Core Scientific lifts colocation revenue nearly 60%, but remains reliant on CoreWeave

Core Scientific’s shift toward data centers serving AI workloads is producing sharply higher revenue, but not yet a broader customer base. In its November 5 third-quarter results, the company reported $232.9 million in sales, including $215.4 million from colocation. Its accompanying filing warned that the business remains highly dependent on CoreWeave until other customer agreements begin generating revenue.

Delivered capacity starts paying

Colocation—the company’s business of providing data-center facilities for customers’ computing workloads—generated nearly 60% more revenue than in the second quarter. Core Scientific attributed that increase to delivering more capacity that it could bill for. Colocation revenue was just $15 million in the same quarter a year earlier.

The company was billing for 485 megawatts of capacity at September 30, up from 395 megawatts at the end of June. It said the September capacity represented more than $700 million in average annualized colocation revenue under generally accepted accounting principles, or GAAP. That is an annualized measure, rather than revenue collected during the quarter.

The quarter-to-quarter change

Colocation revenue

$136.7 million→$215.4 million

USD millions

Colocation revenue rose nearly 60% from Q2 to Q3 2026.

Total revenue

$164.2 million→$232.9 million

USD millions

Company-wide revenue increased alongside the colocation business.

A billion-dollar profit, with an accounting driver

The largest headline number needs a different reading. Core Scientific recorded $1.178 billion in net income, compared with a $1.155 billion loss in the preceding quarter. The company said both quarters’ results were primarily driven by changes in the fair value of warrants, reflecting movements in its stock price. The third-quarter benefit was non-cash, not customer revenue.

Other measures also improved. Gross profit rose to $123.3 million from $70 million in the second quarter. The company’s adjusted EBITDA, an adjusted earnings measure, more than tripled to $133.6 million. Its reported adjusted EBITDA margin reached 57%, up from 25%. Those figures are distinct from the net-income swing driven by warrant accounting.

Building the business remained expensive. Capital expenditures reached $985.1 million, compared with $797.5 million in the previous quarter. That category includes purchases of property, plant and equipment, plus acquisitions of land and development rights. It is therefore broader than spending on equipment alone.

Core Scientific’s combined liquidity and debt-service reserve measure fell to $1.744 billion from $2.601 billion. That total should not be read as unrestricted cash: it includes cash, digital assets, available revolving credit and restricted funds. Cash and cash equivalents alone stood at $803.9 million at September 30.

The next customers come later

In its quarterly filing, Core Scientific said colocation revenue remained concentrated with a single customer. Revenue under agreements with AMD and a Neocloud counterparty was not expected to begin arriving in phases until early 2027. Signing those agreements has not yet removed the company’s dependence on CoreWeave; that depends on the new business beginning and scaling.

CEO Adam Sullivan said the company was nearing full delivery under its first colocation agreement, while construction under its second was underway across five campuses. The filing put total leasable customer power capacity at approximately 1.7 gigawatts across 11 data centers in seven states. That describes the broader capacity base, not the amount already being billed.

The older mining business is still shrinking. Core Scientific expected hosted mining operations to conclude by December 31, 2026, while it continued winding down self-mining. The company is also repurposing remaining mining facilities for high-density colocation as circumstances allow, making the transition a physical conversion of sites as well as a change in revenue mix.