v3.26.3
Segment Reporting
 9 Months Ended
Sep. 30, 2026
Segment Reporting [Abstract]  
SEGMENT REPORTING

19. SEGMENT REPORTING

 

The Company has four reportable segments digital asset mining, cloud services, colocation services, and ETH Staking. 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 digital asset mining segment generates revenue from the bitcoin the Company earns through its mining activities. Cost of revenue consists primarily of direct production costs of mining operations, including electricity, management fee and maintenance cost but excluding depreciation and amortization.  

 

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 Ethereum staking segment generates revenue from both native staking and liquid staking. Cost of revenue consists of direct cost related to ETH staking business including service fee and reward-sharing fees to the service providers.

 

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 $19.5 million of goodwill from the Enovum acquisition allocated to the colocation services, 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.

 

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

 

Three Months Ended September 30, 2026

 

    Digital asset
mining		     Cloud
services		     Colocation
services		     ETH
staking		     Total  
Revenue from external customers   $ 2,022     $ 18,106     $ 5,617     $ 1,028     $ 26,773  
Intersegment revenue     -       -       29       -       29  
Segment revenue     2,022       18,106       5,646       1,028       26,802  
                                         
Reconciliation of revenue                                        
Other revenue (a)                                     294  
Elimination of intersegment revenue                                     (29 )
Total consolidated revenue                                     27,067  
                                         
Less:                                        
Electricity costs     1,126       823       709       -       2,658  
Profit sharing fees     128       -       -       -       128  
Data center lease expense     -       1,883       357       -       2,240  
GPU lease expense     -       2,861       -       -       2,861  
Wage expense     -       -       359       -       359  
Service costs - ETH staking     -       -       -       71       71  
Third-party customer support fees     -       1,219       -       -       1,219  
Other segment items (b)     220       1,121       1,013       -       2,354  
Intersegment cost of revenue     -       29       -       -       29  
Segment cost of revenue     1,474       7,936       2,438       71       11,919  
                                         
Reconciliation of cost of revenue                                        
Elimination of intersegment cost of revenue                                     (29 )
Total consolidated cost of revenue                                     11,890  
                                         
Segment gross profit   $ 548     $ 10,170     $ 3,208     $ 957     $ 14,883  

 

(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 September 30, 2025

 

    Digital asset
mining		     Cloud
services		     Colocation
services		     ETH
staking		     Total  
Revenue from external customers   $ 7,416     $ 18,033     $ 1,692     $ 2,869     $ 30,010  
                                         
Reconciliation of revenue                                        
Other revenue (a)                                     455  
Total consolidated revenue                                     30,465  
                                         
Less:                                        
Electricity costs     3,626       631       289       -       4,546  
Profit sharing fees     993       -       -       -       993  
Data center lease expense     -       1,381       166       -       1,547  
GPU lease expense     -       3,454       -       -       3,454  
Wage expense     -       -       92       -       92  
Service costs - ETH staking     -       -       -       113       113  
Other segment items (b)     414       849       128       -       1,391  
Segment cost of revenue     5,033       6,315       675       113       12,136  
                                         
Segment gross profit   $ 2,383     $ 11,718     $ 1,017     $ 2,756     $ 17,874  

 

(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.

 

Nine Months Ended September 30, 2026

 

    Digital asset
mining		     Cloud
services		     Colocation
services		     ETH
staking		     Total  
Revenue from external customers   $ 8,098     $ 58,679     $ 15,117     $ 4,228     $ 86,122  
Intersegment revenue     -       -       64       -       64  
Segment revenue     8,098       58,679       15,181       4,228       86,186  
                                         
Reconciliation of revenue                                        
Other revenue (a)                                     984  
Elimination of intersegment revenue                                     (64 )
Total consolidated revenue                                     87,106  
                                         
Less:                                        
Electricity costs     4,471       2,467       2,298       -       9,236  
Profit sharing fees     1,167       -       -       -       1,167  
Data center lease expense     -       4,857       894       -       5,751  
GPU lease expense     -       12,177       -       -       12,177  
Wage expense     -       -       817       -       817  
Service costs - ETH staking     -       -       -       234       234  
Third-party customer support fees     -       2,617       -       -       2,617  
Other segment items (b)     848       2,531       2,128       -       5,507  
Intersegment cost of revenue     -       64       -       -       64  
Segment cost of revenue     6,486       24,713       6,137       234       37,570  
                                         
Reconciliation of cost of revenue                                        
Elimination of intersegment cost of revenue                                     (64 )
Total consolidated cost of revenue                                     37,506  
                                         
Segment gross profit   $ 1,612     $ 33,966     $ 9,044     $ 3,994     $ 48,616  

 

(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.

 

 

Nine Months Ended September 30, 2025

 

    Digital asset
mining		     Cloud
services		     Colocation
services		     ETH
staking		     Total  
Revenue from external customers   $ 21,825     $ 49,470     $ 5,060     $ 3,795     $ 80,150  
                                         
Reconciliation of revenue                                        
Other revenue (a)                                     1,073  
Total consolidated revenue                                     81,223  
                                         
Less:                                        
Electricity costs     12,193       1,803       782       -       14,778  
Profit sharing fees     3,235       -       -       -       3,235  
Data center lease expense     -       4,020       473       -       4,493  
GPU lease expense     -       10,951       -       -       10,951  
Wage expense     -       -       262       -       262  
Service costs - ETH staking     -       -       -       175       175  
Other segment items (b)     1,804       2,020       358       -       4,182  
Segment cost of revenue     17,232       18,794       1,875       175       38,076  
                                         
Segment gross profit   $ 4,593     $ 30,676     $ 3,185     $ 3,620     $ 42,074  

 

(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 (loss) income before taxes:

 

    For the Three Months Ended
September 30,		     For the Nine Months Ended
September 30,		  
    2026     2025     2026     2025  
                         
Segment gross profit   $ 14,883     $ 17,874     $ 48,616     $ 42,074  
                                 
Reconciling Items:                                
Other profit (a)     294       455       984       1,073  
Depreciation and amortization expenses     (11,067 )     (9,636 )     (31,191 )     (25,102 )
Impairment of capitalized software assets     -       -       (5,006 )     -  
General and administrative expenses     (25,478 )     (33,095 )     (75,673 )     (61,032 )
Gains (losses) on digital assets     84,040       168,041       (65,871 )     145,990  
Gains on digital intangible assets     5,381       -       16,705       -  
Impairment of digital intangible assets     (3,219 )     (1,836 )     (49,254 )     (1,836 )
Net gain (loss) from disposal of property and equipment     93       (539 )     1,915       (873 )
Induced conversion expense     (80,767 )     -       (80,767 )     -  
Other income (expense), net     17,445       6,159       (3,972 )     6,554  
Change in fair value of derivative liability     10,736       -       6,021       -  
Interest expense     (10,397 )     -       (23,544 )     -  
Net income (loss) before taxes     1,944       147,423       (261,037 )     106,848  

 

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