000183934112/312025Q1falseCore Scientific, Inc./txhttp://fasb.org/us-gaap/2024#AccountingStandardsUpdate202308Memberhttp://fasb.org/us-gaap/2024#RevenueFromContractWithCustomerExcludingAssessedTaxhttp://fasb.org/us-gaap/2024#PropertyPlantAndEquipmentAndFinanceLeaseRightOfUseAssetAfterAccumulatedDepreciationAndAmortizationhttp://fasb.org/us-gaap/2024#PropertyPlantAndEquipmentAndFinanceLeaseRightOfUseAssetAfterAccumulatedDepreciationAndAmortization393xbrli:sharesiso4217:USDiso4217:USDxbrli:sharescore:data_centercore:segmentcore:Unitxbrli:purecore:daycore:asset_service00018393412025-01-012025-03-310001839341us-gaap:CommonClassAMember2025-01-012025-03-310001839341core:WarrantsExercisePriceOf6.81PerShareMember2025-01-012025-03-310001839341core:WarrantsExercisePriceOf0.01PerShareMember2025-01-012025-03-3100018393412025-05-0200018393412025-03-3100018393412024-12-310001839341core:DigitalAssetSelfMiningServiceMember2025-01-012025-03-310001839341core:DigitalAssetSelfMiningServiceMember2024-01-012024-03-310001839341core:DigitalAssetHostedMiningServiceMember2025-01-012025-03-310001839341core:DigitalAssetHostedMiningServiceMember2024-01-012024-03-310001839341core:ColocationServiceMember2025-01-012025-03-310001839341core:ColocationServiceMember2024-01-012024-03-3100018393412024-01-012024-03-310001839341us-gaap:CommonStockMember2024-12-310001839341us-gaap:AdditionalPaidInCapitalMember2024-12-310001839341us-gaap:RetainedEarningsMember2024-12-310001839341us-gaap:RetainedEarningsMember2025-01-012025-03-310001839341us-gaap:AdditionalPaidInCapitalMember2025-01-012025-03-310001839341us-gaap:CommonStockMember2025-01-012025-03-310001839341us-gaap:CommonStockMember2025-03-310001839341us-gaap:AdditionalPaidInCapitalMember2025-03-310001839341us-gaap:RetainedEarningsMember2025-03-310001839341us-gaap:CommonStockMember2023-12-310001839341us-gaap:AdditionalPaidInCapitalMember2023-12-310001839341us-gaap:RetainedEarningsMember2023-12-3100018393412023-12-3100018393412023-01-012023-12-310001839341srt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:RetainedEarningsMember2023-12-310001839341srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2023-12-310001839341srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMemberus-gaap:CommonStockMember2023-12-310001839341srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMemberus-gaap:AdditionalPaidInCapitalMember2023-12-310001839341srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMemberus-gaap:RetainedEarningsMember2023-12-310001839341srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember2023-12-310001839341us-gaap:RetainedEarningsMember2024-01-012024-03-310001839341us-gaap:AdditionalPaidInCapitalMember2024-01-012024-03-310001839341us-gaap:CommonStockMember2024-01-012024-03-310001839341us-gaap:CommonStockMembercore:StockIssuanceInConnectionWithEmergenceMember2024-01-012024-03-310001839341us-gaap:AdditionalPaidInCapitalMembercore:StockIssuanceInConnectionWithEmergenceMember2024-01-012024-03-310001839341core:StockIssuanceInConnectionWithEmergenceMember2024-01-012024-03-310001839341us-gaap:CommonStockMembercore:StockIssuanceForEquityRightsOfferingMember2024-01-012024-03-310001839341us-gaap:AdditionalPaidInCapitalMembercore:StockIssuanceForEquityRightsOfferingMember2024-01-012024-03-310001839341core:StockIssuanceForEquityRightsOfferingMember2024-01-012024-03-310001839341us-gaap:CommonStockMembercore:StockIssuanceForEquityRightsOfferingBackstopCommitmentMember2024-01-012024-03-310001839341us-gaap:AdditionalPaidInCapitalMembercore:StockIssuanceForEquityRightsOfferingBackstopCommitmentMember2024-01-012024-03-310001839341core:StockIssuanceForEquityRightsOfferingBackstopCommitmentMember2024-01-012024-03-310001839341us-gaap:CommonStockMembercore:StockIssuanceForBitmainObligationMember2024-01-012024-03-310001839341us-gaap:AdditionalPaidInCapitalMembercore:StockIssuanceForBitmainObligationMember2024-01-012024-03-310001839341core:StockIssuanceForBitmainObligationMember2024-01-012024-03-310001839341us-gaap:CommonStockMember2024-03-310001839341us-gaap:AdditionalPaidInCapitalMember2024-03-310001839341us-gaap:RetainedEarningsMember2024-03-3100018393412024-03-310001839341core:WarrantLiabilityMember2025-01-012025-03-310001839341core:WarrantLiabilityMember2024-01-012024-03-310001839341stpr:AL2025-03-310001839341stpr:GA2025-03-310001839341stpr:KY2025-03-310001839341stpr:NC2025-03-310001839341stpr:ND2025-03-310001839341stpr:OK2025-03-310001839341stpr:TX2025-03-310001839341us-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2025-03-310001839341us-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2024-12-310001839341srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2024-12-310001839341srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember2024-12-310001839341core:BitcoinMember2025-03-310001839341core:BitcoinMember2024-12-310001839341core:DigitalAssetHostedMiningServiceMembersrt:MinimumMember2025-01-012025-03-310001839341core:DigitalAssetHostedMiningServiceMembersrt:MaximumMember2025-01-012025-03-310001839341core:DigitalAssetHostedMiningServiceMember2025-03-3100018393412025-04-01core:DigitalAssetHostedMiningServiceMember2025-03-310001839341us-gaap:LandAndLandImprovementsMember2025-03-310001839341us-gaap:LandAndLandImprovementsMember2024-12-310001839341us-gaap:BuildingAndBuildingImprovementsMember2025-03-310001839341us-gaap:BuildingAndBuildingImprovementsMember2024-12-310001839341srt:MinimumMemberus-gaap:BuildingAndBuildingImprovementsMember2025-03-310001839341srt:MaximumMemberus-gaap:BuildingAndBuildingImprovementsMember2025-03-310001839341us-gaap:TechnologyEquipmentMember2025-03-310001839341us-gaap:TechnologyEquipmentMember2024-12-310001839341srt:MinimumMemberus-gaap:TechnologyEquipmentMember2025-03-310001839341srt:MaximumMemberus-gaap:TechnologyEquipmentMember2025-03-310001839341core:ElectricalEquipmentMember2025-03-310001839341core:ElectricalEquipmentMember2024-12-310001839341srt:MinimumMembercore:ElectricalEquipmentMember2025-03-310001839341srt:MaximumMembercore:ElectricalEquipmentMember2025-03-310001839341us-gaap:PropertyPlantAndEquipmentOtherTypesMember2025-03-310001839341us-gaap:PropertyPlantAndEquipmentOtherTypesMember2024-12-310001839341srt:MinimumMemberus-gaap:PropertyPlantAndEquipmentOtherTypesMember2025-03-310001839341srt:MaximumMemberus-gaap:PropertyPlantAndEquipmentOtherTypesMember2025-03-310001839341core:PropertyPlantAndEquipmentExcludingConstructionInProgressMember2025-03-310001839341core:PropertyPlantAndEquipmentExcludingConstructionInProgressMember2024-12-310001839341core:CostOfRevenueMembercore:ColocationServiceMember2025-01-012025-03-310001839341core:CostOfRevenueMembercore:ColocationServiceMember2024-01-012024-03-310001839341core:CostOfRevenueMembercore:DigitalAssetSelfMiningServiceMember2025-01-012025-03-310001839341core:CostOfRevenueMembercore:DigitalAssetSelfMiningServiceMember2024-01-012024-03-310001839341core:CostOfRevenueMembercore:DigitalAssetHostedMiningServiceMember2025-01-012025-03-310001839341core:CostOfRevenueMembercore:DigitalAssetHostedMiningServiceMember2024-01-012024-03-310001839341us-gaap:SellingGeneralAndAdministrativeExpensesMember2025-01-012025-03-310001839341us-gaap:SellingGeneralAndAdministrativeExpensesMember2024-01-012024-03-310001839341core:ConvertibleSeniorNotesDue2031Membercore:NotesPayableMember2025-03-310001839341core:ConvertibleSeniorNotesDue2031Membercore:NotesPayableMember2024-12-310001839341core:A3.00ConvertibleSeniorNotesDue2029Membercore:NotesPayableMember2025-03-310001839341core:A3.00ConvertibleSeniorNotesDue2029Membercore:NotesPayableMember2024-12-310001839341core:BremerLoanMembercore:NotesPayableMember2025-03-310001839341core:BremerLoanMembercore:NotesPayableMember2024-12-310001839341core:DidadoNoteMembercore:NotesPayableMember2025-03-310001839341core:DidadoNoteMembercore:NotesPayableMember2024-12-310001839341core:HCMNoteMembercore:NotesPayableMember2025-03-310001839341core:HCMNoteMembercore:NotesPayableMember2024-12-310001839341core:HarperLoanMembercore:NotesPayableMember2025-03-310001839341core:HarperLoanMembercore:NotesPayableMember2024-12-310001839341core:TrilogyNoteMembercore:NotesPayableMember2025-03-310001839341core:TrilogyNoteMembercore:NotesPayableMember2024-12-310001839341core:ACMLoanMembercore:NotesPayableMember2025-03-310001839341core:ACMLoanMembercore:NotesPayableMember2024-12-310001839341core:OtherDebtInstrumentMembercore:NotesPayableMembersrt:MinimumMember2025-03-310001839341core:OtherDebtInstrumentMembercore:NotesPayableMembersrt:MaximumMember2025-03-310001839341core:OtherDebtInstrumentMembercore:NotesPayableMember2025-03-310001839341core:OtherDebtInstrumentMembercore:NotesPayableMember2024-12-310001839341core:NotesPayableMember2025-03-310001839341core:NotesPayableMember2024-12-310001839341us-gaap:ConvertibleDebtMembercore:NotesPayableMember2025-01-012025-03-310001839341us-gaap:ConvertibleDebtMember2025-03-310001839341us-gaap:NotesPayableOtherPayablesMember2025-03-310001839341core:ContingentValueRightsMember2024-01-2300018393412024-01-2300018393412024-01-232024-01-2300018393412025-01-232025-01-230001839341core:WarrantTranche1Member2024-01-230001839341core:WarrantTranche1Memberus-gaap:CommonStockMember2024-01-230001839341core:WarrantTranche2Member2024-01-230001839341core:WarrantTranche2Memberus-gaap:CommonStockMember2024-01-230001839341core:WarrantTranche1Member2025-01-012025-03-310001839341core:WarrantTranche1Member2025-03-310001839341core:WarrantTranche2Member2025-01-012025-03-310001839341core:WarrantTranche2Member2025-03-310001839341core:ContingentValueRightsMember2025-01-012025-03-310001839341us-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2025-03-310001839341us-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2025-03-310001839341us-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMember2025-03-310001839341us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2025-03-310001839341us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2025-03-310001839341us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2025-03-310001839341us-gaap:FairValueMeasurementsRecurringMember2025-03-310001839341us-gaap:FairValueInputsLevel1Membercore:ContingentValueRightsMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:DerivativeFinancialInstrumentsLiabilitiesMember2025-03-310001839341us-gaap:FairValueInputsLevel2Membercore:ContingentValueRightsMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:DerivativeFinancialInstrumentsLiabilitiesMember2025-03-310001839341us-gaap:FairValueInputsLevel3Membercore:ContingentValueRightsMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:DerivativeFinancialInstrumentsLiabilitiesMember2025-03-310001839341core:ContingentValueRightsMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:DerivativeFinancialInstrumentsLiabilitiesMember2025-03-310001839341us-gaap:FairValueInputsLevel1Membercore:WarrantLiabilityMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:DerivativeFinancialInstrumentsLiabilitiesMember2025-03-310001839341us-gaap:FairValueInputsLevel2Membercore:WarrantLiabilityMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:DerivativeFinancialInstrumentsLiabilitiesMember2025-03-310001839341us-gaap:FairValueInputsLevel3Membercore:WarrantLiabilityMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:DerivativeFinancialInstrumentsLiabilitiesMember2025-03-310001839341core:WarrantLiabilityMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:DerivativeFinancialInstrumentsLiabilitiesMember2025-03-310001839341us-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2024-12-310001839341us-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2024-12-310001839341us-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMember2024-12-310001839341us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2024-12-310001839341us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2024-12-310001839341us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2024-12-310001839341us-gaap:FairValueMeasurementsRecurringMember2024-12-310001839341us-gaap:FairValueInputsLevel1Membercore:ContingentValueRightsMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:DerivativeFinancialInstrumentsLiabilitiesMember2024-12-310001839341us-gaap:FairValueInputsLevel2Membercore:ContingentValueRightsMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:DerivativeFinancialInstrumentsLiabilitiesMember2024-12-310001839341us-gaap:FairValueInputsLevel3Membercore:ContingentValueRightsMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:DerivativeFinancialInstrumentsLiabilitiesMember2024-12-310001839341core:ContingentValueRightsMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:DerivativeFinancialInstrumentsLiabilitiesMember2024-12-310001839341us-gaap:FairValueInputsLevel1Membercore:WarrantLiabilityMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:DerivativeFinancialInstrumentsLiabilitiesMember2024-12-310001839341us-gaap:FairValueInputsLevel2Membercore:WarrantLiabilityMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:DerivativeFinancialInstrumentsLiabilitiesMember2024-12-310001839341us-gaap:FairValueInputsLevel3Membercore:WarrantLiabilityMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:DerivativeFinancialInstrumentsLiabilitiesMember2024-12-310001839341core:WarrantLiabilityMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:DerivativeFinancialInstrumentsLiabilitiesMember2024-12-310001839341us-gaap:FairValueInputsLevel1Membercore:A3.00ConvertibleSeniorNotesDue2029Membercore:NotesPayableMember2025-03-310001839341us-gaap:FairValueInputsLevel1Membercore:ConvertibleSeniorNotesDue2031Membercore:NotesPayableMember2025-03-310001839341us-gaap:FairValueInputsLevel1Membercore:A3.00ConvertibleSeniorNotesDue2029Membercore:NotesPayableMember2024-12-310001839341us-gaap:FairValueInputsLevel1Membercore:ConvertibleSeniorNotesDue2031Membercore:NotesPayableMember2024-12-310001839341srt:MinimumMember2025-01-012025-03-310001839341srt:MaximumMember2025-01-012025-03-310001839341core:DemandLetterByHarlinDeanEmploymentClaimFiledMember2022-09-302022-09-300001839341core:ProofOfClaimByHarlinDeanEmploymentClaimFiledMember2022-09-302022-09-300001839341core:ProofOfClaimByHarlinDeanEmploymentClaimFiledMember2025-01-242025-01-240001839341core:ProofOfClaimByGEMContractClaimFiledMember2023-09-062023-09-060001839341core:ProofOfClaimByGEMContractClaimFiledMember2025-01-282025-01-280001839341core:RestrictedStockUnitsMarketConditionMembercore:IncentivePlanMember2024-04-262024-04-260001839341core:ScenarioOneMembercore:RestrictedStockUnitsMarketConditionMemberus-gaap:ShareBasedCompensationAwardTrancheOneMember2024-04-262024-04-260001839341core:ScenarioTwoMembercore:RestrictedStockUnitsMarketConditionMemberus-gaap:ShareBasedCompensationAwardTrancheOneMember2024-04-262024-04-260001839341core:ScenarioThreeMembercore:RestrictedStockUnitsMarketConditionMemberus-gaap:ShareBasedCompensationAwardTrancheOneMember2024-04-262024-04-260001839341core:ScenarioFourMembercore:RestrictedStockUnitsMarketConditionMemberus-gaap:ShareBasedCompensationAwardTrancheOneMember2024-04-262024-04-260001839341core:ScenarioFiveMembercore:RestrictedStockUnitsMarketConditionMemberus-gaap:ShareBasedCompensationAwardTrancheOneMember2024-04-262024-04-260001839341core:ScenarioSixMembercore:RestrictedStockUnitsMarketConditionMemberus-gaap:ShareBasedCompensationAwardTrancheOneMember2024-04-262024-04-260001839341core:ScenarioOneMembercore:RestrictedStockUnitsMarketConditionMemberus-gaap:ShareBasedCompensationAwardTrancheTwoMember2024-04-262024-04-260001839341core:ScenarioTwoMembercore:RestrictedStockUnitsMarketConditionMemberus-gaap:ShareBasedCompensationAwardTrancheTwoMember2024-04-262024-04-260001839341core:ScenarioThreeMembercore:RestrictedStockUnitsMarketConditionMemberus-gaap:ShareBasedCompensationAwardTrancheTwoMember2024-04-262024-04-260001839341core:ScenarioFourMembercore:RestrictedStockUnitsMarketConditionMemberus-gaap:ShareBasedCompensationAwardTrancheTwoMember2024-04-262024-04-260001839341core:ScenarioFiveMembercore:RestrictedStockUnitsMarketConditionMemberus-gaap:ShareBasedCompensationAwardTrancheTwoMember2024-04-262024-04-260001839341core:ScenarioSixMembercore:RestrictedStockUnitsMarketConditionMemberus-gaap:ShareBasedCompensationAwardTrancheTwoMember2024-04-262024-04-260001839341us-gaap:RestrictedStockUnitsRSUMembersrt:ScenarioPreviouslyReportedMember2024-12-310001839341core:RestrictedStockUnitsMarketConditionMember2024-12-310001839341us-gaap:RestrictedStockUnitsRSUMember2025-01-012025-03-310001839341core:RestrictedStockUnitsMarketConditionMember2025-01-012025-03-310001839341us-gaap:RestrictedStockUnitsRSUMember2025-03-310001839341core:RestrictedStockUnitsMarketConditionMember2025-03-310001839341core:CostOfRevenueMember2025-01-012025-03-310001839341core:CostOfRevenueMember2024-01-012024-03-310001839341core:Tranche2WarrantsMember2025-01-012025-03-310001839341core:WarrantTranche2Member2024-01-012024-03-310001839341us-gaap:ConvertibleDebtMember2025-01-012025-03-310001839341us-gaap:ConvertibleDebtMember2024-01-012024-03-310001839341core:WarrantTranche1Member2025-01-012025-03-310001839341core:WarrantTranche1Member2024-01-012024-03-310001839341us-gaap:RestrictedStockUnitsRSUMember2024-01-012024-03-310001839341core:RestrictedStockUnitsMarketConditionMember2024-01-012024-03-310001839341us-gaap:ConvertibleDebtMember2025-01-012025-03-310001839341us-gaap:ConvertibleDebtMember2024-01-012024-03-310001839341us-gaap:RestrictedStockUnitsRSUMember2025-01-012025-03-310001839341us-gaap:RestrictedStockUnitsRSUMember2024-01-012024-03-310001839341us-gaap:EmployeeStockOptionMember2025-01-012025-03-310001839341us-gaap:EmployeeStockOptionMember2024-01-012024-03-310001839341core:RestrictedStockUnitsMarketConditionMember2025-01-012025-03-310001839341core:RestrictedStockUnitsMarketConditionMember2024-01-012024-03-310001839341core:WarrantTranche1Member2025-01-012025-03-310001839341core:WarrantTranche1Member2024-01-012024-03-310001839341us-gaap:OperatingSegmentsMembercore:DigitalAssetSelfMiningServiceMembercore:DigitalAssetSelfMiningSegmentMember2025-01-012025-03-310001839341us-gaap:OperatingSegmentsMembercore:DigitalAssetSelfMiningServiceMembercore:DigitalAssetSelfMiningSegmentMember2024-01-012024-03-310001839341us-gaap:OperatingSegmentsMembercore:DigitalAssetSelfMiningSegmentMember2025-01-012025-03-310001839341us-gaap:OperatingSegmentsMembercore:DigitalAssetSelfMiningSegmentMember2024-01-012024-03-310001839341us-gaap:OperatingSegmentsMembercore:DigitalAssetHostedMiningServiceMembercore:DigitalAssetHostedMiningSegmentMember2025-01-012025-03-310001839341us-gaap:OperatingSegmentsMembercore:DigitalAssetHostedMiningServiceMembercore:DigitalAssetHostedMiningSegmentMember2024-01-012024-03-310001839341us-gaap:OperatingSegmentsMembercore:DigitalAssetHostedMiningSegmentMember2025-01-012025-03-310001839341us-gaap:OperatingSegmentsMembercore:DigitalAssetHostedMiningSegmentMember2024-01-012024-03-310001839341us-gaap:OperatingSegmentsMembercore:ColocationServiceMembercore:ColocationSegmentMember2025-01-012025-03-310001839341us-gaap:OperatingSegmentsMembercore:ColocationServiceMembercore:ColocationSegmentMember2024-01-012024-03-310001839341us-gaap:OperatingSegmentsMembercore:ColocationSegmentMember2025-01-012025-03-310001839341us-gaap:OperatingSegmentsMembercore:ColocationSegmentMember2024-01-012024-03-310001839341core:IndefiniteLivedIntangibleAssetConcentrationRiskMemberus-gaap:SalesRevenueNetMembercore:BitcoinMembercore:MiningSegmentMember2025-01-012025-03-310001839341core:IndefiniteLivedIntangibleAssetConcentrationRiskMemberus-gaap:SalesRevenueNetMembercore:BitcoinMembercore:MiningSegmentMember2024-01-012024-03-310001839341core:CustomerFMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerSegmentBenchmarkMembercore:DigitalAssetHostedMiningSegmentMember2025-01-012025-03-310001839341core:CustomerFMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerSegmentBenchmarkMembercore:DigitalAssetHostedMiningSegmentMember2024-01-012024-03-310001839341core:CustomerGMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerSegmentBenchmarkMembercore:DigitalAssetSelfMiningSegmentMember2025-01-012025-03-310001839341core:CustomerGMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerSegmentBenchmarkMembercore:DigitalAssetSelfMiningSegmentMember2024-01-012024-03-310001839341core:CustomerHMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerSegmentBenchmarkMembercore:DigitalAssetHostedMiningSegmentMember2024-01-012024-03-310001839341core:CustomerIMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerSegmentBenchmarkMembercore:DigitalAssetHostedMiningSegmentMember2024-01-012024-03-310001839341core:CustomerJMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerSegmentBenchmarkMembercore:ColocationSegmentMember2025-01-012025-03-310001839341core:CustomerJMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerSegmentBenchmarkMembercore:ColocationSegmentMember2024-01-012024-03-310001839341core:CustomerKMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerSegmentBenchmarkMembercore:DigitalAssetHostedMiningSegmentMember2025-01-012025-03-310001839341core:StockIssuanceToCreditorsMember2025-01-012025-03-310001839341core:StockIssuanceToCreditorsMember2024-01-012024-03-310001839341core:StockIssuanceForBitmainObligationMember2025-01-012025-03-310001839341core:StockIssuanceForEquityRightsOfferingBackstopCommitmentMember2025-01-012025-03-310001839341core:StockIssuanceForCVRsMember2025-01-012025-03-310001839341core:StockIssuanceForCVRsMember2024-01-012024-03-310001839341us-gaap:ConvertibleDebtMember2025-01-012025-03-310001839341us-gaap:ConvertibleDebtMember2024-01-012024-03-310001839341us-gaap:SecuredDebtMember2025-01-012025-03-310001839341us-gaap:SecuredDebtMember2024-01-012024-03-310001839341core:ExitCreditAgreementMember2025-01-012025-03-310001839341core:ExitCreditAgreementMember2024-01-012024-03-310001839341core:MinerEquipmentFacilityMember2025-01-012025-03-310001839341core:MinerEquipmentFacilityMember2024-01-012024-03-310001839341core:NotesRelatedToSettlementMember2025-01-012025-03-310001839341core:NotesRelatedToSettlementMember2024-01-012024-03-310001839341core:ToddDuCheneMember2025-01-012025-03-310001839341core:ToddDuCheneMember2025-03-31

(Exact name of registrant as specified in its charter)

838 Walker Road

Suite 21-2105

Dover, Delaware

(Address of Principal Executive Offices)

19904

(Zip Code)

(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Emerging growth company

☐

Non-accelerated filer

☐

Smaller reporting company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☒ No ☐

As of May 2, 2025, 297,821,835 shares of Common Stock, par value $0.00001, were outstanding.

This Quarterly Report on Form 10-Q, including, without limitation, statements under Part I. Item 2. — “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”). Forward-looking statements may be identified by the use of words such as “ability,” “aim,” “assume,” “estimate,” “plan,” “possible,” “project,” “forecast,” “goal,” “opportunity,” “intend,” “will,” “expect,” “anticipate,” “believe,” “enable,” “seek,” “target” or other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements include, but are not limited to, statements regarding projections, estimates and forecasts of revenue and other financial and performance metrics, projections of market opportunity and expectations, the Company’s ability to scale and grow its business, the advantages and expected growth of the Company and the Company’s ability to source and retain talent. These statements are provided for illustrative purposes only and are based on various assumptions, whether or not identified in this Quarterly Report on Form 10-Q, and on the current expectations of the Company’s management. These forward-looking statements are not intended to serve, and must not be relied on by any investor, as a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions. Many actual events and circumstances are beyond the control of the Company.

These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and assumptions, known or unknown, that could cause actual results to vary materially from those indicated or anticipated. These risks, assumptions and uncertainties include those described in Part I. Item 1A. — “Risk Factors” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. If one or more of these risks or uncertainties materializes, or if underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. There may be additional risks that the Company could not presently know or that the Company currently believes are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. In addition, forward-looking statements reflect the Company’s expectations, plans or forecasts of future events and views as of the date of this Quarterly Report on Form 10-Q and should not be relied upon as representing the Company’s assessments as of any date subsequent to the date of this Quarterly Report on Form 10-Q. The Company anticipates that subsequent events and developments will cause the Company’s assessments to change. However, while the Company may elect to update these forward-looking statements at some point in the future, the Company specifically disclaims any obligation to do so. Accordingly, you should not place undue reliance on these forward-looking statements, which speak only as of the date they are made.

			March 31, 2025						December 31, 2024
Assets			(Unaudited)
Current Assets:
Cash and cash equivalents			$	697,942					$	836,197
Restricted cash			783						783
Accounts receivable			1,018						1,025
Digital assets			80,646						23,893
Prepaid expenses and other current assets			52,789						42,064
Total Current Assets			833,178						903,962
Property, plant and equipment, net			650,291						556,342
Operating lease right-of-use assets			111,203						114,472
Other noncurrent assets			30,699						24,039
Total Assets			$	1,625,371					$	1,598,815
Liabilities and Stockholders’ Deficit
Current Liabilities:
Accounts payable			$	6,328					$	19,265
Accrued expenses and other current liabilities			95,492						69,230
Deferred revenue			60,872						18,134
Operating lease liabilities, current portion			9,982						9,974
Finance lease liabilities, current portion			1,161						1,669
Notes payable, current portion			16,214						16,290
Contingent value rights, current portion			5,461						—
Total Current Liabilities			195,510						134,562
Operating lease liabilities, net of current portion			94,953						97,843
Convertible and other notes payable, net of current portion			1,071,843						1,073,990
Contingent value rights, net of current portion			11,628						4,272
Warrant liabilities			421,902						1,097,285
Other noncurrent liabilities			11,042						11,043
Total Liabilities			1,806,878						2,418,995
Commitments and contingencies (Note 8)
Stockholders’ Deficit:
Preferred stock; $0.00001 par value; 2,000,000 shares authorized; none issued and outstanding at March 31, 2025 and December 31, 2024			—						—
Common stock; $0.00001 par value; 10,000,000 shares authorized at March 31, 2025 and December 31, 2024; 299,087 and 292,606 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively			3						3
Additional paid-in capital			2,973,015						2,915,035
Accumulated deficit			(3,154,525)						(3,735,218)
Total Stockholders’ Deficit			(181,507)						(820,180)
Total Liabilities and Stockholders’ Deficit			$	1,625,371					$	1,598,815

1 Proceeds from digital assets received as noncash revenue consideration liquidated nearly immediately after receipt as a routine operating activity.

Core Scientific, Inc. (“Core Scientific” or the “Company”) is a leader in digital infrastructure for high-density colocation services and digital asset mining of bitcoin. We operate dedicated, purpose-built facilities for digital asset mining and are a premier provider of digital infrastructure, software solutions and services to our third-party customers. We employ our own large fleet of computers (“miners”) to earn digital assets for our own account. We provide hosting services for large bitcoin mining customers and are in the process of allocating and converting a significant portion of our ten data centers in Alabama (1), Georgia (2), Kentucky (1), North Carolina (1), North Dakota (1), Oklahoma (1), and Texas (3) to support artificial intelligence-related workloads under a series of contracts that entail the modification of certain of our data centers to deliver next generation colocation services. We derive the majority of our revenue from earning bitcoin for our own account (“self-mining”).

The Company has historically focused on designing, developing and operating digital infrastructure to engage in digital asset mining for its own account and providing hosting solutions for third-party digital asset miners. Beginning on March 6, 2024, we announced a series of new contractual agreements with CoreWeave, Inc., a third-party provider of high-performance computing (“HPC”) operations for customers using specialized graphics processing units (“GPUs”). These new agreements leverage the Company’s existing digital infrastructure and expertise in third-party hosting solutions.

We currently operate in three segments: “Digital Asset Self-Mining,” consisting of digital asset mining for our own account, “Digital Asset Hosted Mining,” consisting of our digital infrastructure and third-party hosting services for digital asset mining, and “Colocation,” consisting of providing high-density colocation services to third parties for GPU-based HPC operations. Prior to April 1, 2024, we operated only in the Digital Asset Self-Mining and Digital Asset Hosted Mining segments. During fiscal year 2024, our “Colocation” segment was referred to as “HPC Hosting.”

Our digital asset hosted mining business provides a full suite of services to our digital asset mining customers. We provide deployment, monitoring, troubleshooting, optimization and maintenance of our customers’ digital asset mining equipment and provide necessary electrical power, repair and other infrastructure services necessary for our customers to operate, maintain and efficiently mine digital assets.

Our high-density colocation services provide space, power, cooling, facilities operations, security and other services to third-party HPC customers to support workloads for machine learning and artificial intelligence. The extension of our business into the Colocation segment involves significant risk, including risks involving facility construction, supply chain and the risk of nonperformance by our single customer, as disclosed further in Part I, Item 1A. — “Risk Factors” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission on February 27, 2025.

On January 23, 2024 (the “Effective Date”), the Company emerged from bankruptcy when the conditions to the effectiveness of the Fourth Amended Joint Chapter 11 Plan of Reorganization of Core Scientific, Inc. and its Debtor Affiliates (with Technical Modifications) (the “Plan of Reorganization”) were satisfied or waived. For more detailed information regarding our emergence from bankruptcy, refer to Notes 3 — Chapter 11 Filing and Emergence from Bankruptcy, 8 — Convertible and Other Notes Payable, 9 — Contingent Value Rights and Warrant Liabilities and 12 — Stockholders' Deficit to our consolidated financial statements in Item 8 of Part II of our Annual Report on Form 10-K for the year ended December 31, 2024.

The accompanying consolidated financial statements reflect the application of certain significant accounting policies as described below and elsewhere in these notes to the consolidated financial statements.

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). All intercompany balances and transactions have been eliminated in consolidation.

The preparation of the Company’s consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting period. Some of the more significant estimates include assumptions used in the valuation of digital assets, property, plant and equipment, the initial measurement of lease liabilities, stock-based compensation, the fair value of derivative liabilities, and income taxes.

These estimates are based on information available as of the date of the financial statements; therefore, actual results could differ from management’s estimates.

Cash and cash equivalents include all cash balances and highly liquid investments with original maturities of three months or less from the date of acquisition. As of March 31, 2025 and December 31, 2024, the Company had cash and cash equivalents of $697.9 million and $836.2 million, respectively, substantially all of which exceeded Federal Deposit Insurance Corporation insured limits. Cash equivalents included $672.6 million and $832.2 million of highly liquid money market funds as of March 31, 2025 and December 31, 2024, respectively, which are classified as Level 1 within the fair value hierarchy. Restricted cash consists of a deposit held at a lender’s bank in accordance with the terms of a note agreement.

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-08, Intangibles-Goodwill and Other-Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets (“ASU 2023-08”). ASU 2023-08 is intended to improve the accounting for certain crypto assets by requiring an entity to measure those crypto assets at fair value each reporting period with changes in fair value recognized in net income (loss). The amendments also improve the information provided to investors about an entity’s crypto asset holdings by requiring disclosure about significant holdings, contractual sale restrictions, and changes during the reporting period. ASU 2023-08 is effective for annual and interim reporting periods beginning after December 15, 2024, with early adoption permitted.

The Company’s digital assets are within the scope of ASU 2023-08 and the Company elected to early adopt the new standard prospectively effective January 1, 2024. The transition guidance requires a cumulative-effect adjustment as of the beginning of the current fiscal year for any difference between the carrying amount of the Company’s digital assets and fair value. The early adoption did not have a material impact on the Company’s consolidated financial statements.

The Company intends to optimize cash received from bitcoin mining which may entail, subject to market conditions, holding bitcoin for future sale at any particular point in time. Digital assets are classified as current assets on the Company’s Consolidated Balance Sheets, reflecting management's current intent and expectation to convert these assets to cash within the next year. The classification of digital assets is evaluated regularly, and any change in management's intent or expectations regarding the timing of conversion to cash could result in a reclassification of these assets. Sales of digital assets awarded to the Company through its self-mining activities are classified as cash flows from operating activities if sold nearly immediately. The Company does not have any off-balance sheet holdings of digital assets and does not safeguard digital assets for third parties. The Company tracks its cost basis of digital assets in accordance with the first-in-first-out method of accounting.

The Company’s digital assets have active markets with observable prices and their fair value measurements are considered Level 1. The following table presents a roll-forward of total digital assets for the three months ended March 31, 2025, and the three months ended March 31, 2024 (under the prospectively adopted ASU 2023-08 fair value model) (in thousands):

1 Reflects the impact of the Company’s adoption of Accounting Standards Update (“ASU”) 2023-08, Intangibles-Goodwill and Other-Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets (“ASU 2023-08”) effective January 1, 2024.

2 As of March 31, 2025 and December 31, 2024, there was $0.6 million and $0.9 million, respectively, of digital asset receivable included in prepaid expenses and other current assets on the consolidated balance sheets.

The following table presents the Company’s bitcoin holdings (in thousands, except for quantity):

The Company records contract liabilities in Deferred revenue on the Consolidated Balance Sheets when cash payments are received in advance of performance and recognizes them as revenue when the performance obligations are satisfied. The Company’s total deferred revenue balance as of March 31, 2025 and December 31, 2024, was $60.9 million and $18.1 million, respectively.

During the three months ended March 31, 2025, the Company recognized $0.3 million of revenue that was included in the deferred revenue balance as of the beginning of the year.

During the three months ended March 31, 2024, the Company recognized $6.4 million of revenue that was included in the deferred revenue balance as of the beginning of the year.

Advanced payments are typically recognized in the following month for hosted mining services and are generally recognized within 30 months of license order commencement for colocation services.

The Company recognizes revenue in accordance with ASC 606, Revenue Recognition (“ASC 606”).

One of the Company’s ongoing major or central operations is to provide a service of performing hash calculations to third-party pool operators alongside collectives of third-party bitcoin miners (such collectives, “mining pools”) as a participant. The Company considers the third-party mining pool operators to be its customers under Topic 606. Contract inception and our enforceable right to consideration begins when we commence providing hash calculation services to the mining pool operators. Each party to the contract has the unilateral right to terminate the contract at any time without any compensation to the other party for such termination. As such, the duration of a contract is less than a day and may be continuously renewed multiple times throughout the day. The implied renewal option is not a material right because there are no upfront or incremental fees in the initial contract and the terms, conditions, and compensation amount for the renewal options are at the then market rates.

The Company is entitled to non-cash compensation based on the Full-Pay-Per-Share (“FPPS”) model of the mining pool it is a participant in. FPPS pools pay block rewards and transaction fees, less mining pool fees, and the participants are entitled to non-cash consideration even if a block is not successfully validated by the mining pool operator. The Company is entitled to compensation once it begins to perform hash calculations for the pool operator in accordance with the operator’s specifications over a 24-hour period beginning mid-night UTC and ending 23:59:59 UTC on a daily basis. The non-cash consideration that we are entitled to for providing hash calculations to the pool operator under the FPPS payout method is made up of block rewards and transaction fees less pool operator expenses determined as follows:

•The non-cash consideration in the form of a block reward is based on the total blocks expected to be generated on the Bitcoin Network for the daily 24-hour period beginning midnight UTC and ending 23:59:59 UTC in accordance with the following formula: the daily hash calculations that we provided to the pool operator as a percent of the Bitcoin Network’s implied hash calculations as determined by the network difficulty, multiplied by the total Bitcoin Network block rewards expected to be generated for the same daily period.

•The non-cash consideration in the form of transaction fees paid by transaction requestors is based on the share of total actual fees paid over the daily 24-hour period beginning midnight UTC and ending 23:59:59 UTC in accordance with the following formula: total actual transaction fees generated on the Bitcoin Network during the 24-hour period as a percent of total block rewards the Bitcoin Network actually generated during the same 24-hour period, multiplied by the block rewards we earned for the same 24-hour period noted above.

•The block reward and transaction fees earned by the Company is reduced by mining pool fees charged by the operator for operating the pool based on a rate schedule per the mining pool contract. The mining pool fee is only incurred to the extent we perform hash calculations and generate revenue in accordance with the pool operator’s payout formula during the same 24-hour period beginning mid-night UTC daily.

The above non-cash consideration is variable, since the amount of block reward earned depends on the amount of hash calculations we perform; the amount of transaction fees we are entitled to depends on the actual Bitcoin Network transaction fees over the same 24-hour period; and the operator fees for the same 24-hour period are variable since it is determined based on the total block rewards and transaction fees in accordance with the pool operator’s agreement. While the non-cash consideration is variable, the Company has the ability to estimate the variable consideration at contract inception with reasonable certainty without the risk of significant revenue reversal. The Company does not constrain this variable consideration because it is probable that a significant reversal in the amount of revenue recognized from the contract will not occur when the uncertainty is subsequently resolved and recognizes the non-cash consideration on the same day that control is transferred, which is the same day as contract inception.

The Company measures the non-cash consideration using the spot rate for Bitcoin as quoted on Coinbase Global, Inc., the Company’s principal market. The Company recognizes non-cash consideration on the same day that control of the contracted service is transferred to the pool operator, which is the same day as the contract inception.

Direct expenses associated with providing hash calculation services to a third-party operated mining pool, such as electricity costs and employee compensation, are recorded as cost of revenues. Depreciation and amortization expenses on fixed and right-of-use assets, including digital asset mining equipment used to provide the services, are also recorded as a component of cost of revenues.

The Company generates revenue from contracts with customers from digital asset hosted mining services. The Company generally recognizes revenue when the promised service is performed. Revenue excludes any amounts collected on behalf of third parties, including sales and indirect taxes.

The Company regularly enters contracts that include hosting services, for which revenue is recognized as services are performed on a variable basis. The Company performs hosting services that enable customers to run blockchain and other high-performance computing operations. The Company’s performance obligation related to these services is satisfied over time. The Company recognizes revenue for services that are performed on a consumption basis, such as the amount of electricity used in a period, based on the customer’s use of such resources. The Company recognizes variable consumption usage hosting revenue each month as the uncertainty related to the consideration is resolved, hosting services are provided to our customers, and our customers utilize the hosting services (the customer simultaneously receives and consumes the benefits of the Company’s performance).

The Company generally bills its customers in advance based on estimated consumption under the contract. The Company recognizes revenue based on actual consumption in the period and invoices adjustments in subsequent periods or retains credits toward future consumption. The term between invoicing and when payment is due typically does not exceed 30 days.

Our Colocation segment generates revenue by leasing data center space to our customer under licensing agreements. These arrangements contain lease components for the right to use data center space and nonlease components for power delivery, physical security, and maintenance services. We have elected the practical expedient available under ASC Topic 842, Leases, to combine the nonlease revenue components that have the same pattern of transfer as the related operating lease components into a single combined component. The single combined component is accounted for under ASC Topic 842 as an operating lease if the lease components are the predominant components and is accounted for under ASC Topic 606 if the nonlease components are the predominant components. The lease components are the predominant components in our current licensing arrangements and the single combined component in these arrangements are accounted for under the operating lease guidance of ASC Topic 842.

We have concluded that it is probable that substantially all of the payments will be collected over the term of the arrangements and recognize the total combined component license payments under the agreements on a straight-line basis over the non-cancellable term. Straight-line license revenue represents the difference in revenue recognized during the period and the license payments due pursuant to the underlying arrangement as deferred revenue in the consolidated balance sheets. Certain arrangements include options to extend the term. These extension options are not reasonably certain to be exercised and are excluded from the lease term and calculation of lease payments at lease commencement.

Certain licensing arrangements provide for variable payments for power delivery services and maintenance services on customer assets and reimbursements for lessor costs such as taxes. Payments for physical security and other routine maintenance services are included in the fixed lease payments. Power delivery services represent a stand ready obligation to make power available to the customer over the coterminous lease term and have the same pattern of transfer as the related operating lease components. Customers may request and the Company may provide maintenance services on customer assets during the coterminous lease term. Customers are charged monthly for fees incurred on these maintenance services delivered and actual power costs incurred at current utility or fuel cost rates. These payments from customers for power delivery and maintenance services are recognized as variable lease payments in accordance with the practical expedient elected. Variable lease payments are presented on a gross basis and are included in Colocation revenue in the Consolidated Statements of Operations.

The Company’s performance obligation commitments relate to digital asset hosted mining services. The Company has performance obligations associated with commitments in customer digital asset hosted mining contracts for future services that have not yet been recognized in the financial statements. As of March 31, 2025, for contracts with original terms that exceed one year (ranging from 15 to 24 months), we expect to recognize approximately $5.4 million of revenue in the future related to performance obligations associated with existing hosted mining contracts. The Company expects to recognize approximately 100% of this amount over the next 12 months.

The Company is subject to income taxes mainly in the jurisdictions in which it provides various infrastructure, technology and hosting services. The Company’s tax position requires significant judgment in order to properly evaluate and quantify tax positions and to determine the provision for income taxes.

The Company uses the assets and liabilities method to account for income taxes, which requires that deferred tax assets and deferred tax liabilities be determined based on the differences between the financial statement and tax basis of assets and liabilities, using enacted tax rates in effect for the years in which the differences are expected to be reversed. The Company estimates its actual current tax expense, including permanent charges and benefits, and the temporary differences resulting from differing treatment of items, for tax and financial accounting purposes.

The Company assesses whether it is more likely than not that its deferred tax assets will be realized by considering both positive and negative evidence. If the Company believes that recovery of these deferred tax assets is not more likely than not, the Company establishes a valuation allowance.

Significant judgment is required in determining any valuation allowance recorded against deferred tax assets. In assessing the need for a valuation allowance, the Company considered all available evidence, including recent operating results, projections of future taxable income, the reversal of taxable temporary differences, and the feasibility of tax planning strategies.

GAAP sets forth a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained upon examination, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. Interest and penalties related to unrecognized tax benefits are included within Income Tax Expense. Accrued interest and penalties are included in the related tax liability line in the Company’s Consolidated Balance Sheets.

The Company adjusts its reserves for tax positions in light of changing facts and circumstances, such as the closing of a tax audit, the refinement of an estimate based on new facts or changes in tax laws. To the extent that the final tax outcome of these matters is different than the amounts recorded, the differences are recorded as adjustments to the provision for income taxes in the period in which such determination is made. The provision (benefit) for income taxes includes the impact of reserve provisions and changes to reserves that are considered appropriate.

The Company’s future effective tax rates could be adversely affected by changes in the valuation of the Company’s deferred tax assets or liabilities, or changes in tax laws, regulations, accounting principles or interpretations thereof. In addition, the Company is subject to examination of income tax returns by various tax authorities. The Company regularly assesses the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of its provisions for income taxes.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). Under this ASU, public business entities must annually “(1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income [or loss] by the applicable statutory income tax rate).” The amendments in ASU 2023-09 will be applied on a prospective basis and are effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company adopted ASU 2023-09 as of January 1, 2025 and will reflect the required disclosures in its Annual Report on Form 10-K for the year ending December 31, 2025. The adoption of ASU 2023-09 affects annual income tax disclosures only and does not impact interim reporting.

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), which requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. The amendments in ASU 2024-03 are effective for fiscal years beginning after December 15, 2026, with early adoption permitted. The amendment should be applied prospectively; however, retrospective application is also permitted. The Company is currently evaluating the impact this ASU will have on its consolidated financial statements and related disclosures.

There are no other new accounting pronouncements that are expected to have a significant impact on the Company’s unaudited consolidated financial statements.

Property, plant and equipment, net as of March 31, 2025 and December 31, 2024 consist of the following (in thousands):

1 Estimated useful life of improvements. Land is not depreciated.

2 Includes finance lease assets of $8.5 million and $8.5 million at March 31, 2025 and December 31, 2024, respectively.

3 Includes finance lease assets of $0.4 million and $0.4 million at March 31, 2025 and December 31, 2024, respectively.

4 Includes accumulated amortization for assets under finance leases of $3.2 million and $3.0 million at March 31, 2025 and December 31, 2024, respectively.

Depreciation expense, including amortization of finance lease assets, for the three months ended March 31, 2025 and 2024, was $19.5 million and $28.8 million, respectively.

The components of operating and finance leases are presented on the Company’s Consolidated Balance Sheets as follows (in thousands):

The components of lease expense were as follows (in thousands):

Information relating to the lease term and discount rate is as follows:

Information relating to lease payments is as follows (in thousands):

The Company’s minimum payments under noncancelable operating and finance leases having initial terms and bargain renewal periods in excess of one year are as follows at March 31, 2025, and thereafter (in thousands):

We generate revenue by leasing property to a customer under licensing agreements. The manner in which we recognize these transactions in our financial statements is described in Note 2 — Summary of Significant Accounting Policies, Revenue Recognition — Colocation Revenue. There was no lease revenue during the three months ended March 31, 2024.

The components of lease revenue were as follows (in thousands):

The following table represents the maturity analysis of commenced minimum operating lease payments expected to be received at March 31, 2025, and thereafter (in thousands):

			Operating Leases(1)
Remaining 2025			$	17,569
2026			23,952
2027			24,670
2028			25,410
2029			26,173
Thereafter			33,747
Total			$	151,521

(1) Operating lease payments expected to be received excludes $10.0 billion in total future noncancellable minimum lease payments for operating leases that have not yet commenced at March 31, 2025, which have lease terms of 12 years from commencement.

Notes payable as of March 31, 2025 and December 31, 2024, consists of the following (in thousands):

Interest expense on the 2029 Convertible Notes and 2031 Convertible Notes (together “Convertible Notes”) was as follows (in thousands):

			Three Months Ended March 31, 2025
Coupon interest			$	3,450
Amortization of debt discount and issuance costs			1,297
Total			$	4,747

Maturities on convertible and other notes payable, gross of unamortized discounts, are as follows (in thousands):

			Convertible Notes						Other Notes Payable
Remaining 2025			$	—					$	13,754
2026			—						13,047
2027			—						6,297
2028			—						—
2029			460,000						—
Thereafter			625,000						—
Total			$	1,085,000					$	33,098

On the Effective Date, under the terms of the Plan of Reorganization, the Company entered into the Contingent Value Rights Agreement and recorded the liabilities at fair value as of the Effective Date. Pursuant to the Contingent Value Rights Agreement, the Company issued 51,783,625 CVRs to holders of the Company’s Convertible Notes (in such capacity, the “Payees”) who received common stock, par value $0.00001 per share (the “New Common Stock”) in an aggregate amount of 51,783,625 shares of New Common Stock (the “Corresponding New Common Stock”). The CVRs require the Company to make payments to each Payee, of:

•(i) at the first testing date, cash equal to such Payee’s pro rata share (the “Year 1 Contingent Payment Obligation”) of the lesser of (a) $43,333,333.33 and (b) the difference between (1) $260,000,000 and (2) the fair market value of the Corresponding New Common Stock (the “First Anniversary Payment Amount”); provided that the Year 1 Contingent Payment Obligation will be extinguished if the fair market value of the Corresponding New Common Stock is equal to or in excess of $260,000,000 with respect to the first testing date. On January 23, 2025, the first testing date, the fair market value of the Corresponding New Common Stock was in excess of $260,000,000 and the Year 1 Contingent Payment Obligation was extinguished.

•(ii) at the second testing date, January 23, 2026, cash or New Common Stock (or a combination of cash and New Common Stock), in the Company’s sole discretion, equal to such Payee’s pro rata share (the “Year 2 Contingent Payment Obligation”) of the lesser of (a) $43,333,333.33 and (b) the difference between (1) $260,000,000 minus the First Anniversary Payment Amount and (2) the fair market value of the Corresponding New Common Stock (the “Second Anniversary Payment Amount”); provided that the Year 2 Contingent Payment Obligation will be extinguished if the fair market value of the Corresponding New Common Stock is equal to or in excess of $260,000,000 minus the First Anniversary Payment Amount, if any, with respect to the second testing date. As of March 31, 2025, the estimated fair value of the Year 2 Contingent Payment Obligation was approximately $5.5 million.

•(iii) at the third testing date, January 23, 2027, cash or New Common Stock (or a combination of cash and New Common Stock), in the Company’s sole discretion, equal to such Payee’s pro rata share (the “Year 3 Contingent Payment Obligation”) of the lesser of (a) $43,333,333.33 and (b) the difference between (1) $260,000,000 minus the sum of the First Anniversary Payment Amount and the Second Anniversary Payment Amount and (2) the fair market value of the Corresponding New Common Stock (the “Third Anniversary Payment Amount”); provided that the Year 3 Contingent Payment Obligation will be extinguished if the fair market value of the Corresponding New Common Stock is equal to or in excess of $260,000,000 minus (1) the First Anniversary Payment amount, if any and (2) the Second Anniversary Payment Amount, if any, with respect to the third testing date. As of March 31, 2025, the estimated fair value of the Year 3 Contingent Payment Obligation was approximately $11.6 million.

On the Effective Date, pursuant to the Plan of Reorganization and the confirmation order entered into on January 16, 2024 by the United States Bankruptcy Court for the Southern District of Texas, which, among other things, confirmed the Plan of Reorganization, the Company entered into a warrant agreement (the “Warrant Agreement”) providing for the issuance of 98,313,313 warrants, each exercisable for one share of New Common Stock at an exercise price of $6.81 per share (the “Tranche 1 Warrants”), and 81,927,898 warrants, each exercisable for one share of New Common Stock at an exercise price of $0.01 per share (the “Tranche 2 Warrants” and, together with the Tranche 1 Warrants, the “Warrants”). The Tranche 1 Warrants expire on January 23, 2027, and the Tranche 2 Warrants expire on January 23, 2029.

During the three months ended March 31, 2025, 0.1 million Tranche 1 Warrants were exercised, which resulted in cash receipts of $0.5 million. As of March 31, 2025, there were 97.6 million unexercised Tranche 1 Warrants.

During the three months ended March 31, 2025, 3.4 million Tranche 2 Warrants were exercised, which resulted in immaterial cash receipts. As of March 31, 2025, there were 17.6 million unexercised Tranche 2 Warrants.

During the three months ended March 31, 2025, an increase in fair value of CVRs of $12.8 million was included in Change in fair value of warrant and contingent value rights on the Company’s Consolidated Statements of Operations.

During the three months ended March 31, 2025, a decrease in fair value of Warrants of $634.3 million was included in Change in fair value of warrant and contingent value rights on the Company’s Consolidated Statements of Operations.

The following presents the levels of the fair value hierarchy for the Company's assets and liabilities measured at fair value on a recurring basis as of March 31, 2025 (in thousands):

The following presents the levels of the fair value hierarchy for the Company's assets and liabilities measured at fair value on a recurring basis as of December 31, 2024 (in thousands):

The Convertible Notes are recorded at amortized cost in the condensed consolidated balance sheets. The fair value is disclosed for informational purposes only in accordance with ASC 825-10, Financial Instruments. The following tables present the carrying amounts and estimated fair values of the Convertible Notes as of March 31, 2025 and December 31, 2024 (in thousands):

The Company’s non-financial assets, including property, plant and equipment, are measured at estimated fair value on a nonrecurring basis and are adjusted only upon impairment or when held for sale. During the three months ended March 31, 2025, the Company did not recognize any impairment or other fair value adjustments related to non-financial assets measured at fair value on a nonrecurring basis.

No non-financial assets were classified as Level 3 as of March 31, 2025 or December 31, 2024.

The Company’s financial instruments, that are not subject to recurring fair value measurements, include cash and cash equivalents (other than money market funds), restricted cash, accounts receivable, accounts payable, leases, notes payable and certain accrued expenses and other liabilities. Except for the 2029 Convertible Notes and 2031 Convertible Notes, the carrying amount of these financial instruments materially approximate their fair values.

As of March 31, 2025, the Company was contractually committed for and on behalf of our high-density colocation customer for approximately $1.25 billion of capital expenditures, primarily related to infrastructure modifications, equipment procurement, and labor associated with the conversion of a significant portion of its data centers to deliver high-density colocation services to customers. Of this amount, $906.2 million will be passed through to the Company’s customer as invoiced and $314.8 million will be funded by the customer as prepaid base license fees for the Collocation segment. These capital expenditures are expected to occur within the next 12 to 24 months.

The Company is subject to legal proceedings arising in the ordinary course of business. The Company accrues losses for a legal proceeding when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. However, the uncertainties inherent in legal proceedings make it difficult to reasonably estimate the costs and effects of resolving these matters. Accordingly, actual costs incurred may differ materially from amounts accrued and could materially adversely affect the Company’s business, cash flows, results of operations, financial condition and prospects. Unless otherwise indicated, the Company is unable to estimate reasonably possible losses in excess of any amounts accrued.

On November 14, 2022, Plaintiff Mei Pang filed a purported class-action complaint against Core Scientific, Inc., its former chief executive officer, Michael Levitt, and others in the United States District Court, Western District (Austin) of Texas asserting that the Company violated the Securities Act and Exchange Act by allegedly failing to disclose to investors that among other things the Company was vulnerable to litigation given its decision to pass power costs to its customers, that certain clients had breached their contracts, and that this impacted the Company’s profitability and ability to continue as a going concern.

The complaint seeks monetary damages. Core filed a notice of suggestion of bankruptcy stating that its petition for bankruptcy—filed on December 21, 2022—operates as a stay to the continuation of this matter. Plaintiff subsequently withdrew its claims against Core. A lead plaintiff was appointed in April 2023 and proofs of claim were filed in the Company’s Chapter 11 Cases. After the Company filed its motion to dismiss and a subsequent motion for consideration with respect to remaining claims not dismissed, all remaining claims in the complaint against the individual defendants were subsequently dismissed without prejudice in April 2024.

On December 7, 2023, the United States Bankruptcy Court for the Southern District of Texas in Houston, sustained the Company’s objection to the filed class proof of claim without prejudice to re-file a proof of claim on an individual basis by December 20, 2023; and denied plaintiff’s Motion for Class Treatment under Fed. R. Bankr. P. 7023. No individual proof of claim was filed by any of the class representatives of the purported class action by December 20, 2023, and a separately filed objection to confirmation of Debtors’ Fourth Amended Chapter 11 Plan and Disclosure Statement was overruled by the Bankruptcy Court on January 16, 2024. On January 29, 2024, plaintiff filed a notice of appeal of the order confirming the Company’s Plan of Reorganization.

On June 7, 2024, Plaintiff refiled its complaint asserting that the individual defendants violated the Securities Exchange Act by allegedly failing to disclose to investors that among other things the Company failed to disclose known trends or uncertainties that would have an impact on the Company’s financial performance. The Company’s motion to dismiss the refiled complaint is pending with the United States District Court in Austin, Texas.

On March 7, 2025, the United States District Court for the Western District (Austin) of Texas referred Plaintiff's complaint to the United States Bankruptcy Court for the Southern District of Texas in Houston for determination of the issues raised by the Company's motion to dismiss, dismissed without prejudice Company's motion to dismiss as moot and administratively closed the case. On March 19, 2025, the United States Bankruptcy Court Southern District of Texas Houston Division dismissed Plaintiff's appeal of the order confirming the Company's Plan of Reorganization as it related to the Plaintiffs as moot in light of the administrative closure of the securities case brought by the Plaintiffs in the United States District Court Western District of Texas. On April 2, 2025, the Plaintiff's filed a Motion for Reconsideration of the orders entered in each of the United States District Court for the Southern District of Texas Houston Division and the United States District Court for the Western District of Texas (Austin) and the Company filed its motions opposing each of Plaintiff’s motions for reconsideration.

On July 24, 2023, Plaintiff Brad Ihle filed a purported class action complaint against certain officers and directors of Power & Digital Infrastructure Acquisition Corp. (the former name of the current corporate entity operating our business, or “XPDI”) and XMS Sponsor LLC et al, in the Court of Chancery State of Delaware. The complaint alleges breach of fiduciary duties arising out of the merger of XPDI and the entity that conducted our business operations prior to the merger (“Legacy Core”) and the marketing and solicitation of shareholders pursuant to that merger agreement dated July 20, 2021. Certain of the defendants have notified the Company of their intention to seek defense and indemnification in this matter pursuant to Delaware law and the Company’s bylaws.

On September 30, 2022, Harlin Dean, a former executive of Blockcap, Inc. (n/k/a Core Scientific Acquired Mining, LLC) sent a demand letter to the Company, seeking approximately $9.8 million. Along with the demand letter, Mr. Dean enclosed a complaint that had been filed in the 419th Judicial District Court, Travis County, Texas, which asserted the following causes of action: (1) breach of employment agreement; (2) quantum meruit; (3) promissory estoppel; (4) conversion; (5) declaratory relief; (6) equitable relief/specific performance; (7) imposition of constructive trust; (8) accounting; and (9) attorneys’ fees and costs. According to Mr. Dean, the Company failed to honor the terms of his employment agreement upon his resignation.

Following the Company’s filing of the Chapter 11 Cases, Mr. Dean filed proofs of claim in the Chapter 11 Cases alleging the Company breached Mr. Dean’s employment agreement and various equity award agreements. Mr. Dean seeks a total recovery of approximately $8 million. The Debtors filed an objection to Mr. Dean’s proofs of claim on September 19, 2023. Mr. Dean filed a reply in support of his claim and moved for summary judgment on October 19. As a general unsecured creditor under the Plan of Reorganization, any amount determined to be owed to plaintiff will be paid in common shares of the Company as provided in the Plan of Reorganization.

On January 24, 2025, the Company and Mr. Dean resolved Mr. Dean's proofs of claim and filed with the Bankruptcy Court a Stipulation and Agreed Order providing for an Allowed General Unsecured Claim, payable pursuant to the Plan of Reorganization in 561,866 shares of New Common Stock issued by the Company to Mr. Dean from the New Common Stock reserved for disputed claims as described in Note 12 — Stockholders’ Deficit to our consolidated financial statements in Item 8 of Part II of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, and do not represent a new issuance of shares.

GEM Mining 1, LLC, GEM Mining 2, LLC, GEM Mining 2B, LLC, and GEM Mining 4, LLC (together “GEM”) have filed proofs of claim in the Chapter 11 Cases alleging the Company breached its hosting agreements with GEM and are seeking to recover approximately $4.1 million. The Debtors filed an initial objection to GEM’s proofs of claim on May 4, 2023, and filed a supplemental objection on May 6, 2023. GEM filed a response in opposition to Debtors’ objections on September 6, 2023. Additionally, GEM 1 and GEM 4 filed proofs of claim in the Chapter 11 Case asserting approximately $8 million in rejection damages. The Debtors are currently preparing an objection to these claims along with a reply to GEM’s response to the Debtors’ earlier filed objections. As a general unsecured creditor under the Plan of Reorganization, any amount determined to be owed to plaintiff will be paid in common shares of the Company as provided in the Plan of Reorganization.

On January 28, 2025, the Company resolved GEM’s proofs of claim and filed with the Bankruptcy Court a Stipulation and Agreed Order providing for an Allowed General Unsecured Claim, payable pursuant to the Plan of Reorganization in 817,775 shares of New Common Stock issued by the Company to GEM from the New Common Stock reserved for disputed claims as described in Note 12 — Stockholders’ Deficit to our consolidated financial statements in Item 8 of Part II of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, and do not represent a new issuance of shares.

As of March 31, 2025 and December 31, 2024, there were no other material loss contingency accruals for legal matters.

Leases—See Note 4 — Leases for additional information.

Current income tax expense represents the amount expected to be reported on the Company’s income tax returns, and deferred tax expense or benefit represents the change in net deferred tax assets and liabilities. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities as measured by the enacted tax rates that will be in effect when these differences reverse. Valuation allowances are recorded as appropriate to reduce deferred tax assets to the amount considered likely to be realized.

The income tax expense and effective income tax rate for the three months ended March 31, 2025 and 2024 were as follows:

For the three months ended March 31, 2025, the Company recorded $0.2 million of income tax expense which consisted of discrete state taxes. The Company's estimated annual effective income tax rate without consideration of discrete items is 0.0%, compared to the U.S. federal statutory rate of 21.0% due to projected changes in the valuation allowance 2.6%, state taxes 0.0%, non-deductible loss on warrant and contingent liabilities (24.4)% and other items 0.8%. The Company has a full valuation allowance on its net deferred tax asset as the evidence indicates that it is not more likely than not expected to realize such asset.

For the three months ended March 31, 2024, the Company recorded $0.2 million of income tax expense which consisted of discrete state taxes. The Company's estimated annual effective income tax rate without consideration of discrete items was 0.0%, compared to the U.S. federal statutory rate of 21.0% due to projected changes in the valuation allowance (16.7)%, state taxes 0.1%, fair market value adjustments to the warrant liability (6.0)% and other items 1.6%. The Company has a full valuation allowance on its net deferred tax asset as the evidence indicates that it is not more likely than not expected to realize such asset.

The Company adopted an equity-based management incentive plan on April 26, 2024 (the “Incentive Plan”). Under the Incentive Plan, certain executives have been granted market condition restricted stock units (“MSUs”) which are subject to the achievement of market-based share price goals and the executives’ continued service until the relevant vesting date. The number of shares which vest as of the end of each measurement period on each vesting date are conditioned on the highest 20-day volume weighted average price of the Company's share price achieved during the tranche’s measurement vesting period since grant. The MSU vesting schedule is proportionate over a three-year service period where such proportions are identified as tranches with separate service conditions and measurement periods for the market conditions. If certain market-based share price goals are not met during certain tranche measurement periods, the ability to satisfy such goals apply in subsequent measurement periods and permit vesting if such market conditions are then met (and the service conditions are then satisfied). The following table presents additional information relating to each MSU award:

A summary of RSU and MSU activity for the three months ended March 31, 2025, is as follows (amounts in thousands, except per share amounts):

As of March 31, 2025, the Company had approximately $104.5 million of unrecognized stock-based compensation expense related to RSUs, which is expected to be recognized over a weighted average time period of 2.3 years, and an additional $6.0 million of unrecognized stock-based compensation expense related to MSUs for which some or all of the requisite service has been provided under the service conditions but had market conditions that had not yet been achieved.

The unrecognized stock-based compensation expense related to MSUs is expected to be recognized over a weighted average time period of 1.7 years.

Stock-based compensation expense for the three months ended March 31, 2025 and 2024, is included in the Company’s Consolidated Statements of Operations as follows (in thousands):

1 The three months ended March 31, 2024, includes the reversal of stock-based compensation expense due to $6.1 million in forfeitures incurred during the period.

2 Represents the amounts of stock-based compensation capitalized to property, plant, and equipment.

Basic earnings per share (“EPS”) is measured as the income or loss available to common stockholders divided by the weighted average common shares outstanding for the period. Upon exercise of the Tranche 2 Warrants, shares are issuable for little or no consideration, sometimes referred to as “penny warrants”. Under ASC 260-10-45-13, those issuable shares are considered outstanding in the computation of basic EPS whether or not related warrants have been exercised. At March 31, 2025, approximately 17.6 million shares of common stock remain issuable upon the exercise of the Tranche 2 Warrants and are included in the number of outstanding shares used for the computation of basic EPS for the three months then ended. Additionally, the basic EPS numerator includes an adjustment to eliminate the changes in fair value that have been recognized in Net income.

Diluted EPS includes and presents the dilutive effect on EPS from the potential issuance of shares from unvested restricted stock units, conversion of convertible securities, or the exercise of options and/or warrants. The potentially dilutive effect of convertible securities are calculated using the if-converted method. The potentially dilutive effect of options or warrants are computed using the treasury stock method. When potentially dilutive securities have an anti-dilutive effect (i.e., increase income per share or decrease loss per share), they are excluded from the diluted EPS calculation.

The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted net income per share (in thousands, except per share amounts):

Potentially dilutive securities include securities excluded from the calculation of diluted EPS because to do so would be anti-dilutive. Shares which may be issued from potentially dilutive securities are as follows (in thousands):

The Company’s operating segments are aggregated into reportable segments only if they exhibit similar economic characteristics and have similar business activities.

The Company now has three operating segments: “Digital Asset Self-Mining”, consisting of performing digital asset mining for its own account; “Digital Asset Hosted Mining”, consisting of providing hosting services to third-parties for digital asset mining; and “Colocation”, consisting of providing high-density colocation services to third parties for GPU-based HPC operations. The Company’s Colocation operations met the criteria to be considered a new segment during the second quarter of 2024. During fiscal year 2024, our “Colocation” segment was referred to as “HPC Hosting.” The Digital Asset Self-Mining segment generates revenue from operating owned digital infrastructure and computer equipment as part of a pool of users that process transactions conducted on one or more blockchain networks. In exchange for these services, the Company receives digital assets. The Digital Asset Hosted Mining business generates revenue through the sale of consumption-based contracts for its digital asset hosted mining services which are recurring in nature. The Colocation business generates revenue through licensing agreements and orders with licensees that include fixed and variable payments on a recurring basis.

The Company’s Chief Executive Officer is the chief operating decision maker (“CODM”). The CODM uses gross profit to evaluate performance and allocate resources. Gross profit is used to evaluate actual results against expectations, which are based on comparable prior results, current budget, and current forecast. Gross profit is also used in deciding how profits and cash flows will be reinvested or otherwise deployed. The CODM does not evaluate performance or allocate resources based on segment asset or liability information; accordingly, the Company has not presented a measure of assets by segment. The segments’ accounting policies are the same as those described in the summary of significant accounting policies. The Company excludes certain operating expenses and other expenses from the allocations to operating segments.

The following table presents revenue and gross profit by reportable segment for the periods presented (in thousands):