MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Unless otherwise indicated or the context otherwise requires, references to "MARA," "we," "us," "our" and the "Company" refer to MARA Holdings, Inc. and its consolidated subsidiaries.
You should read the following discussion and analysis together with our financial statements and related notes in Part I, Item 1 of this Quarterly Report on Form 10-Q for the quarter ended June 30, 2026 (this "Quarterly Report").
This Quarterly Report contains forward-looking statements within the meaning of the federal securities laws, which statements are subject to considerable risks and uncertainties. These forward-looking statements are intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. All statements included or incorporated by reference in this Quarterly Report, other than statements of historical fact, are forward-looking statements. You can identify forward-looking statements by the use of words such as "may," "will," "could," "anticipate," "expect," "intend," "believe," "continue" or the negative of such terms, or other comparable terminology. Forward-looking statements also include the assumptions underlying or relating to such statements. Our forward-looking statements are based on our management's current assumptions and expectations about future events and trends, which affect or may affect our business, strategy, operations or financial performance. Although we believe that these forward-looking statements are based upon reasonable assumptions, they are subject to numerous known and unknown risks and uncertainties and are made in light of information currently available to us. Our actual financial condition and results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth in the section entitled "Risk Factors" in Part I, Item 1A, of our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on March 2, 2026, (our "Annual Report"), which is incorporated herein by reference, as well as in the other public filings we make with the U.S. Securities and Exchange Commission (the "SEC"). You should read this Quarterly Report with the understanding that our actual future financial condition and results may be materially different from and worse than what we expect.
Additionally, information regarding market and industry statistics contained in this Quarterly Report is included based upon information available to us that we believe is accurate as of the date of this Quarterly Report. It is generally based upon industry and other publications that are not produced for purposes of securities offerings or economic analysis. We have not reviewed or included data from all sources and cannot assure investors of the accuracy or completeness of the data included in this Quarterly Report. Forecasts and other forward-looking information obtained from these sources are subject to the same qualifications and the additional uncertainties accompanying any estimates of future market size, revenue and market acceptance of products and services. We do not assume any obligation to update any forward-looking statement. As a result, investors should not place undue reliance on these forward-looking statements.
BUSINESS OVERVIEW AND TRENDS
Overview
MARA is an owner, developer and operator of digital infrastructure built to convert energy into high-value compute workloads. Bitcoin mining serves as the foundation of our business, and we have begun pursuing opportunities to expand our infrastructure capacity into adjacent high-value workloads, including artificial intelligence ("AI"), high-performance computing ("HPC") and critical information technology ("IT"). We are vertically integrated across power, land and compute, with a portfolio of energized utility-scale power assets and a decade of large-scale compute operating experience. As our expansion progresses, we intend to allocate capacity across workloads based on economics and demand to optimize asset utilization.
We believe the next phase of digital infrastructure value creation will be shaped by control of power: where it is located, how flexibly it can be deployed and what returns it can generate across compute markets. Our strategy is organized around three reinforcing priorities.
1.Own and control low-cost energy. We believe energy is increasingly becoming the binding constraint on infrastructure growth. By acquiring and operating energy generation assets at below-market costs, we
believe we can reduce our overall cost structure, protect against energy price volatility, and create a durable supply of power for high-value compute workloads.
2.Build AI and digital infrastructure at scale. We are developing large-scale data center campuses, including co-located generation, land, water access and grid interconnection, to serve the growing demand for training, inference and critical IT workloads, with the goal of increasing the proportion of revenue derived from these higher-value workloads.
3.Bitcoin mining is our foundation. Bitcoin mining remains the foundation of our platform and the current primary monetization pathway for our energy assets. We intend to maintain a leading position as one of the world's largest publicly traded Bitcoin mining companies while expanding our revenue base into AI, critical IT, and power markets over time.
As of June 30, 2026, our total energy portfolio consists of approximately 1.9 gigawatts ("GW") of capacity across 19 data centers in North America, the Middle East, Europe, and Latin America.
The term "Bitcoin" with a capital "B" is used to denote the Bitcoin protocol which implements a highly available, public, permanent, and decentralized ledger. The terms "bitcoin" with a lower case "b" and "BTC" are used to denote the digital asset, bitcoin.
Recent Developments
Highlights from the quarter ended June 30, 2026:
•On April 29, 2026, we entered into an equity purchase agreement to acquire Long Ridge Energy & Power LLC ("Long Ridge") for an approximately $1.5 billion enterprise value. In connection with the Long Ridge equity purchase agreement, we entered into a commitment letter with Barclays Bank PLC ("Barclays") to provide a senior secured bridge term loan facility for an aggregate amount of up to $785.0 million.
•Subsequent to quarter end, we entered into a membership interest purchase agreement with HIF USA LLC ("HIF") to acquire all of the issued and outstanding membership interests of MAT 1177 LLC (the "Project Company"), securing rights to a site in Matagorda County, Texas with access to 2,000 megawatts ("MW") of power capacity for an aggregate purchase price of up to $600.0 million. We intend to develop the site into a large-scale digital infrastructure campus supporting high-performance computing and Bitcoin mining operations.
•Subsequent to quarter end, we entered into two bitcoin-backed credit facilities with Coinbase Credit, Inc. ("Coinbase") and Two Prime Lending Limited ("Two Prime") providing for an aggregate $600.0 million of incremental borrowings. In addition, we refinanced our existing $150.0 million borrowing with Coinbase (the "2026 Line of Credit") and consolidated it into the new Coinbase facility. The facilities were initially collateralized by 18,750 bitcoin. Proceeds are expected to be used for general corporate purposes, including funding a portion of the cash consideration for the Long Ridge acquisition.
With the closing of the Long Ridge acquisition and the full energization of the site in Matagorda County, Texas, our potential portfolio of power capacity is expected to expand to approximately 4.8 GW.
Bitcoin Mining Operations
During the six months ended June 30, 2026, we mined 4,669 bitcoin, an increase of 25 bitcoin, or 1%, from the prior year period. The increase was primarily due to an increase in our average operational hashrate driven by the continued fleet expansion and the energization of new mining capacity, partially offset by an increase in the global hashrate, resulting in higher network difficulty and fewer blocks mined. In addition, our mining operations provide operational flexibility, as mining equipment can be rapidly deployed at newly energized sites to generate revenue as AI infrastructure is developed, maintaining productive utilization of our energy assets throughout the development cycle.
As of June 30, 2026, we owned approximately 440,000 mining rigs globally, including our share of mining rigs from our equity method investee, the Abu Dhabi Global Markets company (the "ADGM Entity"), with an energized hashrate of approximately 70.3 exahashes per second ("EH/s"). To stay competitive, we remain focused on
strategically deploying additional mining rigs and scaling our operations, while managing our fleet as it ages along the obsolescence curve. In addition, we continuously evaluate strategic opportunities to support our growth strategy and seek to enhance operational efficiencies by utilizing efficient mining rigs and securing supply contracts. At the beginning of the year, we purchased 2.4 EH of next-generation used application-specific integrated circuit (ASIC) miners, still under warranty, at below-market prices, to replace legacy machines and enhance operational efficiency. We continued this strategy during the second quarter of 2026 by entering into an agreement to purchase additional miners. Going forward, we expect to make smaller, targeted replacements only when the economics are accretive, rather than large-scale purchases.
On January 21, 2026, we acquired an operational data center in Central Nebraska with 35 MW of operational mining capacity and a nameplate capacity of 42 MW. The acquisition increased our total operational capacity in Central Nebraska by approximately 40% to 142 MW, expanding our owned infrastructure footprint and lowering our average cost to mine by adding low-cost, immediately operational capacity adjacent to our existing Nebraska operations.
The following table presents our computing power and miner efficiency as of June 30, 2026 and 2025:
As of June 30, | |||||||||||
2026 |
2025 | ||||||||||
Energized hashrate (1) | 70.3 | 57.4 | |||||||||
Miner efficiency (in joules per terahash) (2) | 17.3 | 18.3 | |||||||||
Total energy capacity (in GW) (3) | 1.9 | 1.7 | |||||||||
(1) We define "Energized hashrate" as the total hashrate that could theoretically be generated if all mining rigs that have been operational are currently in operation and running at 100% of manufacturers' specifications. We use this metric as an indicator of progress in bringing mining rigs online. We believe this metric is a useful indicator of potential bitcoin production. However, metrics cannot be tied directly to any production level expected to be actually achieved as (a) there may be delays in the energization of hashrate, (b) we cannot predict when operational mining rigs may be offline for any reason, including curtailment or machine failure, and (c) we cannot predict global hashrate (and therefore our share of the global hashrate), which has a significant impact on our ability to generate bitcoin in any given period.
(2) The average number of joules of energy required to produce one terahash of computing power.
(3) Total energy capacity represents the maximum amount of electricity our facilities can utilize for our operations.
Bitcoin Value
Our revenues are generally comprised of block rewards earned in bitcoin as a result of successfully solving blocks, and transaction fees earned for verifying transactions in support of the blockchain. Historically, we have held bitcoin produced from our mining operations or purchased on the open market on our Condensed Consolidated Balance Sheets, and in 2025, we changed our digital asset management strategy to permit sales of bitcoin generated from operations. In 2026, we expanded the strategy to allow for sales of bitcoin held on our balance sheet. Accordingly, we may hold bitcoin for long-term investment purposes and may also sell bitcoin from time to time, as well as purchase bitcoin opportunistically, in each case subject to market conditions and our capital allocation priorities. During the six months ended June 30, 2026, we sold approximately 23,093 bitcoin as part of our strategy to fund operations, support growth opportunities and manage liquidity.
As of June 30, 2026, we held approximately 35,577 bitcoin, including 9,270 bitcoin under our digital asset management strategy, on our Condensed Consolidated Balance Sheets, with a carrying value of approximately $2.1 billion. The fair value of our bitcoin may be materially impacted as the market value of bitcoin fluctuates.
Management believes our recent investments, relative position and liquidity, support the execution of our long-term growth strategy.
The following table presents our total bitcoin holdings, including bitcoin under our digital asset management strategy, and the fair value per bitcoin:
Quantity | Fair Value | |||||||||||||
| June 30, 2026 | 35,577 | $ | 58,524 | |||||||||||
| March 31, 2026 | 35,303 | $ | 68,222 | |||||||||||
| December 31, 2025 | 53,822 | $ | 87,498 | |||||||||||
| September 30, 2025 | 52,850 | $ | 114,068 | |||||||||||
| June 30, 2025 | 49,951 | $ | 107,173 | |||||||||||
Energy Cost
Energy cost is the most significant cost driver for Bitcoin mining and represented 54.9% and 34.1%, as a percentage of our owned mining revenues for the three months ended June 30, 2026 and 2025, respectively, and 53.8% and 36.1% for the six months ended June 30, 2026 and 2025, respectively. The increase in energy costs as a percentage of owned mining revenues for both periods was primarily driven by a decline in bitcoin prices, which reduced owned mining revenues, combined with higher purchased energy costs resulting from the continued expansion of our owned mining operations, partially offset by improvements in fleet efficiency year over year. This excludes energy costs from third-party hosted sites.
For the six months ended June 30, 2026, our ability to access power at $0.04 per kilowatt hour ("kWh") across our owned and operated sites provides the economic foundation for each of our workloads across AI, HPC, critical IT, and Bitcoin mining. We believe that owning and controlling power at this scale and cost allows us to allocate energy dynamically across workloads based on market conditions and demand, seeking to maximize the economic return on each megawatt under our control.
The following table presents our owned and operated facility statistics:
Three Months Ended June 30, |
Six Months Ended June 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Owned Facilities Statistics | ||||||||||||||||||||||||||
Purchased energy costs per BTC (1) | $ | 38,690 | $ | 33,735 | $ | 39,328 | $ | 34,723 | ||||||||||||||||||
| Supplemental Information | ||||||||||||||||||||||||||
| Total BTC produced during the period, in whole BTC at owned facilities | 1,260 | 1,237 | 2,377 | 2,454 | ||||||||||||||||||||||
| Average BTC per day, in whole BTC | 13.8 | 13.6 | 13.1 | 13.6 | ||||||||||||||||||||||
Purchased energy costs per kWh (2) | $ | 0.04 | $ | 0.04 | $ | 0.04 | $ | 0.04 | ||||||||||||||||||
(1) "Purchased energy costs per BTC" is calculated as the amounts paid to power providers for power consumed divided by the quantity of bitcoin produced during the period related to our owned mining operations.
(2) "Purchased energy costs per kWh" is calculated using the amounts paid to power providers for power consumed divided by the kWh consumed related to our owned Bitcoin mining operations.
Energy cost can be highly volatile, cyclical and sensitive to geopolitical events and weather conditions or natural disasters, such as weather-related storms and earthquakes, which impact supply and demand for power regionally. All of our owned mining sites and our miners at third-party hosted sites are subject to variable prices and market rate
fluctuations with respect to wholesale energy costs. Such costs are governed by various power purchase agreements, and energy prices can change hour to hour and by location. While this renders energy prices less predictable, it also gives us greater ability and flexibility to actively manage the energy we consume with a goal of increasing profitability and energy efficiency. When prices rise or supply is constrained, we may curtail our operations to avoid using power at increased rates. Although we do not receive significant compensation for curtailment, the dispatchable load of our Bitcoin mining operations helps balance the grid and provides electricity to communities when in need.
In addition to energy costs incurred at our owned mining sites, third-party hosting and other energy costs remain a significant part of our overall cost structure and are subject to similar volatility and market dynamics. For the three months ended June 30, 2026 and 2025, these costs totaled $69.2 million and $69.0 million, respectively, and for the six months ended June 30, 2026 and 2025, these costs totaled $139.2 million and $137.2 million, respectively, reflecting both the expansion of our hosted mining operations and higher variable energy pricing at third-party facilities. Our hosting arrangements typically include energy charges, as well as maintenance and management fees for colocation and operational support. Such hosting arrangements, excluding the commodity swap contract acquired in a previous acquisition, have contractual commitments extending over the next two years and minimum future payments of approximately $308.5 million. Our most significant third-party hosting arrangements are scheduled to expire, beginning in the third quarter of 2027 and expected to fully conclude during the first quarter of 2028. These expirations are expected to eliminate third-party hosting costs and improve our cost per kWh over time as the arrangements expire.
Digital Asset Management
As one of the largest corporate holders of bitcoin globally, our strategy is focused on enhancing shareholder value through disciplined, risk-managed deployment of bitcoin beyond passive holdings. We view bitcoin as a productive asset and may activate a portion of our holdings through lending, structured trading arrangements, and collateralized financing to generate incremental income, fund operations, and reduce our cost of capital.
As of June 30, 2026, we held 35,577 bitcoin, including 9,270 bitcoin that were loaned or pledged as collateral, representing approximately 26% of our total holdings. During the three and six months ended June 30, 2026, the fair value of our bitcoin holdings decreased approximately $343.0 million and $1.4 billion, respectively, due to the decline in bitcoin's market price. Partially offsetting this decline, we generated interest income from our bitcoin lending activities and recognized net investment income (loss) from our bitcoin trading activities.
In 2025, we changed our strategy to permit sales of bitcoin generated from operations. In 2026, we expanded this strategy to allow for sales of bitcoin held on our balance sheet. Accordingly, we may hold bitcoin for long-term investment purposes and may also buy or sell bitcoin from time to time, subject to market conditions and our capital allocation priorities.
The Company's core digital asset management strategy is comprised of the following activities:
Treasury
We retain the majority of our bitcoin holdings as a treasury asset for long-term appreciation and liquidity. Consistent with this approach, we may monetize a portion of our bitcoin holdings from time to time, including through sales of bitcoin held on our balance sheet. We hold our bitcoin across multiple custodial wallets to mitigate counterparty and concentration risk.
Lending
We have entered into lending arrangements with various counterparties to generate additional returns on our bitcoin holdings. As of June 30, 2026, we had loaned out a total of 4,742 bitcoin, which generated $4.3 million and $10.7 million of interest income for the three and six months ended June 30, 2026, respectively. Counterparty creditworthiness was assessed prior to lending and is reassessed periodically. Loaned bitcoin is generally subject to recall upon short notice.
Trading
Our digital asset management strategy includes bitcoin-denominated trades such as options, futures, swaps and spot transactions to generate additional returns on our bitcoin holdings.
Borrowing
As of June 30, 2026, 4,528 bitcoin were pledged as collateral. Of the bitcoin pledged as collateral, 4,253 bitcoin were secured in connection with $150.0 million of outstanding borrowings under our 2026 Line of Credit, which was entered into in January 2026 and bears an interest rate of 7.0% per annum. The remaining 275 bitcoin were pledged for other bitcoin arrangements.
Subsequent to quarter end, we entered into two bitcoin-backed term loan facilities with Coinbase and Two Prime providing for $600.0 million of incremental borrowings. The Coinbase facility refinances and consolidates our existing $150.0 million 2026 Line of Credit with Coinbase and provides $300.0 million of additional funding. The Coinbase facility bears interest at a floating rate equal to the arithmetic average of the upper and lower bounds of the target range for federal funds transactions (the "Fed Funds Mid Rate") plus 3.875% per annum. The $300.0 million Two Prime facility bears interest at a fixed rate of 7.65% per annum. The facilities mature on August 4, 2028 and August 3, 2028, respectively, with the Coinbase facility subject to an automatic one-year extension unless timely canceled by either party. In connection with these facilities, 18,750 bitcoin were pledged as initial collateral as of August 4, 2026, the closing date of both transactions.
The following tables summarize our capital appreciation and income generated from bitcoin holdings as it relates to our digital asset management strategy:
Three Months Ended June 30, 2026 | ||||||||||||||||||||||||||||||||
(in thousands) |
Treasury |
Lending |
Trading |
Borrowing |
Total | |||||||||||||||||||||||||||
Digital Asset Management | ||||||||||||||||||||||||||||||||
Change in fair value of bitcoin (1) | $ | (249,251) | $ | (47,933) | $ | - | $ | (45,523) | $ | (342,707) | ||||||||||||||||||||||
Interest income (2) | - | 4,291 | - | - | 4,291 | |||||||||||||||||||||||||||
Investment income, net (3) | - | - | 1,233 | - | 1,233 | |||||||||||||||||||||||||||
Total | $ | (249,251) | $ | (43,642) | $ | 1,233 | $ | (45,523) | $ | (337,183) | ||||||||||||||||||||||
Three Months Ended June 30, 2025 | ||||||||||||||||||||||||||||||||
(in thousands) |
Treasury |
Lending |
Trading |
Borrowing |
Total | |||||||||||||||||||||||||||
Digital Asset Management | ||||||||||||||||||||||||||||||||
Change in fair value of bitcoin (1) | $ | 844,890 | $ | 126,926 | $ | 1,611 | $ | 218,010 | $ | 1,191,437 | ||||||||||||||||||||||
Interest income (2) | - | 6,795 | - | - | 6,795 | |||||||||||||||||||||||||||
Investment income, net (3) | - | - | 1,366 | - | 1,366 | |||||||||||||||||||||||||||
Total | $ | 844,980 | $ | 133,721 | $ | 2,977 | $ | 218,010 | $ | 1,199,598 | ||||||||||||||||||||||
(1) Change in fair value of bitcoin for the three months ended June 30, 2026 was a loss of $342.7 million and includes the "Change in fair value of digital assets" loss of $249.6 million, excluding a loss of $0.3 million related to other digital assets, resulting in $249.3 million attributable to bitcoin, plus the "Change in fair value of digital assets - receivable, net" loss of $93.5 million. Change in fair value of bitcoin for the three months ended June 30, 2025 was a gain of $1.2 billion and includes the "Change in fair value of digital assets" of $846.0 million, excluding $1.1 million related to other digital assets, resulting in $844.9 million attributable to bitcoin, plus the "Change in fair value of digital assets - receivable, net" of $346.5 million.
(2) Interest income differs from the amount reported as "Interest income" on the Condensed Consolidated Statements of Operations, as it excludes $6.0 million and $2.8 million of interest earned on cash and cash equivalents for the three months ended June 30, 2026 and 2025, respectively.
(3) Investment income, net is associated with the return from various bitcoin-denominated trades and is reported in "Other" on the Condensed Consolidated Statements of Operations.
Six Months Ended June 30, 2026 | ||||||||||||||||||||||||||||||||
(in thousands) |
Treasury |
Lending |
Trading |
Borrowing |
Total | |||||||||||||||||||||||||||
Digital Asset Management | ||||||||||||||||||||||||||||||||
Change in fair value of bitcoin (1) | $ | (963,335) | $ | (226,596) | $ | - | $ | (170,772) | $ | (1,360,703) | ||||||||||||||||||||||
Interest income (2) | - | 10,651 | - | - | 10,651 | |||||||||||||||||||||||||||
Investment income, net (3) | - | - | 3,427 | - | 3,427 | |||||||||||||||||||||||||||
Total | $ | (963,335) | $ | (215,945) | $ | 3,427 | $ | (170,772) | $ | (1,346,625) | ||||||||||||||||||||||
Six Months Ended June 30, 2025 | ||||||||||||||||||||||||||||||||
(in thousands) |
Treasury |
Lending |
Trading |
Borrowing |
Total | |||||||||||||||||||||||||||
Digital Asset Management | ||||||||||||||||||||||||||||||||
Change in fair value of bitcoin (1) | $ | 453,225 | $ | 101,943 | $ | 1,611 | $ | 126,926 | $ | 683,705 | ||||||||||||||||||||||
Interest income (2) | - | 13,125 | - | - | 13,125 | |||||||||||||||||||||||||||
Investment loss, net (3) | - | - | (5,921) | - | (5,921) | |||||||||||||||||||||||||||
Total | $ | 453,225 | $ | 115,068 | $ | (4,310) | $ | 126,926 | $ | 690,909 | ||||||||||||||||||||||
(1) Change in fair value of bitcoin for the six months ended June 30, 2026 was a loss of $1.4 billion and includes the "Change in fair value of digital assets" loss of $964.2 million, excluding a loss of $0.9 million related to other digital assets, resulting in a $963.3 million loss attributable to bitcoin, plus the "Change in fair value of digital assets - receivable, net" loss of $397.4 million. For the six months ended June 30, 2025, change in fair value of bitcoin was a gain of $683.7 million and includes the "Change in fair value of digital assets" of $451.9 million, excluding a loss of $1.4 million related to other digital assets, resulting in $453.2 million attributable to bitcoin, plus the "Change in fair value of digital assets - receivable, net" of $230.5 million.
(2) Interest income differs from the amount reported as "Interest income" on the Condensed Consolidated Statements of Operations, as it excludes $10.1 million and $8.5 million of interest earned on cash and cash equivalents for the six months ended June 30, 2026 and 2025, respectively.
(3) Investment income (loss), net is associated with the return from various bitcoin-denominated internal trades and is reported in "Other" on the Condensed Consolidated Statements of Operations.
The price of bitcoin has historically experienced significant price volatility, in addition to other risks inherent to holding a digital asset. Management monitors these risks and developments in managing our bitcoin investment approach to mitigate adverse effects on our financial position.
AI, HPC, Critical IT, and Inference
Growing demand for AI, HPC, critical IT, and inference workloads is creating significant opportunities for companies that own and operate digital infrastructure at scale. As one of the largest owners and operators of energized, low-cost power capacity, we are making strategic investments to extend our digital infrastructure platform, serve new categories of compute demand, and drive long-term shareholder value.
We are investing in our digital infrastructure to serve growing external demand for large-scale, power-dense compute capacity. Hyperscalers, enterprise AI customers, and cloud service providers require immediate access to energized sites with the operational expertise to support sustained, high-intensity workloads, capabilities that are central to our platform.
In the first quarter of 2026, we acquired a majority interest in Exaion, a European company that develops and operates data centers and provides secure, private cloud and AI inference infrastructure, serving enterprise and regulated-industry customers across three primary product lines: (i) virtual desktops; (ii) data security solutions; and (iii) regulated AI inference solutions. The acquisition expands our capabilities in digital infrastructure, enhances our ability to deliver secure and scalable compute and inference solutions to customers who require data sovereignty and control, and establishes our presence in international markets where demand for private, domestically controlled AI compute is growing. For the six months ended June 30, 2026, the impact of this acquisition on our consolidated results was not material.
Additionally, as part of this expansion, we entered into a strategic agreement (the "Strategic Agreement") with Starwood Digital Ventures LLC ("Starwood") to develop, finance and operate digital infrastructure on select power-rich sites within our existing portfolio. Under the Strategic Agreement, we will contribute certain sites to and retain up to a 50% ownership interest in newly formed joint ventures, while Starwood will lead engineering, procurement and construction activities, secure hyperscale tenancy and operate the assets. Since execution of the Strategic Agreement, we have advanced site selection negotiations across our portfolio, progressed permitting and retrofit work, and commenced discussions with prospective hyperscale tenants. We expect to account for our interest in these joint ventures under the equity method of accounting, and accordingly, our share of each joint venture's results of operations will be reflected as a single line item in our Condensed Consolidated Statements of Operations.
During the quarter, we entered into a definitive agreement to acquire Long Ridge, a vertically integrated gas and power business located in Hannibal, Ohio, built around a 485 MW combined cycle gas turbine power plant operating at approximately 91% capacity factor, co-located with our existing Bitcoin mining site. The facility is interconnected with the PJM transmission network and anchored by vertically integrated natural gas supply through associated exploration and production operations, delivering an expected all-in operating cost of approximately $15 per megawatt-hour. The combination of owned dispatchable generation, vertically integrated fuel, PJM interconnection, and co-located operational infrastructure positions Long Ridge as a premier HPC campus capable of supporting sustained, power-intensive AI workloads at scale. We have received formal indications of interest from investment-grade hyperscale tenants. The acquisition is subject to customary closing conditions and regulatory approvals.
Together, Exaion and the Starwood partnership establish two distinct pathways on the same energy base. The Starwood joint ventures are intended to support hyperscale and large-scale compute workloads, while Exaion focuses on secure, private cloud and regulated enterprise compute. The Long Ridge acquisition, if completed, is expected to support the hyperscale pathway with owned, dispatchable generation and a low-cost power structure. These initiatives are supported by a platform organized around the workloads of: (i) AI, including training, inference, and agentic applications, (ii) critical IT load, including traditional enterprise applications, and (iii) Bitcoin mining. Each workload is supported by a common energy infrastructure layer comprised of owned and operated generation, grid-connected capacity, and behind-the-meter supply.
In July 2026, we further extended our digital infrastructure strategy through the acquisition of the Project Company, subject to approval by the Electric Reliability Council of Texas, Inc. ("ERCOT"). The Project Company holds (i) rights under certain purchase and sale contracts to acquire land located in Matagorda County, Texas, (ii) title to an additional parcel of adjacent land, and (iii) rights under a letter agreement with an electric utility company relating to the provision of 2,000 MW of power capacity to the site. The Project Company intends to develop the site as a large-scale digital infrastructure campus capable of supporting high-performance computing workloads, as well as flexible compute operations, including Bitcoin mining.
Our sites are designed to shift between workloads based on economics, demand, and grid conditions, maximizing utilization of our energy assets within a unified operating model, with Bitcoin mining remaining the foundation of our platform.
RESULTS OF OPERATIONS
Three Months Ended June 30, 2026 Compared to the Three Months Ended June 30, 2025
Revenues
Three Months Ended June 30, | Change | ||||||||||||||||
(in thousands) | 2026 | 2025 | $ | ||||||||||||||
Bitcoin mining revenue | $ | 170,066 | $ | 228,779 | $ | (58,713) | |||||||||||
| Other digital assets mining revenue | 237 | 3,598 | (3,361) | ||||||||||||||
| Hosting services | - | 1,164 | (1,164) | ||||||||||||||
| Other revenue | 4,578 | 4,944 | (366) | ||||||||||||||
| Revenues | $ | 174,881 | $ | 238,485 | $ | (63,604) | |||||||||||
| Supplemental Information | |||||||||||||||||
BTC produced during the period, in whole BTC (1) | 2,422 | 2,358 | 64 | ||||||||||||||
| Average BTC per day, in whole BTC | 26.6 | 25.9 | 0.7 | ||||||||||||||
Average price of BTC mined, in whole dollars (2) | $ | 71,325 | $ | 98,975 | $ | (27,650) | |||||||||||
Number of blocks won | 700 | 694 | 6 | ||||||||||||||
Transaction fees as a percentage of total | 0.7 | % | 1.4 | % | (0.7) | % | |||||||||||
(1) Includes 38 and 47 bitcoin representing our share of the equity method investee, the ADGM Entity, for the three months ended June 30, 2026 and 2025, respectively.
(2) "Average price of BTC" mined is calculated using Bitcoin mining revenue divided by the quantity of bitcoin produced during the period, excluding our share of the bitcoin produced for the equity method investee, the ADGM Entity.
We generated revenues of $174.9 million for the three months ended June 30, 2026, compared to $238.5 million in the prior year period. The $63.6 million, or approximately 27%, decrease in revenues was driven by a decrease in Bitcoin mining revenue and, to a lesser extent, a decrease in other digital assets mining revenue, other revenue and the elimination of hosting revenue.
The $58.7 million decrease in Bitcoin mining revenue was primarily driven by a 28% decrease in the average price of bitcoin mined, which contributed approximately $65.9 million to the decrease, partially offset by a $7.2 million increase in bitcoin production during the three months ended June 30, 2026.
Other digital assets mining revenue decreased 93%, primarily due to lower production resulting from the wind-down of certain other digital asset mining activities. Hosting revenue was eliminated for the three months ended June 30, 2026, following the expiration of the remaining hosting agreement in the first quarter of 2026. Other revenues decreased $0.4 million, or approximately 7%.
Costs and operating expenses (income)
Purchased energy, Operating and maintenance and Third-party hosting and other energy costs
Three Months Ended June 30, | Change | ||||||||||||||||
(in thousands) | 2026 | 2025 | $ | ||||||||||||||
| Purchased energy costs | $ | 48,750 | $ | 41,730 | $ | 7,020 | |||||||||||
| Operating and maintenance costs | 26,905 | 22,362 | 4,543 | ||||||||||||||
Third-party hosting and other energy costs | 69,156 | 69,029 | 127 | ||||||||||||||
Supplemental Information (in whole dollars) | |||||||||||||||||
Cost per Petahash per day (1) | $ | 27.7 | $ | 28.7 | $ | (1.0) | |||||||||||
Purchased energy costs per BTC (2) | $ | 38,690 | $ | 33,735 | $ | 4,956 | |||||||||||
(1) "Cost per Petahash per day" is calculated using Bitcoin mining costs attributable to purchased energy costs, third-party hosting and other energy costs and cash operating and maintenance costs, divided by the daily average operational hashrate online during the period, excluding our share of the hashrate for the equity method investee, the ADGM Entity, and share of hashrate from our noncontrolling interest, by a factor of 1,000.
(2) "Purchased energy costs per BTC" is calculated as the amounts paid to power providers for power consumed divided by the quantity of bitcoin produced during the period related to our owned mining operations.
Purchased energy costs for the three months ended June 30, 2026 totaled $48.8 million compared to $41.7 million in the prior year period, an increase of $7.0 million, or approximately 17%. The increase was primarily driven by the growth of our owned mining operations through acquisitions and increased utilization of capacity at an East Ohio mining site following the expiration of a hosting arrangement, while purchased energy consumption remained relatively consistent with the prior year period. During the three months ended June 30, 2026, our total hashrate increased 22% to 70.3 EH/s, primarily through improvements in miner efficiency and the scaling of our mining fleet. As a result, Cost per Petahash per day improved approximately 4%, from $28.7 to $27.7. Purchased energy costs per bitcoin for our owned mining sites, however, increased to $38,690 compared to $33,735 in the prior year period, primarily due to higher network difficulty resulting from an increase in global hashrate and an increase in cost per kWh.
Operating and maintenance costs for the three months ended June 30, 2026 were $26.9 million compared to $22.4 million in the prior year period, an increase of $4.5 million or approximately 20%, primarily driven by increased site and miner repair and maintenance costs, partially offset by lower shipping and warehouse fees during the quarter.
Third-party hosting and other energy costs for the three months ended June 30, 2026 totaled $69.2 million compared to $69.0 million in the prior year period, a relatively flat increase from the prior year period. These costs primarily consist of colocation services related to third-party hosted sites and energy expenses related to mining other digital assets. The slight increase was primarily due to the addition of energized miners and the expansion of our third-party hosted operations, substantially offset by lower hosting and energy costs at certain third-party hosting sites. Our most significant third-party hosting arrangements are scheduled to expire, beginning in the third quarter of 2027 and expected to fully conclude during the first quarter of 2028. These expirations are expected to eliminate third-party hosting costs and improve our cost per kWh over time as the arrangements expire.
General and administrative
General and administrative expenses were $114.7 million for the three months ended June 30, 2026, compared to $92.9 million in the prior year period. The $21.8 million, or approximately 23% increase, was primarily driven by a $10.2 million litigation settlement recognized in the current period, the inclusion of Exaion's general and administrative expenses following its acquisition, and acquisition and integration costs, partially offset by a decrease in professional and travel expenses in the current period.
Stock-based compensation expense decreased by $7.7 million compared to the prior year period, primarily due to lower expenses associated with our historical equity plans, partially offset by incremental expense related to equity awards granted under our new long-term incentive plan.
Depreciation and amortization
Depreciation and amortization for the three months ended June 30, 2026 totaled $174.7 million compared to $161.7 million in the prior year period. The $12.9 million, or approximately 8%, increase was driven by $28.1 million of accelerated depreciation related to the assessment of expected future use of certain miners, partially offset by lower depreciation as mining rigs reached the end of their useful lives.
Change in fair value of digital assets
We recognized a loss on digital assets of $249.6 million for the three months ended June 30, 2026 compared to a gain of $846.0 million in the prior year period. The $1.1 billion decrease from the prior year period was primarily attributable to the significant decline in the price of bitcoin and the decrease in our bitcoin holdings.
Change in fair value of derivative instrument
We recognized a loss on the change in fair value of derivative instrument of $1.8 million for the three months ended June 30, 2026 compared to a gain of $20.3 million in the prior year period. The change primarily relates to the remeasurement of the commodity swap contract acquired in the GC Data Center Acquisition, which meets the definition of a derivative instrument and is remeasured at fair value at the end of each reporting period. Changes in fair value were primarily driven by movements in electricity forward curve prices during the respective periods and the amendment of the commodity swap during the prior year, lowering the fixed electricity price.
Impairment of goodwill and other assets
During the three months ended June 30, 2025, a severe storm caused irreparable damage to certain mining equipment at our Garden City mining site. In accordance with ASC 360 - Property, Plant, and Equipment, any unforeseen or unexpected retirements should result in a gain or loss recognized in earnings. As such, we recognized an impairment of $26.3 million related to the damaged miners for the three months ended June 30, 2025. Should we successfully receive insurance proceeds, they will be recognized as a gain in the period in which they are received. There were no such impairments in the current year period.
Taxes other than on income
Taxes other than on income were $1.5 million for the three months ended June 30, 2026 compared to $2.4 million in the prior year period. Taxes other than on income consist primarily of property, sales and use taxes.
Research and development
Research and development expenses were $7.2 million for the three months ended June 30, 2026, compared to $8.5 million in the prior year period. The $1.4 million, or approximately 16%, decrease was primarily due to the absence of costs associated with certain technology initiatives that were exited as part of our previously disclosed
restructuring plan in the third quarter of 2025, partially offset by continued investment in ongoing development initiatives supporting our strategic expansion, including activities at Exaion.
Restructuring costs
Restructuring costs for the three months ended June 30, 2026 were $1.8 million, reflecting an additional reserve established during the quarter in connection with the 2026 Restructuring Plan (as defined below) relating to contract termination and employee separation costs. There were no such costs in the prior year period.
Other income (loss)
Change in fair value of digital assets - receivable, net
We recognized a loss on digital assets - receivables, net of $93.5 million for the three months ended June 30, 2026, compared to a gain of $346.5 million in the prior year period. The $440.0 million decrease was primarily attributable to the fair value associated with our bitcoin loaned and pledged as collateral.
Equity in net earnings of unconsolidated affiliate
During the three months ended June 30, 2026, we recorded our share of net loss for our 20% interest in the ADGM Entity of $2.9 million, compared to a loss of $0.9 million in the prior year period. Our share of the ADGM Entity's operating results included earnings from the production of 38 bitcoin and approximately $3.3 million of depreciation and amortization during the three months ended June 30, 2026, while in the prior year period, our share of the ADGM Entity's operating results included earnings from production of 47 bitcoin and approximately $3.2 million of depreciation and amortization.
Interest income, Interest expense and Other
Three Months Ended June 30, | Change | ||||||||||||||||
| (in thousands) | 2026 | 2025 | $ | ||||||||||||||
| Interest income | |||||||||||||||||
Interest income from loaned bitcoin | $ | 4,291 | $ | 6,795 | $ | (2,504) | |||||||||||
Interest income from cash and cash equivalents | 5,972 | 2,836 | 3,136 | ||||||||||||||
Total interest income | 10,263 | 9,631 | 632 | ||||||||||||||
| Interest expense | (6,264) | (12,835) | 6,571 | ||||||||||||||
| Other | 2,646 | (5,509) | 8,155 | ||||||||||||||
Interest income increased by $0.6 million compared to the prior year period, primarily due to a higher average balance of cash and cash equivalents, partially offset by interest income earned on loaned bitcoin under our digital asset management strategy. Interest expense decreased by $6.6 million compared to the prior year period, primarily due to the repayment of our prior credit facilities during the first quarter of 2026, which eliminated the related interest expense incurred in the prior year period. The decrease was partially offset by the interest expense associated with the interest bearing Convertible Notes and the 2026 Line of Credit.
Other of $2.6 million for the three months ended June 30, 2026 was primarily due to investment income of $1.2 million from internal bitcoin trading activities and other income generated by Exaion, partially offset by an increase to the allowance for credit loss resulting from an updated credit assessment.
Income tax expense
For the three months ended June 30, 2026, we recorded income tax expense of $0.6 million, compared to an income tax expense of $208.5 million in the prior year period. The $0.6 million income tax expense primarily reflects
changes in pretax book income and loss during the periods, driven largely by fair value adjustments related to digital assets offset by a valuation allowance.
Six Months Ended June 30, 2026 Compared to the Six Months Ended June 30, 2025
Revenues
Six Months Ended June 30, | Change | ||||||||||||||||
(in thousands) | 2026 | 2025 | $ | ||||||||||||||
Bitcoin mining revenue | $ | 342,228 | $ | 436,538 | $ | (94,310) | |||||||||||
| Other digital assets mining revenue | 653 | 5,768 | (5,115) | ||||||||||||||
| Hosting services | 1,085 | 2,315 | (1,230) | ||||||||||||||
| Other revenue | 5,529 | 7,748 | (2,219) | ||||||||||||||
| Revenues | $ | 349,495 | $ | 452,369 | $ | (102,874) | |||||||||||
| Supplemental Information | |||||||||||||||||
BTC produced during the period, in whole BTC (1) | 4,669 | 4,644 | 25 | ||||||||||||||
| Average BTC per day, in whole BTC | 25.8 | 25.7 | 0.1 | ||||||||||||||
Average price of BTC mined, in whole dollars (2) | $ | 73,707 | $ | 96,203 | $ | (22,496) | |||||||||||
Number of blocks won | 1,353 | 1,360 | (7) | ||||||||||||||
Transaction fees as a percentage of total | 0.7 | % | 1.4 | % | (0.8) | % | |||||||||||
(1) Includes 85 and 106 bitcoin representing our share of the equity method investee, the ADGM Entity, for the six months ended June 30, 2026 and 2025, respectively.
(2) "Average price of BTC mined" is calculated using Bitcoin mining revenue divided by the quantity of bitcoin produced during the period, excluding our share of the bitcoin produced for the equity method investee, the ADGM Entity.
We generated revenues of $349.5 million for the six months ended June 30, 2026, compared to $452.4 million in the prior year period. The $102.9 million, or approximately 23%, decrease in revenues was primarily driven by a decrease in Bitcoin mining revenue and, to a lesser extent, other digital assets mining revenue, hosting revenue and other revenue for the six months ended June 30, 2026.
The $94.3 million decrease in Bitcoin mining revenue was primarily driven by a 23% decrease in the average price of bitcoin mined, which contributed approximately $98.8 million to the decrease, partially offset by a $4.5 million increase in bitcoin production during the six months ended June 30, 2026.
Other digital assets mining revenue decreased 89%, primarily due to lower production resulting from the wind-down of certain other digital asset mining activities. Hosting services revenue decreased $1.2 million to $1.1 million for the six months ended June 30, 2026, compared to $2.3 million in the prior year period, primarily due to the expiration of hosting agreements during the first quarter of 2026. Other revenues decreased $2.2 million, or approximately 29%, primarily due to elimination of the certain management fee revenues, partially offset by revenues generated from Exaion and third-party software arrangements supporting our Bitcoin mining operations.
Costs and operating expenses (income)
Purchased energy, Operating and maintenance and Third-party hosting and other energy costs
Six Months Ended June 30, | Change | ||||||||||||||||
(in thousands) | 2026 | 2025 | $ | ||||||||||||||
| Purchased energy costs | $ | 93,482 | $ | 85,211 | $ | 8,271 | |||||||||||
| Operating and maintenance costs | 57,537 | 42,156 | 15,381 | ||||||||||||||
Third-party hosting and other energy costs | 139,204 | 137,212 | 1,992 | ||||||||||||||
Supplemental Information (in whole dollars) | |||||||||||||||||
Cost per Petahash per day (1) | $ | 27.7 | $ | 29.4 | $ | (1.7) | |||||||||||
Purchased energy costs per BTC (2) | $ | 39,328 | $ | 34,723 | $ | 4,604 | |||||||||||
(1) "Cost per Petahash per day" is calculated using Bitcoin mining costs attributable to purchased energy costs, third-party hosting and other energy costs and cash operating and maintenance costs, divided by the daily average operational hashrate online during the period, excluding our share of the hashrate for the equity method investee, the ADGM Entity, and share of hashrate from our noncontrolling interest, by a factor of 1,000.
(2) "Purchased energy costs per BTC" is calculated as the amounts paid to power providers for power consumed divided by the quantity of bitcoin produced during the period related to our owned mining operations.
Purchased energy costs for the six months ended June 30, 2026 were $93.5 million, compared to $85.2 million in the prior year period, an increase of $8.3 million, or approximately 10%. The increase was primarily driven by the expansion of our owned mining sites through acquisitions, the transition of hosted capacity to self-mining operations, and the growth in our total hashrate to 70.3 EH/s. Cost per Petahash per day improved approximately 6%, from $29.4 to $27.7, compared to the prior year period. Purchased energy costs per bitcoin for our owned mining sites increased to $39,328, compared to $34,723 in the prior year period, primarily due to higher network difficulty driven by growth in global hashrate that resulted in a 3% decline in bitcoin production at our owned mining sites compared to the prior year period.
Operating and maintenance costs for the six months ended June 30, 2026 were $57.5 million compared to $42.2 million in the prior year period, an increase of $15.4 million or approximately 37%, in operating and maintenance costs was primarily due to an increase to site and miner repair and maintenance costs associated with the expansion of our mining fleet, timing of repairs and increased labor costs to support our operational footprint.
Third-party hosting and other energy costs for the six months ended June 30, 2026 totaled $139.2 million compared to $137.2 million in the prior year period, an increase of $2.0 million, or approximately 2%. The increase was primarily due to higher energy consumption, the addition of energized miners and the expansion of our third-party at certain hosted sites, partially offset by downtime due to winter storms at other third-party hosted sites, primarily in Texas, at the beginning of the year. Our most significant third-party hosting arrangements are scheduled to expire, beginning in the third quarter of 2027 and expected to fully conclude during the first quarter of 2028. These expirations are expected to eliminate third-party hosting costs and improve our cost per kWh over time as the arrangements expire.
General and administrative
General and administrative expenses were $201.6 million for the six months ended June 30, 2026, compared to $178.8 million in the prior year period. The $22.7 million, or approximately 13%, increase was primarily attributable to a litigation settlement and acquisition and integration costs, partially offset by lower stock-based compensation expense and professional fees compared to the prior year period.
Stock-based compensation expense decreased $27.5 million compared to the prior year period primarily due to the reversal of stock-based compensation expense associated with forfeitures related to our 2026 Restructuring Plan and lower expenses associated with our historical equity plans, partially offset by incremental expense related to equity awards granted under our new long-term incentive plan.
Depreciation and amortization
Depreciation and amortization for the six months ended June 30, 2026 totaled $366.2 million compared to $319.6 million in the prior year period. The $46.6 million, or approximately 15%, increase was primarily driven by $48.2 million of accelerated depreciation related to the reassessment of expected future use of certain mining rigs, as well as the expansion of our mining fleet and owned infrastructure, partially offset by lower depreciation as mining rigs reached the end of their useful lives.
Change in fair value of digital assets
We recognized a loss on digital assets of $964.2 million for the six months ended June 30, 2026 compared to a gain of $451.9 million in the prior year period. The $1.4 billion decrease was primarily attributable to the significant decline in the price of bitcoin during the year and the decrease in our bitcoin holdings.
Change in fair value of derivative instrument
The fair value of the derivative instrument decreased for the six months ended June 30, 2026 compared to the prior year period, primarily due to the movement in electricity forward curve prices during the respective periods.
Impairment of assets
Due to a severe storm, we experienced irreparable damage to certain mining equipment at our Garden City mining site and as such, recognized an impairment of $26.3 million for the six months ended June 30, 2025. There were no such impairments in the current year period.
Taxes other than on income
Taxes other than on income were $4.0 million for the six months ended June 30, 2026 compared to $5.5 million in the prior year period.
Research and development
Research and development expenses were $15.4 million for the six months ended June 30, 2026 compared to $17.8 million in the prior year period.
Restructuring costs
During the first quarter of 2026, management committed to and initiated a restructuring plan (the "2026 Restructuring Plan") in response to our strategic decision to reallocate resources as part of the strategic shift toward AI and critical IT. As part of the 2026 Restructuring Plan, we realigned our business operations and reduced our workforce by approximately 15%, providing combined annualized savings of $12.0 million. Restructuring costs were $47.6 million for the six months ended June 30, 2026, primarily consisting of $42.0 million related to the elimination of certain business activities and $5.4 million of employee-related separation costs. As of June 30, 2026, an additional restructuring reserve of $1.8 million was established. There were no such expenses in the prior year period.
Other income (loss)
Change in fair value of digital assets - receivable, net
We recognized a loss on digital assets - receivable, net of $397.4 million for the six months ended June 30, 2026 compared to gain of $230.5 million in the prior year period. The $627.8 million decrease was primarily attributable to the fair value associated with our bitcoin loaned and pledged as collateral.
Net gain from extinguishment of debt
During the six months ended June 30, 2026, we repurchased approximately $1.0 billion principal amount of the March 2030 Notes and the June 2031 Notes, resulting in a $70.6 million gain from the extinguishment of debt. There was no such activity in the prior year period.
Equity in net earnings of unconsolidated affiliate
During the six months ended June 30, 2026, we recorded our share of net loss for our 20% interest in the ADGM Entity of $5.0 million, compared to a $0.9 million loss in the prior year period. Our share of the ADGM Entity's operating results included earnings from the production of 85 bitcoin and approximately $6.5 million of depreciation and amortization during the six months ended June 30, 2026, while in the prior year period, our share of the ADGM Entity's operating results included earnings from production of 106 bitcoin and approximately $6.3 million of depreciation and amortization.
Interest income, Interest expense and Other
Six Months Ended June 30, | Change | ||||||||||||||||
| (in thousands) | 2026 | 2025 | $ | ||||||||||||||
| Interest income | |||||||||||||||||
Interest income from lending bitcoin | $ | 10,651 | $ | 13,125 | $ | (2,474) | |||||||||||
| Interest income from cash and cash equivalents | 10,144 | 8,501 | 1,643 | ||||||||||||||
| Total interest income | 20,795 | 21,626 | (831) | ||||||||||||||
| Interest expense | (16,984) | (22,776) | 5,792 | ||||||||||||||
| Other | 6,527 | (3,035) | 9,562 | ||||||||||||||
Interest income decreased by $0.8 million compared to the prior year period, primarily due to the decrease in interest income earned on loaned bitcoin under our digital asset management strategy as we reduced the amount of bitcoin loaned during the current year, partially offset by the interest income earned on our cash and cash equivalent balance. Interest expense decreased for the six months ended June 30, 2026 primarily due to the eliminated interest expense related to our prior credit facilities, partially offset by interest expense associated with our interest bearing Convertible Notes and the 2026 Line of Credit.
Other of $6.5 million for the six months ended June 30, 2026 was primarily due to investment income of $3.4 million from internal bitcoin trading activities and a $1.5 million benefit from the reversal of previously established credit loss reserve, driven by lower bitcoin lending activity, reduced collateral balances and a decline in the market price of bitcoin during the quarter.
Income tax benefit (expense)
For the six months ended June 30, 2026, we recorded income tax benefit of $30.4 million, compared to an income tax expense of $89.3 million in the prior year period. The $30.4 million income tax benefit primarily reflects changes in pretax book income and loss during the periods, driven largely by fair value adjustments related to digital assets offset by a valuation allowance.
NON-GAAP FINANCIAL MEASURES
In order to provide a more comprehensive understanding of the information used by our management team in financial and operational decision-making, we supplement our Condensed Consolidated Financial Statements that have been prepared in accordance with GAAP with the non-GAAP financial measure of Adjusted EBITDA.
We define Adjusted EBITDA as (a) GAAP net income (loss) plus (b) adjustments to add back the impacts of (1) interest, (2) income taxes, (3) depreciation and amortization and (4) adjustments for non-cash and/or non-recurring items, which currently include (i) stock-based compensation expense, (ii) change in fair value of derivative instrument, (iii) impairment of goodwill and other assets, (iv) restructuring costs, (v) acquisition and integration costs, (vi) litigation settlement, (vii) net gain from extinguishment of debt and (viii) net gain on investments.
Management uses Adjusted EBITDA, along with the supplemental information provided herein, as a means of understanding, managing and evaluating business performance and to help inform operating decision-making. We rely primarily on our Condensed Consolidated Financial Statements to understand, manage and evaluate our financial performance and use non-GAAP financial measures only supplementally.
We believe that Adjusted EBITDA is a useful measure to us and to our investors because it excludes certain financial, capital structure and non-cash items that we do not believe directly reflect our core operations and may not be indicative of our recurring operations, in part because they may vary widely across time and within our industry independent of the performance of our core operations. We believe that excluding these items enables us to more effectively evaluate our performance period-over-period and relative to our competitors.
Adjusted EBITDA is not a recognized financial measure under GAAP. When analyzing our operating results, investors should use Adjusted EBITDA in addition to, but not as an alternative for, the most directly comparable financial results calculated and presented in accordance with GAAP. Because our calculation of Adjusted EBITDA may differ from that of other companies, our presentation of this measure may not be comparable to similarly titled measures of other companies.
The following table provides a reconciliation of GAAP net income (loss) to Adjusted EBITDA:
Three Months Ended June 30, |
Six Months Ended June 30, | |||||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
Net income (loss) attributable to common stockholders | $ | (609,685) | $ | 808,235 | $ | (1,869,304) | $ | 275,036 | ||||||||||||||||||
Net loss attributable to noncontrolling interests | (1,632) | (30) | (4,410) | (274) | ||||||||||||||||||||||
Net income (loss) | (611,317) | 808,205 | (1,873,714) | 274,762 | ||||||||||||||||||||||
Interest expense (income), net | (3,999) | 3,204 | (3,811) | 1,150 | ||||||||||||||||||||||
Income tax expense (benefit) | 580 | 208,504 | (30,352) | 89,332 | ||||||||||||||||||||||
Depreciation and amortization (1) | 177,952 | 164,914 | 372,691 | 325,916 | ||||||||||||||||||||||
| EBITDA | (436,784) | 1,184,827 | (1,535,186) | 691,160 | ||||||||||||||||||||||
| Stock-based compensation expense | 46,683 | 54,656 | 77,189 | 103,771 | ||||||||||||||||||||||
| Change in fair value of derivative instrument | 1,769 | (20,311) | 42,814 | (47,139) | ||||||||||||||||||||||
Impairment of goodwill and other assets | - | 26,253 | - | 26,253 | ||||||||||||||||||||||
Restructuring costs (2) | 1,753 | - | 47,638 | - | ||||||||||||||||||||||
Acquisition and integration costs (3) | 15,445 | - | 26,463 | - | ||||||||||||||||||||||
Litigation settlement (3) | 10,200 | - | 10,200 | - | ||||||||||||||||||||||
Net gain from extinguishment of debt | - | - | (70,557) | - | ||||||||||||||||||||||
Net gain on investments (4) | - | - | - | (12,429) | ||||||||||||||||||||||
Adjusted EBITDA (5) (6) | $ | (360,934) | $ | 1,245,425 | $ | (1,401,439) | $ | 761,616 | ||||||||||||||||||
(1) Includes approximately $3.3 million and $3.2 million of depreciation and amortization for the three months ended June 30, 2026 and 2025, respectively, and approximately $6.5 million and $6.3 million of depreciation and amortization for the six months ended June 30, 2026 and 2025, respectively, representing our share in the results of our equity method investee, the ADGM Entity, reported in "Equity in net earnings of unconsolidated affiliate" on the Condensed Consolidated Statements of Operations.
(2) Includes approximately $0.2 million and $1.6 million of stock-based compensation expense related to the 2026 Restructuring Plan for the three and six months ended June 30, 2026.
(3) Acquisition and integration costs and litigation settlement are reported in "General and administrative" on the Condensed Consolidated Statements of Operations. The litigation settlement represents the amount paid in connection with the final resolution of a patent dispute.
(4) Net gain on investments is reported in "Other" on the Condensed Consolidated Statements of Operations. Refer to Note 7 - Investments in the notes to our Condensed Consolidated Financial Statements for further information.
(5) Excludes interest income earned from our bitcoin lending activities of $4.3 million and $6.8 million for the three months ended June 30, 2026 and 2025, respectively, and $10.7 million and $13.1 million for the six months ended June 30, 2026 and 2025, respectively.
(6) Includes the combined change in fair value loss of digital assets and digital assets - receivable, net of $343.0 million for the three months ended June 30, 2026, and the combined fair value gain of $1.2 billion for the three months ended June 30, 2025. For the six months ended June 30, 2026 and 2025, it includes a combined fair value loss of $1.4 billion and gain of $682.3 million, respectively.
FINANCIAL CONDITION AND LIQUIDITY
Cash Flows
The following table presents a summary of our cash flow activity for the six months ended June 30, 2026 and 2025:
For the Six Months Ended June 30, | ||||||||||||||
| (in thousands) | 2026 | 2025 | ||||||||||||
Net cash used in operating activities | $ | (471,257) | $ | (378,931) | ||||||||||
Net cash provided by (used in) investing activities | 1,465,546 | (337,010) | ||||||||||||
Net cash (used in) provided by financing activities | (1,116,002) | 433,645 | ||||||||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (4,145) | - | ||||||||||||
Net decrease in cash, cash equivalents and restricted cash | (125,858) | (282,296) | ||||||||||||
| Cash, cash equivalents and restricted cash - beginning of period | 559,132 | 403,771 | ||||||||||||
Cash, cash equivalents and restricted cash - end of period | $ | 433,274 | $ | 121,475 | ||||||||||
For the six months ended June 30, 2026, cash, cash equivalents and restricted cash totaled $433.3 million at June 30, 2026, a decrease of $125.9 million from December 31, 2025.
Operating Activities
Bitcoin produced and held on our Condensed Consolidated Balance Sheets is excluded from our cash flows from operating activities. As we monetize bitcoin, those proceeds are reflected as cash flows from investing activities.
Cash flows in connection with operating activities consisted of net loss, adjusted for non-cash and non-operating items, including depreciation and amortization, stock-based compensation expense, the loss on the fair value of digital assets and digital assets, receivable, net and other non-cash expenses, as well as changes in operating assets and liabilities.
Cash flows used in operating activities increased by $92.3 million for the six months ended June 30, 2026, compared to the prior year period. This change was primarily due to a $172.8 million decline in net loss adjusted for non-cash and non-operating items, partially offset by a $80.4 million change in cash flows from operating assets and liabilities. The increase in cash used in operating activities was primarily driven by lower revenues and higher operating costs compared to the prior year period.
Investing Activities
Cash flows from investing activities resulted in a source of cash of $1.5 billion, primarily resulting from the proceeds from the sale of digital assets of $1.6 billion, of approximately 23,093 bitcoin at an average price of $70,631. The source of cash was partially offset by the purchase of property and equipment of $94.3 million and the payment of $61.1 million to acquire Exaion and the Meerkat Acquisition, net of cash acquired. These acquisitions are expected to enhance our business by expanding our operational capacity and strengthening our presence in AI and critical IT.
Financing Activities
Cash flows from financing activities used $1.1 billion, primarily from a partial repayment of our March 2030 and June 2031 Notes of $912.8 million and the repayment of our Previous Line of Credit of $350.0 million. For the six months ended June 30, 2026, financing activities were partially offset by securing an additional $150.0 million line of credit established and fully utilized as of June 30, 2026.
Liquidity and Capital Resources
Our liquidity position is supported by cash and cash equivalents, our bitcoin holdings (including our ability to borrow against or monetize bitcoin) and access to our at-the-market ("ATM") offering program. As of June 30, 2026, the combined value of cash and cash equivalents, excluding restricted cash, and digital assets, including bitcoin under our digital asset management strategy, totaled $2.5 billion, and our ATM facility had approximately $1.5 billion of capacity remaining. We believe our existing liquidity resources provide us with sufficient flexibility to meet our obligations and fund our growth initiatives over the next twelve months and beyond.
Sources of Liquidity
Cash and Cash Equivalents
As of June 30, 2026 cash and cash equivalents, excluding restricted cash, totaled $421.3 million. Approximately 30% of cash and cash equivalents were denominated in euros, held by our majority-owned subsidiary Exaion and contractually designated for use in its operations for the next year.
Bitcoin Holdings
At June 30, 2026, we held a total of 35,577 bitcoin on our Condensed Consolidated Balance Sheets, including 9,270 bitcoin under our digital asset management strategy, with a total fair value of $2.1 billion, based on the fair value of a single bitcoin of approximately $58,524.
At June 30, 2026, approximately 4,742 bitcoin were loaned to third parties to generate additional returns, and 4,528 bitcoin were pledged as collateral. Bitcoin activated under our digital asset management strategy is classified as "Digital assets - receivable, net" on the Condensed Consolidated Balance Sheets with a carrying value of $540.9 million. The remaining 26,307 unrestricted bitcoin are classified as long-term assets under "Digital assets, net of current portion" on the Condensed Consolidated Balance Sheets with a fair value of $1.5 billion. Our holdings as of June 30, 2026 excluded 44 bitcoin held by our equity method investee, pending dividend to us.
We actively manage our bitcoin holdings as both a long-term store of value and a source of liquidity. For the six months ended June 30, 2026, we sold approximately 23,093 bitcoin for $1.6 billion in proceeds. We sell bitcoin produced through our mining operations on an ongoing basis and may sell additional holdings from time to time, subject to market conditions and our capital allocation priorities, while also maintaining holdings for long-term investment purposes. Our $2.1 billion bitcoin position represents a significant and flexible source of liquidity.
At-the-Market Offering Program
In March 2025, we established our ATM facility with an initial capacity of $2.0 billion. During the six months ended June 30, 2026, we did not sell any shares through the ATM facility. As of June 30, 2026, our ATM facility had approximately $1.5 billion of capacity remaining, providing us with meaningful optionality to access equity capital markets.
Capital Requirements
Short-term Obligations
During the six months ended June 30, 2026, we strengthened our Condensed Consolidated Balance Sheets and improved our near-term liquidity profile by repurchasing approximately $1.0 billion of our 0.00% convertible senior notes through privately negotiated transactions, consisting of approximately $367.5 million of our March 2030 Notes and approximately $633.4 million of our June 2031 Notes, reducing our total debt from $3.6 billion as of December 31, 2025 to approximately $2.4 billion as of June 30, 2026.
As of June 30, 2026, we had $150.0 million outstanding under our 2026 Line of Credit, with a maturity due within the next twelve months and $48.1 million of the remaining principal of the December 2026 Notes due upon maturity in December 2026. Additionally, as of June 30, 2026, we have classified the $291.6 million remaining principal of
the June 2031 Notes as a current liability on the Condensed Consolidated Balance Sheets, as the holders' option to require the repurchase of the notes at 100% of the principal amount, becomes exercisable in June 2027.
Starwood Joint Venture
In February 2026, we entered into a Strategic Agreement with Starwood to jointly develop, finance and operate digital infrastructure on select power-rich sites within our existing portfolio. The framework operates on a site-by-site basis, with each project forming its own special purpose vehicle upon Starwood securing a qualifying tenant.
Upon contribution of a site, we will receive a predetermined value for the assets contributed at the time of contribution. This upfront recognition of our site contribution value is a defining feature of the structure: because our contribution is credited at the outset of each project, Starwood is required to contribute capital against the value of our site before we are required to invest any incremental cash. We also have the option to retain between 10% and 50% of the equity in each project, providing participation in the upside of each development. Project-level financing is expected to be arranged on a non-recourse basis at the joint venture level, with no guarantee from us and backstopped by Starwood.
Our principal cash obligation under the Strategic Agreement consists of pre-development costs at the contributed sites, expected to be funded through cash on hand or a potential asset-backed credit facility. As of June 30, 2026, we incurred approximately $11.0 million of pre-development costs under the Strategic Agreement.
Long Ridge Acquisition
In April 2026, we entered into a definitive agreement to acquire Long Ridge, a vertically integrated gas and power business, for an enterprise value of approximately $1.5 billion, including the assumption of Long Ridge's existing indebtedness of up to approximately $900.0 million, subject to customary purchase price adjustments. Subsequent to quarter-end, we entered into two bitcoin-backed credit facilities, proceeds of which are expected to fund a portion of the cash consideration for the acquisition. We have also entered into a commitment letter with Barclays for a 364-day senior secured bridge term loan facility of up to $785.0 million, providing us with committed backstop financing for a portion of the assumed indebtedness to the extent needed. We do not expect Long Ridge to require ongoing capital support from the Company following closing.
HIF Acquisition
In July 2026, we entered into a membership interest purchase agreement to acquire the Project Company, a large-scale powered land site spanning more than 1,200 acres in Matagorda County, Texas, from HIF, for an aggregate purchase price of up to $600.0 million. The purchase price is structured as a series of post-closing milestone payments tied to specified project development events, including receipt of regulatory approvals, land acquisition, and execution of a data center lease with a third-party tenant. The first milestone payment is contingent upon receipt of Batch Zero approval from ERCOT, with no payment due absent such approval. Upon execution of a lease relating to the site, HIF will retain a minority interest in the Project Company. We intend to develop the site as a large-scale digital infrastructure campus supporting HPC and Bitcoin mining operations, with expected access to up to 2,000 MW.
Liquidity Risks
Risks to our liquidity outlook include events that could materially diminish our access to capital markets and/or the value of our bitcoin holdings and production capabilities, including:
•Failure to effectively execute our growth strategies;
•Declines in bitcoin prices and/or production, as well as impacts from bitcoin halving events, global hashrate and network difficulty levels, which would impact either or both the value of our bitcoin holdings and our ongoing profitability;
•Significant increases in electricity costs if these cost increases were not accompanied by increases in the price of bitcoin, as this would also reduce profitability;
•Deteriorating macroeconomic conditions, including the impacts of inflation, high interest rates, tariffs and trade wars, a prolonged recession, as well as instability in the banking system; and
•Failure to access financing on terms acceptable to us or at all.
We expect that Staff Accounting Bulletin ("SAB") 122's rescission of SAB 121, which required an entity to recognize a liability and corresponding asset for its obligation to safeguard crypto-assets, will increase commercial banks' activity in our sector and provide us with expanded access to traditional financing, such as debt financing, project financing and other capital. Our access to financing sources on terms acceptable to us or at all is subject to market and other conditions.
CONTRACTUAL OBLIGATIONS AND COMMITMENTS
As of June 30, 2026, we had the following contractual obligations and commitments:
| Payments due by period | ||||||||||||||||||||
| (in thousands) | Total | Short-term |
Long-term | |||||||||||||||||
Convertible Notes (1) | $ | 2,332,505 | $ | 346,277 | $ | 1,986,228 | ||||||||||||||
Line of credit (1) | 150,000 | 150,000 | - | |||||||||||||||||
Lease obligations (2) | 166,727 | 2,888 | 163,839 | |||||||||||||||||
Purchase agreements (3) | 64,552 | 64,552 | - | |||||||||||||||||
Other purchase obligations (3) | 314,126 | 127,724 | 186,402 | |||||||||||||||||
| Total contractual obligations and commitments | $ | 3,027,910 | $ | 691,441 | $ | 2,336,469 | ||||||||||||||
(1) Consists of principal and interest payments on the Convertible Notes and 2026 Line of Credit. Refer to Note 13 - Debt in the notes to our Condensed Consolidated Financial Statements, for further information.
(2) Lease obligations refer to our operating and finance leases related our data centers and office space. Refer to Note 14 - Leases in the notes to our Condensed Consolidated Financial Statements, for further information.
(3) Purchase agreements refer to our miner and other mining equipment agreements. Other purchase obligations consist of contracts for hosting our equipment and operational support in data centers where our equipment is deployed. Refer to Note 15 - Commitments and Contingencies in the notes to our Condensed Consolidated Financial Statements, for further information.
Additionally, on February 26, 2026, we entered into a Strategic Agreement with Starwood granting exclusivity over the development, contribution or sale of certain Bitcoin mining properties in the United States. The agreement contemplates MARA-funded pre-development costs (subject to caps), capital commitments through joint ventures managed by Starwood, and, in certain circumstances, the sale of properties to Starwood.
Refer to the "Liquidity and Capital Resources" section for further information related to Long Ridge acquisition and the HIF acquisition, including expected funding requirements and related commitments.
CRITICAL ACCOUNTING ESTIMATES
We are not aware of any material changes to our critical accounting estimates set forth under the caption "Critical Accounting Estimates" in Part II, Item 7 of our Annual Report, which is incorporated herein by reference.
RECENT ACCOUNTING PRONOUNCEMENTS
See Note 2 - Summary of Significant Accounting Policies to our Condensed Consolidated Financial Statements for a discussion of recent accounting standards and pronouncements.