Core Scientific Inc. reported a Q1 2025 net profit of $580 million but missed revenue forecasts due to a decline in mining activities. Despite a strong profit increase from the previous year, total revenues of $79.5 million fell short of analyst expectations. The company is shifting focus toward high-performance computing and aims for significant growth in colocation revenue by 2026.
Core Scientific Inc., a Bitcoin mining firm, has reported a robust net profit of $580 million for Q1 2025. However, this came in under analyst revenue predictions due to a notable decline in its mining profits. The results were shared on May 7, revealing a significant rise from the $210 million net income recorded in the same quarter last year. Yet, the firm’s total revenue stood at $79.5 million, notably short of the Zacks estimates by 8.11% and down from the previous year’s revenue of $179.3 million in Q1 2024.
In terms of revenue breakdown, the company generated $67.2 million from self-mining activities, $3.8 million from hosted mining, and $8.6 million from colocation, previously referred to as high-performance computing (HPC) hosting. Core Scientific attributed the decline in Bitcoin (BTC) mined and subsequent revenue drops to the halving event on April 20, 2024, which slashed mining rewards from 6.25 BTC to 3.125 BTC. They also shifted focus towards HPC hosting, which is predominantly targeted at supporting artificial intelligence.
On a positive note, losses were somewhat offset by the 74% increase in Bitcoin’s average price and a significant 33% drop in power costs, thanks to reduced rates and lower energy consumption. Core Scientific is investing heavily in the HPC sector, having inked a substantial $1.2 billion deal in February with AI startup CoreWeave to expand their data centre capabilities. They foresee that this strategic pivot could lead to annualized colocation revenue reaching $360 million by the end of 2026.
CEO Adam Sullivan dubbed Q1 2025 an “inflection point” for Core Scientific, noting how the firm’s direction aligns with a crucial shift in the technology landscape towards high-performance data infrastructures, underlining that demand is skyrocketing. This sentiment highlights how the company is positioning itself at the forefront of modern computing advancements.
After the earnings report, shares of Core Scientific (CORZ) experienced a dip, closing down 1% on May 7 at $8.90, though they rebounded over 3% to $9.24 in after-hours trading. Meanwhile, a report from asset manager VanEck indicated that if public Bitcoin mining firms redirected 20% of their energy capacity to AI and HPC initiatives by 2027, it could lead to a staggering $13.9 billion in extra annual profits over the next 13 years.
Other companies in the sector are not standing still: Riot Platforms recently appointed three new board directors, one with a background in repurposing Bitcoin mining assets for HPC. Firms like Hive Digital, Hut 8, and Iris Energy have also pivoted part of their operations into HPC and AI last year, while TeraWulf sold its stake in a Bitcoin facility for $92 million, with those funds earmarked for AI hosting and further HPC data centre construction.
