Core Scientific revenue nearly triples as AI hosting expands; shares fall in market rout

Core Scientific reported sharply higher revenue and profit Thursday as more data center capacity began generating revenue, while outlining customer commitments extending through 2028.

The company released its latest quarterly numbers into a whirlwind of market activity which saw AI and data center companies losing trillions of dollars in market value over the course of a topsy-turvy, post-election trading session. 

Its shares fell more than 10 percent to close at 11.38 in heavy trading.

The company’s third-quarter revenue rose 187 percent from a year earlier and nearly 42 percent from the second quarter to $232.9 million. Operating income turned positive, and adjusted earnings before interest, taxes, depreciation and amortization more than tripled sequentially.

“Our execution at scale is translating into results, with a significant sequential increase in GAAP colocation revenue,” said Adam Sullivan, chief executive officer of Core Scientific. “We are nearing full delivery under our first colocation agreement while construction under our second is underway across five campuses,” Adam Sullivan, Core Scientific’s CEO, said.

 “With revenue growing and substantial contracted capacity still to deliver, we have built a strong foundation for our next phase of growth,” Sullivan said. 

Sullivan told investors and analysts on a conference call that he did not expect this week’s midterm election results to affect “our existing operations or delivery timelines” for capacity under development. He cited construction progress and community and utility relationships. Texas sites received conditional classifications under the grid operator’s Batch Zero review; Hunt entered November’s grid stability assessment. Backup-generator air permits at Pecos and Hunt remained pending with Texas environmental regulators.

“Sustained demand for AI infrastructure creates both a significant opportunity and an extraordinary need for capital,” Sullivan said. Core Scientific is pursuing project financing for its next construction program.

Colocation revenue, generated by providing data center infrastructure for customers’ computing equipment, reached $215.4 million, up nearly 58 percent from the second quarter. A year earlier, it was $15 million. Colocation supplied about 93 percent of revenue as the company converted cryptocurrency mining facilities for AI workloads.

Gross profit climbed to $123.3 million from $3.9 million a year earlier. Operating income reached $72.4 million, reversing losses of $54.8 million a year earlier and $78.5 million in the second quarter. Adjusted EBITDA rose to $133.6 million from $41.1 million sequentially, with its margin expanding to 57 percent from 25 percent.

Net income reached $1.18 billion, compared with losses of $144 million a year earlier and $1.16 billion in the second quarter. A $1.03 billion gain from changes in warrant and contingent value right valuations accounted for most of net profit. The company attributed the valuation change primarily to stock-price movements. A $106.5 million tax benefit also supported earnings. Diluted earnings were 47 cents a share, compared with $3.42 on a basic basis.

Billing capacity reached 485 megawatts at Sept. 30, up from 395 megawatts three months earlier and 120 megawatts at year-end. It remained approximately 485 megawatts on Thursday. Sullivan said about 100 megawatts remained in commissioning, with additional revenue expected over the coming months.

Signed commitments cover approximately 1.12 gigawatts: 590 megawatts for CoreWeave and approximately 530 megawatts involving AMD and another cloud provider. Management estimates more than $24 billion in contracted revenue, approximately $1.8 billion in average annual recurring colocation revenue and $1.6 billion in annual net operating income once delivered. Sullivan said AMD’s direct leases and credit support represent more than half of contracted stabilized net operating income.

The July agreements include 377 megawatts leased directly to AMD and 152 megawatts to an undisclosed cloud provider, whose leases carry AMD credit support. AMD’s sites are Pecos and Hunt County, Texas, and Muskogee, Oklahoma. The other provider’s sites are Auburn, Alabama, and Dalton, Georgia.

Initial deliveries are scheduled for Pecos and Auburn in the first half of 2027, Dalton and Muskogee in the second half, and Hunt County in the first half of 2028. Full delivery is expected by the end of 2028.

AMD holds a right to lease an additional 1,925 megawatts at specified times and under certain circumstances through Dec. 28, 2028. That includes approximately 385 megawatts with secured grid connections, 600 megawatts undergoing utility load studies and 940 megawatts being evaluated for onsite generation.

Most deadlines for AMD to commit to reserved capacity fall in 2027, with the final deadline at the end of 2028. Sullivan said facilities require substantial investment before generating revenue.

Another 170 megawatts remain uncommitted at Calvert City, Kentucky, and Grand Forks, North Dakota. More than 2 gigawatts of new site opportunities are undergoing due diligence.

Sullivan said the industry’s financing focus had brought greater scrutiny to CoreWeave and the neocloud business model. CoreWeave fell 9.83 percent to $43.66 Thursday. Its latest reported quarterly figures show revenue of $2.58 billion, a $626 million net loss and $640 million in net interest expense. Backlog was approximately $104 billion. It reports third-quarter results Tuesday.

Core Scientific terminated its merger agreement with CoreWeave on Oct. 30, 2025, after shareholders rejected it. Their commercial agreements continue, carrying more than $10 billion in potential revenue. Core Scientific describes take-or-pay terms, annual price increases and no unilateral termination right. Construction credits can offset up to 50 percent of monthly hosting fees, leaving early cash receipts below accounting revenue.

The company presented approximately 509 million pro forma diluted shares as of Nov. 2, compared with approximately 322 million common shares outstanding, reflecting potential shares from warrants, convertible notes and equity awards.

Management expects double-digit sequential revenue growth in the fourth quarter and a complete mining exit by year-end. It plans project debt for the initial AMD program, expects no additional equity issuance for that phase and anticipates approximately $650 million from January warrant exercises. Completing CoreWeave’s remaining capacity and beginning AMD-related deliveries in 2027 are the next operating milestones.