The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of the Company and its wholly owned and controlled subsidiaries. All intercompany accounts and transactions, including any noncontrolling interest, have been eliminated in consolidation. The Company has prepared the Condensed Consolidated Financial Statements in accordance with generally accepted accounting principles in the United States (“GAAP”) and regulations of the U.S. Securities and Exchange Commission (the “SEC”) applicable to interim financial information, which permit the omission of certain information to the extent it has not changed materially since the latest annual financial statements. These Condensed Consolidated Financial Statements reflect all adjustments, consisting only of normal recurring adjustments, which, in the opinion of management, are necessary to state fairly the financial position, results of operations and cash flows of the Company for the periods presented. The results of operations for the interim periods are not necessarily indicative of the results to be expected for any future fiscal periods in 2026 or for the full year ending December 31, 2026.

The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The most significant accounting estimates inherent in the preparation of the Company’s financial statements include measurement of digital assets and related receivables, fair value of assets acquired and liabilities assumed in a business combination, determination of useful lives of property and equipment and finite-lived intangible assets, recoverability of long-lived assets, impairment of goodwill, valuation of derivative instruments, stock-based compensation, deferred income taxes, and loss contingencies. Actual results could differ from those estimates.

Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications have no effect on the reported financial position, results of operations, or cash flows. The impact on any prior period disclosures was immaterial.

Except for the updates noted below, there have been no material changes to our significant accounting policies for the three months ended March 31, 2026. See the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 for a detailed discussion.

The Company’s reporting currency is the U.S. dollar. The financial statements of foreign subsidiaries are translated into U.S. dollars using the current exchange rate at the balance sheet date for assets and liabilities and average exchange rates for the period for revenues and expenses. Resulting translation adjustments are recognized as a component of Accumulated Other Comprehensive Loss within the Condensed Consolidated Statements of Equity.

The Company considers all highly liquid investments and other short-term investments with an original maturity of three months or less, when purchased, to be cash equivalents. Restricted cash principally represents cash balances that support commercial letters of credit and are restricted from withdrawal. To manage risk associated with these instruments, the Company maintains a diversified allocation of deposits across banking institutions, money market funds and Federal Deposit Insurance Corporation insured deposits.

As of March 31, 2026, approximately 27% of cash and cash equivalents were denominated in foreign currencies, held by the Company’s foreign subsidiaries and contractually designated for use in their operations. Refer to Note 3 – Acquisitions and Strategic Partnerships, for further information.

As of March 31, 2026, the estimated fair value of the Company’s derivative asset instrument was $8.3 million, estimated using observable market-based inputs classified under Level 2 of the fair value hierarchy. The significant assumptions used in the discounted cash flow model to estimate fair value include the discount rate and electricity forward curves.

The Company accounts for redeemable noncontrolling interest in accordance with ASC 810, Consolidation and ASC 480, Distinguishing Liabilities and Equity (“ASC 480”). Redeemable noncontrolling interest represents ownership interests in consolidated subsidiaries that are not attributable to the Company, arising from the Exaion acquisition, and may be subject to redemption at the option of the holder, upon the occurrence of certain events outside the Company’s control, or at a fixed or determinable price on a fixed or determinable date. As redemption is not solely within the Company’s control, such interests are classified outside of permanent equity in “Redeemable Noncontrolling Interest” on the Condensed Consolidated Balance Sheets.

Redeemable noncontrolling interests are initially recorded at fair value at the date of issuance. Subsequently, the carrying amount is adjusted to the redemption value at each reporting period, if the redeemable noncontrolling interest is currently redeemable, or probable of becoming redeemable, with any changes recognized as an adjustment to retained earnings. Net loss attributable to redeemable noncontrolling interests is recorded based on the proportionate share of the subsidiary’s results, and the effect of foreign currency translation attributable to redeemable noncontrolling interest is recorded within the mezzanine equity section of the Condensed Consolidated Balance Sheets.

As of March 31, 2026, the carrying value of the redeemable noncontrolling interest had not been adjusted to the redemption value as redemption was not considered probable. Refer to Note 3 – Acquisitions and Strategic Partnerships, for further information related to the Exaion acquisition.


(in thousands)
Balance at December 31, 2025	$	—
Issuance of noncontrolling interest in subsidiary	89,116
Net loss attributable to redeemable noncontrolling interest	(1,899)
Effect of foreign currency translation attributable to redeemable noncontrolling interest	(2,199)

Balance at March 31, 2026	$	85,018

Restructuring costs reflect expenses resulting from restructuring initiatives the Company undertakes to improve operational efficiency and align resources with its strategic objectives. Restructuring costs primarily include employee separation costs, asset write-off charges, contract termination costs, costs to vacate facilities, and other direct expenses associated with approved restructuring plans. Costs are recognized when the Company’s management approves a restructuring plan and the related amounts are both probable and estimable.

During the three months ended March 31, 2026, the Company’s management committed to and initiated a restructuring plan (the “2026 Restructuring Plan”) in response to the Company’s strategic decision to reallocate resources toward AI initiatives and related critical IT and HPC opportunities, as well as a significant decline in bitcoin prices. Restructuring costs incurred during the period were $45.9 million and primarily consisted of $41.8 million related to the elimination of certain business activities and $3.9 million of employee-related separation costs, including severance, termination benefits, and equity award modifications. Restructuring costs were recorded on the Condensed Consolidated Statements of Operations. Costs related to employee separation benefits of $2.9 million were accrued as of March 31, 2026, and are expected to be paid out in the following quarter.

The effective tax rate (“ETR”) from continuing operations was 2.40% and 18.26% for the three months ended March 31, 2026 and 2025, respectively. The ETR for the three months ended March 31, 2026 differs significantly from the U.S. statutory tax rate of 21% primarily due to the establishment of a valuation allowance, in addition to non-deductible officer compensation, which represents a permanent difference that reduces the overall tax benefit. The decrease in ETR compared to the prior year period reflects the net impact of these items, primarily driven by the establishment of a valuation allowance in the current period.

During the three months ended March 31, 2026, the Company determined, based upon all available evidence, that it was more likely than not that its federal and state deferred tax assets would not be realized. This conclusion was primarily driven by cumulative net operating losses, which limit the ability to support future taxable income, and a significant decline in the fair value of the Company’s bitcoin holdings. Under ASC 820, Fair Value Measurement, changes in bitcoin fair value are recognized on the Condensed Consolidated Statements of Operations but are not taxable until disposition; accordingly, declines in the value reduce deferred tax liabilities and the associated source

The Company records income tax expense or benefit for interim periods using the actual effective tax rate applicable to the year-to-date results, rather than an estimated annual effective tax rate. This approach differs from prior periods, in which the Company applied an estimated annual tax rate. The change was made because the Company determined it can no longer reliably estimate its annual effective tax rate, primarily due to the volatility of bitcoin fair values and the resulting variability in the Company's deferred tax position.

The Company files federal and state income tax returns. The 2022-2025 tax years generally remain subject to examination by the Internal Revenue Service and various state taxing authorities, although the Company is not currently under examination in any jurisdiction. The Company does not currently expect any of its remaining unrecognized tax benefits to be recognized in the next twelve months.

The Company continually assesses any new accounting pronouncements to determine their applicability. When it is determined that a new accounting pronouncement may affect the Company’s financial reporting, the Company undertakes an analysis to determine any required changes to its Condensed Consolidated Financial Statements and assures that there are proper controls in place to ascertain that the Company’s Condensed Consolidated Financial Statements properly reflect the change.

In December 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements (“ASU 2025-11”). ASU 2025-11 improves the navigability of interim reporting guidance by providing a master list of required interim disclosures and establishing a principle for disclosure of material post-period events. The new standard is effective for the Company for interim periods within annual periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact on disclosures of adopting this standard.

In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal Use Software (“ASU 2025-06”). ASU 2025-06 eliminates accounting consideration of software project development stages and clarifies the threshold applied to begin capitalizing costs. The new standard is effective for the Company for its annual and interim periods beginning January 1, 2028, and permits prospective, modified prospective, retrospective or early adoption. The Company is currently evaluating the impact of adopting the standard.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets (“ASU 2025-05”). ASU 2025-05 provides a practical expedient to assume current economic conditions will not change for the remaining life of an asset when preparing forecasts as part of estimating credit losses. The new standard is effective for the Company for its annual periods beginning January 1, 2026 and interim period within those annual periods, with early adoption permitted and should be applied on a prospective basis. The Company adopted ASC 2025-05 during the interim period, which did not have a material impact on the Condensed Consolidated Financial Statements.

In May 2025, the FASB issued ASU 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity (“ASU 2025-03”), which amends the guidance for identifying the accounting acquirer in transactions involving the acquisition of a variable interest entity that meets the definition of a business. The guidance is intended to reduce diversity in practice and improve consistency in the application of acquisition accounting. The new standard is effective for the Company for

In December 2024, the FASB issued ASU 2024-04, Debt - Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments (“ASU 2024-04”). ASU 2024-04 clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion to improve relevance and consistency. The new standard is effective for the Company for its annual periods beginning January 1, 2026 and interim periods within those annual reporting periods, with early adoption permitted. The Company adopted ASU 2024-04 during the interim period, which did not have a material impact on the Condensed Consolidated Financial Statements.

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”). ASU 2024-03 requires additional disclosures of certain expenses in the notes of the financial statements, to provide enhanced transparency into the expense captions presented on the Condensed Consolidated Statements of Operations. Additionally, in January 2025, the FASB issued ASU 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40), to clarify the effective date of ASU 2024-03. The new standard is effective for the Company for its annual periods beginning January 1, 2027 and for interim periods beginning January 1, 2028, with early adoption permitted. The Company is currently evaluating the impact of adopting the standard.