Core Scientific Reports 171% Net Profit Surge, Revenue Drops 55%

Core Scientific Inc., a prominent Bitcoin mining company, reported a net profit of $580 million for the first quarter of 2025, marking a substantial increase from the $210 million recorded in the same period last year. However, the company fell short of revenue expectations, with total revenue reaching $79.5 million, which was over 8% below Zacks analyst estimates. This revenue figure represents a significant decline from the $179.3 million posted in the first quarter of 2024.

The bulk of Core Scientific’s earnings for the quarter came from self-mining, which contributed $67.2 million. Hosted mining and colocation services added $3.8 million and $8.6 million, respectively. The revenue shortfall can be attributed to the April 2024 Bitcoin halving, which reduced block rewards from 6.25 BTC to 3.125 BTC, thereby decreasing mining income. Additionally, the company is in the midst of an operational transition toward high-performance computing (HPC) hosting, particularly for artificial intelligence applications, which has also impacted revenue.

Despite these challenges, favorable market conditions helped mitigate some losses. Bitcoin’s average price increased by 74% during the quarter, and the company benefited from a 33% reduction in power costs due to lower energy rates and improved efficiency. Core Scientific’s future growth strategy is heavily focused on AI-focused infrastructure. In February, the company secured a $1.2 billion agreement with AI firm CoreWeave to expand data center capacity. This move is expected to significantly bolster colocation revenue, with projections pointing to an annualized figure of $360 million by 2026.

CEO Adam Sullivan described the first quarter as an “inflection point” for the company, highlighting its strategic positioning within the rapidly growing demand for high-performance data services. “We’re at the center of one of the most important shifts in modern computing,” Sullivan stated. The shift to HPC is gaining momentum across the crypto mining sector, with companies like Hive Digital, Hut 8, Iris Energy, and TeraWulf also reallocating mining resources toward AI infrastructure, signaling a broader trend reshaping the future of digital asset operations.

Core Scientific’s pivot to AI-focused infrastructure is part of a broader industry trend. The company’s strategic move to expand its data center capacity for AI applications is expected to drive significant growth in colocation revenue. The agreement with CoreWeave is a key component of this strategy, with the company on track to deliver 250MW of billable capacity by the end of this year and anticipating annualized colocation revenue of approximately $360 million by 2026.

In summary, Core Scientific’s first-quarter results reflect a company in transition, navigating the challenges of declining mining yields and a strategic shift toward high-performance computing. While the revenue shortfall is a setback, the company’s focus on AI infrastructure and favorable market conditions provide a solid foundation for future growth. The industry-wide trend toward AI-focused operations further supports Core Scientific’s strategic direction, positioning the company for long-term success in the evolving digital asset landscape.