Core Scientific will complete its exit from bitcoin mining by year-end and enter 2027 as a pure-play high-density colocation provider, management said on Thursday’s third-quarter earnings call, capping a pivot that has already cut the company’s mining fleet nearly in half.
Chief Financial Officer Jim Nygaard told investors the company expects to “complete the wind-down during the fourth quarter.” Chief Executive Officer Adam Sullivan put the same end date more bluntly: “We expect to complete our exit from Bitcoin mining by year end.” The comments landed alongside a results release filed with the SEC that shows how far the shift has already gone.
Colocation revenue climbed nearly 60% sequentially to $215.4 million in the quarter ended Sept. 30, the earnings exhibit shows. Digital asset self-mining revenue fell to $12.3 million, down about 79% from $57.4 million a year earlier. Hosted mining for third parties added just $5.2 million. Of $232.9 million in total revenue, colocation now accounts for roughly 92%.
Self-mining posted a $7.5 million gross loss in the quarter. Colocation gross profit was $128.4 million, a 60% margin. Adjusted EBITDA more than tripled sequentially to $133.6 million, with the margin expanding to 57% from 25%.
Mining shrinks as AI leases fill the floor
Nygaard said Core Scientific had nearly 50% fewer miners online at the end of September than at year-end 2025. The company has been repurposing power and floor space under long-term customer agreements for AI and high-performance computing workloads, a process its investor materials describe as continuing “as circumstances allow.”
That path is not unique among public miners. Peers have been selling bitcoin and leasing campuses to AI tenants, and research notes have flagged a widening funding gap between those that can finance data center builds and those that cannot.
Core Scientific is billing for 485 megawatts of colocation capacity as of Sept. 30 — up 90 MW in the quarter — representing more than $700 million in average annualized colocation GAAP revenue. The remaining roughly 100 MW under its CoreWeave buildout is in commissioning and expected to start recognizing revenue over the next few months, Sullivan said.
Beyond CoreWeave’s contracted 590 MW, Core Scientific has 530 MW under an AMD-backed agreement across five campuses, with initial delivery targeted for the first half of 2027 and full delivery by the end of 2028. Together, the two relationships cover about 1.1 GW. Once fully delivered and billing, management expects that portfolio alone to generate $1.8 billion in average annual run-rate revenue and $1.6 billion in net operating income.
What Core Scientific’s sheet shows
Bitcoin is almost gone from the books. Digital assets stood at $2.7 million on Sept. 30, down from $49.7 million three months earlier and $222 million at year-end 2025. Earlier this year, Core Scientific was still adding coins even as it sold into the pivot; that chapter is effectively closed.
The mining exit has already carried a cash cost. A $41.9 million loss on contract termination booked in the second quarter reflects the decision to end a Block/Proto mining chip supply agreement. Liquidity ended the third quarter at about $1.7 billion, including roughly $800 million in cash, after heavy capital spending on AMD sites and the Polaris acquisition.
Sullivan framed the wind-down as simplifying the business toward “more attractive long-term growth opportunities.” Nygaard added that starting 2027 with a “very clean P&L” — one without mining in the numbers — should give investors a clearer look at a true colocation run-rate.
The test now is whether Core Scientific turns the last machines off on schedule in the fourth quarter, and whether the AMD financing package lands in time to keep that clean P&L growing.