Core Scientific, Inc./tx

Previous wording

The following Management's Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to promote understanding of the results of operations and financial condition of the Company. This MD&A is provided as a supplement to, and should be read in conjunction with, our unaudited condensed consolidated financial statements and the accompanying notes to unaudited condensed financial statements (Part I, Item 1 of this Form 10-Q) as well as the financial and other information included in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission on February 27, 2025. This section generally discusses the results of operations for the three months ended March 31, 2025, compared to March 31, 2024.

Current wording

The following Management's Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to promote understanding of the results of operations and financial condition of the Company. This MD&A is provided as a supplement to, and should be read in conjunction with, our unaudited condensed consolidated financial statements and the accompanying notes to unaudited condensed financial statements (Part I, Item 1 of this Form 10-Q) as well as the financial and other information included in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission on February 27, 2025. This section generally discusses the results of operations for the three and six months ended June 30, 2025, compared to June 30, 2024.

Previous wording

Core Scientific, Inc. (“we,” “us,” “our,” the “Company,” “Core Scientific,” or “Core”) is a leader in designing, building and operating digital infrastructure for high-density colocation services and digital asset mining of bitcoin. Since our inception in 2018, we have been a premier provider and operator of dedicated, purpose-built facilities and software solutions for digital asset mining for ourselves and our third-party customers, and, during 2024, we announced the arrangements at multiple sites for the provision of high-density digital infrastructure colocation services to a third party engaged in high-performance computing (“HPC”).

Current wording

Core Scientific, Inc. (“we,” “us,” “our,” the “Company,” “Core Scientific,” or “Core”) is a leader in designing, building and operating digital infrastructure for high-density colocation services and digital asset mining of bitcoin. Since our inception in 2018, we have been a premier provider and operator of dedicated, purpose-built facilities and software solutions for digital asset mining for ourselves and our third-party customers. In 2024, we initiated a significant strategic transition from bitcoin mining to colocation services for customers employing HPC workloads such as artificial intelligence-related applications.

Previous wording

We believe that using our existing infrastructure for high-density colocation services will provide more consistent dollar-based revenue and represents substantially less risk than our traditional hosted bitcoin mining or our bitcoin self-mining operations. As a result, we intend to focus our business development and marketing efforts on expanding our high-density colocation customer base. As a result, we initiated a significant strategic transition from bitcoin mining to colocation services for customers employing HPC workloads such as artificial intelligence-related applications.

Current wording

We believe leveraging our existing infrastructure for high-density colocation services will provide more stable and predictable revenue streams and represents substantially less risk than our traditional hosted bitcoin mining or our bitcoin self-mining operations. Last year, as a part of this transition, we announced arrangements at multiple sites for the provision of high-density colocation services to a third party engaged in high-performance computing (“HPC”). We continue to focus our business development and marketing efforts on expanding our high-density colocation customer base and increasing available infrastructure to provide high-density colocation services to HPC customers.

Previous wording

We are substantially engaged in constructing, refurbishing, reallocating or converting a substantial portion of our ten facilities in Alabama (1), Georgia (2), Kentucky (1), North Carolina (1), North Dakota (1), Oklahoma (1), and Texas (3) to support artificial intelligence related workloads, primarily for our one existing HPC customer, but also to support our commitment to meeting the growing demand for high-density colocation solutions and diversifying our revenue streams.

Current wording

We are constructing, refurbishing, reallocating or converting most of our ten facilities in Alabama (1), Georgia (2), Kentucky (1), North Carolina (1), North Dakota (1), Oklahoma (1), and Texas (3) to support artificial intelligence related workloads, primarily for our existing HPC customer, but also to support our commitment to meeting the growing demand for high-density colocation solutions and diversifying our revenue streams.

Previous wording

We had billable power load of approximately 870 megawatts (“MW”) as of March 31, 2025. We had gross power of approximately 1,320 MW as of March 31, 2025.

Current wording

We had billable power load of approximately 875 megawatts (“MW”) as of June 30, 2025. We had gross power of approximately 1,335 MW as of June 30, 2025.

Previous wording

Our average self-mining fleet energy efficiency for the three months ended March 31, 2025 was 24.4 joules per terahash, compared to 24.7 joules per terahash for the three months ended December 31, 2024. Self-mining fleet energy efficiency is a measure of our fleet’s average actual energy efficiency over the period presented.

Current wording

Our average self-mining fleet energy efficiency for the three months ended June 30, 2025 and 2024 was 24.7 joules per terahash. Self-mining fleet energy efficiency is a measure of our fleet’s average actual energy efficiency over the period presented.

Previous wording

Our total revenue was $79.5 million and $179.3 million for the three months ended March 31, 2025 and 2024, respectively. We generated an operating loss of $42.6 million for the three months ended March 31, 2025 and operating income of $55.2 million for the three months ended March 31, 2024. We generated net income of $580.7 million and $210.7 million for the three months ended March 31, 2025 and 2024, respectively. Our adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) was $(6.1) million and $88.0 million for the three months ended March 31, 2025 and 2024, respectively. Adjusted EBITDA is a non-GAAP financial measure. See “Key Business Operating Metrics and Non-GAAP Financial Measures” below for our definition of, and additional information related to Adjusted EBITDA.

Current wording

Our total revenue was $158.2 million and $320.4 million for the six months ended June 30, 2025 and 2024, respectively. We generated an operating loss of $68.9 million for the six months ended June 30, 2025 and operating income of $61.8 million for the six months ended June 30, 2024. We generated net loss of $356.1 million and $594.2 million for the six months ended June 30, 2025 and 2024, respectively. Our adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) was $15.4 million and $134.0 million for the six months ended June 30, 2025 and 2024, respectively. Adjusted EBITDA is a non-GAAP financial measure. See “Key Business Operating Metrics and Non-GAAP Financial Measures” below for our definition of, and additional information related to Adjusted EBITDA.

Previous wording

On February 26, 2025, the Company announced a new agreement with CoreWeave, Inc. to deliver an additional approximately 70 MW of infrastructure at the Company’s Denton, Texas facility.

Current wording

On February 26, 2025, the Company announced a new agreement with CoreWeave to deliver an additional approximately 70 MW of gross power at the Company’s Denton, Texas facility.

Previous wording

As a large-scale owner and operator of high-power digital infrastructure for digital asset mining and high-density colocation services, we believe that we are well positioned to continue to effectively mine digital assets and serve an expanding market for HPC operations. As noted in the “Business Strategy” section below, we believe that opportunities for growth exist in various applications of our data centers for third-party customers focused on cloud computing as well as machine learning and artificial intelligence, which has driven our recent expansion into providing high-density colocation services. Furthermore, we believe that the adoption and mainstream use of bitcoin and the blockchain technology on which it is based has accelerated the demand for bitcoin and other digital currencies.

Current wording

As a large-scale owner and operator of high-power digital infrastructure for digital asset mining and high-density colocation services, we believe that we are well positioned to serve an expanding market for HPC operations. As noted in the “Business Strategy” section below, we believe that opportunities for growth exist in various applications of our data centers for third-party customers focused on cloud computing as well as machine learning and artificial intelligence, which has driven our recent expansion into providing high-density colocation services. Our digital asset mining operation is focused on earning bitcoin by solving complex cryptographic algorithms to validate transactions on specific bitcoin blockchains, which is commonly referred to as “mining.” Our digital asset self-mining activity competes with myriad mining operations throughout the world to complete new blocks on the blockchain and earn the reward in the form of bitcoin.

Previous wording

We focus primarily on contracting our digital infrastructure for high-density colocation services, including allocating a significant portion of our current and future data centers to support other forms of third-party HPC operations, in connection with our short-, medium- and long-term strategic plan.

Current wording

We intend to focus primarily on contracting our digital infrastructure for high-density colocation services, including allocating a significant portion of our current and future data centers to support other forms of third-party HPC operations. As we identify additional high-density colocation services opportunities and contract to provide such services to additional HPC customers our digital infrastructure will transition from digital asset mining to providing services to HPC customers. We will continue to mine digital assets only so long as such activity remains profitable.

Previous wording

Our strategy is focused on hyperscale cloud-based providers and enterprises, including potential customers we believe have significant data center infrastructure needs that have not yet been outsourced or will require additional data center space and power to support their growth and their increasing reliance on technology infrastructure in their operations. We believe our capabilities for serving the needs of large hyperscale providers and enterprises will continue to enable us to capitalize on the growing demand for outsourced data center facilities in our markets and in new markets where our customers are located or plan to be located in the future.

Current wording

Our strategy is focused on hyperscale cloud-based providers and enterprises who have significant data center infrastructure needs that have not yet been outsourced or will require additional data center space and power to support their growth and their increasing reliance on technology infrastructure in their operations. We believe our capabilities for serving the needs of large hyperscale providers and enterprises will continue to enable us to capitalize on the growing demand for outsourced data center facilities in our markets and in new markets where our customers are located or plan to be located in the future.

Previous wording

We have three operating segments: “Digital Asset Self-Mining,” consisting of performing digital asset mining for our 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 third parties for GPU-based HPC operations. Prior to April 1, 2024, we operated only in the Digital Asset Self-Mining and Digital Asset Hosted Mining segments. During fiscal year 2024, our “Colocation” segment was referred to as “HPC Hosting.”

Current wording

We have three operating segments: “Digital Asset Self-Mining,” consisting of performing digital asset mining for our 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 third parties for GPU-based HPC operations. Prior to April

Previous wording

Our Digital Asset Hosted Mining operation segment generates revenue through the sale of electricity-based consumption contracts for our hosting services, which are recurring in nature. Our Digital Asset Hosted Mining operation segment provides a full suite of services to our digital asset mining customers. We provide deployment, monitoring, troubleshooting, optimization and maintenance of our customers’ digital asset mining equipment and provide necessary electrical power, repair and other infrastructure services necessary for our customers to operate, maintain and efficiently mine digital assets. We do not expect to further expand our Digital Asset Hosted Mining operations in 2025 and future years.

Current wording

Our Digital Asset Hosted Mining operation segment generates revenue through the sale of electricity-based consumption contracts for our hosting services, which are recurring in nature. Our Digital Asset Hosted Mining operation segment provides a full suite of services to our digital asset mining customers. We provide deployment, monitoring, troubleshooting, optimization and maintenance of our customers’ digital asset mining equipment and provide necessary electrical power, repair and other infrastructure services necessary for our customers to operate, maintain and efficiently mine digital assets.

Previous wording

Activity related to our digital asset balances for the three months ended March 31, 2025 and 2024, were as follows (in thousands):

Current wording

Activity related to our digital asset balances for the six months ended June 30, 2025 and 2024, were as follows (in thousands):

Previous wording

2 As of March 31, 2025 and December 31, 2024, there was $0.6 million and $0.9 million, respectively, of digital asset receivable included in prepaid expenses and other current assets on the consolidated balance sheets.

Current wording

2 As of June 30, 2025 and December 31, 2024, there was $0.7 million and $0.9 million, respectively, of digital asset receivable included in prepaid expenses and other current assets on the condensed consolidated balance sheets. As of June 30, 2024 and December 31, 2023, there was $0.8 million and $1.7 million, respectively, of digital asset receivable included in prepaid expenses and other current assets on the condensed consolidated balance sheets.

Previous wording

Miners perform computational operations in support of digital asset blockchains measured in “hash rate” or “hashes per second.” A “hash” is the computation run by mining hardware in support of the blockchain; therefore, a miner’s “hash rate” refers to the rate at which it is capable of solving such computations. The equipment originally employed for mining bitcoin used the central processing unit (“CPU”) of a computer to mine various forms of digital assets. Due to performance limitations, CPU mining was rapidly replaced by the GPU, which offers significant performance advantages over CPUs. General purpose chipsets like CPUs and GPUs have since been replaced as the standard in the mining industry by ASIC chips such as those found in the miners we and our customers use to mine bitcoin (although they continue to have uses in other industries). These ASIC chips are designed specifically to maximize the rate of hashing operations.

Current wording

Miners perform computational operations in support of digital asset blockchains measured in “hash rate” or “hashes per second.” A “hash” is the computation run by mining hardware in support of the blockchain; therefore, a miner’s “hash rate” refers to the rate at which it is capable of solving such computations. The equipment originally employed for mining bitcoin used the central processing unit (“CPU”) of a computer to mine various forms of digital assets. Due to performance limitations, CPU mining was rapidly replaced by the graphics processing unit (“GPU”), which offers significant performance advantages over CPUs. General purpose chipsets like CPUs and GPUs have since been replaced as the standard in the mining industry by ASIC chips such as those found in the miners we and our customers use to mine bitcoin (although they continue to have uses in other industries). These ASIC chips are designed specifically to maximize the rate of hashing operations.

Previous wording

Our Digital Asset Self-Mining segment is heavily dependent on the spot price of bitcoin. The prices of digital assets, specifically bitcoin, have experienced substantial volatility, meaning that high or low prices may have little or no relationship to identifiable market forces, may be subject to rapidly changing investor sentiment, and may be influenced by factors such as technology, regulatory void or changes, fraudulent actors, manipulation, and media reporting. Bitcoin (as well as other digital assets) may have value based on various factors, including their acceptance as a means of exchange by consumers and others, scarcity, and market demand.

Current wording

Our Digital Asset Self-Mining segment is heavily dependent on the spot price of bitcoin. The prices of digital assets, specifically bitcoin, have experienced substantial volatility, meaning that high or low prices may have little or no relationship to identifiable market forces, may be subject to rapidly changing investor sentiment, and may be influenced by factors such as technology, regulatory void or changes, fraudulent actors, manipulation, and media reporting. Bitcoin (as well as other digital assets)

Previous wording

The planned growth of our Colocation business, through increased investment in conversion of several of our bitcoin mining sites to Colocation business sites over the next several years, should gradually reduce our overall exposure to volatility in the spot price of bitcoin as our Colocation segment begins to account for a comparatively larger percentage of our financial results. The Colocation business is characterized by implementation of long-term contracts with customers spanning several years with terms and conditions outlining and resulting in stable, predictable revenue and cash flows over each period.

Current wording

The planned growth of our Colocation operation, through increased investment in conversion of several of our bitcoin mining sites to Colocation operation sites over the next several years, should gradually reduce our overall exposure to volatility in the spot price of bitcoin as our Colocation segment begins to account for a comparatively larger percentage of our financial results. The Colocation operation is characterized by implementation of long-term contracts with customers spanning several years with terms and conditions outlining and resulting in stable, predictable revenue and cash flows over each period.

Previous wording

In addition to factors underlying our mining business growth and profitability, the success of our Colocation business greatly depends on our ability to retain and develop opportunities with our existing customers, secure additional infrastructure and attract new customers.

Current wording

In addition to factors underlying our mining business growth and profitability, the success of our Colocation operation greatly depends on our ability to retain and develop opportunities with our existing customers, secure additional infrastructure and attract new customers.

Previous wording

In our Colocation business, we compete with other providers of high-power data center capacity, such as major data center real estate investment trusts (“REITs”), developers of data centers, hyperscalers and bitcoin miners with capacity suitable for high-density colocation services. This competition focuses primarily on the identification and acquisition of new, high-power sites, but also includes competition for the capital required to build or modify existing sites to support high-density colocation. Additionally, the modification of some of our data centers to accommodate our Colocation business involves the procurement of critical equipment, technologies and skilled labor, which are in high demand from other entities seeking to address the same market opportunity, thereby putting us into competition with many other organizations for those resources.

Current wording

In our Colocation operation, we compete with other providers of high-power data center capacity, such as major data center real estate investment trusts (“REITs”), developers of data centers, hyperscalers and bitcoin miners with capacity suitable for high-density colocation services. This competition focuses primarily on the identification and acquisition of new, high-power sites, but also includes competition for the capital required to build or modify existing sites to support high-density colocation. Additionally, the modification of some of our data centers to accommodate our Colocation operation involves the procurement of critical equipment, technologies and skilled labor, which are in high demand from other entities seeking to address the same market opportunity, thereby putting us into competition with many other organizations for those resources.

Previous wording

We believe we possess unique knowledge of data center design principles and systems integration architectures, as well as extensive experience designing, constructing and operating data centers that differentiates and informs our plans for modifying digital asset mining data centers to support our Colocation business, and for developing new data centers designed to support future high-value computing requirements. This knowledge includes designs for higher rack energy densities than currently offered in the legacy data center market to satisfy emerging requirements for advanced technologies supporting emerging workloads such as artificial intelligence.

Current wording

We believe we possess unique knowledge of data center design principles and systems integration architectures, as well as extensive experience designing, constructing and operating data centers that differentiates and informs our plans for modifying digital asset mining data centers to support our Colocation operation, and for developing new data centers designed to support future high-value computing requirements. This knowledge includes designs for higher rack energy densities than currently offered in the legacy data center market to satisfy emerging requirements for advanced technologies supporting emerging workloads such as artificial intelligence.

Previous wording

Due to the relatively short history of digital assets, and their emergence as a new asset class, government regulation of blockchain and digital assets is constantly evolving, with increased interest expressed by U.S. and internal regulators. In October 2020, the Cyber-Digital Task Force of the U.S. Department of Justice published a report entitled “Cryptocurrency: An Enforcement Framework” that detailed the Department’s view with respect to digital assets and the tools at the Department’s disposal to deal with threats posed by digital assets. In February 2021, representatives of the government of Inner Mongolia, China announced plans to ban digital asset mining within the province due to the energy and rare earth mineral demands of the industry. In March 2021, the nominee for Chair of the SEC expressed the need for investor protection along with promotion of innovation in the digital asset space. In March 2022, former President Biden signed an Executive Order outlining an “whole-of-government” approach to addressing the risks and harnessing the potential benefits of digital assets and its underlying technology. The executive order lays out a national policy for digital assets over six highlighted priorities. In January 2023, the U.S. House of Representatives created a new congressional subcommittee focused on digital assets, the Subcommittee of Digital Assets, Financial Technology and Inclusion, operating under the House Financial Services Committee. Most recently, in January 2025, the Acting SEC Chairman announced the launch of a crypto task force dedicated to developing a comprehensive and clear regulatory framework for crypto assets, in contrast to the SEC’s prior reliance on enforcement actions to regulate cryptocurrencies. The extent and content of any forthcoming laws and regulations are not yet ascertainable with certainty, and they may not be ascertainable in the near future.

Current wording

Due to the relatively short history of digital assets, and their emergence as a new asset class, government regulation of blockchain and digital assets is constantly evolving, with increased interest expressed by U.S. and internal regulators. In October 2020, the Cyber-Digital Task Force of the U.S. Department of Justice published a report entitled “Cryptocurrency: An Enforcement Framework” that detailed the Department’s view with respect to digital assets and the tools at the Department’s disposal to deal with threats posed by digital assets. In February 2021, representatives of the government of Inner Mongolia, China announced plans to ban digital asset mining within the province due to the energy and rare earth mineral demands of the industry. In March 2021, the nominee for Chair of the SEC expressed the need for investor protection along with promotion of innovation in the digital asset space. In March 2022, former President Biden signed an Executive Order outlining an “whole-of-government” approach to addressing the risks and harnessing the potential benefits of digital assets and its underlying technology. The executive order lays out a national policy for digital assets over six highlighted priorities. In January 2023, the U.S. House of Representatives created a new congressional subcommittee focused on digital assets, the Subcommittee of Digital Assets, Financial Technology and Inclusion, operating under the House Financial Services Committee. Most recently, in January 2025, the Acting SEC Chairman announced the launch of a crypto task force dedicated to developing a comprehensive and clear regulatory framework for crypto assets, in contrast to the SEC’s prior reliance on enforcement actions to regulate cryptocurrencies. Further, on May 29, 2025, the Digital Asset Market Clarity Act (the “Clarity Act”) was introduced in the U.S. House of Representatives. The Clarity Act provides a regulatory framework for digital assets by clarifying the roles of the SEC and CFTC in oversight of various digital assets and transactions in digital assets. The Clarity Act defines several categories of digital assets: digital commodities and permitted payment stablecoins, which would be subject to the jurisdiction of the CFTC, and excluded digital commodities, such as securities, which would be subject to the jurisdiction of the SEC. The extent and content of any forthcoming laws and regulations are not yet ascertainable with certainty, and they may not be ascertainable in the near future.

Previous wording

Our self-mining hash rate was 18.1 EH/s and 19.3 EH/s as of March 31, 2025 and 2024, respectively, representing a 6% decrease year over year.

Current wording

Our self-mining hash rate was 17.6 EH/s and 19.4 EH/s as of June 30, 2025 and 2024, respectively, representing a 9% decrease year over year.

Previous wording

Our combined self-mining and customer and related party hosting hash rate decreased 25%, to 19.1 EH/s as of March 31, 2025, from 25.5 EH/s as of March 31, 2024.

Current wording

Our combined self-mining and customer and related party hosting hash rate decreased 16%, to 20.6 EH/s as of June 30, 2025, from 24.6 EH/s as of June 30, 2024.

Previous wording

Adjusted EBITDA is a non-GAAP financial measure defined as our net income, adjusted to eliminate the effect of (i) interest income, interest expense, and other income (expense), net; (ii) provision for income taxes; (iii) depreciation and amortization; (iv) stock-based compensation expense; (v) Reorganization items, net; (vi) unrealized fair value adjustment on energy derivatives; (vii) change in fair value of warrant and contingent value rights; (viii) Colocation segment organizational startup costs which are not reflective of the ongoing costs incurred after startup, (ix) post-emergence bankruptcy advisory costs incurred related to reorganization which are not reflective of the ongoing costs incurred in post-emergence operations, and (x) certain additional non-cash items that do not reflect the performance of our ongoing business operations. For additional information, including the reconciliation of net income to Adjusted EBITDA, please refer to the table below. We believe Adjusted EBITDA is an important measure because it allows management, investors, and our Board of Directors to evaluate and compare our operating results, including our return on capital and operating efficiencies, from period-to-period by making the adjustments described above. In addition, it provides useful information to investors and others in understanding and evaluating our results of operations, as well as provides a useful measure for period-to-period comparisons of our business, as it removes the effect of net interest expense, taxes, certain non-cash items, variable charges and timing differences. Moreover, we have included Adjusted EBITDA in this Quarterly Report on Form 10-Q because it is a key measurement used by our management internally to make operating decisions, including those related to operating expenses, evaluate performance, and perform strategic and financial planning.

Current wording

Adjusted EBITDA is a non-GAAP financial measure defined as our net income (loss), adjusted to eliminate the effect of (i) interest income, interest expense, and other income (expense), net; (ii) provision for income taxes; (iii) depreciation and amortization; (iv) stock-based compensation expense; (v) Reorganization items, net; (vi) unrealized fair value adjustment on energy derivatives; (vii) change in fair value of warrant and contingent value rights; (viii) Colocation segment startup costs which are not reflective of the ongoing costs incurred after startup, (ix) post-emergence bankruptcy advisory costs incurred related to reorganization which are not reflective of the ongoing costs incurred in post-emergence operations, and (x) certain additional non-cash items that do not reflect the performance of our ongoing business operations. For additional information, including the reconciliation of net income to Adjusted EBITDA, please refer to the table below. We believe Adjusted EBITDA is an important measure because it allows management, investors, and our Board of Directors to evaluate and compare our operating results, including our return on capital and operating efficiencies, from period-to-period by making the adjustments described above. In addition, it provides useful information to investors and others in understanding and evaluating our results of operations, as well as provides a useful measure for period-to-period comparisons of our business, as it removes the effect of net interest expense, taxes, certain non-cash items, variable charges and timing differences. Moreover, we have included Adjusted EBITDA in this Quarterly Report on Form 10-Q because it is a key measurement used by our management internally to make operating decisions, including those related to operating expenses, evaluate performance, and perform strategic and financial planning.

Previous wording

The following table presents a reconciliation of net income to Adjusted EBITDA for the three months ended March 31, 2025 and 2024 (in thousands):

Current wording

The following table presents a reconciliation of net loss to Adjusted EBITDA for the three and six months ended June 30, 2025 and 2024 (in thousands):

Previous wording

•Colocation revenue. Colocation revenue is generated by leasing data center space and providing related services to licensees at our Austin, Texas high-density data center. These licensing agreements and orders include lease components, nonlease components (such as power delivery, physical security, maintenance and other billable expenses), as well as noncomponent elements such as taxes. Under these contracts, customers pay fixed payments (based on electric capacity) and variable payments on a recurring basis. Colocation power fees are passed through to the customer without markup and are included on a gross basis in Colocation revenue.

Current wording

•Colocation revenue. Colocation revenue is generated by leasing data center space and providing related services to licensees at our Austin, Texas and Denton, Texas high-density data centers. These licensing agreements and orders include lease components, nonlease components (such as power delivery, physical security, maintenance and other billable expenses), as well as noncomponent elements such as taxes. Under these contracts, customers pay fixed payments (based on electric capacity) and variable payments on a recurring basis. Colocation power fees are passed through to the customer without markup and are included on a gross basis in Colocation revenue.

Previous wording

The Company’s cost of digital asset self-mining and digital asset hosted mining services, primarily consist of electricity costs, salaries, stock-based compensation, depreciation of property, plant and equipment used to perform mining operations and hosting services and other related costs. Cost of Colocation relates to our Austin, Texas data center, and primarily consists of facility operations expense, which includes maintenance and lease expense, power fees, payroll and benefits expense and stock-based compensation expense. Colocation power fees are passed through to the customer without markup and are included on a gross basis in Cost of Colocation services.

Current wording

The Company’s cost of digital asset self-mining and digital asset hosted mining services, primarily consist of electricity costs, salaries, stock-based compensation, depreciation of property, plant and equipment used to perform mining operations and hosting services and other related costs. Cost of Colocation relates to our Austin, Texas and Denton, Texas data centers, and primarily consists of facility operations expense, which includes maintenance and lease expense, power fees, payroll and benefits expense and stock-based compensation expense. Colocation power fees are passed through to the customer without markup and are included on a gross basis in Cost of Colocation services.

Previous wording

Losses on exchange or disposal of property, plant and equipment are measured as the differences between the carrying value of the property, plant and equipment disposed of and fair value of the consideration received upon disposal.

Current wording

Loss (gain) on exchange or disposal of property, plant and equipment are measured as the differences between the carrying value of the property, plant and equipment disposed of and fair value of the consideration received upon disposal.

Previous wording

Selling, general and administrative expenses includes compensation, benefits, and other personnel-related expenses, stock-based compensation, rent, Colocation segment organizational and site startup costs, post-emergence bankruptcy advisor fees related to the reorganization, professional fees, business insurance, auditor fees, bad debt, amortization of intangibles, franchise taxes, and bank fees. Colocation segment organizational startup costs were primarily consulting costs that were specifically incurred preparing for and entering into the Colocation business and are not expected to be incurred in the ongoing operations of the Colocation business. Colocation segment site startup costs are indirect costs associated with the administration of converting and building of future Colocation operating sites, and include compensation and other personnel-related expenses, including stock-based compensation. Similar costs will be incurred in the future operations of the Colocation segment sites.

Current wording

Selling, general and administrative expenses includes compensation, benefits, and other personnel-related expenses, stock-based compensation, rent, Colocation segment organizational and site startup costs, post-emergence bankruptcy advisor fees related to the reorganization, professional fees, business insurance, auditor fees, bad debt, amortization of intangibles, franchise taxes, and bank fees. Colocation segment organizational startup costs were primarily consulting costs that were specifically incurred preparing for and entering into Colocation operation and are not expected to be incurred in the ongoing operations of the Colocation business. Colocation segment site startup costs are indirect costs associated with the administration of converting and building of future Colocation operating sites, and include compensation and other personnel-related expenses, including stock-based compensation. Similar costs will be incurred in the future operations of the Colocation segment sites.

Previous wording

The following table sets forth our selected Consolidated Statements of Operations for each of the periods indicated (in thousands).

Current wording

The following table sets forth our selected Condensed Consolidated Statements of Operations for each of the periods indicated (in thousands).

Previous wording

Total revenue decreased by $99.8 million or 56%, to $79.5 million for the three months ended March 31, 2025, from $179.3 million for the three months ended March 31, 2024, as a result of the factors described below.

Current wording

Total revenue decreased by $62.5 million or 44%, to $78.6 million for the three months ended June 30, 2025, from $141.1 million for the three months ended June 30, 2024, as a result of the factors described below.

Previous wording

Digital asset self-mining revenue decreased by $82.8 million or 55%, to $67.2 million for the three months ended March 31, 2025, from $150.0 million for the three months ended March 31, 2024. The year over year decrease in self-mining revenue was driven primarily by:

Current wording

Digital asset self-mining revenue decreased by $48.3 million or 44%, to $62.4 million for the three months ended June 30, 2025, from $110.7 million for the three months ended June 30, 2024. The year over year decrease in self-mining revenue was driven primarily by:

Previous wording

◦a 39% increase in network difficulty driven by a 58% increase in the twelve-month average network hash rate over prior year.

Current wording

◦a 39% increase in the three month average network difficulty driven by a 61% increase in the three month average network hash rate over prior year.

Previous wording

Total digital asset hosted mining revenue from customers decreased by $25.6 million or 87%, to $3.8 million for the three months ended March 31, 2025, from $29.3 million for the three months ended March 31, 2024. The decrease in hosted mining revenue from customers was primarily driven by our shift to our Colocation operations.

Current wording

Total digital asset hosted mining revenue from customers decreased by $19.2 million or 77%, to $5.6 million for the three months ended June 30, 2025, from $24.8 million for the three months ended June 30, 2024. The decrease in hosted mining revenue from customers was primarily driven by our shift to Colocation operations.

Previous wording

Total Colocation revenue was $8.6 million for the three months ended March 31, 2025, compared to nil for the same period in the prior year due to the initiation of Colocation operations at our Austin, Texas data center during the quarter ended June 30, 2024.

Current wording

Total Colocation revenue was $10.6 million for the three months ended June 30, 2025, compared to $5.5 million for the same period in the prior year. This $5.0 million increase was driven by the completion of the first data hall at our Denton, Texas data center during the second quarter ended June 30, 2025. Colocation operations began during the quarter ended June 30, 2024, at our Austin, Texas data center.

Previous wording

Cost of revenue decreased by $30.3 million or 30%, to $71.3 million for the three months ended March 31, 2025, from $101.6 million for the three months ended March 31, 2024. As a percentage of total revenue, cost of revenue totaled 90% and 57% for the three months ended March 31, 2025 and 2024, respectively. The decrease in cost of revenue was primarily attributable to:

Current wording

Cost of revenue decreased by $28.7 million or 28%, to $73.6 million for the three months ended June 30, 2025, from $102.3 million for the three months ended June 30, 2024. As a percentage of total revenue, cost of revenue totaled 94% and 72% for the three months ended June 30, 2025 and 2024, respectively. The decrease in cost of revenue was primarily attributable to:

Previous wording

•a $26.8 million decrease in power costs from lower rates and usage;

Current wording

•a $18.5 million decrease in power costs from lower rates and usage;

Previous wording

•a $9.3 million decrease in depreciation expense driven by the increase in the number of miners becoming fully depreciated; and

Current wording

•a $10.7 million decrease in depreciation expense driven by an increase in the number of miners becoming fully depreciated;

Previous wording

Change in fair value of energy derivatives was nil for the three months ended March 31, 2025, compared to $2.2 million for the three months ended March 31, 2024. Change in fair value of energy derivative was related to the change in fair value of the energy forward purchase contract entered into in November 2023 which expired during the second quarter 2024.

Current wording

Decrease in fair value of energy derivatives was nil for the three months ended June 30, 2025, compared to $0.5 million for the three months ended June 30, 2024. Change in fair value of energy derivative was related to the change in fair value of the energy forward purchase contract entered into in November 2023 which expired during the second quarter 2024.