Core Scientific, Inc./tx 10-Q

Item 1. Financial Statements Core Scientific, Inc. Condensed Consolidated Balance Sheets (Unaudited, in thousands, except par value) June 30, 2026 December 31, 2025 Assets Current Assets: Cash and cash equivalents $ 1,769,735 $ 311,378 Digital assets 49,675 222,000 Customer funding receivable and other current assets 458,489 362,159 Restricted cash, current portion 165,745 — Total Current Assets 2,443,644 895,537 Property, plant and equipment, net 1,774,142 1,293,299 Intangibles, net 228,625 1,076 Operating lease right-of-use assets 114,199 108,484 Restricted cash, net of current portion 615,911 — Other noncurrent assets 80,972 49,248 Total Assets $ 5,257,493 $ 2,347,644 Liabilities and Stockholders’ Deficit Current Liabilities: Accounts payable $ 112,374 $ 126,106 Accrued expenses 509,189 511,957 Deferred revenue 287,201 127,561 Warrant liabilities, current portion 1,811,587 — Other current liabilities 17,443 15,777 Total Current Liabilities 2,737,794 781,401 Long-term debt 4,297,967 1,060,325 Warrant liabilities, net of current portion 163,683 936,107 Deferred revenue, net of current portion 367,242 428,290 Other noncurrent liabilities 110,163 104,261 Total Liabilities 7,676,849 3,310,384 Commitments and contingencies (Note 10) Stockholders’ Deficit: Preferred stock; $ 0.00001 par value; 2,000,000 shares authorized; none issued and outstanding at June 30, 2026 and December 31, 2025 — — Common stock; $ 0.00001 par value; 10,000,000 shares authorized at June 30, 2026 and December 31, 2025; 319,587 and 314,231 shares issued and outstanding at June 30, 2026 and December 31, 2025, respectively 3 3 Additional paid-in capital 3,229,842 3,183,960 Accumulated deficit ( 5,649,201 ) ( 4,146,703 ) Total Stockholders’ Deficit ( 2,419,356 ) ( 962,740 ) Total Liabilities and Stockholders’ Deficit $ 5,257,493 $ 2,347,644 See accompanying notes to unaudited condensed consolidated financial statements. 6 Core Scientific, Inc. Condensed Consolidated Statements of Operations (Unaudited, in thousands, except per share amounts) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Revenue: Colocation revenue $ 136,669 $ 10,560 $ 214,208 $ 19,133 Digital asset self-mining revenue 21,535 62,424 51,640 129,603 Digital asset hosted mining revenue from customers 5,997 5,644 13,597 9,417 Total revenue 164,201 78,628 279,445 158,153 Cost of revenue: Cost of colocation services 56,686 9,430 90,304 17,536 Cost of digital asset self-mining 33,700 59,589 80,889 120,759 Cost of digital asset hosted mining services 3,771 4,584 8,102 6,620 Total cost of revenue 94,157 73,603 179,295 144,915 Gross profit 70,044 5,025 100,150 13,238 Loss (gain) on fair value of digital assets 9,368 ( 29,797 ) 15,926 ( 19,109 ) Loss on disposal of property, plant and equipment 1,273 4,166 14,911 4,172 Loss on remeasurement of assets held for sale 19,495 — 19,495 — Impairment of property, plant and equipment — — 266,488 — Loss on contract termination 41,948 — 41,948 — Colocation organizational and site startup costs 27,039 11,655 35,704 23,322 Selling, general and administrative 49,389 45,285 94,568 78,175 Operating loss ( 78,468 ) ( 26,284 ) ( 388,890 ) ( 73,322 ) Non-operating expenses (income), net: Loss on debt extinguishment 5,435 1,377 5,435 1,377 Interest expense (income), net 23,833 ( 1,185 ) 28,690 ( 3,372 ) Change in fair value of warrants and contingent value rights 1,045,515 909,958 1,076,314 288,494 Other non-operating expense, net 152 207 662 364 Total non-operating expense, net 1,074,935 910,357 1,111,101 286,863 Loss before income taxes ( 1,153,403 ) ( 936,641 ) ( 1,499,991 ) ( 360,185 ) Income tax expense 1,907 158 2,507 363 Net loss $ ( 1,155,310 ) $ ( 936,799 ) $ ( 1,502,498 ) $ ( 360,548 ) Net loss per share, basic and diluted $ ( 3.32 ) $ ( 0.04 ) $ ( 4.39 ) $ ( 0.23 ) Weighted average shares outstanding, basic and diluted 325,329 317,985 324,128 316,593 See accompanying notes to unaudited condensed consolidated financial statements. 7 Core Scientific, Inc. Condensed Consolidated Statements of Changes in Stockholders’ Deficit (Unaudited, in thousands) Common Stock Additional Paid-In Capital Accumulated Deficit Total Stockholders’ Deficit Shares Amount Balance at March 31, 2026 316,949 $ 3 $ 3,188,202 $ ( 4,493,891 ) $ ( 1,305,686 ) Net loss — — — ( 1,155,310 ) ( 1,155,310 ) Stock-based compensation — — 18,759 — 18,759 Restricted stock awards issued 2,065 — 6,073 — 6,073 Restricted stock awards withheld for tax withholding obligations ( 915 ) — ( 17,724 ) — ( 17,724 ) Exercise of warrants 1,488 — 34,532 — 34,532 Balance at June 30, 2026 319,587 $ 3 $ 3,229,842 $ ( 5,649,201 ) $ ( 2,419,356 ) Balance at March 31, 2025 299,087 $ 3 $ 2,973,015 $ ( 3,281,836 ) $ ( 308,818 ) Net loss — — — ( 936,799 ) ( 936,799 ) Stock-based compensation — — 24,346 — 24,346 Restricted stock awards issued 1,499 — — — — Equity issuance costs — — ( 21 ) — ( 21 ) Exercise of warrants 2,560 — 29,305 — 29,305 Balance at June 30, 2025 303,146 $ 3 $ 3,026,645 $ ( 4,218,635 ) $ ( 1,191,987 ) Common Stock Additional Paid-In Capital Accumulated Deficit Total Stockholders’ Deficit Shares Amount Balance at December 31, 2025 314,231 $ 3 $ 3,183,960 $ ( 4,146,703 ) $ ( 962,740 ) Net loss — — — ( 1,502,498 ) ( 1,502,498 ) Stock-based compensation — — 37,146 — 37,146 Restricted stock awards issued 5,755 — 6,728 — 6,728 Restricted stock awards withheld for tax withholding obligations ( 2,274 ) — ( 39,375 ) — ( 39,375 ) Exercise of warrants 1,875 — 41,383 — 41,383 Balance at June 30, 2026 319,587 $ 3 $ 3,229,842 $ ( 5,649,201 ) $ ( 2,419,356 ) Balance at December 31, 2024 292,606 $ 3 $ 2,915,035 $ ( 3,858,087 ) $ ( 943,049 ) Net loss — — — ( 360,548 ) ( 360,548 ) Stock-based compensation — — 40,751 — 40,751 Restricted stock awards issued 4,479 — ( 50 ) — ( 50 ) Equity issuance costs — — ( 21 ) — ( 21 ) Exercise of warrants 6,061 — 70,930 — 70,930 Balance at June 30, 2025 303,146 $ 3 $ 3,026,645 $ ( 4,218,635 ) $ ( 1,191,987 ) See accompanying notes to unaudited condensed consolidated financial statements. 8 Core Scientific, Inc. Condensed Consolidated Statements of Cash Flows (Unaudited, in thousands) Six Months Ended June 30, 2026 2025 Cash flows from Operating Activities: Net loss $ ( 1,502,498 ) $ ( 360,548 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization 32,146 38,487 Loss on disposal of property, plant and equipment 14,911 4,172 Loss on remeasurement of assets held for sale 19,495 — Impairment of property, plant and equipment 266,488 — Change in operating lease right-of-use assets 6,400 5,404 Stock-based compensation 36,001 40,355 Digital asset self-mining revenue ( 51,640 ) ( 129,769 ) Proceeds from sales of digital assets generated by self-mining revenues (1) 208,249 — Loss (gain) on fair value of digital assets 15,926 ( 19,109 ) Change in fair value of warrants and contingent value rights 1,076,314 288,494 Loss on debt extinguishment 5,435 1,377 Changes in operating assets and liabilities: Customer funding receivable and other current assets ( 81,842 ) ( 207,550 ) Accounts payable ( 35,594 ) 133,531 Accrued expenses 155,200 70,826 Deferred revenue from colocation services 98,409 131,293 Other operating assets and liabilities, net ( 32,451 ) ( 8,004 ) Net cash provided by (used in) operating activities 230,949 ( 11,041 ) Cash flows from Investing Activities: Purchases of property, plant and equipment ( 954,244 ) ( 205,259 ) Proceeds from sales of property and equipment 3,927 1,671 Acquisitions of land and development rights ( 232,500 ) — Other investing activities ( 74 ) ( 5,036 ) Net cash used in investing activities ( 1,182,891 ) ( 208,624 ) Cash flows from Financing Activities: Debt extinguishment payments ( 1,000,000 ) ( 26,862 ) Proceeds from the issuance of debt 4,275,250 — Debt issuance costs ( 48,143 ) — Taxes paid related to net share settlement of equity awards ( 35,310 ) — Principal payments on debt — ( 8,613 ) Other financing activities 158 ( 495 ) Net cash provided by (used in) financing activities 3,191,955 ( 35,970 ) Net increase (decrease) in cash, cash equivalents and restricted cash 2,240,013 ( 255,635 ) Cash, cash equivalents and restricted cash—beginning of period 311,378 836,980 Cash, cash equivalents and restricted cash—end of period $ 2,551,391 $ 581,345 Supplemental disclosure of other cash flow information: Cash paid for interest, net of capitalized interest $ 12,846 $ 8,386 Income tax payments $ 652 $ 457 Supplemental disclosure of non-cash investing and financing activities: Purchases of property, plant and equipment in accounts payable and accrued expense $ 127,520 $ 129,904 Reclass of property, plant and equipment to Held for Sale $ 33,286 $ — 9 Operating lease right-of-use assets obtained in exchange for lease obligations $ 13,440 $ 109 Non-cash exercise of warrants $ 1,458 $ 19,559 Reconciliation of cash, cash equivalents, and restricted cash within the Condensed Consolidated Balance Sheets to the amounts shown in the Condensed Consolidated Statements of Cash Flows above: Cash and cash equivalents $ 1,769,735 $ 581,345 Restricted cash, current portion 165,745 — Restricted cash, net of current portion 615,911 — Total cash, cash equivalents and restricted cash $ 2,551,391 $ 581,345 (1) Proceeds from digital assets received as non-cash revenue consideration liquidated upon management's discretion. See accompanying notes to unaudited condensed consolidated financial statements. 10 Core Scientific, Inc. Notes to Unaudited Condensed Consolidated Financial Statements 1. ORGANIZATION AND DESCRIPTION OF BUSINESS Core Scientific, Inc. (“Core Scientific” or the “Company”) is a leader in designing, building and operating large scale, purpose-built data centers for high-density colocation services. The Company develops and operates facilities serving artificial intelligence and high-performance computing related workloads and is a premier provider of digital infrastructure. Historically, the Company focused on digital asset mining for its own account and providing hosting solutions for third-party digital asset miners; in 2024, the Company announced its first high-density colocation contract with CoreWeave, Inc., a provider of high-density computing servicing, marking a strategic shift towards its current high-density colocation business. The majority of the Company's revenue is derived from HDC services. As of June 30, 2026, the Company had a portfolio of 11 facilities in Alabama ( 1 ), Georgia ( 2 ), Kentucky ( 1 ), North Carolina ( 1 ), North Dakota ( 1 ), Oklahoma ( 1 ), and Texas ( 4 ). Core Scientific operates in three segments: “Colocation,” consisting of providing high-density colocation services to customers employing AI and HPC related workloads; “Digital Asset Self-Mining,” consisting of performing digital asset mining for its own account; and “Digital Asset Hosted Mining,” consisting of providing hosting services to third parties for digital asset mining. The Company’s Colocation segment provides space, power, cooling, facilities operations, security and other services to third-party colocation customers to support workloads for machine learning and AI. Colocation segment revenue is concentrated with a single customer; see Note 14 — Segment Reporting. The Digital Asset Self-Mining segment performs digital asset mining for the Company’s own account and generates revenue from operating owned infrastructure and computer equipment as part of mining pools in exchange for digital assets. The Company’s Digital Asset Hosted Mining segment provides a full suite of services to digital asset mining customers. The Company provides deployment, monitoring, troubleshooting, optimization and maintenance of customers’ digital asset mining equipment and provide necessary electrical power, repair and other infrastructure services necessary for customers to operate, maintain and efficiently mine digital assets. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accompanying unaudited interim condensed consolidated financial statements reflect the application of certain significant accounting policies as described below and elsewhere in these notes to the unaudited interim condensed consolidated financial statements. Basis of Presentation The unaudited interim condensed consolidated financial statements have been prepared in accordance with GAAP for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X of the SEC. Accordingly, the unaudited interim condensed consolidated financial statements do not include all the information and notes required for a fair presentation of financial position, results of operations and cash flows in conformity with GAAP and should be read in conjunction with the Company’s consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025. In the opinion of management, all adjustments, consisting of normal, recurring adjustments, considered necessary for a fair presentation have been included. All intercompany balances and transactions have been eliminated in consolidation. Certain prior year amounts have been reclassified for consistency with the current year presentation. The results for the unaudited interim condensed consolidated statements of operations are not necessarily indicative of results to be expected for the year ending December 31, 2026 or for any future interim period. Use of Estimates The preparation of the Company’s condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting period. Some of the more significant estimates include the useful lives of property, plant and equipment, the recoverability and fair value of long-lived assets held and used, and the fair value of assets classified as held for sale, the relative fair values used to allocate consideration in asset acquisitions and the useful lives of the resulting intangible assets, the initial measurement of lease liabilities, stock-based compensation, and income taxes. These estimates are based on information available as of the date of the financial statements; therefore, actual results could differ from management’s estimates. 11 Core Scientific, Inc. Notes to Unaudited Condensed Consolidated Financial Statements Significant Accounting Policies Except for the updates noted below, see the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025 for a detailed discussion of the Company’s significant accounting policies. Cash, Cash Equivalents, and Restricted Cash Cash and cash equivalents include all cash balances and highly liquid investments, including money market funds, with original maturities of three months or less from the date of acquisition. As of June 30, 2026 and December 31, 2025, substantially all cash and cash equivalents exceeded Federal Deposit Insurance Corporation insured limits. Restricted cash as of June 30, 2026, consisted of (i) funds held in the debt service reserve account established under the indenture governing the Company’s $ 3.3 billion aggregate principal amount of 7.75 % Senior Secured Notes due 2031 (the “Senior Secured Notes”), (ii) funds held in escrow in connection with the pending acquisition of Polaris DS LLC, which will be applied to the purchase price at closing, and (iii) funds held in escrow in connection with certain construction and development activities. The Company had no restricted cash as of December 31, 2025. Digital Assets The Company’s digital assets have active markets with observable prices and are classified within Level 1 of the fair value hierarchy. The following table presents the Company’s bitcoin holdings (in thousands, except for quantity): Quantity Cost Basis Fair Value June 30, 2026 848 $ 65,454 $ 49,675 December 31, 2025 2,537 $ 254,694 $ 222,000 Long-Lived Asset Impairments The Company tests long-lived asset groups for recoverability whenever events or changes in circumstances have occurred that may affect recoverability or the estimated useful lives. Long-lived assets include property, plant and equipment and intangible assets subject to amortization. A long-lived asset may be impaired when the estimated future undiscounted cash flows are less than the carrying amount of the asset. If that comparison indicates that the asset’s carrying value may not be recoverable, the impairment is measured based on the difference between the carrying amount and the estimated fair value of the asset. Long-lived assets to be disposed of are reported at the lower of the carrying amount or estimated fair value, less costs to sell. Assets Held for Sale The Company classifies a long-lived asset (disposal group) as held for sale when all of the criteria in ASC 360-10-45-9 are met. Assets held for sale are measured at the lower of carrying amount or fair value, less cost to sell and are no longer depreciated. Any initial or subsequent write-down to fair value less cost to sell is recognized as a loss on remeasurement of assets held for sale in the condensed consolidated statements of operations; a subsequent gain is recognized for any subsequent increase in fair value less cost to sell, but only to the extent of cumulative losses previously recognized. Any gain or loss not previously recognized that results from the sale is recognized at the date of sale. Assets held for sale are included within “Customer funding receivable and other current assets” on the condensed consolidated balance sheets. Recently Adopted Accounting Standards In November 2024, the FASB issued ASU 2024-04, Debt—Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments (“ASU 2024-04”), which clarifies the accounting for certain settlements of convertible debt instruments as induced conversions versus extinguishments. The guidance is effective for fiscal years beginning after December 15, 2025. The Company adopted ASU 2024-04 as of January 1, 2026, and applies the guidance prospectively. The adoption of ASU 2024-04 did not have a material impact on the Company’s consolidated financial statements and related disclosures. 12 Core Scientific, Inc. Notes to Unaudited Condensed Consolidated Financial Statements Accounting Standards Not Yet Adopted In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), which requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. In January 2025, the FASB issued ASU 2025-01 to clarify the effective date of ASU 2024-03 for all public business entities. The amendments are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The amendments should be applied prospectively; retrospective application is also permitted. The Company expects to adopt the ASU prospectively. Adoption will not affect the recognition or measurement of the Company's expenses or the expense captions presented on the face of the Company's condensed consolidated statements of operations, but will result in additional disaggregated expense information in the notes to the Company's consolidated financial statements. 3. ASSET ACQUISITION Hunt County Acquisition On May 5, 2026, the Company completed an acquisition of land in Hunt County, Texas for an aggregate purchase price of approximately $ 233 million, and entered into a related electric service agreement, which is expected to support approximately 430 MW of gross utility power capacity. The Company intends to develop this land as a future data center site. The acquisition was accounted for as an asset acquisition in accordance with ASC 805-50. The total consideration was allocated on a relative fair value basis, with $ 4.7 million allocated to land and $ 227.8 million allocated to development rights. The development rights are a finite-lived intangible asset with a weighted-average amortization period of approximately 30 years and no significant residual value. Amortization will begin when the related data center is placed in service, and no amortization expense was recognized during the periods presented. As of June 30, 2026, the substantial majority of the “Intangibles, net” balance represents development rights recognized in connection with the Hunt County acquisition described above, with the remainder representing an immaterial amount of other intangible assets. As of December 31, 2025, “Intangibles, net” consisted entirely of the same other intangible assets. 4. PROPERTY, PLANT, AND EQUIPMENT The following table presents the composition of property, plant and equipment, net at the dates indicated (in thousands): June 30, 2026 December 31, 2025 Estimated Useful Lives Land and improvements (1) $ 90,770 $ 21,769 20 years Building and improvements 509,709 275,186 10 to 39 years Mining equipment 308,479 393,623 3 years Electrical and mechanical equipment 127,885 80,384 15 years Other property, plant and equipment 7,385 18,164 5 to 7 years Total 1,044,228 789,126 Less: accumulated depreciation and amortization 371,262 406,893 Total 672,966 382,233 Add: Construction in progress 1,101,176 911,066 Property, plant and equipment, net $ 1,774,142 $ 1,293,299 (1) Estimated useful life of improvements. Land is not depreciated. Depreciation expense for the three and six months ended June 30, 2026 was $ 15.3 million and $ 31.6 million, respectively, compared to $ 18.6 million and $ 38.1 million for the three and six months ended June 30, 2025, respectively. During the six months ended June 30, 2026, $ 465.3 million of construction in progress was placed into service, primarily reflecting the commissioning of colocation infrastructure at the Company’s data center facilities. 13 Core Scientific, Inc. Notes to Unaudited Condensed Consolidated Financial Statements The following table presents the composition of property, plant and equipment, net that is subject to operating leases with customers and is included in the total property, plant and equipment, net presented above, at the dates indicated (in thousands): June 30, 2026 December 31, 2025 Land and improvements $ 79,590 $ 5,546 Building and improvements 471,976 146,082 Electrical and mechanical equipment 78,752 19,146 Other property, plant and equipment 250 226 Total 630,568 171,000 Less: accumulated depreciation and amortization 16,473 9,856 Property, plant and equipment, net leased to customers $ 614,095 $ 161,144 Depreciation expense for assets leased to customers was $ 4.9 million and $ 7.5 million for the three and six months ended June 30, 2026, respectively, and immaterial for the three and six months ended June 30, 2025, and is included in the total depreciation expense above. During the six months ended June 30, 2026, the Company recognized impairment charges of $ 266.5 million on its mining-related property, plant and equipment, consisting of $ 151.6 million related to mining equipment and $ 114.9 million related to mining infrastructure, all of which were recognized during the three months ended March 31, 2026. No impairment charges were recognized during the three months ended June 30, 2026, or during the three and six months ended June 30, 2025. The Company identified indicators of impairment of its mining equipment and mining infrastructure asset groups during the three months ended March 31, 2026, including declines in bitcoin prices, declines in bitcoin hashprice, and significant decreases in secondary market values for digital asset mining equipment. In accordance with ASC Topic 360-10, the Company performed a recoverability assessment of its mining-related asset groups. The undiscounted future cash flows for each asset group was less than its carrying amount, indicating the assets were not recoverable. The Company measured the fair value of its mining equipment using a market approach based on observable secondary market pricing data for similar assets, classified as Level 2 within the fair value hierarchy. The Company measured the fair value of its mining infrastructure assets using an income approach based on a discounted cash flow analysis reflecting the estimated future cash flows a market participant would expect from operating the assets as mining hosting facilities, classified as Level 3 within the fair value hierarchy. Refer to Note 9 — Fair Value Measurements for the significant unobservable inputs used in the Level 3 measurement. Assets Held for Sale During the three months ended June 30, 2026, the Company committed to a plan to sell certain undeployed mining equipment and certain electrical equipment that the Company no longer intends to use in its operations. The assets met the criteria for held-for-sale classification under ASC 360-10-45-9, and the Company expects the sales to be completed within one year. Upon classification, depreciation ceased and the assets were remeasured to fair value less cost to sell; see Note 9 — Fair Value Measurements. The remeasurement resulted in a loss of $ 19.5 million, recognized within “Loss on remeasurement of assets held for sale” on the condensed consolidated statement of operations for the three and six months ended June 30, 2026. The remaining carrying value of $ 13.8 million is included within “Customer funding receivable and other current assets” on the condensed consolidated balance sheets as of June 30, 2026. 5. BALANCE SHEET COMPONENTS Customer funding receivable and other current assets consisted of the following at the dates indicated (in thousands): June 30, 2026 December 31, 2025 Customer funding receivable $ 383,758 $ 337,158 Other 74,731 25,001 Total customer funding receivable and other current assets $ 458,489 $ 362,159 Customer funding receivable represents amounts due from the Company’s customer for construction-related payables and accrued expenses incurred on their behalf. The Company collects these amounts from the customer prior to payment to vendors. Obligations related to customer items are paid soon after reimbursement. As of June 30, 2026, $ 302.2 million of the related obligations were included in accrued expenses and $ 81.6 million were included in accounts payable, compared to $ 290.6 million in accrued expenses and $ 46.6 million in accounts payable as of December 31, 2025. 14 Core Scientific, Inc. Notes to Unaudited Condensed Consolidated Financial Statements The customer funding receivable is presented net of an allowance for credit losses. The Company evaluates the collectibility of the customer funding receivable under the current expected credit loss model in accordance with ASC 326 and has determined that no allowance for credit losses was required as of June 30, 2026 or December 31, 2025. Accrued expenses consisted of the following at the dates indicated (in thousands): June 30, 2026 December 31, 2025 Accrued customer funded construction $ 302,183 $ 290,603 Accrued capital expenditures 105,658 197,888 Other 101,348 23,466 Total accrued expenses $ 509,189 $ 511,957 6. LEASES Lessee Accounting The Company leases data center facilities, land, office space, and computer and networking equipment. The following table presents the components of operating and finance leases at the dates indicated (in thousands): Financial statement line item June 30, 2026 December 31, 2025 Assets: Operating lease right-of-use assets Operating lease right-of-use assets $ 114,199 $ 108,484 Finance lease right-of-use assets Other noncurrent assets $ 1,652 $ 1,843 Liabilities: Operating lease liabilities, current portion Other current liabilities $ 13,456 $ 12,343 Operating lease liabilities, net of current portion Other noncurrent liabilities $ 95,043 $ 89,011 Finance lease liabilities, net of current portion Other noncurrent liabilities $ 876 $ 844 The following table presents the components of lease expense for the periods indicated (in thousands): Three Months Ended June 30, Six Months Ended June 30, Financial statement line item 2026 2025 2026 2025 Operating lease expense Cost of colocation services $ 3,863 $ 3,402 $ 7,649 $ 6,809 Operating lease expense Cost of digital asset self-mining 113 76 215 160 Operating lease expense Cost of digital asset hosted mining services 15 8 27 14 Operating lease expense Selling, general and administrative 205 1,218 368 2,425 Short-term lease expense Cost of digital asset self-mining 100 339 242 625 Variable lease expense Cost of colocation services 447 304 832 573 Finance lease expense: Amortization of right-of-use assets Cost of digital asset self-mining 95 170 191 396 Interest on lease liabilities Interest expense (income), net 16 30 32 79 Total finance lease expense 111 200 223 475 Total lease expense $ 4,854 $ 5,547 $ 9,556 $ 11,081 15 Core Scientific, Inc. Notes to Unaudited Condensed Consolidated Financial Statements The following table presents information relating to the lease term and discount rate at the dates indicated: June 30, 2026 June 30, 2025 Weighted Average Remaining Lease Term (Years) Operating leases 7.1 8.1 Finance leases 4.4 0.2 Weighted Average Discount Rate Operating leases 8.3 % 8.5 % Finance leases 7.4 % 12.7 % The following table presents additional information relating to operating and finance leases for the periods indicated (in thousands): Six Months Ended June 30, 2026 2025 Lease Payments Operating cash flows from operating leases $ 10,185 $ 7,547 Operating cash flows from finance leases $ 5 $ 71 Financing cash flows from finance leases $ 1,095 $ 1,125 Supplemental Non-cash Information Operating lease right-of-use assets obtained in exchange for lease obligations $ 13,440 $ 109 The following table presents the Company’s future minimum payments under noncancelable operating and finance leases having terms in excess of one year as of June 30, 2026 (in thousands): Operating Leases Finance Leases Remaining 2026 $ 10,354 $ — 2027 22,957 — 2028 23,568 257 2029 23,309 440 2030 23,470 404 Thereafter 40,809 — Total lease payments 144,467 1,101 Less: imputed interest 35,968 225 Total $ 108,499 $ 876 Lessor Accounting The Company generates revenue by leasing property to a customer under licensing agreements. The manner in which the Company recognizes these transactions in its financial statements is described in Note 2 — Summary of Significant Accounting Policies, Revenue Recognition — Colocation Segment of the Form 10-K for the fiscal year ended December 31, 2025. Lease revenue is included within Colocation revenue in the condensed consolidated statements of operations. The carrying value of property, plant and equipment subject to operating leases with customers is presented in Note 4 — Property, Plant, and Equipment. The following table presents the components of lease revenue for the periods indicated (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Operating lease revenue $ 98,812 $ 7,010 $ 158,008 $ 13,005 Variable lease revenue 37,857 3,550 56,200 6,128 Total lease revenue $ 136,669 $ 10,560 $ 214,208 $ 19,133 16 Core Scientific, Inc. Notes to Unaudited Condensed Consolidated Financial Statements The following table represents future operating lease payments expected to be received as of June 30, 2026 (in thousands): Operating Leases (1) Remaining 2026 $ 132,281 2027 271,468 2028 368,963 2029 527,771 2030 546,112 Thereafter 4,241,072 Total $ 6,087,667 (1) Operating lease payments expected to be received exclude $ 3.1 billion in total future noncancellable operating lease payments expected to be received for operating leases that have not yet commenced as of June 30, 2026, which have initial lease terms of 12 years from commencement. 7. DEBT The following table summarizes the terms and carrying amounts of the Company’s outstanding debt at the dates indicated (dollars in thousands): Stated Interest Rate Effective Interest Rates Maturities June 30, 2026 December 31, 2025 Senior Secured Notes 7.75 % 8.3 % 2031 $ 3,300,000 $ — 2029 Convertible Notes 3.00 % 3.7 % 2029 460,000 460,000 2031 Convertible Notes — % 0.4 % 2031 625,000 625,000 Notes payable 4,385,000 1,085,000 Less: Unamortized discounts 87,033 24,675 Long-term debt $ 4,297,967 $ 1,060,325 The following table presents the components of interest expense for the periods indicated (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Coupon interest $ 48,690 $ 3,450 $ 55,485 $ 6,900 Amortization of debt discount and issuance costs 3,682 1,304 5,358 2,601 Interest incurred 52,372 4,754 60,843 9,501 Less: Capitalized interest 11,725 — 12,050 — Interest expense $ 40,647 $ 4,754 $ 48,793 $ 9,501 The following table presents the contractual maturities of the Company’s debt, gross of unamortized discounts, as of June 30, 2026 (in thousands): Convertible Notes Senior Secured Notes (1) Remaining 2026 $ — $ — 2027 — — 2028 — — 2029 460,000 189,750 2030 — 379,500 Thereafter 625,000 2,730,750 Total $ 1,085,000 $ 3,300,000 (1) Because the First Installment Payment Date (as defined below) is contingent on rent commencement and the abatement of revenue credits under the related datacenter leases, the maturities presented above reflect scheduled amortization assuming a First Installment Payment Date of November 15, 2029. 17 Core Scientific, Inc. Notes to Unaudited Condensed Consolidated Financial Statements In March 2026, the Company entered into a loan facility credit agreement providing for a $ 1.0 billion senior secured loan facility bearing interest at Term SOFR plus 2.50 % per annum, maturing 364 days from closing (the “Term Loan Facility”). In May 2026, a portion of the net proceeds from the Senior Secured Notes offering described below was used to repay in full all outstanding borrowings under the Term Loan Facility, including accrued interest and fees, and to terminate the facility, resulting in a loss on debt extinguishment of $ 5.4 million. The remaining net proceeds were used to fund a debt service reserve account, of which $ 344.8 million remained on deposit as of June 30, 2026, and are included in Restricted cash on the condensed consolidated balance sheets. In connection with the Senior Secured Notes offering, the Company recorded $ 42.0 million of debt issuance costs and a $ 24.8 million original issue discount as reductions of the carrying amount of the Senior Secured Notes, amortized to interest expense over the term of the notes using the effective interest method. Senior Secured Notes On May 6, 2026, Core Scientific Finance, an indirect wholly-owned subsidiary of the Company, completed a private offering of $ 3.30 billion aggregate principal amount of 7.75 % Senior Secured Notes due 2031 at an issue price of 99.25 % of the principal amount. Interest accrues at a rate of 7.75 % per annum and is payable semi-annually in arrears on May 15 and November 15 of each year, beginning November 15, 2026. Amortization of principal will commence on the First Installment Payment Date, defined in the indenture as the first semi-annual payment date to occur at least 15 days after the later of (i) rent commencement under the related datacenter leases and (ii) the abatement of all revenue credits provided by the Company or its affiliates to the tenant under the related datacenter leases. Beginning on the First Installment Payment Date, Core Scientific Finance will make semi-annual installment payments on May 15 and November 15 of each year at an initial annual rate of 11.50 % per annum of the original principal amount of the Senior Secured Notes outstanding on the issue date until the notes are repaid, repurchased, redeemed or otherwise discharged in full. The Senior Secured Notes and related guarantees are secured by first-priority liens on (i) substantially all of the assets of Core Scientific Finance and Core Scientific Austin LLC, Core Scientific Denton LLC, Core Scientific Dalton LLC, Core Scientific Marble LLC and Core Scientific Muskogee LLC (collectively, the "Subsidiary Guarantors"), (ii) the equity interests of Core Scientific Finance held by its direct parent, and (iii) certain assets and rights identified as subject to the Ringfencing (as defined in the completion guarantee description below) which are not yet transferred (or in which rights to use have not been granted) to Core Scientific Finance or the Subsidiary Guarantors. The Indenture contains customary covenants that restrict the ability of Core Scientific Finance and the Subsidiary Guarantors to, among other things, (i) incur additional indebtedness, (ii) pay dividends or distributions on, or redeem or repurchase, capital stock and make other restricted payments, (iii) make certain investments, (iv) create or incur liens, (v) consummate certain assets sales, (vi) enter into sale and lease back transactions, (vii) hold assets or conduct operations unrelated to the operation of the Facilities (as defined in the indenture) and certain additional projects, (viii) terminate or amend certain agreements, (ix) engage in certain transactions with affiliates, and (x) merge, consolidate or transfer or sell all or substantially all of their respective assets. Neither the Company nor its other subsidiaries are subject to these covenants. In addition, the Company provided an uncapped completion guarantee for the benefit of the holders with respect to the completion of specified data center development projects. Core Scientific Finance may redeem the Senior Secured Notes prior to maturity, in whole or in part, at the redemption prices specified in the Indenture, which include a "make-whole" premium for redemptions prior to May 15, 2028. Upon a change of control, Core Scientific Finance is required to offer to repurchase the Senior Secured Notes at 101 % of the principal amount, plus accrued and unpaid interest, if any, but excluding the purchase date. Convertible Notes On August 19, 2024, the Company issued $ 460.0 million in aggregate principal amount of 3.00 % Convertible Senior Notes due 2029 (the “2029 Convertible Notes”). The 2029 Convertible Notes mature on September 1, 2029, unless earlier converted, redeemed or repurchased. The 2029 Convertible Notes are convertible at the option of the holders only upon the occurrence of certain events, including if the Company's common stock price exceeds 130 % of the conversion price (approximately $ 14.30 per share, based on the initial conversion price of approximately $ 11.00 per share) for at least 20 trading days (whether or not consecutive) during the 30 consecutive trading day period ending on, and including, the last trading day of the immediately preceding calendar quarter. The stock price conversion condition for the 2029 Convertible Notes was first satisfied during the fourth quarter of 2025. As a result, the 2029 Convertible Notes were convertible at the option of the holders during the six months ended June 30, 2026. No holders elected to convert during the period. This condition was satisfied during each of the first and second quarters of 2026, and accordingly, the 2029 Convertible Notes remain convertible during the third quarter of 2026. 18 Core Scientific, Inc. Notes to Unaudited Condensed Consolidated Financial Statements On December 5, 2024, the Company issued $ 625.0 million aggregate principal amount of 0.00 % Convertible Senior Notes due 2031 (the "2031 Convertible Notes"). The 2031 Convertible Notes mature on June 15, 2031, unless earlier converted, redeemed, or repurchased. The 2031 Convertible Notes are convertible at the option of the holders only upon the occurrence of certain events, including if the Company’s common stock price exceeds 130 % of the conversion price (approximately $ 29.24 per share, based on the initial conversion price of approximately $ 22.49 per share) for at least 20 trading days (whether or not consecutive) during the 30 consecutive trading day period ending on, and including, the last trading day of the immediately preceding calendar quarter. The stock price conversion condition for the 2031 Convertible Notes was not satisfied during any measurement period through June 30, 2026. 8. WARRANT LIABILITIES On January 23, 2024, the Company entered into a warrant agreement (the “Warrant Agreement”) providing for the issuance of 98,313,313 warrants, each exercisable for one share of common stock at an exercise price of $ 6.81 per share (the “Tranche 1 Warrants”), and 81,927,898 warrants, each exercisable for one share of common stock at an exercise price of $ 0.01 per share (the “Tranche 2 Warrants” and, together with the Tranche 1 Warrants, the “Warrants”). The Tranche 1 Warrants expire on January 23, 2027, and the Tranche 2 Warrants expire on January 23, 2029. During the three and six months ended June 30, 2026, 0.3 million Tranche 1 Warrants were exercised, which resulted in cash receipts of $ 1.2 million. As of June 30, 2026, there were 96.4 million unexercised Tranche 1 Warrants. During the three and six months ended June 30, 2026, 1.2 million and 1.6 million Tranche 2 Warrants were exercised, respectively, which resulted in immaterial cash receipts. As of June 30, 2026, there were 6.6 million unexercised Tranche 2 Warrants. 9. FAIR VALUE MEASUREMENTS The Company measures certain assets and liabilities at fair value on a recurring or nonrecurring basis. For a description of the Company’s fair value measurement policies, including the fair value hierarchy and valuation methodologies, see Note 10 - Fair Value Measurements, of the Form 10-K for the fiscal year ended December 31, 2025. Recurring Fair Value Measurements The following table presents the fair value hierarchy levels and carrying amounts of assets and liabilities measured at fair value on a recurring basis at the dates indicated (dollars in thousands): Level June 30, 2026 December 31, 2025 Assets: Cash and cash equivalents Money market funds 1 $ 1,759,822 $ 267,721 Digital assets 1 49,675 222,000 Total assets measured at fair value on a recurring basis $ 1,809,497 $ 489,721 Liabilities: Contingent value rights (1) 1 $ 1,295 $ 3,366 Warrant liabilities, current portion 1 1,811,587 — Warrant liabilities, net of current portion 1 163,683 936,107 Total liabilities measured at fair value on a recurring basis $ 1,976,565 $ 939,473 (1) The fair value of contingent value rights is included within “Other current liabilities” and “Other noncurrent liabilities” on the Company’s condensed consolidated balance sheets, based on the expected timing of settlement. 19 Core Scientific, Inc. Notes to Unaudited Condensed Consolidated Financial Statements The following table presents the changes in fair value of the Company’s CVRs and Warrant liabilities included in “Change in fair value of warrants and contingent value rights” in the condensed consolidated statements of operations for the periods indicated (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Decrease (increase) in: Fair value of CVRs $ ( 1,036 ) $ ( 13,723 ) $ ( 2,072 ) $ ( 906 ) Fair value of Warrants 1,046,551 923,681 1,078,386 289,400 Change in fair value of warrants and contingent value rights $ 1,045,515 $ 909,958 $ 1,076,314 $ 288,494 Nonrecurring Fair Value Measurements The Company measures certain non-financial assets at fair value on a nonrecurring basis when events or circumstances indicate that the carrying amount may not be recoverable, or upon classification as held for sale. During the six months ended June 30, 2026, the Company recognized nonrecurring fair value measurements in connection with (i) impairment charges on its mining-related property, plant and equipment, measured as of March 31, 2026, and (ii) the remeasurement of certain mining and electrical equipment upon classification as held for sale, measured as of June 30, 2026, each as further discussed below. During the three months ended March 31, 2026, the Company recognized nonrecurring fair value measurements in connection with impairment charges on its mining-related property, plant and equipment. The Company reassessed these assets as of June 30, 2026, and determined that no additional impairment or remeasurement was necessary as the fair value exceeded the depreciated carrying value. See Note 4 — Property, Plant, and Equipment for further detail on each of these measurements. During the three months ended June 30, 2026, certain mining equipment previously impaired was reclassified to held for sale and remeasured to fair value less cost to sell, and certain electrical equipment was classified as held for sale and measured at fair value. The following table presents the fair value of assets measured on a nonrecurring basis as of June 30, 2026 (in thousands): Level 1 Level 2 Level 3 Fair value Mining and electrical equipment held for sale $ — $ 13,790 $ — $ 13,790 The fair value of mining equipment held for sale was determined using a market approach based on observable pricing from published secondary market indices for digital asset mining hardware. The fair value of electrical equipment held for sale was determined using a market approach based on observed sales prices for comparable equipment. Each of these measurements is classified as Level 2 within the fair value hierarchy. The Company’s financial instruments not subject to recurring fair value measurements include cash and cash equivalents (other than money market funds), restricted cash, accounts receivable, accounts payable, leases, debt and certain accrued expenses and other liabilities. Except for the Senior Secured Notes, the 2029 Convertible Notes, and 2031 Convertible Notes, the carrying amounts of these financial instruments materially approximate their fair values. Financial Instruments Not Carried at Fair Value The Senior Secured Notes, the 2029 Convertible Notes and 2031 Convertible Notes are recorded at amortized cost in the condensed consolidated balance sheets. The following table presents the carrying amounts, estimated fair values, and the level within the fair value hierarchy of these instruments at the dates indicated (dollars in thousands): June 30, 2026 December 31, 2025 Level Carrying Amount Fair Value Carrying Amount Fair Value Senior Secured Notes 2 $ 3,300,000 $ 3,349,137 $ — $ — 2029 Convertible Notes 1 $ 460,000 $ 1,108,299 $ 460,000 $ 718,609 2031 Convertible Notes 1 $ 625,000 $ 868,409 $ 625,000 $ 657,735 20 Core Scientific, Inc. Notes to Unaudited Condensed Consolidated Financial Statements 10. COMMITMENTS AND CONTINGENCIES Commitments As of June 30, 2026, the Company had approximately $ 1.0 billion of expected future cash expenditures under its outstanding purchase and construction commitments, primarily related to infrastructure development costs, power utility deposits, equipment procurement, and labor. These commitments relate to the remaining build out at existing customer conversion sites, and new greenfield development undertaken for prospective customers. Of this amount, $ 264 million will be passed through to the Company’s customer as invoiced. Substantially all of these expenditures are expected to occur within the next 12 months. The Company routinely engages with construction vendors for the construction of its facilities. These engagements are governed by contracts containing standard terms and conditions, including certain milestones that obligate the Company to pay as work is completed. In the event of termination of any of these contracts by the Company, the Company would be liable for all work that has been completed or is in process, plus any applicable fees. The Company generally has the right to cancel open purchase orders prior to delivery or terminate the contracts without cause. Polaris DS LLC Merger Agreement On May 5, 2026, the Company entered into an Agreement and Plan of Merger to acquire Polaris DS LLC, which owns an approximately 40 -acre site adjacent to the Company's existing Muskogee, Oklahoma data center operations, which contains an electrical substation, and electric service agreements providing for up to 440 MW of gross utility power capacity. The aggregate purchase price is approximately $ 421 million in cash, subject to customary adjustments, and will be increased by an additional $ 40 million in cash in the event that an additional 40 MW of firm electric capacity becomes available to Polaris DS LLC prior to December 31, 2026. As of June 30, 2026, the Company had deposited $ 120 million in cash into an escrow account, recorded in "Restricted cash, current portion" on the condensed consolidated balance sheets, which will be applied to the purchase price at closing. The transaction is subject to customary closing conditions and is expected to close in the third quarter of 2026. Block, Inc. Contract Termination During the three months ended June 30, 2026, the Company entered into a termination and settlement agreement with Block, Inc. and Proto Global LLC that terminated the Company's existing contract and all future delivery obligations of mining equipment thereunder. As a result, the Company recognized a loss of $ 41.9 million within "Loss on contract termination" in the condensed consolidated statements of operations for the three and six months ended June 30, 2026. Legal Proceedings The Company is subject to legal proceedings arising in the ordinary course of business. The Company accrues losses for a legal proceeding when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. However, the uncertainties inherent in legal proceedings make it difficult to reasonably estimate the costs and effects of resolving these matters. Accordingly, actual costs incurred may differ materially from amounts accrued and could materially adversely affect the Company’s business, cash flows, results of operations, financial condition and prospects. Unless otherwise indicated, the Company is unable to estimate reasonably possible losses in excess of any amounts accrued. Purported Shareholder Class Action (“Pang”) On November 14, 2022, Plaintiff Mei Pang filed a purported class-action complaint against Core Scientific, Inc., its former chief executive officer, Michael Levitt, and others in the United States District Court, Western District (Austin) of Texas asserting that the Company violated the Securities Act and Exchange Act by allegedly failing to disclose to investors that among other things the Company was vulnerable to litigation given its decision to pass power costs to its customers, that certain clients had breached their contracts, and that this impacted the Company’s profitability and ability to continue as a going concern. The complaint seeks monetary damages. The Company filed a notice of suggestion of bankruptcy stating that its petition for bankruptcy—filed on December 21, 2022—operates as a stay to the continuation of this matter. Plaintiff subsequently withdrew its claims against Core. A lead plaintiff was appointed in April 2023 and proofs of claim were filed in the Company’s Chapter 11 Cases. After the Company filed its motion to dismiss and a subsequent motion for consideration with respect to remaining claims not dismissed, all remaining claims in the complaint against the individual defendants were subsequently dismissed without prejudice in April 2024. On December 7, 2023, the United States Bankruptcy Court for the Southern District of Texas in Houston, sustained the Company’s objection to the filed class proof of claim without prejudice to re-file a proof of claim on an individual basis by December 20, 2023; and denied plaintiff’s Motion for Class Treatment under Fed. R. Bankr. P. 7023. No individual proof of claim was filed by any of the class representatives of the purported class action by December 20, 2023, and a separately filed objection to confirmation of Debtors’ Fourth Amended Chapter 11 Plan and Disclosure Statement was overruled by the Bankruptcy Court on January 16, 2024. On January 29, 2024, plaintiff filed a notice of appeal of the order confirming the Company’s Plan of Reorganization. 21 Core Scientific, Inc. Notes to Unaudited Condensed Consolidated Financial Statements On June 7, 2024, Plaintiff refiled its complaint asserting that the individual defendants violated the Securities Exchange Act by allegedly failing to disclose to investors that among other things the Company failed to disclose known trends or uncertainties that would have an impact on the Company’s financial performance. The Company’s motion to dismiss the refiled complaint is pending with the United States District Court in Austin, Texas. On March 7, 2025, the United States District Court for the Western District (Austin) of Texas referred Plaintiff's complaint to the United States Bankruptcy Court for the Southern District of Texas in Houston for determination of the issues raised by the Company's motion to dismiss, dismissed without prejudice Company's motion to dismiss as moot and administratively closed the case. On March 19, 2025, the United States Bankruptcy Court Southern District of Texas Houston Division dismissed Plaintiff's appeal of the order confirming the Company's Plan of Reorganization as it related to the Plaintiffs as moot in light of the administrative closure of the securities case brought by the Plaintiffs in the United States District Court Western District of Texas. On April 2, 2025, the Plaintiff's filed a Motion for Reconsideration of the orders entered in each of the United States District Court for the Southern District of Texas Houston Division and the United States District Court for the Western District of Texas (Austin) each of which was denied and as to which Plaintiff has appealed. Shareholder Class Action (“Ihle”) On July 24, 2023, Plaintiff Brad Ihle filed a class action complaint against certain officers and directors of Power & Digital Infrastructure Acquisition Corp. (the former name of the current corporate entity operating our business, or “XPDI”) and XMS Sponsor LLC et al, in the Court of Chancery State of Delaware. The complaint alleges breach of fiduciary duties arising out of the merger of XPDI and the entity that conducted our business operations prior to the merger and the marketing and solicitation of shareholders pursuant to that merger agreement dated July 20, 2021. Certain of the defendants have notified the Company of their intention to seek defense and indemnification in this matter pursuant to Delaware law and the Company’s bylaws. The matter was settled during the three months ended December 31, 2025, with the Company’s satisfying its existing indemnification obligation through a payment of $ 0.5 million made during the three months ended March 31, 2026. This payment is reflected in “Other non-operating expenses, net” in the Company’s condensed consolidated statements of operations. Patent Infringement Claim Malikie Innovations Ltd and Key Patents Innovations Ltd. (“Malikie”), filed suit in the United States District Court Eastern District of Texas Marshall Division against Core Scientific, Inc. (the “Company”) alleging infringement in the Company’s bitcoin mining business of U.S. Patent Nos. 8,788,827; 10,284,370; 8,666,062; 7,372,960; and 8,532,286. On July 20, 2025 the Company filed a motion to dismiss the claims on the basis that the patents are invalid under 35 U.S.C §101 and on July 25, 2025 the Company filed a motion to transfer the case to the United States District Court for the Western District of Texas (Austin). On November 14, 2025 Malikie filed a motion to amend the complaint to add allegations of infringement of U.S. Patent No. 8,712,039 by the Company’s bitcoin mining business and its HPC business. Malikie also asserted infringement of the previously asserted 8,532,286 patent against the Company’s HPC business. All motions are pending. The court set a trial date of January 25, 2027. Leases —See Note 6 — Leases for additional information. 11. INCOME TAXES Current income tax expense represents the amount expected to be reported on the Company’s income tax returns, and deferred tax expense or benefit represents the change in net deferred tax assets and liabilities. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities as measured by the enacted tax rates that will be in effect when these differences reverse. Valuation allowances are recorded as appropriate to reduce deferred tax assets to the amount considered likely to be realized. The following table presents income tax expense and effective income tax rate for the periods indicated (dollars in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Income tax expense $ 1,907 $ 158 $ 2,507 $ 363 Effective income tax rate ( 0.2 ) % — % ( 0.2 ) % ( 0.1 ) % 22 Core Scientific, Inc. Notes to Unaudited Condensed Consolidated Financial Statements For the three and six months ended June 30, 2026 and 2025, income tax expense consisted of discrete state taxes. The Company’s estimated annual effective income tax rate without consideration of discrete items was ( 0.2 )% and 0.0 % for 2026 and 2025, respectively, compared to the U.S. federal statutory rate of 21.0%. The difference from the statutory rate for the three and six months ended June 30, 2026 was primarily driven by projected changes in the valuation allowance. The difference from the statutory rate for the three and six months ended June 30, 2025 was primarily driven by nondeductible losses on warrant and contingent value right liabilities. The Company has a full valuation allowance on its net deferred tax assets as evidence indicates it is not more likely than not that such asset will be realized. 12. STOCK-BASED COMPENSATION Incentive Plan The Company maintains an equity-based incentive plan (the "Incentive Plan") under which it grants RSUs, MSUs, and PSUs to employees and executive officers. Performance Share Units PSUs are granted to certain executive officers under the Incentive Plan and are subject to satisfaction of a service condition and the achievement of market or performance conditions during a defined measurement period. In April 2025, the Company granted PSUs that are eligible to vest in three equal annual installments through March 2028, subject to continued service and the achievement of market and performance conditions, with the number of shares earned ranging from 0 % to 300 % of target based on the achievement of the applicable conditions during each measurement period. In May 2026, the Company granted additional PSUs eligible to cliff vest on March 15, 2029, subject to continued service and the achievement of market and performance conditions, including RTSR, energized megawatt growth, and new customer acquisition, over the 2026 through 2028 calendar years. The number of shares earned ranges from 0 % to 200 % of target, and up to 250 % of target for the Chief Executive Officer. The grant date fair value of the tranche subject to the RTSR market condition was estimated using a Monte Carlo simulation model, using the following assumptions: May 2026 Grant Expected term of awards in years 2.6 Expected volatility 85 % Risk-free interest rate 4.01 % Expected dividend yield 0 % Restricted Stock Units RSUs are granted to employees and executive officers under the Incentive Plan and generally vest over a three-year service period, based on continued service. Market Condition Restricted Stock Units MSUs vest based on the achievement of share price goals over a defined measurement period. For the vesting schedule and additional terms of outstanding MSU awards, see Note 13 - Stockholders’ Deficit in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025. 23 Core Scientific, Inc. Notes to Unaudited Condensed Consolidated Financial Statements Stock-Based Compensation The following table summarizes RSU, MSU, and PSU activity for the six months ended June 30, 2026 (shares in thousands): Restricted Stock Units Market Condition Restricted Stock Units Performance Restricted Stock Units Number of Shares Weighted-Average Grant Date Fair Value Number of Shares Weighted-Average Grant Date Fair Value Number of Shares Weighted-Average Grant Date Fair Value Unvested - December 31, 2025 13,270 $ 8.58 844 $ 6.14 5,519 $ 11.57 Granted 2,077 19.96 8 3.99 1,717 29.31 Performance adjustment (1) — — — — ( 1,471 ) 11.57 Vested ( 3,454 ) 9.62 — — ( 1,840 ) 15.71 Forfeited ( 262 ) 8.56 — — — — Unvested - June 30, 2026 11,631 $ 10.24 852 $ 6.14 3,925 $ 20.24 (1) Represents the adjustment to PSUs to reflect the number earned based on achievement of the applicable market and performance conditions ( 0 % to 300 % of target). The following table presents unrecognized compensation cost and the related weighted-average period over which the cost is expected to be recognized as of June 30, 2026 (dollars in thousands): Unrecognized Compensation Cost Weighted-Average Recognition Period RSUs $ 99,093 2.0 years PSUs 62,631 2.5 years MSUs 994 0.5 years Total $ 162,718 The following table presents the stock-based compensation expense included in the Company’s condensed consolidated statements of operations for the periods indicated (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Cost of revenue $ 1,283 $ 941 $ 2,136 $ 2,323 Colocation organizational and site startup costs 4,302 4,638 8,526 7,590 Selling, general and administrative 12,655 18,592 25,339 30,442 Stock-based compensation expense, net of amounts capitalized (1) 18,240 24,171 36,001 40,355 Capitalized stock-based compensation (2) 519 176 1,145 396 Total stock-based compensation cost $ 18,759 $ 24,347 $ 37,146 $ 40,751 (1) The six months ended June 30, 2025 includes $ 3.0 million of stock-based compensation expense as a result of accelerated vesting of outstanding RSUs for former board members. (2) Represents the amounts of stock-based compensation capitalized to property, plant, and equipment. 13. NET LOSS PER SHARE Basic EPS is measured as the net loss available to common stockholders divided by the weighted average common shares outstanding for the period. Diluted EPS reflects the potential dilution from unvested RSUs, PSUs, and MSUs, conversion of convertible securities using the if-converted method, and exercise of options and warrants using the treasury stock method. When potentially dilutive securities have an antidilutive effect they are excluded from the diluted EPS calculation. Upon exercise of the Tranche 2 Warrants, shares are issuable for little or no consideration, sometimes referred to as “penny warrants”. Under ASC 260-10-45-13, those issuable shares are considered outstanding in the computation of basic EPS whether or not related warrants have been exercised. At June 30, 2026, approximately 6.6 million shares of common stock remain issuable upon the exercise of the Tranche 2 Warrants and are included in weighted average shares outstanding for the three and six months then ended. The basic EPS numerator is adjusted to eliminate changes in fair value of Tranche 2 Warrants recognized in net loss. 24 Core Scientific, Inc. Notes to Unaudited Condensed Consolidated Financial Statements The 2029 and 2031 Convertible Notes were excluded from the computation of diluted EPS for all periods presented as their inclusion would be antidilutive given the Company’s net loss position in all periods. The following table presents the reconciliation of the numerators and denominators used to compute basic and diluted net loss per share for the periods indicated (in thousands, except per share amounts): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Numerator: Net loss $ ( 1,155,310 ) $ ( 936,799 ) $ ( 1,502,498 ) $ ( 360,548 ) Add: Change in fair value of Tranche 2 Warrants 74,234 923,525 78,995 289,104 Basic and diluted net loss $ ( 1,081,076 ) $ ( 13,274 ) $ ( 1,423,503 ) $ ( 71,444 ) Denominator: Weighted average shares outstanding - basic and diluted 325,329 317,985 324,128 316,593 Net loss per share - basic and diluted $ ( 3.32 ) $ ( 0.04 ) $ ( 4.39 ) $ ( 0.23 ) The following table presents pote ntially dilutive securities excluded from the calculation of diluted EPS because their inclusion would be anti-dilutive (in thousands): June 30, 2026 June 30, 2025 Convertible Notes 69,611 69,611 RSUs, PSUs, and MSUs 16,408 25,204 Stock options 334 344 Tranche 1 Warrants 96,361 97,542 Total shares issuable from potentially dilutive securities 182,714 192,701 14. SEGMENT REPORTING The Company has three operating segments: Colocation, Digital Asset Self-Mining, and Digital Asset Hosted Mining. The Colocation segment provides HDC services to customers employing AI and HPC workloads and generates revenue through licensing agreements and orders with licensees that include fixed and variable payments on a recurring basis. The Digital Asset Self-Mining segment performs digital asset mining for the Company’s own account and generates revenue from operating owned digital infrastructure and computer equipment as part of mining pools in exchange for digital assets. The Digital Asset Hosted Mining segment provides hosting services to third-parties for digital asset mining through consumption-based contracts. The Company’s Chief Executive Officer is the CODM. The CODM uses gross profit to evaluate segment performance and allocate resources. Gross profit is used to evaluate actual results against expectations based on comparable prior results, current budget, and current forecast, and to inform decisions about how profits and cash flows will be reinvested or otherwise deployed. The CODM does not evaluate performance or allocate resources based on segment asset or liability information; accordingly, the Company has not presented a measure of assets by segment. The segments’ accounting policies are the same as those described in the summary of significant accounting policies. The Company excludes certain operating expenses and other expenses from the allocations to operating segments; these items are presented in the reconciliation of segment gross profit to consolidated loss before income taxes below. 25 Core Scientific, Inc. Notes to Unaudited Condensed Consolidated Financial Statements The following table presents revenue and gross profit by reportable segment for the periods indicated (dollars in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Colocation Segment Colocation revenue: License fees $ 98,812 $ 7,010 $ 158,008 $ 13,005 Power fees passed through to customer 35,073 3,464 56,132 6,050 Maintenance and other 2,784 86 68 78 Total colocation revenue 136,669 10,560 214,208 19,133 Cost of colocation services: Power fees passed through to customer 35,073 3,464 56,132 6,050 Depreciation expense 4,621 104 6,696 171 Employee compensation 4,801 1,148 7,787 2,442 Facility operations expense 10,381 4,336 17,136 8,187 Other segment items (1) 1,810 378 2,553 686 Total cost of colocation services 56,686 9,430 90,304 17,536 Colocation gross profit $ 79,983 $ 1,130 $ 123,904 $ 1,597 Colocation gross margin 59 % 11 % 58 % 8 % Digital Asset Self-Mining Segment Digital asset self-mining revenue $ 21,535 $ 62,424 $ 51,640 $ 129,603 Cost of digital asset self-mining: Power fees 17,861 30,720 45,131 61,039 Depreciation expense 9,897 18,058 23,806 37,317 Employee compensation 4,052 8,272 7,579 15,607 Facility operations expense 1,286 2,089 3,258 5,369 Other segment items (1) 604 450 1,115 1,427 Total cost of digital asset self-mining 33,700 59,589 80,889 120,759 Digital Asset Self-Mining gross profit (loss) $ ( 12,165 ) $ 2,835 $ ( 29,249 ) $ 8,844 Digital Asset Self-Mining gross margin ( 56 ) % 5 % ( 57 ) % 7 % Digital Asset Hosted Mining Segment Digital asset hosted mining revenue from customers $ 5,997 $ 5,644 $ 13,597 $ 9,417 Cost of digital asset hosted mining services: Power fees 2,356 3,208 5,659 4,574 Depreciation expense 626 334 931 479 Employee compensation 542 779 969 1,110 Facility operations expense 167 220 401 368 Other segment items (1) 80 43 142 89 Total cost of digital asset hosted mining services 3,771 4,584 8,102 6,620 Digital Asset Hosted Mining gross profit $ 2,226 $ 1,060 $ 5,495 $ 2,797 Digital Asset Hosted Mining gross margin 37 % 19 % 40 % 30 % Consolidated Consolidated total revenue $ 164,201 $ 78,628 $ 279,445 $ 158,153 Consolidated cost of revenue $ 94,157 $ 73,603 $ 179,295 $ 144,915 Consolidated gross profit $ 70,044 $ 5,025 $ 100,150 $ 13,238 Consolidated gross margin 43 % 6 % 36 % 8 % (1) Other segment items consist primarily of software and IT costs, travel, professional and contract services, and telecommunications costs. 26 Core Scientific, Inc. Notes to Unaudited Condensed Consolidated Financial Statements The following table presents a reconciliation of total reportable segment gross profit to consolidated loss before income taxes included in the Company’s condensed consolidated statements of operations for the periods indicated (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Reportable segment gross profit $ 70,044 $ 5,025 $ 100,150 $ 13,238 Loss (gain) on fair value of digital assets 9,368 ( 29,797 ) 15,926 ( 19,109 ) Loss on disposal of property, plant and equipment 1,273 4,166 14,911 4,172 Loss on remeasurement of assets held for sale 19,495 — 19,495 — Impairment of property, plant and equipment — — 266,488 — Loss on contract termination 41,948 — 41,948 — Colocation organizational and site startup costs 27,039 11,655 35,704 23,322 Selling, general and administrative 49,389 45,285 94,568 78,175 Operating loss ( 78,468 ) ( 26,284 ) ( 388,890 ) ( 73,322 ) Non-operating expenses (income), net: Loss on debt extinguishment 5,435 1,377 5,435 1,377 Interest expense (income), net 23,833 ( 1,185 ) 28,690 ( 3,372 ) Change in fair value of warrants and contingent value rights 1,045,515 909,958 1,076,314 288,494 Other non-operating expense, net 152 207 662 364 Total non-operating expense, net 1,074,935 910,357 1,111,101 286,863 Loss before income taxes $ ( 1,153,403 ) $ ( 936,641 ) $ ( 1,499,991 ) $ ( 360,185 ) Concentrations of Revenue and Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of cash and cash equivalents and accounts receivable. Credit risk with respect to accounts receivable is concentrated with a small number of customers. The Company places its cash and cash equivalents with major financial institutions, which management assesses to be of high credit quality, in order to limit the exposure to credit risk. As of June 30, 2026 and December 31, 2025, all of the Company’s fixed assets were located in the United States. For the three and six months ended June 30, 2026 and 2025, all of the Company’s revenue was generated in the United States. For the three months ended June 30, 2026 and 2025, 13 % and 80 %, respectively, of the Company’s total revenue was generated from one customer in the Digital Asset Self-Mining segment. For the six months ended June 30, 2026 and 2025, 18 % and 82 %, respectively, of the Company’s total revenue was generated from one customer in the Digital Asset Self-Mining segment. For the three months ended June 30, 2026 and 2025, 83 % and 13 %, respectively, of the Company’s total revenue was generated from one customer in the Colocation segment. For the six months ended June 30, 2026 and 2025, 77 % and 12 %, respectively, of the Company’s total revenue was generated from one customer in the Colocation segment. As of June 30, 2026 and December 31, 2025, substantially all of the Company’s digital assets were held by one third-party digital asset service. 27 Core Scientific, Inc. Notes to Unaudited Condensed Consolidated Financial Statements 15. SUBSEQUENT EVENTS On July 27, 2026, the Company entered into Lease Agreements (collectively, the “AMD Leases”) with Advanced Micro Devices, Inc. (“AMD”) for an aggregate of 377 MW of critical IT capacity at the Company’s Pecos, TX; Muskogee, OK; and Hunt County, TX sites; and Lease Agreements (the “Neocloud Leases,” and collectively with the AMD Leases, the “Leases”) with a Neocloud (“Neocloud”), for 152 MW of critical IT capacity at the Company’s Auburn, AL and Dalton Phase 3, GA sites. Each of the Leases is for a fifteen year term with three five-year options. The AMD Leases provide AMD a reservation of capacity right to lease from the Company at certain times and under certain circumstances an additional 1,925 MWs of critical IT capacity through December 28, 2028. In connection with the Neocloud Leases, each of the Company, Neocloud and AMD has entered into a Credit Support Agreement with respect to each Neocloud Lease: (i) establishing protections for AMD equipment held within the applicable Neocloud Lease premises, (ii) providing AMD the right, but not the obligation, to cure certain defaults of Neocloud under the applicable Neocloud Lease, and (iii) establishing AMD’s rights and obligations in the event of certain material defaults by a Neocloud with respect to the applicable Neocloud Lease. Each Credit Support Agreement will terminate automatically upon earliest to occur of the expiration of the applicable Neocloud Lease, specified circumstances relating to the insolvency or default of Neocloud, and 15 years from the effective date of the applicable Neocloud Lease. In addition, AMD may terminate the applicable Credit Support Agreement upon the Company’s breach of a material representation, subject to a specified cure period. In addition, the Company issued to AMD a warrant (the “Warrant”) to purchase up to 30 million shares (the “Warrant Shares”) of the Company’s common stock, par value $ 0.00001 per share (“Common Stock”) at an exercise price of $ 23.47 per share, which represents the volume-weighted average price of the Company’s Common Stock on the Nasdaq Global Select Market for the five trading days prior to execution of the Leases. The Warrant is exercisable immediately, subject to satisfaction of the vesting conditions therein, and will terminate on July 27, 2031. The Warrant Shares will vest at a rate of 12,222 shares per megawatt of critical IT load under the signed agreements. As a result of the Leases executed on July 27, 2026, an aggregate of approximately 6.5 million Warrant Shares vested and became exercisable. The warrant and underlying shares were not registered under the Securities Act and were issued in reliance on Section 4(a)(2). The Company is evaluating the accounting treatment, including measurement and classification. 28