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SEGMENT REPORTING
 6 Months Ended
Jun. 30, 2026
Segment Reporting [Abstract]  
SEGMENT REPORTING
14. SEGMENT REPORTING
The Company has three operating segments: Colocation, Digital Asset Self-Mining, and Digital Asset Hosted Mining.
The Colocation segment provides HDC services to customers employing AI and HPC workloads and 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 performs digital asset mining for the Company’s own account and generates revenue from operating owned digital infrastructure and computer equipment as part of mining pools in exchange for digital assets. The Digital Asset Hosted Mining segment provides hosting services to third-parties for digital asset mining through consumption-based contracts.
The Company’s Chief Executive Officer is the CODM. The CODM uses gross profit to evaluate segment performance and allocate resources. Gross profit is used to evaluate actual results against expectations based on comparable prior results, current budget, and current forecast, and to inform decisions about 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; these items are presented in the reconciliation of segment gross profit to consolidated loss before income taxes below.
The following table presents revenue and gross profit by reportable segment for the periods indicated (dollars in thousands):
Three Months Ended June 30,Six Months Ended June 30,
2026202520262025
Colocation Segment
Colocation revenue:
License fees
$98,812 $7,010 $158,008 $13,005 
Power fees passed through to customer
35,073 3,464 56,132 6,050 
Maintenance and other
2,784 86 68 78 
Total colocation revenue136,669 10,560 214,208 19,133 
Cost of colocation services:
Power fees passed through to customer
35,073 3,464 56,132 6,050 
Depreciation expense4,621 104 6,696 171 
Employee compensation
4,801 1,148 7,787 2,442 
Facility operations expense10,381 4,336 17,136 8,187 
Other segment items(1)
1,810 378 2,553 686 
Total cost of colocation services56,686 9,430 90,304 17,536 
Colocation gross profit
$79,983 $1,130 $123,904 $1,597 
Colocation gross margin
59 %11 %58 %8 %
Digital Asset Self-Mining Segment
Digital asset self-mining revenue
$21,535 $62,424 $51,640 $129,603 
Cost of digital asset self-mining:
Power fees17,861 30,720 45,131 61,039 
Depreciation expense9,897 18,058 23,806 37,317 
Employee compensation4,052 8,272 7,579 15,607 
Facility operations expense1,286 2,089 3,258 5,369 
Other segment items(1)
604 450 1,115 1,427 
Total cost of digital asset self-mining33,700 59,589 80,889 120,759 
Digital Asset Self-Mining gross profit (loss)
$(12,165)$2,835 $(29,249)$8,844 
Digital Asset Self-Mining gross margin(56)%5 %(57)%7 %
Digital Asset Hosted Mining Segment
Digital asset hosted mining revenue from customers$5,997 $5,644 $13,597 $9,417 
Cost of digital asset hosted mining services:
Power fees2,356 3,208 5,659 4,574 
Depreciation expense626 334 931 479 
Employee compensation542 779 969 1,110 
Facility operations expense167 220 401 368 
Other segment items(1)
80 43 142 89 
Total cost of digital asset hosted mining services3,771 4,584 8,102 6,620 
Digital Asset Hosted Mining gross profit
$2,226 $1,060 $5,495 $2,797 
Digital Asset Hosted Mining gross margin37 %19 %40 %30 %
Consolidated
Consolidated total revenue$164,201 $78,628 $279,445 $158,153 
Consolidated cost of revenue
$94,157 $73,603 $179,295 $144,915 
Consolidated gross profit
$70,044 $5,025 $100,150 $13,238 
Consolidated gross margin43 %6 %36 %8 %
(1)Other segment items consist primarily of software and IT costs, travel, professional and contract services, and telecommunications costs.
The following table presents a reconciliation of total reportable segment gross profit to consolidated loss before income taxes included in the Company’s condensed consolidated statements of operations for the periods indicated (in thousands):
Three Months Ended June 30,Six Months Ended June 30,
2026202520262025
Reportable segment gross profit
$70,044 $5,025 $100,150 $13,238 
Loss (gain) on fair value of digital assets9,368 (29,797)15,926 (19,109)
Loss on disposal of property, plant and equipment
1,273 4,166 14,911 4,172 
Loss on remeasurement of assets held for sale19,495 — 19,495 — 
Impairment of property, plant and equipment
— — 266,488 — 
Loss on contract termination41,948 — 41,948 — 
Colocation organizational and site startup costs 27,039 11,655 35,704 23,322 
Selling, general and administrative
49,389 45,285 94,568 78,175 
Operating loss
(78,468)(26,284)(388,890)(73,322)
Non-operating expenses (income), net:
Loss on debt extinguishment
5,435 1,377 5,435 1,377 
Interest expense (income), net
23,833 (1,185)28,690 (3,372)
Change in fair value of warrants and contingent value rights
1,045,515 909,958 1,076,314 288,494 
Other non-operating expense, net152 207 662 364 
Total non-operating expense, net
1,074,935 910,357 1,111,101 286,863 
Loss before income taxes
$(1,153,403)$(936,641)$(1,499,991)$(360,185)
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 June 30, 2026 and December 31, 2025, all of the Company’s fixed assets were located in the United States. For the three and six months ended June 30, 2026 and 2025, all of the Company’s revenue was generated in the United States. For the three months ended June 30, 2026 and 2025, 13% and 80%, respectively, of the Company’s total revenue was generated from one customer in the Digital Asset Self-Mining segment. For the six months ended June 30, 2026 and 2025, 18% and 82%, respectively, of the Company’s total revenue was generated from one customer in the Digital Asset Self-Mining segment. For the three months ended June 30, 2026 and 2025, 83% and 13%, respectively, of the Company’s total revenue was generated from one customer in the Colocation segment. For the six months ended June 30, 2026 and 2025, 77% and 12%, respectively, of the Company’s total revenue was generated from one customer in the Colocation segment. As of June 30, 2026 and December 31, 2025, substantially all of the Company’s digital assets were held by one third-party digital asset service.