Two Bitcoin miners reported nearly $2 billion in profit. The biggest boost wasn’t cash

Core Scientific and TeraWulf reported nearly $1.9 billion of combined third-quarter profit as they shifted from Bitcoin mining toward data-center hosting for AI customers. Their earnings included $1.76 billion of pretax non-cash gains from revaluing financial instruments.

The November 5 Core Scientific disclosure and November 6 TeraWulf disclosure show different operating outcomes for the quarter ended September 30, 2026. Core earned $72 million in operating income under U.S. accounting rules; TeraWulf recorded an $88 million operating loss. Core's operating result itself included a $19 million digital-asset fair-value gain. Hosting now supplies most of both companies' revenue, following their shift from Bitcoin mining toward computing leases. Assessing whether the conversions fund themselves requires the separate cash-flow and financing disclosures.

How non-cash gains lifted Core Scientific and TeraWulf profits

Core’s $1,178 million consolidated net income and TeraWulf’s $710 million add up to approximately $1.89 billion.

In Core's filing, the $1,034 million revaluation gain comprised $964 million on legacy Tranche 1 and Tranche 2 warrants, $69 million on the liability portion of an AMD warrant and $1 million on contingent value rights. Legacy instruments supplied the largest component of Core's gain.

Warrants give holders rights to buy shares. Core's AMD warrant accompanied July customer leases, with its issuance value recorded as an incentive reducing future lease revenue. Its liability portion is remeasured through earnings. Core attributed changes in its broader warrant and contingent-value line primarily to stock-price changes.

TeraWulf's $728 million gain came from revaluing Google warrants issued in exchange for credit support covering certain Fluidstack lease obligations. The credit support can help finance projects. Remeasurement raises reported earnings through a non-cash accounting entry.

The revaluation gains enter earnings before tax, while the net-income figures also reflect tax effects and other gains. Core also recorded a $106.5 million tax benefit, primarily from releasing part of a valuation allowance associated with its Polaris acquisition. TeraWulf recorded a $95 million gain on selling its Abernathy joint-venture stake.

Follow the non-cash gain

Legacy warrants supplied most of Core's $1.034bn pretax revaluation gain. Its AMD warrant is a separate lease-linked instrument.

Large accounting gains can lift net income while operating results diverge.

Net income is after tax; revaluation gains are before tax. Separate scales compare earnings and operating results. These measures differ from cash flow and cannot establish construction-funding adequacy.

Sources and evidence

Sources

1. Core Scientific Q3 2026 Form 10-Q
2. TeraWulf Q3 2026 Form 10-Q
3. Core Scientific Q3 results
4. TeraWulf Q3 results

Supporting facts

• For the quarter ended September 30, 2026, Core Scientific reported consolidated net income of $1,178.130 million and TeraWulf reported $709.534 million, a combined $1,887.664 million. Their non-cash fair-value gains totaled $1,762.800 million before tax, so the two aggregates are not an earnings reconciliation. [1] [2] [3] [4]
• Core Scientific's Q3 2026 GAAP operating income was $72.350 million; TeraWulf's GAAP operating loss was $88.225 million. These consolidated operating measures exclude the large non-operating warrant revaluation gains. Core's operating result also includes a $19.264 million digital-asset fair-value gain and is not a cash-flow measure. [1] [2] [3] [4]
• Core Scientific's Q3 $1,034.358 million fair-value gain comprised $964.060 million on its legacy Tranche 1 and Tranche 2 warrant liabilities, $69.065 million on the liability-classified portion of its AMD warrant and $1.233 million on contingent value rights. [1]
• TeraWulf's Q3 2026 $728.442 million warrant and derivative fair-value gain came from remeasurement of Google warrants issued in exchange for backstopping certain Fluidstack lease obligations; the warrants are liabilities and their fair-value changes enter earnings. [2]
• Remeasurement of these warrant liabilities can raise reported income without itself supplying construction cash; the gains alone cannot establish that either AI conversion is self-funding. [1] [2] [3] [4]
• After September 30, TeraWulf increased revolving-credit commitments from $250 million to approximately $400 million and added a conditional, uncommitted accordion for up to $150 million. Its November 4 Google credit support for Anthropic leases concerns anticipated project financing and is not cash proceeds already received. [2] [4]

Method

Q3 ended September 30, 2026. USD millions. Reported figures rounded from filings. Net-income bars share a 0 to $1,200m scale; operating bars use a separate symmetric ±$100m scale. Core instrument gains sum to $1,034.358m before rounding. No pretax gain is subtracted from after-tax income.

Scope

Net income is after tax; revaluation gains are before tax. Separate scales compare earnings and operating results. These measures differ from cash flow and cannot establish construction-funding adequacy.

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The difference also reaches per-share results: Core reported $3.42 basic earnings versus $0.47 diluted, while TeraWulf reported $1.42 basic earnings and a $0.03 diluted loss. The diluted calculations include warrant-gain reversals in the earnings used per share, alongside share-count adjustments.

Hosting growth is visible in both companies' sales. Core's colocation revenue reached $215 million out of $233 million in total sales, up from $137 million in the preceding quarter. Colocation gross profit was $128 million at a reported 60% margin.

TeraWulf generated $63 million of high-performance computing (HPC) lease revenue, approximately 83% of its $76 million total. Its $11 million HPC segment profit excludes expenses including corporate overhead and depreciation that enter consolidated operating results, giving it a different expense allocation from Core's colocation gross profit.

Construction funding shows up elsewhere

For the nine months ended September 30, Core generated $296 million of operating cash while spending $1,495 million on property, plant and equipment and another $677 million on asset acquisitions. Net financing cash inflow was $3,200 million.

Over that same nine-month period, TeraWulf used $179 million of operating cash and spent $2,231 million on plant and equipment purchases and deposits. It received $1,010 million of net financing cash, including approximately $1,200 million from common-stock issuance.

Core says conversions for hosting customer CoreWeave are largely funded by that customer. Development under its AMD and other cloud-customer arrangements will require additional external financing. It plans project-level bond financing. Management says existing liquidity plus anticipated funding sources support planned development and operating needs.

TeraWulf's Abernathy sale supplied $250 million of cash during Q3, distinct from the accounting gain; further installments remained expected. After quarter-end, it increased revolving-credit commitments to about $400 million, with an additional conditional, uncommitted $150 million expansion option. Its post-quarter November 4 Google credit support for leases with customer Anthropic concerns anticipated project financing. The Fluidstack warrants behind Q3's gain relate to a separate arrangement.

For the next phase, the operating split provides a more useful starting point than the combined profit: Core has reached positive operating income, while TeraWulf still reports an operating loss. Delivered hosting capacity, cash collections and financing commitments will determine how much of the construction bill the growing businesses can carry.