Core Scientific to Exit Bitcoin Mining by Year-End as Colocation Hits $215 Million

Core Scientific told investors on Thursday that it will exit bitcoin mining entirely by year-end, closing out a pivot that has already halved its mining fleet and pushed colocation revenue to $215.4 million in a single quarter.

The announcement came on the company's third-quarter 2026 earnings call. Chief Executive Officer Adam Sullivan put it plainly: "We expect to complete our exit from Bitcoin mining by year end." Chief Financial Officer Jim Nygaard confirmed the timeline, saying the company expects to "complete the wind-down during the fourth quarter." The comments accompanied a results release filed with the SEC for the quarter ended Sept. 30.

The numbers show how complete the transformation already is. Colocation revenue climbed nearly 60% sequentially to $215.4 million, according to the earnings exhibit. Digital asset self-mining revenue collapsed to $12.3 million, down about 79% from $57.4 million a year earlier. Hosted mining for third parties added just $5.2 million. Of $232.9 million in total revenue, colocation now accounts for roughly 92%.

What does the exit change for the business?

The margin picture tells the story. Self-mining posted a $7.5 million gross loss in the quarter. Colocation delivered $128.4 million in gross profit — a 60% margin. Adjusted EBITDA more than tripled sequentially to $133.6 million, with the margin expanding from 25% to 57%.

Nygaard said Core Scientific had nearly 50% fewer miners online at the end of September than at year-end 2025. The company has been repurposing that power and floor space under long-term customer agreements for AI and high-performance computing workloads, a process its investor materials describe as continuing "as circumstances allow."

Core Scientific is not alone. Public miners across the sector have been selling bitcoin and leasing campuses to AI tenants, and research notes have flagged a widening funding gap between firms that can finance data center builds and those that cannot.

The contracted pipeline is substantial. Core Scientific is billing for 485 megawatts of colocation capacity as of Sept. 30 — up 90 MW in the quarter — representing more than $700 million in average annualized colocation GAAP revenue. The remaining roughly 100 MW under its CoreWeave buildout is in commissioning and should start recognizing revenue over the next few months, Sullivan said.

Beyond CoreWeave's contracted 590 MW, Core Scientific has 530 MW under an AMD-backed agreement across five campuses, with initial delivery targeted for the first half of 2027 and full delivery by the end of 2028. Together, the two relationships cover about 1.1 gigawatts. Once fully delivered and billing, management expects that portfolio to generate $1.8 billion in average annual run-rate revenue and $1.6 billion in net operating income.

What does the balance sheet look like now?

Bitcoin is almost gone from the books. Digital assets stood at $2.7 million on Sept. 30, down from $49.7 million three months earlier and $222 million at year-end 2025. Earlier this year the company was still adding coins even as it sold into the pivot; that chapter is effectively closed.

The exit has carried a real cash cost. A $41.9 million loss on contract termination booked in the second quarter reflects the decision to end a Block/Proto mining chip supply agreement. Liquidity ended the third quarter at about $1.7 billion, including roughly $800 million in cash, after heavy capital spending on the AMD sites and the Polaris acquisition.

Sullivan framed the wind-down as simplifying the business toward "more attractive long-term growth opportunities." Nygaard added that starting 2027 with a "very clean P&L" — one without mining in the numbers — should give investors a clearer look at a true colocation run-rate.

The test now is execution. Core Scientific must turn the last machines off on schedule in the fourth quarter, and the AMD financing package must land in time to keep that clean P&L growing into 2027.