Core Scientific Posts $580M Net Income in Q1 2025 Despite Revenue Decline
Core Scientific (NASDAQ: CORZ) reported fiscal Q1 2025 financial results on Wednesday, revealing a net income of $580.7 million, largely driven by a substantial non-cash mark-to-market adjustment tied to warrant liabilities.
This comes despite a sharp drop in revenue and continued operating losses.
Total revenue for the quarter came in at $79.5 million, down from $179.3 million in Q1 2024—a nearly 56% year-over-year decline, largely due to the Bitcoin halving and a strategic shift toward Colocation services.
Key Developments and Strategic Highlights
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The company is on track to deliver 250MW of billable capacity to CoreWeave by year-end, potentially driving $360 million in annualized colocation revenue in 2026.
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It expects to deliver 8MW of capacity at its Denton facility by the end of May, with an additional 40MW coming online by the end of the current quarter.
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Core Scientific ended the quarter with $778.6 million in cash, cash equivalents, and digital assets, supporting both organic and inorganic growth opportunities.
Shift to Colocation Hits Mining Revenue
Digital asset self-mining revenue fell sharply to $67.2 million, down from $150 million in Q1 2024, resulting in a 9% gross margin. The decline stems from a 75% drop in BTC mined, which was partially offset by a 74% increase in average BTC price and lower power costs.
Hosted mining revenue declined to $3.8 million, with gross profit of $1.7 million (46% margin), affected by the operational pivot away from hosting.
Colocation revenue totaled $8.6 million, with a modest 5% gross margin. Excluding direct power pass-through costs, non-GAAP gross margin stood at 8%.
Net Income Driven by Non-Cash Gains
The sharp rise in net income—up from $210.7 million in Q1 2024—was primarily due to a $621.5 million mark-to-market gain related to warrant and contingent value right liabilities, driven by a decline in the company’s share price.
Core Scientific also benefited from:
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A $16.3 million drop in interest expense, helped by lower rates
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A $7.9 million increase in money market returns
These gains were partially offset by:
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A $99.8 million drop in total revenue
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$111.4 million in reorganization-related costs (none recurring in Q1 2025)
Adjusted EBITDA Turns Negative
Adjusted EBITDA for the quarter was $(6.1) million, compared to $88.0 million a year ago. The decline reflects weaker revenue, higher operating expenses, and reduced profitability in mining operations.
CEO: “Inflection Point for Our Business”
CEO Adam Sullivan called the quarter a turning point, emphasizing the company’s accelerated execution on infrastructure projects and its growing role in next-gen data center infrastructure.
“We are not just expanding capacity; we are shaping the foundation for the next era of data center infrastructure,” said Sullivan.
Kosta Gushterov
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