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SEGMENT REPORTING
 3 Months Ended
Mar. 31, 2026
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: “Colocation”, consisting of providing high-density colocation services to
customers employing AI and HPC related workloads; “Digital Asset Self-Mining”, consisting of performing digital asset mining for
its own account; and “Digital Asset Hosted Mining”, consisting of providing hosting services to third-parties for digital asset mining.
The Colocation operation generates revenue through licensing agreements and orders with licensees that include fixed and variable
payments on a recurring basis. 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 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 March 31,
2026
2025
(in thousands, except percentages)
Colocation Segment
Colocation revenue:
License fees
$59,195
$5,995
Power fees passed through to customer
21,059
2,586
Maintenance and other
(2,715)
(8)
Total colocation revenue
77,539
8,573
Cost of colocation services:
Power fees passed through to customer
21,059
2,586
Depreciation expense
2,075
67
Employee compensation
2,986
1,295
Facility operations expense
6,755
3,852
Other segment items
743
306
Total cost of colocation services
33,618
8,106
Colocation gross profit
$43,921
$467
Colocation gross margin
57%
5%
Digital Asset Self-Mining Segment
Digital asset self-mining revenue
$30,105
$67,179
Cost of digital asset self-mining:
Power fees
27,271
30,319
Depreciation expense
13,909
19,259
Employee compensation
3,527
7,335
Facility operations expense
1,972
3,280
Other segment items
510
977
Total cost of digital asset self-mining
47,189
61,170
Digital Asset Self-Mining gross profit
$(17,084)
$6,009
Digital Asset Self-Mining gross margin
(57)%
9%
Digital Asset Hosted Mining Segment
Digital asset hosted mining revenue from customers
$7,600
$3,773
Cost of digital asset hosted mining services:
Power fees
3,303
1,367
Depreciation expense
306
145
Employee compensation
427
332
Facility operations expense
234
148
Other segment items
61
44
Total cost of digital asset hosted mining services
4,331
2,036
Digital Asset Hosted Mining gross profit
$3,269
$1,737
Digital Asset Hosted Mining gross margin
43%
46%
Consolidated
Consolidated total revenue
$115,244
$79,525
Consolidated cost of revenue
$85,138
$71,312
Consolidated gross profit
$30,106
$8,213
Consolidated gross margin
26%
10%
A reconciliation of the reportable segment gross profit to (loss) income before income taxes included in the Company’s
condensed consolidated statements of operations for the three months ended March 31, 2026 and 2025, is as follows (in thousands):
Three Months Ended March 31,
2026
2025
Reportable segment gross profit
$30,106
$8,213
Decrease in fair value of digital assets
6,558
10,688
Loss on disposal of property, plant and equipment
13,638
6
Impairment of property, plant and equipment
266,488
—
Colocation organizational and site startup costs
8,665
11,667
Advisor fees
333
603
Selling, general and administrative
44,846
32,287
Operating loss
(310,422)
(47,038)
Non-operating expenses (income), net:
Interest expense (income), net
4,857
(2,187)
Change in fair value of warrants and contingent value rights
30,799
(621,464)
Loss on legal settlements
500
—
Other non-operating expense, net
10
157
Total non-operating expense (income), net
36,166
(623,494)
(Loss) income before income taxes
$(346,588)
$576,456
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 and accounts receivable. Credit risk with respect to accounts receivable is concentrated with a small number of customers.
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 March 31, 2026 and December 31, 2025, all of the Company’s fixed assets
were located in the United States. For the three months ended March 31, 2026 and 2025, all of the Company’s revenue was generated
in the United States. For the three months ended March 31, 2026 and 2025, 26% and 84%, respectively, of the Company’s total
revenue was generated from one customer in the Digital Asset Self-Mining segment. For the three months ended March 31, 2026 and
2025, 67% and 11%, respectively, of the Company's total revenue was generated from one customer in the Colocation segment. As of
March 31, 2026 and December 31, 2025, substantially all of the Company’s digital assets were held by one third-party digital asset
service.