MARA Holdings, Inc. 10-Q

ITEM 1. FINANCIAL STATEMENTS MARA HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS June 30, December 31, 2025 2024 (in thousands, except share and per share data) (unaudited) ASSETS Current assets: Cash and cash equivalents $ 109,475 $ 391,771 Restricted cash 12,000 12,000 Digital assets, current portion 2,259 4,327 Other receivables 31,026 6,345 Deposits 19,428 18,778 Derivative instrument, current portion 21,046 1,542 Prepaid expenses and other current assets 41,221 35,610 Total current assets 236,455 470,373 Digital assets, net of current portion 3,686,882 3,223,989 Digital assets - receivable, net 1,646,478 960,057 Property and equipment, net 1,634,053 1,549,491 Advances to vendors 6,261 121,298 Investments 134,259 111,493 Long-term deposits 211,345 240,651 Long-term prepaids 12,748 14,221 Operating lease right-of-use assets 32,996 16,874 Derivative instrument, net of current portion 35,040 7,405 Goodwill 82,776 82,751 Intangible assets, net 2,150 2,714 Total long-term assets 7,484,988 6,330,944 TOTAL ASSETS $ 7,721,443 $ 6,801,317 LIABILITIES AND EQUITY Current liabilities: Accounts payable $ 9,837 $ 12,556 Accrued expenses 56,803 76,887 Line of credit, current portion 350,000 — Operating lease liabilities, current portion 1,052 239 Finance lease liability, current portion 173 168 Other current liabilities 23,155 5,347 Total current liabilities 441,020 95,197 See accompanying notes to the Condensed Consolidated Financial Statements 1 Table of Contents Notes payable 2,250,546 2,246,578 Line of credit, net of current portion — 200,000 Operating lease liabilities, net of current portion 39,722 22,977 Finance lease liability, net of current portion 3,817 3,709 Deferred tax liabilities 178,083 88,503 Other long-term liabilities 12,043 8,411 Total long-term liabilities 2,484,211 2,570,178 Commitments and Contingencies (Note 15) Equity: Preferred stock, par value $ 0.0001 per share, 50,000,000 shares authorized; no shares issued and outstanding at June 30, 2025 and December 31, 2024 — — Common stock, par value $ 0.0001 per share, 800,000,000 shares authorized; 362,337,906 shares and 340,258,453 shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively 36 34 Additional paid-in capital 4,542,968 4,155,386 Accumulated earnings (deficit) 248,649 ( 26,387 ) Total stockholders’ equity attributable to MARA 4,791,653 4,129,033 Noncontrolling interest 4,559 6,909 Total equity 4,796,212 4,135,942 TOTAL LIABILITIES AND EQUITY $ 7,721,443 $ 6,801,317 See accompanying notes to the Condensed Consolidated Financial Statements 2 Table of Contents MARA HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) Three Months Ended June 30, Six Months Ended June 30, (in thousands, except share and per share data) 2025 2024 2025 2024 Revenues $ 238,485 $ 145,139 $ 452,369 $ 310,337 Costs and operating expenses (income) Purchased energy costs 41,730 26,113 85,211 32,201 Third-party hosting and other energy costs 69,029 54,020 137,212 123,586 Operating and maintenance costs 22,362 15,595 42,156 31,409 General and administrative 92,948 53,492 178,813 122,398 Depreciation and amortization 161,741 107,508 319,638 189,110 Change in fair value of digital assets ( 846,027 ) 147,999 ( 451,865 ) ( 340,808 ) Change in fair value of derivative instrument ( 20,311 ) ( 38,251 ) ( 47,139 ) ( 22,999 ) Impairment of assets 26,253 — 26,253 — Taxes other than on income 2,437 1,555 5,532 4,065 Early termination expenses — 5,660 — 27,757 Research and development 8,546 3,845 17,844 6,311 Total costs and operating expenses (income) ( 441,292 ) 377,536 313,655 173,030 Operating income (loss) 679,777 ( 232,397 ) 138,714 137,307 Other income Change in fair value of digital assets - receivable, net 346,547 — 230,480 — Interest income 9,631 2,308 21,626 4,881 Interest expense ( 12,835 ) ( 1,369 ) ( 22,776 ) ( 2,625 ) Equity in net earnings of unconsolidated affiliate ( 902 ) 49 ( 915 ) 1,308 Other ( 5,509 ) 93 ( 3,035 ) 3,037 Total other income 336,932 1,081 225,380 6,601 Income (loss) before income taxes 1,016,709 ( 231,316 ) 364,094 143,908 Income tax benefit (expense) ( 208,504 ) 31,657 ( 89,332 ) ( 6,394 ) Net income (loss) $ 808,205 $ ( 199,659 ) $ 274,762 $ 137,514 Less: net loss attributable to noncontrolling interest 30 — 274 — Net income (loss) attributable to common stockholders $ 808,235 $ ( 199,659 ) $ 275,036 $ 137,514 Net income (loss) per share of common stock - basic $ 2.29 $ ( 0.72 ) $ 0.79 $ 0.51 Weighted average shares of common stock - basic 352,901,683 278,674,506 348,524,166 268,899,932 Net income (loss) per share of common stock - diluted $ 1.84 $ ( 0.72 ) $ 0.64 $ 0.50 Weighted average shares of common stock - diluted 440,912,159 278,674,506 436,271,805 277,959,660 See accompanying notes to the Condensed Consolidated Financial Statements 3 Table of Contents MARA HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (unaudited) For the Three Months Ended June 30, 2025 Common Stock Additional Paid-in Capital Accumulated Earnings (Deficit) Total Stockholders’ Equity Noncontrolling Interest Total Equity (in thousands, except share data) Number Amount Balance at March 31, 2025 346,279,403 $ 34 $ 4,284,279 $ ( 559,586 ) $ 3,724,727 $ 3,953 $ 3,728,680 Stock-based compensation, net of tax withholding 2,157,781 — 54,656 — 54,656 — 54,656 Issuance of common stock, net of offering costs 14,977,998 2 219,201 — 219,203 — 219,203 Repurchase of shares in settlement of restricted stock ( 1,077,276 ) — ( 15,168 ) — ( 15,168 ) — ( 15,168 ) Contribution from noncontrolling interest — — — — — 636 636 Net income (loss) — — — 808,235 808,235 ( 30 ) 808,205 Balance at June 30, 2025 362,337,906 $ 36 $ 4,542,968 $ 248,649 $ 4,791,653 $ 4,559 $ 4,796,212 For the Six Months Ended June 30, 2025 Common Stock Additional Paid-in Capital Accumulated Earnings (Deficit) Total Stockholders’ Equity Noncontrolling Interest Total Equity (in thousands, except share data) Number Amount Balance at December 31, 2024 340,258,453 $ 34 $ 4,155,386 $ ( 26,387 ) $ 4,129,033 $ 6,909 $ 4,135,942 Stock-based compensation, net of tax withholding 3,898,871 — 103,771 — 103,771 — 103,771 Issuance of common stock, net of offering costs 20,406,546 2 319,341 — 319,343 — 319,343 Repurchase of shares in settlement of restricted stock ( 2,225,964 ) — ( 35,530 ) — ( 35,530 ) — ( 35,530 ) Distribution to noncontrolling interest — — — — — ( 2,076 ) ( 2,076 ) Net income (loss) — — — 275,036 275,036 ( 274 ) 274,762 Balance at June 30, 2025 362,337,906 $ 36 $ 4,542,968 $ 248,649 $ 4,791,653 $ 4,559 $ 4,796,212 See accompanying notes to the Condensed Consolidated Financial Statements 4 Table of Contents For the Three Months Ended June 30, 2024 Common Stock Additional Paid-in Capital Accumulated Deficit Total Stockholders’ Equity Noncontrolling Interest Total Equity (in thousands, except share data) Number Amount Balance at March 31, 2024 268,944,172 $ 27 $ 2,707,333 $ ( 230,467 ) $ 2,476,893 $ — $ 2,476,893 Stock-based compensation, net of tax withholding 1,008,225 — 27,049 — 27,049 — 27,049 Issuance of common stock, net of offering costs 17,472,602 1 344,949 — 344,950 — 344,950 Repurchase of shares in settlement of restricted stock ( 378,420 ) — ( 6,578 ) — ( 6,578 ) — ( 6,578 ) Net loss — — — ( 199,659 ) ( 199,659 ) — ( 199,659 ) Balance at June 30, 2024 287,046,579 $ 28 $ 3,072,753 $ ( 430,126 ) $ 2,642,655 $ — $ 2,642,655 For the Six Months Ended June 30, 2024 Common Stock Additional Paid-in Capital Accumulated Deficit Total Stockholders’ Equity Noncontrolling Interest Total Equity (in thousands, except share data) Number Amount Balance at December 31, 2023 242,829,391 $ 24 $ 2,183,537 $ ( 567,640 ) $ 1,615,921 $ — $ 1,615,921 Stock-based compensation, net of tax withholding 3,320,993 — 78,090 — 78,090 — 78,090 Issuance of common stock, net of offering costs 42,135,953 4 834,239 — 834,243 — 834,243 Repurchase of shares in settlement of restricted stock ( 1,239,758 ) — ( 23,113 ) — ( 23,113 ) — ( 23,113 ) Net income — — — 137,514 137,514 — 137,514 Balance at June 30, 2024 287,046,579 $ 28 $ 3,072,753 $ ( 430,126 ) $ 2,642,655 $ — $ 2,642,655 See accompanying notes to the Condensed Consolidated Financial Statements 5 Table of Contents MARA HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) Six Months Ended June 30, (in thousands) 2025 2024 CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 274,762 $ 137,514 Adjustments to reconcile net income to net cash used in operating activities: Depreciation and amortization 319,638 189,110 Deferred tax expense 89,580 5,556 Change in fair value of digital assets and digital assets - receivable, net ( 682,345 ) ( 340,808 ) Impairment of assets 26,253 — Net gain on investments ( 12,429 ) ( 5,236 ) Stock-based compensation 103,771 80,245 Change in fair value of derivative instrument ( 47,139 ) ( 22,999 ) Early termination expenses — 27,757 Equity in net earnings of unconsolidated affiliate 915 ( 1,308 ) Other adjustments from operations, net 4,260 890 Changes in operating assets and liabilities ( 456,197 ) ( 274,232 ) Net cash used in operating activities ( 378,931 ) ( 203,511 ) CASH FLOWS FROM INVESTING ACTIVITIES Advances to vendors ( 108,392 ) ( 465,277 ) Acquisition, net of cash acquired ( 36,369 ) ( 275,880 ) Purchase of property and equipment ( 157,771 ) ( 26,309 ) Proceeds from sale of property and equipment 3,674 — Proceeds from sale of digital assets 14,252 113,701 Purchase of digital assets ( 27,131 ) ( 19,026 ) Investment in equity method investments ( 5,828 ) ( 13,791 ) Purchase of equity investments ( 19,445 ) ( 8,005 ) Net cash used in investing activities ( 337,010 ) ( 694,587 ) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issuance of common stock, net of issuance costs 319,343 834,243 Repurchase of shares in settlement of restricted stock ( 35,530 ) ( 23,113 ) Line of credit 150,000 — Repayment of finance lease liabilities ( 168 ) ( 163 ) Cash paid for shares withheld for taxes — ( 2,155 ) Net cash provided by financing activities 433,645 808,812 Net decrease in cash, cash equivalents and restricted cash ( 282,296 ) ( 89,286 ) Cash, cash equivalents and restricted cash — beginning of period 403,771 357,313 Cash, cash equivalents and restricted cash — end of period $ 121,475 $ 268,027 See accompanying notes to the Condensed Consolidated Financial Statements 6 Table of Contents MARA HOLDINGS, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (unaudited) NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS MARA Holdings, Inc. (together with its subsidiaries, the “Company” or “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. The Company also offers advanced technology solutions to optimize data center operations, including next-generation liquid immersion cooling systems. The Company is primarily focused on computing for, acquiring, and holding bitcoin as a long-term investment. The term “Bitcoin” with a capital “B” is used to denote the Bitcoin protocol which implements a highly available, public, permanent, and decentralized ledger. The term “bitcoin” with a lower case “b” is used to denote the digital asset, bitcoin. NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of the Company and its wholly owned and controlled subsidiaries. All significant intercompany accounts and transactions, including any noncontrolling interest, have been eliminated in consolidation. The Company has prepared the Condensed Consolidated Financial Statements in accordance with generally accepted accounting principles in the United States (“GAAP”) and regulations of the U.S. Securities and Exchange Commission (the “SEC”) applicable to interim financial information, which permit the omission of certain information to the extent it has not changed materially since the latest annual financial statements. These Condensed Consolidated Financial Statements reflect all adjustments, consisting only of normal recurring adjustments, which, in the opinion of management, are necessary to present fairly the financial position, results of operations and cash flows of the Company for the periods presented. The results of operations for the interim periods are not necessarily indicative of the results to be expected for any future fiscal periods in 2025 or for the full year ending December 31, 2025. These financial statements should be read in conjunction with the financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 3, 2025. Use of Estimates and Assumptions The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The most significant accounting estimates inherent in the preparation of the Company’s financial statements include fair value of assets acquired and liabilities assumed in a business combination, estimates associated with the useful lives of property and equipment, realization of long-lived assets, impairment of goodwill, valuation of derivative instruments, deferred income taxes, unrealized tax positions, measurement of digital assets and related receivables and loss contingencies. Actual results could differ from those estimates. Reclassifications Effective the first quarter of 2025, the Company made certain changes to the presentation of its Condensed Consolidated Statements of Operations to provide greater transparency and improve the usefulness of its financial reporting. Specifically, the Company disaggregated cost of revenue and certain operating expenses into the following new line items: “Purchased energy costs,” “Third-party hosting and other energy costs” and “Operating and maintenance costs.” In addition, cost of depreciation and amortization and amortization of intangibles have been aggregated into a single line item titled “Depreciation and amortization.” The Company also began separately F-7 Table of Contents presenting expenses related to “Taxes other than on income,” which were previously included within general and administrative expenses. These changes are intended to provide more meaningful information regarding the nature of the Company’s operating expenses and to align the presentation with the evolving nature of the Company’s operations. Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications have no effect on the reported financial position, results of operations, or cash flows. The impact on any prior period disclosures were immaterial. Segment Information Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”), or decision–making group, in deciding how to allocate resources and assess performance. The Company’s CODM group is composed of the Chief Executive Officer and Chief Financial Officer. The Company operates as one operating segment and uses net income as a measure of profit or loss on a consolidated basis in making decisions regarding resource allocation and performance assessment. Additionally, the Company’s CODM regularly reviews the Company’s expenses on a consolidated basis. The financial metrics used by the CODM help make key operating decisions, such as determination of digital asset purchases and significant acquisitions and allocation of budget between operating costs, general and administrative and research and development expenses. Cash and Cash Equivalents The Company considers all highly liquid investments and other short-term investments with a maturity of three months or less, when purchased, to be cash equivalents. The Company maintains cash and cash equivalent balances at financial institutions that are insured by the Federal Deposit Insurance Corporation (“FDIC”). During March 2023, the Company began to participate, to the extent practicable, in insured cash sweep programs which “sweep” its deposits across multiple FDIC insured accounts, each with deposits of no more than $250.0 thousand. As of June 30, 2025, substantially all of the Company’s cash and cash equivalents were FDIC insured. Restricted Cash Restricted cash as of June 30, 2025 principally represented those cash balances that support commercial letters of credit and are restricted from withdrawal. Digital Assets The Company holds bitcoin for long-term investment purposes as a bitcoin investment approach, retains all bitcoin mined in its operations, and may periodically make strategic open market purchases of bitcoin. The Company seeks to generate returns on its holdings, as bitcoin price appreciates and actively pursues risk-adjusted return opportunities to generate cash flows that supports its operating expenses. As a result, bitcoin digital assets are included in non-current assets on the Condensed Consolidated Balance Sheets due to the Company’s intent to retain and hold bitcoin. Other digital assets are held with the intent to fund operating expenses and are included in current assets on the Condensed Consolidated Balance Sheets. In addition, digital assets that are loaned, actively managed or pledged as collateral are reported as “Digital assets - receivable, net” and classified as long-term assets on the Condensed Consolidated Balance Sheets, consistent with the Company’s intent to retain all bitcoin under its bitcoin investment approach. Proceeds from the sale of digital assets are included within investing activities in the accompanying Condensed Consolidated Statement of Cash Flows. Following the adoption of Accounting Standards Update (“ASU”) 2023-08, Accounting for and Disclosure of Crypto Assets , effective January 1, 2023, the Company measures digital assets at fair value with changes recognized on the Condensed Consolidated Statements of Operations, in accordance with ASC 350-60 - Intangibles - Goodwill and Other - Crypto Assets (“ASC 350-60”). The Company tracks its cost basis of digital assets in accordance with the first-in-first-out method of accounting. Refer to Note 5 – Digital Assets, for further information. F-8 Table of Contents Digital Assets - Receivable, net The Company lends digital assets to counterparties under fixed term loans. In addition, the Company has pledged bitcoin as collateral for the Line of Credit (as defined below). Digital asset receivables that do not have a prespecified maturity date are repayable at the Company’s option, subject to notice between three and 35 business days. While the loan is outstanding, the borrower has the right and the ability to use the digital assets at its discretion, including the ability to sell or pledge the borrowed digital assets to third parties. At the conclusion of the loan, the borrower is obligated to return the same type and quantity of digital assets as those lent by the Company. The digital asset receivables are initially measured upon transfer at fair value and subsequently remeasured at fair value at the end of each reporting period. The changes in fair value are recognized on the Condensed Consolidated Statements of Operations, in accordance with ASC 350-60. A loan fee is accrued daily based on the amount owing, paid on a monthly basis consistent with each loan’s terms. Additionally, the Company established a separately managed account (“SMA”) with an external full-service advisor and transferred an allotted amount of the Company’s bitcoin holdings to be actively managed under such agreement. The SMA is managed within defined parameters intended to generate returns while limiting downside risk, and it maintains liquidity with short-term notice. Similar to bitcoin loaned or pledged as collateral, bitcoin transferred to the SMA is initially measured at fair value upon transfer and subsequently remeasured at fair value at the end of each reporting period. The digital asset receivable balance is evaluated for possible credit losses, in accordance with ASC 326 - Financial Instruments - Credit Losses . The allowance for credit losses on digital assets receivables under the current expected credit loss (“CECL”) model is determined by utilizing the profitability of default (“PD”) loss given default (“LGD”) approach. In order to apply the PD LGD approach, management considers the remaining expected life of the loans and forecasts of future economic conditions. Allowance for credit losses are included in “Other” on the Condensed Consolidated Statements of Operations. Refer to Note 5 – Digital Assets, “Digital assets - receivable, net” for further information. Other Receivable The Company acquired accounts receivable as a result of its acquisition of GC Data Center Equity Holdings, LLC on January 12, 2024 (the “GC Data Center Acquisition”), which consist of trade receivables. The Company provides an allowance for credit losses equal to the estimated uncollectible amounts, based on historical and customer specific experience and current economic and market conditions. The allowance for credit losses was $ 8.6 million as of June 30, 2025. Derivatives The Company enters into derivative contracts to manage its exposure to fluctuations in the price of bitcoin and energy costs and not for any other purpose. In addition, the Company evaluates its financing and service arrangements to determine whether certain arrangements contain features that qualify as embedded derivatives requiring bifurcation in accordance with ASC 815 - Derivatives and Hedging . Embedded derivatives that are required to be bifurcated from the host instrument or arrangement are accounted for and valued as separate financial instruments. There were no embedded derivatives requiring separation from the host instrument as of June 30, 2025 and December 31, 2024. The Company does not elect to designate derivatives as hedges for accounting purposes and, as such, records derivatives at fair value, with subsequent changes in fair value and settlements recognized in earnings. The Company classifies derivative assets or liabilities on the Condensed Consolidated Balance Sheets as current or non-current based on whether settlement of the instrument could be required within 12 months of the balance sheet date and for derivatives with multiple settlements, based on the term of the contract. Bitcoin Derivatives From time to time the Company enters into derivative contracts to mitigate bitcoin market pricing volatility risk. During the three and six months ended June 30, 2025, the Company recorded a $ 0.8 million gain and $ 7.0 million F-9 Table of Contents loss, respectively, on derivatives as a non-operating expense on the Condensed Consolidated Statements of Operations, settled through bitcoin. As of June 30, 2025 and December 31, 2024, the Company had various derivative instruments outstanding to mitigate bitcoin market pricing volatility risk. Energy Derivatives The Company acquired a commodity swap contract as a result of the GC Data Center Acquisition on January 12, 2024. The commodity swap contract hedges price variability in electricity purchases and expires on December 31, 2027. The commodity swap contract meets the definition of a derivative due to terms that provide for net settlement. During the three months ended June 30, 2025, the Company modified the commodity swap contract that had the effect of reducing the contracted fixed electricity purchase cost and resulted in an $ 8.2 million adjustment included in the “Change in fair value of derivative instrument” on the Condensed Consolidated Statements of Operations. As of June 30, 2025, the estimated fair value of the Company’s derivative asset instrument was $ 56.1 million, estimated using observable market-based inputs classified under Level 2 of the fair value hierarchy. The significant assumptions used in the discounted cash flow model to estimate fair value include the discount rate and electricity forward curves. Accordingly, the Company records the “ Change in fair value of derivative instrument ” on the Condensed Consolidated Statements of Operations. The following table presents changes in fair value of the derivative asset instrument: (in thousands) Balance at December 31, 2024 $ 8,947 Change in fair value of derivative instrument 47,139 Balance at June 30, 2025 $ 56,086 For the three months ended June 30, 2025, the Company recorded $ 20.3 million as the “Change in fair value of the derivative instrument” on the Condensed Consolidated Statements of Operations. Property and Equipment Property and equipment are stated at cost, net of accumulated depreciation and impairment, as applicable. Property and equipment acquired through business combinations are measured at fair value at the acquisition date. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. The Company’s property and equipment is primarily composed of digital asset mining rigs, which are largely homogeneous and have approximately the same useful lives. Accordingly, the Company utilizes the group method of depreciation for its digital asset mining rigs. The Company will update the estimated useful lives of its digital asset mining server group periodically if information on the operations of the mining equipment indicates changes are required. The Company will assess and adjust the estimated useful lives of its mining equipment when there are indicators that the productivity of the mining assets is longer or shorter than the assigned estimated useful lives. Investments Investments, which may be made from time-to-time for strategic reasons, are included in non-current assets on the Condensed Consolidated Balance Sheets. Refer to Note 8 – Investments, for further information. Equity Method Investments The Company accounts for investments in which it owns between 20% and 50% of the common stock and has the ability to exercise significant influence, but not control, over the investee using the equity method of accounting in accordance with ASC 323 - Equity Method Investments and Joint Ventures . Under the equity method, an investor F-10 Table of Contents initially records its investment in the investee at cost and adjusts the carrying amount of its investment to recognize its proportionate share of the earnings or losses of the investee after the date of investment. Other Investments Investments in which the Company does not have the ability to exercise significant influence and does not have readily determinable fair values, are recorded at cost minus impairment, plus or minus changes from observable price changes in orderly transactions for identical or similar investments of the same issuer, in accordance with the measurement alternative described in ASC 321 - Investments – Equity Securities (“ASC 321”). As part of the Company’s policy to maximize return on strategic investment opportunities, while preserving capital and limiting downside risk, the Company may at times enter into equity investments or Simple Agreements for Future Equity (“SAFE”). The nature and timing of the Company’s investments will depend on available capital at any particular time and the investment opportunities identified and available to the Company. However, the Company generally does not make investments for speculative purposes and does not intend to engage in the business of making investments. Leases The Company determines if an arrangement contains a lease at inception based on whether or not the Company has the right to control the asset during the contract period and other facts and circumstances. At lease inception, the Company determines the lease classification as either an operating or finance lease, with classification effecting the expense recognition on the Condensed Consolidated Statements of Operations. For leases with terms longer than 12 months, a lease liability is recorded on the Company’s Condensed Consolidated Balance Sheets for the present value of its fixed minimum payment obligations over the lease term, including renewal extension options, and a corresponding right-of-use (“ROU”) asset equal to the initial lease liability is recorded, adjusted for any prepayments, indirect costs and lease incentives, as well as adjustments to reflect favorable or unfavorable terms of an acquired lease when compared to market terms at the time of an acquisition. Refer to Note 14 – Leases, for further information. Goodwill Goodwill represents the excess of the purchase price over the fair value of the net assets acquired in a business combination. Goodwill is not subject to amortization, and instead, assessed for impairment annually at the end of each fiscal year, or more frequently when events or changes in circumstances indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying amount in accordance with ASC 350 - Intangibles - Goodwill and Other . The Company has the option to first assess qualitative factors to determine whether events or circumstances indicate it is more likely than not that the fair value of a reporting unit is greater than its carrying amount, in which case a quantitative impairment test is not required. As provided for by ASU 2017-04, Simplifying the Test for Goodwill Impairment , the quantitative goodwill impairment test is performed by comparing the fair value of the reporting unit with its carrying amount, including goodwill. If the fair value of the reporting unit exceeds its carrying amount, goodwill is not impaired. An impairment loss is recognized for any excess of the carrying amount of the reporting unit over its fair value up to the amount of goodwill allocated to the reporting unit. Income tax effects from any tax-deductible goodwill on the carrying amount of the reporting unit are considered when measuring the goodwill impairment loss, if applicable. Finite-Lived Intangible Assets Intangible assets are recorded at cost less any accumulated amortization and any accumulated impairment losses. Intangible assets acquired through business combinations are measured at fair value at the acquisition date. Intangible assets with finite lives are comprised of customer relationships and intellectual property and are amortized over their estimated useful lives on an accelerated basis over the projected pattern of economic benefits, which range from one to four years . Finite-lived intangible assets are reviewed for impairment annually, or more frequently when F-11 Table of Contents events or changes in circumstances indicate that it is more likely than not that the fair value has been reduced to less than its carrying amount. Business Combinations The Company accounts for business combinations under the acquisition method of accounting in accordance with ASC 805 - Business Combinations (“ASC 805”), by recognizing the identifiable tangible and intangible assets acquired and liabilities assumed, measured at the acquisition date fair value. The determination of fair value involves assumptions, estimates and judgments. The initial allocation of the purchase price is considered preliminary and therefore subject to change until the end of the measurement period (up to one year from the acquisition date). Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net assets acquired. Contingent consideration is included within the purchase price and is initially recognized at fair value as of the acquisition date. Contingent consideration, classified as a liability, is remeasured to fair value each reporting period, until the contingency is resolved. Changes in fair value of contingent consideration period-over-period are recognized in earnings. Acquisition related expenses are recognized separately from the business combination and are expensed as incurred. Revenues The Company recognizes revenue under ASC 606 – Revenue from Contracts with Customers (“ASC 606”). The core principle of the revenue standard is that a reporting entity should recognize revenues to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Refer to Note 4 – Revenues, for further information. Purchased Energy Costs The Company defines purchased energy costs as the amount paid to power providers for power consumed related to the Company’s owned bitcoin mining operations. Third-Party Hosting and Other Energy Costs The Company considers third-party hosting and other energy costs as power expenses paid to power providers for power consumed related to third party hosted bitcoin mining operations, as well as other digital asset mining operation energy costs. As of June 30, 2025, the Company have third party hosting agreements extending through 2028, refer to Note 15 – Commitments and Contingencies, for further information. Stock-based Compensation The Company recognizes stock-based compensation expense for awards to employees and non-employees based on the grant date fair value of the award and uses the graded-vesting method to recognize expense on a straight-line basis over the requisite service period from the date of grant of the award for each separately vesting tranche. The grant date fair value of awards with market-based conditions is determined using the Monte Carlo simulation model. Restricted stock units represent the right to receive a certain number of shares of the Company’s common stock, with vesting subject to a service requirement. Performance-based stock units represent the right to receive a number of shares of the Company’s common stock based on the achievement of performance-based measures or market-based conditions, with vesting subject to a service requirement. At each reporting date, the Company reassesses the level of expected achievement of performance-based measures and records any resulting cumulative adjustment in the period of reassessment. The Company accounts for forfeitures as they occur, rather than estimated expected forfeitures at the grant date, resulting in a true-up of expense to reflect actual vesting outcomes. Refer to Note 12 – Stock-based Compensation, for further information. F-12 Table of Contents Impairment of Long-lived Assets Management reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to undiscounted future cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Research and Development Research and development costs consist primarily of contractor costs, equipment, supplies, personnel, and related expenses for research and development activities. Research and development costs are expensed as incurred in accordance with ASC 730 – Research and Development and are included in operating expenses on the Condensed Consolidated Statements of Operations. Research and development costs were $ 8.5 million and $ 3.8 million, for the three months ended June 30, 2025 and 2024 respectively and $ 17.8 million and $ 6.3 million, for the six months ended June 30, 2025 and 2024 respectively. Income Taxes Effective Tax Rate Our effective tax rate from continuing operations was 20.51 % and 13.69 % for the three months ended June 30, 2025 and 2024, respectively, and 24.52 % and 4.44 % for the six months ended June 30, 2025 and 2024, respectively. The difference between the U.S. statutory tax rate of 21% was primarily due to non-deductible officer compensation, which represents a permanent difference that reduces the overall tax benefit. During the six months ended June 30, 2025, the Company concluded, based upon all available evidence, it was more likely than not that it would have sufficient future taxable income to realize the Company’s federal and state deferred tax assets, as the Company continues to be in a three year cumulative income position. Income Tax in Interim Periods The Company records its tax expense or benefit on an interim basis using an estimated annual effective tax rate. This rate is applied to the current period ordinary income or loss to determine the income tax provision or benefit allocated to the interim period. The income tax effects of unusual or infrequent items are excluded from the estimated annual effective tax rate and are recognized in the impacted interim period. Adjustments to the estimated annual effective income tax rate are recognized in the period when such estimates are revised. Uncertain Tax Positions The Company files federal and state income tax returns. The 2021-2024 tax years generally remain subject to examination by the Internal Revenue Service and various state taxing authorities, although the Company is not currently under examination in any jurisdiction. The Company does not currently expect any of its remaining unrecognized tax benefits to be recognized in the next twelve months. Recent Accounting Pronouncements The Company continually assesses any new accounting pronouncements to determine their applicability. When it is determined that a new accounting pronouncement may affect the Company’s financial reporting, the Company undertakes an analysis to determine any required changes to its Condensed Consolidated Financial Statements and F-13 Table of Contents assures that there are proper controls in place to ascertain that the Company’s Condensed Consolidated Financial Statements properly reflect the change. In May 2025, the Financial Accounting Standards Board (“FASB”) issued ASU 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity, which amends the guidance for identifying the accounting acquirer in transactions involving the acquisition of a variable interest entity that meets the definition of a business. The guidance is intended to reduce diversity in practice and improve consistency in the application of acquisition accounting. The new standard is effective for the Company for its annual periods beginning January 1, 2027, with early adoption permitted. The Company is currently evaluating the impact of adopting the standard. In March 2025, the FASB issued ASU No. 2025-02, Liabilities (405): Amendments to SEC Paragraph Pursuant to SEC Staff Accounting Bulletin No. 122. ASU 2025-02 amends the Accounting Standard Codification to remove the text of SEC Staff Accounting Bulletin (“SAB”) 121, as rescinded by SAB 122. The new standard is effective immediately and is not expected to have a material impact on the Company’s Condensed Consolidated Financial Statements. In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 requires entities to disclose specific rate reconciliations, amount of income taxes separated by federal and individual jurisdiction, and the amount of income (loss) from continuing operations before income tax expense (benefit) disaggregated between federal, state, and foreign. The new standard is effective for the Company for its annual periods beginning January 1, 2025, with early adoption permitted. The Company has concluded that it will adopt the standard prospectively on the Consolidated Financial Statements to be included in the Annual Report on Form 10-K for the year ending December 31, 2025. The Company is currently evaluating the impact of the new requirement for its income tax disclosure. NOTE 3 – ACQUISITIONS The Wind Farm ( Hansford County, Texas ) On February 14, 2025, the Company acquired a wind farm located in Hansford County, Texas with 240 megawatts of interconnection capacity, with 114 megawatts of nameplate wind capacity from Great Plains Wind Park Holdings, LLC (the “Wind Farm”) for a total consideration of $ 49.2 million, including transaction costs and contingent consideration. The primary assets acquired were property and equipment of $ 48.2 million and $ 1.0 million related to working capital. In addition, the Company recorded a $ 10.9 million ROU asset and corresponding lease liability and a $ 3.3 million asset retirement obligation and offsetting liability, recognized in property and equipment and other long-term liabilities, respectively. The acquisition was accounted for as an asset acquisition that did not meet the definition of a business. The total consideration was allocated based on the relative fair values of the assets acquired and liabilities assumed, and no goodwill was recognized. This acquisition is intended to convert underutilized sustainable resources into economic value, achieve low energy cost, and enable broader renewable energy development. F-14 Table of Contents GC Data Center Acquisition and Garden City Acquisition The following unaudited pro forma financial information reflects the acquisition of the Garden City Acquisition and GC Data Center Acquisition by the application of pro forma adjustments to the Company’s historical financial statements as if the acquisition had occurred on January 1, 2023, for the indicated periods: Three Months Ended June 30, Six Months Ended June 30, (in thousands, expect per share data) 2024 2024 Revenue $ 145,139 $ 313,430 Income before income taxes ( 233,247 ) 151,610 Earnings per common share: Basic $ ( 0.72 ) $ 0.54 Diluted ( 0.72 ) 0.52 The unaudited pro forma financial information should not be considered indicative of actual results that would have been achieved had the acquisition of the acquired facilities actually been consummated on the date indicated and does not purport to be indicative of the Company’s future financial position or results of operations. These pro forma results include the impact of amortizing certain purchase accounting adjustments such as intangible assets and the impact of the acquisition on interest and income tax expense. No adjustments have been reflected in the pro forma financial information for anticipated growth and efficiency opportunities. There were no material nonrecurring pro forma adjustments directly attributable to the acquisition included within the unaudited pro forma financial information. NOTE 4 – REVENUES The Company recognizes revenue in accordance with ASC 606. The core principle of the revenue standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle: • Step 1: Identify the contract with the customer; • Step 2: Identify the performance obligations in the contract; • Step 3: Determine the transaction price; • Step 4: Allocate the transaction price to the performance obligations in the contract; and • Step 5: Recognize revenue when the Company satisfies a performance obligation. In order to identify the performance obligations in a contract with a customer, an entity must assess the promised goods or services in the contract and identify each promised good or service that is distinct. A performance obligation meets ASC 606’s definition of a “distinct” good or service (or bundle of goods or services) if both of the following criteria are met: • The customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (i.e., the good or service is capable of being distinct); and • The entity’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e., the promise to transfer the good or service is distinct within the context of the contract). If a good or service is not distinct, the good or service is combined with other promised goods or services until a bundle of goods or services is identified that is distinct. F-15 Table of Contents The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. When determining the transaction price, an entity must consider the effects of all of the following: • Variable consideration • Constraining estimates of variable consideration • The existence of a significant financing component in the contract • Noncash consideration • Consideration payable to a customer Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized under the accounting contract will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The transaction price is allocated to each performance obligation on a relative standalone selling price basis. The transaction price allocated to each performance obligation is recognized when that performance obligation is satisfied, at a point in time or over time, as appropriate. Application of the Five-Step Model to the Company’s Mining and Hosting Operations The Company’s ongoing major or central operation is to provide bitcoin transaction verification services to the transaction requestor, in addition to the Bitcoin network through a Company-operated mining pool as the operator (“Operator”) (such activity, “mining”) and to provide a service of performing hash calculations to third-party pool operators alongside collectives of third-party bitcoin miners (such collectives, “mining pools”) as a participant (“Participant”). In 2024, the Company acquired multiple operational bitcoin mining sites for the purpose of improving efficiencies and the scale of the Company’s mining operations. The Company provided hosting services to institutional-scale crypto mining companies at these sites. The Company will not be taking on any new hosting services customers at these locations and will transition to self-mining at these sites as existing customer agreements expire or are terminated early. The following table presents the Company’s revenues disaggregated for those arrangements in which the Company is the Operator and Participant: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2025 2024 2025 2024 Revenues from contracts with customers Mining operator - transaction fees $ 3,044 $ 4,923 $ 5,825 $ 13,907 Mining participant 11,024 11,324 21,813 23,638 Hosting services (1) 1,164 8,661 2,315 29,436 Total revenues from contracts with customers 15,232 24,908 29,953 66,981 Mining operator - block rewards 218,309 118,716 414,668 240,713 Other Revenue 4,944 1,515 7,748 2,643 Total revenues $ 238,485 $ 145,139 $ 452,369 $ 310,337 F-16 Table of Contents (1) Includes revenue associated with prior year acquisitions. The Company made a strategic decision to exit hosting services upon acquisitions. Intercompany transactions have been eliminated in consolidation. Mining Operator As Operator, the Company provides transaction verification services to the transaction requestor, in addition to the Bitcoin network. Transaction verification services are an output of the Company’s ordinary activities; therefore, the Company views the transaction requestor as a customer and recognizes the transaction fees as revenue from contracts with customers under ASC 606. The Bitcoin network is not an entity such that it may not meet the definition of a customer; however, the Company has concluded that it is appropriate to apply ASC 606 by analogy to block rewards earned from the Bitcoin network. The Company is currently entitled to the block reward of 3.125 bitcoin, subsequent to the halving that occurred on April 19, 2024. Prior to the halving, the Company was entitled to the block reward of 6.25 bitcoin from each successful validation of a block. The Company is also entitled to the transaction fees paid by the transaction requester payable in bitcoin for each successful validation of a block. The Company assessed the following factors in the determination of the inception and duration of each individual contract to validate a block and satisfaction of its performance obligation as follows: • For each individual contract, the parties’ rights, the transaction price, and the payment terms are fixed and known as of the inception of each individual contract. • The transaction requestor and the Bitcoin network each have a unilateral enforceable right to terminate their respective contracts at any time without penalty. • For each of these respective contracts, contract inception and completion occur simultaneously upon block validation; that is, the contract begins upon, and the duration of the contract does not extend beyond, the validation of an individual blockchain transaction; and each respective contract contains a single performance obligation to perform a transaction validation service and this performance obligation is satisfied at the point-in-time when a block is successfully validated. In accordance with ASC 606-10-32-21, the Company measures the estimated fair value of the non-cash consideration (block reward and transaction fees) at contract inception, which is at the time the performance obligation to the requester and the network is fulfilled by successfully validating a block. The Company measures the non-cash consideration which is fixed as of the inception of each individual contract using the quoted spot rate for bitcoin determined using the Company’s primary trading platform for bitcoin at the time the Company successfully validates a block. Expenses associated with providing bitcoin transaction verification services, such as hosting fees, electricity costs, and related fees are recorded as purchased energy costs. Depreciation on digital asset mining equipment is recorded as depreciation and amortization. Mining Participant The Company participates in third-party operated mining pools. When the Company is a Participant in a third-party operated mining pool, the Company provides a service to perform hash calculations to the third-party pool operators. The Company considers the third-party mining pool operators to be its customers under Topic 606. Contract inception and the Company’s enforceable right to consideration begins when the Company commences providing hash calculation services to the mining pool operators. Each party to the contract has the unilateral right to terminate the contract at any time without any compensation to the other party for such termination. As such, the duration of a contract is less than a day and may be continuously renewed multiple times throughout the day. The implied renewal option is not a material right because there are no upfront or incremental fees in the initial contract and the terms, conditions, and compensation amount for the renewal options are at the then market rates. The Company is entitled to non-cash compensation based on the pool operator’s payout model. The payout methodologies differ depending on the type of third-party operated mining pool. Full-Pay-Per-Share (“FPPS”) pools pay block rewards and transaction fees, less mining pool fees and Pay-Per-Share (“PPS”) pools pay block rewards less mining pool fees but no transaction fees. For FPPS and PPS pools, the Company is entitled to non-cash consideration even if a block is not successfully validated by the mining pool operators. Success-based mining pools F-17 Table of Contents pay a fractional share of the successfully mined block and transaction fees, reduced by pool operator expenses only if a block is successfully validated. For the six months ended June 30, 2025 and during 2024, the Company participated in FPPS mining pools. FPPS Mining Pools The Company primarily participated in mining pools that use the FPPS payout method for the six months ended June 30, 2025. The Company is entitled to compensation once it begins to perform hash calculations for the pool operator in accordance with the operator’s specifications over a 24-hour period beginning midnight UTC and ending 23:59:59 UTC on a daily basis. The non-cash consideration that the Company is entitled to for providing hash calculations to the pool operator under the FPPS payout method is made up of block rewards and transaction fees less pool operator expenses determined as follows: • The non-cash consideration in the form of a block reward is based on the total blocks expected to be generated on the Bitcoin network for the daily 24-hour period beginning midnight UTC and ending 23:59:59 UTC in accordance with the following formula: the daily hash calculations that the Company provided to the pool operator as a percent of the Bitcoin network’s implied hash calculations as determined by the network difficulty, multiplied by the total Bitcoin network block rewards expected to be generated for the same daily period. • The non-cash consideration in the form of transaction fees paid by transaction requestors is based on the share of total actual fees paid over the daily 24-hour period beginning midnight UTC and ending 23:59:59 UTC in accordance with the following formula: total actual transaction fees generated on the Bitcoin network during the 24-hour period as a percent of total block rewards the Bitcoin network actually generated during the same 24-hour period, multiplied by the block rewards the Company earned for the same 24-hour period noted above. • The block reward and transaction fees earned by the Company is reduced by mining pool fees charged by the operator for operating the pool based on a rate schedule per the mining pool contract. The mining pool fee is only incurred to the extent the Company performs hash calculations and generates revenue in accordance with the pool operator’s payout formula during the same 24-hour period beginning midnight UTC daily. The above non-cash consideration is variable in accordance with paragraphs ASC 606-10-32-5 to 606-10-32-7, since the amount of block reward earned depends on the amount of hash calculations the Company performs; the amount of transaction fees the Company is entitled to depends on the actual Bitcoin network transaction fees over the same 24-hour period; and the operator fees for the same 24-hour period are variable since they are determined based on the total block rewards and transaction fees in accordance with the pool operator’s agreement. While the non-cash consideration is variable, the Company has the ability to estimate the variable consideration at contract inception with reasonable certainty without the risk of significant revenue reversal. The Company does not constrain this variable consideration because it is probable that a significant reversal in the amount of revenue recognized from the contract will not occur when the uncertainty is subsequently resolved and recognizes the non-cash consideration on the same day that control is transferred, which is the same day as contract inception. The Company measures the non-cash consideration based on the simple average daily spot rate of bitcoin determined using the Company’s primary trading platform for bitcoin over a 24-hour period beginning midnight UTC and ending 23:59:59 UTC on the day of contract inception. The Company recognizes non-cash consideration on the same day that control of the contracted service is transferred to the pool operator, which is the same day as the contract inception. Hosting Services The Company operates multiple bitcoin mining sites, which were acquired during the year ended December 31, 2024, that provide hosting services to institutional-scale crypto mining companies. Hosting services include colocation and managed services. Colocation services include providing mining companies with sheltered data center space, electrical power, cooling, and internet connectivity. Managed services generally include providing F-18 Table of Contents customers with technical support and maintenance services, in addition to colocation services. As of June 30, 2025, only one customer remains associated with these hosting services. The Company will not be taking on any new hosting services customers and will transition acquired sites to self-mining as existing customer agreements expire or are terminated early. Colocation services revenue is recognized over time as the customer simultaneously receives and consumes the benefits of the Company’s performance. Managed services revenue is recognized at a point-in-time as the control transfers to the customer, satisfying the performance obligation. The transaction price for colocation services is variable based on the consumption of energy and the managed services price is a fixed rate per miner basis. The Company recognizes hosting services revenue to the extent that a significant reversal of such revenue will not occur. Hosting services customers are generally invoiced in advance of the month in which the Company satisfies its performance obligation, and deferred revenue is recorded for any upfront payments received in advance of the Company’s performance. The monthly transaction price is generally variable based on the amount of megawatt hours (“MWh”) consumed by the customers equipment and when other monthly contracted services are performed. At the end of each month, the customer is billed for the actual amount owed for services performed. The Company recognizes revenue for hosting services under the right-to-invoice practical expedient in ASC 606-10-55-18, which allows for the recognition of revenue over time as the Company’s right-to-invoice for final payment corresponds directly with the value of services transferred to the customer to-date. Expenses associated with providing hosting services are recorded as third-party hosting and other energy costs and depreciation on hosting equipment is recorded as depreciation and amortization. NOTE 5 – DIGITAL ASSETS Digital assets The following table presents the Company’s significant digital asset holdings as of June 30, 2025 and December 31, 2024, respectively: As of June 30, 2025 (in thousands, except for quantity) Quantity Cost Basis Fair Value Bitcoin 34,401 $ 2,614,512 $ 3,686,882 Bitcoin - receivable (1) 15,550 813,241 1,666,557 Total bitcoin holdings 49,951 3,427,753 5,353,439 Other digital assets 5,836 2,259 Total digital assets held as of June 30, 2025 $ 3,433,589 $ 5,355,698 As of December 31, 2024 (in thousands, except for quantity) Quantity Cost Basis Fair Value Bitcoin 34,519 $ 2,415,963 $ 3,223,989 Bitcoin - receivable (1) 10,374 401,334 968,436 Total bitcoin holdings 44,893 2,817,297 4,192,425 Kaspa 34,817,098 5,624 4,327 Total digital assets held as of December 31, 2024 $ 2,822,921 $ 4,196,752 (1) The Company’s bitcoin - receivable holdings include bitcoin loaned, actively managed or pledged as collateral. Refer to Note 5 – Digital Assets, “Digital assets - receivable, net” and Note 13 - Debt, for further information. F-19 Table of Contents The Company earned 2 and 51 bitcoin that were pending distribution from the Company’s equity method investee, the ADGM Entity (as defined below), which are excluded from the Company’s holdings as of June 30, 2025 and December 31, 2024, respectively. Digital assets - receivable, net Lending Throughout 2024 , the Company entered into master securities loan agreements with various counterparties that represent digital asset loan receivables to generate yield from our loaned bitcoin holdings for the Company’s stakeholders. As of December 31, 2024, a total of 7,377 bitcoin remained loaned to counterparties under these agreements. During the three months ended June 30, 2025, an additional 500 bitcoin were loaned out to one of the counterparties, increasing the total bitcoin loaned under these agreements to 7,877 . Trading On May 6, 2025, the Company entered into an SMA agreement with Two Prime, an external full-service advisor, and transferred approximately 500 bitcoin, followed by an additional 1,500 bitcoin in late June 2025, to be actively managed under the arrangement. As of June 30, 2025, an additional 4 bitcoin had been earned through the SMA, or approximately $ 0.4 million, resulting in a total of 2,004 bitcoin held and actively managed within the SMA. Borrowing As of June 30, 2025 and December 31, 2024, the Company had a total of 5,669 and 2,997 bitcoin pledged as collateral, respectively, in connection with outstanding borrowings under the Line of Credit. Refer to Note 13 – Debt, for further information. Digital assets - receivable, net consists of the following: (in thousands) June 30, 2025 December 31, 2024 Digital asset receivable - lending $ 844,203 $ 688,674 Digital asset receivable - trading 214,741 — Digital asset receivable - borrowing 607,613 279,762 Total digital asset receivable 1,666,557 968,436 Less: Allowance for credit loss ( 20,079 ) ( 8,379 ) Digital assets - receivable, net $ 1,646,478 $ 960,057 The aforementioned digital asset receivables are initially recognized at fair value upon transfer and subsequently remeasured at fair value each reporting period. The changes in fair value are recognized as “Changes to digital assets - receivable, net” on the Condensed Consolidated Statements of Operations. The allowance for credit losses reflects the Company’s current estimate of the potential credit losses associated with the digital assets loaned, transferred to be actively managed, and bitcoin pledged as collateral in connection with outstanding borrowings. The credit loss is recorded as a valuation account, directly offsetting the digital asset receivables on the Condensed Consolidated Balance Sheets. Changes to the allowance for credit losses on loans, F-20 Table of Contents based on quarterly analyses, are recorded as provision for credit losses within “Other” on the Condensed Consolidated Statements of Operations. The Company assesses the creditworthiness of its borrowers on a quarterly basis. For the purpose of determining the allowance for credit loss, financial assets with similar risk characteristics are pooled together. Our financial assets are aggregated by exposure term and assigned risk ratings. The Company considers credit ratings and several factors including the collateral and/or security of the digital asset receivable and are aligned with the ratings used by major credit ratings agencies. Given the limited historical data related to digital asset receivables and incurred losses related to digital asset receivables, the Company chose to rely on external data to perform the calculation of expected credit losses. The Company utilized the profitability of default (“PD”) and loss given default (“LGD”) approach to estimate the allowance for credit loss. In order to apply the PD LGD approach, management considered the lifetime of the digital asset receivables, the reasonable and supportable forecast, and the PD LGD. As of June 30, 2025, the Company recorded a corresponding allowance for credit loss of $ 20.1 million, based on the PD LGD approach. As of December 31, 2024, the Company had digital asset receivables outstanding and recorded an allowance for credit loss of $ 8.4 million. NOTE 6 – ADVANCES TO VENDORS AND DEPOSITS The Company contracts with bitcoin mining equipment manufacturers to procure equipment necessary for the operation of its bitcoin mining operations. These agreements typically require a certain percentage of the value of the total order to be paid in advance at specific intervals, usually within several days of execution of a contract and periodically thereafter with final payments due prior to each shipment date. The Company accounts for these payments as “Advances to vendors” on the Condensed Consolidated Balance Sheets. As of June 30, 2025 and December 31, 2024, such advances totaled approximately $ 6.3 million and $ 121.3 million, respectively. In addition, the Company contracts with various service providers for hosting of its equipment, operational support in data centers where the Company’s equipment is deployed and construction of data centers on leased sites. These contracts typically require advance payments to service providers in conjunction with the contractual obligations associated with these services. Additionally, when applicable, funds related to a surety bond are included. The Company classifies these payments as “Deposits” and “Long-term deposits” on the Condensed Consolidated Balance Sheets. As of June 30, 2025 and December 31, 2024, such deposits totaled approximately $ 230.8 million and $ 259.4 million, respectively. F-21 Table of Contents NOTE 7 – PROPERTY AND EQUIPMENT The components of property and equipment as of June 30, 2025 and December 31, 2024 are: (in thousands, except useful life) Useful life (Years) June 30, 2025 December 31, 2024 Land (1) — $ 3,510 $ 3,510 Land improvements 9 26,530 26,530 Building and improvements 25 90,308 86,877 Mining rigs 3 1,851,286 1,705,648 Containers 10 - 15 117,162 106,784 Mining and transportation equipment 4 - 15 211,347 124,900 Software and hardware 2 3,316 3,316 Asset retirement obligation 8 - 15 11,129 7,879 Construction in progress — 195,869 71,396 Other 7 7,048 6,335 Total gross property, equipment 2,517,505 2,143,175 Less: Accumulated depreciation and amortization ( 883,452 ) ( 593,684 ) Property and equipment, net $ 1,634,053 $ 1,549,491 (1) Refer to Note 14 – Leases, for further information regarding the Company’s finance land lease. The Company’s asset retirement obligations represent the estimated costs to return a site to its original state. As of June 30, 2025, the Company recognized an additional asset retirement obligation of $ 3.3 million related to the Wind Farm land lease. Asset retirement obligations are accreted over the term of the leases. The Company’s accretion expense related to the asset retirement obligation for the three months ended June 30, 2025 and 2024 was $ 0.3 million and $ 0.2 million, respectively, and $ 0.6 million and $ 0.4 million, for the six months ended June 30, 2025 and 2024, respectively. The Company’s depreciation expense related to property and equipment for the three months ended June 30, 2025 and 2024 was $ 158.9 million and $ 87.8 million, respectively and $ 313.7 million and $ 165.8 million, for the six months ended June 30, 2025 and 2024, respectively. Storm Damage During the second quarter of 2025, severe storms damaged certain mining equipment at the Company’s Garden City bitcoin mining site. As of June 30, 2025, the Company recognized an impairment of $ 26.0 million related to storm damage included in “Impairment of assets” on the Condensed Consolidated Statements of Operations. NOTE 8 – INVESTMENTS The components of investments as of June 30, 2025 and December 31, 2024 are: (in thousands) June 30, 2025 December 31, 2024 Equity method investments $ 48,312 $ 57,447 Other investments 85,947 54,046 Total investments $ 134,259 $ 111,493 F-22 Table of Contents Equity Method Investment The ADGM Entity On January 27, 2023, the Company entered into a Shareholders’ Agreement to form an Abu Dhabi Global Markets company (the “ADGM Entity”) in which the Company has a 20 % ownership interest, which is accounted for as an equity method investment. The ADGM Entity commenced mining operations in September 2023. The Company’s share of net loss for the three and six months ended June 30, 2025 was $ 0.9 million and $ 0.9 million, respectively, including approximately $ 3.2 million and $ 6.3 million of depreciation and amortization. For the three and six months ended June 30, 2024, the Company’s share of net income was nearly zero and $ 1.3 million, respectively, including approximately $ 3.5 million and $ 6.1 million of depreciation and amortization. As of June 30, 2025, the Company’s investment in the ADGM Entity was $ 48.3 million and is reflected in “Investments” on the Condensed Consolidated Balance Sheets. Other Investments Other investments consist of strategic investments made from time to time in equity securities and SAFE investments. Investments in Equity Securities Auradine As of June 30, 2025, the total carrying amount of the Company’s investment in Auradine, Inc. (“Auradine”) preferred stock was $ 85.4 million. On February 19, 2025, the Company converted $ 1.2 million from its prior Auradine SAFE investment into preferred stock and purchased additional shares of Auradine preferred stock for a purchase price of $ 20.0 million. The preferred stock purchased on February 19, 2025 was similar to the Company’s other investments in Auradine preferred stock and, as a result, the Company recorded $ 11.9 million as a gain on investment to adjust the carrying value of its investments to an observable price in accordance with the measurement alternative in ASC 321. In addition, the Company recorded an additional $ 2.7 million gain on investment to adjust the carrying value of its common stock investment in Auradine to an observable price, in accordance with ASC 321. The gain on investments was recorded to “Other” on the Condensed Consolidated Statements of Operations. Other Investments During the six months ended June 30, 2025, the Company wrote off a previous investment of $ 2.3 million, as the Company believed there were indicators the carrying value may not be recoverable. The loss on investments was recorded to “Other” on the Condensed Consolidated Statements of Operations. As of June 30, 2025, the Company had no SAFE investments. As of December 31, 2024, the Company had two SAFE investments with a carrying value of $ 1.4 million. NOTE 9 – FAIR VALUE MEASUREMENT The Company measures certain financial and non-financial assets and liabilities at fair value on a recurring or non-recurring basis. The Company uses a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, essentially an exit price, based on the highest and best use of the asset or liability. F-23 Table of Contents The levels of the fair value hierarchy are: Level 1: Observable inputs such as quoted market prices in active markets for identical assets or liabilities Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data Level 3: Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions The carrying amounts reported on the Condensed Consolidated Balance Sheets for cash and cash equivalents, restricted cash, other receivables, deposits, prepaid expenses and other current assets, advances to vendors, accounts payable and accrued expenses approximate their estimated fair market value based on the short-term maturity of these instruments. Additionally, the carrying amounts reported on the Condensed Consolidated Balance Sheets for the Company’s operating lease liabilities and other long-term liabilities approximate fair value as the related interest rates approximate rates currently available to the Company. Financial assets and liabilities are classified in their entirety within the fair value hierarchy based on the lowest level of input that is significant to their fair value measurement. The Company measures the fair value of its marketable securities and investments by taking into consideration valuations obtained from third-party pricing sources. The pricing services utilize industry standard valuation models, including both income and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputs included reported trades of and broker-dealer quotes on the same or similar securities, issuer credit spreads, benchmark securities and other observable inputs. Recurring measurement of fair value The following tables present information about the Company’s assets and liabilities measured at fair value on a recurring basis and the Company’s estimated level within the fair value hierarchy for each of those assets and liabilities as of June 30, 2025 and December 31, 2024, respectively: (in thousands) Total carrying value at June 30, 2025 Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Assets: Money market funds $ 53,289 $ 53,289 $ — $ — Digital assets 3,689,141 3,689,141 — — Digital assets - receivable, net (1) 1,646,478 — 1,646,478 — Derivative instrument (2) 56,086 — 56,086 — Liabilities: Contingent consideration liability (3) 15,310 — — 15,310 F-24 Table of Contents (in thousands) Total carrying value at December 31, 2024 Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Assets: Money market funds $ 292,927 $ 292,927 $ — $ — Digital assets 3,228,316 3,228,316 — — Digital assets - receivable, net (1) 960,057 — 960,057 — Derivative instrument (2) 8,947 — 8,947 — Liabilities: Contingent consideration liability (3) 8,138 — — 8,138 (1) The fair value of digital assets - receivable, net was estimated using the market approach, utilizing observable market prices and other relevant market data, which are considered Level 2 inputs. Refer to Note 5 – Digital Assets, “Digital assets - receivable, net” for further information. (2) The fair value of the derivative instrument was estimated using a discounted cash flow approach that considers various assumptions including current market prices and electricity forward curves, which are considered Level 2 inputs. Fluctuations in market prices and electricity forward curves could result in significant increases (decreases) in the fair value of derivative instruments. Refer to Note 2 – Summary of Significant Accounting Policies, “Derivatives”, for further information. (3) Represents the estimated amount of acquisition-related consideration expected to be paid in the future as of June 30, 2025 for the GC Data Center Acquisition, the Arkon Acquisition and the Wind Farm. Increases (decreases) in the probability of achieving the milestones could result in significant changes in the fair value of the contingent consideration. Refer to Note 3 – Acquisitions and Note 15 - Commitments and Contingencies, for further information. The Company includes money market funds in cash and cash equivalents on the Condensed Consolidated Balance Sheets. There were no transfers among Levels 1, 2 or 3 during the six months ended June 30, 2025 or the year ended December 31, 2024. Fair value of financial instruments not recognized at fair value The following tables present information about the Company’s financial instruments that are not recognized at fair value on the Condensed Consolidated Balance Sheets as of June 30, 2025 and December 31, 2024, respectively, is as follows: (in thousands) Total carrying value at June 30, 2025 Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Liabilities: Notes payable $ 2,250,546 $ 2,190,748 $ — $ — (in thousands) Total carrying value at December 31, 2024 Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Liabilities: Notes payable $ 2,246,578 $ 1,974,398 $ — $ — F-25 Table of Contents There were no transfers among Levels 1, 2 or 3 during the six months ended June 30, 2025 and year ended December 31, 2024. As of June 30, 2025 and December 31, 2024 there were no other assets and liabilities measured at fair value on a non-recurring basis. NOTE 10 – NET INCOME (LOSS) PER SHARE Net income (loss) per share is calculated in accordance with ASC 260 - Earnings Per Share . Basic income (loss) per share is computed by dividing net income (loss) attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period. For the three and six months ended June 30, 2025 and 2024, the Company recorded net income (loss) and as such, the Company calculated the impact of dilutive common stock equivalents in determining diluted earnings per share. The following table presents the total potential securities that were not included in the computation of diluted income (loss) per share, as their inclusion would have been anti-dilutive: Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Warrants 324,375 324,375 324,375 324,375 Restricted stock units — 9,152,998 — — Performance-based restricted stock units (1) — 2,991,580 — — Convertible Notes (2) — 4,341,422 — — Total dilutive shares 324,375 16,810,375 324,375 324,375 (1) Anti-dilutive performance-based restricted stock units are presented up to 249 % as the total potential vested shares. Refer to Note 12 - Stock-based Compensation, for further information. (2) Refer to Note 13 - Debt, for further information. F-26 Table of Contents The following table sets forth the computation of basic and diluted income (loss) per share: Three Months Ended June 30, Six Months Ended June 30, (in thousands, except share and per share data) 2025 2024 2025 2024 Basic earnings per share of common stock: Net income (loss) attributable to common stockholders - basic $ 808,235 $ ( 199,659 ) $ 275,036 $ 137,514 Weighted average shares of common stock - basic 352,901,683 278,674,506 348,524,166 268,899,932 Net income (loss) per share of common stock - basic $ 2.29 $ ( 0.72 ) $ 0.79 $ 0.51 Diluted earnings per share of common stock: Net income (loss) attributable to common stockholders - basic $ 808,235 $ ( 199,659 ) $ 275,036 $ 137,514 Add: Notes interest expense, net of tax 2,836 — 5,671 1,969 Net income (loss) attributable to common stockholders - diluted $ 811,071 $ ( 199,659 ) $ 280,707 $ 139,483 Weighted average shares of common stock - basic 352,901,683 278,674,506 348,524,166 268,899,932 Restricted stock units 3,896,469 — 4,094,789 4,431,276 Performance-based restricted stock units 2,007,055 — 1,545,898 287,030 Convertible Notes 82,106,952 — 82,106,952 4,341,422 Weighted average shares of common stock - diluted 440,912,159 278,674,506 436,271,805 277,959,660 Net income (loss) per share of common stock - diluted $ 1.84 $ ( 0.72 ) $ 0.64 $ 0.50 NOTE 11 – STOCKHOLDERS’ EQUITY Common Stock On February 19, 2025, the Company’s shareholders approved an amendment to the Company’s articles of incorporation that increased the amount of common stock authorized for issuance to 800,000,000 with a par value of $ 0.0001 per share. At-the-Market Offering Agreements On March 28, 2025, the Company commenced a new at-the-market (“ATM”) offering program, which replaced the 2024 ATM (as defined below), with Barclays Capital Inc., BMO Capital Markets Corp., BTIG, LLC, Cantor Fitzgerald & Co., Guggenheim Securities, LLC, H.C. Wainwright & Co., LLC and Mizuho Securities USA LLC acting as the sales agents (collectively, the “Agents”) pursuant to an ATM agreement (the “2025 ATM”), under which the Company may offer and sell shares of its common stock from time to time through the Agents having an aggregate offering price of up to $ 2.0 billion. During the three and six months ended June 30, 2025, the Company sold 14,977,998 shares of common stock for an aggregate purchase price of $ 219.2 million, net of offering expenses of $ 1.1 million. In February 2024, the Company commenced an ATM offering program pursuant to an ATM agreement (the “2024 ATM”), under which the Company had the right to offer and sell shares of its common stock from time to time having an aggregate offering price of up to $ 1.5 billion. During the six months ended June 30, 2025, the Company sold 5,428,548 shares of common stock for an aggregate purchase price of $ 100.1 million, net of offering expenses of $ 2.6 million, and concluded the 2024 ATM. F-27 Table of Contents NOTE 12 – STOCK-BASED COMPENSATION 2018 Equity Incentive Plan The Company’s Amended and Restated 2018 Equity Incentive Plan (the “2018 Plan”) provides for the issuance of stock options, restricted stock, restricted stock units (“RSUs”), preferred stock and other awards to employees, directors, consultants and other service providers. In June 2025, the Company’s shareholders approved an amendment to the 2018 Plan that increased the number of shares authorized for issuance thereunder by 18,000,000 shares. As of June 30, 2025, the Company had an aggregate of 21,484,291 shares of common stock reserved for future issuance under the 2018 Plan. The Company grants awards to employees under annual long-term incentive plans (“LTIP”) to align the incentive structure to the long-term goals of the Company, promote retention, and promote the achievement of targeted results. LTIP awards have included service-based RSUs and performance-based restricted stock units (“PSUs”). PSUs vest subject to the Company’s achievement of defined performance measures and continued employment. Restricted Stock Units The Company grants service-based RSUs to employees, directors, and consultants. RSUs granted to employees generally vest over a four-year period from the date of grant; however, in certain instances, all or a portion of a grant may vest immediately. RSUs granted to directors generally vest over a one-year period. The Company measures the fair value of RSUs at the grant date and recognizes expenses on a straight-line basis over the requisite service period from the date of grant for each separately-vesting tranche under the graded-vesting attribution method. A summary of the Company’s service-based RSU activity for the six months ended June 30, 2025, is as follows: Number of RSUs Weighted Average Grant Date Fair Value Nonvested at December 31, 2024 7,988,767 $ 15.44 Granted 3,929,770 14.98 Forfeited ( 185,305 ) 15.81 Vested ( 2,423,484 ) 14.99 Nonvested at June 30, 2025 9,309,748 $ 15.36 As of June 30, 2025, there was approximately $ 76.4 million of aggregate unrecognized stock-based compensation related to unvested service-based RSUs that is expected to be recognized over the next 2.8 years. Performance-based Restricted Stock Units The Company granted PSUs on February 28, 2025 to its employees, and subsequently to new hires, pursuant to the 2025 LTIP. The PSUs vest based on the achievement of certain performance-based conditions and a market-based condition, based on the Russell 2000 Index, and are further subject to a service condition. The service periods for these PSUs range from approximately two to four years and will vest as a percentage of the target number of shares between 0 % and 249 %, based on the individual level of achievement of each of the performance-based conditions and the market-based condition. F-28 Table of Contents A summary of the Company’s PSU activity for the six months ended June 30, 2025, is as follows: Number of PSUs Weighted Average Grant Date Fair Value (1) Nonvested at December 31, 2024 2,260,612 $ 49.05 Granted 3,834,875 16.14 Forfeited ( 39,948 ) 41.79 Vested ( 375,176 ) 49.09 Nonvested at June 30, 2025 (2) 5,680,363 $ 26.88 (1) Weighted average grant date fair value reflects the incremental impact of the Company’s modified 2024 LTIP awards, which resulted in a 200 % achievement of the target level as of the December 2024 modification date. (2) Includes 1,855,312 awards that achieved an actual payout of 200 % of the target level. As of June 30, 2025, there was approximately $ 133.2 million of aggregate unrecognized stock-based compensation related to unvested PSUs that is expected to be recognized over the next 2.4 years. Common Stock Warrants As of June 30, 2025, the Company’s issued and outstanding common stock warrants had no change from December 31, 2024. The Company continues to have 324,375 outstanding warrants, at a weighted average exercise price of $ 25.00 , that are expected to expire in approximately 0.5 years. Stock-based Compensation Expense The following table presents a summary of the Company’s stock-based compensation expense, by award type: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2025 2024 2025 2024 Performance-based restricted stock units $ 35,210 $ 5,169 $ 59,533 $ 5,169 Restricted stock units 19,446 23,163 44,238 75,076 Total stock-based compensation expense $ 54,656 $ 28,332 $ 103,771 $ 80,245 The following table presents information about stock-based compensation expense by financial statement line item on the Company’s Condensed Consolidated Statements of Operations: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2025 2024 2025 2024 Operating and maintenance costs $ 698 $ — $ 789 $ — General and administrative 52,867 28,332 101,787 80,245 Research and development 1,091 — 1,195 — Total stock-based compensation expense $ 54,656 $ 28,332 $ 103,771 $ 80,245 F-29 Table of Contents NOTE 13 – DEBT The net carrying value of the Company’s outstanding debt as of June 30, 2025 and December 31, 2024, consisted of the following: (in thousands) June 30, 2025 December 31, 2024 December 2026 Notes $ 66,989 $ 66,811 September 2031 Notes 292,564 292,014 March 2030 Notes 981,594 979,642 June 2031 Notes 909,399 908,111 Line of credit 350,000 200,000 Total debt 2,600,546 2,446,578 Current portion of long-term debt ( 350,000 ) — Total long-term debt $ 2,250,546 $ 2,446,578 As of June 30, 2025, the Company had $ 350.0 million outstanding under its Line of Credit, with periodic maturities due within the next twelve months. The Company has historically accessed capital markets, refinanced existing debt and issued new debt, however, such financing may not always be available. The Company believes it has sufficient liquid resources, including the fair value of the Company’s bitcoin holdings of $ 5.3 billion, to meet its current obligations. In July 2025, the Company issued $ 950.0 million aggregate principal amount of 0.00 % Convertible Senior Notes due 2032. Refer to Note 18 – Subsequent Events for further information. Convertible Senior Notes The Company issued the following convertible notes (collectively, the “Convertible Notes”) in private offerings: • $ 925.0 million aggregate principal amount of 0.0 % Convertible Senior Notes due 2031 (the “June 2031 Notes”) • $ 1.0 billion aggregate principal amount of 0.0 % Convertible Senior Notes due 2030 (the “March 2030 Notes”) • $ 300.0 million aggregate principal amount of 2.125 % Convertible Senior Notes due 2031 (the “September 2031 Notes”) • $ 747.5 million aggregate principal amount of 1.0 % Convertible Senior Notes due 2026 (the “December 2026 Notes”) F-30 Table of Contents The following table summarizes the key terms of each of the Convertible Notes: December 2026 September 2031 March 2030 June 2031 Issuance Date November 2021 August 2024 November 2024 December 2024 Maturity Date December 1, 2026 September 1, 2031 March 1, 2030 June 1, 2031 Remaining Principal (in thousands) $ 67,492 $ 300,000 $ 1,000,000 $ 925,000 Stated Interest Rate 1.0 % 2.125 % 0.0 % 0.0 % Interest Payment Dates June 1 & December 1 March 1 & September 1 March 1 & September 1 June 1 & December 1 Net Proceeds (1) (in thousands) $ 728,082 $ 291,595 $ 979,176 $ 907,908 Effective Interest Rate 1.0 % 2.6 % 0.4 % 0.3 % Initial Conversion Rate 13.1277 52.9451 38.5902 28.9159 Initial Conversion Price $ 76.17 $ 18.89 $ 25.91 $ 34.58 Share Principal Price $ 1,000 $ 1,000 $ 1,000 $ 1,000 (1) Net proceeds are net of customary offering expenses associated with the issuance of each of the Convertible Notes (the “issuance costs”) at the time of issuance. The Company accounts for these issuance costs as a reduction to the principal amount and amortizes the issuance costs to interest expense from the respective debt issuance date through the Maturity Date, on the Condensed Consolidated Statements of Operations. The Company may, from time to time, seek to repurchase additional notes prior to the maturity date, whether through privately negotiated purchases, open market purchases, or otherwise. Line of Credit In October 2024, the Company secured lines of credit (collectively, the “Original Line of Credit”) with two counterparties for a total of $ 200.0 million, collateralized by 4,499 bitcoin. The Original Line of Credit, as amended in February 2025, bears interest at a rate of 10.5 % per annum, with maturity dates beginning in 2026. The Company drew $ 200.0 million from the Original Line of Credit in October 2024 and concurrently transferred bitcoin to the counterparties as collateral at a fair value, at the time of transfer, of $ 284.8 million. In March 2025, the Company secured a second line of credit (the “New Line of Credit” and together with the Original Line of Credit, the “Line of Credit”) with a new counterparty for a total of $ 150.0 million, collateralized by 3,250 bitcoin. The New Line of Credit bears interest at a rate of 8.85 % per annum and has a maturity date of March 2026. The Company drew $ 150.0 million from the New Line of Credit in March 2025 and concurrently transferred bitcoin to the counterparty as collateral for a fair value, at the time of transfer, of $ 269.5 million. As of June 30, 2025, the aggregate outstanding balance on the Line of Credit was $ 350.0 million, and 5,669 bitcoin remained collateralized. The Line of Credit includes provisions requiring the collateral to be balanced against the outstanding borrowings. If the value of the collateral securing our borrowings fluctuates below or above a set threshold, the Company will be required to contribute additional collateral, or may withdraw excess collateral, as applicable, to maintain the agreed-upon level. NOTE 14 – LEASES As of June 30, 2025, the Company had operating and finance leases primarily for office space, mining facilities and land in the United States. The Company is party to an arrangement for the use of energized cryptocurrency mining facilities under which the Company pays for electricity per megawatt based on usage. The Company has determined that it has embedded operating leases at two of the facilities governed by this arrangement and has elected not to separate lease and non-lease components. Payment for these two operating leases is entirely variable and based on usage of electricity and expensed as incurred. F-31 Table of Contents The following table presents the assets and liabilities related to the Company’s operating and finance leases as of June 30, 2025 and December 31, 2024: (in thousands) June 30, 2025 December 31, 2024 Assets Balance Sheet Classification Operating lease ROU assets Operating lease right-of-use assets $ 32,996 $ 16,874 Finance lease ROU assets Property and equipment, net 2,862 2,877 Total ROU assets $ 35,858 $ 19,751 Liabilities Current portion: Operating lease liabilities Operating lease liabilities, current portion $ 1,052 $ 239 Finance lease liability Finance lease liability, current portion 173 168 Long-term portion: Operating lease liabilities Operating lease liabilities, net of current portion 39,722 22,977 Finance lease liability Finance lease liability, net of current portion 3,817 3,709 Total lease liabilities $ 44,764 $ 27,093 Lease costs are recorded on a straight-line basis within operating expenses. The Company’s total lease expenses are comprised of the following: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2025 2024 2025 2024 Lease costs: Operating lease cost $ 1,521 $ 761 $ 2,533 $ 965 Finance lease cost: Amortization of ROU asset (1) 8 11 15 11 Interest on lease liabilities 280 — 280 — Short-term lease rent expense 127 21 272 37 Variable lease cost 19,231 20,043 41,513 43,229 Total rent expense $ 21,167 $ 20,836 $ 44,613 $ 44,242 (1) Amortization of finance lease ROU asset is included in “Depreciation and amortization” on the Condensed Consolidated Statements of Operations. F-32 Table of Contents Additional information regarding the Company’s leasing activities is as follows: Six Months Ended June 30, 2025 2024 Operating cash flows from operating leases $ 1,435 $ 840 Operating cash flows from finance lease 280 — Financing cash flows from finance lease $ 168 $ 163 Weighted-average remaining lease term (in years): Operating leases 19.9 9.7 Finance lease 95.8 96.8 Weighted-average discount rate: Operating leases 7.2 % 6.7 % Finance lease 7.2 % 7.2 % The following table presents the Company’s future minimum lease payments as of June 30, 2025: (in thousands) Year Operating Leases Finance Lease 2025 (remaining) $ 1,355 $ — 2026 4,152 173 2027 5,953 178 2028 5,948 183 2029 5,810 189 Thereafter 52,632 88,908 Total 75,850 89,631 Less: Imputed interest ( 35,076 ) ( 85,641 ) Present value of lease liability $ 40,774 $ 3,990 NOTE 15 - COMMITMENTS AND CONTINGENCIES Commitments Miners and Other Mining Equipment As of June 30, 2025, the Company has paid approximately $ 144.7 million in deposits and payments toward the purchase of miners and other mining equipment pursuant to new and existing purchasing agreements. The remaining commitment of approximately $ 51.4 million is due in periodic installments throughout 2025. The Company contracts with service providers for hosting our equipment and operational support in data centers where our equipment is deployed. Under these arrangements, the Company expects to pay at minimum approximately $ 444.3 million in total payments over the next three years . Contingent Consideration Liabilities In connection with certain acquisitions, the Company may be required to make additional payments to the sellers that are contingent upon the occurrence of future events. The estimated total contingent consideration as of June 30, F-33 Table of Contents 2025 was approximately $ 15.3 million related to the GC Data Center Acquisition, the Arkon Acquisition and the Wind Farm. Refer to Note 3 – Acquisitions, for further information. The following table presents changes in the estimated fair value of the Company’s contingent consideration liabilities: (in thousands) Balance at December 31, 2024 $ 8,138 The Wind Farm acquisition 10,000 Change in fair value of contingent consideration ( 2,828 ) Balance at June 30, 2025 $ 15,310 For the three months ended June 30, 2025, the Company recorded $ 0.1 million as the change in the estimated fair value of contingent consideration, recorded to “Other” on the Condensed Consolidated Statements of Operations. Contingencies Legal Proceedings The Company, and its subsidiaries, from time to time may be subject to various claims, lawsuits and legal proceedings that arise from the ordinary course of business. In accordance with ASC 450 - Contingencies , if a loss contingency associated with the following legal matters are probable to be incurred and the amount of loss can be reasonably estimated, an accrual is recorded on the Condensed Consolidated Balance Sheets. As of June 30, 2025, the Company has determined that the liabilities associated with certain litigation matters are not expected to have a material impact on the Company’s Financial Statements. The Company will continue to monitor each related legal issue and adjust accruals as new information and developments occur. Moreno v. Marathon On March 30, 2023, a putative class action complaint was filed in the United States District Court for the District of Nevada, against the Company and present and former senior management, alleging claims under Section 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), arising out of the Company’s announcement of accounting restatements on February 28, 2023. On March 29, 2024, the court appointed lead plaintiffs and counsel. On June 4, 2024, lead plaintiffs filed an amended class action complaint, styled as Langer et al. v. Marathon et al . The allegations in the amended class action complaint are substantially similar to those in the March 30, 2023 putative class action complaint. On August 5, 2024, the defendants moved to dismiss the amended class action complaint. On December 6, 2024, the motion to dismiss the amended class action complaint was fully briefed. On March 3, 2025, the United States District Court for the District of Nevada heard the Company’s motion to dismiss the amended complaint and, while granting the Company’s motion to dismiss, the court also granted the plaintiffs thirty days to amend their complaint to avoid a permanent dismissal. On April 2, 2025, lead plaintiffs filed a second amended class action complaint. The Company filed a motion to dismiss the second amended complaint on June 2, 2025. Derivative Complaints On June 22, 2023, a shareholder derivative complaint was filed in the Circuit Court of the 17th Judicial Circuit for Broward County, Florida, against current members of the Company’s Board and senior management, alleging claims for breach of fiduciary duty and unjust enrichment based on allegations substantially similar to the allegations in the March 30, 2023 putative class action complaint in Moreno . On July 8, 2023, a second shareholder derivative complaint was filed in the United States District Court for the District of Nevada, against current and former members of the Company’s Board and senior management, alleging claims under Sections 14(a), 10(b), and 21D of the Exchange Act and for breach of fiduciary duty, unjust F-34 Table of Contents enrichment, and waste of corporate assets, based on allegations substantially similar to the allegations in the March 30, 2023 putative class action complaint in Moreno . On July 12, 2023, a third shareholder derivative complaint was filed in the United States District Court for the District of Nevada, against current and former members of the Company’s Board and senior management, alleging claims under Section 14(a) of the Exchange Act and for breach of fiduciary duty, based on allegations substantially similar to the allegations in the March 30, 2023 putative class action complaint in Moreno . On July 13, 2023, a fourth shareholder derivative complaint was filed in the Circuit Court of the 17th Judicial Circuit for Broward County, Florida (together with the complaint filed on June 22, 2023, the “Florida Derivative Actions”), against current members of the Company’s Board and senior management, alleging claims for breach of fiduciary duty, unjust enrichment, and waste of corporate assets, based on allegations substantially similar to the allegations in the March 30, 2023 putative class action complaint in Moreno . On August 14, 2023, the two derivative actions pending in the United States District Court for the District of Nevada were consolidated (the “Nevada Derivative Action”). On April 1, 2024, the United States District Court for the District of Nevada appointed co-lead counsel for plaintiffs in the Nevada Derivative Action. On June 25, 2024, plaintiffs filed an amended consolidated complaint in the Nevada Derivative Action alleging breaches of fiduciary duties, unjust enrichment, waste of corporate assets, claims under Section 14(a) of the Exchange Act, and for contribution under Sections 10(b) and 21D of the Exchange Act. On August 9, 2024, the defendants moved to dismiss the amended complaint in the Nevada Derivative Action. On October 16, 2023, the parties to the derivative actions pending in the Circuit Court of the 17th Judicial Circuit for Broward County, Florida filed an agreed order to stay both actions pending completion of the Nevada Derivative Action. On July 25, 2024, the Florida Derivative Actions were administratively closed. On November 7, 2024, the motion to dismiss the amended complaint in the Nevada Derivative Action was fully briefed. On February 20, 2025, the United States District Court for the District of Nevada heard the Company’s motion to dismiss the amended complaint and, while granting the Company’s motion to dismiss, the court also granted the plaintiff thirty days to amend its complaint to avoid a permanent dismissal. On March 21, 2025, plaintiffs filed a second amended consolidated complaint. The Company filed a motion to dismiss the second amended consolidated complaint on May 20, 2025. Information Subpoena On October 6, 2020, the Company entered into a series of agreements with multiple parties to design and build a data center for up to 100 -megawatts in Hardin, Montana. In conjunction therewith, the Company filed a Current Report on Form 8-K on October 13, 2020 disclosing that, pursuant to a Data Facility Services Agreement, the Company issued 6,000,000 shares of restricted common stock, in transactions exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”). During the quarter ended September 30, 2021, the Company and certain of its executives received a subpoena to produce documents and communications concerning the Hardin, Montana data center facility. The Company received an additional subpoena from the SEC on April 10, 2023, relating to, among other things, transactions with related parties. On April 21, 2025, the SEC’s Division of Enforcement notified the Company that it had concluded its investigation and did not intend to recommend an enforcement action against the Company. Ho v. Marathon On January 14, 2021, plaintiff Michael Ho (“Ho”) filed a civil complaint (the “Complaint”) in which he alleged, among other things, that the Company breached the terms of a non-disclosure agreement, profited from commercially sensitive information he shared with the Company, and refused to compensate him for his role in securing the Company’s acquisition of an energy supplier. The Complaint initially alleged six causes of action: (1) breach of written contract, (2) breach of implied contract, (3) quasi-contract, (4) services rendered, (5) intentional interference with prospective economic relations, and (6) negligent interference with prospective economic relations. On February 22, 2021, the Company responded to the Complaint with a general denial of the claims and asserted certain affirmative defenses. On February 25, 2021, the Company removed the action to the United States District Court in the Central District of California (the “Court”). The Company subsequently filed a motion for summary judgment with respect to each of the causes of action. As a result of the Court’s summary judgment ruling and Ho’s F-35 Table of Contents voluntary dismissal of certain claims, the only remaining cause of action at the time of verdict was breach of written contract. On July 8, 2024, the Court commenced a jury trial with respect to the sole remaining claim. On July 18, 2024, the jury determined that the Company had breached the non-disclosure agreement and returned a verdict in the amount of $ 138.8 million. On September 18, 2024, the Court entered a judgment of the same amount, plus post-judgment interest. The Company has not paid any portion of the award. On October 16, 2024, the Company filed a renewed motion for judgment as a matter of law (or in the alternative for a new trial and remittitur), which seeks to overturn, or at a minimum significantly reduce, the damage award. Also on October 16, 2024, the Company filed a motion to correct the post-judgment interest rate set forth in the judgment, and Ho filed a motion requesting an award of pre-judgment interest. In the fourth quarter of 2024, the Company acquired a surety bond for the amount owing. On May 7, 2025, the Court entered an order denying the Company’s motions for judgment as a matter of law and for a new trial but granted a 20 percent reduction of the jury’s verdict. The Court also denied Ho’s motion for pre-verdict prejudgment interest but awarded post-verdict prejudgment interest. The Company intends to continue to defend its positions vigorously and assert its various legal arguments to challenge both the verdict and the amount of the award. Malikie Innovations Ltd. et al v. MARA On May 12, 2025, Malikie Innovations Ltd., a non-practicing entity, filed a lawsuit against the Company in the Western District of Texas, alleging that the Company’s bitcoin mining operations infringe certain patents related to cryptographic technologies used in the Bitcoin network. The Company filed a motion to dismiss one of the asserted patents on July 21, 2025, and intends to vigorously defend against the claims. NOTE 16 - RELATED PARTY TRANSACTIONS During the six months ended June 30, 2025, the Company converted $ 1.2 million from its previously outstanding Auradine SAFE investment into preferred stock and purchased additional shares of Auradine preferred stock for a purchase price of $ 20.0 million. As of June 30, 2025, the Company’s total investment holdings in Auradine was $ 85.4 million, reflecting prior purchases of preferred stock, the exercise of a warrant to acquire common stock and adjustments to the carrying value of the investment in accordance with ASC 321. The Company holds one seat on Auradine’s board of directors. During the six months ended June 30, 2025, the Company advanced $ 73.3 million to Auradine for product purchases, all of which were fulfilled by the end of the period, with no outstanding balance remaining. As of June 30, 2025, the Company had an outstanding commitment to Auradine to purchase $ 51.4 million of additional products to be paid in periodic installments throughout 2025. During the six months ended June 30, 2024, the Company made advances of $ 29.1 million, for future purchases resulting in a total advances to Auradine of $ 43.6 million as of June 30, 2024. F-36 Table of Contents NOTE 17 – SUPPLEMENTAL CONDENSED CONSOLIDATED FINANCIAL INFORMATION The following table provides supplemental disclosure of Condensed Consolidated Statements of Cash Flows information: Six Months Ended June 30, 2025 2024 Cash and cash equivalents $ 109,475 $ 256,027 Restricted cash 12,000 12,000 Total cash, cash equivalents and restricted cash $ 121,475 $ 268,027 Supplemental information: Cash paid during the year for: Cash paid for income taxes $ 2,052 $ 1,256 Cash paid for interest 100 4 Supplemental schedule of non-cash investing and financing activities: Digital assets transferred from Digital assets, net of current portion $ 598,267 $ — Digital assets transferred to Digital assets, net of current portion 131,020 — Right-of-use asset obtained in exchange for new operating lease liabilities 6,537 — Reclassifications from advances to vendor to property and equipment upon receipt of equipment 223,430 175,442 Reclassifications from long-term prepaid to property and equipment — 3,273 Reclassifications from deposits to property and equipment 2,556 — Reclassifications from investments to property and equipment — 4,416 Reclassifications from long-term prepaid to intangible assets — 2,633 Contingent consideration from acquisition 10,000 — Asset retirement obligation acquired 3,250 — Dividends received from equity method investment 14,049 18,912 Distribution to noncontrolling interest 2,076 — NOTE 18 – SUBSEQUENT EVENTS On July 25, 2025, the Company issued $ 950.0 million in aggregate principal amount of 0.00 % Convertible Senior Notes due 2032 (the “August 2032 Notes”). The August 2032 Notes do not bear regular interest and will mature on August 1, 2032, unless earlier converted, redeemed or repurchased in accordance with their terms. The Company used a portion of the net proceeds from the sale of the August 2032 Notes to repurchase approximately $ 19.4 million in aggregate principal amount of outstanding December 2026 Notes, resulting in a gain on extinguishment of debt, and approximately $ 36.9 million to pay the cost of capped call transactions entered into with certain of the initial purchasers of the notes or their respective affiliates and certain other financial institutions. Subsequent to June 30, 2025, the Company issued an aggregate 7,944,692 shares of common stock under the 2025 ATM. As a result, the Company had approximately $ 1.6 billion aggregate offering price remaining under the 2025 ATM. F-37 Table of Contents