Core Scientific will complete its exit from bitcoin mining by the end of the year and enter 2027 as a pure-play high-density colocation provider, management said on Thursday's third-quarter earnings call, capping a pivot that has already cut the company's mining fleet nearly in half.

Chief Financial Officer Jim Nygaard told investors the company expects to “complete the wind-down during the fourth quarter.” Chief Executive Officer Adam Sullivan put the same deadline more bluntly: “We expect to complete our exit from Bitcoin mining by year end.”

The remarks came alongside a results release filed with the SEC showing how far the shift has already progressed. The company's Q3 announcement details the numbers behind the transition.

Colocation revenue — earned by housing and powering customers' computing hardware in company-run data centers — climbed nearly 60% sequentially to $215.4 million in the quarter ended Sept. 30. Digital asset self-mining revenue fell to $12.3 million, down roughly 79% from $57.4 million a year earlier, while hosted mining for third parties contributed just $5.2 million. Colocation now accounts for about 92% of the company's $232.9 million in total revenue.

Profitability tells a similar story. Self-mining posted a $7.5 million gross loss for the quarter. Colocation generated $128.4 million in gross profit, a 60% margin. Adjusted EBITDA more than tripled sequentially to $133.6 million, with its margin expanding to 57% from 25%.

Mining Shrinks as AI Leases Fill the Floor

Nygaard said Core Scientific had nearly 50% fewer miners online at the end of September than at year-end 2025. The company has been repurposing power and floor space for AI and high-performance computing workloads under long-term customer agreements, a process its investor materials describe as continuing “as circumstances allow.”

The path is not unique among public miners. Peers have been selling bitcoin and leasing campuses to AI tenants, and research notes have flagged a widening funding gap between companies that can finance data center builds and those that cannot. Mining campuses appeal as conversion targets because they arrive with secured power capacity, an asset that can take years to obtain for new data center construction.

Core Scientific was billing for 485 megawatts of colocation capacity as of Sept. 30, an increase of 90 MW during the quarter, representing more than $700 million in average annualized colocation GAAP revenue. Sullivan said the remaining roughly 100 MW of the buildout for CoreWeave, an AI cloud infrastructure provider, is in commissioning and expected to begin recognizing revenue over the next few months.

Beyond CoreWeave's contracted 590 MW, Core Scientific has 530 MW under an agreement backed by chipmaker AMD, spanning five campuses, with initial delivery targeted for the first half of 2027 and full delivery by the end of 2028. Together, the two relationships cover about 1.1 GW. Once fully delivered and billing, management expects that portfolio alone to generate $1.8 billion in average annual run-rate revenue and $1.6 billion in net operating income.

What Core Scientific's Balance Sheet Shows

Bitcoin is nearly gone from the books. Digital assets stood at $2.7 million on Sept. 30, down from $49.7 million three months earlier and $222 million at year-end 2025. Earlier this year, Core Scientific was still adding coins even as it sold into the pivot; that chapter is now effectively closed.

The mining exit has already carried a cash cost. A $41.9 million loss on contract termination booked in the second quarter reflects the decision to end a mining chip supply agreement with Proto, Block's bitcoin mining chip venture. Liquidity ended the third quarter at about $1.7 billion, including roughly $800 million in cash, after heavy capital spending on AMD sites and the Polaris acquisition.

Sullivan framed the wind-down as simplifying the business toward “more attractive long-term growth opportunities.” Nygaard added that starting 2027 with a “very clean P&L,” one without mining in the numbers, should give investors a clearer view of a true colocation run-rate.

The test now is whether Core Scientific switches off its last machines on schedule in the fourth quarter, and whether the AMD financing package lands in time to keep that clean P&L growing.

This article first appeared on Bitcoin Magazine and is written by Micah Zimmerman.