Core Scientific's Q2 2025 Results: Pivoting from Bitcoin Mining to AI Infrastructure

Core Scientific Revenue Falls 44 Percent | The Motley Fool

Core Scientific (CORZ 0.42%), a digital infrastructure provider with roots in bitcoin mining, reported its Q2 FY2025 results on August 8, 2025. The report revealed a mixed performance. The company posted a net loss, largely due to non-cash charges, as GAAP revenue dropped to $78.6 million, missing analyst expectations of $83.8 million (GAAP). This represented a 44.3% year-over-year decline. The results reflected continued pressure in Core Scientific's legacy bitcoin mining operations, only partly offset by growing, though still modest, revenue from its newer colocation and AI computing business. Overall, the quarter underscored both the ongoing costs of transition and some encouraging early growth in new digital infrastructure services. Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report. Core Scientific operates purpose-built facilities for digital asset mining (such as bitcoin) and high-density colocation, also known as hosting services for demanding computing needs like artificial intelligence. Historically, the company earned most of its revenue by directly mining bitcoin using fleets of specialized computers known as application-specific integrated circuits (ASICs). Over the last year, Core Scientific has been pivoting toward providing colocation and high-performance computing (HPC) hosting. These are services in which clients rent rack space, power, and network access in specialized data centers. The focus is moving away from the volatile bitcoin market to what management expects will be steadier income from supporting AI and enterprise computing. Key to this transition are conversions of existing mining sites and large contracts with customers such as CoreWeave, an AI cloud computing provider. Core Scientific's GAAP revenue in Q2 2025 reached $78.6 million, falling short of the $83.8 million GAAP analyst forecast. The largest revenue contributor remained bitcoin self-mining, which generated $62.4 million (GAAP) in digital asset self-mining revenue but was down 43.6% year over year as the number of bitcoins mined fell by 62% year over year. A 50% rise in average bitcoin price partly offset the lower mining output. Colocation revenue, which covers data center hosting for client computing workloads such as AI training and inference, surged to $10.6 million, nearly doubling year over year. This growth reflected expansions at the Denton, Texas facility. Management described Denton as a cornerstone of the new business strategy, designed to handle high-density GPU clusters for AI customers. According to the company, "The increase was due to the expansion of colocation operations into Denton, Texas during the quarter." Hosted mining revenue (where Core Scientific operates miners owned by others) fell sharply to $5.6 million (GAAP). This drop matched management's ongoing shift away from third-party bitcoin mining to focus on higher-value digital infrastructure services. Segment margins suffered company-wide, with gross margin in self-mining falling to 5% from 28% year over year. The company attributed this decline to cost pressures and reduced production. Overall consolidated gross profit (GAAP) collapsed to $5.0 million, an 87% decrease year over year. Net loss (GAAP) reached $936.8 million in Q2 2025, most of it from non-cash charges, mainly related to the remeasurement of warrants and contingent value rights. These are financial instruments on the balance sheet that can fluctuate in value depending on the share price or other triggers. Adjusted EBITDA, a non-GAAP measure of operating earnings before certain non-cash and interest items, fell to $21.5 million from $46.0 million year over year. On the cash front, the company held $581.3 million of cash and cash equivalents as of June 30, 2025, down from $836.2 million (GAAP) as of December 31, 2024. The decrease reflected ongoing capital investments and operating losses. Notably, CoreWeave funded $90.3 million of the $121.3 million in capital expenditures during Q2 2025, limiting direct cash outflows on new data center projects. Cash flow from operations was negative for the six months ended June 30, 2025, though liquidity is still described as strong by management, with additional digital assets on the balance sheet. The company's focus remains on rapidly converting bitcoin mining sites to colocation facilities capable of supporting advanced workloads. This means retrofitting power, cooling, and networking infrastructure in existing buildings to handle racks of servers for applications such as artificial intelligence and large-scale cloud computing. Core Scientific's new business with CoreWeave, which specializes in AI-optimized cloud services, is central to the growth strategy. The company expects to deliver 250 megawatts (MW) of billable capacity to CoreWeave by the end of 2025 and reach 590 MW by early 2027. The term "megawatt" refers to the scale of electrical power available for customer use at a data center site; higher MW means the ability to host more or larger computing loads. While this contract supports much of the near-term development, management highlights that revenue concentration risk is high since CoreWeave is currently the major colocation customer. Management reports that as of Q1 2025, the sales pipeline is expanding, with several potential clients seeking deployments of between 50 and 100 MW. However, no new customers outside of CoreWeave were signed during the quarter. Executives consider diversification of the client base a top priority. Demand from enterprises is described as rising, especially as organizations work to implement artificial intelligence applications that traditional data centers may not be able to support. The legacy bitcoin mining segment remains an important revenue source, but profitability is under pressure from rising competition, energy costs, and fluctuating digital asset prices. Power fees accounted for $30.7 million in self-mining costs in Q2 2025. Management is focused on negotiating for low-cost power and maximizing efficiency as it balances the legacy business with the ongoing transformation. At the same time, changes in digital asset regulation and energy market rules continue to require attention to compliance and risk management. The company's capital structure is complex, including over $1 billion in debt and large non-cash warrant liabilities that affect reported earnings. Finally, a major event during the quarter was the agreement, announced July 7, under which CoreWeave would acquire Core Scientific in an all-stock merger. Each Core Scientific share will be replaced by 0.1235 shares of CoreWeave at closing. This transaction still requires shareholder and regulatory approval and, if successful, could bring additional scale and capital to Core Scientific's platform. Management did not offer explicit forward financial guidance in this earnings release. No investor conference call or accompanying earnings presentation was held. However, management reiterated existing targets from previous periods, including plans to ramp up billable capacity delivery to CoreWeave and add at least 300 MW of new capacity organically by the end of 2027, with further growth possible through acquisitions. Investors will want to watch for updates regarding new non-CoreWeave customers, progress against construction milestones at existing and planned sites, and continued growth in colocation revenue. Key risks remain, including reliance on a small number of clients, ongoing volatility in bitcoin mining, potential changes to the regulatory landscape, and the execution of the pending merger.

Core Scientific Announces Fiscal Second Quarter 2025 Results

Core Scientific, Inc. (NASDAQ: CORZ), a leader in digital infrastructure for high-density colocation services and digital asset mining, today announced financial results for the fiscal second quarter of 2025. On July 7, 2025, the Company entered into an Agreement and Plan of Merger (the "Merger Agreement") with CoreWeave. Pursuant to the Merger Agreement, subject to the terms and conditions set forth therein, CoreWeave will acquire the Company in an all-stock transaction. Pursuant to the Merger Agreement, each outstanding share of the Company's common stock at the Effective Time (as defined in the Merger Agreement) will be cancelled and converted into a number of fully paid and non-assessable shares of CoreWeave Class A common stock, equal to the exchange ratio of 0.1235. The transaction is subject to the approval of the Company's stockholders and customary closing conditions, including applicable regulatory approvals. CONFERENCE CALL AND EARNINGS PRESENTATION Due to the pending transaction, Core Scientific will not be hosting a conference call or providing an accompanying earnings presentation in conjunction with its second quarter 2025 earnings release. For further details and discussion of our financial performance please refer to our Form 10-Q for the quarter ended June 30, 2025. ABOUT CORE SCIENTIFIC Core Scientific, Inc. ("Core Scientific" or the "Company") is a leader in digital infrastructure for high-density colocation services and digital asset mining. We operate dedicated, purpose-built facilities for high-density colocation services and are a premier provider of digital infrastructure, software solutions and services to our third-party customers. We employ our own fleet of computers ("miners") to earn digital assets for our own account and we are in the process of converting most of our existing facilities to support artificial intelligence-related workloads and next generation colocation services. We currently derive the majority of our revenue from earning digital assets for our own account but expect to rapidly increase revenue derived from high-density compute. Our colocation facilities are located in Alabama (1), Georgia (2), Kentucky (1), North Carolina (1), North Dakota (1), Oklahoma (1) and Texas (3). To learn more, visit www.corescientific.com. SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended, (the "Exchange Act"). Forward-looking statements may include words such as "aim," "estimate," "plan," "project," "forecast," "goal," "intend," "will," "expect," "anticipate," "believe," "seek," "target" or other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements include, but are not limited to, statements regarding projections, estimates and forecasts of revenue and other financial and performance metrics, projections of market opportunity and expectations, the Company's ability to scale and grow its business, the advantages and expected growth of the Company and the Company's ability to source and retain talent. These statements are provided for illustrative purposes only and are based on various assumptions, whether or not identified in this press release, and on the current expectations of the Company's management. These forward-looking statements are not intended to serve, and must not be relied on by any investor, as a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions. Many actual events and circumstances are beyond the control of the Company. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and assumptions, known or unknown, that could cause actual results to vary materially from those indicated or anticipated. These risks, assumptions and uncertainties include those described in Part I. Item 1A. -- "Risk Factors" of the Company's Annual Report on Form 10-K for the year ended December 31, 2024. If one or more of these risks or uncertainties materializes, or if underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. Additional risk factors that may cause actual results to vary materially include, but are not limited to: the completion of the proposed acquisition of the Company by CoreWeave, Inc. ("CoreWeave") on anticipated terms or at all, and the timing thereof, including obtaining regulatory approvals that may be required and the Company stockholder approval of the proposed transaction and the other conditions to the completion of the proposed transaction; uncertainty in the value of the consideration that Company stockholders would receive in the proposed transaction, if completed, due to fluctuations in the market price of CoreWeave common stock until closing; anticipated tax treatment of the proposed transaction for Company stockholders, unforeseen liabilities, future capital expenditures, revenues, expenses, earnings, synergies, economic performance, indebtedness, financial condition, losses, future prospects, business and management strategies, expansion and growth of the combined company following completion of the proposed transaction; the possibility that any of the anticipated benefits of the proposed transaction will not be realized or will not be realized within the expected time period; the ability of the Company to integrate its businesses successfully with CoreWeave's and to achieve anticipated synergies and value creation; potential litigation relating to the proposed transaction that could be instituted against the Company, or its directors and officers; the risk that disruptions from the proposed transaction will harm the Company's business, including current plans and operations and that management's time and attention will be diverted on transaction-related issues; potential adverse reactions or changes to business relationships resulting from the announcement or completion of the proposed transaction; rating agency actions and the Company's ability to access short- and long-term debt markets on a timely and affordable basis; legislative, regulatory and economic developments and actions targeting public companies in the artificial intelligence, power, data center and crypto mining industries and changes in local, national or international laws, regulations and policies affecting the Company; potential business uncertainty, including the outcome of commercial negotiations and changes to existing business relationships during the pendency of the proposed transaction that could affect the Company's financial performance and operating results; certain restrictions during the pendency of the proposed transaction that may impact the Company's ability to pursue certain business opportunities or strategic transactions or otherwise operate its business; acts of terrorism or outbreak of war, hostilities, civil unrest, attacks against the Company or political or security disturbances; the possibility that the transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events; the impacts of pandemics or other public health crises, including the effects of government responses on people and economies; global or regional changes in the supply and demand for power and other market or economic conditions that impact demand and pricing; changes in technical or operating conditions, including unforeseen technical difficulties; development delays at the Company's data center sites, including any delays in the conversion of such sites from crypto mining facilities to high performance computing sites; the Company's ability to earn digital assets profitably and to attract customers for its high density colocation capabilities; the Company's ability to perform under its existing colocation agreements; the Company's ability to maintain its competitive position in its existing operating segments; the impact of increases in total network hash rate; the Company's ability to raise additional capital to continue its expansion efforts or other operations; the Company's need for significant electric power and the limited availability of power resources; the potential failure in the Company's critical systems, facilities or services the Company provides; the physical risks and regulatory changes relating to climate change; potential significant changes to the method of validating blockchain transactions; the Company's vulnerability to physical security breaches, which could disrupt operations; a potential slowdown in market and economic conditions, particularly those impacting high density computing, the blockchain industry and the blockchain hosting market; price volatility of digital assets and bitcoin in particular; potential changes in the interpretive positions of the SEC or its staff with respect to digital asset mining firms; the likelihood that U.S. federal and state legislatures and regulatory agencies will enact laws and regulations to regulate digital assets and digital asset intermediaries; changing expectations with respect to ESG policies; the effectiveness of the Company's compliance and risk management methods; the adequacy of the Company's sources of recovery if the digital assets held by the Company are lost, stolen or destroyed due to third-party digital asset services; and those risks that will be described in the proxy statement/prospectus that will be included in the registration statement on Form S-4 that will be filed with the SEC in connection with the proposed transaction. These risks, as well as other risks associated with the proposed transaction, will be more fully discussed in the proxy statement/prospectus that will be included in the registration statement on Form S-4 that will be filed with the SEC in connection with the proposed transaction. While the list of factors presented here is, and the list of factors to be presented in the registration statement on Form S-4 will be, considered representative, no such list should be considered to be a complete statement of all potential risks and uncertainties. Unlisted factors may present significant additional obstacles to the realization of forward-looking statements. You should not place undue reliance on any of these forward-looking statements as they are not guarantees of future performance or outcomes; actual performance and outcomes, including, without limitation, Core Scientific's or CoreWeave's actual results of operations, financial condition and liquidity, and the development of new markets or market segments in which Core Scientific or CoreWeave operate, may differ materially from those made in or suggested by the forward-looking statements contained in this communication. Neither Core Scientific nor CoreWeave assumes any obligation to publicly provide revisions or updates to any forward-looking statements, whether as a result of new information, future developments or otherwise, should circumstances change, except as otherwise required by securities and other applicable laws. Neither future distribution of this communication nor the continued availability of this communication in archive form on Core Scientific's or CoreWeave's website should be deemed to constitute an update or re-affirmation of these statements as of any future date. There may be additional risks that the Company could not presently know or that the Company currently believes are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. In addition, forward-looking statements reflect the Company's expectations, plans or forecasts of future events and views as of the date of this press release and should not be relied upon as representing the Company's assessments as of any date subsequent to the date of this press release. The Company anticipates that subsequent events and developments will cause the Company's assessments to change. However, while the Company may elect to update these forward-looking statements at some point in the future, the Company specifically disclaims any obligation to do so. Accordingly, you should not place undue reliance on these forward-looking statements, which speak only as of the date they are made. Please follow us on: https://www.linkedin.com/company/corescientific/ https://x.com/core_scientific https://www.youtube.com/@Core_Scientific