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
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.
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.
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:
A $16.3 million drop in interest expense, helped by lower rates
A $7.9 million increase in money market returns
These gains were partially offset by:
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.
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Source: https://coindoo.com/core-scientific-posts-580m-net-income-in-q1-2025-despite-revenue-decline/