# Core Scientific, Inc./tx (CORZ)

Informational only - not investment advice.

CIK: 0001839341
SIC: 6199 Finance Services
SIC breadcrumb: [Finance, Insurance, And Real Estate](/division/H/) > [SIC Major Group 61](/major-group/61/) > [SIC 6199 Finance Services](/industry/6199/)
Latest 10-K filed: 2026-03-02
SEC page: https://www.sec.gov/edgar/browse/?CIK=1839341
Filing source: https://www.sec.gov/Archives/edgar/data/1839341/000162828026013305/core-20251231.htm

## Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
| --- | ---: | --- | ---: | --- |
| Revenue | 319019000 | USD | 2025 | 2026-03-02 |
| Net income | -288616000 | USD | 2025 | 2026-03-02 |
| Assets | 2347644000 | USD | 2025 | 2026-03-02 |

## Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-03-02. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001839341.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

| Metric | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Revenue |  | 60,320,000 | 544,483,000 | 640,313,000 | 502,400,000 | 510,672,000 | 319,019,000 |
| Net income |  | -12,206,000 | 47,312,000 | -2,146,318,000 | -246,487,000 | -1,437,874,000 | -288,616,000 |
| Operating income |  | -6,327,000 | 131,494,000 | -2,109,553,000 | 8,961,000 | -142,065,000 | -245,589,000 |
| Gross profit |  | 9,392,000 | 238,862,000 | 8,400,000 | 123,459,000 | 121,070,000 | 37,898,000 |
| Diluted EPS |  | -0.14 | 0.20 | -6.30 | -0.65 | -4.87 | -0.88 |
| Operating cash flow |  | -23,765,000 | -56,735,000 | 205,187,000 | 65,114,000 | 42,896,000 | 278,250,000 |
| Capital expenditures |  | 0.00 | 0.00 | 383,980,000 | 16,161,000 | 94,961,000 | 729,000,000 |
| Share buybacks |  |  |  | 31,646,000 | 0.00 | 0.00 |  |
| Assets |  | 15,000 | 2,438,864,000 | 807,686,000 | 712,156,000 | 1,475,946,000 | 2,347,644,000 |
| Liabilities |  | 400 | 1,053,178,000 | 1,217,032,000 | 1,309,097,000 | 2,418,995,000 | 3,310,384,000 |
| Stockholders' equity | 106,329,000 | 89,224,000 | 1,341,210,000 | -409,346,000 | -596,941,000 | -943,049,000 | -962,740,000 |
| Cash and cash equivalents |  |  | 117,871,000 | 15,884,000 | 50,409,000 | 836,197,000 | 311,378,000 |
| Free cash flow |  | -23,765,000 | -56,735,000 | -178,793,000 | 48,953,000 | -52,065,000 | -450,750,000 |

### Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

| Metric | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Net margin |  | -20.24% | 8.69% |  | -49.06% |  | -90.47% |
| Operating margin |  | -10.49% | 24.15% |  | 1.78% | -27.82% | -76.98% |
| Return on assets |  |  | 1.94% |  | -34.61% | -97.42% | -12.29% |
| Current ratio |  |  | 2.36 | 0.46 | 0.20 | 6.72 | 1.15 |

## Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-06. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001839341.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

| Quarter | End date | Revenue | Net income | Diluted EPS | Method |
| --- | --- | ---: | ---: | ---: | --- |
| 2022-Q2 | 2022-06-30 |  |  | -2.49 | reported discrete quarter |
| 2022-Q3 | 2022-09-30 |  |  | -1.23 | reported discrete quarter |
| 2023-Q1 | 2023-03-31 |  |  | -0.03 | reported discrete quarter |
| 2023-Q2 | 2023-03-31 |  | -388,000 | 0.00 | reported discrete quarter |
| 2023-Q2 | 2023-06-30 | 126,912,000 |  |  | reported discrete quarter |
| 2023-Q3 | 2023-09-30 | 112,904,000 | -41,146,000 | -0.11 | reported discrete quarter |
| 2023-Q4 | 2023-12-31 | 141,929,000 | -195,693,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2024-Q1 | 2024-03-31 | 179,291,000 | 210,691,000 | 0.78 | reported discrete quarter |
| 2024-Q2 | 2024-06-30 | 141,102,000 | -804,896,000 | -4.51 | reported discrete quarter |
| 2024-Q3 | 2024-09-30 | 95,354,000 | -455,259,000 | -1.17 | reported discrete quarter |
| 2024-Q4 | 2024-12-31 | 94,925,000 | -265,541,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2025-Q1 | 2025-03-31 | 79,525,000 | 580,693,000 | 1.25 | reported discrete quarter |
| 2025-Q2 | 2025-06-30 | 78,628,000 | -936,799,000 | -0.04 | reported discrete quarter |
| 2025-Q3 | 2025-09-30 | 81,103,000 | -144,027,000 | -0.45 | reported discrete quarter |
| 2025-Q4 | 2025-12-31 | 79,763,000 | 215,959,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2026-Q1 | 2026-03-31 | 115,244,000 | -347,188,000 | -1.06 | reported discrete quarter |

## Macro Cross-References
- [CPIAUCSL](/indicator/CPIAUCSL/): Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
- [UNRATE](/indicator/UNRATE/): Unemployment Rate
- [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate
- [CES0500000003](/indicator/CES0500000003/): Average Hourly Earnings of All Employees, Total Private
- [DFEDTARU](/indicator/DFEDTARU/): Federal Funds Target Range - Upper Limit
- [DFEDTARL](/indicator/DFEDTARL/): Federal Funds Target Range - Lower Limit
- [DGS3MO](/indicator/DGS3MO/): Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
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- [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
- [DGS30](/indicator/DGS30/): Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
- [T10Y2Y](/indicator/T10Y2Y/): 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
- [CPILFESL](/indicator/CPILFESL/): Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
- [CPIUFDSL](/indicator/CPIUFDSL/): Consumer Price Index for All Urban Consumers: Food
- [CPIENGSL](/indicator/CPIENGSL/): Consumer Price Index for All Urban Consumers: Energy
- [CUSR0000SAH1](/indicator/CUSR0000SAH1/): Consumer Price Index for All Urban Consumers: Shelter
- [PCEPI](/indicator/PCEPI/): Personal Consumption Expenditures: Chain-type Price Index
- [PCEPILFE](/indicator/PCEPILFE/): Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
- [PPIACO](/indicator/PPIACO/): Producer Price Index by Commodity: All Commodities
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- [U6RATE](/indicator/U6RATE/): Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
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- [GDPC1](/indicator/GDPC1/): Real Gross Domestic Product
- [A191RL1Q225SBEA](/indicator/A191RL1Q225SBEA/): Real Gross Domestic Product: Percent Change from Preceding Period
- [INDPRO](/indicator/INDPRO/): Industrial Production: Total Index
- [TCU](/indicator/TCU/): Capacity Utilization: Total Index
- [HOUST](/indicator/HOUST/): New Privately-Owned Housing Units Started: Total Units
- [PERMIT](/indicator/PERMIT/): New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
- [RSAFS](/indicator/RSAFS/): Advance Retail Sales: Retail Trade
- [PCE](/indicator/PCE/): Personal Consumption Expenditures
- [DSPIC96](/indicator/DSPIC96/): Real Disposable Personal Income
- [PSAVERT](/indicator/PSAVERT/): Personal Saving Rate
- [M2SL](/indicator/M2SL/): M2
- [BOPGSTB](/indicator/BOPGSTB/): U.S. International Trade in Goods and Services: Balance
- [MSPUS](/indicator/MSPUS/): Median Sales Price of Houses Sold for the United States
- [HSN1F](/indicator/HSN1F/): New One Family Houses Sold: United States
- [RHORUSQ156N](/indicator/RHORUSQ156N/): Homeownership Rate in the United States
- [TTLCONS](/indicator/TTLCONS/): Total Construction Spending: Total Construction in the United States
- [RRVRUSQ156N](/indicator/RRVRUSQ156N/): Rental Vacancy Rate in the United States
- [TOTALSL](/indicator/TOTALSL/): Total Consumer Credit Owned and Securitized
- [REVOLSL](/indicator/REVOLSL/): Revolving Consumer Credit Owned and Securitized
- [DRCCLACBS](/indicator/DRCCLACBS/): Delinquency Rate on Credit Card Loans, All Commercial Banks
- [GDP](/indicator/GDP/): Gross Domestic Product
- [GPDI](/indicator/GPDI/): Gross Private Domestic Investment
- [GCE](/indicator/GCE/): Government Consumption Expenditures and Gross Investment
- [PCEC](/indicator/PCEC/): Personal Consumption Expenditures
- [NETEXP](/indicator/NETEXP/): Net Exports of Goods and Services
- [GFDEBTN](/indicator/GFDEBTN/): Federal Debt: Total Public Debt
- [GFDEGDQ188S](/indicator/GFDEGDQ188S/): Federal Debt: Total Public Debt as Percent of Gross Domestic Product
- [FYFSD](/indicator/FYFSD/): Federal Surplus or Deficit
- [FGRECPT](/indicator/FGRECPT/): Federal Government Current Receipts
- [FGEXPND](/indicator/FGEXPND/): Federal Government: Current Expenditures
- [MANEMP](/indicator/MANEMP/): All Employees, Manufacturing
- [USCONS](/indicator/USCONS/): All Employees, Construction
- [USTRADE](/indicator/USTRADE/): All Employees, Retail Trade
- [USFIRE](/indicator/USFIRE/): All Employees, Financial Activities
- [USGOVT](/indicator/USGOVT/): All Employees, Government
- [AWHAETP](/indicator/AWHAETP/): Average Weekly Hours of All Employees, Total Private
- [DGORDER](/indicator/DGORDER/): Manufacturers' New Orders: Durable Goods
- [NEWORDER](/indicator/NEWORDER/): Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
- [BUSINV](/indicator/BUSINV/): Total Business Inventories
- [EXPGS](/indicator/EXPGS/): Exports of Goods and Services
- [IMPGS](/indicator/IMPGS/): Imports of Goods and Services
- [IR](/indicator/IR/): Import Price Index (End Use): All Commodities
- [PPIFIS](/indicator/PPIFIS/): Producer Price Index by Commodity: Final Demand

## Latest quarter (10-Q)

Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/1839341/000162828026031396/core-20260331.htm

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary.
Confidence: high
Filing date: 2026-05-06
Report date: 2026-03-31

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Unless the context otherwise requires, all references in this section to “we,” “us,” “our,” the “Company,” “Core Scientific,”

or “Core” refer to Core Scientific, Inc. and its subsidiaries.

The following Management's Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is

intended to promote understanding of the results of operations and financial condition of the Company. This MD&A is provided as a

supplement to, and should be read in conjunction with, our unaudited condensed consolidated financial statements and the

accompanying notes to unaudited condensed financial statements (Part I, Item 1 of this Form 10-Q) as well as the financial and other

information included in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the Securities and

Exchange Commission on March 2, 2026. This section generally discusses the results of operations for the three months ended

March 31, 2026, compared to March 31, 2025.

As discussed in the section titled “Cautionary Note Regarding Forward-Looking Statements,” the following discussion and

analysis contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they never

materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking

statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those

discussed in the section titled “Risk Factors” under Part I, Item 1A in our Annual Report on Form 10-K for the year ended December

31, 2025, filed with the Securities and Exchange Commission on March 2, 2026.

Overview

Core Scientific, Inc. (“we,” “us,” “our,” the “Company,” “Core Scientific,” or “Core”) designs, builds and operates large-scale

purpose-built data centers that support high-density colocation services and digital asset mining for both our own account and to a

lesser extent, third-party customers. Our data centers are optimized for power-intensive, mission-critical computing workloads, with a

focus on artificial intelligence (“AI”) and other high-performance computing (“HPC”) applications.

In 2024, we announced our first high-density colocation contract with CoreWeave, Inc. (“CoreWeave), a provider of HPC

services, which was subsequently expanded to 590 megawatts (“MW”) of leased customer power capacity over the exercise of several

contractual options. We believe leveraging our existing infrastructure for high-density colocation services will provide more stable and

predictable revenue streams and represents substantially less risk over time than our traditional hosted bitcoin mining or self-mining

operations.

We are constructing, refurbishing, reallocating or converting our 11 facilities in Alabama (1), Georgia (2), Kentucky (1), North

Carolina (1), North Dakota (1), Oklahoma (1), and Texas (4) to support artificial intelligence related workloads, in support of our

existing colocation customer, but also to support our commitment to meeting the growing demand for high-density colocation

solutions and diversifying our customer base. This will be done as circumstances allow and, in a manner, designed to retain access to

electrical power under our control, maximize the value of our digital asset mining equipment to third parties, and fulfill existing

obligations to suppliers and customers.  In addition to converting our existing portfolio, we are actively pursuing the acquisition of

new sites, including land and power capacity, to expand our data center footprint beyond our current facilities.

We will continue to mine digital assets and manage our self-mining fleet with a focus on power expense coverage and cash

generation while we convert our data centers for alternative high-density colocation service business opportunities. We expect to

increase revenue derived from high-density colocation (“HDC”) services as capacity gets delivered to our current end customer as well

as when we sign and begin generating revenue from new colocation customers.

As of March 31, 2026, we operated a diversified portfolio of ten data centers across seven U.S. states, representing

approximately 1.9 gigawatts (“GW”) of gross utility power capacity, or approximately 1.3 GW of total leasable customer power

capacity. We continue to be in active discussions with both our existing and future potential utility providers regarding additional

power allocations.

For the three months ended March 31, 2026, total revenue increased to $115.2 million from $79.5 million for the prior period,

primarily due to higher colocation revenue from incremental billable customer power capacity, partially offset by lower digital asset

self-mining revenue driven by reduced bitcoin production and lower average bitcoin prices. Operating loss was $310.4 million for the

three months ended March 31, 2026, compared to $47.0 million in the prior period, primarily driven by $266.5 million of non-cash

impairment charges on mining-related property, plant and equipment. Net loss was $347.2 million during the three months ended

March 31, 2026, compared to net income of $576.3 million in the prior period, and included significant non-cash items, including

33

changes of $30.8 million in the fair value of warrants and contingent value rights. Adjusted EBITDA increased to $4.4 million from

$(6.1) million in the prior period. Adjusted EBITDA is a non-GAAP financial measure. See “Key Business Operating Metrics and

Non-GAAP Financial Measures” below for our definition of, and additional information related to Adjusted EBITDA.

Recent Developments

Term Loan Facility

On March 4, 2026, we entered into a loan facility Credit Agreement (the “Credit Agreement”), by and among us, as borrower,

the lenders party thereto from time to time (the “Lenders”) and Morgan Stanley Senior Funding, Inc. (“MSSF”), as administrative

agent and collateral agent. The Credit Agreement provides for a senior secured loan facility (the “Term Loan Facility”) in an aggregate

principal amount of $500.0 million. The Credit Agreement also provides for an accordion feature that allowed us to request an

increase in commitments under the Credit Agreement by up to an additional $500.0 million. Subject to certain customary conditions,

we may borrow funds available under the Term Loan Facility, in up to ten separate advances, during the period commencing on May

4, 2026 and ending on the date that is one business day prior to the Maturity Date (as defined below). We borrowed the full $500.0

million initially available under the Credit Agreement on March 5, 2026.

On March 18, 2026, we entered into an Amendment No. 1 to the Credit Agreement (the “Incremental Amendment”) with

MSSF and JPMorgan Chase Bank, N.A. (“JPM”), as Amendment No. 1 Term Lender, which amends the Credit Agreement to increase

the term loan commitments thereunder by $500.0 million, to $1.0 billion total, pursuant to the accordion feature. We borrowed the full

$500.0 million incremental commitment on March 18, 2026.

The Term Loan Facility will mature, and all obligations thereunder will become due and payable, on March 3, 2027 (the

“Maturity Date”). Loans under the Term Loan Facility bear interest at a rate equal to term SOFR (subject to a 0% floor), plus an

applicable margin of 2.50% per annum.

Our obligations under the Credit Agreement are guaranteed by certain of our direct or indirect, wholly owned material domestic

subsidiaries and are secured by a first-priority lien on substantially all our and the guarantors assets.

In connection with the offering of $3.3 billion aggregate principal amount of 7.75% senior secured notes due 2031 by our

indirect wholly-owned subsidiary, Core Scientific Finance I LLC, as described below, we used a portion of the proceeds from such

offering that was distributed to us to repay in full the outstanding borrowings under the Term Loan Facility, including accrued interest

thereon and fees and expenses in connection therewith, and upon such repayment, we terminated the Term Loan Facility.

Senior Secured Notes Offering

On April 22, 2026, our indirect wholly-owned subsidiary, Core Scientific Finance I LLC ("Core Scientific Finance"), priced a

private offering of $3.30 billion aggregate principal amount of 7.75% senior secured notes due 2031 at an issue price of 99.25% of the

principal amount. Core Scientific Finance used the net proceeds from the offering to fund a debt service reserve account, and the

remaining proceeds to make a distribution to us, a portion of which we used to repay in full the outstanding borrowings under the

Term Loan Facility, including accrued interest thereon and fees and expenses in connection therewith. The Offering closed on May 6,

2026.

The Notes are guaranteed by each of Core Scientific Austin LLC, Core Scientific Denton LLC, Core Scientific Dalton LLC,

Core Scientific Marble LLC and Core Scientific Muskogee LLC, which collectively represent Core Scientific Finance's only

subsidiaries (the "Subsidiary Guarantors").

In connection with the Offering, we have commenced a series of restructuring transactions intended to transfer or grant all

assets and rights reasonably necessary for the development and operation of specified data center facilities to Core Scientific Finance

and the Subsidiary Guarantors.

The Notes and related guarantees are secured by first-priority liens on (i) substantially all assets of Core Scientific Finance and

the Subsidiary Guarantors, other than certain excluded property, (ii) all equity interests of Core Scientific Finance held by the direct

parent of Core Scientific Finance, Core Scientific Finance Holding LLC ("Holdco"), and (iii) certain of our assets and rights to be

transferred or granted, as applicable, to Core Scientific Finance and the Subsidiary Guarantors pursuant to the restructuring described

above that have not yet been transferred or granted as of the date hereof.

34

In addition, in connection with the issuance of the Secured Notes, we provide a customary, uncapped completion guarantee for

the benefit of the holders of the Notes with respect to the completion of the data center development projects. The completion

guarantee will require that we provide Core Scientific Finance with funds necessary to ensure the completion of such projects in the

event that the proceeds of the offering of Secured Notes and other available funds are insufficient to do so.

CoreWeave Special Purpose Vehicle

The Company received notice from its counterparty, CoreWeave, Inc., of its intention to enter into assignment and assumption

agreements for our Dalton 1 and Denton North Colocation License Agreements and Orders, as amended, ("License Agreements") with

a special purpose vehicle that is an indirect subsidiary of CoreWeave, Inc. ("CW SPV"). We understand that CW SPV received certain

commitments from a customer sufficient for the debt issued by CW SPV to obtain an investment grade rating. While CoreWeave

remains a primary obligor under the terms of the License Agreements, as a result of the assignment and assumption agreements, CW

SPV is now the Licensee under the License Agreements.

Key Factors Affecting Our Financial Performance

Our results of operations, liquidity and cash flows are affected by a number of factors, including (i) our ability to execute our

strategic transition toward high‑density colocation services, (ii) bitcoin market conditions and network fundamentals that drive

self‑mining economics, (iii) broader macroeconomic and regulatory developments, (iv) power prices and curtailment activity, and (v)

the competitive landscape for our industry. The factors below highlight key drivers that have affected, and may continue to affect, our

financial performance.

[Excerpt truncated for page length; source filing is linked above.]

## Latest 10-K MD&A

Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary.
Confidence: high

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Unless the context otherwise requires, all references in this section to “we,” “us,” “our,” the “Company,” “Core Scientific,”

or “Core” refer to Core Scientific, Inc. and its subsidiaries.

The following Management's Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is

intended to promote understanding of the results of operations and financial condition. This MD&A is provided as a supplement to,

and should be read in conjunction with, our consolidated financial statements and the accompanying Notes to Financial Statements

(Part II, Item 8 of this Form 10-K). This section generally discusses the results of operations for 2025 compared to 2024. For

discussion related to the results of operations and changes in consolidated financial condition for 2024 compared to 2023 refer to

Part II, Item 7. — “Management's Discussion and Analysis of Financial Condition and Results of Operations” in our fiscal year 2024

Annual Report on Form 10-K, which was filed with the SEC on February 20, 2025.

Unless otherwise indicated, references to “2025” and “2024” in this MD&A refer to the years ended December 31, 2025

and 2024, respectively.

As described in Note 3 — Restatement of Previously Issued Financial Statements in Part II, Item 8 to the consolidated

financial statements included in this Annual Report, during the preparation of the consolidated financial statements for the year ended

December 31, 2025, the Company identified errors in its previously issued consolidated financial statements related to the accounting

for property, plant and equipment demolished in connection with the conversion of certain facilities from digital asset mining

operations to high-density colocation infrastructure. The Company is concurrently filing an amended Annual Report on Form 10-K/A

for the year ended December 31, 2024 and amended Quarterly Reports on Forms 10-Q/A for the quarterly periods ended March 31,

2025, June 30, 2025, and September 30, 2025. The discussion that follows presents 2024 comparative data on an as-restated basis.

As discussed in the section titled “Cautionary Note Regarding Forward-Looking Statements,” the following discussion and

analysis contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they never

materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking

statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those

discussed in the section titled “Risk Factors” under Part I, Item 1A in this Annual Report on Form 10-K.

Overview

Core Scientific, Inc. (“we,” “us,” “our,” the “Company,” “Core Scientific,” or “Core”) designs, builds and operates large-scale

purpose-built data centers that support high-density colocation services and digital asset mining for both our own account and to a

lesser extent, third-party customers. Our data centers are optimized for power-intensive, mission-critical computing workloads, with a

focus on artificial intelligence (“AI”) and other high-performance computing (“HPC”) applications.

In 2024, the Company announced its first high-density colocation contract with CoreWeave, Inc. (“CoreWeave), a  provider of

high-performance computing (“HPC”) services, which subsequently had been expanded to 590 megawatts (“MW”) of leased customer

power capacity over the exercise of several contractual options. We believe leveraging our existing infrastructure for high-density

colocation services will provide more stable and predictable revenue streams, and represents substantially less risk over time than our

traditional hosted bitcoin mining or self-mining operations.

We are constructing, refurbishing, reallocating or converting our ten facilities in Alabama (1), Georgia (2), Kentucky (1), North

Carolina (1), North Dakota (1), Oklahoma (1), and Texas (3) to support artificial intelligence related workloads, in support of our

existing colocation customer, but also to support our commitment to meeting the growing demand for high-density colocation

solutions and diversifying our customer base. This will be done as circumstances allow and in a manner designed to retain access to

electrical power under our control, maximize the value of our digital asset mining equipment to third parties, and fulfill existing

obligations to suppliers and customers. We intend to convert every megawatt in our portfolio to high-density colocation infrastructure

over the next three years. In addition to converting our existing portfolio, we are actively pursuing the acquisition of new sites,

including land and power capacity, to expand our data center footprint beyond our current facilities.

Currently, the vast majority of our revenue is from mining bitcoin for our own account (“self-mining”). We will continue to

mine digital assets and manage our self-mining fleet with a focus on power expense coverage and cash generation while we convert

our data centers for alternative high-density colocation service business opportunities. We expect to increase revenue derived from

high-density colocation (“HDC”) services as capacity gets delivered to our current end customer as well as when we sign and begin

generating revenue from new colocation customers.

50

As of December 31, 2025, we operated a diversified portfolio of ten data centers across seven U.S. states, representing

approximately 1.4 gigawatts (“GW”) of gross utility power capacity, or approximately 920 megawatts (“MW”) of total leasable

customer power capacity. We continue to be in active discussions with both our existing and future potential utility providers

regarding additional power allocations.

During 2025, total revenue decreased to $319.0 million from $510.7 million, primarily due to lower digital asset self-mining

revenue and digital asset hosted mining revenue as we shifted capital and infrastructure toward colocation, partially offset by higher

colocation revenue from incremental billable customer power capacity. Operating loss increased to $245.6 million in 2025 from

$142.1 million in 2024. Net loss was $288.6 million in 2025 and included significant non-cash items, including changes of $33.1

million in the fair value of warrants and contingent value rights. Adjusted EBITDA decreased to $29.7 million in 2025 from $157.4

million in 2024. Adjusted EBITDA is a non-GAAP financial measure. See “Key Business Operating Metrics and Non-GAAP

Financial Measures” below for our definition of, and additional information related to Adjusted EBITDA.

Developments During 2025

On July 7, 2025, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with CoreWeave, Inc.

(“CoreWeave”) pursuant to which CoreWeave would acquire the Company in an all-stock transaction, subject to stockholder approval

and other customary closing conditions. On October 30, 2025, the Company terminated the Merger Agreement in accordance with its

terms following Company stockholder rejection of the terms of the Merger Agreement at a special meeting of stockholders on that

date.

The Company incurred $21.6 million of advisory, legal, and other professional or consulting fees related to the proposed

transaction which are reflected in our results of operations for the year ended December 31, 2025. Other than these costs, the

termination of the Merger Agreement did not result in any termination fees and did not have a material impact on the Company’s

financial position or results of operations.

Our Business Model

Business Overview

As a large-scale owner and operator of high-power digital infrastructure, we generate revenue primarily through (i) Colocation

services (ii) Digital Asset Self‑Mining, and (iii) Digital Asset Hosted Mining services. We are in the process of reallocating significant

portions of our infrastructure and capital from bitcoin mining to HDC services for AI and HPC workloads.

We focus primarily on contracting our digital infrastructure for Colocation, mining bitcoin, and enhancing efficiencies in our

operations. In self‑mining, we earn bitcoin by operating our owned mining fleet through mining pool arrangements, and in hosted

mining and colocation we earn fees for providing infrastructure, power and related services to third parties.

Our data centers house bitcoin mining computers and will increasingly house specialized compute accelerators, including

graphics processing units (“GPUs”). These facilities leverage our specialized design and construction capabilities by employing high-

density, innovative engineering, power designs and modular construction. For digital asset mining, our proprietary thermodynamic

structural design manages heat and airflow to deliver reliable operations to us and our customers. As part of our go-forward strategy,

we are in the process of converting our entire data center portfolio to support our high-density Colocation operations for AI and HPC

workloads.

Business Strategy

Our strategy is to grow our revenue and profitability by converting and expanding our large-scale data center infrastructure

portfolio to deliver high-density colocation services for artificial intelligence and HPC workloads. We plan to develop and bring

online the infrastructure required to meet our existing contractual commitments to our high-density colocation customer, expand our

infrastructure portfolio by securing additional land and power at new and existing sites, and sign additional colocation customers to

diversify our revenue base.

Our customer strategy targets hyperscale cloud-based providers, neoclouds, and enterprises, including customers we believe

have significant data center infrastructure needs that have not yet been outsourced or will require additional data center space and

power to support their growth and their increasing reliance on technology infrastructure in their operations.

51

Segments

We have three operating segments: “Colocation,” consisting of providing high-density colocation services to customers

employing AI and HPC related workloads, “Digital Asset Self-Mining,” consisting of performing digital asset mining for our own

account, and “Digital Asset Hosted Mining,” consisting of providing hosting services to third parties for digital asset mining. Prior to

April 1, 2024, we operated primarily in the Digital Asset Self-Mining and Digital Asset Hosted Mining segments.

Our Colocation segment provides space, power, cooling, facilities operations, security and other services to third-party

customers to support workloads for machine learning and artificial intelligence.

Our Digital Asset Self-Mining operation segment generates revenue from the deployment and operation of our own large fleet

of miners within our owned digital infrastructure as part of a pool of users that process transactions conducted on one or more

blockchain networks. In exchange for this activity, we receive digital assets in the form of bitcoin.

Our Digital Asset Hosted Mining operation segment generates revenue from recurring hosting services, which are generally

priced based on power usage and other service components. Our Digital Asset Hosted Mining operation segment provides a full suite

of services to our digital asset mining customers. We provide deployment, monitoring, troubleshooting, optimization and maintenance

of our customers’ digital asset mining equipment and provide necessary electrical power, repair and other infrastructure services

necessary for our customers to operate, maintain and efficiently mine digital assets. We do not currently expect to further expand our

Digital Asset Hosted Mining operations in future years.

Mining Equipment

On July 5, 2024, we entered into an arrangement with Block, Inc. (“Block”), a technology company developing ASICs,

pursuant to which we received ASICs during 2025 and expect to receive additional ASICs during 2026. As of December 31, 2025, we

estimate approximately $64.8 million of remaining cash payments associated with this arrangement, of which approximately $36.6

million was paid upon delivery in January 2026, with the remaining balance payable on a deferred basis primarily during 2026 and

extending into early 2027.

Aside from the miners received in 2025 and those expected from Block, we do not anticipate entering into new large-scale

bitcoin mining equipment procurement agreements as we continue to shift capital allocation toward HDC infrastructure. As a result,

we expect future capital expenditures related to mining equipment to decline. See “Liquidity and Capital Resources” for a discussion

of our material cash requirements and expected sources of funding, including capital expenditures and commitments.

The tables below summarize the total number of self- and hosted miners in operation as of December 31, 2025 and

December 31, 2024 (miners in thousands):

Bitcoin Miners in Operation as of December 31, 2025

Mining Equipment

Hash rate (EH/s)

Number of Miners

Self-miners

15.7

135.5

Hosted miners

2.2

15.9

Total mining equipment

17.9

151.4

Bitcoin Miners in Operation as of December 31, 2024

Mining Equipment

Hash rate (EH/s)

Number of Miners

Self-miners

19.1

164.0

Hosted miners

1.0

7.1

Total mining equipment

20.1

171.1

See “Key Business Operating Metrics and Non‑GAAP Financial Measures” below for definitions and discussion of the

operating metrics management uses to evaluate our performance.

52

Key Factors Affecting Our Financial Performance

Our results of operations, liquidity and cash flows are affected by a number of factors, including (i)  our ability to execute our

strategic transition toward high‑density colocation services, (ii) bitcoin market conditions and network fundamentals that drive

self‑mining economics, (iii) broader macroeconomic and regulatory developments, (iv) power prices and curtailment activity, and (v)

the competitive landscape for our industry. The factors below highlight key drivers that have affected, and may continue to affect, our

financial performance.

Our financial performance depends in part on our ability to operate our self‑mining fleet profitably and, as we transition our

business, to execute and expand our colocation operations and attract and retain colocation customers. Increases in power costs,

inability to mine digital assets efficiently and to sell digital assets at favorable prices will reduce our operating margins and could have

a material near-term adverse effect on our business, financial condition and results of operations. In addition, sustained declines in

bitcoin prices or adverse changes in network conditions could reduce cash generated from self‑mining during periods where

self‑mining remains a significant contributor to our results.

Strategic Transition to High-Density Colocation Services

As we grow our Colocation operations over the next several years by converting the remaining bitcoin mining sites and adding

new infrastructure and customers, we expect Colocation to represent a larger share of our results and gradually reduce our exposure to

bitcoin spot price volatility. The Colocation segment is characterized by the implementation of long-term contracts with customers

spanning 10+ years with terms and conditions resulting in stable, predictable revenue and cash flows over each period.

The pace of this transition, and the timing of related revenue and cash flows, depends on (i) customer deployment schedules

under existing and future contracts and (ii) the timing and cost of converting and commissioning incremental billable customer power

capacity. Conversion capital expenditures and timelines are sensitive to equipment lead times and availability, labor constraints,

permitting and interconnection sequencing, and supply chain and logistical challenges. Changes in these inputs can affect when

incremental capacity becomes billable and therefore may affect the timing of colocation revenue, cost of services and related cash

flows.

Bitcoin Market Conditions

Our Digital Asset Self-Mining segment is heavily dependent on the spot price of bitcoin. The prices of digital assets,

specifically bitcoin, have experienced substantial volatility, meaning that high or low prices may have little or no relationship to

identifiable market forces, may be subject to rapidly changing investor sentiment, and may be influenced by factors such as

technology, regulatory developments and enforcement actions. Bitcoin (as well as other digital assets) may have value based on

various factors, including their acceptance as a means of exchange by consumers and others, scarcity, and market demand. Changes in

the market price of bitcoin can materially affect (i) revenue recognized from self‑mining, (ii) the fair value of digital assets we hold

and related gains or losses recognized in our results of operations, and (iii) liquidity to the extent we sell bitcoin as part of our treasury

strategy. Bitcoin miners also receive a transaction fee in the form of a portion of bitcoin for validating transactions on the Bitcoin

network.  The transaction fee can vary in value over time, with higher fees prioritizing certain transactions over those with lower fees. 

An increase in Bitcoin network transaction fees increases mining proceeds.

Higher power costs, lower realized bitcoin prices, or reduced mining efficiency would reduce self-mining margins and cash

generation during periods when self-mining remains a significant contributor to our results. As we transition, the timing of colocation

conversions and customer deployments, and our ability to execute and scale colocation operations and retain colocation customers,

will increasingly influence our revenue mix and profitability.

Bitcoin Network Fundamentals

Our business is not only impacted by the volatility in digital asset prices and transaction fees, but also by increases in the

competition for digital asset production. For bitcoin, this increased competition is described as the network hash rate resulting from the

growth in the overall quantity and quality of miners working to solve blocks on the bitcoin blockchain, and the difficulty index

associated with the secure hashing algorithm employed in solving the blocks. Increases in network hash rate generally increase

network difficulty over time, which can reduce the amount of bitcoin earned for a given level of deployed hash rate and power

consumption.

53

Increased difficulty reduces the mining proceeds of the equipment proportionally and eventually requires bitcoin miners to

upgrade their mining equipment to remain profitable and compete effectively with other miners. Difficulty and network conditions are

outside of our control and can materially affect our self‑mining revenue and margins.

Tariffs

Beginning on February 1, 2025, the United States government announced a series of additional tariffs on goods imported to the

United States, raising concerns about material price inflation and delivery delays with respect to equipment and materials needed for

our high-density colocation data center conversions and also with respect to parts, machinery and hardware used in our digital asset

mining business. To date, tariffs have had no material impact on our costs or business operations, but we continue to analyze the

impact of these tariffs on our business and actions we can take to minimize any future impact. Our agreement with our HDC customer

is funded almost entirely by the customer and our financial contribution is capped at a fixed dollar amount, limiting the overall

potential impact of tariffs on our existing and future capital expenditures. Tariffs, however, could have additional impacts on our

results of operations in future years. To the extent tariffs increase the cost and/or lead time of key equipment and materials, they could

affect conversion economics, timelines and/or operating costs, which could affect the timing and profitability of our colocation

expansion.

Electricity Costs

Electricity cost is the major operating cost for our mining fleet, as well as for the hosted mining services provided to customers.

The cost and availability of electricity are affected primarily by changes in seasonal demand, with peak demand during the summer

months driving higher costs and increased curtailments to support grid operators. Severe winter weather can increase the cost of

electricity and the frequency of curtailments when it results in damage to power transmission infrastructure that reduces the grid’s

ability to deliver power. Geopolitical and macroeconomic factors, such as overseas military or economic conflict between states, can

adversely affect electricity costs by raising the cost of power generation inputs such as natural gas. Other events out of our control can

also impact electricity costs and availability. In our self‑mining and hosted mining operations, increases in power prices and/or

increased curtailments can materially reduce margins and cash generation. In our colocation operations, power costs are passed

through to customers and changes in power prices may increase revenue and cost of colocation services without a corresponding

change in gross profit.

Our Competition and Customers

In addition to factors underlying our mining business growth and profitability, the success of our Colocation business greatly

depends on our ability to retain and develop opportunities with our existing customers, secure additional infrastructure and attract new

customers.

Competition in digital asset mining is driven in part by access to low‑cost power, scale, fleet efficiency and capital availability,

and can contribute to increases in network hash rate and difficulty. We face significant competition in every aspect of our business,

including, but not limited to, the acquisition of new miners, the ability to raise capital, obtaining low-cost electricity, obtaining access

to sites with reliable sources of high power, and evaluating new technology developments in the industry. 

Based on available data, we believe that an increase in the scale and sophistication of competition in the digital asset mining

industry has continued to increase network hash rate, with new entrants and existing competitors increasing the number of miners

mining for bitcoin.

Despite this trend, our ability to compete in self‑mining will depend on managing fleet efficiency, power costs and capital

allocation as we shift resources toward colocation.

In our Colocation operations, we compete with other providers of high-power data center capacity, such as major data center

real estate investment trusts, developers of data centers, hyperscalers and bitcoin miners with capacity suitable for high-density

colocation services. This competition focuses primarily on the identification and acquisition of new, high-power sites, but also

includes competition for the capital required to build or modify existing sites to support high-density colocation.

Competition in colocation may affect pricing, contract terms, and the pace at which we can secure additional power and sites,

and therefore may affect revenue growth and required capital expenditures.

54

Regulation

We operate in a dynamic regulatory environment. For a discussion of federal, state, and international regulatory developments

affecting our digital asset mining and colocation activities, see “Government Regulation” in the Part I, Item 1 “Business” section in

this Annual Report on Form 10-K. We continue to evaluate whether any such developments present known trends or uncertainties that

may materially impact our operations, energy costs, or customer demand. Regulatory developments affecting digital assets, data

centers, energy markets and environmental matters could affect compliance costs, power availability and pricing, and customer

demand, which could impact our results of operations and liquidity.

Key Business Operating Metrics and Non-GAAP Financial Measures

In addition to our financial results, we use the following business operating metrics and non-GAAP financial measures to

evaluate our business, measure our performance, identify trends affecting our business, and make strategic decisions. These operating

metrics and non‑GAAP financial measures should be considered in addition to, and not as a substitute for, our consolidated financial

statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”).

Management also uses the following data center capacity and power metrics (measured in megawatts) to evaluate the scale of

our utility power footprint and customer IT load capacity, monitor customer commitments and remaining available capacity, assess

commissioning progress and deployment pacing, and inform capital allocation and site planning decisions. Unless otherwise indicated,

these metrics are presented as of period end and represent management estimates based on operational and engineering data and may

not be comparable to similarly titled measures used by other operators.

Metric (MW)

Definition

How management uses it

Gross Utility Power Capacity

Total electric utility power capacity agreements

associated with our data center sites under our

control as of period end, including capacity that

is commissioned for future use.

Used for portfolio planning and utility power

allocation discussions.

Total Leasable Customer Power

Capacity

Our estimate of the total non-redundant

customer IT load that our data center sites could

support in the aggregate as of period end,

regardless of whether such capacity has been

contracted with customers or remains available

for sale. This metric is representative of the

amount of power available for customer use in

servicing their workloads.

Used to assess total customer‑usable IT load

available for leasing, evaluate leased versus

unleased capacity, and plan conversion/

development sequencing and sales capacity.

Leased Customer Power

Capacity

Power capacity that is committed to customers

under executed customer contracts, regardless of

whether service has commenced as of period

end.

Used to monitor signed customer commitments

and contracted backlog and to plan future

deployment/commissioning requirements.

Unleased Customer Power

Capacity

The portion of Total Leasable Customer Power

not committed under customer contracts as of

period end. This metric is calculated as Total

Leasable Customer Power minus Leased

Customer Power Capacity.

Used to monitor remaining uncommitted

customer IT load and to prioritize incremental

contracting and conversion/commissioning

plans.

Billable Customer Power

Capacity

Portion of Leased Customer Power Capacity for

which service has commenced and we are

actively billing as of period end.

Used to monitor in-service customer power that

is billing and to track deployment/

commissioning pace and near-term revenue

ramp.

55

The following table presents the values for these metrics as of December 31, 2025 (in megawatts).

December 31,

2025

Gross Utility Power Capacity

1,426

Total Leasable Customer Power Capacity

920

Leased Customer Power Capacity

590

Unleased Customer Power Capacity

330

Billable Customer Power Capacity

120

Adjusted EBITDA

We report our financial results in accordance with GAAP. To supplement our consolidated financial statements, we provide

investors with Adjusted EBITDA, which is a non‑GAAP financial measure. Adjusted EBITDA is defined as our net loss, adjusted to

eliminate the effect of (i) interest income, interest expense, and other income (expense), net; (ii) provision for income taxes;

(iii) depreciation and amortization; (iv) stock-based compensation expense; (v) Reorganization items, net; (vi) unrealized fair value

adjustment on energy derivatives; (vii) change in fair value of warrant and contingent value rights; (viii) Colocation segment startup

costs primarily related to the initial ramp up of new colocation sites, (ix) impairment of property, plant and equipment, (x) site

demolition costs incurred in connection with the conversion of existing facilities to colocation data center operations, (xi) post-

emergence bankruptcy advisory costs incurred related to reorganization, (xii) transaction costs incurred in connection with the Merger

Agreement, including advisory, legal, and other professional or consulting fees, (xiii) loss on legal settlements, and (xiv) certain

additional non-cash items that do not reflect the performance of our ongoing business operations. The most directly comparable

GAAP measure to Adjusted EBITDA is net loss. For additional information, including a reconciliation of net loss to Adjusted

EBITDA, please refer to the table below.

We believe Adjusted EBITDA is an important measure because it allows management, investors, and our Board of Directors to

evaluate and compare our operating results, including our return on capital and operating efficiencies, from period-to-period by

making the adjustments described above. In addition, it provides useful information to investors and others in understanding and

evaluating our results of operations, as well as provides a useful measure for period-to-period comparisons of our business, as it

removes the effect of net interest expense, taxes, certain non-cash items, variable charges and timing differences. Moreover, we have

included Adjusted EBITDA in this Annual Report on Form 10-K because it is a key measurement used by our management internally

to make operating decisions, including those related to operating expenses, evaluate performance, and perform strategic and financial

planning.

The above items are excluded from our Adjusted EBITDA measure because these items are non-cash in nature or because the

amount and timing of these items are not related to the current results of our core business operations which renders evaluation of our

current performance, comparisons of performance between periods and comparisons of our current performance with our competitors

less meaningful. However, you should be aware that when evaluating Adjusted EBITDA, we may incur future expenses similar to

those excluded when calculating this measure. Our presentation of this measure should not be construed as an inference that its future

results will be unaffected by unusual items. Further, this non-GAAP financial measure should not be considered in isolation from, or

as a substitute for, financial information prepared in accordance with GAAP. We compensate for these limitations by relying primarily

on GAAP results and using Adjusted EBITDA on a supplemental basis. Our computation of Adjusted EBITDA may not be

comparable to other similarly titled measures computed by other companies because not all companies calculate this measure in the

same fashion. You should review the reconciliation of net loss to Adjusted EBITDA below and not rely on any single financial

measure to evaluate our business.

56

The following table presents a reconciliation of net loss to Adjusted EBITDA for the years ended December 31, 2025 and 2024 

(in thousands):

Year Ended December 31,

2025

2024

Adjusted EBITDA

Net loss

$(288,616)

$(1,437,874)

Adjustments:

Interest (income) expense, net

(3,277)

37,070

Income tax expense

583

859

Depreciation and amortization

68,841

113,205

Stock-based compensation expense

98,236

51,924

Unrealized fair value adjustment on energy derivatives

—

(2,262)

Loss on disposal of property, plant and equipment

9,680

4,210

Impairment of property, plant and equipment

11,359

122,869

Site conversion demolition costs

4,442

—

Loss on debt extinguishment

1,933

487

Colocation startup costs

—

4,611

Merger Agreement related costs

21,588

—

Post-emergence bankruptcy advisory costs

1,784

4,822

Reorganization items, net

—

(111,439)

Change in fair value of warrants and contingent value rights

33,059

1,369,157

Loss on legal settlements

10,690

2,070

Other non-operating expense (income), net

39

(2,395)

Other

—

123

Adjusted EBITDA

$(29,659)

$157,437

57

Results of Operations for the Year Ended December 31, 2025 and 2024

The following table sets forth our selected consolidated statements of operations for each of the periods indicated (in

thousands).

Year Ended December 31,

2025

2024

$ Change

Revenue:

Colocation revenue

$65,424

$24,378

$41,046

Digital asset self-mining revenue

229,207

408,740

(179,533)

Digital asset hosted mining revenue from customers

24,388

77,554

(53,166)

Total revenue

319,019

510,672

(191,653)

Cost of revenue:

Cost of colocation services

45,679

21,709

23,970

Cost of digital asset self-mining

218,868

314,335

(95,467)

Cost of digital asset hosted mining services

16,574

53,558

(36,984)

Total cost of revenue

281,121

389,602

(108,481)

Gross profit

37,898

121,070

(83,172)

Decrease in fair value of digital assets

31,603

1,052

30,551

Decrease in fair value of energy derivatives

—

2,757

(2,757)

Loss on disposal of property, plant and equipment

9,680

4,210

5,470

Impairment of property, plant and equipment

11,359

122,869

(111,510)

Colocation organizational and site startup costs

48,249

13,734

34,515

Advisor fees

23,372

4,822

18,550

Selling, general and administrative

159,224

113,691

45,533

Operating loss

(245,589)

(142,065)

(103,524)

Non-operating expense (income), net:

Loss on debt extinguishment

1,933

487

1,446

Interest (income) expense, net

(3,277)

37,070

(40,347)

Change in fair value of warrants and contingent value rights

33,059

1,369,157

(1,336,098)

Reorganization items, net

—

(111,439)

111,439

Loss on legal settlements

10,690

2,070

8,620

Other non-operating expense (income), net

39

(2,395)

2,434

Total non-operating expense, net

42,444

1,294,950

(1,252,506)

Loss before income taxes

(288,033)

(1,437,015)

1,148,982

Income tax expense

583

859

(276)

Net loss

$(288,616)

$(1,437,874)

$1,149,258

58

The following table summarizes gross profit and gross margin by reportable segment for 2025 and 2024.

Year Ended December 31,

2025

2024

Change

Colocation Segment

Colocation gross profit

$19,745

$2,669

$17,076

Colocation gross margin

30%

11%

19%

Digital Asset Self-Mining Segment

Digital asset self-mining gross profit

$10,339

$94,405

$(84,066)

Digital asset self-mining gross margin

5%

23%

(18)%

Digital Asset Hosted Mining Segment

Digital asset hosted mining gross profit

$7,814

$23,996

$(16,182)

Digital asset hosted mining gross margin

32%

31%

1%

Gross profit represents segment revenue less segment cost of revenue. Accordingly, the year over year changes in gross profit

and gross margin by segment are primarily driven by the changes in revenue and cost of revenue discussed in the “Revenue” and

“Cost of revenue” sections below.

Revenue

Year Ended December 31,

2025

2024

$ Change

Revenue:

Colocation revenue

$65,424

$24,378

$41,046

Digital asset self-mining revenue

229,207

408,740

(179,533)

Digital asset hosted mining revenue from customers

24,388

77,554

(53,166)

Total revenue

$319,019

$510,672

$(191,653)

Percentage of total revenue:

Colocation revenue

20%

5%

Digital asset self-mining revenue

72%

80%

Digital asset hosted mining revenue from customers

8%

15%

Total revenue

100%

100%

Colocation revenue

Colocation revenue consists of fees charged to customers for licensed data center space, power and related services. Under our

contracts, customers generally pay fixed monthly fees based on billable customer power capacity and variable usage‑based charges

and other billable services. Power fees are passed through to customers without markup and are recognized as revenue on a gross

basis, with a corresponding charge to cost of colocation services. As a result, changes in power prices can cause fluctuations in

colocation revenue that are not indicative of changes in our underlying colocation margins.

The year over year increase in colocation revenue was primarily attributable to incremental billable customer power capacity at

our Denton, Texas and Marble, North Carolina data centers. In addition, lease operations at our Austin, Texas data center, which

commenced in the second quarter of 2024, contributed to higher colocation revenue.

Digital asset self-mining revenue

Digital asset self‑mining revenue consists primarily of bitcoin earned from operating our owned mining fleet. We participate in

mining pools under which we receive consideration based on the hash rate we contribute to the pool.

The year over year decrease in self-mining revenue was driven primarily by lower bitcoin production, partially offset by higher

average bitcoin prices.

59

Year Ended December 31,

2025

2024

% Change

Bitcoin mined

2,276

6,595

(65)%

Average price of bitcoin

$101,639

$65,894

54%

Self-mining hash rate

15.7

19.1

(18)%

The decrease in bitcoin mined was driven primarily by (i) a reduction in our deployed mining fleet due primarily to our

strategic shift to colocation, (ii) the Bitcoin network’s halving, which reduced bitcoin earned per unit of hash rate beginning in April

2024, and (iii) more challenging network conditions, including higher network difficulty.

Digital asset hosted mining revenue

Digital asset hosted mining revenue represents fees earned for providing infrastructure, power and related services to third‑party

miners. Under our hosting contracts, customers are generally billed monthly based on power capacity and/or power consumption over

the term of the arrangement, which typically ranges from one to three years.

The year over year decrease in hosted mining revenue from customers was primarily driven by our shift to our Colocation

operations.

Cost of revenue

Year Ended December 31,

2025

2024

$ Change

Cost of revenue:

Cost of colocation services

$45,679

$21,709

$23,970

Cost of digital asset self-mining

218,868

314,335

(95,467)

Cost of digital asset hosted mining services

16,574

53,558

(36,984)

Total cost of revenue

$281,121

$389,602

$(108,481)

Cost of revenue includes the costs to operate our colocation, digital asset self‑mining, and digital asset hosted mining

businesses, including power fees, depreciation, personnel and facility-related costs.

Colocation cost of revenue

The year over year increase in cost of colocation services was driven primarily by incremental billable capacity at our Denton,

Texas and Marble, North Carolina data centers during 2025. In addition, costs related to lease operations at our Austin, Texas data

center, which commenced in the second quarter of 2024, contributed to higher colocation cost of revenue in 2025.

Digital asset self-mining cost of revenue

The year over year decrease in cost of digital asset self-mining was driven primarily by reduced self-mining activity during

2025, including lower power consumption and depreciation.

Digital asset hosted mining cost of revenue

The year over year decrease in cost of digital asset hosted mining services was driven primarily by the wind-down of hosted

mining arrangements, which resulted in lower power consumption.

60

Decrease in fair value of digital assets

Year Ended December 31,

2025

2024

$ Change

Decrease in fair value of digital assets

$31,603

$1,052

$30,551

Percentage of total revenue

10%

—%

The year over year change in fair value of digital assets was primarily driven by higher bitcoin holdings in 2025 under our

bitcoin holding strategy and bitcoin price declines during portions of 2025.

Impairment of property, plant and equipment

Year Ended December 31,

2025

2024

$ Change

Impairment of property, plant and equipment

11,359

122,869

$(111,510)

Percentage of total revenue

4%

24%

The year over year decrease was primarily driven by a lower volume of assets committed to demolition in connection with the

conversion of data center facilities from digital asset mining to high-density colocation operations, compared to a significantly higher

volume of such charges recognized in 2024. We expect to incur future impairments of PP&E at the point at which the assets become

committed to demolition, which is generally expected to occur at the time of colocation customer contract execution.

Colocation organizational and site startup costs

Year Ended December 31,

2025

2024

$ Change

Colocation organizational and site startup costs

$48,249

$13,734

$34,515

Percentage of total revenue

15%

3%

Colocation organizational and site startup costs primarily consist of employee compensation, including stock-based

compensation. The year over year increase was primarily driven by site startup costs incurred to convert facilities from digital asset

mining to colocation operations, partially offset by the absence of organizational startup costs incurred in 2024 in connection with the

formation of the colocation segment.

Selling, general and administrative

Year Ended December 31,

2025

2024

$ Change

Selling, general and administrative

$159,224

$113,691

$45,533

Percentage of total revenue

50%

22%

Selling, general and administrative expenses (“SG&A”) consist primarily of personnel-related costs and professional fees.

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The increase in SG&A was driven primarily by:

•a $34.1 million increase in stock-based compensation expense;

•a $6.8 million increase in payroll expense; and

•a $6.4 million increase in professional fees.

Non-operating expenses (income), net

Year Ended December 31,

2025

2024

$ Change

Non-operating expenses (income), net:

Loss on debt extinguishment

$1,933

$487

$1,446

Interest (income) expense, net

(3,277)

37,070

(40,347)

Change in fair value of warrants and contingent value rights

33,059

1,369,157

(1,336,098)

Reorganization items, net

—

(111,439)

111,439

Loss on legal settlements

10,690

2,070

8,620

Other non-operating expense (income), net

39

(2,395)

2,434

Total non-operating expense, net

$42,444

$1,294,950

$(1,252,506)

Non-operating expenses (income), net primarily reflects (i) non-cash changes in the fair value of warrants and contingent value

rights and (ii) interest (income) expense, net, and reorganization-related items.

•The year over year decrease in change in fair value of warrants and contingent value rights was driven by changes in our

stock price, which increased by $0.51 per share during 2025, compared to an increase of $10.61 from January 23, 2024, the

date of our emergence from bankruptcy, to December 31, 2024; and

•The absence of Reorganization items, net in 2025 was due to our emergence from bankruptcy on January 23, 2024.

•The year over year decrease in Interest (income) expense, net was driven primarily by a $23.2 million decrease in interest

expense due to lower interest rates on outstanding debt, including the repayment of certain higher-interest notes during 2025,

and a $17.3 million increase in interest income earned on money market funds.

Liquidity and Capital Resources

Sources and Uses of Cash

We finance our operating and capital requirements primarily through a combination of (i) cash and cash equivalents, (ii) cash

generated from operations, (iii) sales of digital assets (bitcoin), subject to market conditions and our treasury strategy, and (iv)

financing activities, including debt financing arrangements. We also receive customer prepayments under our colocation

arrangements, which are associated with, and are expected to offset a significant portion of, the capital expenditures required to build

out and convert facilities for those arrangements.

During 2026, we currently expect to monetize substantially all of our bitcoin holdings, subject to market conditions, to enhance

liquidity and fund our planned capital expenditures and other cash requirements. We currently anticipate that the majority of these

sales would occur during the first quarter of 2026. However, the timing and amount of any sales will depend on market conditions and

our liquidity needs and may change.

Our planned capital expenditures and other cash requirements may require additional external financing. We may from time to

time seek additional financing to fund our operations and capital expenditures. If we are unable to obtain financing on acceptable

terms, we may be required to reduce, delay or modify planned expenditures or pursue other alternatives.

We have assessed our current and expected operating and capital expenditure requirements and our current and expected

sources of liquidity, and have determined, based on our forecasted financial results and financial condition as of December 31, 2025,

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that our available liquidity, including cash and cash equivalents and expected operating cash flows and customer funding related to our

colocation arrangements, will be sufficient to satisfy our cash requirements for at least the next twelve months.

The following table summarizes our cash and cash equivalents and the fair value of our digital assets (in thousands):

December 31,

2025

2024

Cash and cash equivalents

$311,378

$836,197

Digital assets

$222,000

$23,893

The following table presents our cash flows (in thousands):

Year Ended December 31,

2025

2024

Net cash provided by operating activities

278,250

42,896

Net cash used in investing activities

(740,750)

(95,192)

Net cash (used in) provided by financing activities

(63,102)

819,567

Net cash provided by operating activities increased to $278.3 million in 2025 from $42.9 million in 2024, primarily due to

higher cash inflows from operating working capital driven by deferred revenue associated with colocation services.

Net cash used in investing activities increased to $740.8 million in 2025 from $95.2 million in 2024, primarily reflecting capital

expenditures related to our colocation expansion.

Net cash used in financing activities was $63.1 million in 2025 compared to net cash provided of $819.6 million in 2024,

primarily due to the absence of prior-year financing proceeds.

Material Cash Requirements

Our material cash requirements from known contractual and other obligations consist primarily of (i) obligations for long-term

debt and related interest, (ii) operating lease obligations for property, and (iii) capital expenditure commitments related to the

conversion of a significant portion of our data centers to high-density colocation operations.

During 2025 and 2024, we spent $729.0 million and $95.0 million on capital expenditures, respectively. We expect to increase

capital expenditures in 2026 relative to 2025 to support our strategic shift to colocation services.

For additional information regarding our operating lease obligations, convertible notes, and purchase commitments, refer to

Note 7 — Leases, Note 8 — Convertible and Other Notes Payable, and Note 11 — Commitments and Contingencies, respectively, to

our consolidated financial statements included in Item 8 of Part II of this Annual Report on Form 10-K.

Critical Accounting Estimates

The critical accounting estimates, assumptions, judgments and the related policies that we believe have the most significant

impact on our consolidated financial statements are described below.

Property, Plant, and Equipment

The Company has made significant investments in Bitcoin mining equipment, which constitutes a substantial portion of its

property, plant, and equipment. Accounting for this equipment involves significant judgment and estimation uncertainty, particularly

regarding the determination of its estimated useful life for depreciation purposes and the assessment of potential impairment.

The Company depreciates its Bitcoin mining equipment using the straight-line method over an estimated useful life of three

years. This estimate reflects management’s judgment based on the current state of technology and industry practices. However, the

actual useful life of this equipment is uncertain due to the rapid pace of technological advancements in the Bitcoin mining industry.

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The Company evaluates its Bitcoin mining equipment for impairment whenever events or changes in circumstances indicate

that the carrying amount of the equipment may not be recoverable. Recoverability is assessed by comparing the carrying amount of the

asset to the sum of the undiscounted futures cash flows expected from its use and disposal. If the carrying amount is not recoverable,

the impairment loss is measured as the difference between the carrying amount and the asset's fair value. Potential impairment triggers

include a significant decline in the market price of Bitcoin or the introduction of new technologies that reduce the efficiency or

profitability of the Company’s existing equipment. These assessments rely on significant judgment and require assumptions about

future events and conditions, including Bitcoin prices, mining difficulty rates, electricity costs, and anticipated technological

advancements.

Management believes that its current estimates and assumptions are reasonable based on the information available. Actual

results may differ, and any such differences could materially impact the Company’s financial condition and results of operations.

Stock-Based Compensation

The valuation of equity awards that contain market conditions, including the 2025 performance restricted stock units with a

relative total shareholder return condition, requires the use of a Monte Carlo pricing model. The model incorporates assumptions that

are both unobservable and significant to the overall fair value measurement, including expected volatility of the Company’s common

stock and its correlation with the Russell 2000 Index, which reflect anticipated variability and relative performance of the Company’s

stock price over the performance period. These assumptions involve judgment and are based on a combination of historical data and

market information. If different assumptions had been used, the resulting grant-date fair value of these awards, and the related stock-

based compensation expense recognized over the requisite service period, could have been materially different. Management believes

the estimates and assumptions used in the valuation of these awards are reasonable based on information available at the time of grant.

Recent Accounting Pronouncements

For a discussion of new accounting standards relevant to our business, refer to Note 2 — Summary of Significant Accounting

Policies to our consolidated financial statements in Item 8 of Part II of this Annual Report on Form 10-K.