SEGMENT REPORTING

9 Months Ended

Sep. 30, 2025

Segment Reporting [Abstract]

SEGMENT REPORTING

14. SEGMENT REPORTING

The Company’s operating segments are aggregated into reportable segments only if they exhibit similar economic characteristics and have similar business activities.

The Company has three operating segments: “Digital Asset Self-Mining”, consisting of performing digital asset mining for its own account; “Digital Asset Hosted Mining”, consisting of providing hosting services to third-parties for digital asset mining; and “Colocation”, consisting of providing high-density colocation services to customers employing AI and HPC related workloads. The Company’s Colocation operations met the criteria to be considered a new segment during the second quarter of 2024. During fiscal year 2024, our “Colocation” segment was referred to as “HPC Hosting.” The Digital Asset Self-Mining segment generates revenue from operating owned digital infrastructure and computer equipment as part of a pool of users that process transactions conducted on one or more blockchain networks. In exchange for these services, the Company receives digital assets. The Digital Asset Hosted Mining business generates revenue through the sale of consumption-based contracts for its digital asset hosted mining services which are recurring in nature. The Colocation operation generates revenue through licensing agreements and orders with licensees that include fixed and variable payments on a recurring basis.

The Company’s Chief Executive Officer is the chief operating decision maker (“CODM”). The CODM uses gross profit to evaluate performance and allocate resources. Gross profit is used to evaluate actual results against expectations, which are based on comparable prior results, current budget, and current forecast. Gross profit is also used in deciding how profits and cash flows will be reinvested or otherwise deployed. The CODM does not evaluate performance or allocate resources based on segment asset or liability information; accordingly, the Company has not presented a measure of assets by segment. The segments’ accounting policies are the

same as those described in the summary of significant accounting policies. The Company excludes certain operating expenses and other expenses from the allocations to operating segments.

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

	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
Digital Asset Self-Mining Segment	(in thousands, except percentages)
Digital asset self-mining revenue	$	57,438		$	68,138		$	187,041		$	328,840
Cost of digital asset self-mining:
Power fees	33,280			37,426			94,319			123,584
Depreciation expense	15,474			27,415			52,792			83,067
Employee compensation	7,803			4,995			23,411			15,712
Facility operations expense	2,089			3,514			7,458			9,695
Other segment items	792			1,205			2,217			4,062
Total cost of digital asset self-mining	59,438			74,555			180,197			236,120
Digital Asset Self-Mining gross (loss) profit	$	(2,000)		$	(6,417)		$	6,844		$	92,720
Digital Asset Self-Mining gross margin	(3)		%	(9)		%	4		%	28		%
Digital Asset Hosted Mining Segment
Digital asset hosted mining revenue from customers	$	8,714		$	16,878		$	18,131		$	71,050
Cost of digital asset hosted mining services:
Power fees	4,793			7,875			9,367			32,670
Depreciation expense	376			934			856			3,245
Employee compensation	1,115			1,200			2,225			4,244
Facility operations expense	297			734			665			2,499
Other segment items	113			1,171			201			6,730
Total cost of digital asset hosted mining services	6,694			11,914			13,314			49,388
Digital Asset Hosted Mining gross profit	$	2,020		$	4,964		$	4,817		$	21,662
Digital Asset Hosted Mining gross margin	23		%	29		%	27		%	30		%
Colocation Segment
Colocation revenue:
License fees	$	9,848		$	7,806		$	22,853		$	11,625
Maintenance and other	1,550			45			1,628			82
Licensing revenue	11,398			7,851			24,481			11,707
Power fees passed through to customer	3,553			2,487			9,603			4,150
Total Colocation revenue	14,951			10,338			34,084			15,857
Cost of Colocation services:
Depreciation expense	219			42			389			57
Employee compensation	2,209			1,399			4,651			1,477
Facility operations expense	4,383			4,863			12,570			7,964
Other segment items	702			250			1,388			284
Cost of licensing revenue	7,513			6,554			18,998			9,782
Power fees passed through to customer	3,553			2,487			9,604			4,150
Total cost of Colocation services	11,066			9,041			28,602			13,932
Colocation gross profit	$	3,885		$	1,297		$	5,482		$	1,925
Colocation licensing gross margin	34		%	17		%	22		%	16		%
Colocation gross margin	26		%	13		%	16		%	12		%
Consolidated
Consolidated total revenue	$	81,103		$	95,354		$	239,256		$	415,747
Consolidated cost of revenue	$	77,198		$	95,510		$	222,113		$	299,440
Consolidated gross profit	$	3,905		$	(156)		$	17,143		$	116,307
Consolidated gross margin	5		%	—		%	7		%	28		%

A reconciliation of the reportable segment gross profit (loss) to loss before income taxes included in the Company’s condensed consolidated statements of operations for the three and nine months ended September 30, 2025 and 2024, is as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2025 (As Restated)		2024		2025 (As Restated)		2024
Reportable segment gross profit (loss)	$	3,905	$	(156)	$	17,143	$	116,307
(Increase) decrease in fair value of digital assets	(10,957)		206		(30,066)		247
Decrease in fair value of energy derivatives	—		—		—		2,757
Loss on disposal of property, plant and equipment	300		509		4,472		4,061
Impairment of property, plant and equipment	—		—		—		97,261
Selling, general and administrative	69,354		40,348		170,851		88,655
Operating loss	(54,792)		(41,219)		(128,114)		(76,674)
Non-operating expense (income), net:
Loss on debt extinguishment	—		317		1,377		487
Interest (income) expense, net	(821)		7,072		(4,193)		35,934
Change in fair value of warrants and contingent value rights	74,864		408,520		363,358		1,144,441
Reorganization items, net	—		—		—		(111,439)
Loss on legal settlements	15,075		356		15,504		2,070
Other non-operating income, net	(8)		(2,359)		(73)		(1,926)
Total non-operating expense, net	89,110		413,906		375,973		1,069,567
Loss before income taxes	$	(143,902)	$	(455,125)	$	(504,087)	$	(1,146,241)

Concentrations of Revenue and Credit Risk

Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of cash and cash equivalents. The Company places its cash and cash equivalents with major financial institutions, which management assesses to be of high credit quality, in order to limit the exposure to credit risk. As of September 30, 2025 and December 31, 2024, all of the Company’s fixed assets were located in the United States. For the three and nine months ended September 30, 2025 and 2024, all of the Company’s revenue was generated in the United States. For the three and nine months ended September 30, 2025, 71% and 78% of the Company’s total revenue was generated from digital asset mining of bitcoin from one customer. For the three and nine months ended September 30, 2024, 71% and 79%, respectively, of the Company’s total revenue was generated from digital asset mining of bitcoin from one customer. As of September 30, 2025 and 2024, substantially all of our digital assets were held by one third-party digital asset service.

For the three and nine months ended September 30, 2025, and 2024, the concentration of customers comprising 10% or more of the Company’s Digital Asset Self-Mining, Digital Asset Hosted Mining, and Colocation segment revenue were as follows:

Three Months Ended September 30,

Three Months Ended September 30,

Three Months Ended September 30,

2025

2024

2025

2024

2025

2024

Percent of Digital Asset Self-Mining segment revenue:

Percent of Digital Asset Hosted Mining segment revenue:

Percent of Colocation segment revenue:

Customer

F

N/A

N/A

23

%

73

%

N/A

N/A

G

100

%

100

%

N/A

N/A

N/A

N/A

H

N/A

N/A

N/A

19

%

N/A

N/A

J

N/A

N/A

N/A

N/A

100

%

100

%

L

N/A

N/A

77

%

N/A

N/A

N/A

Nine Months Ended September 30,

Nine Months Ended September 30,

Nine Months Ended September 30,

2025

2024

2025

2024

2025

2024

Percent of Digital Asset Self-Mining segment revenue:

Percent of Digital Asset Hosted Mining segment revenue:

Percent of Colocation segment revenue:

Customer

F

N/A

N/A

42

%

59

%

N/A

N/A

G

100

%

100

%

N/A

N/A

N/A

N/A

H

N/A

N/A

N/A

23

%

N/A

N/A

J

N/A

N/A

N/A

N/A

100

%

100

%

L

N/A

N/A

54

%

N/A

N/A

N/A