Core Scientific Reports $580M Q1 Profit Despite 56% Revenue Decline

TLDR

Core Scientific reported $580.7 million in Q1 2025 net profit, more than double Q1 2024’s $210.7 million
Revenue fell to $79.5 million from $179.3 million year-over-year, missing analyst estimates
Profit largely driven by $621.5 million non-cash mark-to-market warrant adjustments related to stock price decrease
Company pivoting from Bitcoin mining toward high-performance compute (HPC) hosting for AI
CoreWeave partnership expected to generate $360 million in annual revenue by 2026

Core Scientific, the Nasdaq-listed Bitcoin mining company, posted a massive $580.7 million profit for Q1 2025, more than doubling the $210.7 million it earned in the same period last year. This substantial profit comes despite a steep decline in revenue, which fell to $79.5 million from $179.3 million year-over-year.

The company’s shares (CORZ) closed at $8.90 on May 7, down 1% during regular trading hours. However, the stock rose over 3% to $9.24 in after-hours trading following the earnings announcement.

The mining firm’s profit surge was primarily due to a $621.5 million non-cash mark-to-market adjustment in the value of its warrants. This accounting adjustment was required due to a major decrease in the company’s share price during the quarter.

Revenue fell short of expectations, missing Zacks analysts’ estimates by 8.11%. The decline in revenue was attributed to two main factors: the Bitcoin halving event of April 2024, which cut mining rewards from 6.25 BTC to 3.125 BTC, and the company’s strategic shift toward high-performance computing services.

Strategic Pivot to AI Computing

Core Scientific is making a major transition from its traditional Bitcoin mining focus toward high-value compute markets, particularly targeting artificial intelligence applications. This pivot comes as Bitcoin miners face increasing competition and declining profits following the 2024 halving event.

“This quarter marks an inflection point for Core Scientific,” CEO Adam Sullivan stated. “In a matter of months, we have transformed vision into execution, delivering infrastructure at scale and positioning ourselves at the center of one of the most important shifts in modern computing.”

Core Scientific has announced its First Quarter 2025 Results!

– On track to deliver 250MW of billable capacity to CoreWeave by the end of this year and anticipate entering 2026 with annualized colocation revenue of approximately $360 million.– First tranche of 8MW of billable… pic.twitter.com/cHt5xSA74Y

— Core Scientific (@Core_Scientific) May 7, 2025

The company’s revenue breakdown shows that digital asset operations still dominate its business, with $67.2 million coming from self-mining and $3.8 million from hosted mining. Its colocation (high-performance computing) revenue reached $8.6 million.

Core Scientific’s hosting revenue dropped by $25.6 million quarter-over-quarter, reflecting the company’s strategic pivot toward HPC services. This decline was partially offset by lower power costs due to reduced rates and usage.

Future Growth and Partnerships

A key element of Core Scientific’s strategy is its partnership with AI startup CoreWeave. In February, the companies announced a $1.2 billion data center expansion deal, with Core Scientific set to provide 250MW of billable capacity to CoreWeave by the end of this year.

The first 8MW of capacity at the Denton facility will be delivered to CoreWeave by the end of May, with an additional 40MW expected by the end of the quarter. This partnership is projected to generate approximately $360 million in annual revenue for Core Scientific by 2026.

The company ended Q1 with a strong financial position, reporting $778.6 million in cash, cash equivalents, and digital assets. This liquidity gives Core Scientific flexibility to pursue both organic growth and potential acquisitions.

Core Scientific’s strategic shift aligns with an industry trend. According to asset manager VanEck, if publicly traded Bitcoin mining companies shifted 20% of their energy capacity to AI and high-performance computing by 2027, they could increase yearly profits by $13.9 billion over 13 years.

Other mining companies like Riot Platforms, Hive Digital, Hut 8, and Iris Energy have also begun converting parts of their operations to support high-performance computing and AI workloads.

Core Scientific’s first quarter results underscore the changing landscape for Bitcoin miners, who are increasingly looking beyond cryptocurrency to sustain profitability in the post-halving environment.