Bitcoin miner Core Scientific is seeing green, but the full picture is more complex than it looks at first glance. The company posted a $580 million net profit for the first quarter of 2025—more than double its earnings from a year ago. Yet, it still missed revenue expectations, and a deeper dive into the numbers explains why.
Strong Net Income, Weak Top-Line Numbers
On May 7, Core Scientific released its Q1 2025 financial results. The $580 million profit marked a significant leap from the $210 million it earned in Q1 2024. That’s a 176% increase in net income year-over-year.
But not everything was bullish. The company’s total revenue came in at $79.5 million, which is 8.11% below analyst estimates from Zacks. This figure also reflects a sharp decline from the $179.3 million it posted in the same period last year.
So what’s behind the mismatch? The answer lies in mining profitability and strategic repositioning.
Revenue Breakdown: Where the Money Came From
Core Scientific’s revenue wasn’t entirely from mining Bitcoin. Here’s how it was split:
| Revenue Source | Q1 2025 Amount |
|---|---|
| Self-mining | $67.2 million |
| Hosted mining | $3.8 million |
| Colocation (ex-HPC) | $8.6 million |
| Total Revenue | $79.5 million |
The major chunk—self-mining—took a hit. The company attributed the revenue drop to the Bitcoin halving on April 20, 2024, when block rewards were slashed from 6.25 BTC to 3.125 BTC. That change directly impacted income from mining operations, shrinking daily rewards across the board.
The Halving Effect and Strategic Shift
Halvings are a regular part of the Bitcoin cycle, but they always hit miners hard. Fewer coins per block mean less direct income. Core Scientific faced exactly that situation, compounded by their operational pivot toward high-performance computing (HPC) hosting.
Rather than bet solely on mining, the company is moving into AI infrastructure. In February 2025, Core Scientific signed a $1.2 billion agreement with AI startup CoreWeave to expand its data center footprint. That pivot aims to prepare the firm for a broader role in powering artificial intelligence applications.
As CEO Adam Sullivan noted, the first quarter marked an “inflection point.” He emphasized the importance of adapting to meet the rising demand for high-performance computing infrastructure—particularly with the AI boom well underway.
Bitcoin Price and Energy Costs Help Cushion the Blow
While the halving hurt, two major tailwinds kept the ship afloat:
- Bitcoin’s average price rose 74% year-over-year, easing some revenue pressure from lower block rewards.
- Power costs dropped 33%, thanks to better energy rates and reduced consumption.
These two factors helped prevent a steeper revenue decline and allowed the company to post such a strong net profit.
Looking Ahead: AI Hosting May Dominate
One of the more forward-looking metrics in Core Scientific’s report was its projected colocation revenue. Thanks to the CoreWeave partnership, the company expects $360 million in annualized colocation revenue by the start of 2026. That’s a substantial shift in focus—and a potential gold mine if AI continues to scale.
Meanwhile, other miners are noticing the trend. According to a VanEck report from August, if public mining firms convert 20% of their energy capacity to HPC and AI hosting by 2027, they could collectively generate $13.9 billion in additional profits over the next 13 years.
Industry players are already making moves:
- Hive Digital, Hut 8, and Iris Energy pivoted parts of their operations to HPC last year.
- TeraWulf sold a Bitcoin mining stake for $92 million in October, redirecting funds to AI hosting projects.
- Riot Platforms added board members with expertise in HPC transitions back in February.
Clearly, Core Scientific is not alone in this strategic evolution.
Stock Market Response: Mixed But Hopeful
The market reaction was nuanced. Core Scientific’s stock (CORZ) closed at $8.90 on May 7, down 1%. But after-hours trading saw a 3% bump, lifting it to $9.24. This suggests investors are cautiously optimistic, likely encouraged by the AI expansion plans despite short-term revenue misses.