Key Highlights:
- Core Scientific plans to discontinue Bitcoin self-mining by the end of 2026 and focus on colocation services from 2027.
- Colocation revenue surged nearly 60% quarter-over-quarter to $215.4 million in Q3 2026.
- The company reported $232.9 million in total quarterly revenue, compared with $81.1 million a year earlier.
- Bitcoin self-mining revenue fell to $12.3 million from $57.4 million in the same quarter last year.
- Core Scientific was billing customers for 485 megawatts of colocation capacity as of September 30, generating more than $700 million in annualized revenue.
Nasdaq-listed Core Scientific is preparing to bring its Bitcoin self-mining operations to an end by December 2026. The decision follows a significant shift in the company’s business strategy as colocation services become its primary revenue source.
The company plans to focus entirely on providing colocation services from 2027, moving away from operating its own Bitcoin mining infrastructure. The transition comes as revenue from its mining business continues to decline while demand for its data center capacity drives growth in its colocation segment.
The development was reported following Core Scientific’s third-quarter 2026 earnings announcement and management’s comments during its November 5 earnings call.
The company’s latest results highlight the scale of the transition. Colocation revenue reached $215.4 million in the third quarter, accounting for approximately 92% of its total revenue of $232.9 million.
Colocation revenue increased nearly 60%
Core Scientific reported $232.9 million in total revenue for the third quarter ended September 30, 2026, compared with $164.2 million in the previous quarter and $81.1 million in the same period last year.
Colocation revenue increased nearly 60% quarter-over-quarter, rising from $136.7 million in Q2 to $215.4 million in Q3. The segment generated just $15 million in revenue during the third quarter of 2025.
The growth reflects the company’s continued delivery of contracted data center capacity and the expansion of customer billing across its facilities.
As of September 30, Core Scientific was billing customers for 485 megawatts (MW) of capacity, up from 395 MW at the end of June. This represented more than $700 million in average annualized colocation revenue.
Chief Executive Officer Adam Sullivan said the company was approaching full delivery under its first colocation agreement, while construction under its second agreement was progressing across five campuses.
The company reported adjusted EBITDA of $133.6 million for the quarter, more than three times the $41.1 million recorded in Q2. Its adjusted EBITDA margin also expanded to 57%, compared with 25% in the previous quarter.
Bitcoin Mining Revenue Continues to Decline
While colocation operations expanded, Core Scientific’s Bitcoin mining business recorded a substantial decline in revenue.
Revenue from self-mining Bitcoin fell to $12.3 million in Q3 2026, down from $21.5 million in the previous quarter and $57.4 million in the third quarter of 2025.
This represents a decline of approximately 79% year-over-year.
The company also reported $5.2 million in hosted mining revenue during the quarter, compared with $6 million in Q2 and $8.7 million a year earlier.
Combined, self-mining and hosted mining generated approximately $17.4 million, accounting for less than 8% of the company’s quarterly revenue.
The widening difference between the two business segments underscores why Core Scientific is moving away from its traditional mining operations and reallocating its infrastructure toward colocation services.
Recently, BTC miner Riot Platforms also reported lower Bitcoin mining revenue. Riot sold 20,264 BTC for approximately $1.5 billion during the first nine months of 2026, in a move to fund data center development.
Net Income Reaches $1.18 Billion
Core Scientific reported net income of approximately $1.18 billion for the third quarter, compared with a net loss of $1.16 billion in the previous quarter and a loss of $144 million in Q3 2025.
However, the reported profit was largely influenced by a non-cash gain of approximately $1.03 billion from changes in the fair value of warrants and contingent value rights.
The company also recorded $985.1 million in capital expenditures during the quarter, up from $797.5 million in Q2, reflecting continued investment in its infrastructure and data center development.
Core Scientific ended September with approximately $1.74 billion in liquidity and debt service reserve assets, compared with $2.60 billion at the end of June.
Core Scientific’s Business Moves Beyond Bitcoin
Core Scientific’s planned exit from self-mining reflects a broader restructuring of its infrastructure and revenue model.
The company sold nearly all of its 2,537 BTC holdings in Q1 2026 to fund AI colocation expansion.
Rather than continuing to operate mining equipment across its facilities, the company is repurposing its remaining mining sites to support high-density colocation services.
Its existing customer agreements and ongoing construction projects are central to this transition. The company is working to deliver additional contracted capacity while expanding the infrastructure available to customers.
The shift will make colocation services the company’s primary business from 2027, subject to the completion of its planned mining exit and infrastructure transition.
For Core Scientific, the coming months will be crucial as it winds down its self-mining operations and continues converting its facilities to support its expanding colocation business.
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