MARA Holdings, Inc. 10-Q

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Unless otherwise indicated or the context otherwise requires, references to “MARA,” “we,” “us,” and the “Company” refer to MARA Holdings, Inc. and its consolidated subsidiaries. You should read the following discussion and analysis together with our financial statements and related notes in Part I, Item 1 of this Quarterly Report on Form 10-Q for the quarter ended March 31, 2025 (this “Quarterly Report”). This Quarterly Report contains forward-looking statements within the meaning of the federal securities laws, which statements are subject to considerable risks and uncertainties. These forward-looking statements are intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. All statements included or incorporated by reference in this Quarterly Report, other than statements of historical fact, are forward-looking statements. You can identify forward-looking statements by the use of words such as “may,” “will,” “could,” “anticipate,” “expect,” “intend,” “believe,” “continue” or the negative of such terms, or other comparable terminology. Forward-looking statements also include the assumptions underlying or relating to such statements. Our forward-looking statements are based on our management’s current assumptions and expectations about future events and trends, which affect or may affect our business, strategy, operations or financial performance. Although we believe that these forward-looking statements are based upon reasonable assumptions, they are subject to numerous known and unknown risks and uncertainties and are made in light of information currently available to us. Our actual financial condition and results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth in the section entitled “Risk Factors” in Part I, Item 1A, of our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 3, 2025, (our “Annual Report”), which is incorporated herein by reference, as well as in the other public filings we make with the U.S. Securities and Exchange Commission (the “SEC”). You should read this Quarterly Report with the understanding that our actual future financial condition and results may be materially different from and worse than what we expect. Additionally, information regarding market and industry statistics contained in this Quarterly Report is included based upon information available to us that we believe is accurate as of the date of this Quarterly Report. It is generally based upon industry and other publications that are not produced for purposes of securities offerings or economic analysis. We have not reviewed or included data from all sources and cannot assure investors of the accuracy or completeness of the data included in this Quarterly Report. Forecasts and other forward-looking information obtained from these sources are subject to the same qualifications and the additional uncertainties accompanying any estimates of future market size, revenue and market acceptance of products and services. We do not assume any obligation to update any forward-looking statement. As a result, investors should not place undue reliance on these forward-looking statements. BUSINESS OVERVIEW AND TRENDS Overview MARA is a vertically integrated digital energy and infrastructure company that leverages high-intensity compute, such as bitcoin mining, to monetize excess energy and optimize power management. We are focused on two key priorities: strategically growing by shifting our model toward low-cost energy with more efficient capital deployment and bringing to market a full suite of solutions for data centers and edge inference, including energy management, load balancing and advanced cooling. As of March 31, 2025, our total energy portfolio consisted of approximately 1.7 gigawatts (“GW”) of capacity with 16 data centers deployed across North America, the Middle East, Europe, and Latin America. We believe we are one of the world’s largest publicly traded bitcoin mining companies, with the majority of our production in the United States. While we remain a dominant player in bitcoin mining, we have expanded our footprint in energy generation and are investing in research and development to establish a presence in AI and adjacent markets, creating additional revenue opportunities over the long term. We believe the AI industry is shifting towards inference computing, which requires distributed, low-latency, and energy-efficient infrastructure. To support this shift, we are developing modular at the edge infrastructure solutions, including next-generation two-phase immersion cooling (“2PIC”) 37 Table of Contents systems designed to improve efficiency and sustainability. We are also exploring power management solutions, including load balancing, to provide services to the variable energy demands of AI inference workloads. We intend to continue vertically integrating and further reduce energy costs. Recent Developments Highlights from the quarter ended March 31, 2025: • On February 14, 2025, we completed the acquisition of a wind farm (the “Wind Farm”) in Hansford County, Texas with 240 megawatts (“MW”) of interconnection capacity and 114 MW of nameplate wind capacity. The Wind Farm will utilize previous-generation ASIC mining hardware to provide an avenue for the hardware to continue operating profitably beyond its normal lifecycle. • On March 11, 2025, we secured a $150.0 million line of credit, collateralized by a portion of our bitcoin holdings, to support general corporate needs. As of March 31, 2025, approximately 3,250 bitcoin remained pledged as collateral in connection with this line of credit. • On March 28, 2025, we commenced a new at-the-market offering program having an aggregate offering price of up to $2.0 billion. In addition, during April 2025, we fully energized our 25 MW micro data center initiative at wellheads in North Dakota and Texas, converting excess flared gas into power for our operations. These sites reduce our reliance on grid power and provide us with the lowest cost per bitcoin of our currently operational sites. Bitcoin Value Our revenues are generally comprised of block rewards earned in bitcoin as a result of successfully solving blocks, and transaction fees earned for verifying transactions in support of the blockchain. After the halving event of April 2024, the current reward for each solved block is equal to 3.125 bitcoin plus transaction fees. The impacts of halving on our results of operations and financial condition may be exacerbated by changes in the market value of bitcoin, which has historically been subject to significant volatility. For example, as of March 31, 2025, the price of a bitcoin was $82,534, compared to $71,289 as of March 31, 2024. We continue to retain all bitcoin mined in our operations or purchased, in line with our full holding onto bitcoin (“HODL”) strategy. As of March 31, 2025, we held approximately 47,531 bitcoin, including 14,269 loaned and collateralized bitcoin , on our Condensed Consolidated Balance Sheets with a carrying value of approximately $3.9 billion. The fair value of our bitcoin may be materially impacted as the market value of bitcoin fluctuates. Management believes, given our recent investments, coupled with our relative position and liquidity, we are well-positioned to execute on our long-term growth strategy. The following table presents our bitcoin digital asset holdings (including loaned and collateralized bitcoin) and the fair value per bitcoin: Quantity Fair Value March 31, 2025 47,531 $ 82,534 December 31, 2024 44,893 93,354 September 30, 2024 26,747 63,301 June 30, 2024 18,488 62,668 March 31, 2024 17,320 71,289 Bitcoin Mining Operations In response to an increased demand for bitcoin, we anticipate additional mining operators entering the market and existing competitors scaling their operations, which will grow the blockchain’s network hashrate and difficulty 38 Table of Contents associated with solving a block. As the overall hashrate and difficulty of the Bitcoin network increases, we will need to continue growing our hashrate to remain competitive. During the three months ended March 31, 2025, we mined 2,286 bitcoin, a decrease of 525 bitcoin, or 19%, from the prior year period. The decrease was primarily due to the result of the April 2024 halving event and the increase in global hashrate. As of March 31, 2025, we owned approximately 420,000 mining rigs globally, including our share of mining rigs from our equity method investee, the ADGM entity, with an energized hashrate of approximately 54.3 exahashes per second (“EH/s”). To stay competitive, we remain focused on strategically deploying additional mining rigs and scaling our operations, while managing our fleet as it ages along the obsolescence curve. In addition, we continuously evaluate strategic opportunities to support our growth strategy and seek to enhance operational efficiencies by utilizing efficient mining rigs and securing contracts with price protection clauses. The following table presents our computing power, miner efficiency and supplemental information as of March 31, 2025 and 2024: As of March 31, 2025 2024 Energized hashrate (“EH/s”) (1) 54.3 27.8 Miner efficiency (in joules per terahash) (2) 19.3 25.0 BTC Yield (3) 3.5 % 2.6 % Share of available miner rewards 5.5 % 3.1 % (1) We define Energized Hashrate as the total hashrate that could theoretically be generated if all mining rigs that have been operational are currently in operation and running at 100% of manufacturers’ specifications. We use this metric as an indicator of progress in bringing mining rigs online. We believe this metric is a useful indicator of potential bitcoin production. However, metrics cannot be tied directly to any production level expected to be actually achieved as (a) there may be delays in the energization of hashrate (b) we cannot predict when operational mining rigs may be offline for any reason, including curtailment or machine failure and (c) we cannot predict Global Hashrate (and therefore our share of the Global Hashrate), which has a significant impact on our ability to generate bitcoin in any given period. (2) The average number of joules of energy required to produce one terahash of computing power. (3) BTC Yield is a key performance indicator that represents the percentage change period-to-period of the ratio between our bitcoin holdings and our Assumed Fully Diluted Shares Outstanding. Assumed Fully Diluted Shares Outstanding refers to the aggregate of our actual shares of common stock outstanding as of the end of the applicable period plus all additional shares that would result from the assumed conversion of all outstanding convertible notes inclusive of the potential make-whole fundamental change provision, exercise of all outstanding warrants and settlement of all outstanding restricted stock units and performance-based restricted stock units. Energy Cost Energy cost is the most significant cost driver for mining and represented 38.3%, as a percentage of our owned mining revenues for the three months ended March 31, 2025. This excludes energy costs from third party hosted sites. Energy cost can be highly volatile, cyclical and sensitive to geopolitical events and weather conditions, such as winter storms and earthquakes, which impact supply and demand for power regionally. All of our owned mining sites and our hosted miners are subject to variable prices and market rate fluctuations with respect to wholesale energy costs. Such costs are governed by various power purchase agreements, and energy prices can change hour to hour and by location. While this renders energy prices less predictable, it also gives us greater ability and flexibility to actively manage the energy we consume with a goal of increasing profitability and energy efficiency. When such events occur, we may curtail our operations to avoid using power at increased rates. Although we do not receive significant compensation for curtailment, the dispatchable load of our bitcoin mining operations helps balance the 39 Table of Contents grid and provides electricity to communities when in need. The average price of direct energy we paid for our owned facilities for the three months ended March 31, 2025 was $0.04 per kilowatt hour (“kWh”). Three Months Ended March 31, 2025 2024 Owned Facilities Statistics Purchased energy costs per BTC (1) $ 35,728 $ 12,953 Supplemental Information Total BTC produced during the period, in whole BTC at owned facilities (2) 1,217 470 Average BTC per day, in whole BTC (2) 13.5 5.2 Purchased energy cost per kWh (3) $ 0.04 NM NM - Not meaningful (1) Purchased energy cost per BTC is calculated as the amounts paid to power providers for power consumed divided by the quantity of bitcoin produced during the period related to our owned mining operations. In addition to the impact of the April 2024 halving event, purchased energy costs increased due to broad-based increases in energy costs. (2) In 2024, the Company scaled its mining operations through acquisitions and deployment of additional infrastructure, resulting in an increase in its share of BTC block rewards. The growth was partially mitigated by the BTC halving event. (3) Purchased energy cost per kWh is calculated using the amounts paid to power providers for power consumed divided by the kWh consumed related to our owned bitcoin mining operations. In the first quarter of 2024, this metric was not meaningful as we were in the early stages of our transition to a vertically integrated operating model focused on owned infrastructure. This transition began in January 2024, when we commenced acquiring data centers to support owned mining operations, which initially represented a limited portion of our overall operations during the period. RESULTS OF OPERATIONS Three Months Ended March 31, 2025 Compared to the Three Months Ended March 31, 2024 Revenues Three Months Ended March 31, Change (in thousands) 2025 2024 $ Bitcoin (“BTC”) mining revenue $ 207,760 $ 138,841 $ 68,919 Other digital assets mining revenue 2,170 4,454 (2,284) Hosting services 1,151 20,775 (19,624) Other revenue 2,803 1,128 1,675 Revenues $ 213,884 $ 165,198 $ 48,686 Supplemental Information BTC produced during the period, in whole BTC (1) 2,286 2,811 (525) Average BTC per day, in whole BTC 25.4 30.9 (5.5) Average price of BTC mined (2) $ 93,317 $ 52,591 $ 40,726 Number of blocks won 666 368 298 Transaction fees as a percentage of total 1.4 % 7.0 % (5.6) % (1) Includes 60 and 171 bitcoin representing our share of the equity method investee, the ADGM entity, for the three months ended March 31, 2025 and 2024, respectively. 40 Table of Contents (2) Average price of BTC mined is calculated using BTC mining revenue divided by the bitcoin production, excluding our share of the bitcoin produced for the equity method investee, the ADGM entity. We generated revenues of $213.9 million for the three months ended March 31, 2025, compared to $165.2 million in the prior year period. The $48.7 million, or approximately 30%, increase in revenues was primarily driven by an increase in bitcoin mining revenue partially offset by a decrease in hosting services. The $68.9 million increase in bitcoin mining revenue was primarily driven by a 77% increase in the average bitcoin price, which contributed $90.7 million, partially offset by a $21.8 million decrease in bitcoin production due to halving. During the three months ended March 31, 2025 and 2024, revenue from hosting services was $1.2 million and $20.8 million, respectively, a decrease of $19.6 million due to the termination of various hosting agreements from the GC Data Center Acquisition during 2024. Costs and expenses Purchased energy, third party hosting and other energy and operating and maintenance costs Three Months Ended March 31, Change (in thousands) 2025 2024 $ Purchased energy costs $ 43,481 $ 6,088 $ 37,393 Third party hosting and other energy costs 68,183 69,566 (1,383) Operating and maintenance costs 19,794 15,814 3,980 Supplemental Information Cost per Petahash per day (1) $ 28.5 $ 38.1 $ (9.6) Purchased energy costs per BTC (2) $ 35,728 $ 12,953 $ 22,775 (1) Cost per Petahash per day is calculated using bitcoin mining costs attributable to purchased energy costs, third party hosting and other energy costs and operating and maintenance costs, divided by the daily average operational hashrate online during the period, excluding our share of the hashrate for the equity method investee, the ADGM Entity, and share of hashrate from our noncontrolling interest, by a factor of 1,000. (2) Purchased energy cost per BTC is calculated as the amounts paid to power providers for power consumed divided by the quantity of bitcoin produced during the period related to our owned mining operations. Purchased energy costs during the three months ended March 31, 2025 totaled $43.5 million compared to $6.1 million in the prior year period, an increase of $37.4 million or approximately 614%. Purchased energy costs consist of power expenses paid to power providers for power consumed related to our owned bitcoin mining operations. The increase was primarily driven by the expansion of our owned mining sites through acquisitions and the growth in our hashrate to 54.3 EH/s. Our Cost per Petahash per day improved to $28.5 from $38.1, or approximately 25%, compared to the prior year period despite a higher network difficulty due to an increase in global hashrate. For the three months ended March 31, 2025. Purchased energy cost per bitcoin for our owned mining sites was $35,728 compared to $12,953 in the prior year period. Third party hosting and other energy costs during the three months ended March 31, 2025 totaled $68.2 million compared to $69.6 million in the prior year period, a decrease of $1.4 million or approximately 2%. These costs consist of colocation services related to third party hosted sites and energy expenses related to mining other digital assets. The decrease was primarily due to a decrease in hosting related operating costs and unexpected equipment downtime in the prior year period, offset by an increase in energized miners at third party hosted facilities. Operating and maintenance costs during the three months ended March 31, 2025 totaled $19.8 million compared to $15.8 million in the prior year period, an increase of $4.0 million or approximately 25%. The increase in operating and maintenance costs was primarily due to an increase in shipping and warehouse fees and site repair and maintenance fees associated with our mining operations compared to the prior year period. 41 Table of Contents Refer to Note 2 – Summary of Significant Accounting Policies in the notes to our Condensed Consolidated Financial Statements for further information on our presentation change relating to our costs. General and administrative expenses General and administrative expenses were $85.9 million for the three months ended March 31, 2025, compared to $68.9 million in the prior year period. General and administrative expenses consist of stock based compensation, professional and legal fees and other people and office expenses. The $17.0 million, or approximately 25%, increase was primarily due to an increase in the scale of business and acquisitions, an increase in our employee headcount from 72 to 171 and an increase in professional fees as part of our strategic expansion. Stock based compensation decreased $3.0 million primarily due to the timing of grants. Restricted stock units awarded for 2023 performance were granted earlier during the three months ended March 31, 2024 compared to the grant of 2025 performance-based restricted stock units (“PSUs”). Depreciation and amortization Depreciation and amortization during the three months ended March 31, 2025 totaled $157.9 million compared to $81.6 million in the prior year prior. The $76.3 million, or approximately 94%, increase was primarily due to the deployment of additional mining rigs and an overall increased scale of business. Change in fair value of digital assets We recognized a loss on digital assets of $394.2 million for the three months ended March 31, 2025 compared to a gain of $488.8 million in the prior year period. The $883.0 million, or approximately 181%, decrease was primarily related to the change in bitcoin price from $93,354 to $82,534, from December 31, 2024 to March 31, 2025, respectively and the underlying digital assets held. As of March 31, 2025, we had 47,531 bitcoin, an increase of 174% compared to the prior year period. Change in fair value of derivative instrument We recognized a gain on the change in fair value of derivative instrument of $26.8 million for the three months ended March 31, 2025 compared to a loss of $15.3 million in the prior year period, to adjust the fair value of the commodity swap contract acquired in the GC Data Center Acquisition, which meets the definition of a derivative instrument and is measured each reporting period at fair value. The changes in fair value are primarily due to the movement in electricity forward curves prices during the respective periods. Taxes other than on income Taxes other than on income were $3.1 million for the three months ended March 31, 2025 compared to $2.5 million in the prior year period. Taxes other than on income consist primarily of property and sales and use taxes. Early termination expenses In the first quarter of 2024, we entered into termination and transition agreements with the operator from the GC Data Center Acquisition, for an early termination fee of $13.5 million. In addition, we entered into an agreement for the early termination of a data center hosting agreement with one of its customers, upon which we forgave an outstanding accounts receivable balance of $8.6 million. Research and development Research and development expenses were $9.3 million for the three months ended March 31, 2025 compared to $2.5 million in the prior year period. The $6.8 million, or approximately 277% increase, was primarily due to the increase in contractor costs, supplies, personnel, and related expenses for our mining and technology businesses. 42 Table of Contents Other income (loss) Change in fair value of digital assets - receivable, net We recognized a loss on digital assets - receivables, net of $116.1 million for the three months ended March 31, 2025, for the fair value recognized in connection with the lending agreements with various counterparties and collateralized bitcoin in connection with the lines of credit. There were no such activities in the prior year period. Equity in net earnings of unconsolidated affiliate During the three months ended March 31, 2025, we recorded our share of net loss for our 20% interest in the ADGM Entity of nearly zero, compared to an income of $1.3 million in the prior year period. Our share of the ADGM Entity’s operating results included earnings from the production of 60 bitcoin and approximately $3.1 million of depreciation and amortization during the three months ended March 31, 2025, whereas in the prior year period, our share of ADGM Entity’s operating results included earnings from production of 171 bitcoin, a $4.1 million impairment of property and equipment and approximately $2.6 million of depreciation and amortization. Interest income, interest expense and other Three Months Ended March 31, Change (in thousands) 2025 2024 $ Interest income $ 11,995 $ 2,573 $ 9,422 Interest expense (9,941) (1,256) (8,685) Other 2,474 2,944 (470) Interest income increased by $9.4 million compared to the prior year period, primarily due to a higher average balance of cash and cash equivalents and interest earned on loaned bitcoin. Interest expense increased for the three months ended March 31, 2025 by $8.7 million primarily due to the Convertible Notes and the Line of Credit. Other of $2.5 million for the three months ended March 31, 2025 primarily related to a net gain on investments of $12.4 million, partially offset by a $7.7 million loss on bitcoin derivative settlements and an adjustment to the allowance for credit loss related to additional bitcoin collateralized during the quarter. Income tax benefit (expense) We recorded income tax benefit of $119.2 million for the three months ended March 31, 2025 compared to an income tax expense of $38.1 million in the prior year period. The $119.2 million income tax benefit primarily reflects changes in pretax book income and loss during the periods, driven largely by fair value adjustments related to digital assets. The income tax benefit was partially offset by the prior year’s release of the valuation allowance. NON-GAAP FINANCIAL MEASURES In order to provide a more comprehensive understanding of the information used by our management team in financial and operational decision-making, we supplement our Condensed Consolidated Financial Statements that have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) with the non-GAAP financial measure of Adjusted EBITDA. We define Adjusted EBITDA as (a) GAAP net income (loss) attributable to common stockholders plus (b) adjustments to add back the impacts of (1) interest, (2) income taxes, (3) depreciation and amortization and (4) adjustments for non-cash and/or non-recurring items, which currently include (i) stock compensation expense, (ii) change in fair value of derivative instrument, (iii) net gain on investments and (iv) early termination expenses. Management uses Adjusted EBITDA, along with the supplemental information provided herein, as a means of understanding, managing and evaluating business performance and to help inform operating decision-making. We rely primarily on our Condensed Consolidated Financial Statements to understand, manage and evaluate our financial performance and uses non-GAAP financial measures only supplementally. 43 Table of Contents We believe that Adjusted EBITDA is a useful measure to us and to our investors because it excludes certain financial, capital structure and non-cash items that we do not believe directly reflect our core operations and may not be indicative of our recurring operations, in part because they may vary widely across time and within our industry independent of the performance of our core operations. We believe that excluding these items enables us to more effectively evaluate our performance period-over-period and relative to our competitors. Adjusted EBITDA is not a recognized financial measure under GAAP. When analyzing our operating results, investors should use Adjusted EBITDA in addition to, but not as an alternative for, the most directly comparable financial results calculated and presented in accordance with GAAP. Because our calculation of Adjusted EBITDA may differ from that of other companies, our presentation of this measure may not be comparable to similarly titled measures of other companies. Certain prior period information has been reclassified to conform to the current period presentation. The following table provides a reconciliation of GAAP net income (loss) to Adjusted EBITDA: Three Months Ended March 31, (in thousands) 2025 2024 Net income (loss) attributable to common stockholders $ (533,199) $ 337,173 Interest income, net (2,054) (1,317) Income tax expense (benefit) (119,172) 38,051 Depreciation and amortization (1) 161,002 84,185 EBITDA (493,423) 458,092 Stock based compensation expense 49,115 51,913 Change in fair value of derivative instrument (26,828) 15,252 Net gain on investments (2) (12,429) (5,236) Early termination expenses — 22,097 Adjusted EBITDA $ (483,565) $ 542,118 (1) Includes approximately $3.1 million and $2.6 million of depreciation and amortization from our share in the results of our equity method investee, the ADGM entity, reported in “Equity in net earnings of unconsolidated affiliate” for the three months ended March 31, 2025 and 2024, respectively, on the Condensed Consolidated Statements of Operations. Additionally, for the three months ended March 31, 2024, depreciation and amortization includes $0.6 million amortization that was previously classified within general and administrative on the Condensed Consolidated Statements of Operations. (2) Net gain on investments is reported in “Other” on the Condensed Consolidated Statements of Operations. Refer to Note 9 – Investments in the notes to our Condensed Consolidated Financial Statements for further information. FINANCIAL CONDITION AND LIQUIDITY The following table presents a summary of our cash flow activity for the three months ended March 31, 2025 and 2024: For the Three Months Ended March 31, (in thousands) 2025 2024 Net cash used in operating activities $ (215,488) $ (88,340) Net cash used in investing activities (209,846) (416,591) Net cash provided by financing activities 229,778 471,886 Net decrease in cash, cash equivalents and restricted cash (195,556) (33,045) Cash, cash equivalents and restricted cash — beginning of period 403,771 357,313 Cash, cash equivalents and restricted cash — end of period $ 208,215 $ 324,268 44 Table of Contents Cash flows for the three months ended March 31, 2025: Cash, cash equivalents and restricted cash totaled $208.2 million at March 31, 2025, a decrease of $195.6 million from December 31, 2024. Cash flows from operating activities resulted in a use of funds of $215.5 million, as net income (loss), adjusted for non-cash and non-operating items, in the amount of $34.7 million was offset by the use of cash of $250.2 million from changes in operating assets and liabilities. When we produce and hold bitcoin on our Condensed Consolidated Balance Sheets, we exclude such bitcoin from our operating cash flows. If we monetize bitcoin in the future, those proceeds are reported as cash flows from investing activities. Changes in cash flows from operating assets and liabilities were driven by a use of funds associated with changes in digital assets of $212.7 million due to the non-cash adjustment for bitcoin mining revenues and deposits of $6.6 million resulting from increased deposits associated with hosting agreements and renewable energy credits. Cash flows from investing activities resulted in a use of funds of $209.8 million, primarily resulting from the use of funds for advances to vendors of $97.4 million, purchase of property and equipment of $38.9 million, the purchase of 340 bitcoin for $27.1 million and payment of $36.3 million to acquire the Wind Farm for an additional 114 MW of nameplate capacity. The use of funds was partially offset by proceeds from the sale of digital assets of $8.7 million and the sale of property and equipment of $3.5 million. Cash flows from financing activities resulted in a source of cash of $229.8 million, primarily from the periodic issuance of common stock under our 2024 ATM of $100.1 million and securing an additional $150.0 million line of credit. As of March 31, 2025, the facility was fully utilized. Bitcoin holdings: At March 31, 2025, we held a total of 47,531 bitcoin, including 14,269 loaned and collateralized bitcoin, on our Condensed Consolidated Balance Sheets with a total fair value of $3.9 billion. The fair value of a single bitcoin was approximately $82,534 at March 31, 2025. Approximately 7,377 of our total bitcoin holdings were loaned to third parties to generate additional return and 6,892 bitcoin were utilized as collateral for borrowings. Loaned and collateralized bitcoin are classified as “Digital asset - receivables, net” on the Condensed Consolidated Balance Sheets with a carrying value of $1.2 billion. Consistent with our HODL strategy, the remaining 33,263 unrestricted bitcoin were classified as long-term digital assets on the Condensed Consolidated Balance Sheets with a fair value of $2.7 billion. Our holdings as of March 31, 2025 excluded 4 bitcoin held by our equity method investee, pending dividend to us. We expect that our future bitcoin holdings will generally increase but will fluctuate from time to time, both in number of bitcoin held and fair value in U.S. dollars, depending upon operating and market conditions. We intend to add to our bitcoin holdings primarily through our production activities and from time to time purchases. As a result of our adoption of the aforementioned strategy, we anticipate funding our operating and investing activities principally from available cash and cash equivalents and from our financing activities. At-the-Market Offering Programs and Proceeds: As of March 31, 2025, we sold 5,428,548 shares of common stock for an aggregate purchase price of $100.1 million, net of commission and offering expenses of $2.6 million, pursuant to the 2024 ATM, which was terminated and replaced with the 2025 ATM on March 28, 2025. As of March 31, 2025, approximately $2.0 billion of our common stock remained available for issuance and sale pursuant to the 2025 ATM. Liquidity and Capital Resources: Cash and cash equivalents, excluding restricted cash, totaled $196.2 million and the fair value of digital asset holdings, including loaned and collateralized bitcoin, was $3.9 billion at March 31, 2025. The combined value of cash and cash equivalents, excluding restricted cash, and digital assets, including loaned and collateralized bitcoin, totaled nearly $4.1 billion as of March 31, 2025. We expect that Staff Accounting Bulletin (“SAB”) 122’s rescission of SAB 121, which required an entity to recognize a liability and corresponding asset for its obligation to safeguard crypto-assets, will increase commercial banks’ activity in our sector and provide us with expanded access to traditional financing, such as debt financing, project financing and other capital. Our access to financing sources on terms acceptable to us or at all is subject to market and other conditions. 45 Table of Contents While we classify our digital assets and digital asset receivables as long-term, consistent with the announced HODL strategy, both asset types are readily convertible to cash, and therefore considered a liquid resource. We expect to have sufficient liquidity, including cash on hand and access to public capital markets, to support ongoing operations in the next 12 months and beyond. We will continue to seek to fund our business activities, and especially our growth opportunities, through the public capital markets, primarily through periodic equity issuances using our at-the-market facilities. The risks to our liquidity outlook would include events that materially diminish our access to capital markets and/or the value of our bitcoin holdings and production capabilities, including: • Failure to effectively execute our growth strategies; • Declines in bitcoin prices and/or production, as well as impacts from bitcoin halving events, which would impact both the value of our bitcoin holdings and our ongoing profitability; • Significant increases in electricity costs if these cost increases were not accompanied by increases in the price of bitcoin, as this would also reduce profitability; • Deteriorating macroeconomic conditions, including the impacts of inflation, high interest rates, tariffs and trade wars, a prolonged recession, as well as instability in the banking system; and • Failure to access financing on terms acceptable to us or at all. CONTRACTUAL OBLIGATIONS AND COMMITMENTS We contract with service providers for hosting our equipment and operational support in data centers where our equipment is deployed. Under these arrangements, we expect to pay at a minimum approximately (i) $161.9 million during the remainder of calendar year 2025 and (ii) $306.2 million in total payments during the calendar years 2026 through 2028. Under certain arrangements, we are required to pay variable pass-through power and service fees in addition to the estimated minimum amounts. As of March 31, 2025, we had a remaining commitment of approximately $23.5 million due for the purchase of miners and other mining equipment per our purchase agreements, to be paid in periodic installments throughout 2025. Assuming the remaining outstanding Convertible Notes are not converted into common stock, repurchased or redeemed prior to maturity, (i) remaining interest payments of approximately $0.5 million and $4.8 million through the remainder of the calendar year 2025 for the 1.0% Convertible Senior Notes due 2026 (the “December 2026 Notes”) and the 2.125% Convertible Senior Notes due 2031 (the “September 2031 Notes”), respectively, (ii) annual interest payments of approximately $0.7 million in the 2026 calendar year in connection with the December 2026 Notes and annual interest payments of approximately $6.4 million in each calendar year from 2026 through 2031 in connection with the September 2031 Notes and (iii) principal for each of the Convertible Notes upon maturity, for a total of $2.3 billion, will be payable under the terms of the Convertible Notes. Refer to Note 14 – Debt in the notes to our Condensed Consolidated Financial Statements, for further information. We have operating and finance lease obligations related to land and office buildings. We expect to make payments of $1.8 million and $0.2 million related to operating and finance leases, respectively, for the remainder of 2025 and $65.5 million and $89.6 million related to operating and finance leases, respectively, thereafter. Refer to Note 15 – Leases in the notes to our Condensed Consolidated Financial Statements, for further information. On March 11, 2025, we secured an additional line of credit for $150.0 million, collateralized by 3,250 of our bitcoin holdings. We used the funds for general corporate purposes. As of March 31, 2025, the facility was fully utilized. 46 Table of Contents CRITICAL ACCOUNTING ESTIMATES We are not aware of any material changes to our critical accounting estimates set forth under the caption “Critical Accounting Estimates” in Part II, Item 7 of our Annual Report, which is incorporated herein by reference. RECENT ACCOUNTING PRONOUNCEMENTS See Note 2 – Summary of Significant Accounting Policies to our Condensed Consolidated Financial Statements for a discussion of recent accounting standards and pronouncements. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We are not aware of any material changes to our disclosures regarding market risks in connection with our bitcoin holdings. Refer to Part II, Item 7A of our Annual Report, which is incorporated herein by reference.