v3.26.1
Segment Reporting
 6 Months Ended
Jun. 30, 2026
Segment Reporting [Abstract]  
SEGMENT REPORTING

16. SEGMENT REPORTING

 

The Company has two reportable segments: cloud services and colocation services. The reportable segments are identified based on the types of service performed.

 

Gross profit (loss) is the segment performance measure the chief operating decision maker (“CODM”) uses to assess the Company’s reportable segments.

 

The cloud services segment generates revenue from providing high performance computing services to support generative AI workstreams. Cost of revenue consists of direct production costs, including electricity costs, data center lease expense, GPU servers lease expense, third-party customer support fees, and other relevant costs, but excluding depreciation and amortization.

 

Colocation services generate revenue by providing customers with physical space, power and cooling within the data center facility. Cost of revenue consists of direct production costs related to our HPC data center services, including electricity costs, lease costs, data center employees’ wage expenses, and other relevant costs but excluding depreciation and amortization.

 

The CODM analyzes the performance of the segments based on reportable segment revenue and reportable segment cost of revenue. No operating segments have been aggregated to form the reportable segments.

 

Other than the $19.4 million of goodwill from the Enovum acquisition allocated to the Colocation Services segment, the Company does not allocate all assets to the reporting segments as these are managed on an entity-wide basis. Therefore, the Company does not separately disclose the total assets of its reportable operating segments.

 

All Other revenue is generated from equipment leases with external customers. 

 

All revenue and cost of revenue from intersegment transactions have been eliminated in the condensed consolidated statements of operations and comprehensive (loss) income.

 

The following tables present segment revenue and segment gross profit reviewed by the CODM:

 

Three Months Ended June 30, 2026

 

    Cloud
services		     Colocation
services		     Total  
Revenue from external customers   $ 23,806     $ 4,726     $ 28,532  
Intersegment revenue     -       26       26  
Segment revenue     23,806       4,752       28,558  
                         
Reconciliation of revenue                        
Other revenue (a)             307       307  
Elimination of intersegment revenue                     (26 )
Total consolidated revenue                     28,839  
                         
Less:                        
Electricity costs     739       758       1,497  
Datacenter lease expense     1,578       70       1,648  
GPU lease expense     5,601       -       5,601  
Wage expense     -       253       253  
Third-party customer support fees     1,250       -       1,250  
Other segment items (b)     795       666       1,461  
Intersegment cost of revenue     26       -       26  
Segment cost of revenue     9,989       1,747       11,736  
                         

Reconciliation of cost of revenue

                        
Elimination of intersegment cost of revenue                     (26 )
Total consolidated cost of revenue                     11,710  
                         
Segment gross profit   $ 13,817     $ 3,005     $ 16,822  

 

(a) Other revenue is primarily attributable to equipment leasing revenue and is therefore not included in the total for segment gross profit.

 

(b) All amounts included within Other segment items are individually insignificant.

 

Three Months Ended June 30, 2025

 

    Cloud
services		     Colocation
services		     Total  
Revenue from external customers   $ 16,595     $ 1,729     $ 18,324  
                         
Reconciliation of revenue                        
Other revenue (a)             338       338  
Total consolidated revenue                     18,662  
                         
Less:                        
Electricity costs     599       270       869  
Datacenter lease expense     1,366       156       1,522  
GPU lease expense     3,749       -       3,749  
Wage expense     -       170       170  
Other segment items (b)     799       92       891  
Segment cost of revenue     6,513       688       7,201  
                         
Segment gross profit   $ 10,082     $ 1,041     $ 11,123  

 

(a) Other revenue is primarily attributable to Equipment Leasing and is therefore not included in the total for segment gross profit.

 

(b) All amounts included within Other segment items are individually insignificant.

 

The following tables present segment revenue and segment gross profit reviewed by the CODM:

 

Six Months Ended June 30, 2026

 

    Cloud
services		     Colocation
services		     Total  
Revenue from external customers   $ 40,573     $ 9,500     $ 50,073  
Intersegment revenue             35       35  
Segment revenue     40,573       9,535       50,108  
                         
Reconciliation of revenue                        
Other revenue (a)             689       689  
Elimination of intersegment revenue                     (35 )
Total consolidated revenue                     50,762  
                         
Less:                        
Electricity costs     1,644       1,589       3,233  
Datacenter lease expense     2,974       537       3,511  
GPU lease expense     9,316       -       9,316  
Wage expense     -       458       458  
Third-party customer support fees     1,398       -       1,398  
Other segment items (b)     1,410       1,115       2,525  
Intersegment cost of revenue     35       -       35  
Segment cost of revenue     16,777       3,699       20,476  
                         

Reconciliation of cost of revenue

                        
Elimination of intersegment cost of revenue                     (35 )
Total consolidated cost of revenue                     20,441  
                         
Segment gross profit   $ 23,796     $ 5,836     $ 29,632  

 

(a) Other revenue is primarily attributable to equipment leasing revenue and is therefore not included in the total for segment gross profit.

 

(b) All amounts included within Other segment items are individually insignificant.

 

Six Months Ended June 30, 2025

 

    Cloud
services		     Colocation
services		     Total  
Revenue from external customers   $ 31,438     $ 3,367     $ 34,805  
                         
Reconciliation of revenue                        
Other revenue (a)             619       619  
Total consolidated revenue                     35,424  
                         
Less:                        
Electricity costs     1,189       493       1,682  
Datacenter lease expense     2,640       307       2,947  
GPU lease expense     7,497       -       7,497  
Wage expense     -       170       170  
Other segment items (b)     1,293       230       1,523  
Segment cost of revenue     12,619       1,200       13,819  
                         
Segment gross profit   $ 18,819     $ 2,167     $ 20,986  

 

(a) Other revenue is primarily attributable to equipment leasing and is therefore not included in the total for segment gross profit.

 

(b) All amounts included within Other segment items are individually insignificant.

 

The following table presents the reconciliation of segment gross profit to net income before taxes:

 

    For the Three Months Ended
June 30,		     For the Six Months Ended
June 30,		  
    2026     2025     2026     2025  
Segment gross profit   $ 16,822     $ 11,123     $ 29,632     $ 20,986  
                                 
Reconciling Items:                                
Other revenue (a)     307       338       689       619  
Depreciation and amortization expenses     (6,567 )     (5,140 )     (13,008 )     (8,970 )
Impairment of capitalized software assets     (5,006 )     -       (5,006 )     -  
General and administrative expenses     (14,811 )     (15,477 )     (32,582 )     (19,754 )
Net gain from disposal of property and equipment     -       -       1,822       -  
Other (expense) income, net     (454 )     769       (220 )     754  
Interest expense - third parties     (4,578 )     -       (6,573 )     -  
Interest expense - related parties     (1,438 )     -       (1,438 )     -  
Net loss before taxes   $ (15,725 )   $ (8,387 )   $ (26,684 )   $ (6,365 )

 

(a) Other revenue is primarily attributable to equipment leasing and is therefore not included in the total for segment gross profit