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SEGMENT REPORTING
 9 Months Ended
Sep. 30, 2025
Segment Reporting [Abstract]  
SEGMENT REPORTING
13. 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,
2025202420252024
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 fees33,280 37,426 94,319 123,584 
Depreciation expense15,474 27,415 52,792 83,067 
Employee compensation7,803 4,995 23,411 15,712 
Facility operations expense2,089 3,514 7,458 9,695 
Other segment items792 1,205 2,217 4,062 
Total cost of digital asset self-mining59,438 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 fees4,793 7,875 9,367 32,670 
Depreciation expense376 934 856 3,245 
Employee compensation1,115 1,200 2,225 4,244 
Facility operations expense297 734 665 2,499 
Other segment items113 1,171 201 6,730 
Total cost of digital asset hosted mining services6,694 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 margin23 %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 expense219 42 389 57 
Employee compensation
2,209 1,399 4,651 1,477 
Facility operations expense4,383 4,863 12,570 7,964 
Other segment items702 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 margin5 %— %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,
2025202420252024
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 exchange or disposal of property, plant and equipment
2,933 509 7,105 4,061 
Selling, general and administrative
69,354 40,348 166,409 88,655 
Operating (loss) income(57,425)(41,219)(126,305)20,587 
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 rights74,864 408,520 363,358 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
$(146,535)$(455,125)$(502,278)$(1,048,980)
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/AN/A23 %73 %N/AN/A
G
100 %100 %N/AN/AN/AN/A
HN/AN/AN/A19 %N/AN/A
JN/AN/AN/AN/A100 %100 %
LN/AN/A77 %N/AN/AN/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/AN/A42 %59 %N/AN/A
G
100 %100 %N/AN/AN/AN/A
HN/AN/AN/A23 %N/AN/A
JN/AN/AN/AN/A100 %100 %
LN/AN/A54 %N/AN/AN/A