Core Scientific reported lower third-quarter revenue as the U.S.-based digital infrastructure provider transitioned from Bitcoin mining to high-density colocation (HDC) services while a pending $9 billion all-stock acquisition by CoreWeave remained in the balance.
The Nasdaq-listed company's total revenue for the third quarter of fiscal 2025 was $81.1 million, down from $95.4 million in the year-ago period. Self-mining revenue for the digital asset fell from $68.1 million to $57.4 million due to a 55% drop in Bitcoin mined.
However, the impact of the decline was partially offset by an 88% increase in Bitcoin's average price. Host mining revenue plummeted from $16.9 million to $8.7 million. This reflects the company's “continued strategic pivot” towards its expanding high-density colocation business.
HDC revenue increased even though total revenue decreased
Revenue from high-density colocation, formerly known as high-performance computing (HPC) hosting, rose to $15 million from $10.3 million a year ago. This may be seen as a small victory in the company's pivot towards artificial intelligence-centered infrastructure.
Core Scientific reported a gross profit of $3.9 million, down from a loss of $200,000, and a net loss of $146.7 million, down from $455.3 million in the year-ago period. The lower loss was due to a decrease in non-cash fair value adjustments of $74.9 million from $408.5 million in the prior-year period, which the company said was related to the remeasurement of warrants and contingent value rights.
Adjusted EBITDA was negative $2.4 million, compared to $10.1 million in the prior-year period. Increased operating expenses and decreased profits reportedly weighed on the company.
Capital expenditures (capex) totaled $244.5 million, of which $196.4 million was funded by CoreWeave under an existing colocation agreement. The company ended the quarter with $694.8 million in liquidity, including $453.4 million in cash and equivalents and $241.4 million in Bitcoin.
Migration to high-density colocation
Core Scientific, once one of the largest Bitcoin miners in North America, has been steadily repurposing its vast data center footprint to serve AI workloads and enterprise clients. HDC revenue growth in the third quarter highlights some early traction in this direction, but it still represents a small portion of total revenue.
As mining output declines and energy costs rise, companies like Core Scientific are leveraging access to power and data center capacity to rebrand themselves as partners in the artificial intelligence boom.
The company said it plans to “rapidly increase revenue from high-density colocation” and convert most of its remaining mining facilities to support AI-related workloads.
Merger uncertainty increases ahead of shareholder vote
CoreWeave announced in July that it had reached an agreement with Core Scientific to acquire the miner in an all-stock deal that valued the company at approximately $9 billion. The merger is expected to help Coreweave expand its AI infrastructure, which is said to account for 76% of Core Scientific's revenue.
But the deal is facing growing resistance. A proxy advisory firm recently advised investors to vote against the deal, saying Core Scientific could maintain the “considerable success” it has achieved as an independent company.
Some large shareholders have also spoken out against the deal, including Gullane Capital, Core Scientific's third-largest shareholder. Founder Trip Miller reportedly said, “Following the math of today's deal, I would have to vote no.” Another investor, Two Seas Capital, also said it would vote against the deal.
The fate of the acquisition now depends on the outcome of a general meeting of shareholders scheduled for October 30th, where investors are expected to vote.
