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and its subsidiaries.
−Removed: The following Management's Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to promote understanding of the results of operations and financial condition.
−Removed: This MD&A is provided as a supplement to, and should be read in conjunction with, our unaudited condensed consolidated financial statements and the accompanying Notes to Unaudited Financial Statements (Part I, Item 1 of this Form 10-Q) as well as the financial and other information included in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission on March 13, 2024.
−Removed: This section generally discusses the results of operations for the three and nine months ended September 30, 2024 compared to September 30, 2023.
+Added: The following Management's Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to promote understanding of the results of operations and financial condition of the Company.
+Added: This MD&A is provided as a supplement to, and should be read in conjunction with, our unaudited condensed consolidated financial statements and the accompanying notes to unaudited condensed financial statements (Part I, Item 1 of this Form 10-Q) as well as the financial and other information included in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission on February 27, 2025.
+Added: This section generally discusses the results of operations for the three months ended March 31, 2025, compared to March 31, 2024.
As discussed in the section titled “Cautionary Note Regarding Forward-Looking Statements,” the following discussion and analysis contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements.
−Removed: Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed in the section titled “Risk Factors” under Part I, Item 1A in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission on March 13, 2024,and under Part II, Item 1A in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, filed with the Securities and Exchange Commission on August 7, 2024.
−Removed: Core Scientific is a leader in digital infrastructure for bitcoin mining and high-performance computing.
−Removed: We operate dedicated, purpose-built facilities for digital asset mining and are a premier provider of digital infrastructure, software solutions and services to our third-party customers.
−Removed: We employ our own large fleet of computers (“miners”) to earn digital assets for our own account and to provide hosting services for large bitcoin mining customers and we are in the process of allocating and converting a significant portion of our nine operational data centers in Alabama (1), Georgia (2), Kentucky (1), North Carolina (1), North Dakota (1) and Texas (3), and our facility in development in Oklahoma to support artificial intelligence-related workloads under a series of contracts that entail the modification of certain of our data centers to deliver hosting services for high-performance computing (“HPC”).
−Removed: We derive the majority of our revenue from earning bitcoin for our own account (“self-mining”).
−Removed: We began digital asset mining at scale in 2018 and in 2020 became one of the largest North American providers of hosting services primarily for third-party mining customers.
−Removed: We had an average hourly operating power demand of approximately 607 megawatts (“MW”) for the nine months ended September 30, 2024.
−Removed: We had secured approximately 1,200 MW of contracted power capacity at our sites as of September 30, 2024.
−Removed: We also operate and manage one of the largest data center infrastructure asset bases among publicly listed North American miners with operational capacity of approximately 830 MW in support of our mining and HPC operations.
−Removed: Our average self-mining fleet energy efficiency for the three months ended September 30, 2024 was 24.5 joules per terahash, compared to 24.7 joules per terahash for the three months ended June 30, 2024.
+Added: Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed in the section titled “Risk Factors” under Part I, Item 1A in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission on February 27, 2025.
+Added: Core Scientific, Inc.
+Added: (“we,” “us,” “our,” the “Company,” “Core Scientific,” or “Core”) is a leader in designing, building and operating digital infrastructure for high-density colocation services and digital asset mining of bitcoin.
+Added: Since our inception in 2018, we have been a premier provider and operator of dedicated, purpose-built facilities and software solutions for digital asset mining for ourselves and our third-party customers, and, during 2024, we announced the arrangements at multiple sites for the provision of high-density digital infrastructure colocation services to a third party engaged in high-performance computing (“HPC”).
+Added: We believe that using our existing infrastructure for high-density colocation services will provide more consistent dollar-based revenue and represents substantially less risk than our traditional hosted bitcoin mining or our bitcoin self-mining operations.
+Added: As a result, we intend to focus our business development and marketing efforts on expanding our high-density colocation customer base.
+Added: As a result, we initiated a significant strategic transition from bitcoin mining to colocation services for customers employing HPC workloads such as artificial intelligence-related applications.
+Added: We are substantially engaged in constructing, refurbishing, reallocating or converting a substantial portion of our ten facilities in Alabama (1), Georgia (2), Kentucky (1), North Carolina (1), North Dakota (1), Oklahoma (1), and Texas (3) to support artificial intelligence related workloads, primarily for our one existing HPC customer, but also to support our commitment to meeting the growing demand for high-density colocation solutions and diversifying our revenue streams.
+Added: Currently, the vast majority of our revenue is from mining bitcoin for our own account (“self-mining”).
+Added: We remain committed to maintaining the efficiency of our digital asset mining business while capitalizing on the opportunities presented by the growing high-density colocation services business.
+Added: We had billable power load of approximately 870 megawatts (“MW”) as of March 31, 2025.
+Added: We had gross power of approximately 1,320 MW as of March 31, 2025.
+Added: Our average self-mining fleet energy efficiency for the three months ended March 31, 2025 was 24.4 joules per terahash, compared to 24.7 joules per terahash for the three months ended December 31, 2024.
Self-mining fleet energy efficiency is a measure of our fleet’s average actual energy efficiency over the period presented.
−Removed: Beginning on March 6, 2024, we announced a series of new contractual agreements with a third-party provider of HPC operations for customers using specialized cloud-based graphics processing units (“GPUs”).
−Removed: These new agreements leverage the Company’s existing digital infrastructure and expertise in third-party hosting solutions.
−Removed: We believe that using our existing infrastructure for HPC hosting operations will provide more consistent dollar-based revenue and represents substantially less risk than for our traditional hosted bitcoin mining or our bitcoin self-mining operations.
−Removed: As a result, we intend to focus our business development and marketing efforts on expanding our HPC hosting customer base.
−Removed: We expect that third-party hosting for traditional bitcoin mining customers will decline significantly as a portion of our revenue mix.
−Removed: Our total revenue was $415.7 million and $360.5 million for the nine months ended September 30, 2024 and 2023, respectively.
−Removed: We generated operating income of $20.6 million and $5.0 million for the nine months ended September 30, 2024 and 2023, respectively.
−Removed: We incurred net loss of $1.05 billion and $50.8 million for the nine months ended September 30, 2024 and 2023, respectively.
−Removed: Our adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) was $144.2 million and $112.9 million for the nine months ended September 30, 2024 and 2023, respectively.
+Added: Our total revenue was $79.5 million and $179.3 million for the three months ended March 31, 2025 and 2024, respectively.
+Added: We generated an operating loss of $42.6 million for the three months ended March 31, 2025 and operating income of $55.2 million for the three months ended March 31, 2024.
+Added: We generated net income of $580.7 million and $210.7 million for the three months ended March 31, 2025 and 2024, respectively.
+Added: Our adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) was $(6.1) million and $88.0 million for the three months ended March 31, 2025 and 2024, respectively.
Adjusted EBITDA is a non-GAAP financial measure.
See “ Key Business Operating Metrics and Non-GAAP Financial Measures ” below for our definition of, and additional information related to Adjusted EBITDA.
−Removed: Recent Developments
−Removed: CoreWeave HPC Hosting Agreements
−Removed: On February 29, 2024, the Company entered into a long-term contract with CoreWeave, Inc.
−Removed: (“CoreWeave”) to deliver 16 MW of infrastructure at the Company’s Austin, Texas facility.
−Removed: Following the commencement of operations in the Austin, Texas facility, on June 3, 2024, the Company entered into a series of long-term contracts with CoreWeave to deliver approximately 200 MW of infrastructure to host CoreWeave’s HPC operations, which will require the Company to modify multiple existing sites.
−Removed: The site modifications commenced in the second half of fiscal 2024 and operational status is expected to begin in the first half of fiscal 2025.
−Removed: On June 25, 2024, the Company announced CoreWeave’s execution of an option to secure an additional 70 MW of infrastructure to host its HPC operations.
−Removed: Operational status for the additional 70 MW is expected in the second half of 2025.
−Removed: Further, on August 6, 2024, the Company announced that CoreWeave had executed an option to secure an additional 112 MW of infrastructure to host its HPC operations.
−Removed: On October 22, 2024, the Company announced that CoreWeave had exercised its final option for an additional 120 MW of infrastructure.
−Removed: 2029 Convertible Notes Offering
−Removed: On August 19, 2024, the Company the Company completed a private offering (the “2029 Convertible Notes Offering”) of $460.0 million aggregate principal amount of 3.00% Convertible Senior Notes due 2029 (the “2029 Convertible Notes”), which included the exercise in full of the initial purchasers’ option to purchase up to an additional $60.0 million aggregate principal amount of 2029 Convertible Notes.
−Removed: The net proceeds from the 2029 Convertible Notes Offering were approximately $447.6 million, after deducting the initial purchasers’ discounts and commissions and the Company’s estimated offering expenses.
−Removed: The Company used approximately $62.0 million of the net proceeds from the 2029 Convertible Notes Offering to repay in full the outstanding loans under the Exit Credit Agreement, of which $0.8 million was paid for interest.
−Removed: Additionally, the Company used approximately $154.1 million of the net proceeds from the 2029 Convertible Notes Offering to redeem all of the outstanding Secured Notes, of which $4.1 million was paid for interest.
−Removed: Further, On September 6, 2024, the Company paid $49.6 million to repay the BlockFi facility in full, of which $0.7 million was paid for interest.
−Removed: The Company intends to use the remaining net proceeds from the 2029 Convertible Notes Offering for general corporate purposes, including working capital, operating expenses, capital expenditures, acquisitions of complementary businesses or assets, or other repurchases of its securities.
−Removed: For more detailed information regarding the 2029 Convertible Notes Offering conversion, refer to Note 6 — Convertible and Other Notes Payable to our condensed consolidated financial statements in Item 1 of Part I of this Quarterly Report on Form 10-Q.
−Removed: On April 19, 2024, the Bitcoin protocol executed its fourth planned halving, wherein the bitcoin rewards issued for each solved block declined from 6.25 bitcoin to 3.125 bitcoin, reducing the bitcoin received from bitcoin mining by 50% (excluding transaction fee rewards).
−Removed: As a result, revenue generated from bitcoin mining declined, adversely impacting gross profit.
−Removed: Emergence from Bankruptcy
−Removed: On January 15, 2024, the Company and certain of its affiliates filed with the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”) the Fourth Amended Joint Chapter 11 Plan of Core Scientific, Inc.
−Removed: and its Affiliated Debtors (with Technical Modifications) (the “Plan of Reorganization”).
−Removed: On January 16, 2024, the Bankruptcy Court entered an order confirming the Plan of Reorganization.
−Removed: On January 23, 2024 (the “Effective Date”), the conditions to the effectiveness of the Plan of Reorganization were satisfied or waived and the Company emerged from bankruptcy.
−Removed: On January 24, 2024, the Company’s common shares began trading on the Nasdaq market under the ticker symbol CORZ.
−Removed: On the Effective Date, a new Board of Directors was constituted and the Company, in accordance with the Plan of Reorganization satisfied and extinguished claims in the Chapter 11 cases through the issuance of (i) new common stock (“New Common Stock”), (ii) new warrants (“New Warrants”), (iii) contingent value rights (“CVRs”), (iv) new secured convertible notes due 2029 (“New Secured Convertible Notes”), and (v) new secured notes due 2028 (“New Secured Notes”).
−Removed: For more detailed information regarding our emergence from bankruptcy, refer to Notes 3 — Chapter 11 Filing and Emergence from Bankruptcy, 6 — Convertible and Other Notes Payable, 7 — Contingent Value Rights and Warrant Liabilities and 10 — Stockholders' Deficit to our condensed consolidated financial statements in Item 1 of Part I of this Quarterly Report on Form 10-Q.
+Added: On January 23, 2024, the Company emerged from bankruptcy when the conditions to the effectiveness of the Fourth Amended Joint Chapter 11 Plan of Reorganization of Core Scientific, Inc.
+Added: and its Debtor Affiliates (with Technical Modifications) (the “Plan of Reorganization”) were satisfied or waived.
+Added: For more detailed information regarding our emergence from bankruptcy, refer to Notes 3 — Chapter 11 Filing and Emergence from Bankruptcy, 8 — Convertible and Other Notes Payable, 9 — Contingent Value Rights and Warrant Liabilities and 12 — Stockholders' Deficit to our consolidated financial statements in Item 8 of Part II of our Annual Report on Form 10-K for the year ended December 31, 2024.
+Added: Developments During 2025
+Added: On February 26, 2025, the Company announced a new agreement with CoreWeave, Inc.
+Added: to deliver an additional approximately 70 MW of infrastructure at the Company’s Denton, Texas facility.
Our Business Model
Business Overview
−Removed: As a large-scale owner and operator of high-power digital infrastructure for bitcoin mining and hosting services, we believe that we are well positioned to serve customers in digital asset mining and an expanding market for HPC operations.
−Removed: We believe that the adoption and mainstream use of bitcoin and the blockchain technology on which it is based has accelerated the demand for bitcoin and other digital currencies.
−Removed: Further, as noted in the “Business Strategy” section below, we believe that opportunities for growth exist in various applications of our data centers for third-party customers focused on cloud computing as well as machine learning and artificial intelligence, which has driven our recent expansion into providing HPC hosting services.
−Removed: We focus primarily on mining and selling bitcoin for cash, enhancing efficiencies in our operations (reducing our cost to mine) and contracting our digital infrastructure for HPC hosting.
+Added: As a large-scale owner and operator of high-power digital infrastructure for digital asset mining and high-density colocation services, we believe that we are well positioned to continue to effectively mine digital assets and serve an expanding market for HPC operations.
+Added: As noted in the “Business Strategy” section below, we believe that opportunities for growth exist in various applications of our data centers for third-party customers focused on cloud computing as well as machine learning and artificial intelligence, which has driven our recent expansion into providing high-density colocation services.
+Added: Furthermore, we believe that the adoption and mainstream use of bitcoin and the blockchain technology on which it is based has accelerated the demand for bitcoin and other digital currencies.
+Added: We focus primarily on contracting our digital infrastructure for high-density colocation services, including allocating a significant portion of our current and future data centers to support other forms of third-party HPC operations, in connection with our short-, medium- and long-term strategic plan.
Our digital asset mining operation is focused on earning bitcoin by solving complex cryptographic algorithms to validate transactions on specific bitcoin blockchains, which is commonly referred to as “mining.” Our digital asset self-mining activity competes with myriad mining operations throughout the world to complete new blocks on the blockchain and earn the reward in the form of bitcoin.
−Removed: Our data centers house bitcoin mining computers and will increasingly house GPUs.
−Removed: These specialized facilities lever our specialized design and construction proficiency by employing high-density, low-cost engineering, power designs and modular construction.
−Removed: For bitcoin mining, our proprietary thermodynamic structural design manages heat and airflow to deliver best-in-class uptime and, ultimately, increased mining rewards to us and our customers.
−Removed: We are allocating a significant portion of our current and future data centers to support other forms of high-value compute, such as HPC hosting operations, in connection with our short-, medium- and long-term strategic plan.
Business Strategy
−Removed: Our business strategy is to grow our revenue and profitability by maximizing the portion of our infrastructure portfolio contracted for HPC hosting, expanding that portfolio and increasing the efficiency of our self-mining fleet.
−Removed: We intend to strategically develop the infrastructure necessary to support business growth and profitability and pursue adjacent high-value compute opportunities that lever our data center expertise and capabilities.
−Removed: For example, in February 2024, we entered into a multi-year lease agreement for a data center in Austin, Texas, to provide hosting services for CoreWeave with up to 16 MW of data center infrastructure in support of its GPU cloud compute workloads.
−Removed: This facility became operational in the second fiscal quarter of 2024.
−Removed: Since June 3, 2024, the Company has entered into a series of long-term contracts with CoreWeave to deliver approximately 500 MW of infrastructure to host CoreWeave’s HPC operations.
−Removed: These contracts represent a significant milestone in the HPC hosting portion of our strategy and tap into the rapidly growing hyperscale data center market.
−Removed: We believe the potential business opportunity for HPC hosting complements our current business model with expected stable, long-term revenue.
−Removed: We believe we can successfully apply our experience developing and operating a large, multi-state portfolio of digital infrastructure for digital asset mining to the design, development and operation of large-scale data centers configured to optimize the performance of specialized computers for other specific, high-value applications such as cloud computing, machine learning and artificial intelligence.
−Removed: We intend to seek additional opportunities and to engage additional customers in the HPC Hosting segment to expand our business into these areas using our knowledge, expertise, existing and future infrastructure where favorable market opportunities exist.
+Added: Our business strategy is to grow our revenue and profitability by expanding our large-scale data center infrastructure portfolio configured for specialized computers performing specific, high-value applications such as cloud computing, machine learning and artificial intelligence, and maximizing the portion of our infrastructure portfolio contracted for high-density colocation services.
+Added: We intend to continue to strategically develop and make operational the infrastructure necessary to support our existing contractual commitments to our existing HPC customer and to support expected customer growth and additional demand by leveraging our data center expertise and capabilities.
+Added: We intend to seek additional opportunities and to engage additional customers in the high-density colocation services (“Colocation”) segment to expand our business into these areas using our knowledge, expertise, existing and future infrastructure where favorable market opportunities exist.
+Added: Our strategy is focused on hyperscale cloud-based providers and enterprises, including potential customers we believe have significant data center infrastructure needs that have not yet been outsourced or will require additional data center space and power to support their growth and their increasing reliance on technology infrastructure in their operations.
+Added: We believe our capabilities for serving the needs of large hyperscale providers and enterprises will continue to enable us to capitalize on the growing demand for outsourced data center facilities in our markets and in new markets where our customers are located or plan to be located in the future.
We have three operating segments:
−Removed: “Digital Asset Self-Mining,” consisting of performing digital asset mining for our own account, “Digital Asset Hosted Mining,” consisting of providing hosting services to third parties for digital asset mining, and “HPC Hosting,” consisting of providing hosting services to third parties for GPU-based HPC hosting operations.
−Removed: Our Digital Asset Self-Mining operation segment generates revenue from operating our own digital infrastructure and mining computers as part of a pool of users that process transactions conducted on one or more blockchain networks.
+Added: “Digital Asset Self-Mining,” consisting of performing digital asset mining for our own account, “Digital Asset Hosted Mining,” consisting of providing hosting services to third parties for digital asset mining, and “Colocation,” consisting of providing high-density colocation services to third parties for GPU-based HPC operations.
+Added: Prior to April 1, 2024, we operated only in the Digital Asset Self-Mining and Digital Asset Hosted Mining segments.
+Added: During fiscal year 2024, our “Colocation” segment was referred to as “HPC Hosting.”
+Added: Our Digital Asset Self-Mining operation segment generates revenue from the deployment and operation of our own large fleet of miners within our owned digital infrastructure as part of a pool of users that process transactions conducted on one or more blockchain networks.
In exchange for this activity, we receive digital assets in the form of bitcoin.
Our Digital Asset Hosted Mining operation segment generates revenue through the sale of electricity-based consumption contracts for our hosting services, which are recurring in nature.
−Removed: Our HPC Hosting operation segment generates revenue by providing colocation, cloud and connectivity services to customers in exchange for a fee.
−Removed: The Company’s HPC and cloud compute operations met the criteria to be considered a new segment during the second quarter of 2024.
+Added: Our Digital Asset Hosted Mining operation segment provides a full suite of services to our digital asset mining customers.
+Added: We provide deployment, monitoring, troubleshooting, optimization and maintenance of our customers’ digital asset mining equipment and provide necessary electrical power, repair and other infrastructure services necessary for our customers to operate, maintain and efficiently mine digital assets.
+Added: We do not expect to further expand our Digital Asset Hosted Mining operations in 2025 and future years.
+Added: Our Colocation operation segment generates revenue by providing colocation, cloud and connectivity services to customers in exchange for a fee.
+Added: Our Colocation operation segment provides space, power, cooling, facilities operations, security and other services to third-party HPC customers to support workloads for machine learning and artificial intelligence.
Mining Equipment
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Delivery schedules have ranged from one month to 12 months.
−Removed: As of December 31, 2023, we had two active purchase agreements with Bitmain.
−Removed: The first agreement was for the acquisition of Antminer S19J XP miners with a combined exahash of 4.1 or 28,400 miners.
−Removed: The second agreement was for the acquisition of Antminer S21 miners with a combined exahash of 2.5 or approximately 12,900 miners.
−Removed: As of September 30, 2024, the Company had received all of the miners and completed all 2024 payments due on miners ordered for deployment this year.
−Removed: The tables below summarize the total number of self- and hosted miners in operation as of September 30, 2024 and December 31, 2023 (miners in thousands):
−Removed: Bitcoin Miners in Operation as of September 30, 2024
+Added: The tables below summarize the total number of self- and hosted miners in operation as of March 31, 2025, December 31, 2024 and March 31, 2024 (miners in thousands):
+Added: Bitcoin Miners in Operation as of March 31, 2025
Mining Equipment Hash rate (EH/s) Number of Miners
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Total mining equipment 20.1 171.1
+Added: Bitcoin Miners in Operation as of March 31, 2024
+Added: Mining Equipment Hash rate (EH/s) Number of Miners
+Added: Self-miners 19.3 172.8
+Added: Hosted miners 6.2 51.1
+Added: Total mining equipment 25.5 223.9
Summary of Digital Asset Activity
−Removed: Activity related to our digital asset balances for the nine months ended September 30, 2024 and 2023, were as follows (in thousands):
−Removed: September 30, 2024 September 30, 2023
+Added: Activity related to our digital asset balances for the three months ended March 31, 2025 and 2024, were as follows (in thousands):
+Added: March 31, 2025 March 31, 2024
Digital assets, beginning of period $ 23,893 $ 2,284
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Gain from sale of digital assets
−Removed: Impairment of digital assets — (2,864)
Payment of board fee — (89)
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Accounting for and Disclosure of Crypto Assets (“ASU 2023-08”) effective January 1, 2024.
−Removed: 2 As of September 30, 2024 and December 31, 2023, there was $0.7 million and $1.7 million, respectively, of digital asset receivable included in prepaid expenses and other current assets on the condensed consolidated balance sheets.
+Added: 2 As of March 31, 2025 and December 31, 2024, there was $0.6 million and $0.9 million, respectively, of digital asset receivable included in prepaid expenses and other current assets on the consolidated balance sheets.
Performance Metrics
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Our Digital Asset Self-Mining segment is heavily dependent on the spot price of bitcoin.
−Removed: The prices of digital assets, specifically bitcoin, have experienced substantial volatility, meaning that high or low prices may have little or no relationship to identifiable market forces, may be subject to rapidly changing investor sentiment, and may be influenced by factors such as technology, regulatory void or changes, fraudulent actors, manipulation, and media reporting.
+Added: The prices of digital assets, specifically bitcoin, have experienced substantial volatility, meaning that high or low prices may have little or no relationship to
+Added: identifiable market forces, may be subject to rapidly changing investor sentiment, and may be influenced by factors such as technology, regulatory void or changes, fraudulent actors, manipulation, and media reporting.
Bitcoin (as well as other digital assets) may have value based on various factors, including their acceptance as a means of exchange by consumers and others, scarcity, and market demand.
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Transaction Fees Favorable Unfavorable
+Added: Beginning on February 1, 2025, the United States government has announced a series of additional tariffs on goods imported to the United States raising concerns about material price inflation and delivery delays with respect to equipment and materials needed for our high-density colocation data center conversions and also with respect to parts, machinery and hardware used in our digital asset mining business.
+Added: To date, tariffs have had no material impact on our costs or business operations, but we continue to analyze the impact of these tariffs on our business and actions we can take to minimize any future impact.
+Added: Our agreement with our largest high- density colocation customer is funded almost entirely by our customer and our financial contribution is capped at a fixed dollar amount limiting the overall potential impact of tariffs on our existing and future capital expenditures.
+Added: Tariffs, however, could have additional material and yet unforeseen impacts on our results of operations in fiscal year 2025 and future years.
Further affecting the industry, and particularly for the bitcoin blockchain, the digital asset reward for solving a block is subject to periodic incremental halving.
−Removed: Halving is a process designed to control the overall supply and reduce the risk of inflation in digital
−Removed: assets using a proof-of-work consensus algorithm.
+Added: Halving is a process designed to control the overall supply and reduce the risk of inflation in digital assets using a proof-of-work consensus algorithm.
At a predetermined block, the mining reward is reduced by half, hence the term “halving.” A reduction in the number of bitcoins rewarded per block would result in a reduction of revenue to those mining bitcoin, barring any increase in the spot price of bitcoin or decrease in Bitcoin network hash rate or difficulty.
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Many factors influence the price of bitcoin and the other digital assets we may mine for, and potential increases or decreases in prices in advance of or following a future halving are unknown.
+Added: Business Mix Shift to High-Density Colocation Services
+Added: The planned growth of our Colocation business, through increased investment in conversion of several of our bitcoin mining sites to Colocation business sites over the next several years, should gradually reduce our overall exposure to volatility in the spot price of bitcoin as our Colocation segment begins to account for a comparatively larger percentage of our financial results.
+Added: The Colocation business is characterized by implementation of long-term contracts with customers spanning several years with terms and conditions outlining and resulting in stable, predictable revenue and cash flows over each period.
Electricity Costs
−Removed: Electricity cost is the major operating cost for the mining fleet, as well as for the hosting services provided to customers and related parties.
+Added: Electricity cost is the major operating cost for the mining fleet, as well as for the hosting services provided to customers.
The cost and availability of electricity are affected primarily by changes in seasonal demand, with peak demand during the summer months driving higher costs and increased curtailments to support grid operators.
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Our Competition and Customers
−Removed: In addition to factors underlying our mining business growth and profitability, the success of our HPC hosting business greatly depends on our ability to retain and develop opportunities with our existing customers, secure additional infrastructure and attract new customers.
+Added: In addition to factors underlying our mining business growth and profitability, the success of our Colocation business greatly depends on our ability to retain and develop opportunities with our existing customers, secure additional infrastructure and attract new customers.
Our business environment is constantly evolving.
−Removed: In digital asset mining, miners can range from individual enthusiasts to professional mining operations with dedicated data centers.
−Removed: The Company competes with other enterprises that focus all or a portion of their activities on mining activities at scale.
+Added: However, digital asset mining is now dominated by large-scale, industrial miners operating large dedicated facilities around the world, including sovereign nation states with vast resources who mine directly or support mining operations through their sovereign wealth funds, all of whom compete to solve new blocks, acquire new and used miners, and purchase and consume energy and supplies to build mining facilities.
We face significant competition in every aspect of our business, including, but not limited to, the acquisition of new miners, the ability to raise capital, obtaining low-cost electricity, obtaining access to sites with reliable sources of high power, and evaluating new technology developments in the industry.
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Despite this trend, we believe we have continued to maintain a competitive hash rate capacity among both public and private bitcoin miners.
−Removed: However, remaining competitive in our evolving industry, both against new entrants into the market and existing
−Removed: competitors, will require the expansion of our existing miner fleet by purchasing new and available used miners, as well as innovating to develop and implement new technologies and mining solutions.
−Removed: In HPC hosting, we compete with other providers of high-power data center capacity, such as major data center real estate investment trusts (“REITs”), developers of data centers, hyperscalers and bitcoin miners with capacity suitable for HPC hosting.
−Removed: This competition focuses primarily on the identification and acquisition of new, high-power sites, but also includes competition for the capital required to build or modify existing sites to support HPC hosting.
−Removed: Additionally, the modification of some of our data centers to accommodate HPC hosting involves the procurement of critical equipment, technologies and skilled labor, which are in high demand from other entities seeking to address the same market opportunity, thereby putting us into competition with many other organizations for those resources.
+Added: However, remaining competitive in our evolving industry, both against new entrants into the market and existing competitors, will require the expansion of our existing miner fleet by purchasing new and available used miners, as well as innovating to develop and implement new technologies and mining solutions.
+Added: In our Colocation business, we compete with other providers of high-power data center capacity, such as major data center real estate investment trusts (“REITs”), developers of data centers, hyperscalers and bitcoin miners with capacity suitable for high-density colocation services.
+Added: This competition focuses primarily on the identification and acquisition of new, high-power sites, but also includes competition for the capital required to build or modify existing sites to support high-density colocation.
+Added: Additionally, the modification of some of our data centers to accommodate our Colocation business involves the procurement of critical equipment, technologies and skilled labor, which are in high demand from other entities seeking to address the same market opportunity, thereby putting us into competition with many other organizations for those resources.
We believe that because of our operational high-power data center capacity and the experience, knowledge, capabilities and relationships of our data center development and operations team, we are uniquely qualified to address the current strong demand for high-power data center capacity to support HPC applications successfully.
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We believe that we differentiate ourselves by offering premium products and services, including our ability to manage our power sourcing and construct proprietary, passively-cooled digital asset mining data centers at scale.
−Removed: Our operational digital asset mining facilities lever our specialized design and construction proficiency by employing high-density, low-cost engineering and power designs.
+Added: Our operational digital asset mining facilities leverage our specialized design and construction proficiency by employing high-density, low-cost engineering and power designs.
Our proprietary thermodynamic solution manages heat and airflow to deliver best-in-class uptime and, ultimately, increases mining rewards to us and to our hosted mining customers.
3 unchanged sentences
Our approach to data center design enables us to deliver efficiency at scale.
−Removed: We believe we possess unique knowledge of data center design principles and systems integration architectures, as well as extensive experience designing, constructing and operating data centers that differentiates and informs our plans for modifying digital asset mining data centers to support HPC hosting, and for developing new data centers designed to support future high-value compute requirements.
+Added: We believe we possess unique knowledge of data center design principles and systems integration architectures, as well as extensive experience designing, constructing and operating data centers that differentiates and informs our plans for modifying digital asset mining data centers to support our Colocation business, and for developing new data centers designed to support future high-value computing requirements.
This knowledge includes designs for higher rack energy densities than currently offered in the legacy data center market to satisfy emerging requirements for advanced technologies supporting emerging workloads such as artificial intelligence.
3 unchanged sentences
and internal regulators.
−Removed: In October 2020, the Cyber-Digital Task Force of the U.S.
+Added: In October 2020,
+Added: the Cyber-Digital Task Force of the U.S.
Department of Justice published a report entitled “Cryptocurrency:
2 unchanged sentences
In March 2021, the nominee for Chair of the SEC expressed the need for investor protection along with promotion of innovation in the digital asset space.
−Removed: In March 2022, President Biden signed an Executive Order outlining an “whole-of-government” approach to addressing the risks and harnessing the potential benefits of digital assets and its underlying technology.
+Added: In March 2022, former President Biden signed an Executive Order outlining an “whole-of-government” approach to addressing the risks and harnessing the potential benefits of digital assets and its underlying technology.
The executive order lays out a national policy for digital assets over six highlighted priorities.
1 unchanged sentence
House of Representatives created a new congressional subcommittee focused on digital assets, the Subcommittee of Digital Assets, Financial Technology and Inclusion, operating under the House Financial Services Committee.
+Added: Most recently, in January 2025, the Acting SEC Chairman announced the launch of a crypto task force dedicated to developing a comprehensive and clear regulatory framework for crypto assets, in contrast to the SEC’s prior reliance on enforcement actions to regulate cryptocurrencies.
+Added: The extent and content of any forthcoming laws and regulations are not yet ascertainable with certainty, and they may not be ascertainable in the near future.
In addition to the activities of the United States federal government and its various agencies and regulatory bodies, government regulation of blockchain and digital assets is also under active consideration by similar entities in other countries and transnational organizations, such as the European Union.
4 unchanged sentences
In addition to our financial results, we use the following business operating metrics and non-GAAP financial measures to evaluate our business, measure our performance, identify trends affecting our business, and make strategic decisions.
−Removed: For a definition of these key business operating metrics, see the sections titled “Self-Mining Hash Rate,” “Cost of Self-Mining One Bitcoin and Hash Cost,” (below), and for non-GAAP financial measures, see the section titled “Adjusted EBITDA” (below).
−Removed: September 30,
+Added: For a definition of these key business operating metrics, see the sections titled “Self-Mining Hash Rate,” and “Cost of Self-Mining One Bitcoin and Hash Cost,” (below), and for non-GAAP financial measures, see the section titled “Adjusted EBITDA” (below).
Self-Mining Hash rate (Exahash per second)
−Removed: Three Months Ended September 30, Nine Months Ended September 30,
−Removed: 2024 2023 2024 2023
Adjusted EBITDA (in millions) $ (6.1) $ 88.0
−Removed: Three Months Ended September 30, Nine Months Ended September 30,
−Removed: 2024 2023 2024 2023
+Added: Three Months Ended March 31,
Cash Costs per Bitcoin
−Removed: Direct power cost per bitcoin self-mined $ 33,946 $ 14,550 $ 22,099 $ 12,019
−Removed: Operational costs per bitcoin self-mined 1
+Added: Power cost per bitcoin self-mined
$ 42,178 $ 15,925
+Added: Operational costs per bitcoin self-mined 1
Total cost to self-mine one bitcoin 2
1 unchanged sentence
Cash-Based Hash Cost 3
−Removed: Direct power cost per terahash
+Added: Power cost per terahash
$ 0.024 $ 0.028
Operational costs per terahash 1
−Removed: 0.006 0.008 0.005 0.006
Total cash-based hash cost 3
16 unchanged sentences
Management uses our self-mining hash rate to monitor our performance and competitive advantage in mining bitcoin as global competition also increases.
−Removed: Our self-mining hash rate was 20.4 EH/s and 15.0 EH/s as of September 30, 2024 and 2023, respectively representing a 36% increase year over year.
−Removed: Our combined self-mining and customer and related party hosting hash rate increased 5%, to 23.4 EH/s as of September 30, 2024, from 22.3 EH/s as of September 30, 2023.
+Added: Our self-mining hash rate was 18.1 EH/s and 19.3 EH/s as of March 31, 2025 and 2024, respectively, representing a 6% decrease year over year.
+Added: Our combined self-mining and customer and related party hosting hash rate decreased 25%, to 19.1 EH/s as of March 31, 2025, from 25.5 EH/s as of March 31, 2024.
Cost of Self-Mining One Bitcoin and Hash Cost
2 unchanged sentences
The Company excludes stock-based compensation and depreciation from calculations of these operating metrics.
+Added: Cash Costs per Bitcoin and Cash-Based Hash Cost are key business operating metrics.
The cost of self-mining one bitcoin metric provides useful information to investors as it demonstrates our capacity to profitably mine bitcoin when comparing it to the price of bitcoin, particularly given volatility in energy prices as well as in the price of bitcoin.
3 unchanged sentences
Adjusted EBITDA
−Removed: Adjusted EBITDA is a non-GAAP financial measure defined as our net income or (loss), adjusted to eliminate the effect of (i) interest income, interest expense, and other income (expense), net;
+Added: Adjusted EBITDA is a non-GAAP financial measure defined as our net income, adjusted to eliminate the effect of (i) interest income, interest expense, and other income (expense), net;
(ii) provision for income taxes;
2 unchanged sentences
(v) Reorganization items, net;
−Removed: (vi) change in fair value of energy derivatives;
+Added: (vi) unrealized fair value adjustment on energy derivatives;
(vii) change in fair value of warrant and contingent value rights;
−Removed: (viii) HPC advisory startup costs or site conversion startup costs which are not reflective of the ongoing costs incurred after startup, (ix) bankruptcy advisory costs incurred related to reorganization which are not reflective of the ongoing costs incurred in post-emergence operations, and (x) certain additional non-cash items that do not reflect the performance of our ongoing business operations.
−Removed: For additional information, including the reconciliation of net income (loss) to Adjusted EBITDA, please refer to the table below.
+Added: (viii) Colocation segment organizational startup costs which are not reflective of the ongoing costs incurred after startup, (ix) post-emergence bankruptcy advisory costs incurred related to reorganization which are not reflective of the ongoing costs incurred in post-emergence operations, and (x) certain additional non-cash items that do not reflect the performance of our ongoing business operations.
+Added: For additional information, including the reconciliation of net income to Adjusted EBITDA, please refer to the table below.
We believe Adjusted EBITDA is an important measure because it allows management, investors, and our Board of Directors to evaluate and compare our operating results, including our return on capital and operating efficiencies, from period-to-period by making the adjustments described above.
−Removed: In addition, it provides useful information to investors and others in understanding and evaluating our results of operations, as well as provides a useful measure for period-to-period comparisons of our business, as it removes the effect of net interest expense, taxes, certain non-cash items, variable charges and timing differences.
+Added: In addition, it provides useful information to investors and others in understanding and evaluating our results of operations, as well as provides a useful measure for period-to-period comparisons of our business, as it removes the effect of net interest expense, taxes, certain non-cash items, variable charges and
+Added: timing differences.
Moreover, we have included Adjusted EBITDA in this Quarterly Report on Form 10-Q because it is a key measurement used by our management internally to make operating decisions, including those related to operating expenses, evaluate performance, and perform strategic and financial planning.
5 unchanged sentences
Our computation of Adjusted EBITDA may not be comparable to other similarly titled measures computed by other companies because not all companies calculate this measure in the same fashion.
−Removed: You should review the reconciliation of net income (loss) to Adjusted EBITDA below and not rely on any single financial measure to evaluate our business.
−Removed: The following table presents a reconciliation of net loss to Adjusted EBITDA for the three and nine months ended September 30, 2024 and 2023, (in thousands):
−Removed: Three Months Ended September 30, Nine Months Ended September 30,
+Added: You should review the reconciliation of net income to Adjusted EBITDA below and not rely on any single financial measure to evaluate our business.
+Added: The following table presents a reconciliation of net income to Adjusted EBITDA for the three months ended March 31, 2025 and 2024 (in thousands):
+Added: Three Months Ended March 31,
Adjusted EBITDA
$ 580,693 $ 210,691
−Removed: Interest expense, net 7,072 2,196 35,934 2,317
+Added: Interest (income) expense, net (2,187) 14,087
Income tax expense
2 unchanged sentences
Unrealized fair value adjustment on energy derivatives — (797)
−Removed: Loss on disposal of property, plant and equipment 509 340 4,061 514
−Removed: HPC advisory startup costs
−Removed: Bankruptcy advisory costs
−Removed: 1,863 — 2,160 —
−Removed: Loss (gain) on debt extinguishment 317 (374) 487 (21,135)
+Added: Losses on exchange or disposal of property, plant and equipment 6 3,820
+Added: Loss on debt extinguishment
+Added: Post-emergence bankruptcy advisory costs
Reorganization items, net — (111,439)
−Removed: Change in fair value of warrant and contingent value rights
−Removed: 408,520 — 1,144,441 —
−Removed: Other non-operating expenses (income), net (2,003) (1,090) 144 (3,978)
+Added: Change in fair value of warrants and contingent value rights
(621,464) (60,114)
+Added: Other non-operating expense, net 157 1,746
Adjusted EBITDA
$ (6,071) $ 87,996
−Removed: 1 Certain prior year amounts have been reclassified for consistency with the current year presentation.
Components of Results of Operations
−Removed: Our revenue consists primarily of digital asset self-mining income, and fees from our digital asset hosting and HPC hosting operations.
−Removed: The Company’s HPC and cloud compute operations began during the second quarter of 2024.
+Added: Our revenue consists primarily of digital asset self-mining income, and fees from our digital asset hosting and high-density colocation operations.
+Added: The Company’s Colocation operations began during the second quarter of 2024.
• Digital asset self-mining rev enue.
5 unchanged sentences
Revenues from digital asset self-mining are impacted by volatility in bitcoin prices, as well as increases in the bitcoin blockchain’s network hash rate resulting from the growth in the overall quantity and quality of miners working to solve blocks on the bitcoin blockchain and the difficulty index associated with the secure hashing algorithm employed in solving the blocks.
−Removed: • Digital asset hosted mining revenue from customers and related parties.
−Removed: Digital asset hosted mining revenue from customers and related parties is based on electricity-based consumption contracts with our customers and related parties.
+Added: • Digital asset hosted mining revenue from customers.
+Added: Digital asset hosted mining revenue from customers is based on electricity-based consumption contracts with our customers.
Most contracts are renewable, and our customers are generally billed on a fixed and recurring basis each month for the duration of their contract, which vary from one to three years in length.
1 unchanged sentence
Under these new contracts, customers pay for the cost of digital asset hosting and infrastructure, and we share the proceeds that are generated.
−Removed: • HPC hosting revenue.
−Removed: HPC hosting revenue is generated by licensing data center space and related services to licensees at our Austin, Texas data center.
+Added: • Colocation revenue.
+Added: C olocation revenue is generated by leasing data center space and providing related services to licensees at our Austin, Texas high-density data center.
These licensing agreements and orders include lease components, nonlease components (such as power delivery, physical security, maintenance and other billable expenses), as well as noncomponent elements such as taxes.
Under these contracts, customers pay fixed payments (based on electric capacity) and variable payments on a recurring basis.
+Added: Colocation power fees are passed through to the customer without markup and are included on a gross basis in Colocation revenue.
Cost of revenue
The Company’s cost of digital asset self-mining and digital asset hosted mining services, primarily consist of electricity costs, salaries, stock-based compensation, depreciation of property, plant and equipment used to perform mining operations and hosting services and other related costs.
−Removed: Cost of HPC hosting services relate to our Austin, Texas data center, and primarily consists of lease expense, power, payroll and benefits expense and stock-based compensation expense.
+Added: Cost of Colocation relates to our Austin, Texas data center, and primarily consists of facility operations expense, which includes maintenance and lease expense, power fees, payroll and benefits expense and stock-based compensation expense.
+Added: Colocation power fees are passed through to the customer without markup and are included on a gross basis in Cost of Colocation services.
Change in fair value of digital assets
1 unchanged sentence
Under ASU 2023-08, the Company measures digital assets at fair value with the changes in fair value during the reporting period recognized in change in fair value of digital assets.
−Removed: Recognition of digital asset results prior to adoption are described below.
−Removed: Gain from sale of digital assets
−Removed: Prior to the adoption of ASU 2023-08 effective January 1, 2024, gain from sale of digital assets consisted of the excess of sales proceeds over the carrying value of the digital assets at the time of sale.
−Removed: Gains were recognized as they were realized upon sale(s).
−Removed: Impairment of digital assets
−Removed: Prior to the adoption of ASU 2023-08 effective January 1, 2024, impairment losses were recognized in the period in which the impairment was identified.
−Removed: The impaired digital assets were written down to their fair value at the time of impairment and the new carrying value would not be adjusted upward for any subsequent increase in fair value until sale.
+Added: Gain from sales of digital assets
+Added: Prior to the adoption of ASU 2023-08, Gain from sales of digital assets was recorded when realized upon sale(s).
+Added: In determining the gain to be recognized upon sale, we calculated the difference between the sales price and carrying value of the digital assets sold immediately prior to sale.
Change in fair value of energy derivatives
−Removed: The Change in fair value of energy derivatives represents changes in the fair value of the derivative liability related to the energy forward purchase contract described in more detail in “Energy Forward Purchase Contract” in Note 2 — Summary of Significant Accounting Policies to our consolidated financial statements in Item 8 of Part II of our Annual Report on Form 10-K for the year ended December 31, 2023.
−Removed: Loss on disposal of property, plant and equipment
−Removed: Loss on disposal of property, plant and equipment are measured as the differences between the carrying value of the property, plant and equipment disposed of and fair value of the consideration received upon disposal.
−Removed: Operating expenses
−Removed: Operating expenses consist of research and development, sales and marketing, and general and administrative expenses.
−Removed: Each is outlined in more detail below.
−Removed: • Research and development.
−Removed: We invest in research and development to enhance the efficiency and effectiveness of our mining operations and hosting services and to support our efforts to capture business opportunities in adjacent high-value compute markets.
−Removed: Research and development costs include compensation and benefits, stock-based compensation, other personnel related costs and professional fees.
−Removed: • Sales and marketing.
−Removed: Sales and marketing expenses consist of marketing expenses, trade shows and events, professional fees, compensation and benefits, stock-based compensation and other personnel-related costs.
−Removed: • General and administrative.
−Removed: General and administrative expenses include compensation and benefits expenses for employees who are not part of the research and development and sales and marketing organization and other personnel-related expenses.
−Removed: Also included are stock-based compensation, rent, HPC advisory and site startup costs, bankruptcy advisor fees related to the reorganization, professional fees, business insurance, auditor fees, bad debt, amortization of intangibles, franchise taxes, and bank fees.
−Removed: HPC advisory startup costs were specifically incurred preparing for and entering into the HPC hosting business on activities and services that are not expected to be utilized within future ongoing operations of the HPC hosting business.
−Removed: Non-operating (income) expenses, net:
−Removed: Non-operating expenses, net includes (gain) loss on debt extinguishment, interest expense (income), net, reorganization items, net, fair value adjustments of warrants and contingent value rights, and other non-operating (income) expenses, net.
+Added: Change in fair value of energy derivatives represents changes in the fair value of the derivative liability related to the energy forward purchase contract to fix a specified component of the energy price related to forecasted energy purchases at our Cottonwood 1 facility from November 2023 through May 2024.
+Added: Losses on exchange or disposal of property, plant and equipment
+Added: Losses on exchange or disposal of property, plant and equipment are measured as the differences between the carrying value of the property, plant and equipment disposed of and fair value of the consideration received upon disposal.
+Added: Selling, general and administrative
+Added: Selling, general and administrative expenses includes compensation, benefits, and other personnel-related expenses, stock-based compensation, rent, Colocation segment organizational and site startup costs, post-emergence bankruptcy advisor fees related to the reorganization, professional fees, business insurance, auditor fees, bad debt, amortization of intangibles, franchise taxes, and bank fees.
+Added: Colocation segment organizational startup costs were primarily consulting costs that were specifically incurred preparing for and
+Added: entering into the Colocation business and are not expected to be incurred in the ongoing operations of the Colocation business.
+Added: Colocation segment site startup costs are indirect costs associated with the administration of converting and building of future Colocation operating sites, and include compensation and other personnel-related expenses, including stock-based compensation.
+Added: Similar costs will be incurred in the future operations of the Colocation segment sites.
+Added: Non-operating expenses (income), net:
+Added: Non-operating expenses (income), net includes loss (gain) on debt extinguishment, interest expense, net, reorganization items, net, fair value adjustments of convertible notes, warrants and contingent value rights, and other non-operating (income) expenses, net.
Reorganization items, net consists of costs directly associated with the reorganization during the bankruptcy period, including professional fees (including reimbursed third-party professional fees) and other bankruptcy related costs, negotiated settlements, satisfaction of allowed claims, and debtor-in-possession finance fees.
9 unchanged sentences
Deferred tax assets are reduced by a valuation allowance to the extent management believes it is not more likely than not to be realized.
−Removed: Results of Operations for the Three Months Ended September 30, 2024 and 2023
−Removed: The following table sets forth our selected Condensed Consolidated Statements of Operations for each of the periods indicated.
−Removed: Three Months Ended September 30, Period over Period Change
−Removed: 2024 2023 Dollar
−Removed: (in thousands, except percentages)
+Added: Results of Operations for the Three Months Ended March 31, 2025 and 2024
+Added: The following table sets forth our selected Consolidated Statements of Operations for each of the periods indicated (in thousands).
+Added: Three Months Ended March 31,
+Added: 2025 2024 $ Change
Digital asset self-mining revenue
2 unchanged sentences
3,773 29,332 (25,559)
−Removed: Digital asset hosted mining revenue from related parties
−Removed: — 2,828 (2,828) NM
−Removed: HPC hosting revenue 10,338 — 10,338 NM
+Added: Colocation revenue
+Added: 8,573 — 8,573
Total revenue 79,525 179,291 (99,766)
4 unchanged sentences
2,036 20,081 (18,045)
−Removed: Cost of HPC hosting services 9,041 — 9,041 NM
−Removed: Total cost of revenue 95,510 97,485 (1,975) (2)%
−Removed: Gross (loss) profit
−Removed: (156) 15,419 (15,575) (101)%
−Removed: Change in fair value of digital assets
−Removed: (206) — (206) NM
−Removed: Gain from sale of digital assets
−Removed: — 363 (363) NM
−Removed: Impairment of digital assets — (681) 681 NM
−Removed: Change in fair value of energy derivatives
−Removed: Loss on disposal of property, plant and equipment
−Removed: (509) (340) (169) 50%
−Removed: Operating expenses:
−Removed: Research and development 2,841 2,253 588 26%
−Removed: Sales and marketing 3,151 1,041 2,110 NM
−Removed: General and administrative 34,356 23,511 10,845 46%
−Removed: Total operating expenses 40,348 26,805 13,543 51%
−Removed: Operating loss
−Removed: (41,219) (12,044) (29,175) NM
−Removed: Non-operating (income) expenses, net:
−Removed: Loss (gain) on debt extinguishment
−Removed: 317 (374) 691 NM
−Removed: Interest expense, net
−Removed: 7,072 2,196 4,876 NM
−Removed: Reorganization items, net — 28,256 (28,256) NM
−Removed: Change in fair value of warrant and contingent value rights
−Removed: 408,520 — 408,520 NM
−Removed: Other non-operating income, net
−Removed: (2,003) (1,090) (913) 84%
−Removed: Total non-operating expenses, net
−Removed: 413,906 28,988 384,918 NM
−Removed: Loss before income taxes
−Removed: (455,125) (41,032) (414,093) NM
−Removed: Income tax expense
−Removed: 134 114 20 18%
−Removed: $ (455,259) $ (41,146) $ (414,113) NM
−Removed: NM - Not Meaningful
−Removed: Three Months Ended September 30, Period over Period Change
−Removed: 2024 2023 Dollar Percentage
−Removed: (in thousands, except percentages)
−Removed: Digital asset self-mining revenue
−Removed: $ 68,138 $ 83,056 $ (14,918) (18) %
−Removed: Digital asset hosted mining revenue from customers
−Removed: 16,878 27,020 (10,142) (38) %
−Removed: Digital asset hosted mining revenue from related parties
−Removed: — 2,828 (2,828) NM
−Removed: HPC hosting revenue 10,338 — 10,338 NM
−Removed: Total revenue $ 95,354 $ 112,904 $ (17,550) (16) %
−Removed: Percentage of total revenue:
−Removed: Digital asset self-mining revenue 71 % 73 %
−Removed: Digital asset hosted mining revenue from customers 18 % 24 %
−Removed: Digital asset hosted mining revenue from related parties — % 3 %
−Removed: HPC hosting revenue 11 % — %
−Removed: Total revenue
−Removed: Total revenue decreased by $17.6 million or 16%, to $95.4 million for the three months ended September 30, 2024, from $112.9 million for the three months ended September 30, 2023, as a result of the factors described below.
−Removed: Digital asset self-mining revenue decreased by $14.9 million or 18%, to $68.1 million for the three months ended September 30, 2024, from $83.1 million for the three months ended September 30, 2023.
−Removed: The decrease in mining revenue was driven primarily by a 62% decrease in bitcoin mined.
−Removed: The decrease in mining revenue was partially offset by an increase in the price of bitcoin and an increase in our self-mining hash rate, which was due to an approximate increase of 31,000 mining units deployed.
−Removed: Our self-mining hash rate increased by 36%, to 20.4 EH/s for the three months ended September 30, 2024, from 15.0 EH/s for the same period in the prior year.
−Removed: The total number of bitcoins self-mined for the three months ended September 30, 2024, was 1,115 compared to 2,953 for the same period in the prior year.
−Removed: Although our self-mining hash rate increased 36%, the April 2024 halving and a 61% increase in network hash rate lead to a 62% decrease in bitcoin received from self-mining.
−Removed: The average price of bitcoin for the three months ended September 30, 2024, was $61,002 as compared to $28,091 for the same period in the prior year, a 117% increase.
−Removed: Total digital asset hosted mining revenue from customers decreased by $10.1 million or 38%, to $16.9 million for the three months ended September 30, 2024, from $27.0 million for the three months ended September 30, 2023.
−Removed: The decrease in digital asset hosted mining revenue from customers was primarily driven by the termination of contracts with several customers since September 30, 2023, due primarily to the reallocation of a majority of our data centers from digital asset mining to HPC hosting.
−Removed: Total digital asset hosted mining revenue from related parties was nil for the three months ended September 30, 2024, compared to $2.8 million for the three months ended September 30, 2023.
−Removed: There were no related-party transactions during the three months ended September 30, 2024.
−Removed: Total HPC hosting revenue was $10.3 million for the three months ended September 30, 2024, compared to nil for the same period in the prior year due to the initiation of HPC hosting operations for CoreWeave at our Austin, Texas data center during the quarter ended June 30, 2024.
−Removed: Cost of revenue
−Removed: Three Months Ended September 30, Period over Period Change
−Removed: 2024 2023 Dollar Percentage
−Removed: (in thousands, except percentages)
−Removed: Cost of revenue
+Added: Cost of Colocation services
8,106 — 8,106
−Removed: Gross (loss) profit
+Added: Total cost of revenue 71,312 101,645 (30,333)
8,213 77,646 (69,433)
−Removed: Cost of revenue decreased by $2.0 million or 2%, to $95.5 million for the three months ended September 30, 2024, from $97.5 million for the three months ended September 30, 2023.
−Removed: The decrease in cost of revenue was primarily attributable to a $11.6 million decrease in power costs and a $1.9 million decrease in facility operations expense, partially offset by increased HPC hosting costs, primarily lease, power, payroll and benefits and stock-based compensation, of $7.4 million incurred during the current quarter with no comparable activity for the same period in fiscal 2023, increased depreciation expense of $4.4 million driven by the increase in the number of miners in service, and a $0.8 million increase in stock-based compensation expense.
Change in fair value of digital assets
−Removed: Three Months Ended September 30, Period over Period Change
−Removed: 2024 2023 Dollar Percentage
−Removed: (in thousands, except percentages)
−Removed: Change in fair value of digital assets
−Removed: $ (206) $ — $ (206) NM
−Removed: Percentage of total revenue
−Removed: Change in fair value of digital assets was $0.2 million for the three months ended September 30, 2024, and reflects the Company’s adoption of ASU 2023-08 effective January 1, 2024.
−Removed: Gain from sale of digital assets
−Removed: Three Months Ended September 30, Period over Period Change
−Removed: 2024 2023 Dollar Percentage
−Removed: (in thousands, except percentages)
−Removed: Gain from sale of digital assets
−Removed: $ — $ 363 $ (363) NM
−Removed: Percentage of total revenue
−Removed: Gain from sale of digital assets was nil for the three months ended September 30, 2024, compared to a gain of $0.4 million for the three months ended September 30, 2023.
−Removed: There are no gains from sale of digital assets recorded in fiscal 2024 due to the Company’s adoption of ASU 2023-08 effective January 1, 2024.
−Removed: For the three months ended September 30, 2023, the carrying value of our digital assets sold was $88.5 million and the sales price was $88.1 million.
−Removed: Impairment of digital assets
−Removed: Three Months Ended September 30, Period over Period Change
−Removed: 2024 2023 Dollar Percentage
−Removed: (in thousands, except percentages)
−Removed: Impairment of digital assets $ — $ (681) $ 681 NM
−Removed: Percentage of total revenue
−Removed: Impairment of digital assets was nil for the three months ended September 30, 2024, compared to $0.7 million for the three months ended September 30, 2023.
−Removed: Upon the Company’s adoption of ASU 2023-08 effective January 1, 2024, the Company measures digital assets at fair value each reporting period with changes in fair value recognized in net income.
−Removed: Prior to the adoption of ASU 2023-08, impairment existed when the carrying amount exceeded its fair value.
−Removed: Impairment was measured using quoted prices of the digital asset at the time its fair value was being assessed.
−Removed: Quoted prices, including intraday low prices, were collected and utilized in impairment testing and measurement on a daily basis.
−Removed: If the then current carrying value of a digital asset exceeded the fair value so determined, an impairment loss occurred with respect to those digital assets in the amount equal to the difference between their carrying value and the price determined.
−Removed: The carrying value of our digital assets amounted to nil as of September 30, 2024 and $0.6 million as of September 30, 2023.
−Removed: Loss on disposal of property, plant and equipment
−Removed: Three Months Ended September 30, Period over Period Change
−Removed: 2024 2023 Dollar Percentage
−Removed: (in thousands, except percentages)
−Removed: Loss on disposal of property, plant and equipment
10,688 — 10,688
−Removed: Percentage of total revenue
−Removed: Loss on disposal of property, plant and equipment increased by $0.2 million to a loss of $0.5 million for the three months ended September 30, 2024, from a loss of $0.3 million for the three months ended September 30, 2023.
−Removed: This loss was due to the disposal of mining equipment.
−Removed: Operating Expenses
−Removed: Three Months Ended September 30, Period over Period Change
−Removed: 2024 2023 Dollar Percentage
−Removed: Operating expenses:
−Removed: (in thousands, except percentages)
−Removed: Research and development
+Added: Gain from sales of digital assets
+Added: Change in fair value of energy derivatives
— 2,218 (2,218)
−Removed: Sales and marketing
−Removed: 3,151 1,041 2,110 NM
−Removed: General and administrative
+Added: Losses on exchange or disposal of property, plant and equipment 6 3,820 (3,814)
+Added: Selling, general and administrative
40,115 16,924 23,191
−Removed: Total operating expenses
+Added: Operating (loss) income
(42,596) 55,227 (97,823)
−Removed: Percentage of total revenue
−Removed: Total operating expenses increased $13.5 million or 51%, to $40.3 million for the three months ended September 30, 2024, from $26.8 million for the three months ended September 30, 2023.
−Removed: Research and development expenses increased $0.6 million or 26%, to $2.8 million for the three months ended September 30, 2024, from $2.3 million for the three months ended September 30, 2023.
−Removed: The increase was driven by a $0.7 million increase in stock-based compensation expense and a $0.1 million increase in payroll and benefits expense primarily driven by higher salaries, partially offset by a $0.3 million decrease in software costs .
−Removed: Sales and marketing expenses increased $2.1 million to $3.2 million for the three months ended September 30, 2024, from $1.0 million for the three months ended September 30, 2023.
−Removed: The increase was driven primarily by a $1.3 million increase in stock-based compensation expense and a $0.7 million increase in sales and marketing event expenses.
−Removed: General and administrative expenses increased $10.8 million to $34.4 million for the three months ended September 30, 2024, from $23.5 million for the three months ended September 30, 2023.
−Removed: The increase was primarily driven by a $3.7 million increase in HPC site startup costs incurred during the current quarter with no comparable activity for the same period in fiscal 2023, a $2.1 million increase in bankruptcy advisory costs, a $4.1 million increase in payroll and benefits expense primarily driven by increased bonuses and higher salaries, a $1.0 million increase in corporate taxes, a $0.6 million increase in software costs, and $0.5 million higher stock-based compensation expense.
−Removed: Non-operating expenses, net
−Removed: Three Months Ended September 30, Period over Period Change
−Removed: 2024 2023 Dollar Percentage
Non-operating expenses (income), net:
−Removed: (in thousands, except percentages)
−Removed: Loss (gain) on debt extinguishment
−Removed: $ 317 $ (374) $ 691 NM
−Removed: Interest expense, net
−Removed: 7,072 2,196 4,876 NM
−Removed: Reorganization items, net — 28,256 (28,256) NM
−Removed: Change in fair value of warrant and contingent value rights
−Removed: 408,520 — 408,520 NM
−Removed: Other non-operating income, net
−Removed: (2,003) (1,090) (913) 84%
−Removed: Total non-operating expenses, net
−Removed: $ 413,906 $ 28,988 $ 384,918 NM
−Removed: Total non-operating expenses, net increased by $384.9 million, to total non-operating expense, net of $413.9 million for the three months ended September 30, 2024, from total non-operating expenses, net of $29.0 million for the three months ended September 30, 2023.
−Removed: The increase in total non-operating expenses, net was primarily driven by:
−Removed: • the Company’s entry into a warrant agreement and Convertible Value Rights Agreement pursuant to the Plan of Reorganization.
−Removed: During the three months ended September 30, 2024, we incurred a $408.5 million Change in fair value of warrant and contingent value rights was due to the increase in the price of the underlying instruments driven by the increase in the Company’s stock price to $11.86 per share as of September 30, 2024, from $9.30 per share as of June 30, 2024.
−Removed: The increase in stock price resulted in a $414.5 million increase in the fair value of the warrant liabilities during the three months ended September 30, 2024, partially offset by a $6.0 million decrease in fair value of contingent value rights, and;
−Removed: • a $4.9 million increase in Interest expense, net resulting from the Bankruptcy Court ordered stay on payment of pre-petition obligations, including interest during the same period in 2023;
−Removed: partially offset by,
−Removed: • $28.3 million in Reorganization items, net for the three months ended September 30, 2023, with no comparable activity for the same period in fiscal 2024 due the Company’s emergence from bankruptcy during the first quarter 2024.
−Removed: Income tax expense
−Removed: Three Months Ended September 30, Period over Period Change
−Removed: 2024 2023 Dollar Percentage
−Removed: (in thousands, except percentages)
−Removed: Income tax expense
−Removed: $ 134 $ 114 $ 20 18 %
−Removed: Percentage of total revenue
−Removed: Income tax expense consists of U.S.
−Removed: federal, state and local income taxes.
−Removed: For the three months ended September 30, 2024, our income tax expense was $0.1 million.
−Removed: For the three months ended September 30, 2023, our income tax expense was $0.1 million.
−Removed: The Company's effective tax rate for the three months ended September 30, 2024, was lower than the federal statutory rate of 21% primarily due to a valuation allowance on the Company’s deferred tax assets and certain non-deductible expenses.
−Removed: Segment Total Revenue and Gross Profit
−Removed: The following table presents total revenue and gross (loss) profit by reportable segment for the periods presented:
−Removed: Three Months Ended September 30, Period over Period Change
−Removed: 2024 2023 Dollar Percentage
−Removed: Digital Asset Self-Mining Segment (in thousands, except percentages)
−Removed: Digital asset self-mining revenue $ 68,138 $ 83,056 $ (14,918) (18) %
−Removed: Cost of digital asset self-mining
−Removed: 74,555 72,603 1,952 3 %
−Removed: Digital Asset Self-Mining gross (loss) profit $ (6,417) $ 10,453 $ (16,870) NM
−Removed: Digital Asset Self-Mining gross margin (9) % 13%
−Removed: Digital Asset Hosted Mining Segment
−Removed: Digital asset hosted mining revenue from customers $ 16,878 $ 29,848 $ (12,970) (43) %
−Removed: Cost of digital asset hosted mining services 11,914 24,882 (12,968) (52) %
−Removed: Digital Asset Hosted Mining gross profit $ 4,964 $ 4,966 $ (2) — %
−Removed: Digital Asset Hosted Mining gross margin 29 % 17 %
−Removed: HPC Hosting Segment
−Removed: HPC hosting revenue $ 10,338 $ — $ 10,338 NM
−Removed: Cost of HPC hosting services 9,041 — 9,041 NM
−Removed: HPC Hosting gross profit $ 1,297 $ — $ 1,297 NM
−Removed: HPC Hosting gross margin 13% —%
−Removed: Consolidated total revenue $ 95,354 $ 112,904 $ (17,550) (16) %
−Removed: Consolidated cost of revenue 95,510 97,485 (1,975) (2) %
−Removed: Consolidated gross (loss) profit
−Removed: $ (156) $ 15,419 $ (15,575) (101)%
−Removed: Consolidated gross margin
−Removed: For the three months ended September 30, 2024, cost of revenue included depreciation expense of $27.4 million for the Digital Asset Self-Mining segment, $0.9 million for the Digital Asset Hosted Mining segment, and a nominal amount for the HPC Hosting segment.
−Removed: For the three months ended September 30, 2023, cost of revenue included depreciation expense of $22.0 million for the Digital Asset Self-Mining segment, $1.9 million for the Digital Asset Hosted Mining segment, and nil for the HPC Hosting segment.
−Removed: For the three months ended September 30, 2024 and 2023, the top three hosting customers accounted for approximately 97% and 76%, respectively, of the Digital Asset Hosted Mining’s segment total revenue.
−Removed: For the three months ended September 30, 2024, gross profit in the Digital Asset Self-Mining segment decreased by $16.9 million, resulting in a gross loss of $6.4 million compared to gross profit of $10.5 million for the three months ended September 30, 2023.
−Removed: The decrease in the Digital Asset Self-Mining segment gross profit was primarily due to a 18% decrease in mining revenue driven by a 62% decrease in bitcoin mined due to the April 2024 halving and higher network difficulty, partially offset by a 117% increase in the price of bitcoin and an increase in our self-mining hash rate and an approximate increase of 31,000 mining units deployed.
−Removed: An increase in depreciation expense, driven primarily by the increase in miners placed in service, further contributed to the decrease in the Digital Asset Self-Mining segment gross profit.
−Removed: Our self-mining hash rate was 20.4 EH/s for the three months ended September 30, 2024, compared to 15.0 EH/s for the three months ended September 30, 2023, by an increase of 36%.
−Removed: For the three months ended September 30, 2024, gross profit in the Digital Asset Hosted Mining segment decreased nominally compared to the three months ended September 30, 2023.
−Removed: Digital Asset Hosted Mining segment gross margin for the three months ended September 30, 2024 was 29%, compared to a gross margin of 17% for the three months ended September 30, 2023.
−Removed: increase in Digital Asset Hosted Mining segment gross margin for the three months ended September 30, 2024, compared to the three months ended September 30, 2023 was primarily due to lower Digital asset hosted mining revenue driven by the termination of contracts with several customers since September 30, 2023, due primarily to our shift to HPC hosting, offset by lower power costs from lower rates and a reduced allocation of power to hosted customers.
−Removed: For the three months ended September 30, 2024, gross profit in the HPC Hosting segment was $1.3 million compared to nil for the three months ended September 30, 2023, due to the HPC Hosting segment starting operation during the quarter ended June 30, 2024.
−Removed: A reconciliation of the reportable segment gross (loss) profit to loss before income taxes included in our Condensed Consolidated Statements of Operations for the three months ended September 30, 2024 and 2023, is as follows:
−Removed: Three Months Ended September 30, Period over Period Change
−Removed: 2024 2023 Dollar Percentage
−Removed: (in thousands, except percentages)
−Removed: Reportable segment gross (loss) profit
−Removed: $ (156) $ 15,419 $ (15,575) (101)%
−Removed: Change in fair value of digital assets (206) — (206) NM
−Removed: Gain from sale of digital assets — 363 (363) NM
−Removed: Impairment of digital assets — (681) 681 NM
−Removed: Loss on disposal of property, plant and equipment
−Removed: (509) (340) (169) 50%
−Removed: Operating expenses:
−Removed: Research and development 2,841 2,253 588 26 %
−Removed: Sales and marketing 3,151 1,041 2,110 NM
−Removed: General and administrative 34,356 23,511 10,845 46 %
−Removed: Total operating expenses 40,348 26,805 13,543 51 %
−Removed: Operating loss
−Removed: (41,219) (12,044) (29,175) NM
−Removed: Non-operating (income) expenses, net:
−Removed: Loss (gain) on debt extinguishment
−Removed: 317 (374) 691 NM
−Removed: Interest expense, net
−Removed: 7,072 2,196 4,876 NM
−Removed: Reorganization items, net — 28,256 (28,256) NM
−Removed: Change in fair value of warrant and contingent value rights 408,520 — 408,520 NM
−Removed: Other non-operating income, net
−Removed: (2,003) (1,090) (913) 84%
−Removed: Total non-operating expenses, net
−Removed: 413,906 28,988 384,918 NM
−Removed: Loss before income taxes
−Removed: $ (455,125) $ (41,032) $ (414,093) NM
−Removed: Results of Operations for the Nine Months Ended September 30, 2024 and 2023
−Removed: The following table sets forth our selected Condensed Consolidated Statements of Operations for each of the periods indicated.
−Removed: Nine Months Ended September 30, Period over Period Change
−Removed: 2024 2023 Dollar
−Removed: (in thousands, except percentages)
−Removed: Digital asset self-mining revenue
−Removed: $ 328,840 $ 278,164 $ 50,676 18 %
−Removed: Digital asset hosted mining revenue from customers
+Added: Loss on debt extinguishment
+Added: Interest (income) expense, net
(2,187) 14,087 (16,274)
−Removed: Digital asset hosted mining revenue from related parties
−Removed: — 10,062 (10,062) NM
−Removed: HPC hosting revenue 15,857 — 15,857 NM
−Removed: Total revenue 415,747 360,471 55,276 15 %
−Removed: Cost of revenue:
−Removed: Cost of digital asset self-mining
+Added: Change in fair value of warrants and contingent value rights
(621,464) (60,114) (561,350)
−Removed: Cost of digital asset hosted mining services
+Added: Reorganization items, net — (111,439) 111,439
+Added: Other non-operating expense, net 157 1,746 (1,589)
+Added: Total non-operating income, net
(623,494) (155,670) (467,824)
−Removed: Cost of HPC hosting services 13,932 — 13,932 NM
−Removed: Total cost of revenue 299,440 276,312 23,128 8%
+Added: Income before income taxes
580,898 210,897 370,001
−Removed: Change in fair value of digital assets
−Removed: (247) — (247) NM
−Removed: Gain from sale of digital assets
−Removed: — 2,358 (2,358) NM
−Removed: Impairment of digital assets — (2,864) 2,864 NM
−Removed: Change in fair value of energy derivatives
−Removed: (2,757) — (2,757) NM
−Removed: Loss on disposal of property, plant and equipment
−Removed: (4,061) (514) (3,547) NM
−Removed: Operating expenses:
−Removed: Research and development 6,814 5,308 1,506 28%
−Removed: Sales and marketing 7,099 3,133 3,966 NM
−Removed: General and administrative 74,742 69,671 5,071 7%
−Removed: Total operating expenses 88,655 78,112 10,543 13%
−Removed: Operating income
−Removed: 20,587 5,027 15,560 NM
−Removed: Non-operating (income) expenses, net:
−Removed: Loss (gain) on debt extinguishment
−Removed: 487 (21,135) 21,622 NM
−Removed: Interest expense, net
−Removed: 35,934 2,317 33,617 NM
−Removed: Reorganization items, net (111,439) 78,270 (189,709) NM
−Removed: Change in fair value of warrant and contingent value rights
−Removed: 1,144,441 — 1,144,441 NM
−Removed: Other non-operating (income) expense, net
−Removed: 144 (3,978) 4,122 NM
−Removed: Total non-operating expenses, net
−Removed: 1,069,567 55,474 1,014,093 NM
−Removed: Loss before income taxes
−Removed: (1,048,980) (50,447) (998,533) NM
Income tax expense
$ 580,693 $ 210,691 $ 370,002
−Removed: $ (1,049,464) $ (50,794) $ (998,670) NM
−Removed: NM - Not Meaningful
−Removed: Nine Months Ended September 30, Period over Period Change
−Removed: 2024 2023 Dollar Percentage
−Removed: (in thousands, except percentages)
+Added: Three Months Ended March 31,
+Added: 2025 2024 $ Change
Digital asset self-mining revenue
2 unchanged sentences
3,773 29,332 (25,559)
−Removed: Digital asset hosted mining revenue from related parties
−Removed: — 10,062 (10,062) NM
−Removed: HPC hosting revenue 15,857 — 15,857 NM
+Added: Colocation revenue
+Added: 8,573 — 8,573
Total revenue $ 79,525 $ 179,291 $ (99,766)
2 unchanged sentences
Digital asset hosted mining revenue from customers 5 % 16 %
−Removed: Digital asset hosted mining revenue from related parties — % 3 %
−Removed: HPC hosting revenue 4 % — %
+Added: Colocation revenue 11 % — %
Total revenue
−Removed: Total revenue increased by $55.3 million or 15%, to $415.7 million for the nine months ended September 30, 2024, from $360.5 million for the nine months ended September 30, 2023, as a result of the factors described below.
−Removed: Digital asset self-mining revenue increased by $50.7 million or 18%, to $328.8 million for the nine months ended September 30, 2024, from $278.2 million for the nine months ended September 30, 2023.
−Removed: The year over year increase in mining revenue was driven primarily by an increase in the price of bitcoin and an increase in our self-mining hash rate fleet mix and efficiency, and an approximate increase of 31,000 mining units deployed.
−Removed: The increase in mining revenue was partially offset by a 48% decrease in bitcoin mined.
−Removed: Our self-mining hash rate increased by 36%, to 20.4 EH/s for the nine months ended September 30, 2024, from 15.0 EH/s for the same period in the prior year.
−Removed: The total number of bitcoins self-mined for the nine months ended September 30, 2024, was 5,621 compared to 10,721.
−Removed: Although our self-mining hash rate increased 36%, the April 2024 halving and the nine month average network hash rate increased approximately 71%, leading to a 48% decrease in bitcoin received from self-mining.
−Removed: The average price of bitcoin for the nine months ended September 30, 2024, was $60,031 as compared to $26,353 for the same period in the prior year, a 128% increase.
−Removed: Total digital asset hosted mining revenue from customers decreased by $1.2 million or 2%, to $71.1 million for the nine months ended September 30, 2024, from $72.2 million for the nine months ended September 30, 2023.
−Removed: The decrease in hosted mining revenue from customers was primarily driven by the termination of contracts with several customers since September 30, 2023, due primarily to the reallocation of a majority of our data centers from digital asset mining to HPC hosting.
−Removed: Total digital asset hosted mining revenue from related parties was nil for the nine months ended September 30, 2024, compared to $10.1 million for the nine months ended September 30, 2023.
−Removed: There were no related-party transactions during the nine months ended September 30, 2024.
−Removed: Total HPC hosting revenue was $15.9 million for the nine months ended September 30, 2024, compared to nil for the same period in the prior year due to the initiation of HPC hosting operations for CoreWeave at our Austin, Texas data center during the quarter ended June 30, 2024.
+Added: Total revenue decreased by $99.8 million or 56%, to $79.5 million for the three months ended March 31, 2025, from $179.3 million for the three months ended March 31, 2024, as a result of the factors described below.
+Added: Digital asset self-mining revenue decreased by $82.8 million or 55%, to $67.2 million for the three months ended March 31, 2025, from $150.0 million for the three months ended March 31, 2024.
+Added: The year over year decrease in self-mining revenue was driven primarily by:
+Added: • a 75% decrease in bitcoin mined to 719 for the three months ended March 31, 2025, compared to 2,825 for the three months ended March 31, 2024, driven primarily by:
+Added: ◦ an approximate net decrease of 16,800 deployed mining units due primarily to the operational shift to our Colocation business;
+Added: ◦ a 50% decrease in block rewards as a result of the April 2024 halving;
+Added: ◦ a 6% decrease in self-mining hash rate to 18.1 EH/s for the three months ended March 31, 2025, from 19.3 EH/s for the same period in the prior year;
+Added: ◦ a 39% increase in network difficulty driven by a 58% increase in the twelve-month average network hash rate over prior year.
+Added: This decrease in self-mining revenue was partially offset by:
+Added: • a 74% increase in the average price of bitcoin to $93,443 for the three months ended March 31, 2025, compared to $53,579 for the three months ended March 31, 2024;
+Added: • an increase in our average self-mining hash rate fleet mix and efficiency to 24.4 joules per terahash.
+Added: Total digital asset hosted mining revenue from customers decreased by $25.6 million or 87%, to $3.8 million for the three months ended March 31, 2025, from $29.3 million for the three months ended March 31, 2024.
+Added: The decrease in hosted mining revenue from customers was primarily driven by our shift to our Colocation operations.
+Added: Total Colocation revenue was $8.6 million for the three months ended March 31, 2025, compared to nil for the same period in the prior year due to the initiation of Colocation operations at our Austin, Texas data center during the quarter ended June 30, 2024.
Cost of revenue
−Removed: Nine Months Ended September 30, Period over Period Change
−Removed: 2024 2023 Dollar Percentage
−Removed: (in thousands, except percentages)
+Added: Three Months Ended March 31,
+Added: 2025 2024 $ Change
Cost of revenue
1 unchanged sentence
8,213 77,646 (69,433)
−Removed: Cost of revenue increased by $23.1 million or 8%, to $299.4 million for the nine months ended September 30, 2024, from $276.3 million for the nine months ended September 30, 2023.
−Removed: As a percentage of total revenue, cost of revenue totaled 72% and 77% for the nine months ended September 30, 2024 and 2023, respectively.
−Removed: The increase in cost of revenue was primarily attributable to increased depreciation expense of $21.9 million driven by the increase in the number of miners in service, HPC hosting costs, primarily rent, power, payroll and benefits and stock-based compensation of $12.2 million incurred during the current fiscal year with no comparable activity for the same period in fiscal 2023, increased proceeds sharing costs of $3.5 million associated with the increase in average bitcoin price over prior year, a $2.3 million increase in payroll and benefits primarily driven by increased bonuses and higher salaries, and a $1.9 million i ncrease in stock-based compensation expense, partially offset by a $14.3 million decrease in power costs and $2.6 million lower facility operations expense.
+Added: Cost of revenue decreased by $30.3 million or 30%, to $71.3 million for the three months ended March 31, 2025, from $101.6 million for the three months ended March 31, 2024.
+Added: As a percentage of total revenue, cost of revenue totaled 90% and 57% for the three months ended March 31, 2025 and 2024, respectively.
+Added: The decrease in cost of revenue was primarily attributable to:
+Added: • a $26.8 million decrease in power costs from lower rates and usage;
+Added: • a $9.3 million decrease in depreciation expense driven by the increase in the number of miners becoming fully depreciated;
+Added: • a $2.6 million decrease in proceed sharing costs.
+Added: This decrease in cost of revenue was partially offset by:
+Added: • a $8.1 million increase in Colocation segment costs, primarily rent, power, and payroll and benefits incurred during the current fiscal year with no comparable activity for the same period in fiscal 2024;
+Added: • a $1.3 million increase in payroll and benefits due to increases in bonuses and salaries driven primarily by an increase in employee headcount.
Change in fair value of digital assets
−Removed: Nine Months Ended September 30, Period over Period Change
−Removed: 2024 2023 Dollar Percentage
−Removed: (in thousands, except percentages)
+Added: Three Months Ended March 31,
+Added: 2025 2024 $ Change
Change in fair value of digital assets
−Removed: $ (247) $ — $ (247) NM
−Removed: Percentage of total revenue
−Removed: Change in fair value of digital currency assets was $0.2 million for the nine months ended September 30, 2024, and reflects the Company’s adoption of ASU 2023-08 effective January 1, 2024.
−Removed: Gain from sale of digital assets
−Removed: Nine Months Ended September 30, Period over Period Change
−Removed: 2024 2023 Dollar Percentage
−Removed: (in thousands, except percentages)
−Removed: Gain from sale of digital assets
−Removed: $ — $ 2,358 $ (2,358) NM
−Removed: Percentage of total revenue
−Removed: Gain from sale of digital assets was nil for the nine months ended September 30, 2024, compared to a gain of $2.4 million for the nine months ended September 30, 2023.
−Removed: There are no gains from sale of digital assets recorded in fiscal 2024 due to the Company’s adoption of ASU 2023-08 effective January 1, 2024.
−Removed: For the nine months ended September 30, 2023, the carrying value of our digital assets sold was $285.4 million and the sales price was $287.8 million.
−Removed: Impairment of digital assets
−Removed: Nine Months Ended September 30, Period over Period Change
−Removed: 2024 2023 Dollar Percentage
−Removed: (in thousands, except percentages)
−Removed: Impairment of digital assets $ — $ (2,864) $ 2,864 NM
+Added: $ 10,688 $ — $ 10,688
Percentage of total revenue
−Removed: Impairment of digital assets was nil for the nine months ended September 30, 2024, compared to $2.9 million for the nine months ended September 30, 2023.
−Removed: Upon the Company’s adoption of ASU 2023-08 effective January 1, 2024, the Company measures digital assets at fair value each reporting period with changes in fair value recognized in net income.
−Removed: Prior to the adoption of ASU 2023-08, impairment existed when the carrying amount exceeded its fair value.
−Removed: Impairment was measured using quoted prices of the digital asset at the time its fair value was being assessed.
−Removed: Quoted prices, including intraday low prices, were collected and utilized in impairment testing and measurement on a daily basis.
−Removed: If the then current carrying value of a digital asset exceeded the fair value so determined, an impairment loss occurred with respect to those digital assets in the amount equal to the difference between their carrying value and the price determined.
−Removed: The carrying value of our digital assets amounted to nil as of September 30, 2024, and $0.6 million as of September 30, 2023.
+Added: Change in fair value of digital assets was $10.7 million for the three months ended March 31, 2025, and reflects the decrease in the price of bitcoin held during the three months ended March 31, 2025.
Change in fair value of energy derivatives
−Removed: Nine Months Ended September 30, Period over Period Change
−Removed: 2024 2023 Dollar Percentage
−Removed: (in thousands, except percentages)
+Added: Three Months Ended March 31,
+Added: 2025 2024 $ Change
Change in fair value of energy derivatives
−Removed: $ (2,757) $ — $ (2,757) NM
+Added: $ — $ 2,218 $ (2,218)
Percentage of total revenue
−Removed: Change in fair value of energy derivatives, which is related to the change in fair value of the derivative liability of the energy forward purchase contract entered into in October 2023, was $2.8 million for the nine months ended September 30, 2024.
−Removed: Loss on disposal of property, plant and equipment
−Removed: Nine Months Ended September 30, Period over Period Change
−Removed: 2024 2023 Dollar Percentage
−Removed: (in thousands, except percentages)
−Removed: Loss on disposal of property, plant and equipment
−Removed: $ (4,061) $ (514) $ (3,547) NM
+Added: Change in fair value of energy derivatives was nil for the three months ended March 31, 2025, compared to $2.2 million for the three months ended March 31, 2024.
+Added: Change in fair value of energy derivative was related to the change in fair value of the energy forward purchase contract entered into in November 2023 which expired during the second quarter 2024.
+Added: Losses on exchange or disposal of property, plant and equipment
+Added: Three Months Ended March 31,
+Added: 2025 2024 $ Change
+Added: Losses on exchange or disposal of property, plant and equipment $ 6 $ 3,820 $ (3,814)
Percentage of total revenue
−Removed: Loss on disposal of property, plant and equipment increased by $3.5 million to $4.1 million for the nine months ended September 30, 2024, from $0.5 million for the nine months ended September 30, 2023.
−Removed: This loss was due to the disposal of mining equipment.
−Removed: Operating Expenses
−Removed: Nine Months Ended September 30, Period over Period Change
−Removed: 2024 2023 Dollar Percentage
−Removed: Operating expenses:
−Removed: (in thousands, except percentages)
−Removed: Research and development
+Added: Losses on exchange or disposal of property, plant and equipment decreased by $3.8 million to a nominal amount for the three months ended March 31, 2025, from $3.8 million for the three months ended March 31, 2024.
+Added: The losses for the three months ended March 31, 2024 were primarily due to the write-off of leasehold improvements and disposal of containers and other mining equipment.
+Added: Selling, general and administrative
+Added: Three Months Ended March 31,
+Added: 2025 2024 $ Change
+Added: Selling, general and administrative
$ 40,115 $ 16,924 $ 23,191
−Removed: Sales and marketing
−Removed: 7,099 3,133 3,966 NM
−Removed: General and administrative
+Added: Percentage of total revenue
+Added: Selling, general and administrative expenses increased $23.2 million or 137%, to $40.1 million for the three months ended March 31, 2025, from $16.9 million for the three months ended March 31, 2024.
+Added: The increase was driven primarily by:
+Added: • a $13.9 million increase in stock-based compensation expense;
+Added: • a $7.2 million increase in Colocation segment site startup costs which primarily include payroll, benefits, and stock-based compensation for activities related to the startup of our Colocation segment sites that have transitioned from digital asset site operations and administration;
+Added: • a $2.5 million increase in payroll and benefits expense due to increases in bonuses and salaries driven primarily by an increase in employee headcount;
+Added: partially offset by
+Added: • a $1.1 million decrease in in post-emergence bankruptcy advisor fees and a $1.0 million decrease in rent expenses.
+Added: Non-operating income, net
+Added: Three Months Ended March 31,
+Added: 2025 2024 $ Change
+Added: Non-operating expenses (income), net:
+Added: Loss on debt extinguishment
$ — $ 50 $ (50)
−Removed: Total operating expenses
+Added: Interest (income) expense, net (2,187) 14,087 (16,274)
+Added: Change in fair value of warrants and contingent value rights
(621,464) (60,114) (561,350)
−Removed: Percentage of total revenue
−Removed: Total operating expenses increased $10.5 million or 13%, to $88.7 million for the nine months ended September 30, 2024, from $78.1 million for the nine months ended September 30, 2023.
−Removed: Research and development expenses increased by $1.5 million or 28%, to $6.8 million for the nine months ended September 30, 2024, from $5.3 million for the nine months ended September 30, 2023.
−Removed: The increase was driven by a $1.0 million increase in payroll and benefits expense primarily driven by increased bonuses and higher salaries and a $0.6 million increase in stock-based compensation expense .
−Removed: Sales and marketing expenses increased by $4.0 million to $7.1 million for the nine months ended September 30, 2024, from $3.1 million for the nine months ended September 30, 2023.
−Removed: The increase was driven primarily by a $2.5 million increase in stock-based compensation expense and a $1.0 million increase in sales and marketing event expenses.
−Removed: General and administrative expenses increased by $5.1 million or 7%, to $74.7 million for the nine months ended September 30, 2024, from $69.7 million for the nine months ended September 30, 2023.
−Removed: The increase was primarily driven by a $14.2 million increase in payroll and benefits expense primarily driven by increased bonuses and higher salaries, $4.6 million of HPC advisory startup costs and $3.7 million site startup costs incurred during the current period with no comparable activity for the same period in fiscal 2023, a $2.2 million increase in bankruptcy advisor fees, and a $1.8 million increase in corporate taxes, primarily property taxes, partially offset by $20.7 million lower stock-based compensation due to cancellation and forfeitures of equity-based awards during the nine months ended September 30, 2024, and no new equity awards granted during fiscal 2023.
−Removed: Non-operating (income) expenses, net
−Removed: Nine Months Ended September 30, Period over Period Change
−Removed: 2024 2023 Dollar Percentage
−Removed: Non-operating (income) expenses, net:
−Removed: (in thousands, except percentages)
−Removed: Loss (gain) on debt extinguishment
−Removed: $ 487 $ (21,135) $ 21,622 NM
−Removed: Interest expense, net 35,934 2,317 33,617 NM
−Removed: Reorganization items, net (111,439) 78,270 (189,709) NM
−Removed: Change in fair value of warrant and contingent value rights
−Removed: 1,144,441 — 1,144,441 NM
−Removed: Other non-operating expense (income), net
−Removed: 144 (3,978) 4,122 NM
−Removed: Total non-operating expenses, net
−Removed: $ 1,069,567 $ 55,474 $ 1,014,093 NM
−Removed: Total non-operating expenses, net increased by $1.01 billion, to $1.07 billion for the nine months ended September 30, 2024, from total non-operating expenses, net of $55.5 million for the nine months ended September 30, 2023.
−Removed: The increase in total non-operating expenses, net was primarily driven by:
−Removed: • the Company’s entry into a warrant agreement and Convertible Value Rights Agreement pursuant to the Plan of Reorganization.
−Removed: During the nine months ended September 30, 2024, we incurred a $1.14 billion Change in fair value of warrant and contingent value rights was due to the increase in the price of the underlying instruments driven by the increase in the Company’s stock price to $11.86 per share as of September 30, 2024, from $3.44 per share as of the Effective Date.
−Removed: The increase in stock price resulted in a $1.22 billion increase in the fair value of the warrant liabilities during the nine months ended September 30, 2024, partially offset by a $79.3 million decrease in fair value of contingent value rights;
−Removed: • a $33.6 million increase in Interest expense, net resulting from the Bankruptcy Court ordered stay on payment of pre-petition obligations, including interest during the same period in fiscal 2023, and;
−Removed: • a $21.1 million Gain on extinguishment of debt recognized during the same period in the prior year, partially offset by
−Removed: • a $189.7 million decrease in Reorganization items, net related to a $143.8 million gain associated with the satisfaction of allowed claims, a $41.5 million decrease in profession fees and other bankruptcy costs, an $15.0 million decrease in debtor-in-possession financing costs, partially offset by a $12.8 million increase in reimbursed claimant professional fees.
−Removed: Income tax expense
−Removed: Nine Months Ended September 30, Period over Period Change
−Removed: 2024 2023 Dollar Percentage
−Removed: (in thousands, except percentages)
−Removed: Income tax expense
+Added: Reorganization items, net — (111,439) 111,439
+Added: Other non-operating expense, net 157 1,746 (1,589)
+Added: Total non-operating income, net
$ (623,494) $ (155,670) $ (467,824)
−Removed: Percentage of total revenue
−Removed: Income tax expense consists of U.S.
−Removed: federal, state and local income taxes.
−Removed: For the nine months ended September 30, 2024 and 2023, our income tax expense was $0.5 million and $0.3 million, respectively.
−Removed: The Company's effective tax rate for the nine months ended September 30, 2024, was lower than the federal statutory rate of 21% primarily due to a valuation allowance on the Company’s deferred tax assets and certain non-deductible expenses.
+Added: Total non-operating income, net increased by $467.8 million, to $623.5 million for the three months ended March 31, 2025, from total non-operating income, net of $155.7 million for the three months ended March 31, 2024.
+Added: The increase in total non-operating income, net was primarily driven by:
+Added: • During the three months ended March 31, 2025, we incurred a $621.5 million decrease in Change in fair value of warrant and contingent value rights due to the decrease in the Company’s stock price to $7.24 per share as of March 31, 2025, from $14.05 per share as of December 31, 2024.
+Added: The decrease in stock price resulted in a $634.3 million decrease in the fair value of the warrant liabilities during the three months ended March 31, 2025, partially offset by a $12.8 million increase in fair value of contingent value rights;
+Added: • a $16.3 million decrease in Interest expense, net driven primarily by an $8.7 million decrease in interest expense due to lower interest rates during the three months ended March 31, 2025, and a $7.9 million increase in proceeds from money market funds.
+Added: This decrease was partially offset by $111.4 million in Reorganization items, net incurred during the three months ended March 31, 2024 with no related activity during the same period in the current year.
+Added: Reorganization items, net consisted of costs directly associated with the reorganization during the bankruptcy period, including professional fees (including reimbursed third-party professional fees) and other bankruptcy related costs, negotiated settlements, satisfaction of allowed claims, and debtor-in-possession finance fees.
Segment Total Revenue and Gross Profit
−Removed: The following table presents total revenue and gross profit by reportable segment for the periods presented:
−Removed: Nine Months Ended September 30, Period over Period Change
−Removed: 2024 2023 Dollar Percentage
−Removed: Digital Asset Self-Mining Segment (in thousands, except percentages)
+Added: The following table presents total revenue and gross profit by reportable segment for the periods presented (in thousands, except percentages):
+Added: Three Months Ended March 31,
+Added: 2025 2024 $ Change
+Added: Digital Asset Self-Mining Segment
Digital asset self-mining revenue
−Removed: Cost of digital asset self-mining
$ 67,179 $ 149,959 $ (82,780)
+Added: Cost of digital asset self-mining:
+Added: Power fees 30,319 44,983 (14,664)
+Added: Depreciation expense 19,259 27,478 (8,219)
+Added: Employee compensation 7,335 4,680 2,655
+Added: Facility operations expense 3,280 2,950 330
+Added: Other segment items 977 1,473 (496)
+Added: Total cost of digital asset self-mining 61,170 81,564 (20,394)
Digital Asset Self-Mining gross profit $ 6,009 $ 68,395 $ (62,386)
−Removed: $ 92,720 $ 66,039 $ 26,681 40%
Digital Asset Self-Mining gross margin 9 % 46 % (37) %
2 unchanged sentences
Cost of digital asset hosted mining services:
+Added: Power fees 1,367 13,494 (12,127)
+Added: Depreciation expense 145 1,270 (1,125)
+Added: Employee compensation 332 1,404 (1,072)
+Added: Facility operations expense 148 885 (737)
+Added: Other segment items 44 3,028 (2,984)
+Added: Total cost of digital asset hosted mining services 2,036 20,081 (18,045)
Digital Asset Hosted Mining gross profit $ 1,737 $ 9,251 $ (7,514)
Digital Asset Hosted Mining gross margin 46 % 32 % 14 %
−Removed: HPC Hosting Segment
−Removed: HPC hosting revenue $ 15,857 $ — $ 15,857 NM
−Removed: Cost of HPC hosting services 13,932 — 13,932 NM
−Removed: HPC Hosting gross profit $ 1,925 $ — $ 1,925 NM
−Removed: HPC Hosting gross margin 12% —%
+Added: Colocation Segment
+Added: Colocation revenue:
+Added: License fees $ 5,995 $ — $ 5,995
+Added: Maintenance and other (8) — (8)
+Added: Licensing revenue
+Added: 5,987 — 5,987
+Added: Power fees passed through to customer 2,586 — 2,586
+Added: Total Colocation revenue 8,573 — 8,573
+Added: Cost of Colocation services:
+Added: Depreciation expense 67 — 67
+Added: Employee compensation
+Added: 1,295 — 1,295
+Added: Facility operations expense 3,852 — 3,852
+Added: Other segment items 306 — 306
+Added: Cost of licensing revenue 5,520 — 5,520
+Added: Power fees passed through to customer
+Added: 2,586 — 2,586
+Added: Total cost of Colocation services 8,106 — 8,106
+Added: Colocation gross profit $ 467 $ — $ 467
+Added: Colocation licensing gross margin 8 % — % 8 %
+Added: Colocation gross margin 5 % — % 5 %
Consolidated total revenue $ 79,525 $ 179,291 $ (99,766)
1 unchanged sentence
Consolidated gross profit $ 8,213 $ 77,646 $ (69,433)
−Removed: $ 116,307 $ 84,159 $ 32,148 38%
Consolidated gross margin 10 % 43 % (33) %
−Removed: For the nine months ended September 30, 2024, cost of revenue included depreciation expense of $83.1 million for the Digital Asset Self-Mining segment, $3.2 million for the Digital Asset Hosted Mining segment, and a nominal amount for the HPC Hosting segment.
−Removed: For the nine months ended September 30, 2023, cost of revenue included depreciation expense $60.8 million for the Digital Asset Self-Mining segment, $3.7 million for the Digital Asset Hosted Mining segment, and nil for the HPC Hosting segment.
−Removed: For the nine months ended September 30, 2024 and 2023, the top three hosting customers accounted for approximately 89% and 73%, respectively, of the Digital Asset Hosting’s segment total revenue.
−Removed: For the nine months ended September 30, 2024, gross profit in the Digital Asset Self-Mining segment increased by $26.7 million compared to the nine months ended September 30, 2023, due to a higher Digital Asset Self-Mining segment gross margin of 28% for the nine months ended September 30, 2024, compared to 24% for the nine months ended September 30, 2023.
−Removed: The increase in the Digital Asset Self-Mining segment gross profit was primarily due to a 18% increase in self-mining revenue driven by a 128% increase in the price of bitcoin, an increase in our self-mining hash rate, fleet mix and efficiency, and an increase in the number of mining units deployed, partially offset by the 48% decrease in bitcoin mined.
−Removed: The increase in the Digital Asset Self-Mining segment gross profit was partially offset by an increase in depreciation expense as a percentage of segment revenues, which was driven primarily by an approximate increase of 31,000 miners placed in service.
−Removed: Our self-mining hash rate was 20.4 EH/s for the nine months ended September 30, 2024, compared to 15.0 EH/s for the nine months ended September 30, 2023, an increase of 36%.
−Removed: For the nine months ended September 30, 2024, gross profit in the Digital Asset Hosted Mining segment increased by $3.5 million compared to the nine months ended September 30, 2023, reflecting a Digital Asset Hosted Mining segment gross margin of
−Removed: 30% for the nine months ended September 30, 2024, compared to a gross margin of 22% for the nine months ended September 30, 2023.
−Removed: The increase in Digital Asset Hosted Mining segment gross margin for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023 was primarily due to lower Cost of digital asset hosted mining services primarily driven by lower power costs from lower rates and usage, partially offset by decreased digital asset hosted mining revenue from related parties as there were no related party transactions during fiscal 2024 and by the termination of contracts with several customers since September 30, 2023, due primarily to our shift to HPC hosting.
−Removed: For the nine months ended September 30, 2024, gross profit in the HPC Hosting segment was $1.9 million compared to nil for the nine months ended September 30, 2023, due to the HPC Hosting segment starting operation during the quarter ended June 30, 2024.
−Removed: A reconciliation of the reportable segment gross profit to loss before income taxes included in our Condensed Consolidated Statements of Operations for the nine months ended September 30, 2024 and 2023, is as follows:
−Removed: Nine Months Ended September 30, Period over Period Change
−Removed: 2024 2023 Dollar Percentage
−Removed: (in thousands, except percentages)
+Added: Digital Asset Self-Mining
+Added: For the three months ended March 31, 2025, gross profit in the Digital Asset Self-Mining segment decreased by $62.4 million compared to the three months ended March 31, 2024, reflecting a Digital Asset Self-Mining segment gross margin of 9% for the three months ended March 31, 2025, compared to 46% for the three months ended March 31, 2024.
+Added: The decrease in the Digital Asset Self-Mining segment gross profit was primarily due to a 55% decrease in self-mining revenue driven by:
+Added: • a 75% decrease in bitcoin mined to 719 for the three months ended March 31, 2025, compared to 2,825 for the three months ended March 31, 2024, driven primarily by:
+Added: ◦ an approximate net decrease of 16,800 deployed mining units due primarily to the operational shift to Colocation;
+Added: ◦ a 50% decrease in block rewards as a result of the April 2024 halving;
+Added: ◦ a 6% decrease in our self-mining hash rate to 18.1 EH/s for the three months ended March 31, 2025, compared to 19.3 EH/s for the three months ended March 31, 2024;
+Added: ◦ an 39% increase in network difficulty driven by a 58% increase in the twelve-month average network hash rate over prior year;
+Added: partially offset by
+Added: • a 74% increase in the average price of bitcoin to $93,443 for the three months ended March 31, 2025, compared to $53,579 for the three months ended March 31, 2024;
+Added: This decrease in the digital asset self-mining revenue was partially offset by:
+Added: • a $20.4 million or 25% decrease in the total cost of digital asset self-mining driven by:
+Added: ◦ a $14.7 million decrease in power costs due primarily to lower power rates;
+Added: ◦ a $8.2 million or 30% decrease in depreciation expense, which was driven primarily by an approximate net decrease of 16,800 deployed miners during the current year;
+Added: partially offset by
+Added: ◦ a $2.7 million or 57% increase in employee compensation due to increases in bonuses and salaries driven primarily by an increase in employee headcount.
+Added: Digital Asset Hosted Mining
+Added: For the three months ended March 31, 2025, gross profit in the Digital Asset Hosted Mining segment decreased by $7.5 million compared to the three months ended March 31, 2024, reflecting a Digital Asset Hosted Mining segment gross margin of 46% for the three months ended March 31, 2025, compared to a gross margin of 32% for the three months ended March 31, 2024.
+Added: The increase in Digital Asset Hosted Mining segment gross margin for the three months ended March 31, 2025, compared to the three months ended March 31, 2024 was primarily due to:
+Added: • a $25.6 million or 87% decrease in the digital asset hosted mining revenue driven primarily by our shift to Colocation operations, partially offset by:
+Added: • a $18.0 million or 90% decrease in the total cost of digital asset hosted mining services driven primarily by:
+Added: ◦ a $12.1 million decrease in power costs from lower usage driven primarily by our operational shift to Colocation segment and lower rates;
+Added: ◦ a $3.0 million decrease in other segment costs;
+Added: ◦ a $1.1 million decrease in depreciation expense and a $1.1 million decrease in employee compensation.
+Added: For the three months ended March 31, 2025 and 2024, the top three hosting customers accounted for approximately 100% and 86%, respectively, of the Digital Asset Hosted Mining’s segment total revenue.
+Added: For the three months ended March 31, 2025, gross profit in the Colocation segment was $0.5 million compared to nil for the three months ended March 31, 2024, due to the Colocation segment starting operation during the quarter ended June 30, 2024.
+Added: Colocation revenue includes a base license fee as well as the direct pass-through of power costs to our client, with no margin added.
+Added: Colocation costs at our Austin, Texas data center consist primarily of lease expense, the direct pass-through of power costs, and direct and indirect facilities operations expenses, including personnel and benefit costs and stock-based compensation.
+Added: A reconciliation of the reportable segment gross profit to income before income taxes included in our Consolidated Statements of Operations for the three months ended March 31, 2025 and 2024, is as follows (in thousands):
+Added: Three Months Ended March 31,
+Added: 2025 2024 $ Change
Reportable segment gross profit
$ 8,213 $ 77,646 $ (69,433)
−Removed: Change in fair value of digital assets (247) — (247) NM
−Removed: Gain from sale of digital assets — 2,358 (2,358) NM
−Removed: Impairment of digital assets — (2,864) 2,864 NM
+Added: Change in fair value of digital assets 10,688 — 10,688
+Added: Gain from sales of digital assets
Change in fair value of energy derivatives
−Removed: (2,757) — (2,757) NM
+Added: — 2,218 (2,218)
Loss on exchange or disposal of property, plant and equipment
−Removed: (4,061) (514) (3,547) NM
−Removed: Operating expenses:
−Removed: Research and development 6,814 5,308 1,506 28 %
−Removed: Sales and marketing 7,099 3,133 3,966 NM
−Removed: General and administrative 74,742 69,671 5,071 7 %
−Removed: Total operating expenses 88,655 78,112 10,543 13 %
−Removed: Operating income
−Removed: 20,587 5,027 15,560 NM
−Removed: Non-operating (income) expenses, net:
−Removed: Loss (gain) on debt extinguishment
−Removed: 487 (21,135) 21,622 NM
−Removed: Interest expense, net
−Removed: 35,934 2,317 33,617 NM
−Removed: Reorganization items, net (111,439) 78,270 (189,709) NM
−Removed: Change in fair value of warrant and contingent value rights 1,144,441 — 1,144,441 NM
−Removed: Other non-operating (income) expense, net 144 (3,978) 4,122 NM
−Removed: Total non-operating expenses, net
−Removed: 1,069,567 55,474 1,014,093 NM
−Removed: Loss before income taxes
−Removed: $ (1,048,980) $ (50,447) $ (998,533) NM
+Added: 6 3,820 (3,814)
+Added: Selling, general and administrative
+Added: 40,115 16,924 23,191
+Added: Operating (loss) income (42,596) 55,227 (97,823)
+Added: Non-operating expenses (income), net:
+Added: Loss on debt extinguishment
+Added: Interest (income) expense, net
+Added: (2,187) 14,087 (16,274)
+Added: Reorganization items, net — (111,439) 111,439
+Added: Change in fair value of warrants and contingent value rights (621,464) (60,114) (561,350)
+Added: Other non-operating expense, net 157 1,746 (1,589)
+Added: Total non-operating income, net
+Added: (623,494) (155,670) (467,824)
+Added: Income before income taxes
+Added: $ 580,898 $ 210,897 $ 370,001
Liquidity and Capital Resources
−Removed: Sources of Liquidity
−Removed: We finance our operations primarily through cash generated from operations, including sales of self-mined bitcoin, debt issuances, equipment financing arrangements, and sales of equity securities.
−Removed: Operating and Capital Resources
−Removed: Historically, a substantial portion of our liquidity needs arose from debt service on our outstanding indebtedness and from funding the costs of operations, working capital and capital expenditures.
−Removed: Following our Chapter 11 filing, our level of capital expenditures was reduced, and we expect them to remain at a reduced level now that we have emerged from Chapter 11.
−Removed: We have assessed our current and expected operating and capital expenditure requirements and our current and expected sources of liquidity, and have determined, based on our forecasted financial results and financial condition as of September 30, 2024, that our operating cash flows, existing cash balances, and continued access to debt markets will be sufficient to satisfy our cash requirements over the next twelve months and beyond.
−Removed: Cash, Cash Equivalents, Restricted Cash, Cash Requirements and Cash Flows
+Added: Sources and Uses of Cash
+Added: We finance our operations primarily through debt issuances, cash generated from operations, including the sale of self-mined bitcoin and fees from leasing Colocation segment data center space, equipment financing arrangements, and sales of equity securities.
+Added: We have assessed our current and expected operating and capital expenditure requirements and our current and expected sources of liquidity, and have determined, based on our forecasted financial results and financial condition as of March 31, 2025, that our operating cash flows, existing cash balances, and continued access to debt markets will be sufficient to satisfy our cash requirements over the next twelve months and beyond.
+Added: Cash, Cash Equivalents, Restricted Cash and Cash Flows
Cash and cash equivalents include all cash balances and highly liquid investments with original maturities of three months or less from the date of acquisition.
−Removed: September 30, December 31, Period over Period Change
−Removed: 2024 2023 Dollar Percentage
−Removed: (in thousands, except percentages)
−Removed: Cash and cash equivalents $ 253,019 $ 50,409 $ 202,610 NM
+Added: March 31, December 31,
+Added: 2025 2024 $ Change
+Added: Cash and cash equivalents $ 697,942 $ 836,197 $ (138,255)
Restricted cash 783 783 —
−Removed: Total cash, cash equivalents and restricted cash $ 253,802 $ 69,709 $ 184,093 NM
−Removed: As of September 30, 2024 and December 31, 2023, restricted cash of $0.8 million and $19.3 million, consisted of cash held in escrow to pay for construction and development activities.
+Added: Total cash, cash equivalents and restricted cash $ 698,725 $ 836,980 $ (138,255)
+Added: As of March 31, 2025 and December 31, 2024, restricted cash of $0.8 million, consisted of cash held in escrow to pay for construction and development activities.
The following table summarizes our cash, cash equivalents and restricted cash and cash flows for the periods indicated.
−Removed: Nine Months Ended September 30,
+Added: Three Months Ended March 31,
(in thousands)
−Removed: Cash, cash equivalents and restricted cash – beg.
+Added: Cash, cash equivalents and restricted cash – beginning of period
$ 836,980 $ 69,709
11 unchanged sentences
Changes in net cash from operating activities results primarily from cash received from hosting customers payments for power fees and equipment purchases.
−Removed: Other drivers of the changes in net cash from operating activities include research and development
−Removed: costs, sales and marketing costs and general and administrative expenses (including personnel expenses and fees for professional services) and interest payments on debt.
−Removed: Net cash provided by operating activities was $29.1 million for the nine months ended September 30, 2024 and $43.4 million for the nine months ended September 30, 2023.
−Removed: The decrease in net cash provided by operating activities was primarily due to a increase in net loss of $1.00 billion, a $143.8 million increase in non-cash reorganization items, a $79.3 million decrease in the fair value of contingent value rights, a $50.7 million increase in digital asset self-mining income, and a $13.5 million decrease in stock-based compensation.
−Removed: The decrease in net cash provided by operating activities was partially offset by a $1.22 billion increase in the fair value of warrant liabilities, a $22.4 million increase in depreciation and amortization, and a $21.6 million decrease in loss on debt extinguishment.
+Added: Other drivers of the changes in net cash from operating activities include research and development costs, sales and marketing costs and general and administrative expenses (including personnel expenses and fees for professional services) and interest payments on debt.
+Added: Net cash used in operating activities was $40.6 million for the three months ended March 31, 2025 and net cash provided by operating activities was $22.2 million for the three months ended March 31, 2024.
+Added: The decrease in net cash provided by operating activities was primarily due to a decrease in $67.4 million from our bitcoin holding strategy and a decrease of $28.4 million in net income before the effects of non-cash adjustments.
+Added: The decrease in net cash provided by operating activities was offset by an increase of $36.0 million from operating assets and liabilities driven primarily by customer prepaid base license fees of $42.0 million used in funding property, plant, and equipment purchases.
Investing Activities
Our net cash used in investing activities consists primarily of purchases of property, plant and equipment.
−Removed: Net cash used in investing activities for the nine months ended September 30, 2024 and 2023, was $66.4 million and $5.4 million, respectively.
−Removed: The increase in net cash used in investing activities was driven primarily by a $61.7 million increase in purchases of property, plant and equipment.
+Added: Net cash used in investing activities for the three months ended March 31, 2025 and 2024, was $93.5 million and $32.0 million, respectively.
+Added: Purchases of property, plant, and equipment were $88.4 million during the three months ended March 31, 2025.
+Added: Of those purchases, $59.5 million related to the Colocation segment and $28.9 million related to the digital asset mining segments.
+Added: Prepaid base license fees of $42.0 million recognized as deferred revenue during the three months ended March 31, 2025 and included in the operating activities above, funded a portion of the property, plant, and equipment purchases for the Colocation segment.
+Added: The increase in investing cash used was further driven by a $5.0 million purchase of a strategic equity investment.
Financing Activities
−Removed: Net cash provided by (used in) financing activities consists of proceeds from stock issuances, issuances of debt, net of issuance costs and principal payments on debt, including notes payable and finance leases.
−Removed: Net cash provided by financing activities for the nine months ended September 30, 2024 was $221.4 million.
−Removed: Net cash used by financing activities for the nine months ended September 30, 2023 was $26.4 million.
−Removed: The change was due primarily to an inflow of $447.6 million from the proceeds for the issuance of 3% senior convertible notes, net, $55.0 million from the issuance of common stock during the nine months ended September 30, 2024, and a $20.0 million draw from the Exit Facility.
−Removed: The increase in net cash provided by financing activities was partially offset by an increase in principal payments on debt of $268.9 million.
+Added: Net cash used in financing activities consists of proceeds from stock issuances and principal payments on debt, including notes payable and finance leases.
+Added: Net cash used in financing activities for the three months ended March 31, 2025 was $4.2 million.
+Added: Net cash provided by financing activities for the three months ended March 31, 2024 was $54.4 million.
+Added: The decrease in net cash provided by financing activities was related to $55.0 million from the issuance of common stock and a $20.0 million draw from the exit facility during the three months ended March 31, 2024.
+Added: The decrease in cash provided by financing activities was partially offset by decreases in principal payments on debt of $9.7 million, restricted stock tax holding obligations of $3.4 million, and principal repayments of finance leases of $3.0 million.
Future Commitments and Contractual Obligations
−Removed: For a discussion of Commitments and Contractual Obligations, refer to Note 9 — Commitments and Contingencies to our unaudited condensed consolidated financial statements.
−Removed: Related Party Transactions
−Removed: We had agreemen ts to provide hosting services to various entities that are either managed and invested in by individuals who were directors and executives of Core Scientific during fiscal 2023.
−Removed: For the three and nine months ended September 30, 2024, there were no related-party transactions.
−Removed: For the three and nine months ended September 30, 2023, we recognized digital asset hosting revenue of $2.8 million and $10.1 million, respectively, from the contracts with related parties.
−Removed: Foreign Currency and Exchange Risk
−Removed: The vast majority of our cash generated from revenue is denominated in U.S.
+Added: Our material cash commitments from known contractual and other obligations consist primarily of obligations for long-term debt and related interest, leases for property and equipment, and capital expenditures related to the conversion of a significant portion of our data centers to high-density colocation operations.
+Added: Certain amounts included in our contractual obligations as of March 31, 2025, are based on our estimates and assumptions about these obligations, including their duration, anticipated actions by third parties and other factors.
+Added: For more information regarding the Company’s future commitments and contractual obligations refer to Notes 4 — Leases, 5 — Convertible and Other Notes Payable and 8 — Commitments and Contingencies to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.
Critical Accounting Estimates
−Removed: We prepare our condensed consolidated financial statements in accordance with GAAP.
−Removed: In doing so, we have to make estimates and assumptions.
−Removed: Our critical accounting estimates are those estimates that involve a significant level of uncertainty, subjectivity and judgment at the time the estimate was made, and changes in them have had or are reasonably likely to have a material effect on our financial condition or results of operations.
−Removed: Accordingly, actual results could differ materially from our estimates.
−Removed: We base our estimates on past experience and other assumptions that we believe are reasonable under the circumstances, and we evaluate these estimates on an ongoing basis.
−Removed: Except as described below, there have been no other material changes to our critical accounting estimates during the nine months ended September 30, 2024, as compared to those disclosed in our “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” audited consolidated financial statements and the accompanying notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, which was filed with the SEC on March 13, 2024.
−Removed: Contingent Value Rights Liabilities
−Removed: As described in Note 2 — Summary of Significant Accounting Policies and Note 7 — Contingent Value Rights and Warrant Liabilities, on the Effective Date, the Company issued CVRs to certain creditors.
−Removed: When the CVRs were recognized on the Effective Date, observable market data was not available.
−Removed: The Monte Carlo simulation model was used to determine their fair value, which required inputs that were both unobservable and significant to the overall fair value measurement, including estimated volatility.
−Removed: If we had used different assumptions or estimates, the estimated fair value of the CVRs could have been materially different.
−Removed: Subsequently, the fair value of the CVRs has been determined based on the observable listed trading price for such CVRs, thereby eliminating the significant level of estimation uncertainty in periods subsequent to the initial recognition of the CVRs.
−Removed: Warrant Liabilities
−Removed: As described in Note 2 — Summary of Significant Accounting Policies and Note 7 — Contingent Value Rights and Warrant Liabilities, on the Effective Date, holders of the Company’s previous common stock received warrants.
−Removed: When the warrants were recognized on the Effective Date, observable market data was not available.
−Removed: The Monte Carlo simulation model was used to determine their fair value, which required inputs that were both unobservable and significant to the overall fair value measurement, including estimated volatility.
−Removed: If we had used different assumptions or estimates, the estimated fair value of the warrants could have been materially different.
−Removed: Subsequently, the fair value of the warrants has been determined based on the observable listed trading price for such warrants, thereby eliminating the significant level of estimation uncertainty in periods subsequent to the initial recognition of the warrants.
−Removed: Stock-Based Compensation
−Removed: As described in Note 2 — Summary of Significant Accounting Policies, during the nine months ended September 30, 2024, the Company granted MSUs to certain executives.
−Removed: The estimated fair value of the MSUs was estimated on the date of grant using the Monte Carlo simulation model, which required inputs that were both unobservable and significant to the overall fair value measurement, including estimated volatility.
−Removed: If we had used different assumptions or estimates, the estimated fair value of the MSUs could have been materially different.
−Removed: Recent Accounting Pronouncements
−Removed: For a discussion of new accounting standards relevant to our business, refer to Note 2 — Summary of Significant Accounting Policies to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.
−Removed: Emerging Growth Company
−Removed: We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act.
−Removed: We may take advantage of certain exemptions from various public company reporting requirements, including not being required to have our internal control over financial reporting audited by our independent registered public accounting firm under Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and any golden parachute payments.
−Removed: We may take advantage of these exemptions for up to five years or until we are no longer an emerging growth company, whichever is earlier.
−Removed: In addition, the JOBS Act provides that an “emerging growth company” can delay adopting new or revised accounting standards until those standards apply to private companies.
−Removed: We have elected to use the extended transition period under the JOBS Act.
−Removed: Accordingly, our financial statements may not be comparable to the financial statements of public companies that comply with such new or revised accounting standards.
−Removed: On the last business day of the second quarter in 2024, the aggregate market value of the Company’s shares of common stock held by non-affiliate stockholders exceeded $700 million.
−Removed: As a result, as of December 31, 2024, the Company will be considered a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, and will cease to be an emerging growth company as defined in the JOBS Act.
−Removed: The impact of this change in filing status includes being subject to the requirements of large accelerated filers, which includes shortened filing timelines, no delayed adoption of certain accounting standards, and attestation of the Company’s internal control over financial reporting by its independent auditor.
+Added: The preparation of financial statements and related disclosures in conformity with GAAP and the Company’s discussion and analysis of its financial condition and operating results require the Company’s management to make judgments, assumptions and estimates that affect the amounts reported.
+Added: Note 2 — Summary of Significant Accounting Policies to our unaudited condensed consolidated financial statements in Part I.
+Added: Item 1 — “Financial Statements” of this Quarterly Report on Form 10-Q and in Part II.
+Added: Item 8 to our audited consolidated financial statements and accompanying notes of the 2024 Annual Report on Form 10-K describe the significant accounting policies and methods used in the preparation of the Company’s consolidated financial statements.
+Added: There have been no material changes to the Company’s critical accounting estimates since the Annual Report on Form 10-K for the year ended December 31, 2024, which was filed with the United States Securities and Exchange Commission (“SEC”) on February 27, 2025.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.