Core Scientific to End Bitcoin Mining by Year-End for Colocation

Core Scientific is set to finish stepping away from bitcoin mining before the year concludes, positioning itself to operate as an exclusive high-density colocation provider by the start of 2027. Management shared this update during Thursday’s third-quarter earnings call, highlighting a strategic transition that has already reduced the company’s operational mining fleet by nearly half.

Chief Financial Officer Jim Nygaard informed investors that the firm anticipates concluding the wind-down throughout the fourth quarter. Chief Executive Officer Adam Sullivan expressed the timeline similarly, stating that the company plans to finalize its departure from Bitcoin mining by year-end. These statements accompanied an SEC filing that outlines the rapid progress of this operational shift.

According to the earnings exhibits, colocation revenue surged close to 60% sequentially, reaching $215.4 million for the quarter ending September 30. Conversely, digital asset self-mining revenue dropped to $12.3 million—a roughly 79% decline from the $57.4 million generated during the same period last year. Third-party hosted mining contributed a mere $5.2 million. Out of $232.9 million in total revenue, colocation now represents approximately 92%.

During the quarter, self-mining recorded a gross loss of $7.5 million, whereas colocation produced a gross profit of $128.4 million, marking a 60% margin. Adjusted EBITDA experienced a sequential triple-digit increase to $133.6 million, pushing the margin up from 25% to 57%.

Mining shrinks as AI leases fill the floor

Nygaard noted that Core Scientific operated nearly 50% fewer miners at the close of September compared to the end of 2025. The company has actively repurposed electrical power and facility space under long-term client agreements to support artificial intelligence and high-performance computing workloads, an ongoing initiative that investor disclosures note will continue as conditions permit.

This trajectory is shared by other industry participants. Public miners have increasingly liquidated bitcoin holdings and leased their data center campuses to AI enterprises, while industry research notes highlight a growing financial gap between firms capable of funding data center construction and those unable to do so.

As of September 30, Core Scientific was billing for 485 megawatts of active colocation capacity—marking a 90 MW increase for the quarter—which translates to over $700 million in average annualized colocation GAAP revenue. Sullivan explained that the remaining 100 MW under the CoreWeave buildout is currently undergoing commissioning, with revenue recognition anticipated over the upcoming months.

In addition to CoreWeave’s contracted 590 MW, Core Scientific holds a 530 MW agreement backed by AMD spanning five campuses. Initial deliveries are scheduled for the first half of 2027, with full delivery expected by late 2028. Combined, these two partnerships account for roughly 1.1 gigawatts. Once fully deployed and operational, leadership anticipates this portfolio will independently yield $1.8 billion in average annual run-rate revenue alongside $1.6 billion in net operating income.

What Core Scientific’s sheet shows

Bitcoin has nearly vanished from the company balance sheet. Digital assets were valued at $2.7 million on September 30, falling from $49.7 million three months prior and $222 million at the conclusion of 2025. Although Core Scientific previously accumulated coins while simultaneously executing its pivot earlier this year, that phase has officially concluded.

The exit from mining has incurred direct financial costs. A $41.9 million contract termination loss was logged in the second quarter due to the cancellation of a Block/Proto mining chip supply contract. Liquidity closed out the third quarter at approximately $1.7 billion, which included roughly $800 million in cash, following significant capital expenditures dedicated to AMD sites and the Polaris acquisition.

Sullivan described the wind-down as a measure to streamline operations toward more lucrative long-term growth prospects. Nygaard added that entering 2027 with an unencumbered profit-and-loss statement devoid of mining metrics will provide investors with a transparent perspective on the company’s true colocation run-rate.

The immediate test for Core Scientific involves shutting down its final mining rigs on schedule during the fourth quarter and ensuring the AMD financing framework materializes in time to sustain the expansion of its streamlined financial reports.

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