Core Scientific (NASDAQ:CORZ) reported a sharp increase in third-quarter colocation revenue and adjusted earnings as it brought more data center capacity online for CoreWeave, and said it expects further revenue growth as the remaining capacity is delivered.
On its Nov. 5 earnings call, the company also said development of its initial 530-megawatt agreement with AMD remains on schedule, with first delivery expected in the first half of 2027. Management said it has invested its required equity contribution for that build-out and is working to secure the remaining project financing.
Colocation growth drives results
Third-quarter GAAP colocation revenue rose nearly 60% from the second quarter to $215 million, Chief Financial Officer Jim Nygaard said. Adjusted EBITDA more than tripled to $134 million from $41 million, while adjusted EBITDA margin expanded to 57% from 25%.
Nygaard attributed the improvement to 90 megawatts of additional capacity entering billing during the quarter and a full quarter of contributions from capacity delivered in the second quarter. He said the company expects a double-digit sequential increase in fourth-quarter revenue as more capacity enters billing.
Core Scientific is billing CoreWeave for 485 megawatts across five campuses, up from 120 megawatts at the beginning of the year, Chief Executive Officer Adam Sullivan said. The remaining approximately 100 megawatts under the 590-megawatt agreement is expected to be delivered by early next year.
Nygaard noted that, under GAAP, CoreWeave contract revenue is recognized on a straight-line basis over the 12-year lease terms, effectively pulling forward contractual escalators.
AMD build-out and financing
Approximately half of AMD’s initial 530-megawatt commitment is expected to come online in 2027, with the balance delivered throughout 2028, Sullivan said. AMD also holds exclusive reservation rights for approximately 1.9 gigawatts of additional capacity; that capacity is not yet contracted. Most commitment deadlines fall in 2027, with the final deadline at the end of 2028.
Sullivan said the company expects pricing for any additional AMD commitments to reflect the agreed design, prevailing rates and development costs, with the objective of maintaining substantially similar returns. The company continues to estimate build costs for the current AMD leases at $11 million to $12 million per megawatt.
Core Scientific expects its approximately 1.1 gigawatts contracted across CoreWeave and AMD to generate $1.8 billion in average annual run-rate revenue and $1.6 billion in net operating income once fully delivered and billing, Sullivan said.
Project bonds remain the company’s expected financing approach for the AMD projects, although it is also evaluating other debt options. Nygaard said the company does not expect to issue additional equity or equity-linked securities to fund the first phase of the AMD build-out. He added that lenders and investors have sought more comprehensive diligence on project details, but the company has not seen changes in financing terms or covenants.
Core Scientific ended the quarter with approximately $1.7 billion in liquidity, including about $800 million in cash, $840 million in restricted cash and debt service reserves, and $100 million in revolver availability. The total declined by approximately $1 billion from the second quarter, reflecting $540 million in capital expenditure and roughly $440 million for the Polaris acquisition.
Nygaard said the company expects approximately $650 million in cash proceeds from the exercise of Tranche 1 warrants around their January 2027 expiration. He said the priority for that capital is to support proactive builds and serve as equity for additional sites.
Permitting and power plans
Sullivan said the midterm election results have not changed Core Scientific’s outlook for its contracted capacity or expected delivery timelines. Pecos, Texas, remains on schedule for initial delivery in the first half of 2027, while the Hunt campus has been included in an upcoming grid stability assessment, he said.
Both Texas sites have secured stormwater permits, but Sullivan said the company is still working through air permits for backup generators. Management expects those generators to qualify under a permit-by-rule framework and said design changes could help address potential permitting obstacles.
For possible on-site power generation at Pecos, the company is advancing a proposed 10.6-mile natural gas pipeline connection. Sullivan said Core Scientific has not yet filed air permits for that generation and plans to do so with the independent power producer it ultimately selects. The company is working with AMD to select a partner and generation equipment.
Mining exit and acquisitions
Core Scientific expects to complete its exit from Bitcoin mining during the fourth quarter and enter 2027 focused on high-density colocation, Nygaard said. Nearly 50% fewer miners were online at the end of September than at year-end 2025.
Beyond its existing contracts and AMD’s reservation rights, the company is evaluating approximately 2 gigawatts of potential capacity at new sites, with power energization expected in 2029 and later. Sullivan said more assets are being offered for sale as some developers face capital constraints, but Core Scientific intends to be selective and prioritize its existing commitments.
About Core Scientific (NASDAQ:CORZ)
Core Scientific, Inc is a digital infrastructure company that develops and operates data centers for high-performance computing. The company has historically focused on bitcoin mining, using specialized computing equipment and supporting infrastructure to validate transactions on the Bitcoin network. It also provides hosting and infrastructure services for other digital asset miners.
Core Scientific is expanding its business toward hosting high-performance computing and artificial intelligence workloads.
