Financial Analysis

Note 16. Commitments and Contingencies Commitments Miners and mining equipment Through March 31, 2026, the Company has paid approximately $796.1 million in total deposits and payments to MicroBT for the purchase of miners pursuant to the Master Agreement described in Note 6. Property and Equipment . As of March 31, 2026, the Company has a remaining commitment of $4.8 million for the purchase of miners, which is expected to be paid in the second quarter of 2026. Infrastructure During 2024, the Company entered into agreements related to water supply infrastructure for the Corsicana Facility, resulting in total remaining commitments of approximately $8.9 million as of March 31, 2026. The Company expects to incur these costs through the remainder of 2026. Contingent consideration liabilities Block Mining As part of the July 23, 2024 acquisition of Block Mining, a vertically integrated bitcoin mining company based in Kentucky, (the Block Mining Acquisition) , the sellers are eligible to earn an additional $32.5 million in potential earn-out targets, payable in cash or stock, if certain milestones were reached by December 31, 2025. This contingent consideration had an acquisition date fair value of $26.1 million. As of March 31, 2026, the Block Mining Acquisition contingent consideration had an estimated fair value of $6.2 million recognized on the Condensed Consolidated Balance Sheets in Contingent consideration liabilities, current portion . The fair value measurement as of March …

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Note 11. Debt 2030 Notes The Companys 0.75% Convertible Senior Notes due 2030 (the 2030 Notes) are recognized as long-term debt on the Condensed Consolidated Balance Sheets, net of unamortized debt issuance costs. As of March 31, 2026, the amount recognized was $583.0 million ($594.4 million principal less $11.4 million of unamortized debt issuance costs). During the three months ended March 31, 2026 and 2025, the Company recognized $0.8 million and $0.8 million, respectively, of amortization of the deferred issuance costs. As of March 31, 2026, the 2030 Notes had an estimated fair value of approximately $683.5 million. The estimated fair value is based on quoted prices in an active market and valued at the closing price reported at the end of the period and thus represents a Level 1 measurement on the fair value hierarchy. Revolving Credit Facilities $50 Million Credit Facility In July 2024, the Company entered into a one-year $50.0 million Revolving Credit Facility (the $50 Million Credit Facility). In May 2025, the Company extended the term of the facility through July 15, 2026. Revolving loans borrowed by the Company under the $50 Million Credit Facility may be used for general corporate purposes and carry a per annum interest rate of 1.25% plus the Secured Overnight Financing Rate (SOFR). Letters of Credit issued under the $50 Million Credit Facility have a one-year term and incur fees of 1.25% per annum on the amount of Letters of Credit outstanding. Letters of Credit r …

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Remainder of 2026 2027 Total Data Center $ 17,347 $ $ 17,347 Engineering $ 170,127 $ 59,751 $ 229,878 …

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Note 14. Stock-Based Compensation The 2019 Equity Incentive Plan authorizes the granting of stock-based compensation awards to directors, officers, employees, and certain consultants of the Company in the form of RSAs, RSUs, or stock options, all of which settle in shares of the Companys common stock upon vesting. As of March 31, 2026, the Company had 2,600,611 shares of common stock reserved for issuance under the 2019 Equity Incentive Plan. The following table presents the Companys stock-based compensation expense by category: Three Months Ended March 31, 2026 2025 Performance-based stock awards and units $ 30,326 $ 25,545 Service-based stock awards and units 8,464 4,031 Stock options 376 Total stock-based compensation, net of amounts capitalized 39,166 29,576 Capitalized stock-based compensation 295 Total stock-based compensation $ 39,461 $ 29,576 Stock-based compensation expense is recognized in Selling, general, and administrative on the Condensed Consolidated Statements of Operations. Capitalized stock-based compensation is recognized in Construction in progress within Property and equipment, net on the Condensed Consolidated Balance Sheets. Performance-Based Awards and Units Performance-based RSAs and RSUs are eligible to vest over a three-year performance period based on the Companys total shareholder return (TSR) as compared to the performance of the Russell 3000 Index (the Index). The following table presents a summary of the activity of the performance-based RSAs: …

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Note 15. Fair Value Measurements Assets and Liabilities Measured at Fair Value on a Recurring Basis The following tables present the Companys assets and liabilities measured at fair value on a recurring basis: Fair value measured as of March 31, 2026 Significant Quoted prices in Significant other unobservable Total carrying active markets observable inputs inputs value (Level 1) (Level 2) (Level 3) Bitcoin (a) $ 673,885 $ 673,885 $ $ Restricted bitcoin (a) $ 395,810 $ 395,810 $ $ Derivative assets (b) $ 97,118 $ $ $ 97,118 Derivative liabilities (c) $ 922 $ $ $ 922 Contingent consideration liabilities (d) $ 8,195 $ $ $ 8,195 Fair value measured as of December 31, 2025 Significant Quoted prices in Significant other unobservable Total carrying active markets observable inputs inputs value (Level 1) (Level 2) (Level 3) Bitcoin (a) $ 1,227,462 $ 1,227,462 $ $ Restricted bitcoin (a) $ 347,979 $ 347,979 $ $ Derivative assets (b) $ 148,048 $ $ $ 148,048 Contingent consideration liabilities (d) $ 8,195 $ $ $ 8,195 (a) See Note 5. Bitcoin. (b) See Note 8. Power Supply Agreements . (c) See Note 8. Power Supply Agreements . Derivative liability balances are included in Accrued expenses and other current liabilities on the Condensed Consolidated Balance Sheets. (d) See Note 16. Commitments and Contingencies . There were no transfers of financial instruments between Level 1, Level 2, and Level 3 during the periods presented. Assets and Liabilities Not Measured at Fair Value on a Recurring …

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Note 12. Leases as Lessee Operating Leases As of March 31, 2026, the Company had operating leases primarily for its various offices, the manufacturing facilities of ESS Metron and E4A Solutions, and the Kentucky Facility, all of which expire on various dates through July 2035. As of March 31, 2026 and December 31, 2025, operating lease right-of-use assets were $35.5 million and $26.7 million, respectively, and operating lease liabilities were $35.0 million and $26.0 million, respectively. Finance Lease In 2025, the Company entered into a lease for equipment located at the Kentucky Facility. Title to the leased equipment will be transferred to the Company at the conclusion of the lease, which expires on December 31, 2029. As of March 31, 2026, the finance lease right-of-use asset was $3.4 million and there was no remaining lease liability. The following table presents the components of the Companys lease expense. Ground and facilities lease expenses are included in Cost of revenue , office lease expenses are included in Selling, general, and administrative , and finance leases are amortized into Depreciation and amortization on the Condensed Consolidated Statements of Operations: Three Months Ended March 31, 2026 2025 Finance lease cost: Amortization of right-of-use assets $ 90 $ Operating lease cost 2,730 1,582 Variable lease cost 175 98 Total lease expense $ 2,995 $ 1,680 The following table presents supplemental lease information: Three Months Ended March 31, 2026 2025 Oper …

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Recently Issued Accounting Pronouncements The Company continually assesses new accounting pronouncements to determine their applicability. When it is determined that a new accounting pronouncement affects the Companys financial reporting, the Company undertakes a study to determine the consequences of such change to its Condensed Consolidated Financial Statements and ensures that there are proper controls in place to ensure that the Companys Condensed Consolidated Financial Statements properly reflect the change. In November 2024, the FASB issued ASU No. 2024-03, Income StatementReporting Comprehensive IncomeExpense Disaggregation Disclosures (Subtopic 220-40) (ASU 2024-03). ASU 2024-03 requires, in the notes to the annual and interim financial statements, disaggregated information about certain income statement expense line items. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is evaluating the impact of the updated guidance on the Companys Consolidated Financial Statements and disclosures. …

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Note 4. Revenue from Contracts with Customers Disaggregated revenue Revenue disaggregated by reportable segment is presented in Note 18. Segment Information . Contract balances Contract assets relate to uncompleted Engineering contracts and uncompleted amounts related to Data Center tenant fit-out services. As of March 31, 2026 and December 31, 2025, contract assets were $14.1 million and $8.3 million, respectively. As of December 31, 2025, all contract assets were attributable to Engineering. As of March 31, 2026, $7.1 million of the contract assets were attributable to Engineering contracts and $7.0 million were attributable to Data Center tenant fit-out services as a result of incurring costs in excess of amounts billed. Contract liabilities relate to uncompleted Engineering contracts. As of March 31, 2026 and December 31, 2025, contract liabilities were $64.7 million and $37.1 million, respectively. During the three months ended March 31, 2026 and 2025, $10.0 million and $4.5 million, respectively, of the beginning balance of contract liabilities were recognized as revenue. During the three months ended March 31, 2026 and 2025, $ (0.4) million and $1.6 million, respectively, were recognized as revenue as a result of satisfying performance obligations in previous periods. Remaining performance obligation The following table presents the estimated future recognition of the Companys remaining performance obligations, which represent the transaction price of current contracts …

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Note 18. Segment Information The Company has three reportable segments: Bitcoin Mining, Data Center, and Engineering. The reportable segments are identified based on the types of services performed. No operating segments have been aggregated to form the reportable segments. Gross profit (loss) is the segment performance measure the CODM uses to assess the Companys reportable segments and is calculated before the elimination of intersegment profits. The CODM is the Companys CEO. The CODM uses segment gross profit (loss) to assess the performance of, manage the operations of, and allocate capital and operational resources to the Companys three reportable segments, and as part of the budgeting process and review of budget-to-actual variances for capital allocation decisions. Other than the $97.2 million of goodwill from the Block Mining Acquisition allocated to the Bitcoin Mining segment and $25.3 million of goodwill from the E4A Solutions Acquisition allocated to the Engineering segment, the Company does not allocate assets to the reporting segments because its assets are managed on an entity-wide basis. The Company also does not regularly provide segment assets to its CODM, and, therefore, does not separately disclose the total assets of its reportable operating segments. The Bitcoin Mining segment generates revenue from the bitcoin earned through its Bitcoin Mining activities. The Data Center segment generates revenue from developing and leasing data center space and power ca …

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Note 2. Summary of Significant Accounting Policies and Recent Accounting Pronouncements Basis of presentation and principles of consolidation The accompanying unaudited condensed consolidated financial statements (Condensed Consolidated Financial Statements) and these notes (Notes) have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). In the opinion of management, the Condensed Consolidated Financial Statements reflect all adjustments, consisting of normal and recurring adjustments, considered necessary for a fair presentation of such interim results. Unless otherwise indicated, amounts are stated in thousands of U.S. dollars, except for: share, per share, megawatt hours (MWh) and miner quantities; bitcoin quantities, prices, and hash rate; cost to mine one bitcoin; and production value of one bitcoin mined. The results in the Condensed Consolidated Financial Statements and these Notes include required estimates and assumptions of management, and they are not necessarily indicative of results to be expected for the year ending December 31, 2026, or for any future interim period. Further, the Condensed Consolidated Financial Statements and these Notes do not include all the information and notes required by GAAP for a complete presentation of annual financial statements. As such, the Condensed Consolidated Financial Statements and these Notes should be read in conjunction with the consolidated financial statement …

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Note 13. Stockholders Equity The Company is authorized to issue up to 680,000,000 shares of common stock, without any par value per share. Each holder of common stock is entitled to one vote for each share held of record on all matters to be voted on by such holders. Holders of common stock are entitled to receive dividends, if declared. Upon liquidation, dissolution or winding-up, holders of common stock are entitled to share ratably in the net assets legally available for distribution after payment of all debts and other liabilities, subject to any preferential rights of the holders of preferred stock, if any. During the three months ended March 31, 2026, approximately 0.4 million shares of common stock vested or were issued to the Companys board of directors, officers, employees, and advisors in settlement of an equal number of fully vested restricted stock awards (RSAs) or restricted stock units (RSUs) awarded to such individuals by the Company under the Companys 2019 Equity Incentive Plan, as amended (the 2019 Equity Incentive Plan). The Company withheld approximately 0.2 million of these shares, with a fair value of approximately $2.0 million, to cover taxes related to the settlement of such vested RSAs and RSUs, as permitted by the 2019 Equity Incentive Plan. At-the-Market Equity (ATM) Program In December 2025, the Company established the 2025 ATM program, under which it could offer and sell up to $500.0 million in shares of the Companys common stock (the 2025 ATM Prog …

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