Quarterly Report for Quarter Ending June 30, 2025 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations

The following Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") provides information that will assist the reader in understanding our results of operations and financial condition. This MD&A should be read in conjunction with our Condensed Consolidated Financial Statements and the related notes (the "Notes") and other financial information included elsewhere in this Quarterly Report, as well as our audited consolidated financial statements for the year ended December 31, 2024, as included in our 2024 Annual Report.

Unless otherwise indicated, amounts are stated in thousands of U.S. dollars except for: share, per share, per MWh and miner amounts; bitcoin quantities, prices, and hash rate; cost to mine one bitcoin; and production value of one bitcoin mined.

Our MD&A is primarily organized as follows:

Forward-Looking Statements

This MD&A includes forward-looking statements based on current expectations that involve risks and uncertainties, such as our plans, objectives, expectations, and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors. See "Cautionary Note Regarding Forward-Looking Statements" and "Risk Factors" for a discussion of factors that could cause actual results to differ materially - and potentially adversely - from the results described in or implied by the forward-looking statements contained in this MD&A and elsewhere in this Quarterly Report.

Business Overview and Trends

General

We are a vertically integrated Bitcoin Mining company principally engaged in enhancing our power infrastructure to support efficient and large-scale Bitcoin Mining operations in support of the Bitcoin blockchain. In addition to our growing mining and engineering businesses, we are in the process of developing a scalable data center platform designed to allocate a portion of our power capacity toward supporting AI/HPC workloads. This dual-pronged strategy will enable us to capitalize on both the long-term potential of bitcoin and the growing demand for power and data center infrastructure, positioning us to participate in two rapidly evolving sectors.

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We operate in two reportable business segments: Bitcoin Mining and Engineering.

We own and operate multiple Bitcoin Mining facilities in the United States, including the Rockdale Facility, the Corsicana Facility, and the Kentucky Facility. The Rockdale Facility in Texas, with 700 MW of developed capacity, is believed to be one of the largest Bitcoin Mining facilities in North America, as measured by developed capacity. In 2024, we completed 400 MW of developed capacity at our second large-scale Texas site, the Corsicana Facility. Also in 2024, we expanded our operations through the acquisition of Block Mining, a Kentucky-based vertically integrated bitcoin miner, and E4A Solutions, a leading provider of electrical engineering services to a diverse customer base of energy developers and data center operators. The Block Mining Acquisition added 60 MW of developed capacity for self-mining, which we plan to expand to 110 MW during the remainder of 2025, and provided us with access to a second electrical grid. The E4A Solutions Acquisition added engineering expertise to service our electrical infrastructure and allows us to provide electrical solutions and services to support the rapidly growing market for electrical infrastructure.

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Our market environment is highly competitive, both globally and regionally. We compete with other large-scale bitcoin miners, as well as individual participants, to earn the bitcoin reward that is central to our operations. Our industry continues to evolve alongside the proliferation of bitcoin and cryptocurrencies in general, and we believe we are well positioned within the digital commodities industry in which we operate.

AI/HPC Development

We strengthened our execution capacity by recruiting critical talent and launching a scalable data center platform to support the initial phase of development designated for AI/HPC applications at the Corsicana Facility, or AI/HPC Phase I. Additionally, we are evaluating further expansion opportunities and assessing the feasibility of developing additional power capacity to support AI/HPC applications. We are in the process of standardizing design templates and assessing procurement of all long-lead equipment, in alignment with our disciplined capital allocation strategy focused on delivering superior risk-adjusted returns. These foundational investments reflect a proactive, strategic approach that positions us for durable, long-term leadership and value creation in the data center sector.

Business Segments

Bitcoin Mining

During the six months ended June 30, 2025, we continued to deploy miners across all our Facilities, with the objective of increasing our operational efficiency and performance moving forward. As of June 30, 2025, we had a total deployed hash rate capacity of 35.4 EH/s, as compared to 31.5 EH/s as of December 31, 2024, an increase of 12.3%.

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During the six months ended June 30, 2025, we mined 2,956 bitcoin, reflecting an increase of 748 bitcoin compared to the 2,208 bitcoin we mined during the six months ended June 30, 2024. The increase was primarily due to our increase in deployed hash rate and significantly improved operational efficiency, partially offset by the increase in the global network hash rate and the halving that occurred in April 2024.

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Custodians

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As bitcoin is a decentralized cryptocurrency, it is not required that bitcoin be held by a custodian, and we may choose to self-custody. However, we believe that our private keys associated with our bitcoin are better safeguarded within the secure environment provided by custodians. Self-custody poses an increased risk to our private keys, and we may not have the same level of protection as that offered by custody providers who are well-versed in industry best practices for safeguarding digital assets from potential theft, loss, or destruction.

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Our bitcoin custodian and brokerage services relationships are non-exclusive, and we may change our custodian and brokerage relationships at any time. We continually monitor our bitcoin assets held by our custodians. The Company's insurance providers do not have inspection rights associated with our bitcoin assets held in cold storage. For additional information regarding our relationships with our custodians, NYDIG Trust Company LLC and Coinbase, Inc., on behalf of itself and Coinbase Custody Trust Company, LLC, and, if applicable, Coinbase or Coinbase Custody International Ltd., and a description of our underlying agreements with them, see Part I, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" of our 2024 Annual Report.

Bitcoin Mining Metrics

The following table presents our key Bitcoin Mining metrics:

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The following table presents our cost to mine one bitcoin (amounts in thousands, except Quantity of bitcoin mined and Production value of one bitcoin mined amounts):

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During 2023, 2024, and 2025, we entered into purchase orders under the Master Agreement to acquire new miners from MicroBT. These purchase orders represented a total hash rate of 44.7 EH/s, with a total purchase price of approximately $709.0 million, subject to downward price adjustments as provided by the Master Agreement. These miners are primarily intended for deployment at the Corsicana Facility, which commenced operations in April 2024. Delivery of these miners began in 2023, and all miners under these purchase orders are expected to be received by the end of 2025, with deployment following on an ongoing basis. The Master Agreement provided us with four additional annual options to purchase miners, on the same or more favorable terms as the second purchase order executed under the Master Agreement.

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For the three and six months ended June 30, 2025, Bitcoin Mining revenue was approximately $140.9 million and $283.7 million, respectively.

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Engineering

Our Engineering business designs and manufactures power distribution equipment and custom-engineered electrical products. These products support our vertical integration strategy by enabling the internal development of critical electrical components and engineering services necessary for our site developments. This integration helps mitigate our execution and counter-party risk in ongoing and future expansion projects. The specialized talent employed in our Engineering business allows us the opportunity to explore new methods to optimize and develop best-in-class Bitcoin Mining operations, which has been instrumental in the development of our industrial-scale immersion-cooled Bitcoin Mining hardware.

Our Engineering business also provides electricity distribution product design, manufacturing, and installation services primarily focused on large-scale commercial and governmental customers and serves a broad scope of clients across a wide range of markets, including data center, power generation, utility, water, industrial, and alternative energy.

Engineering revenue is derived from the sale of custom products built to customers' specifications under fixed-price contracts with one identified performance obligation. Engineering revenue is recognized over time as performance creates or enhances an asset with no alternative use, and for which we have an enforceable right to receive compensation as defined under the contract.

In December 2024, we completed the E4A Solutions Acquisition. This acquisition is consistent with our vertically integrated strategy by adding engineering expertise to service our own existing and future electrical infrastructure and allows us to provide electrical solutions and services to support the rapidly growing market for electrical infrastructure.

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For the three and six months ended June 30, 2025, Engineering revenue was approximately $10.6 million and $24.5 million, respectively.

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Strategic Goals and Initiatives

Bitcoin Treasury Strategy

Our bitcoin acquisition strategy ("Bitcoin Treasury Strategy") involves acquiring bitcoin primarily through vertically integrated mining operations, while also retaining the flexibility to purchase bitcoin in the open market using available liquidity, including proceeds from debt or equity issuances. Additionally, the Company may sell bitcoin to support operational needs and strategic initiatives. This vertically integrated approach has contributed to operational stability during market volatility and positioned the Company to capitalize on industry consolidation while strengthening its liquidity profile.

Power Strategy

Long-term power contracts form the basis of our power strategy. We utilize the Rockdale PPA and the Corsicana PPA (together, the "PPAs") at our Facilities in the following ways:

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Manual Curtailment

We power down operations and return power to the utility when market prices for electricity provide the potential for us to receive more power curtailment credits than the Bitcoin Mining revenues we would have generated had we not curtailed our mining operations. We receive power credits for the difference between the market power price and our fixed power price, which provides

us with the ability to maximize our overall profitability between Bitcoin Mining and supporting the grid by not drawing power from the grid when electricity is most scarce.

Ancillary Services

We competitively bid to sell ERCOT and MISO the option to control our electrical load during certain hours. ERCOT and MISO compensate us in the form of Demand Response Service Programs' Credits, which are received whether or not we are called on to power down.

ERCOT's 4CP Program

At the Rockdale Facility and the Corsicana Facility, we voluntarily power down operations during times of peak demand in summer months. Participation provides us with substantial savings on transmission costs in the subsequent year's power bills, reducing our overall power costs.

The following table presents our power curtailment credits:

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The following graph presents the primary decision points that guide our decision to curtail power usage or power down our mining operations, and when we might resume mining operations:

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Challenges, Risks, and Industry Trends

Increased Competition and Global Network Hash Rate

The price of bitcoin increased during the first quarter of 2024 due to a new source of demand, the 11 bitcoin spot Exchange Traded Funds ("ETFs"), which were approved to begin trading by the SEC on January 11, 2024. These ETFs, as investment vehicles, provide investors with a new way to gain exposure to bitcoin through more traditional financial markets.

During 2023 and 2024, the bitcoin mining industry experienced record growth as the price of bitcoin increased from the lows experienced in early 2023. The rising bitcoin price renewed opportunities to access capital markets to fund growth, leading to unprecedented expansion in mining operations, which resulted in a doubling of the size of provisioned hash calculation services on the network, as measured by total hash rate. In advance of the April 2024 bitcoin network halving, many bitcoin mining companies heavily invested in implementing vertically integrated business models, infrastructure, and upgrading and expanding mining fleets. Competition on the bitcoin network has expanded in kind, and we expect competition within the mining industry to intensify as long as bitcoin prices remain elevated or increase further.

We have observed that when the market price for bitcoin experiences sustained increases, new miners are introduced onto the bitcoin network, contributing to an increase in the global network hash rate. Despite the halving in April 2024 and increase in the global network hash rate, our hash rate grew by approximately 186% from December 31, 2023 to June 30, 2025. This growth contributed to an increase of approximately 33.9% in the number of bitcoin we mined during the six months ended June 30, 2025 as compared to the same period in 2024.

Accordingly, as the global network hash rate continues to rise, miners must scale their operations to maintain or improve their share of mining rewards. In response, we have expanded our Bitcoin mining capacity through the development of new facilities, such as the Corsicana Facility, and strategic acquisitions, including the Block Mining Acquisition. These efforts are supported by investments in electricity supply and distribution infrastructure. We are also focused on other strategic growth opportunities that enhance our long-term competitiveness. Further, we have adopted new and improved technology to increase both our mining power and efficiency, including our industrial-scale adoption of immersion cooling and our strategic acquisitions of large quantities of the latest powerful and efficient miners available.

Volatile Transaction Fees

The bitcoin mining industry recently experienced an increase in transaction fees on the bitcoin network, alongside growing overall demand for bitcoin. While transaction fees remain inherently volatile, they are paid directly to miners and are representative of the public interest in transacting on the bitcoin network. These transaction fees, combined with the block subsidy issued by the bitcoin network, make up the total reward paid to miners upon solving a block.

Since 2021, we have led the industry by focusing on a vertically integrated business model. We remain committed to building long-term stockholder value by taking strategic actions to further vertically integrate our business at the current Rockdale Facility, developing the Corsicana Facility, and integrating our acquisitions, including the Kentucky Facility and E4A Solutions. Management believes that vertical integration will strengthen each of our business segments by providing increased capacity for our Bitcoin Mining operations, expanding opportunities for implementing our proprietary power strategy, and positioning us to capitalize on supply chain efficiencies and electrical engineering services through our Engineering segment. We continue to focus on deploying our efficient Bitcoin Mining fleet, at scale, while realizing the benefits of being an owner and operator of our Bitcoin Mining facilities.

Grid Curtailment

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The Public Utility Commission of Texas, ERCOT, and Oncor Electric Delivery Company ("Oncor")collectively oversee the regulatory, administrative, and delivery aspects of our power supply in Texas. In Kentucky, MISO oversees our power supply. As the bitcoin mining industry has expanded in recent years, regulatory scrutiny on bitcoin mining facilities and their energy consumption has intensified accordingly.

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As Texas's grid operator, ERCOT is responsible for monitoring and testing market participants, including our Bitcoin Mining facilities at the Rockdale Facility and the Corsicana Facility, to evaluate their impact on grid reliability. As part of this process, ERCOT may issue curtailment notices to reduce the power usage at our Texas operations. Our Facilities in Texas are subject to periodic testing and monitoring and have experienced power curtailments in response to instructions we receive from Oncor and

ERCOT. Given the inherent uncertainty regarding the duration or extent of power curtailments and testing procedures, we are currently unable to reasonably estimate their potential impact on our operations. If we cannot secure adequate access to electrical power, we may be forced to reduce or shut down our operations, which would have a material adverse effect on our business, prospects, financial condition, and operating results.

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See Part I, Item 1A. "Risk Factors" of our 2024 Annual Report for additional discussion regarding potential impacts the competitive and evolving industry may have on our business.

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Recent Events Affecting the Company

An inflationary environment marked by global supply chain logistics disruptions across multiple distribution channels, has in the past contributed to delays in certain of our miner delivery schedules and in our infrastructure development schedules, driven by constraints in the globalized supply chains for miners, electricity distribution equipment, and construction materials, and these conditions may contribute to delays in the future. We have also experienced delays in our Engineering business segment's manufacturing and delivery schedule, and in our infrastructure development schedules, resulting from constraints in the globalized supply chains for miners, electricity distribution equipment, and construction materials.

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During the six months ended June 30, 2025, we continued to operate under such conditions; however, we effectively and efficiently mitigated delivery delays to avoid material impacts to our miner deployment schedule, although we cannot guarantee continued success in mitigating any such delivery delays in the future. Additionally, the development and expansion of our Facilities requires large quantities of construction materials, specialized electricity distribution equipment, and other critical components, all of which are in high demand and may be difficult to source. To help mitigate the impacts of increasing demand for these goods, global supply chain constraints, and uncertainty arising from recently imposed U.S. tariffs on imports and retaliatory tariffs imposed by other countries, including any inflationary pricing that may result from such impacts, we procured and already hold many electrical infrastructure components and materials we require to develop the Corsicana Facility and to expand the Kentucky Facility, as well as replacement components and parts for our existing systems, to help shorten the impact of potential damage to installed equipment.

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Summary of Riot's Bitcoin Mining Results

The following tables present additional information about our own Bitcoin Mining activities, including bitcoin production and sales of the bitcoin mined:

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Results of Operations

Comparative Results for the Three Months Ended June 30, 2025, and 2024:

Revenue

Total revenue for the three months ended June 30, 2025 and 2024 was $153.0 million and $70.0 million, respectively. Total revenue consists of our Bitcoin Mining revenue, Engineering revenue, and Other revenue. Other revenue consists almost entirely of residual activity related to our remaining data center hosting operations.

For the three months ended June 30, 2025 and 2024, Bitcoin Mining revenue was $140.9 million and $55.8 million, respectively. The increase of $85.1 million was primarily due to higher bitcoin prices in the 2025 period, which averaged $98,800 per bitcoin, as compared to $66,004 per bitcoin for the 2024 period. Despite the substantial increase in the global network hash rate, Bitcoin production increased by 68.9% during the three months ended June 30, 2025 compared to the same period in 2024, primarily due to a 61.3% increase in deployed hash rate.

For the three months ended June 30, 2025 and 2024, Engineering revenue was $10.6 million and $9.6 million, respectively. Of the increase, $3.7 million was due to the E4A Solutions Acquisition in December 2024, which was partially offset by a reduction of revenue resulting from change orders received on numerous custom projects.

Costs and expenses

The following table presents Cost of revenue for Bitcoin Mining:

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The increase of approximately $42.9 million in Cost of revenue for Bitcoin Mining was primarily due to the increase in Bitcoin Mining capacity at the Corsicana Facility, which requires additional headcount and direct costs necessary to maintain and support our expanded Bitcoin Mining operations. Property taxes increased due to the continued expansion of the Corsicana Facility and the acquisition of the Kentucky Facility in July 2024. Cost of revenue for Bitcoin Mining excludes depreciation and amortization, which are stated separately on our Condensed Consolidated Statements of Operations.

Cost of revenue for Engineering for the three months ended June 30, 2025 and 2024 was $9.9 million and $8.3 million, respectively, an increase of approximately $1.6 million. The costs consisted primarily of direct materials and labor, as well as indirect manufacturing costs, which increased along with the increase in revenue compared to the three months ended June 30, 2024.

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Selling, general and administrative expenses for the three months ended June 30, 2025 and 2024 were $75.9 million and $61.2 million, respectively, an increase of approximately $14.7 million. Selling, general and administrative expenses consist of stock-based compensation, legal and professional fees, and other personnel and related costs. The increase was primarily due to a $12.3 million increase in legal and professional fees, primarily related to ongoing litigation and a $4.7 million increase in compensation expense as a result of hiring additional employees to support our ongoing growth, partially offset by a $2.0 million decrease in stock-based compensation due to the vesting of awards during 2024.

Depreciation and amortization for the three months ended June 30, 2025 and 2024 was $83.2 million and $37.3 million, respectively, an increase of approximately $45.9 million. The increase was primarily due to increased depreciation from the Corsicana Facility coming online in April 2024 and additional miners being deployed.

The change in fair value of bitcoin for the three months ended June 30, 2025 and 2024 was a gain of $470.8 million and a loss of $76.4 million, respectively, and was recognized to adjust the fair value of our bitcoin held at the end of each period.

The change in fair value of our derivative assets for the three months ended June 30, 2025 and 2024 was a loss of $42.7 million and a gain of $27.5 million, respectively, and was recorded to adjust the fair value of our PPAs, which were classified as a derivative asset and measured at fair value. The changes in fair value were due to changes in future power prices over the applicable periods. The loss incurred during the three months ended June 30, 2025 was primarily attributable to the average of the forward prices utilized in the discounted cash flow estimation models decreasing from $55.41 per MWh as of March 31, 2025 to $53.31 per MWh as of June 30, 2025. The gain recognized during the three months ended June 30, 2024 was primarily attributable to the average of the forward prices increasing from $47.46 per MWh as of March 31, 2024 to $51.13 per MWh as of June 30, 2024.

Power curtailment credits for the three months ended June 30, 2025 and 2024 were $8.3 million and $13.9 million, respectively, and represent sales of unused power under certain of our PPAs and participation in ancillary services under ERCOT Demand Response Services Programs. The amount of these credits varies from period to period depending on various factors impacting the supply of power to, and the demand for power on, the ERCOT grid, such as weather and global fuel costs.

The change in fair value of contingent consideration for the three months ended June 30, 2025 was a loss of $9.4 million, as compared to no gain or loss for the three months ended June 30, 2024, and was a result of the contingent consideration recognized in July and December 2024 as part of the acquisitions of Block Mining and E4A Solutions.

The loss on contract settlement of $158.1 million was attributable to the Rhodium Settlement.

Other income (expense)

Interest income for the three months ended June 30, 2025 and 2024 was $3.3 million and $8.5 million, respectively. The decrease was primarily due to a decrease in cash balances on deposit.

Interest expense for the three months ended June 30, 2025 and 2024 was $6.1 million and $0.3 million, respectively. The increase was primarily due to the debt from new financing arrangements entered into during late 2024 and 2025.

Gain (loss) on equity method investment - marketable securities for the three months ended June 30, 2025 and 2024, were gains of $6.1 million and $24.5 million, respectively, and were recognized to adjust the fair value of our equity method investment held at the end of each period.

Comparative Results for the Six Months Ended June 30, 2025 and 2024:

Revenue

Total revenue for the six months ended June 30, 2025 and 2024 was $314.4 million and $149.3 million, respectively. Total revenue consists of our Bitcoin Mining revenue, Engineering revenue, and Other revenue. Other revenue consists almost entirely of residual activity related to our remaining data center hosting operations.

For the six months ended June 30, 2025 and 2024, Bitcoin Mining revenue was $283.7 million and $127.2 million, respectively. The increase of $156.6 million was primarily due to higher bitcoin prices in the 2025 period, which averaged $95,991 per bitcoin, as compared to $57,591 per bitcoin for the 2024 period. Despite the substantial increase in the global network hash rate and the April 2024 halving, bitcoin production increased by 33.9% during the six months ended June 30, 2025 compared to the same period in 2024 due to the significant increases in our deployed and operating hash rate during each of the periods.

For the six months ended June 30, 2025 and 2024, Engineering revenue was $24.5 million and $14.3 million, respectively. The increase of $10.2 million was primarily attributable to the E4A Solutions Acquisition in December 2024, which accounted for $7.6 million of the increase. The remaining increase was primarily attributable to the accelerated completion of certain custom products and, therefore, the recognition of revenue.

Costs and expenses

The following table presents Cost of revenue for Bitcoin Mining:

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The increase of approximately $81.2 million in Cost of revenue for Bitcoin Mining was primarily due to the increase in Bitcoin Mining capacity at the Corsicana Facility, which requires additional headcount and direct costs necessary to maintain and support our expanded Bitcoin Mining operations. Property taxes increased due to the continued expansion of the Corsicana Facility and the acquisition of the Kentucky Facility in July 2024. Cost of revenue for Bitcoin Mining excludes depreciation and amortization, which are stated separately on our Condensed Consolidated Statements of Operations.

Cost of revenue for Engineering for the six months ended June 30, 2025 and 2024 was $21.7 million and $14.3 million respectively, an increase of approximately $7.4 million. The costs consisted primarily of direct materials and labor, as well as indirect manufacturing costs, which increased along with the increase in revenue compared to the six months ended June 30, 2024.

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Selling, general and administrative expenses for the six months ended June 30, 2025 and 2024 were $147.4 million and $118.8 million, respectively, an increase of approximately $28.6 million. Selling, general and administrative expenses consist of stock-based compensation, legal and professional fees, and other personnel and related costs. The increase was primarily due to an $18.5 million increase in legal and professional fees primarily related to ongoing litigation and a $7.7 million increase in compensation expense as a result of hiring additional employees to support our ongoing growth. The remaining increase was due to an increase in other general operating costs such as insurance and information technology projects to support our growth, partially offset by a $4.4 million decrease in stock-based compensation due to the vesting of awards during 2024.

Depreciation and amortization for the six months ended June 30, 2025 and 2024 was $161.1 million and $69.7 million, respectively, an increase of approximately $91.5 million. The increase was primarily due to increased depreciation from the Corsicana Facility coming online in April 2024 and additional miners being deployed.

The change in fair value of bitcoin for the six months ended June 30, 2025 and 2024 were gains of $262.8 million and $157.7 million, respectively, and was recognized to adjust the fair value of our bitcoin held at the end of each period.

The change in fair value of our derivative assets for the six months ended June 30, 2025 and 2024 was a loss of $0.9 million and a gain of $47.7 million, respectively, and were recorded to adjust the fair value of our PPAs, which were classified as a derivative asset and measured at fair value. The changes in fair value were due to changes in future power prices over the applicable period. The loss incurred during the six months ended June 30, 2025 was primarily attributable to the average of the forward prices utilized in the discounted cash flow estimation models increasing from $51.98 as of December 31, 2024 to $55.41 per MWh as of March 31, 2025, but then decreasing to $53.31 per MWh as of June 30, 2025. The gain recognized during the six months ended June 30, 2024 was primarily attributable to the average of the forward prices increasing from $43.80 per MWh as of December 31, 2023 to $51.13 per MWh as of June 30, 2024.

Power curtailment credits for the six months ended June 30, 2025 and 2024 were $16.1 million and $19.0 million, respectively, and represent sales of unused power under certain of our PPAs and participation in ancillary services under ERCOT Demand Response Services Programs. The amount of these credits varies from period to period depending on various factors impacting the supply of power to, and the demand for power on, the ERCOT grid, such as weather and global fuel costs.

The change in fair value of contingent consideration for the six months ended June 30, 2025 was a loss of $17.6 million, as compared to no gain or loss for the six months ended June 30, 2024, and was a result of the contingent consideration recognized in July and December 2024 as part of the acquisitions of Block Mining and E4A Solutions.

The loss on contract settlement of $158.1 million was attributable to the Rhodium Settlement.

Other income (expense)

Interest income for the six months ended June 30, 2025 and 2024 was $6.7 million and $16.7 million, respectively. The decrease was primarily due to a decrease in cash balances on deposit.

Interest expense for the six months ended June 30, 2025 and 2024 was $8.4 million and $0.7 million, respectively. The increase was primarily due to the debt from new financing arrangements entered into during late 2024 and 2025.

Gain (loss) on equity method investment - marketable securities for the six months ended June 30, 2025 and 2024, was a loss of $57.1 million and a gain of $24.5 million, respectively, and was recognized to adjust the fair value of our equity method investment held at the end of each period.

Non-GAAP Measures

In addition to financial measures presented under generally accepted accounting principles in the United States ("GAAP"), we consistently evaluate our use of and calculation of non-GAAP financial measures such as "Adjusted EBITDA." EBITDA is computed as net income before interest, taxes, depreciation, and amortization. Adjusted EBITDA is a financial measure defined as EBITDA adjusted to eliminate the effects of certain non-cash and/or non-recurring items that do not reflect our ongoing strategic business operations, which management believes results in a performance measurement that represents a key indicator of our core business operations in Bitcoin Mining. The adjustments include fair value adjustments such as derivative power contract adjustments, equity securities fair value changes, and non-cash stock-based compensation expense, in addition to financing and legacy business income and expense items.

We believe Adjusted EBITDA can be an important financial performance 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 such adjustments. Additionally, Adjusted EBITDA is used as a performance metric for share-based compensation.

Adjusted EBITDA is provided in addition to, and should not be considered a substitute for, or superior to, net income, the most comparable measure under GAAP to Adjusted EBITDA. Further, Adjusted EBITDA should not be considered as an alternative to revenue growth, net income, diluted net income per share, or any other performance measure derived in accordance with GAAP, or as an alternative to cash flow from operating activities as a measure of our liquidity. Adjusted EBITDA has limitations as an analytical tool, and you should not consider this financial measure either in isolation or as a substitute for analyzing our results as reported under GAAP.

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The following table reconciles Adjusted EBITDA to Net income (loss), the most comparable GAAP performance measure:

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Liquidity and Capital Resources

We generate non-cash revenue through mining bitcoin at our Facilities, which we manage based on our Bitcoin Treasury Strategy, while financing operations and other expenses through sales of our bitcoin production, borrowing against our credit facilities, and issuance of common stock under the ATM offering program. During the six months ended June 30, 2025 and 2024, we issued and sold approximately 10.8 million shares and 4.1 million shares, respectively, of our common stock under our ATM offering program for aggregate net proceeds (net of commissions and expenses) of $121.1 million and $516.0 million, respectively.

As of June 30, 2025, we had net working capital of approximately $141.2 million, which included cash and cash equivalents of $255.4 million and marketable securities of $62.5 million. We reported a net loss of $76.9 million during the six months ended June 30, 2025, which included $270.9 million in non-cash net gains, primarily resulting from revenue recognized from bitcoin mined of $283.7 million, and the change in fair value of bitcoin of $262.8 million, partially offset by depreciation and amortization of $161.1 million, stock-based compensation of $59.7 million, and unrealized losses on marketable securities of $57.1 million.

We monitor our balance sheet on an ongoing basis and evaluate the level of bitcoin retained from monthly production in consideration of our cash requirements for ongoing operations and expansion.

Contractual Commitments and Obligations

As of June 30, 2025, we had a remaining commitment of approximately $83.5 million due to MicroBT for the contractual purchase of miners, which we expect to pay during 2025.

Revenue from Operations

Bitcoin Mining

We expect to generate ongoing revenue from bitcoin rewards in connection with our Bitcoin Mining operations and our ability to liquidate bitcoin rewards at future values will be regularly evaluated to generate cash for operations.

Generating bitcoin rewards that exceed our production and overhead costs will determine our ability to report profit margins related to such Bitcoin Mining operations, although accounting for our reported profitability is significantly complex. Furthermore,

regardless of our ability to generate proceeds from the sale of our bitcoin produced from our Bitcoin Mining business, we may need to raise additional capital in the form of equity or debt to fund our operations and pursue our business strategy.

The ability to raise funds through the sale of equity, debt financings, or the sale of bitcoin to maintain our operations is subject to many risks and uncertainties and any future equity issuances or convertible debt offerings could result in dilution to our existing stockholders and any future debt or debt securities may contain covenants that limit our operations or ability to enter into certain transactions. Our ability to realize revenue through bitcoin production and successfully convert bitcoin into cash or fund overhead with bitcoin is subject to a number of risks, including regulatory, financial and business risks, many of which are beyond our control. Additionally, we have observed significant historical volatility in the market price of bitcoin and, as such, future prices cannot be predicted.

Engineering

Substantially all Engineering revenue is derived from the sale of custom products built to customers' specifications under fixed-price contracts and electrical engineering services. Revenue is recognized over time as performance creates or enhances an asset with no alternative use, and for which we have an enforceable right to receive compensation as defined under the contract. The length of time required to complete a custom product varies but is typically between four and 12 weeks.

Customers are typically required to make periodic progress payments based on contractually agreed-upon milestones.

If we are unable to generate sufficient revenue from our Bitcoin Mining and Engineering operations when needed or secure additional sources of funding, it may be necessary to significantly reduce our current rate of spending or explore other strategic alternatives.

ATM Equity Offerings

During 2025 and 2024, we offered and sold shares of our common stock through ATM offering programs pursuant to sales agreements with sales agents (each, an "ATM Program"). See Note 14. Stockholders' Equity for the terms and provisions of each sales agreement.

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The following table sets forth shares sold and net proceeds received (net of sales commissions and expenses) from shares sold under each ATM Program:

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As of June 30, 2025, approximately $238.3 million of our common stock remained available for issuance and sale pursuant to the August 2024 ATM Program. The remaining prior ATM Program sales agreements were terminated as of August 9, 2024.

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Legal Proceedings

We have been named a defendant in several lawsuits, as more fully described in Note 17. Commitments and Contingencies.

Cash Flows

The following table presents a summary of our cash flows:

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Operating Activities

The increase in cash used was primarily attributable to increased power costs of $68.4 million, a $32.9 million increase in selling, general, and administrative costs, excluding stock-based compensation, both of which were primarily driven by our increased mining capacity and headcount, combined with other general operating costs such as insurance and information technology projects to support our growth. During the six months ended June 30, 2025, we paid a one-time cash cost of $122.6 million related to the loss on contract settlement related to the Rhodium acquisition.

Investing Activities

For the six months ended June 30, 2025 and 2024, net cash used in investing activities was primarily attributable to purchases and deposits paid for miners and purchases of property and equipment for our ongoing expansions. During the six months ended June 30, 2025, we paid approximately $86.4 million in deposits and payments for the purchase of miners, with anticipated additional payments of $83.5 million to be made in 2025, and paid approximately $93.2 million for the purchase of property and equipment, partially offset by proceeds from the sale of bitcoin of $131.8 million and proceeds of $14.7 million from the sale of marketable securities. During the six months ended June 30, 2024, we paid approximately $279.0 million in deposits and payments for the purchase of miners, paid approximately $110.8 million for the purchase of property and equipment, and paid approximately $133.2 for our investment in marketable securities.

Financing Activities

For the six months ended June 30, 2025 and 2024, net cash provided by financing activities primarily consisted of proceeds from our ATM Program offerings of $123.9 million and $527.0 million, respectively. We have approximately $838.8 million in debt outstanding, primarily consisting of $594.4 million from our 2030 Notes, $200 million from our bitcoin-backed credit facility, $54.3 million from our revolving credit facilities, and debt acquired as part of the Block Mining Acquisition. During the six months ended June 30, 2025, we received total net proceeds of $254.3 million from our debt. We have primarily financed our strategic growth through proceeds from issuances of our common stock through ATM Program offerings and various credit facilities, and it is reasonably likely that we will continue to finance our ongoing growth similarly.

Critical Accounting Policies

In preparing our financial statements in accordance with GAAP, there are certain accounting policies that may require a choice between acceptable accounting methods or may require substantial judgment or estimation in their application. The methods, estimates and judgments we use in applying our most critical accounting policies have a significant impact on the results we report in our Condensed Consolidated Financial Statements. An accounting estimate is considered critical if both (i) the nature of the estimates or assumptions is material due to the levels of subjectivity and judgment involved, and (ii) the impact within a reasonable range of outcomes of the estimates and assumptions is material to our Condensed Consolidated Financial Statements. These include: business combinations, valuation of the Rockdale PPA and the Corsicana PPA, long-lived assets and stock-based compensation. We believe these and other accounting policies set forth in Note 2. Significant Accounting Policies and Recent Accounting Pronouncements should be reviewed as they are integral to understanding our results of operations and financial condition.

We have discussed the selection of critical accounting policies and the effect of estimates with the Audit Committee of our Board.

Business combinations

Accounting for business combinations requires management to make significant estimates and assumptions, especially at the acquisition date, including estimates for property and equipment and contingent consideration, where applicable. Although we believe our assumptions and estimates have been reasonable and appropriate, they are based in part on historical experience and information obtained from management of the acquired companies and are inherently uncertain. Estimates used in determining the value of property and equipment included the estimated replacement costs, which included replacement cost new, remaining life, and effective age. Estimates primarily used in determining the value of the contingent consideration included the timing and probability of achieving milestones and discount rates.

Rockdale PPA and Corsicana PPA Valuations

The Rockdale PPA and the Corsicana PPA are accounted for as derivatives, the valuations of which are based on significant unobservable inputs, which include discounted cash flow estimation models containing quoted commodity exchange spot and

forward prices and are adjusted for basis spreads for load zone-to-hub differentials through the respective terms of the Rockdale PPA and the Corsicana PPA. Significant judgment and estimations are required when creating the discounted cash flow estimation models. Should our discounted cash flow estimation models change significantly, potentially material changes to the fair value of the derivative asset may result, which could have a material impact on our financial statements.

See Note 9. Power Supply Agreements for a discussion of the unobservable inputs and their impact on the valuation.

Long-Lived Assets

Long-lived assets are stated at cost and depreciated using the straight-line method over the estimated useful lives of the assets. Judgment is necessary in estimating our various assets' useful lives. This includes evaluating our own usage experience with our currently owned assets, the quality of materials used in construction-related projects, and for our miners, the rate of technological advancement and market-related factors such as the price of bitcoin and the bitcoin network hash rate, which impact the value of the miners. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable, which is determined based on a comparison of the carrying amount of an asset to undiscounted future cash flows expected to be generated by the asset. Significant judgment is used when estimating future cash flows, particularly the price of bitcoin and the bitcoin network hash rate. If such assets are considered impaired, an impairment is recognized based on the amount by which the carrying amount exceeds the estimated fair value of the assets.

Should our estimates of useful lives, undiscounted future cash flows, or asset fair values change, additional and potentially material impairments may be required, which could have a material impact on our reported financial results.

Stock-Based Compensation

Stock-based compensation expense related to share-based payment awards is recognized at the grant date of the award and is estimated based on the fair market value of our common stock on the date of the grant. Compensation cost for performance-based, share-based payment awards is recognized over the performance period when achievement of the milestones and targets becomes probable. We use significant judgment in determining the likelihood of meeting milestones and market conditions. Inputs into valuation models such as Monte Carlo simulations include both the Company's and the Russell 3000's historical and expected annual volatilities, and depending on the inputs selected, we could calculate significantly different estimated grant date fair values, materially impacting the valuation of our stock-based awards and the stock-based compensation expense we recognize in future periods.

Recent Accounting Pronouncements

See Note 2. Significant Accounting Policies and Recent Accounting Pronouncements for a description of applicable recent accounting pronouncements and any material impact on our financial statements.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.