Core Scientific, Inc./tx 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations Unless the context otherwise requires, all references in this section to “we,” “us,” “our,” the “Company,” “Core Scientific,” or “Core” refer to Core Scientific, Inc. and its subsidiaries. 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. 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 the unaudited condensed consolidated 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, 2025, filed with the Securities and Exchange Commission on March 2, 2026. This section generally discusses the results of operations for the three and six months ended June 30, 2026, compared to June 30, 2025. 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. 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, 2025, filed with the Securities and Exchange Commission on March 2, 2026. Overview Core Scientific, Inc. is a leader in designing, building and operating large-scale purpose-built data centers for HDC services. We develop and operate facilities serving AI and HPC related workloads and are a provider of digital infrastructure to our third-party customers. The majority of our revenue is derived from HDC service. Our strategic objective is to maximize the value of our large-scale data center infrastructure portfolio by converting power capacity across our facilities into long-term contracted HDC revenue streams. We believe this strategy enhances the predictability of future cash flows, reduces the relative contribution of bitcoin market volatility to our operating results, and increases the long-term value of our infrastructure platform relative to its historical use in digital asset mining operations. In 2024, we announced our first HDC contract with CoreWeave, a provider of HPC services, which was subsequently expanded to approximately 590 MW of leased customer power capacity across five sites. As of June 30, 2026, approximately 395 MW has commenced billing. During the six months ended June 30, 2026, certain CoreWeave license agreements were assigned to a special purpose vehicle financing structure while CoreWeave remained a primary obligor under the agreements. See “Strategic Transition to High-Density Colocation Services” below for a more detailed discussion of this arrangement and the associated risks. While our current colocation revenue remains concentrated with a single customer, we believe our available unleased power capacity provides a meaningful opportunity to diversify our customer base over time. As of June 30, 2026, we controlled approximately 2.1 GW of gross utility power capacity, or approximately 1.3 GW of total leasable customer power capacity across 11 data centers in seven U.S. states including Alabama ( 1 ), Georgia ( 2) , Kentucky (1), North Carolina (1), North Dakota (1), Oklahoma (1), and Texas (4). We continue to develop, convert and expand most of our facilities to support AI and HPC workloads while pursuing additional land and power opportunities to expand our data center footprint. We expect colocation revenue to increase as additional contracted capacity is commissioned and delivered to our existing customer and as we add new customer relationships over time. We continue to operate a self-mining fleet at two facilities and provide hosted mining services to one remaining customer. Our hosted mining operations are expected to conclude by December 31, 2026, while we continue to wind down our self-mining operations. 2026 Highlights: • On July 28, 2026, we announced a strategic commercial relationship with AMD with the potential to support up to 2.5 GW of leasable capacity, anchored by a 15-year agreement for approximately 530 MW across five sites. • On May 6, 2026, our indirect wholly-owned subsidiary, Core Scientific Finance completed a $3.3 billion offering of 7.75% Senior Secured Notes due 2031 (the "Senior Secured Notes”). The net proceeds were used to fund a debt service reserve account and to repay in full and terminate our Term Loan Facility. The Senior Secured Notes and related guarantees are secured by first-priority liens, among other things, on substantially all assets of Core Scientific Finance and its subsidiary guarantors, which own or operate our specified data center development projects. For additional details, see Note 7 — Debt to our condensed consolidated financial statements. 29 • Billable customer power capacity of 395 MW as of June 30, 2026, against 590 MW of leased customer power capacity, with the remaining 195 MW in various stages of construction and commissioning. • On May 5, 2026, we closed on the acquisition of land and related electrical power in Hunt County, Texas for approximately $233 million in cash, which is expected to support approximately 430 MW of gross power capacity, with an approved ERCOT interconnection ramp schedule. For additional details, see Note 3 — Asset Acquisition to our condensed consolidated financial statements. • In May 2026, we announced our entry into an agreement and plan of merger to acquire Polaris DS LLC, for approximately $421 million in cash, subject to certain adjustments. The acquisition will add approximately 40 additional acres adjacent to our existing data center operating in Muskogee, Oklahoma, and will provide up to 440 MW of gross utility power capacity. The transaction is expected to close in the third quarter of 2026. For additional details, see Note 10 — Commitments and Contingencies to our condensed consolidated financial statements. These operational milestones, together with the strategic financing and portfolio developments outlined above, drove the financial results for the three and six months ended June 30, 2026, which are summarized below. Financial Results: • Total revenue for the three and six months ended June 30, 2026 was $164.2 million and $279.4 million, respectively, compared to $78.6 million and $158.2 million for the three and six months ended June 30, 2025. ◦ Colocation revenue was $136.7 million and $214.2 million for the three and six months ended June 30, 2026, respectively, compared to $10.6 million and $19.1 million for the three and six months ended June 30, 2025, respectively. The increase in colocation revenue was driven by incremental billable customer power capacity delivered to our customer. ◦ Digital asset self-mining revenue was $21.5 million and $51.6 million for the three and six months ended June 30, 2026, respectively, compared to $62.4 million and $129.6 million for the three and six months ended June 30, 2025, respectively. The decrease reflected a reduction in bitcoin mined of 53% and 49% for the three and six months ended June 30, 2026, respectively, compared to the three and six months ended June 30, 2025, as well as a decline in the average bitcoin price of 27% and 23% for the same periods, respectively. ◦ The increase in colocation revenue and corresponding decline in self-mining revenue reflects the continued execution of our strategy to reallocate power capacity from digital asset mining to long-term contracted colocation services. • Net loss for the three and six months ended June 30, 2026 was $1.2 billion and $1.5 billion, respectively, compared to $936.8 million and $360.5 million for the three and six months ended June 30, 2025, respectively. Net loss for the three and six months ended June 30, 2026 was primarily driven by the change in fair value of warrants. Net loss for the six months ended June 30, 2026 was also impacted by a $266.5 million impairment charge on mining-related property, plant and equipment recognized during the first quarter of 2026. • Adjusted EBITDA was $41.1 million and $50.0 million for the three and six months ended June 30, 2026, respectively, compared to $28.5 million and $26.7 million for the three and six months ended June 30, 2025, respectively. Adjusted EBITDA is a non-GAAP financial measure. See “Key Business Operating Metrics and Non-GAAP Financial Measures” below for our definition and reconciliation to net loss. • Capital expenditures were $954.2 million for the six months ended June 30, 2026, of which $180.9 million was funded by CoreWeave pursuant to its existing colocation service agreement with the Company. • Cash and cash equivalents and digital assets totaled $1.8 billion as of June 30, 2026. Recent Developments 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. 30 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 each one megawatt (“MW”) of critical IT load contemplated by the Leases. 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 was issued, and the Warrant Shares are expected to be issued, in reliance on the exemption from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”). Key Factors Affecting Our Financial Performance Our results of operations, liquidity and cash flows are affected by a number of factors, including (i) our ability to execute and scale our HDC business, retain our existing colocation customer and attract new colocation customers, (ii) our ability to complete construction of contracted data center capacity on schedule and within budget, (iii) customer concentration and the financial health of our primary colocation customer, (iv) bitcoin market conditions and network fundamentals that continue to affect our Digital Asset Self‑Mining segment during our transition period, (v) power costs and availability across our portfolio, (vi) broader macroeconomic, regulatory and tariff developments, and (vii) our ability to service our debt obligations and fund our capital requirements. The factors below highlight key drivers that have affected, and may continue to affect, our financial performance. Strategic Transition to High-Density Colocation Services High-density colocation is now our primary business. For the six months ended June 30, 2026, colocation revenue represented 77% of total revenue, compared to 12% for the six months ended June 30, 2025, reflecting the rapid scaling of billable customer power capacity under our agreement with CoreWeave. We expect colocation to represent an increasingly dominant share of our results as additional capacity is commissioned and delivered, gradually reducing our exposure to bitcoin spot price volatility and the operational risks associated with digital asset mining. During the transition period, our consolidated results reflect both the ramp up of colocation revenue and the planned decline of our mining operations, and we expect this dynamic to continue as additional contracted capacity is placed in service. The Colocation segment is characterized by the implementation of long-term contracts spanning 10 or more years with payment structures that provide terms and conditions resulting in stable, predictable revenue and cash flows over each contract period. As of June 30, 2026, we had contracted 590 MW of leased customer power capacity and were actively billing for 395 MW. The gap between leased and billable capacity represents our primary near-term revenue growth opportunity. The pace at which we convert leased capacity to billable capacity depends on a number of factors, including equipment lead times and availability, labor constraints, permitting and interconnection sequencing, supply chain and logistical challenges, and the pace of customer deployment under existing contracts. Changes in these inputs can affect when incremental capacity becomes billable and therefore may affect the timing of colocation revenue, cost of services and related cash flows. In addition to converting our existing facilities we are also developing new data center sites, including our recently acquired Hunt County, Texas campus. Both conversion and new site development carry meaningful execution risks, including construction cost variability, equipment lead times, permitting uncertainty, and technical requirements associated with high-density colocation workloads. Our colocation revenue is currently derived entirely from a single customer, CoreWeave, a provider of HPC services. For the six months ended June 30, 2026, CoreWeave represented approximately 77% of our total revenue. This concentration means that our financial results, liquidity and cash flows are highly dependent on CoreWeave’s continued performance of its obligations under our license agreements, its financial health, and its ongoing demand for our data center capacity. During the period, CoreWeave entered into assignment and assumption agreements transferring certain license agreements to CW SPV, a special purpose vehicle that is an indirect subsidiary of CoreWeave. CoreWeave remains a primary obligor under those 31 agreements. While we believe this structure supports the long-term stability of these arrangements, the assignment introduces an additional layer of counterparty structure, and our revenue and cash flows remain dependent on performance by entities within the CoreWeave corporate family. Our practical ability to enforce recourse against CoreWeave would depend on its financial condition at the time of any default. Any material adverse change in CoreWeave’s business, financial condition or ability to perform under our license agreements could have a disproportionate impact on our revenue, results of operations and liquidity. Our deferred revenue balance as of June 30, 2026 includes significant customer prepayments for capacity not yet delivered. To the extent we are unable to deliver contracted capacity on schedule, or if our customer relationship was disrupted, our revenue recognition, deferred revenue obligations and capital recovery could be materially affected. A key strategic priority is diversifying our customer base by signing new colocation customers. Our ability to do so depends on a number of factors, including the availability and timing of unleased capacity at our facilities, the competitive environment for high-power data center capacity, pricing dynamics in the colocation market, and our ability to demonstrate reliable execution on our existing contract. Until we successfully diversify our customer base, our financial results will remain highly sensitive to the performance of our relationship with CoreWeave. Electricity Costs In our Colocation segment, power costs are passed through to our customer without markup and are recognized as revenue on a gross basis, with a corresponding charge to cost of colocation services. As a result, changes in power prices affect colocation revenue and cost of services in equal measure, with no corresponding impact on colocation gross profit. However, significant changes in power prices can cause large fluctuations in reported colocation revenue and cost of revenue that are not indicative of changes in underlying operating performance. Nonetheless, this pass-through structure provides an important degree of insulation from power price volatility on our largest and fastest growing revenue stream. In our Digital Asset Self‑Mining and Digital Asset Hosted Mining segments, electricity is the primary operating cost and is not passed through to customers. In these segments, increases in power prices directly compress margins. The cost and availability of electricity are affected by changes in seasonal demand, with peak demand during summer months driving higher costs and increased curtailments to support grid operators. Severe weather events, geopolitical developments, and macroeconomic factors can also affect power costs and availability in ways outside our control. As our colocation business grows and our mining operations wind down, the proportion of our cost base subject to direct power price exposure will decrease. Beyond cost, the availability of sufficient electrical power is one of the most important constraints on our colocation growth. The timing of utility approvals, interconnection studies, and power delivery agreements can affect when new capacity becomes available and therefore may affect the timing of our capital deployment and revenue ramp. We continue to be in active discussions with both our existing and future potential utility providers regarding additional power allocations across our portfolio, and we believe our ability to secure and maintain these agreements is a key factor affecting our long-term growth and competitive positioning. Bitcoin Market Conditions Our Digital Asset Self-Mining segment revenue is directly dependent on the spot price of bitcoin. For the six months ended June 30, 2026, self-mining represented 18% of total revenue, down from 82% for the six months ended June 30, 2025, as we have strategically reallocated power capacity from mining to colocation operations. Bitcoin prices continue to affect the performance of our Digital Asset Self-Mining segment, including mining revenue, the value of digital assets held on our balance sheet, and the recoverability of mining-related assets. During the six months ended June 30, 2026, deteriorating mining economics contributed to a $266.5 million impairment charge on mining-related assets. As our transition to colocation progresses, we expect bitcoin market conditions to have a diminishing effect on our overall financial results. We continue to manage our self-mining fleet with a focus on generating cash flows and covering power expenses while we execute our colocation transition. We will be opportunistic in monetizing our bitcoin holdings, subject to market conditions and our treasury strategy. Bitcoin Network Fundamentals Our self-mining results are also affected by competitive dynamics of the Bitcoin network, including the network hash rate and difficulty in solving blocks. Increases in network hash rate result in higher network difficulty over time, which reduces the amount of bitcoin earned for a given level of deployed hash rate and power consumption. These dynamics are entirely outside of our control. As we wind down our mining operations and reallocate capacity to colocation, network difficulty affects the rate at which we are able to generate value from our remaining mining fleet during the transition period. We are not investing in new mining equipment to 32 maintain or expand our mining hash rate. Rather, our focus is on maximizing the cash generation from our existing fleet while we convert facilities and, where appropriate, selling or otherwise monetizing mining equipment as we retire it from service. To the extent network difficulty increases materially or bitcoin transaction fees decline, the revenue and cash generation from our remaining fleet during the transition period will be reduced. Tariffs Beginning on February 1, 2025, the United States government announced a series of additional tariffs on goods imported to the United States, raising concerns about price inflation and delivery delays with respect to equipment and materials used in our data center conversions and our digital asset mining business. During the three and six months ended June 30, 2026, tariffs contributed to higher costs for certain equipment and materials procured directly by the Company for non-customer-funded projects. Our agreement with CoreWeave is funded almost entirely by the customer, and our financial contribution to those projects is capped at a fixed dollar amount, limiting our exposure to tariff-related cost increases on customer-funded capital expenditures. However, capital expenditures associated with developing new data center sites, including our Hunt County, Texas campus and the Muskogee, Oklahoma site we have agreed to acquire, are not subject to the same customer-funding structure as our existing CoreWeave conversion projects. To the extent these sites require significant equipment and material procurement funded directly by the Company, our exposure to tariff-related cost increases on those projects may be greater than on our existing customer-funded portfolio. Sustained or further increases in tariffs on key equipment and materials could affect construction costs, timelines, and operating economics at these sites, which could affect the timing and profitability of our colocation expansion. We continue to analyze the impact of tariffs on our business and the actions we can take to minimize current and future exposure. Certain equipment and material used in our data center development have lead times in excess of 12 months. To the extent we are able to place orders in advance of potential tariff increases, our exposure to future cost escalation on those items may be reduced. Debt Service and Capital Requirements Our capital structure has changed materially during 2026. As of June 30, 2026, our consolidated indebtedness includes $460.0 million of 3.00% Convertible Senior Notes due 2029 (the “2029 Convertible Notes”), $625.0 million of 0.00% Convertible Senior Notes due 2031 (the “2031 Convertible Notes”), and $3.30 billion of 7.75% Senior Secured Notes due 2031 issued by our indirect subsidiary Core Scientific Finance. The Senior Secured Notes require semi-annual interest payments on May 15 and November 15 of each year, beginning November 15, 2026, and semi-annual principal amortization at an initial annual rate of 11.50% of the original principal amount outstanding on the issue date until the notes are repaid, repurchased, redeemed or otherwise discharged, beginning on the First Installment Payment Date. The First Installment Payment Date is defined as the first semi-annual payment date occurring at least 15 days after both rent commencement under the related data center leases and the abatement of all revenue credits provided to the tenant. Revenue credits refer to fixed amounts credited against the tenant’s payment obligation during the initial ramp-up period under the license agreements. As a result, the timing of principal amortization is directly linked to our operational delivery milestones under our colocation arrangements. Our construction capital requirements are also substantial. As of June 30, 2026, we were contractually committed to approximately $1.0 billion of future cash expenditures, of which approximately $264 million will be passed through to our customer as invoiced, with substantially all remaining expenditures expected to occur within the next 12 months. The interaction between our debt service obligations, construction capital commitments, customer prepayment inflows, and operating cash flows is a key factor affecting our liquidity and capital allocation decisions. See "Liquidity and Capital Resources" below for further discussion. Our Competition In our Colocation segment, we compete for customers and capacity with major data center real estate investment trusts, developers of purpose-built data centers and other operators with high-power capacity suitable for AI and HPC workloads. Competition in this market focuses primarily on facility location, timing, power capacity availability and scale, reliability and uptime, reputation, technical specifications including power density and cooling capabilities, pricing and contract terms, speed of delivery, and track record of execution. Our ability to attract new colocation customers and diversify beyond our current single-customer concentration depends on our ability to compete effectively across these dimensions. The market for HDC capacity serving AI workloads has grown rapidly, and competition for both customers and new sites has intensified. Competition for new power capacity and land sites is particularly acute, as utilities and grid operators have limited interconnection capacity in many markets and the lead times for securing new power agreements can be significant. Our ability to secure attractive new sites and power agreements before competitors do is an important factor affecting our long-term growth. 33 In our Digital Asset Self-Mining segment, competition is driven by access to low-cost power, mining fleet efficiency, scale, and capital availability. As we wind down our mining operations, our ability to compete effectively as a miner becomes a declining factor in our overall financial performance. We will continue to manage our existing fleet with a focus on cash generation rather than competitive positioning, and we do not intend to make material new investments in mining capacity. Regulation We operate in a dynamic regulatory environment. For a discussion of federal, state, and international regulatory developments affecting our digital asset mining and colocation activities, see “Government Regulation” in Part I, Item 1 “Business” section in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the Securities and Exchange Commission on March 2, 2026. We continue to evaluate whether regulatory developments present known trends or uncertainties that may materially impact our operations, energy costs, or customer demand. Regulatory developments affecting data centers, energy markets, AI infrastructure, and environmental matters could affect compliance costs, power availability and pricing, permitting timelines, and customer demand, each of which could impact our results of operations and liquidity. In particular, regulatory requirements governing data center construction, environmental impact, and utility interconnection could affect the timeline and cost of developing our new sites, and our ability to complete our contracted data center development projects on schedule. We continue to monitor these developments closely and incorporate regulatory considerations into our site selection, development planning, and capital allocation decisions. Key Business Operating Metrics and Non-GAAP Financial Measures 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. These operating metrics and non‑GAAP financial measures should be considered in addition to, and not as a substitute for, our consolidated financial statements prepared in accordance with GAAP. Management also uses the following data center capacity and power metrics (measured in megawatts) to evaluate the scale of our utility power footprint and customer IT load capacity, monitor customer commitments and remaining available capacity, assess commissioning progress and deployment pacing, and inform capital allocation and site planning decisions. Unless otherwise indicated, these metrics are presented as of period end and represent management estimates based on operational and engineering data and may not be comparable to similarly titled measures used by other operators. Metric (MW) Definition How management uses it Gross Utility Power Capacity Total electric utility power capacity agreements associated with our data center sites under our control as of period end, including capacity that is commissioned for future use. Used for portfolio planning and utility power allocation discussions. Total Leasable Customer Power Capacity Our estimate of the total non-redundant customer IT load that our data center sites could support in the aggregate as of period end, regardless of whether such capacity has been contracted with customers or remains available for sale. This metric is representative of the amount of power available for customer use in servicing their workloads. Used to assess total customer‑usable IT load available for leasing, evaluate leased versus unleased capacity, and plan conversion/development sequencing and sales capacity. Leased Customer Power Capacity Power capacity that is committed to customers under executed customer contracts, regardless of whether service has commenced as of period end. Used to monitor signed customer commitments and contracted backlog and to plan future deployment/commissioning requirements. Unleased Customer Power Capacity The portion of Total Leasable Customer Power Capacity not committed under customer contracts as of period end. This metric is calculated as Total Leasable Customer Power Capacity minus Leased Customer Power Capacity. Used to monitor remaining uncommitted customer IT load and to prioritize incremental contracting and conversion/commissioning plans. Billable Customer Power Capacity Portion of Leased Customer Power Capacity for which service has commenced and we are actively billing as of period end. Used to monitor in-service customer power that is billing and to track deployment/commissioning pace and near-term revenue ramp. 34 Billable Customer Power Capacity is the primary driver of our Colocation segment revenue in each period, as revenue recognition commences when capacity is delivered and service begins. The gap between Leased Customer Power Capacity and Billable Customer Power Capacity represents contracted capacity for which we are constructing and commissioning infrastructure, and reflects our near-term revenue growth opportunity as that capacity is placed into service. Gross Utility Power Capacity and Total Leasable Customer Power Capacity are used primarily for portfolio planning and to evaluate our available capacity for future customer contracting. The following table presents the values for these metrics as of the dates indicated (in megawatts): June 30, 2026 March 31, 2026 December 31, 2025 Gross Utility Power Capacity 2,115 1,860 1,426 Total Leasable Customer Power Capacity 1,275 1,275 920 Leased Customer Power Capacity 590 590 590 Unleased Customer Power Capacity 685 685 330 Billable Customer Power Capacity 395 225 120 Adjusted EBITDA We report our financial results in accordance with GAAP. To supplement our consolidated financial statements, we provide investors with Adjusted EBITDA, a non‑GAAP financial measure. Adjusted EBITDA is defined as our net loss, adjusted to eliminate the effect of (i) interest expense (income), net; (ii) provision for income taxes; (iii) depreciation and amortization; (iv) stock-based compensation expense; (v) loss on disposal and impairment of property, plant and equipment; (vi) loss on remeasurement of assets held for sale; (vii) loss on contract termination; (viii) colocation organizational startup costs primarily related to the initial ramp up of new colocation sits and the conversion of existing facilities to colocation data center operations; (ix) loss on debt extinguishment; (x) change in fair value of warrant and contingent value rights; (xi) loss on legal settlements; (xii) post-emergence bankruptcy advisory costs incurred related to reorganization and (xiii) certain additional non-cash items that do not reflect the performance of our ongoing business operations. The most directly comparable GAAP measure to Adjusted EBITDA is net loss. We believe Adjusted EBITDA is useful to management, investors, and our Board of Directors because it removes the effect of items that are either non-cash in nature, not reflective of our core operating performance, or subject to timing and variability that makes period-to-period comparisons less meaningful. This includes impairment charges on mining-related assets, which are non-cash and reflect changes in bitcoin market conditions rather than the operating performance of our colocation business. Adjusted EBITDA is used by management internally to make operating decisions, evaluate performance, and perform strategic and financial planning, including assessment of return on capital and operating efficiencies. In addition, we believe it provides useful information to investors in understanding and evaluating our results of operations and making period-to-period comparisons of our business, as it removes the effect of interest, taxes, non-cash charges, and other items subject to timing variability. You should be aware that when evaluating Adjusted EBITDA, we may incur future expenses similar to those when calculating this measure. Our presentation of this measure should not be construed as an inference that its future results will be unaffected by unusual items. This measure should be considered in addition to, and not as a substitute for, our condensed consolidated financial statements prepared in accordance with GAAP. We compensate for these limitations by relying primarily on GAAP results and using Adjusted EBITDA on a supplemental basis. Our computation of Adjusted EBITDA may not be comparable to similarly titled measures used by other companies because not all companies calculate this measure in the same fashion. You should review the reconciliation of net loss to Adjusted EBITDA below and not rely on any single financial measure to evaluate our business. 35 The following table presents a reconciliation of net loss to Adjusted EBITDA for the periods indicated (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Net loss $ (1,155,310) $ (936,799) $ (1,502,498) $ (360,548) Adjustments: Interest expense (income), net 23,833 (1,185) 28,690 (3,372) Income tax expense 1,907 158 2,507 363 Depreciation and amortization 15,498 18,756 32,146 38,487 Stock-based compensation expense 13,938 19,533 27,475 32,765 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 — Colocation organizational and site startup costs (1) 27,039 11,655 35,704 23,322 Loss on contract termination 41,948 — 41,948 — Loss on debt extinguishment 5,435 1,377 5,435 1,377 Change in fair value of warrants and contingent value rights 1,045,515 909,958 1,076,314 288,494 Loss on legal settlements (2) — — 500 — Post-emergence bankruptcy advisory costs (3) 397 695 714 1,298 Other 135 207 162 364 Adjusted EBITDA $ 41,103 $ 28,521 $ 49,991 $ 26,722 (1) Included in Colocation organizational and site startup costs are costs associated to Stock-based compensation expense of $4.3 million and $8.5 million for the three and six months ended June 30, 2026, respectively, and $4.6 million and $7.6 million for the three and six months ended June 30, 2025, respectively. For the six months ended June 30, 2025, there was also $4.4 million in site conversion demolition costs. (2) Included in Other non-operating expense, net on the condensed consolidated statements of operations. (3) Included in Selling, general and administrative on the condensed consolidated statements of operations. Results of operations for the three and six months ended June 30, 2026 and 2025 Revenue The following table presents the components of revenue for the periods indicated (dollars in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 $ Change 2026 2025 $ Change Colocation revenue $ 136,669 $ 10,560 $ 126,109 $ 214,208 $ 19,133 $ 195,075 Digital asset self-mining revenue 21,535 62,424 (40,889) 51,640 129,603 (77,963) Digital asset hosted mining revenue from customers 5,997 5,644 353 13,597 9,417 4,180 Total revenue $ 164,201 $ 78,628 $ 85,573 $ 279,445 $ 158,153 $ 121,292 Percentage of total revenue: Colocation revenue 83 % 13 % 77 % 12 % Digital asset self-mining revenue 13 % 80 % 18 % 82 % Digital asset hosted mining revenue from customers 4 % 7 % 5 % 6 % Total revenue 100 % 100 % 100 % 100 % 36 Colocation revenue Colocation revenue consists of fees charged to customers for licensed data center space, power and related services. Under our contract, the customer generally pays fixed monthly fees based on billable customer power capacity and variable usage‑based charges and other billable services. Power fees are passed through to our customer without markup and are recognized as revenue on a gross basis, with a corresponding charge to cost of colocation services. As a result, changes in power prices can cause fluctuations in colocation revenue that are not indicative of changes in our underlying colocation margins. The increase in colocation revenue for the three and six months ended June 30, 2026, compared to the three and six months ended June 30, 2025, was primarily attributable to incremental billable customer power capacity. Digital asset self-mining revenue Digital asset self‑mining revenue consists primarily of bitcoin earned from operating our owned mining fleet. We participate in mining pools under which we receive consideration based on the hash rate we contribute to the pool. The decrease in self-mining revenue for the three and six months ended June 30, 2026, compared to the three and six months ended June 30, 2025, was driven primarily by lower bitcoin production and lower average realized bitcoin prices. Cost of revenue The following table presents the components of cost of revenue for the periods indicated (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 $ Change 2026 2025 $ Change Cost of colocation services $ 56,686 $ 9,430 $ 47,256 $ 90,304 $ 17,536 $ 72,768 Cost of digital asset self-mining 33,700 59,589 (25,889) 80,889 120,759 (39,870) Cost of digital asset hosted mining services 3,771 4,584 (813) 8,102 6,620 1,482 Total cost of revenue $ 94,157 $ 73,603 $ 20,554 $ 179,295 $ 144,915 $ 34,380 Cost of revenue includes the costs to operate our colocation, digital asset self‑mining, and digital asset hosted mining businesses, including power fees, depreciation, personnel and facility-related costs. Cost of colocation services The increase in cost of colocation services for the three and six months ended June 30, 2026, compared to the three and six months ended June 30, 2025, was driven primarily by incremental billable capacity, in line with increased colocation revenue. Cost of digital asset self-mining The decrease in cost of digital asset self-mining for the three and six months ended June 30, 2026, compared to the three and six months ended June 30, 2025, was driven primarily by reduced self-mining activity, including lower power consumption resulting from the reallocation of power capacity to colocation operations and lower depreciation expense. 37 Gross Profit The following table summarizes gross profit (loss) and gross margin by reportable segment for the periods indicated (dollars in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 Change 2026 2025 Change Colocation Segment Colocation gross profit $ 79,983 $ 1,130 $ 78,853 $ 123,904 $ 1,597 $ 122,307 Colocation gross margin 59 % 11 % 48 % 58 % 8 % 50 % Digital Asset Self-Mining Segment Digital asset self-mining gross profit (loss) $ (12,165) $ 2,835 $ (15,000) $ (29,249) $ 8,844 $ (38,093) Digital asset self-mining gross margin (56) % 5 % (61) % (57) % 7 % (64) % Digital Asset Hosted Mining Segment Digital asset hosted mining gross profit $ 2,226 $ 1,060 $ 1,166 $ 5,495 $ 2,797 $ 2,698 Digital asset hosted mining gross margin 37 % 19 % 18 % 40 % 30 % 10 % Gross profit (loss) represents segment revenue less segment cost of revenue. Accordingly, the changes in gross profit (loss) and gross margin by segment for the three and six months ended June 30, 2026, compared to the three and six months ended June 30, 2025, are primarily driven by the changes in revenue and cost of revenue discussed in the “Revenue ” and “Cost of revenue ” sections above. Operating Expenses The following table summarizes the components of operating expenses for the periods indicated (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 $ Change 2026 2025 $ Change Loss (gain) on fair value of digital assets $ 9,368 $ (29,797) $ 39,165 $ 15,926 $ (19,109) $ 35,035 Loss on disposal of property, plant and equipment 1,273 4,166 (2,893) 14,911 4,172 10,739 Loss on remeasurement of assets held for sale 19,495 — 19,495 19,495 — 19,495 Impairment of property, plant and equipment — — — 266,488 — 266,488 Loss on contract termination 41,948 — 41,948 41,948 — 41,948 Colocation organizational and site startup costs 27,039 11,655 15,384 35,704 23,322 12,382 Selling, general and administrative 49,389 45,285 4,104 94,568 78,175 16,393 Total operating expenses $ 148,512 $ 31,309 $ 117,203 $ 489,040 $ 86,560 $ 402,480 Loss (gain) on fair value of digital assets The loss (gain) on fair value of digital assets reflects the movement in fair value of bitcoin held from our self-mining operations for each period presented. The loss recognized for the three and six months ended June 30, 2026, compared to a gain for the three and six months ended June 30, 2025, reflects a decrease in the price of bitcoin during the respective periods. Loss on remeasurement of assets held for sale During the three months ended June 30, 2026, we classified certain mining equipment as held for sale and remeasured the assets to fair value less cost to sell, resulting in a $19.5 million loss. See Note 4 — Property, Plant, and Equipment and Note 9 — Fair Value Measurements for further detail. 38 Impairment of property, plant and equipment During the three months ended March 31, 2026, we recognized non-cash impairment charges of $266.5 million on our mining-related property, plant and equipment. The charges resulted from sustained deterioration in bitcoin mining economics during the period, including declines in bitcoin prices, hashprice reaching historic lows, and significant decreases in secondary market values for mining equipment. Of the total charge, $151.6 million related to mining equipment whose carrying value exceeded current secondary market values, and $114.9 million related to mining infrastructure at facilities used in our self-mining operations, whose carrying values exceeded fair values determined using a discounted cash flow methodology. No impairment charges were recognized during the three months ended June 30, 2026, or during the three and six months ended June 30, 2025. Loss on contract termination During the three months ended June 30, 2026, we entered into a termination and settlement agreement with Block, Inc. and Proto Global LLC to terminate our existing contract and all future delivery obligations of mining equipment thereunder, resulting in a loss of $41.9 million. We terminated this agreement in connection with the wind-down of our remaining mining obligations as part of our ongoing strategic transition to high-density colocation operations. Colocation organizational and site startup costs Colocation organizational and site startup costs are expected to continue declining as a percentage of revenue as our initial CoreWeave facilities reach full operational maturity, though the Company may incur similar costs in future periods in connection with new customer relationships and new site development activities. Non-Operating Expenses, Net The following table summarizes the components of non-operating expenses (income), net for the periods indicated (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 $ Change 2026 2025 $ Change Loss on debt extinguishment $ 5,435 $ 1,377 $ 4,058 $ 5,435 $ 1,377 $ 4,058 Interest expense (income), net 23,833 (1,185) 25,018 28,690 (3,372) 32,062 Change in fair value of warrants and contingent value rights 1,045,515 909,958 135,557 1,076,314 288,494 787,820 Other non-operating expense, net 152 207 (55) 662 364 298 Total non-operating expenses, net $ 1,074,935 $ 910,357 $ 164,578 $ 1,111,101 $ 286,863 $ 824,238 Interest expense (income), net The increase in interest expense (income), net for the three and six months ended June 30, 2026, compared to the three and six months ended June 30, 2025, was driven primarily by interest incurred on the $3.30 billion aggregate principal amount of 7.75% Senior Secured Notes issued in May 2026 and on the $1.0 billion Term Loan Facility that was borrowed in March 2026 and repaid in May 2026. Change in fair value of warrants and contingent value rights The increase in change in fair value of warrants and contingent value rights for the three and six months ended June 30, 2026, compared to the three and six months ended June 30, 2025, was driven by changes in our stock price during the respective periods. 39 Liquidity and Capital Resources Sources and Uses of Cash We finance our operating and capital requirements primarily through a combination of cash and cash equivalents, cash generated from operations, customer prepayments received under our colocation arrangements, proceeds from sales of digital assets (bitcoin), and external financing activities, including debt financing arrangements. Customer prepayments under our colocation arrangements are associated with, and expected to offset a significant portion of, the capital expenditures required to build out and convert facilities for those arrangements. Based on our assessment of current and expected operating and capital expenditure requirements, we have determined that our available liquidity, including cash and cash equivalents, expected operating cash flows, and customer funding related to our colocation arrangements, will be sufficient to satisfy our cash requirements for at least the next twelve months from the date of this filing. The following table summarizes our cash and cash equivalents and the fair value of our digital assets at the dates indicated (in thousands): June 30, 2026 December 31, 2025 Cash and cash equivalents $ 1,769,735 $ 311,378 Digital assets 49,675 222,000 $ 1,819,410 $ 533,378 Term Loan Facility In March 2026, we entered into a loan facility credit agreement and fully drew a $1.0 billion senior secured loan facility (the “Term Loan Facility”). On May 6, 2026, we repaid in full all outstanding borrowings under the Term Loan Facility, including accrued interest and fees, using proceeds from the Senior Secured Notes offering described below, and terminated the facility. As of June 30, 2026, there were no remaining borrowings or obligations outstanding under the Term Loan Facility. Senior Secured Notes On May 6, 2026, Core Scientific Finance, our indirect wholly-owned subsidiary, completed a private offering of $3.30 billion aggregate principal amount of 7.75% Senior Secured Notes due 2031. Core Scientific Finance used the net proceeds to fund a debt service reserve account and to make a distribution to the Company, a portion of which was used to repay and terminate the Term Loan Facility. As of June 30, 2026, $345 million remained in the debt service reserve account and is included in Restricted cash, net of current portion on our condensed consolidated balance sheet. In connection with the Senior Secured Notes offering, we provided an uncapped completion guarantee for the benefit of the noteholders with respect to the completion of specified data center development projects. This guarantee reflects our commitment to complete the specified development projects and is consistent with our existing contractual construction obligation, which are discussed further below. The Senior Secured Notes require semi-annual interest payments on May 15 and November 15, beginning November 15, 2026. Semi-annual principal amortization on May 15 and November 15 will commence on the First Installment Payment Date at an initial annual rate of 11.50% of the $3.30 billion original principal amount. We also have outstanding $460 million of 2029 Convertible Notes and $625 million of 2031 Convertible Notes. For maturity dates, amortization schedules, and full terms of all outstanding debt, see Note 7 — Debt to our consolidated financial statements. 40 Deferred Revenue Customer prepayments received under our colocation license agreements represent a significant source of operating cash inflows and are recorded as deferred revenue until the related capacity is delivered and revenue is recognized. Colocation deferred revenue reflects advance payments received from our customer for contracted capacity, including prepaid base license fees received in connection with the customer-funded development of colocation facilities. During the initial billing period, CoreWeave receives build credits that offset a portion of amounts otherwise due, which affects the timing of cash collection relative to revenue recognition. Deferred revenue is recognized as revenue as capacity is placed into service over the course of several billing cycles as the prepaid fees are used up. Hosted mining deferred revenue reflects deposits received from customers in advance of providing equipment deployment, monitoring, and infrastructure services under our hosted mining arrangements. The following table presents a rollforward of deferred revenue for the six months ended June 30, 2026: Deferred Revenue from Colocation Services Deferred Revenue from Hosted Mining Services Total Deferred Revenue Balance at December 31, 2025 $ 553,878 $ 1,973 $ 555,851 Cash payments received 181,149 2,154 183,303 Revenue recognized - amounts billed and earned (58,710) (1,972) (60,682) Non-cash straight line adjustment - base license fees earned but not yet billed (24,029) — (24,029) Balance at June 30, 2026 $ 652,288 $ 2,155 $ 654,443 The non-cash straight-line adjustment reflects the base license fees that are earned ratably over the contract term under ASC 842 but are not yet due from customer under the contractual billing schedule. This component reduces colocation deferred revenue and does not represent a cash receipt. Hosted mining deferred revenue is immaterial to our consolidated balance sheet. Digital Asset Sales During the six months ended June 30, 2026, we mined approximately 695 bitcoin, sold 2,385 bitcoin for aggregate proceeds of $208.2 million to fund planned capital expenditures and other cash requirements, and recognized a $15.9 million decrease in fair value, resulting in a closing balance of 848 bitcoin with a fair value of $50 million, compared to 2,537 bitcoin with a fair value of $222 million at December 31, 2025. We will be opportunistic in monetizing our remaining bitcoin holdings, subject to market conditions and our treasury strategy. Cash flow Summary The following table presents our cash flows for the periods indicated (in thousands): Six Months Ended June 30, 2026 2025 Net cash provided by (used in) operating activities $ 230,949 $ (11,041) Net cash used in investing activities $ (1,182,891) $ (208,624) Net cash provided by (used in) financing activities $ 3,191,955 $ (35,970) Operating Activities The improvement of approximately $242.0 million in cash provided by (used in) operating activities was primarily due to: • Digital asset sales: $208.2 million of proceeds from sales of digital assets generated by self-mining revenues during the six months ended June 30, 2026, as management elected to monetize the majority of our bitcoin holdings to fund capital requirements. • Non-cash charges: While net loss increased $1.1 billion year-over-year, this was substantially offset by a corresponding increase in non-cash charges, most notably the $787.8 million increase in fair value of warrant and contingent value rights liabilities and the $266.5 million impairment of property, plant and equipment recognized in the current period. Continued growth and scaling of our colocation operations, including higher billable customer power capacity, increased customer prepayments received under our colocation arrangement, and the associated operating cash flows generated as our colocation business ramps towards full operational capacity also contributed to the overall improvement in operating cash flows. 41 Investing Activities The increase in cash used in investing activities reflects higher capital expenditures of $954.2 million for the six months ended June 30, 2026 compared to $205.3 million for the six months ended June 30, 2025, driven by our conversion and expansion of data center infrastructure for colocation operations. Of the $954.2 million of capital expenditures, $180.9 million was funded by CoreWeave pursuant to its existing colocation service agreement. In addition, during the six months ended June 30, 2026, we paid $232.5 million in connection with the acquisition of land and development rights in Hunt County, Texas. See Note 3 — Asset Acquisition for further detail. Financing Activities The improvement in cash provided by (used in) financing activities was primarily driven by $3.3 billion in gross proceeds from the issuance of the Senior Secured Notes in May 2026, partially offset by the repayment of $1.0 billion of outstanding borrowings under the Term Loan Facility. As of June 30, 2026, we were contractually committed to approximately $1.0 billion of future cash expenditures under outstanding purchase and construction commitments, of which $264 million will be passed through to our customer as invoiced. These commitments relate to the remaining build-out at existing customer conversion sites, our recently acquired Hunt County, Texas campus, and new development activities undertaken for prospective customers. Substantially all of these expenditures are expected to occur within the next 12 months. We expect to incur significant capital expenditures beyond the next 12 months as we continue to develop our data center portfolio. We also have ongoing operating lease obligations for our data center and office facilities; for the amounts and timing of those obligations, see Note 6 — Leases to our condensed consolidated financial statements. We may from time to time seek additional financing to fund our operations and capital expenditures. If we are unable to obtain financing on acceptable terms, we may be required to reduce, delay, or modify planned expenditures or pursue other alternatives. Critical Accounting Estimates The critical accounting estimates, assumptions, judgments and the related policies that we believe have the most significant impact on our condensed consolidated financial statements are described below. Property, Plant, and Equipment Our mining-related property, plant, and equipment involves significant estimates, including the determination of useful lives and the evaluation of recoverability and fair value. These estimates require judgment about future bitcoin mining economics, including technology improvements, bitcoin prices, hashprice, power prices, secondary market values for mining equipment, and the assumptions underlying fair value measurements such as discount rates and projected cash flows. During the six months ended June 30, 2026, we recognized significant impairment charges on our mining-related assets (see Note 4 — Property, Plant, and Equipment and Note 9 — Fair Value Measurements to our condensed consolidated financial statements in Item 1 of Part I of this Quarterly Report on Form 10-Q). Stock-Based Compensation We have outstanding equity awards that include performance conditions, the achievement of which must be assessed by management at each reporting date. Compensation expense for these awards is recognized based on the estimated number of awards expected to vest, applying a cumulative catch-up adjustment when those estimates change. The assessment of probable achievement requires significant judgment, including assumptions about our infrastructure deployment progress, customer pipeline activity, and a degree of Compensation Committee discretion. Given the range of potential payout outcomes, changes in management's probability assessments could result in material adjustments to stock-based compensation expense recognized in future periods. Management believes its current estimates are reasonable based on available information. Actual results may differ, and any such differences could materially impact our financial condition and results of operations. Recent Accounting Pronouncements For a discussion of new accounting standards relevant to our business, refer to Note 2 — Summary of Significant Accounting Policies to our condensed consolidated financial statements in Item 1 of Part I of this Quarterly Report on Form 10-Q. 42