Key Takeaways:
- Core Scientific's colocation business generated $80 million in gross profit in Q2
- Self-mining gross margin turned negative 56% as revenue fell 29%
- Billable colocation capacity reached 437 MW, far below 1.1 GW of leased power
Geri
Core Scientific posts $80M colocation profit as mining margin turns negative
Core Scientific reported $136.7 million in colocation revenue and $80 million in gross profit from AI hosting in the second quarter, while its self-mining business posted a negative 56% gross margin.
"The colocation segment is now generating more gross profit than the company reports on a consolidated basis," Jim Nygaard, chief financial officer at Core Scientific, said on the earnings call.
Total revenue reached $164.2 million, up 42% from the first quarter. Self-mining revenue fell 29% to $21.5 million, weighed by higher energy costs and a shrinking fleet. Core Scientific ended June with nearly 30% fewer miners online than at the end of Q1 and was self-mining at only two sites, Nygaard said.
The $1.16 billion net loss was primarily driven by a $1.05 billion fair-value expense tied to warrants and contingent value rights as the stock price rose. Adjusted EBITDA improved to $41.1 million from $8.9 million in the prior quarter. Capital expenditures reached $797.5 million as the company accelerated data center construction.
Billable colocation capacity rose to 437 megawatts by mid-July, representing about $635 million in average annualized GAAP revenue. That remains well below the roughly 1.1 gigawatts of leased customer power capacity tied to more than $24 billion of potential contracted revenue. The AMD partnership, anchored by 15-year agreements covering about 530 megawatts across five sites, accounts for more than $14 billion of that total.
Liquidity stood at $1.82 billion, up from $1.04 billion in Q1, aided by the April pricing of $3.3 billion in senior secured notes.
The results strengthen the economic case for Core Scientific's pivot from Bitcoin mining to high-density colocation, though management did not say conversion had become compulsory. Investors will watch the Q3 report, expected by late November, for updates on capacity conversion timelines and colocation margin trends.
This article is for informational purposes only and does not constitute investment advice.
