Core Scientific Reports Negative 56% Self-Mining Gross Margin in Q2

Core Scientific, a longtime Bitcoin miner, reported a negative 56% self-mining gross margin in Q2 as its colocation business generated sharply higher profit. The company’s Q2 results show self-mining generated $21.5 million of revenue against $33.7 million of cost of revenue, resulting in a $12.2 million segment gross loss. In contrast, high-density colocation for AI customers produced $136.7 million of revenue and $80.0 million of gross profit at a 59% margin. This outperformed Core Scientific’s consolidated total gross profit of $70.0 million due to losses in mining and other segments. The company is repurposing mining facilities for colocation "as circumstances allow," with CFO Jim Nygaard stating that mining operations are primarily to offset contractual power costs during wind-down. Core Scientific ended June with nearly 30% fewer miners online than in Q1 and was self-mining at only two sites. The colocation pipeline is larger than current billing capacity, with 395 MW of billing capacity at quarter-end, increasing to 437 MW by mid-July, representing approximately $635 million in average annualized revenue. A 15-year agreement with AMD covers about 530 MW and over $14 billion in potential base revenue. However, the operational footprint remains below the roughly 1.1 GW of leased customer power capacity tied to over $24 billion in potential contracted revenue, indicating much of the AI story depends on conversion and delivery. The $1.16 billion net loss was largely due to a $1.05 billion fair-value expense for warrants and contingent value rights as the stock price rose, overstating operational damage. The quarter highlights why mining is losing its claim on the company’s power and sites, with one segment producing a negative margin while the other generated more gross profit than the total recorded.