W.018Core Scientific’s colocation revenue rose 58% in a quarter. Its debt has quadrupled since December
Core Scientific’s third-quarter colocation revenue was $215.4M, up 58% from the second quarter, with 485 MW billing at September 30. Capital spending reached $985M in the quarter, long-term debt stood at $4.30B against $1.06B at the end of 2025, and a $1.03B gain on warrants and contingent value rights, with a $106.5M tax benefit, took an operating profit of $72M to net income of $1.18B.
Colocation is now 92% of revenue
Core Scientific revenue by segment, $M, for the five quarters to September 2026: colocation (data center capacity licensed to tenants, including power fees passed through to them), bitcoin self-mining, and hosted mining. Q3 2025 is as restated in the Q3 2026 release. Labels above the bars are total revenue.
Data
| $M | Colocation | of which licence fees | of which power fees | of which maintenance and other | Self-mining | Hosted | Total | Billing MW |
|---|---|---|---|---|---|---|---|---|
| Q3 2025 | 15.0 | 9.8 | 3.6 | 1.6 | 57.4 | 8.7 | 81.1 | – |
| Q4 2025 | 31.3 | 25.0 | 6.3 | 0.0 | 42.2 | 6.3 | 79.8 | 120 |
| Q1 2026 | 77.5 | 59.2 | 21.1 | -2.7 | 30.1 | 7.6 | 115.2 | 225 |
| Q2 2026 | 136.7 | 98.8 | 35.1 | 2.8 | 21.5 | 6.0 | 164.2 | 395 |
| Q3 2026 | 215.4 | 157.3 | 57.6 | 0.6 | 12.3 | 5.2 | 232.9 | 485 |
What the quarter shows
Revenue rose 42% in the quarter, to $232.9M, and colocation carried all of it. Colocation revenue rose to $215.4M from $136.7M; the release calls the rise nearly 60%. Of the $215.4M, $157.3M was licence fees and $57.6M was power fees passed through to tenants. Self-mining revenue fell to $12.3M, from $57.4M a year earlier. Colocation gross profit was $128.4M, and adjusted EBITDA was $133.6M.
The first agreement, with CoreWeave, is nearly delivered. Core Scientific had 485 MW billing at September 30, up from 395 MW at the end of June, and says that represents over $700M of average annualized colocation GAAP revenue. Its first colocation agreement, with CoreWeave, covers about 590 MW at five sites, and the release says Core Scientific is nearing full delivery under it; in July the company expected full delivery in early 2027. Its July deck put the second agreement’s first deliveries in the first half of 2027, so the 485 MW is 82% of the first agreement’s capacity if all of it comes from that agreement, which the release does not say.
485 MW billing; about 1.1 GW contracted, and an option on 1.9 GW more
Core Scientific capacity, MW of critical IT load: capacity billing at September 30 (Q3 release); the CoreWeave licences under the first agreement (about 590 MW, April 2026 filing); the July 2026 leases to AMD (377 MW) and to an unnamed neocloud with AMD credit support (152 MW); their sum; and, outlined, the up to 1,925 MW more AMD may reserve through December 28, 2028, which is an option, not a lease.
The second agreement, and AMD
The second agreement, signed in July, is with AMD and a neocloud backed by AMD. Core Scientific signed 15-year leases on July 27 for 377 MW with AMD at Pecos and Hunt County in Texas and Muskogee in Oklahoma, and for 152 MW with a neocloud it did not name, at Auburn, Alabama and Dalton, Georgia, with AMD providing credit support. In July the company valued the agreement at more than $14B of potential base contracted revenue, and its roughly 1.1 GW of leased capacity at more than $24B of potential contracted revenue. The release says construction under the second agreement is underway at five campuses; the July deck scheduled initial deliveries from the first half of 2027 to the first half of 2028. AMD’s own third-quarter filing, covered in W.015, lists $13.3B of data center leases not yet commenced, with terms of 10 to 15 years, which it expects to assign or sublease; AMD does not name its landlords.
The quarter’s capital spending was $985M; by 06.ai’s arithmetic, about $444M of it was one acquisition. The company’s capex figure includes land and development rights. In August it closed the purchase of Polaris DS, about 440 MW of grid-connected power supplied by Oklahoma Gas & Electric, for about $444M in cash; nine-month purchases of property, plant and equipment were $1,495.0M, which leaves $540.7M for the third quarter. Across the first nine months of 2026 capex was $2,172M.
Capital spending reached $985M in the quarter
Core Scientific capital spending as the company defines it (purchases of property, plant and equipment plus land and development rights), $M, by quarter. The grey segment is site purchases: about $232.5M of Hunt County land in Q2 2026 and, by difference, about $444.4M in Q3 2026, matching the Polaris DS price. Earlier quarters include spending funded by CoreWeave ($196.4M in Q3 2025, $226.2M in Q4 2025, $129.9M in Q1 2026).
Debt, warrants and the net income
Long-term debt rose $3.24B this year. It stood at $4,302.2M at September 30, against $1,060.3M at December 31, 2025. The increase is mainly the $3.3B of 7.75% senior secured notes due 2031 that closed in May, issued by a subsidiary, Core Scientific Finance I LLC; at that coupon they cost about $256M a year in interest, against $629M of licence fees at the third quarter’s rate. The balance sheet shows $803.9M of cash, $837.6M of restricted cash and a stockholders’ deficit of $1,092.1M. Liquidity, including the debt service reserve, fell to $1,744.2M from $2,601.1M in June.
The net income came from a fall in the value of the company’s warrants. Core Scientific carries its warrants and contingent value rights as liabilities at fair value, so their value rises and falls with its share price. The third quarter’s $1,034.4M gain on them, after a $1,045.5M loss in the second quarter, and a $106.5M tax benefit took net income to $1,178.1M. Excluding the warrant gain, net income was $143.7M, of which $106.5M was the tax benefit. The release gave no guidance.
From $72M of operating income to $1.18B of net income
Core Scientific, third quarter of 2026, $M: operating income, then the items below it in the income statement, ending at net income. “Other, net” is the remainder by difference (−$0.2M), from rounding and smaller items.
What this changes on 06.ai
- Pack lead (Who funds the neoclouds?): Core Scientific is a landlord financed with $3.3B of 7.75% secured notes against CoreWeave licence revenue, with a stockholders’ deficit of $1,092.1M; a datapoint for the cost of debt one step removed from the neoclouds.
- Series lead: colocation capacity billing against contracted MW by quarter (120, 225, 395, 485 MW against about 1.1 GW), a direct measure of how fast leased AI capacity is being delivered.
- Series lead: AMD as a direct data center tenant (377 MW here, 1,925 MW of options), alongside the leases in W.015.
Sources and method
| Item | Figure | Source |
|---|---|---|
| Q3 2026 | Revenue $232.9M; colocation $215.4M (licence fees $157.3M, power fees $57.6M); self-mining $12.3M; hosted mining $5.2M; colocation gross profit $128.4M; operating income $72.4M; net interest expense $35.0M; warrant and CVR fair-value gain $1,034.4M; income tax benefit $106.5M; net income $1,178.1M; adjusted EBITDA $133.6M; 485 MW billing, “over $700 million” average annualized colocation GAAP revenue; capex $985.1M; nine-month purchases of PP&E $1,495.0M and cash paid for asset acquisitions $676.9M; long-term debt $4,302.2M (Dec 31: $1,060.3M); cash $803.9M, restricted cash $837.6M; stockholders’ deficit −$1,092.1M; liquidity and DSRA $1,744.2M (Jun 30: $2,601.1M); Q2 2026 and restated Q3 2025 comparatives | Core Scientific Q3 release, Nov 5 |
| Q2 2026 | Billing 437 MW in mid-July (approximately $635M annualized); about 1.1 GW of leased capacity and “more than $24 billion of potential contracted revenue”; the AMD agreements “more than $14 billion of potential base contracted revenue”; $232.5M of land and development rights inside capex | Core Scientific Q2 release, Jul 28 |
| Q2 deck | CoreWeave sites and MW (about 590 MW); billing 120 MW at Dec 31, 2025, 225 MW at Mar 31 and 395 MW at Jun 30, 2026; first agreement about $850M average annualized GAAP revenue when fully delivered, full delivery early 2027; second agreement initial deliveries 1H27 to 1H28, full by end-2028; about $1.8B average annualized revenue when both are fully delivered; build cost $11–12M per MW | Core Scientific Q2 earnings deck, Jul 28 |
| Second agreement | Leases signed Jul 27, 2026: 377 MW to AMD at Pecos TX, Muskogee OK and Hunt County TX; 152 MW to a neocloud at Auburn AL and Dalton GA with AMD credit support; 15-year terms, three 5-year renewals; AMD may reserve up to 1,925 MW more through Dec 28, 2028; AMD warrant for up to 30M shares at $23.47 | Core Scientific 8-K, Jul 28 |
| Notes | $3.3B of 7.75% senior secured notes due 2031, issued by Core Scientific Finance I LLC; CoreWeave licences about 590 MW, 12-year terms (Austin seven years), about $10B estimated aggregate revenue | Core Scientific 8-K exhibit, Apr 21 |
| Earlier quarters | Q1 2026: revenue $115.2M, colocation $77.5M, capex $389.2M. Q4 2025: revenue $79.8M, colocation $31.3M, capex $279.2M | Q1 release (May 6); Q4 release (Mar 2) |
| H1 2026 | Six-month purchases of property, plant and equipment $954.2M; Hunt County land, about $233M, closed May 5, 2026 | Core Scientific 10-Q, Q2 2026 |
| Polaris | About 440 MW of grid-connected power under agreements with Oklahoma Gas & Electric, for about $444M in cash, closed Aug 14, 2026 | Core Scientific, Aug 14 |
Growth: colocation $215.4M ÷ $136.7M − 1 = +57.6%; ÷ $15.0M = 14.4×. Revenue $232.9M ÷ $164.2M − 1 = +41.8%; segment totals are the sum of colocation, self-mining and hosted mining. Colocation share $215.4M ÷ $232.9M = 92.5%. Billing 485 − 395 = 90 MW; 485 ÷ 590 = 82.2%. Contracted 590 + 377 + 152 = 1,119 MW. Run-rate per MW: $700M ÷ 485 = $1.44M a year, against $1.44M for the CoreWeave agreement at full delivery ($850M ÷ 590), a consistency check only.
Capex: Q3 purchases of PP&E $1494.979M − $954.244M = $540.7M (from the unrounded thousands); $985.1M − $540.7M = $444.4M of site purchases, consistent with the $676.9M nine-month cash paid for asset acquisitions ($676.9M − $232.5M = $444.4M). Nine-month capex $389.2M + $797.5M + $985.1M = $2,171.8M. Debt: $4,302.2M ÷ $1,060.3M = 4.06×; difference $3,241.9M. Interest on the notes $3.3B × 7.75% = $255.8M a year, at the coupon, before discount and fees; licence fees $157.3M × 4 = $629.1M, an illustration, not a forecast. Net income: $72.4M −$35.0M + $1,034.4M + $106.5M + other −$0.2M = $1,178.1M; without the warrant gain, $1,178.1M − $1,034.4M = $143.7M.
Wire reports are written within hours of the news, on a six-hour schedule. Each lists its sources and shows the arithmetic behind its figures. Not investment advice.