SEGMENT REPORTING (Tables)

3 Months Ended

Mar. 31, 2022

Schedule of Revenue and Gross Profit by Reporting Segment

The following table presents revenue and gross profit by reportable segment for the periods presented (in thousands):


	Three Months Ended March 31,
		2022		2021
Equipment Sales and Hosting Segment
Revenue:
Hosting revenue		$	33,214	$	12,692
Equipment sales		26,305		31,926
Total revenue		$	59,519	$	44,618
Cost of revenue:
Cost of hosting services		$	31,231	$	11,829
Cost of equipment sales		22,535		26,231
Total Cost of revenue		$	53,766	$	38,060
Gross profit		$	5,753	$	6,558
Mining Segment
Digital asset mining income		$	133,000	$	9,628
Total revenue		$	133,000	$	9,628
Cost of revenue		68,750		1,653
Gross profit		$	64,250	$	7,975

Consolidated total revenue		$	192,519	$	54,246
Consolidated cost of revenue		$	122,516	$	39,713
Consolidated gross profit		$	70,003	$	14,533

Schedules of Customer Concentration Risk

For the three months ended March 31, 2022 and 2021, the concentration of customers comprising 10% or more of the Company’s total revenue, Equipment Sales and Hosting segment revenue was as follows:


	Three Months Ended March 31,				Three Months Ended March 31,
	2022		2021		2022		2021
	Percent of total revenue:				Percent of Equipment Sales and Hosting segment:
Customer

A	12	%	N/A		39	%	N/A
B	N/A		42	%	N/A		51	%
Blockcap	N/A		21	%	N/A		25	%

Reconciliation of Reportable Segment Gross Profit to Loss Before Income Taxes

A reconciliation of the reportable segment gross profit to (loss) income before income taxes included in the Company’s consolidated statements of operations and comprehensive (loss) income for the three months ended March 31, 2022 and 2021 is as follows (in thousands):


	Three Months Ended March 31,
	2022		2021
Reportable segment gross profit	$	70,003	$	14,533

Gain from sales of digital assets	2,163		30
Impairment of digital assets	(53,985)		—
Operating expense:
Research and development	3,340		1,208
Sales and marketing	1,398		534
General and administrative	40,160		3,795
Total operating expense	44,898		5,537
Operating (loss) income	(26,717)		9,026
Non-operating expense, net:
Loss on debt extinguishment and other	—		42
Interest expense, net	21,676		2,135
Other non-operating (income), net	(357)		—
Fair value adjustments on convertible notes	386,037		—
Fair value adjustments on derivative warrant liabilities	(10,275)		—
Other non-operating (income), net	(357)		—
Total non-operating expense, net	397,081		2,177
(Loss) income before income taxes	(423,798)		6,849
Income tax expense	42,406		—
Net (loss) income	$	(466,204)	$	6,849