule-based red flags across seven dimensions (liquidity, solvency, profitability, cash flow, sales trend, market signal, news). Ohlson O-score (1980) gives an accounting-based 1-year failure probability; Merton distance-to-default (Bharath & Shumway 2008) gives a market-implied probability. Financial institutions use a capital-based rule set. Recalculated every trading day from the latest filings, prices and news.