• Core Scientific’s revenue jumped to $232.9 million, above analysts' expectations of $193 million.
• The company's colocation revenue was up almost 60% to $215.4 million.
• Core Scientific's $3.42 per share earnings beat projections of a $0.05 loss, driven by a $1.03 billion warrant gain.

Core Scientific Inc. (CORZ) announced its third-quarter results on Thursday, with its artificial intelligence colocation business contributing around 92% of its third-quarter revenue.

That was the highest percentage of revenue colocation has ever accounted for. A year ago, it accounted for less than a fifth of sales, with Bitcoin (BTC) mining accounting for the rest.

Source: Revenue figures come from Core Scientific’s quarterly earnings’ filings. Colocation share calculated by Stocktwits.<

Chief Executive Officer Adam Sullivan said the company is close to completing the ‘full delivery’ of its first major colocation contract. The company's earnings report shows total revenue increased to $232.9 million in the quarter, from $81.1 million a year ago. That was above the $193 million analysts had expected, according to Koyfin data.

Revenue from colocation, which involves hosting AI-related computing workloads, rose nearly 60% from the prior quarter to $215.4 million. The company said the expansion was due to increasing the billing capacity for customers.

CORZ's price was down over 6% in morning trade. On Stocktwits, the retail sentiment around CORZ improved to ‘extremely bullish’ from ‘bullish’, as chatter around it increased to ‘high’ from ‘normal’ levels over the past day. 

First Contract Nearly Complete

Sullivan said the company is "nearing full delivery" under its first colocation agreement, while construction under its second is underway at five campuses. 

As of late September, Core Scientific was billing 485 megawatts of capacity, up from 395 megawatts at the end of June, the company said. That capability comes to an average annualized colocation revenue of more than $700 million. 

The company spent $985.1 million in capital expenditures during the quarter, up from $797.5 million in the second quarter. It ended the quarter with $1.74 billion of liquidity and debt service reserves.

Mining Business Keeps Shrinking

The company's Bitcoin business continued to shrink. Self-mining revenues fell to $12.3 million from $57.4 million, the company stated. Hosted mining revenue also decreased from $8.7 million to $5.2 million. Core Scientific said it's converting its remaining mining sites to colocation sites as quickly as it can.

Profit Driven By Warrant Gain

Core Scientific reported basic earnings of $3.42 per share, compared to a loss of $0.45 per share a year ago. Analysts had expected a loss of $0.05 per share, according to data from Koyfin.

The company said the profit was driven mainly by a $1.03 billion non-cash gain on its warrants. Net income was $1.18 billion compared with a loss of $144 million a year earlier.

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