Hut 8 Corp. (NASDAQ: HUT) posts Q1 2026 loss despite strong revenue jump
Hut 8 Corp. reported sharply higher Q1 2026 revenue but a much larger loss driven by digital asset mark-to-market impacts. Revenue rose to $71.0 million from $21.8 million, mainly from Compute services. However, losses on digital assets were $295.7 million, contributing to an operating loss of $370.4 million and a net loss attributable to Hut 8 of $219.8 million, or $(1.98) per share.
Hut 8 held substantial digital assets, including Bitcoin with a carrying value of $1.11 billion (16,331 Bitcoin) and Investment Tokens of $9.9 million. The company ended the quarter with $160.0 million in cash and used $27.2 million in operating cash flow, while raising equity through at-the-market offerings at both the parent and American Bitcoin Corp.
Key strategic actions included the sale of the Far North joint venture, generating a gain of $33.6 million, continued large-scale miner purchases funded via Bitcoin pledges to Bitmain, and use of a $200.0 million Coinbase credit facility and a $159.3 million convertible note to support growth of its energy and digital infrastructure platform.
Positive
- None.
Negative
- None.
Insights
Hut 8 posts strong revenue growth but results are dominated by crypto mark-to-market swings and rising leverage.
Hut 8 grew Q1 2026 revenue to $71.0M from $21.8M, mainly from Compute, showing rapid scaling of its platform. But a $295.7M loss on digital assets and heavy depreciation pushed operating loss to $370.4M and net loss attributable to Hut 8 to $219.8M.
The balance sheet is highly tied to Bitcoin, with digital assets of $1.12B and 16,331 Bitcoin held or pledged. Funding includes a $200.0M Coinbase facility and a $159.3M convertible note, alongside equity raises. Gains on derivatives of $40.8M and a $33.6M gain on the Far North JV sale partially offset volatility.
Net cash used in operating activities was $27.2M, while investing used $51.2M and financing provided $191.0M, including at-the-market equity of over $230M across Hut 8 and American Bitcoin Corp. Future filings will clarify how new miners, power assets, and derivative structures affect revenue stability and sensitivity to Bitcoin prices.
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
| |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
| |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number
(Exact name of registrant as specified in its charter)
| |
(State or other jurisdiction of | (I.R.S. Employer Identification No.) |
| |
| |
(Address of principal executive offices) | (Zip Code) |
(
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| | |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Toronto Stock Exchange |
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.
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).
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.
| | | |
☒ | Accelerated filer | ☐ | |
Non-accelerated filer | ☐ | Smaller reporting company | |
| | Emerging growth 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 Act). Yes
As of May 4, 2026, the registrant had
Table of Contents
TABLE OF CONTENTS
| ||
| | Page |
| | |
Cautionary Statement Regarding Forward-Looking Statements | | 1 |
| | |
PART I – FINANCIAL INFORMATION | | 2 |
Item 1. Financial Statements | | 2 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | | 41 |
Item 3. Quantitative and Qualitative Disclosures About Market Risk | | 56 |
Item 4. Controls and Procedures | | 57 |
| | |
PART II – OTHER INFORMATION | | 58 |
Item 1. Legal Proceedings | | 58 |
Item 1A. Risk Factors | | 58 |
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | | 58 |
Item 3. Defaults Upon Senior Securities | | 58 |
Item 4. Mine Safety Disclosures | | 58 |
Item 5. Other Information | | 58 |
Item 6. Exhibits | | 60 |
| | |
Signatures | | 61 |
Table of Contents
Cautionary Statement Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q (this “Quarterly Report”) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties, as well as assumptions, that, if proven incorrect or do not materialize, could cause our results to differ materially from those expressed or implied by these forward-looking statements. Forward-looking statements generally are identified by the words “intend,” “plan,” “may,” “should,” “will,” “project,” “estimate,” “anticipate,” “believe,” “expect,” “continue,” “potential,” “opportunity,” and similar expressions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. Such statements are based on management’s current expectations and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. There can be no assurance that actual results or business conditions will not differ materially from those projected or suggested in such forward-looking statements as a result of various factors, including those described in Part I, Item 1A, “Risk Factors” in the Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (the “Annual Report”) and in Part II, Item 1A, “Risk Factors” of this Quarterly Report. Except as required by law, we do not assume any obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.
1
Table of Contents
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
Hut 8 Corp. and Subsidiaries
Condensed Consolidated Balance Sheets
(in USD thousands, except share and per share data)
| | | | | | |
| | March 31, | | December 31, | ||
| | 2026 | | 2025 | ||
| | (Unaudited) | | (Audited) | ||
Assets | | | | | | |
Current assets |
| | |
| | |
Cash | | $ | | | $ | |
Restricted cash | |
| | |
| |
Accounts receivable, net | | | | | | |
Deposits and prepaid expenses | |
| | |
| |
Derivative assets | |
| — | |
| |
Digital assets – pledged for miner purchase | | | — | | | |
Digital assets receivable | | | | | | |
Assets held for sale | | | — | | | |
Total current assets | |
| | |
| |
| | | | | | |
Non-current assets | |
| | |
| |
Derivative assets | | | | | | |
Digital assets – held in custody | |
| | |
| |
Digital assets – pledged for miner purchase | | | | | | |
Digital assets – pledged as collateral | | | | | | |
Property and equipment, net | | | | | | |
Operating lease right-of-use asset | | | | | | |
Deposits and prepaid expenses | | | | | | |
Investment in unconsolidated joint venture | |
| | |
| |
Other investments | | | | | | |
Intangible assets, net | | | | | | |
Goodwill | | | | | | |
Total non-current assets | |
| | |
| |
Total assets | | $ | | | $ | |
| | | | | | |
Liabilities and stockholders’ equity | |
| | |
| |
Current liabilities | |
| | |
| |
Accounts payable and accrued expenses | | $ | | | $ | |
Miner purchase liability, current portion | | | — | | | |
Deferred revenue | |
| | |
| |
Operating lease liability, current portion | | | | | | |
Loans, notes payable, and other financial liabilities, current portion | |
| | |
| |
Income taxes payable | | | | | | |
Liabilities held for sale | | | — | | | |
Total current liabilities | | | | | | |
| | | | | | |
Non-current liabilities | |
| | |
| |
Miner purchase liability, less current portion | | | | | | |
Operating lease liability, less current portion | |
| | |
| |
Loans, notes payable, and other financial liabilities, less current portion | | | | | | |
Deferred tax liabilities | |
| | |
| |
Warrant liability | | | | | | |
Total non-current liabilities | | | | | | |
Total liabilities | | | | | | |
| | | | | | |
Commitments and contingencies | |
| | |
| |
| | | | | | |
Equity | |
| | |
| |
Preferred stock, $ | |
| — | |
| — |
Common stock, $ | |
| | |
| |
Additional paid-in capital | |
| | |
| |
(Accumulated deficit) retained earnings | |
| ( | |
| |
Accumulated other comprehensive loss | | | ( | | | ( |
Total Hut 8 Corp. stockholders’ equity | |
| | |
| |
Non-controlling interests | | | | | | |
Total equity | | | | | | |
Total liabilities and equity | | $ | | | $ | |
See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.
2
Table of Contents
Hut 8 Corp. and Subsidiaries
Condensed Consolidated Statements of Operations and Comprehensive Loss
(Unaudited, in USD thousands, except share and per share data)
| | | | | | |
| | Three Months Ended | ||||
| | March 31, | ||||
| | 2026 | | 2025 | ||
Revenue: | | | | | | |
Power | | $ | | | $ | |
Digital Infrastructure | |
| | |
| |
Compute | | | | | | |
Total revenue | |
| | |
| |
| | | | | | |
Cost of revenue (exclusive of depreciation and amortization shown below): | |
| | |
| |
Cost of revenue – Power | |
| | |
| |
Cost of revenue – Digital Infrastructure | |
| | |
| |
Cost of revenue – Compute | |
| | |
| |
Total cost of revenue | | | | | | |
| | | | | | |
Operating expenses: | |
| | | | |
Depreciation and amortization | |
| | |
| |
General and administrative expenses | |
| | |
| |
Losses on digital assets | | | | | | |
Loss on sale of property and equipment | |
| — | |
| |
Total operating expenses | |
| | |
| |
Operating loss | |
| ( | |
| ( |
| | | | | | |
Other (expense) income: | |
| | |
| |
Foreign exchange (loss) gain | | | ( | | | |
Interest expense | | | ( | | | ( |
Asset contribution costs | | | — | | | ( |
Gain on derivatives | | | | | | |
(Loss) gain on other financial liability | | | ( | | | |
Gain on warrant liability | | | | | | — |
Gain on sale of Far North JV, net of transaction costs | | | | | | — |
Equity in earnings of unconsolidated joint venture | | | | | | |
Total other income (expense) | |
| | |
| ( |
| | | | | | |
Net loss before income taxes | |
| ( | |
| ( |
| | | | | | |
Income tax benefit | |
| | |
| |
| | | | | | |
Net loss | | | ( | | | ( |
| | | | | | |
Less: Net loss attributable to non-controlling interests | | | | | | |
Net loss attributable to Hut 8 Corp. | | $ | ( | | $ | ( |
| | | | | | |
Net loss per share of common stock: | | | | | | |
Basic attributable to Hut 8 Corp. | | $ | ( | | $ | ( |
Diluted attributable to Hut 8 Corp. | | $ | ( | | $ | ( |
| | | | | | |
Weighted average number of shares of common stock outstanding: | | | | | | |
Basic | | | | | | |
Diluted | | | | | | |
| | | | | | |
Net loss | | $ | ( | | $ | ( |
Other comprehensive (loss) income: | | | | | | |
Foreign currency translation adjustments | | | ( | | | |
Total comprehensive loss | | | ( | | | ( |
Less: Comprehensive loss attributable to non-controlling interests | | | | | | |
Comprehensive loss attributable to Hut 8 Corp. | | $ | ( | | $ | ( |
See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.
3
Table of Contents
Hut 8 Corp. and Subsidiaries
Condensed Consolidated Statements of Equity
(Unaudited, in USD thousands, except share and per share data)
Three Months Ended March 31, 2025
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | Additional | | | | | | | Accumulated Other | | | ||||
| | Common Stock | | Paid-in | | Retained | | Non-controlling | | Comprehensive | | Total | ||||||||
| | Shares | | Amount | | Capital | | Earnings | | Interests | | (Loss) Income | | Equity | ||||||
Balance, December 31, 2024 | | | | $ | | | $ | | | $ | | | $ | | | $ | ( | | $ | |
Issuance of common stock – at-the-market offering, net of issuance costs | | | | | | | | | | | — | | | — | | | — | | | |
Issuance of common stock – stock option exercises | | | | | | | | | | | — | | | — | | | — | | | |
Issuance of common stock – restricted stock unit settlements | | | | | | | | ( | | | — | | | — | | | — | | | — |
Stock-based compensation | | — | | | — | | | | | | — | | | — | | | — | | | |
Issuance of warrants by subsidiary |
| — | | | — | | | | | | — | | | — | | | — | | | |
Non-controlling interest in American Bitcoin Corp. | | — | | | — | | | ( | | | — | | | | | | — | | | |
Foreign currency translation adjustments | | — | | | — | | | — | | | — | | | ( | | | | | | |
Net loss attributable to Hut 8 Corp. | | — | | | — | | | — | | | ( | | | — | | | — | | | ( |
Net loss attributable to non-controlling interest | | — | | | — | | | — | | | — | | | ( | | | — | | | ( |
Balance, March 31, 2025 | | | | $ | | | $ | | | $ | | | $ | | | $ | ( | | $ | |
Three Months Ended March 31, 2026
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | Additional | | Retained | | | | | Accumulated Other | | | ||||
| | | Common Stock | | Paid-in | | Earnings | | Non-controlling | | Comprehensive | | Total | ||||||||
| | | Shares | | Amount | | Capital | | (Accumulated Deficit) | | Interests | | (Loss) Income | | Equity | ||||||
Balance, December 31, 2025 | |
| | | $ | |
| $ | | | $ | | | $ | | | $ | ( | | $ | |
Issuance of Class A common stock by American Bitcoin Corp., net of issuance costs | |
| — | |
| — |
|
| | |
| — | |
| | |
| — | |
| |
Deferred income tax on American Bitcoin Corp. – equity transactions | | | — | | | — | | | ( | | | — | | | — | | | — | | | ( |
Issuance of common stock – at-the-market offering, net of issuance costs | | | | | | | | | | | | — | | | — | | | — | | | |
Issuance of common stock – stock option exercises | | | | | | | | | | | | — | | | — | | | — | | | |
Issuance of common stock – restricted stock unit settlements | | | | | | | | | ( | | | — | | | — | | | — | | | — |
Stock-based compensation | | | — | | | — | | | | | | — | | | — | | | — | | | |
Foreign currency translation adjustments | | | — | | | — | | | — | | | — | | | | | | ( | | | ( |
Exercise of warrants issued by subsidiary | | | — | | | — | | | ( | | | — | | | | | | — | | | — |
Sale of Far North JV and non-controlling interest acquisition prior to sale | | | — | | | — | | | ( | | | — | | | ( | | | | | | ( |
Net loss attributable to Hut 8 Corp. | | | — | | | — | | | — | | | ( | | | — | | | — | | | ( |
Net loss attributable to non-controlling interests | | | — | | | — | | | — | | | — | | | ( | | | — | | | ( |
Balance, March 31, 2026 | | | | | $ | |
| $ | | | $ | ( | | $ | | | $ | ( | | $ | |
See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.
4
Table of Contents
Hut 8 Corp. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited, in USD thousands)
| | | | | | |
| | Three Months Ended | ||||
| | March 31, | ||||
| | 2026 | | 2025 | ||
Operating activities | | | | | | |
Net loss | | $ | ( | | $ | ( |
Adjustments to reconcile net loss to net cash used in operating activities: | | | | | | |
Depreciation and amortization | | | | | | |
Amortization of operating right-of-use assets | | | | | | |
Non-cash lease expense | | | | | | |
Stock-based compensation | | | | | | |
Equity in earnings of unconsolidated joint venture | | | ( | | | ( |
Distributions of earnings from unconsolidated joint venture | | | | | | — |
ASIC compute revenue | | | ( | | | ( |
Losses on digital assets | | | | | | |
Deferred tax assets and liabilities | | | ( | | | ( |
Foreign exchange loss (gain) | | | | | | ( |
Amortization of debt discount | | | | | | |
Loss on sale of property and equipment | | | — | | | |
Gain on derivatives | | | ( | | | ( |
Loss (gain) on other financial liability | | | | | | ( |
Gain on warrant liability | | | ( | | | — |
Gain on sale of Far North JV, net of transaction costs | | | ( | | | — |
Paid-in-kind interest expense | | | | | | |
Asset contribution costs | | | — | | | |
Changes in assets and liabilities: | | | | | | |
Accounts receivable, net | | | | | | |
Deposits and prepaid expenses | | | | | | |
Income taxes receivable | | | | | | |
Income taxes payable | | | | | | — |
Accounts payable and accrued expenses | | | ( | | | ( |
Deferred revenue | | | | | | ( |
Operating lease liabilities | | | ( | | | ( |
Net cash used in operating activities | | | ( | | | ( |
| | | | | | |
Investing activities | | | | | | |
Proceeds from sale of digital assets | | | — | | | |
Bitcoin purchased | | | ( | | | — |
Deposits for future sites | | | ( | | | — |
Purchases of property and equipment | | | ( | | | ( |
Proceeds from sale of property and equipment | | | — | | | |
Net proceeds from sale of Far North JV, net of cash divested | | | | | | — |
Additions to intangible assets | | | — | | | ( |
Net cash used in investing activities | | | ( | | | ( |
| | | | | | |
Financing activities | | | | | | |
Repayments of loans payable | | | ( | | | — |
Principal payments on finance lease | | | ( | | | ( |
Settlement of finance lease obligation in connection with sale of Far North JV | | | ( | | | — |
Cash paid to buyout non-controlling interest of Far North JV | | | ( | | | — |
Proceeds from the issuance of common stock – stock option exercises | | | | | | |
Proceeds from the issuance of common stock – at-the-market offering, net of issuance costs | | | | | | |
Proceeds from the issuance of American Bitcoin Corp. Class A common stock – at-the-market offering, net of issuance costs | | | | | | — |
Proceeds from other financial liability | | | — | | | |
Net cash provided by financing activities | | | | | | |
| | | | | | |
Effect of exchange rate changes on cash, and restricted cash | | | ( | | | ( |
Net increase in cash | | | | | | |
Cash, beginning of period | | | | | | |
Cash, and restricted cash, end of period | | $ | | | $ | |
See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.
5
Table of Contents
Hut 8 Corp. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited, in USD thousands)
| | | | | | |
| | Three Months Ended | ||||
| | March 31, | ||||
| | 2026 | | 2025 | ||
Supplemental cash flow information: | | | | | | |
Cash paid for interest | | $ | | | $ | |
Cash paid for income taxes | | $ | | | $ | — |
| | | | | | |
Non-cash transactions | | | | | | |
Reclassification of deposits and prepaid expenses to property and equipment | | $ | | | $ | — |
Right-of-use assets obtained in exchange for operating lease liabilities | | $ | — | | $ | |
Compute revenue in accounts receivable, net | | $ | | | $ | — |
Property and equipment acquired under miner purchase liability | | $ | | | $ | |
Property and equipment acquired under accounts payable and accrued expenses | | $ | | | $ | — |
Property and equipment acquired through exchange of right-of-use asset – Far North JV | | $ | | | $ | — |
Bitcoin redemption and put options acquired under miner purchase liability | | $ | | | $ | — |
Net income (loss) attributable to non-controlling interests | | $ | ( | | $ | ( |
Issuance of common stock – restricted stock unit settlements | | $ | | | $ | |
Issuance of warrants by subsidiary as finance lease payments | | $ | — | | $ | |
Stock-based compensation capitalized in property and equipment, net | | $ | | | $ | — |
Subsidiary warrants exercised | | $ | | | $ | — |
| | | | | | |
Reconciliation of cash, and restricted cash to the Consolidated Balance Sheets: | | | | | | |
Cash | | $ | | | $ | |
Restricted cash | | | | | | |
Total cash, and restricted cash | | $ | | | $ | |
See accompanying Notes to Unaudited Condensed Consolidated Financial Statements
6
Table of Contents
Note 1. Organization
Nature of operations and corporate information
Hut 8 Corp. (together with its consolidated subsidiaries, the “Company” or “Hut 8”) is an energy infrastructure platform integrating power, digital infrastructure, and compute at scale to fuel next-generation, energy-intensive technologies such as AI, high-performance computing, and ASIC compute. The Company develops, commercializes, and operates industrial-scale energy and data center infrastructure through a power-first, innovation-driven approach. The Company was incorporated in Delaware in January 2023.
Note 2. Basis of presentation, summary of significant accounting policies and recent accounting pronouncements
Basis of presentation
The accompanying Unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial reporting. While these statements reflect all normal recurring adjustments which are, in the opinion of management, necessary for fair presentation of the results of the interim period, they do not include all the information and footnotes required by GAAP for complete financial statements. As such, the information included in this Quarterly Report should be read in conjunction with the Company’s Consolidated Financial Statements for the year ended December 31, 2025, and related notes thereto, included in the Annual Report.
Interim results are not necessarily indicative of results for a full year.
The U.S. Dollar is the functional and presentation currency of the Company.
Significant accounting policies followed by the Company in the preparation of the accompanying Unaudited Condensed Consolidated Financial Statements are summarized below.
Principles of consolidation
These Unaudited Condensed Consolidated Financial Statements of the Company include the accounts of the Company and its controlled subsidiaries. Consolidated subsidiaries’ results are included from the date the subsidiary was formed or acquired. Intercompany balances and transactions have been eliminated in consolidation.
Unconsolidated investments in which the Company does not have a controlling interest but does have significant influence are accounted for as equity method investments, with earnings recorded in other (expense) income. These investments are included in long-term assets and the Company’s proportionate share of income or loss is included in other (expense) income.
Recent accounting pronouncements
The Company continually assesses any new accounting pronouncements to determine their applicability. When it is determined that a new accounting pronouncement affects the Company’s financial reporting, the Company undertakes a study to determine the consequences of the change to its Unaudited Condensed Consolidated Financial Statements and ensures that there are proper controls in place to ascertain that the Company’s Unaudited Condensed Consolidated Financial Statements properly reflect the change.
7
Table of Contents
In December 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025-12, Codification Improvements (“ASU 2025-12”). Among other amendments to various Topics within the FASB Accounting Standards Codification, ASU 2025-12 clarifies dilutive earnings per share treatment for certain contracts that may be settled in stock or cash when a company has a loss from continuing operations. This update is effective for interim and annual reporting periods beginning after December 15, 2026, with early adoption permitted. The Company is currently assessing the impact of adopting this standard. For earnings per share amendments, adoption of ASU 2025-12 requires retrospective application to each prior reporting period presented.
In September 2025, FASB issued ASU 2025-07, Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606) (“ASU 2025-07”). With respect to Topic 815, ASU 2025-07 refines the scope of Topic 815 to clarify which contracts are subject to derivative accounting. This update is effective for interim and annual reporting periods beginning after December 15, 2026, with early adoption permitted. The Company is currently assessing the impact of adopting this standard. ASU 2025-07 may be applied using a prospective or modified retrospective transition approach.
In September 2025, FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”). ASU 2025-06 modernizes the accounting for internal-use software to current development practices, clarifies when to begin capitalizing costs, and enhances disclosure requirements. This update is effective for interim and annual periods beginning after December 15, 2027, with early adoption permitted. The Company is currently assessing the impact of adopting the standard. ASU 2025-06 may be applied using a prospective transition, modified transition, or retrospective transition approach.
In January 2025, FASB issued ASU 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date (“ASU 2025-01”). ASU 2025-01 was issued to clarify the effective date for ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”). ASU 2024-03 requires public business entities to provide additional disclosures in the notes to financial statements, disaggregating specific expense categories within relevant income statement captions. The prescribed categories include purchases of inventory, employee compensation, depreciation, intangible asset amortization, and depreciation, depletion, and amortization related to oil-and-gas producing activities. ASU 2024-03 is effective for the first annual reporting period beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently assessing the impact of adopting the standard. ASU 2024-03 may be applied prospectively or retrospectively.
Use of estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions about future events that affect the amounts reported in the financial statements and accompanying notes. Future events and their effects cannot be determined with absolute certainty. Therefore, the determination of estimates requires the exercise of judgment. Actual results inevitably will differ from those estimates, and such differences may be material to the financial statements. The most significant accounting estimates inherent in the preparation of the Company’s Unaudited Condensed Consolidated Financial Statements include estimates associated with revenue recognition, determining the useful lives and recoverability of long-lived assets, impairment analysis of finite-lived intangibles, goodwill and digital assets, stock-based compensation, and current and deferred income tax assets (including the associated valuation allowance) and liabilities.
8
Table of Contents
Accounts receivable
Accounts receivable consists of amounts due from the Company’s Power, Digital Infrastructure, and Compute customers. The Company records accounts receivable at the invoiced amount less an allowance for any potentially uncollectable accounts under the current expected credit loss (“CECL”) impairment model and presents the net amount of the financial instrument expected to be collected. The CECL impairment model requires an estimate of expected credit losses, measured over the contractual life of an instrument, that considers forecasts of future economic conditions in addition to information about past events and current conditions. Based on this model, the Company considers many factors, including the age of the balance, collection history, and current economic trends. Bad debts are written off after all collection efforts have ceased.
Allowances for credit losses are recorded as a direct reduction from an asset’s amortized cost basis. Credit losses are recorded in General and administrative expenses in the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss.
Based on the Company’s current and historical collection experience, management recorded allowances for doubtful accounts of $
Fair value measurement
The Company’s financial assets and liabilities are accounted for in accordance with FASB ASC Topic 820, Fair Value Measurements and Disclosures (“ASC 820”) which defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy requires an entity to maximize the use of observable inputs when measuring fair value and classifies those inputs into three levels:
Level 1— Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2— Observable, market-based inputs, other than quoted prices included in Level 1, for the assets or liabilities either directly or indirectly.
Level 3—Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
Observable inputs are based on market data obtained from independent sources, while unobservable inputs are based on the Company’s market assumptions. Unobservable inputs require significant management judgment or estimation. In some cases, the inputs used to measure an asset or a liability may fall into different levels of the fair value hierarchy. In those instances, the fair value measurement is required to be classified using the lowest level of input that is significant to the fair value measurement. Such determination requires significant management judgment.
Assets and liabilities measured at fair value on a recurring basis
The following table presents information about the Company’s assets and liabilities measured at fair value on a recurring basis and the Company’s estimated level within the fair value hierarchy of those assets and liabilities as of March 31, 2026 and December 31, 2025:
| | | | | | | | | | | | |
| | Fair value measured at March 31, 2026 | ||||||||||
| | Total carrying | | | | | Significant other | | Significant | |||
| | value at | | Quoted prices in | | observable | | unobservable | ||||
| | March 31, | | active markets | | inputs | | inputs | ||||
(in USD thousands) | | 2026 | | (Level 1) | | (Level 2) | | (Level 3) | ||||
Digital assets | | $ | | | $ | | | $ | — | | $ | — |
Bitcoin redemption and put options | | | | | | — | | | | | | — |
Other financial liability | | | ( | | | — | | | — | | | ( |
Warrant liability | | | ( | | | — | | | — | | | ( |
9
Table of Contents
| | | | | | | | | | | | |
| | Fair value measured at December 31, 2025 | ||||||||||
| | Total carrying | | | | | Significant other | | Significant | |||
| | value at | | Quoted prices in | | observable | | unobservable | ||||
| | December 31, | | active markets | | inputs | | inputs | ||||
(in USD thousands) | | 2025 | | (Level 1) | | (Level 2) | | (Level 3) | ||||
Digital assets | | $ | | | $ | | | $ | — | | $ | — |
Bitcoin redemption and put options | | | | | | — | | | | | | — |
Other financial liability | | | ( | | | — | | | — | | | ( |
Warrant liability | | | | | | — | | | — | | | |
In determining the fair value of its digital assets, the Company uses quoted prices as determined by the Company’s principal market, which is the Coinbase exchange. As such, the Company’s digital assets were determined to be Level 1 assets.
The Company estimates the fair value of its Bitcoin redemption and put options using the Black model, which includes several inputs and assumptions, including the forward price of the underlying asset (Bitcoin), the underlying asset’s implied volatility, the risk-free interest rate, and the expected term of the redemption option. As of March 31, 2026, these options were held only by American Bitcoin Corp. (“American Bitcoin”).
See Derivatives below for a description of certain of the Company’s derivative instrument accounting policies.
In estimating the fair value of its call options sold on Bitcoin that it owns (the “covered call options”), the Company uses the Black model, which includes several inputs and assumptions, including the forward price of the underlying asset (Bitcoin), the underlying asset’s implied volatility, the risk-free interest rate, and the expected term of the options. The expected term of the options is the contractual term of the options given the options can only be exercised on their expiry date (i.e., European-style options). The Company determined that the covered call options are Level 2 liabilities given all inputs are observable, but the options themselves are not traded in an active market.
The Company estimated the fair value of its other financial liability using the Probability-Weighted Expected Return Method (“PWERM”), which includes significant unobservable inputs, including the instrument’s estimated credit spread, and as a result, the Company determined that the other financial liability is a Level 3 liability. For quantitative disclosure on the inputs used to estimate the fair value of the Company’s other financial liability, see Note 9. Loans, notes payable, and other financial liabilities. See Other financial liability for a description of the Company’s other financial liability accounting policy.
The Company estimated the fair value of its warrant liability using the Black-Scholes pricing model, which includes significant unobservable inputs, including the expected term of the warrants, and as a result, the Company determined that the warrant liability is a Level 3 liability. For quantitative disclosure on the inputs used to estimate the fair value of the Company’s warrant liability, see Note 10. Derivatives. See Warrant liability for a description of the Company’s warrant liability accounting policy.
The Company estimates the fair value of its separated embedded derivative from the convertible note, namely from the Company’s Coatue Note (as defined below), using the partial differential equation model (“PDE Model”), which includes several inputs and assumptions including the Company’s common stock price at the time of valuation, the implied volatility of the Company’s common stock matching the moneyness of the conversion option, the risk-free interest rate curve, and the instrument’s estimated credit spread. In addition, management’s assumption of the probability of occurrence of the separated embedded derivative from the convertible note’s trigger event is a significant unobservable input. For quantitative disclosure on the inputs used to estimate the fair value of the Company’s separated embedded derivative from the convertible note, see Note 10. Derivatives. The Company determined that the separated embedded derivative from the convertible note is a Level 3 liability given significant unobservable inputs are included in its valuation.
10
Table of Contents
Assets and liabilities measured at fair value on a non-recurring basis
In addition to assets and liabilities that are measured at fair value on a recurring basis, the Company also measures certain assets and liabilities at fair value on a non-recurring basis. The Company’s non-financial assets, including goodwill, intangible assets, operating lease right-of-use assets, assets held for sale, and property and equipment, are measured at fair value when there is an indication of impairment and the carrying amount exceeds the asset’s projected undiscounted cash flows. These assets are recorded at fair value only when an impairment charge is recognized. The Company had
The carrying amounts of the Company’s financial assets and liabilities, such as cash, accounts receivable, accounts payable, and accrued expenses, approximate fair value due to the short-term nature of these instruments. The carrying value of loans and notes payable and other long-term liabilities approximate fair value, except for the Company’s convertible note, as the related interest rates approximate rates currently available to the Company. See Derivatives and Convertible instruments below for a description of the Company’s derivative instrument accounting policy and convertible instrument accounting policy, respectively, and Note 9. Loans, notes payable, and other financial liabilities for disclosure on the Company’s convertible note.
Goodwill
Goodwill represents the cost of a business acquisition in excess of the fair value of the net assets acquired. Goodwill is not amortized and is reviewed at least annually for possible impairment. A qualitative assessment may be first performed to determine whether it is more likely than not that a reporting unit is impaired. If through the qualitative assessment, it is determined that it is more likely than not that goodwill is not impaired, no further testing is required. If it is determined more likely than not that goodwill is impaired, or if the Company elects not to first assess qualitative factors, the Company’s impairment testing continues with the estimation of the fair value of the reporting unit using a combination of an income (discounted cash flow) approach and a market approach at the reporting unit level. The estimation of the fair value of the reporting unit requires significant management judgment with respect to revenue and expense growth rates, changes in working capital and the selection and use of an appropriate discount rate. The estimate of the fair value of the reporting unit is based on the best information available as of the date of the assessment. The use of different assumptions would increase or decrease estimated discounted future operating cash flows and could increase or decrease an impairment charge. Company management uses its judgment in assessing whether assets may have become impaired between annual impairment tests. Indicators such as adverse business conditions, economic factors, and technological change or competitive activities may signal that an asset has become impaired. For the three months ended March 31, 2026 and 2025, there was
Impairment of long-lived assets
The Company reviews long-lived assets for impairment at least annually, or more frequently whenever events or changes in circumstances indicate that the carrying value of such assets (or asset groups) may not be fully recoverable. The asset (or asset group) to be held and used that is subject to impairment review represents the lowest level of identifiable cash flows that is largely independent of other groups of assets and liabilities. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to undiscounted future cash flows expected to be generated by the asset. If such assets are considered unrecoverable, the impairment loss to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Factors the Company considers that could trigger an impairment include, but are not limited to, the following: significant changes in the manner of the Company’s use of the acquired assets or the strategy for the Company’s overall business, significant underperformance relative to expected historical or projected development milestones, significant negative regulatory or economic trends, and significant technological changes that could render the asset (or asset group) obsolete. Fair value is determined through various valuation techniques, including discounted cash flow models, quoted market values, and third-party independent appraisals, as necessary. When recognized, impairment losses related to long-lived assets to be held and used in operations are recorded as cost and expenses in the Company’s Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss. For the three months ended March 31, 2026 and 2025, there was
11
Table of Contents
Derivatives
The Company accounts for the derivative contracts it enters into, including Bitcoin redemption and put options, covered call options, the separated embedded derivative from the convertible note, and warrant liability as follows:
Bitcoin redemption and put options
The Company has entered into agreements to purchase property and equipment that include pledges of Bitcoin, rights to make future pledges of Bitcoin, and rights to redeem the pledged Bitcoin for certain periods after the relevant redemption periods start. These Bitcoin redemption and put options do not qualify as accounting hedges under FASB ASC Topic 815, Derivatives and Hedging (“ASC 815”). Accordingly, the Company carries its Bitcoin redemption and put options at fair value and any gains or losses are recognized in profit or loss.
Covered call options
From time to time, the Company has sold covered call options to generate cash flows on a portion of its Bitcoin held. These options do not qualify as accounting hedges under ASC 815. Accordingly, the Company carries its covered call options at fair value and any gains or losses are recognized in profit or loss.
Separated embedded derivative from the convertible note
The Company evaluates and accounts for derivatives embedded in its convertible instruments in accordance with ASC 815. Accordingly, the Company has assessed if embedded derivatives should be separated from its host contract and accounted for as a derivative instrument based on whether all three ASC 815 criteria are met: (1) the economic characteristics and risks of the embedded derivative are not clearly and closely related to the economic characteristics and risks of the host contract, (2) the hybrid instrument is not remeasured at fair value under GAAP with changes in fair value reported in earnings as they occur, and (3) a separate instrument with the same terms as the embedded derivative would be a derivative instrument. ASC 815 also provides an exception to this rule when the host instrument is deemed to be a conventional convertible debt instrument as defined in the FASB ASC topic. The Company identified embedded derivatives in the Coatue Note, which is a convertible instrument it issued, including conversion options, other redemption features, and contingently exercisable options. The Company determined that the Contingent Repurchase Right (as defined in Note 9. Loans, notes payable, and other financial liabilities) in such convertible instrument is an embedded derivative that should be separated from its host contract and accounted for as a derivative instrument as per ASC 815. The conversion option is indexed to the Company’s common stock and meets the criteria for classification in stockholders’ equity, and therefore derivative accounting does not apply. The other embedded derivatives do not meet all three previously mentioned ASC 815 criteria, and therefore should not be separated from their host contract. The Company accounts for its separated embedded derivative as a derivative instrument that is carried at fair value and any gains or losses are recognized in profit or loss.
Warrant liability
The Company assumed certain warrants in the ABTC Merger (as defined in Note 10. Derivatives) that meet the definition of a derivative under ASC 815, and due to the terms, the warrants are required to be classified as a liability. The Company carries its warrant liability at fair value and any gains or losses are recognized in profit or loss.
Other financial liability
The Company carries its other financial liability at fair value in accordance with FASB ASC Topic 480, Distinguishing Liabilities from Equity (“ASC 480”) and any gains or losses are recognized in profit or loss.
12
Table of Contents
Net loss per share attributable to common stockholders
Basic net loss per share of common stock attributable to the Company is computed by dividing net loss attributable to the Company adjusted for the impact of subsidiary warrants exercisable for little or no cash consideration (“Penny Warrant(s)”) issued by a consolidated subsidiary by the weighted-average number of shares of common stock outstanding during the period.
Diluted net loss per share of common stock attributable to the Company is computed by giving effect to all potentially dilutive shares of common stock, including stock options, restricted stock units, deferred stock units, performance stock units, and common stock purchase warrants to the extent dilutive under the treasury-stock method, the numerator adjustment from the impact of the warrant liability assumed by a consolidated subsidiary to the extent dilutive, and potential shares of common stock issuable upon conversion of the Company’s convertible note under the if-converted method. Under the if-converted method, net loss attributable to the Company is adjusted by the effect, net of tax, of potentially dilutive shares computed under this method. Contingently issuable shares whose issuance is contingent upon the satisfaction of certain conditions are considered outstanding and included in the computation of diluted net loss per share of common stock attributable to the Company if all necessary conditions have been satisfied by the end of the period or if the end of the period is deemed the end of the contingently issuable shares’ contingency period. In computing potentially dilutive shares of common stock, each class of shares is applied to basic net loss per share of common stock attributable to the Company on a most to least dilutive basis until a particular class no longer produces further dilution, if applicable.
Non-controlling interests
Non-controlling interests represent the portion of net assets in consolidated entities that are not owned by the Company and are reported as a component of equity on Company’s Unaudited Condensed Consolidated Balance Sheets. As of March 31, 2026, the non-controlling interest on the Company’s Unaudited Condensed Consolidated Balance Sheets consists of
Note 3. Far North JV sale
On February 2, 2026, the Company closed on its share purchase agreement (“Far North SPA”) with TransAlta Corporation (“TransAlta”), under which TransAlta acquired
13
Table of Contents
A reconciliation of the proceeds received by the Company, or paid for on behalf of the Company, and the gain on sale of the Far North JV is as follows:
| | | |
(in USD thousands) | | Amount | |
Cash consideration paid by TransAlta | | $ | |
Indebtedness owed by the Far North JV to the Company | | | ( |
Finance lease buyout (1) | | | ( |
Carrying amount of the Far North JV’s net assets | | | ( |
Net transaction costs | | | ( |
Foreign currency translation adjustments of the Far North JV | | | ( |
Gain on sale of Far North JV, net of transaction costs | | $ | |
(1) | The finance lease buyout comprised $ |
The results of operations of the Far North JV were part of the Power Generation business, under the Company’s Power segment. The divestiture did not meet the criteria to be classified as discontinued operations as it did not represent a strategic shift that would have a major effect on the Company’s operations or financial results.
Note 4. Segment information
The following table presents gross revenue, gross cost of revenue and certain reconciling items for the Company’s reportable segments, reconciled to the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss. Certain reconciling items, including general and administrative expenses, are presented on a gross basis.
| | | | | | |
| | Three Months Ended | ||||
| | March 31, | ||||
(in USD thousands) | | 2026 | | 2025 | ||
Reportable segment revenue: | | | | | | |
Power | | $ | | | $ | |
Digital Infrastructure | |
| | | | |
Compute | | | | | | |
Eliminations | | | ( | | | — |
Total segment and consolidated revenue | | $ | | | $ | |
| | | | | | |
Reportable segment cost of revenue (exclusive of depreciation and amortization shown below): | |
| | |
| |
Cost of revenue – Power | |
| | |
| |
Cost of revenue – Digital Infrastructure | |
| | |
| |
Cost of revenue – Compute | |
| | |
| |
Eliminations | | | ( | | | — |
Total segment and consolidated cost of revenue | | $ | | | $ | |
| | | | | | |
Reconciling items: | | | | | | |
Depreciation and amortization | | | ( | | | ( |
General and administrative expenses | | | ( | | | ( |
Losses on digital assets | | | ( | | | ( |
Loss on sale of property and equipment | |
| — | | | ( |
Foreign exchange (loss) gain | |
| ( | | | |
Interest expense | | | ( | | | ( |
Asset contribution costs | | | — | | | ( |
Gain on derivatives | | | | | | |
(Loss) gain on other financial liability | | | ( | | | |
Gain on warrant liability | | | | | | — |
Gain on sale of Far North JV, net of transaction costs | | | | | | — |
Equity in earnings of unconsolidated joint venture | | | | | | |
Income tax benefit | |
| | | | |
General and administrative expenses eliminations | | | | | | — |
Net loss | | $ | ( | | $ | ( |
| | | | | | |
Less: Net loss attributable to non-controlling interests | | | | | | |
Net loss attributable to Hut 8 Corp. | | $ | ( | | $ | ( |
14
Table of Contents
The following table presents summarized information for revenue by geographic area:
| | | | | | |
| | Three Months Ended | ||||
| | March 31, | ||||
(in USD thousands) | | 2026 | | 2025 | ||
Revenue | | | | | | |
United States | | $ | | | $ | |
Canada | |
| | |
| |
Total revenue | | $ | | | $ | |
The following table presents summarized information for long-lived assets by geographic area:
| | | | | | |
|
| March 31, | | December 31, | ||
(in USD thousands) | | 2026 | | 2025 | ||
United States |
| $ | |
| $ | |
Canada | | | | | | |
Total Long-Lived Assets | | $ | | | $ | |
Note 5. Digital assets
Digital assets on the Company’s Unaudited Condensed Consolidated Balance Sheets consist of Bitcoin and Investment Tokens (as defined below) as of March 31, 2026.
Bitcoin
The following table presents the changes in the carrying amount of Bitcoin as of March 31, 2025 and March 31, 2026:
| | | |
(in USD thousands) | | Amount | |
Balance as of December 31, 2024 | | $ | |
Revenue recognized from Bitcoin mined | | | |
Carrying value of Bitcoin sold | | | ( |
Change in fair value of Bitcoin | | | ( |
Foreign currency translation adjustments | | | |
Balance as of March 31, 2025 | | $ | |
| | | |
Number of Bitcoin held as of March 31, 2025 | | | |
Number of Bitcoin pledged to Bitmain as of March 31, 2025 | | | |
Cost basis of Bitcoin held as of March 31, 2025 | | $ | |
Realized gains on the sale of Bitcoin for the three months ended March 31, 2025 | | $ | |
| | | |
Balance as of December 31, 2025 | | $ | |
Revenue recognized from Bitcoin mined | | | |
Bitcoin mining revenue earned in prior period received in current period | | | |
Bitcoin purchased | | | |
Bitcoin mining revenue not received | | | ( |
Carrying value of Bitcoin disposed to settle miner purchase liability | | | ( |
Change in fair value of Bitcoin | | | ( |
Foreign currency translation adjustments | | | ( |
Balance as of March 31, 2026 | | $ | |
| | | |
Number of Bitcoin held as of March 31, 2026 | | | |
Number of Bitcoin pledged to Bitmain as of March 31, 2026 | | | |
Cost basis of Bitcoin held as of March 31, 2026 | | $ | |
Realized gains on the sale or disposition of Bitcoin for the three months ended March 31, 2026 | | $ | |
15
Table of Contents
As of March 31, 2026, the Company’s Bitcoin was either held in segregated custody accounts for the benefit of the Company, held in segregated custody accounts under the Company’s ownership and pledged as collateral under a borrowing arrangement, or held by Bitmain Technologies Delaware Limited (together with its affiliates, “Bitmain”) for the Bitcoin pledged in connection with the 2025 ABTC Bitmain Purchase Agreement (as defined below) and 2026 ABTC Bitmain Purchase Agreement (as defined below) for miner purchases from them. The details of the Bitcoin are as follows:
| | | | | | | | | | |
| | Amount | | Number of digital assets | ||||||
(in USD thousands) | | March 31, 2026 | | December 31, 2025 | | March 31, 2026 | | December 31, 2025 | ||
Current | | | | | | | | | | |
Bitcoin pledged for miner purchase | | $ | — | | $ | | | — | | |
Total current Bitcoin – pledged for miner purchase | | | — | | | | | — | | |
| | | | | | | | | | |
Non-current | | | | | | | | | | |
Bitcoin held in custody | | | | | | | | | | |
Total non-current Bitcoin – held in custody | | | | | | | | | | |
| | | | | | | | | | |
Non-current | | | | | | | | | | |
Bitcoin pledged for miner purchase | | | | | | | | | | |
Total non-current Bitcoin – pledged for miner purchase | | | | | | | | | | |
| | | | | | | | | | |
Non-current | | | | | | | | | | |
Bitcoin pledged as collateral | | | | | | | | | | |
Total non-current Bitcoin – pledged as collateral | | | | | | | | | | |
| | | | | | | | | | |
Total Bitcoin |
| $ | | | $ | |
| | | |
In November 2024, the Company entered into a Purchase Agreement with Bitmain to purchase approximately
During 2024, the Company entered into an ASIC colocation contract with Bitmain to host miners at the Company’s Vega site. The agreement featured a fixed hosting fee with a partial or full option to purchase the hosted machines in up to three tranches at a fixed price within six months of energization of the relevant tranche. The Company completed energization of the miners during June and July 2025. On March 31, 2025, the Company entered into a Put Option Agreement (the “Put Option Agreement”), with American Bitcoin (as defined below), pursuant to which the Company had the right to put to American Bitcoin any ASIC miners purchased by the Company under this purchase option.
On August 5, 2025, pursuant to a put option agreement with American Bitcoin, the Company assigned its option to purchase up to approximately
16
Table of Contents
Concurrently with the execution of the 2025 ABTC Bitmain Purchase Agreement, American Bitcoin purchased
In February 2026, American Bitcoin entered into a Future Sales and Purchase Agreement (the “2026 ABTC Bitmain Purchase Agreement”) with Bitmain to purchase approximately
As of March 31, 2026, the Company had pledged
In accordance with FASB ASC Topic 610-20, Other Income – Gains and Losses from the Derecognition of Nonfinancial Assets, the Company assessed the transfer of nonfinancial assets, Bitcoin, under ASC 606. Specifically, the Company noted that the Bitcoin pledged to Bitmain under the 2025 ABTC Bitmain Purchase Agreement and 2026 ABTC Bitmain Purchase Agreement constitute repurchase agreements under ASC 606. As a result, the Bitcoin was not derecognized upon transfer as the Company retains repurchase options.
Due to the redemption rights and the Company’s continued economic exposure to the Bitcoin, the pledged Bitcoin is separately classified as Digital assets – pledged for miner purchase on the Unaudited Condensed Consolidated Balance Sheets, which represents restricted Bitcoin.
The Company recorded Bitcoin redemption and put options, which are derivative assets, with an initial fair value of $
Investment Tokens
During 2025, the Company purchased
17
Table of Contents
There were
| | | |
(in USD thousands) | | Amount | |
Balance as of December 31, 2025 | | $ | |
Change in fair value of Investment Tokens | | | ( |
Balance as of March 31, 2026 | | $ | |
| | | |
Number of Investment Tokens held as of March 31, 2026 | | | |
Cost basis of Investment Tokens held as of March 31, 2026 | | $ | |
As of March 31, 2026, the Company’s Investment Tokens were held in a segregated custody account for the benefit of the Company. The details of the Investment Tokens are as follows:
| | | | | | | | | | |
| | Amount | | Number of digital assets | ||||||
(in USD thousands) | | March 31, 2026 | | December 31, 2025 | | March 31, 2026 | | December 31, 2025 | ||
Non-current | | | | | | | | | | |
Investment Tokens held in custody | | $ | | | $ | | | | | |
Total non-current Investment tokens – held in custody | | | | | | | | | | |
| | | | | | | | | | |
Total Investment Tokens |
| $ | | | $ | |
| | | |
Note 6. Property and equipment, net
The components of property and equipment were as follows:
| | | | | | |
(in USD thousands) | | March 31, 2026 | | December 31, 2025 | ||
Mining infrastructure | | $ | | | $ | |
Miners and mining equipment | | | | | | |
Data center infrastructure | | | | | | |
Computer and network equipment | | | | | | |
Leasehold improvements | | | | | | |
Land and land improvements | | | | | | |
AI GPUs | | | | | | |
Construction in progress | | | | | | |
Property and equipment, gross |
| | |
| | |
Less: Accumulated depreciation |
| | ( |
| | ( |
Property and equipment, net | | $ | | | $ | |
Depreciation and amortization expense related to property and equipment was $
Impairment of long-lived assets
There is considerable management judgment necessary to determine the estimated future cash flows and fair values of the Company’s long-lived assets, and, accordingly, actual results could vary significantly from such estimates, which fall under Level 3 within the fair value measurement hierarchy (see discussion of fair value measurements in Note 2. Basis of presentation, summary of significant accounting policies and recent accounting pronouncements).
18
Table of Contents
Note 7. Deposits and prepaid expenses
The components of deposits and prepaid expenses are as follows:
| | | | | | |
(in USD thousands) | | March 31, 2026 | | December 31, 2025 | ||
Current | | | | | | |
Prepaid insurance | | $ | | | $ | |
Prepaid electricity | |
| | |
| |
Deposits for site development | | | | | | |
Deposits for future site purchases | | | | | | |
Other deposits | |
| | |
| |
Total current deposits and prepaid expenses | | $ | | | $ | |
| | | | | | |
Non-current | | | | | | |
Deposits related to electricity supply under electricity supply agreement | | $ | | | $ | |
Lease deposits | | | | | | |
Other deposits | |
| | |
| |
Total non-current deposits and prepaid expenses | | $ | | | $ | |
| | | | | | |
Total deposits and prepaid expenses | | $ | | | $ | |
Note 8. Investment in unconsolidated joint venture
On November 25, 2022, the Company acquired a
The consideration paid by the Company for the acquisition of the Acquired Interests consisted of $
TZRC is a two-member operating joint venture where both members jointly control the essential areas of the entity’s business. The purpose of TZRC is to develop, construct, install, own, finance, rent, and operate one or more modular data centers located on or near renewable power sources for purposes of digital asset mining. The entity self-mines and provides hosting services. The Company assumed the role of property manager under a property management agreement (“PMA”) to provide day-to-day management and oversight services of TZRC’s data center facilities. The service contract has a term of
The Company accounts for its indirect
19
Table of Contents
Note 9. Loans, notes payable, and other financial liabilities
Details of the Company’s loans, notes payable, and other financial liabilities are as follows:
| | | | | | | | | | |
(in USD thousands) | | | | | | March 31, | | December 31, | ||
Issuance Date | | Maturity Date | | Interest Rate | | 2026 | | 2025 | ||
TZRC Secured Promissory Note | | | | | | | | | | |
December 6, 2022 | | April 8, 2027 |
| | % | $ | | | $ | |
| | | | | | | | | | |
Coinbase Credit Facility | | |
| | |
| | |
| |
June 26, 2023 | | June 16, 2026 |
| % |
| | |
| | |
| | | | | | | | | | |
Coatue Note (convertible note) | | | | | | | | | | |
June 28, 2024 | | June 28, 2029 | | | % | | | | | |
| | | | | | | | | | |
Two Prime Credit Facility | | | | | | | | | | |
August 25, 2025 | | (1) | | | % | | — | | | — |
| | | | | | | | | | |
Other financial liability | | (2) | | (2) | | | | | | |
| | | | | | | | | | |
Total principal balance | | | | | | | | | | |
Less: unamortized discount and deferred financing costs | | | | | | | ( | | | ( |
Total carrying amount | | | | | | $ | | | $ | |
Less: current portion | | | | | | | | | | |
Long-term portion | | | | | | $ | | | $ | |
(1) | See Two Prime Credit Facility below for additional information |
(2) | See Other financial liability below for additional information |
The following table outlines maturities of our long-term debt, including the current portion, as of March 31, 2026:
| | | |
(in USD thousands) | | | |
Year ending December 31, | | | |
2026 (excluding the three months ended March 31, 2026) | | $ | |
2027 | |
| |
2028 | |
| — |
2029 | | | |
2030 | | | — |
Thereafter | |
| — |
Total | | $ | |
During the three months ended March 31, 2026 and 2025, total principal payments of the Company’s debt were $
During the three months ended March 31, 2026 and 2025, the Company recorded amortization of debt issuance costs, included in interest expense, of $
During the three months ended March 31, 2026 and 2025, interest expense related to the Company’s debt was $
The Company accounts for all of its loans and notes payable in accordance with FASB ASC Topic 470-20, Debt with Conversion and Other Options (“ASC 470”), ASC 815, and ASC 480. The Company evaluated all of its loans and notes payable to determine if there were any embedded components that qualified as derivatives to be separately accounted for.
20
Table of Contents
TZRC Secured Promissory Note
The Company assumed the TZRC Secured Promissory Note with an estimated fair value amount as of the date of investment of approximately $
The stated interest on the TZRC Secured Promissory Note accrues at a rate per annum equal to the lesser of (a) a varying rate per annum equal to the sum of (i) the prime rate as published in The Wall Street Journal, plus (ii)
The TZRC Secured Promissory Note is secured by a first priority security interest in the Company’s membership interest in TZRC. The Company is not a guarantor of the TZRC Secured Promissory Note, and there is no recourse to the Company.
The PIK interest for the three months ended March 31, 2026 was $
Coinbase credit facility
The Company is party to a credit facility with Coinbase Credit, Inc. (“Coinbase”). The original credit facility was established on June 26, 2023 (the “Original Credit Facility”) and was amended and restated on each of January 12, 2024, June 17, 2024, June 16, 2025, and December 22, 2025. The Original Credit Facility provided for an interest rate of
The credit facility has subsequently been amended and restated, most recently on December 22, 2025 pursuant to the fourth amended and restated credit agreement (the “Fourth Amended and Restated Credit Agreement”) with Coinbase. Under the Fourth Amended and Restated Credit Agreement, the total principal amount available under the facility increased by $
The Company’s obligations under the Fourth Amended and Restated Credit Agreement are secured by the Borrower’s interest in certain Bitcoin held in the custody of Coinbase Custody Trust Company, LLC (“Coinbase Custody”) and Coinbase’s recourse is limited to such Bitcoin held in the custody of Coinbase Custody.
21
Table of Contents
As of March 31, 2026, the Company has $
Coatue Note (convertible note)
On June 21, 2024, the Company entered into a Convertible Note Purchase Agreement (the “Purchase Agreement”) with Coatue Tactical Solutions Lending Holdings AIV 3 LP (the “Coatue Fund”), and a subsidiary of the Company (the “Guarantor”) providing for the purchase and sale of a convertible note (the “convertible note”) in the principal amount of $
The convertible note bears interest at a rate of
During the term of the convertible note, the convertible note is convertible from time to time, in whole or in part, into shares of the Company’s common stock at the option of the Coatue Fund. The initial conversion price of the convertible note is $
The Coatue Fund will have the right to require the Company to repurchase all, but not less than all, of the convertible note upon a change of control or a delisting on a U.S. stock exchange. If the implied valuation of such event is at least $
Beginning on the two-year anniversary of the convertible note’s issuance and continuing until its maturity, the Company has the right, from time to time, to redeem all or any portion of the convertible note for a redemption price equal to
The Purchase Agreement includes certain representations, warranties, and covenants, including limitations on the ability of the Company and the Guarantor to incur indebtedness, make certain restricted payments and investments, and enter into affiliate transactions, subject to certain exceptions enumerated in the Purchase Agreement. The Company may consummate a transaction restricted by the foregoing covenants without the Coatue Fund’s consent, so long as it substantially concurrently and as a condition thereto repurchases the convertible note in full from the Coatue Fund for an amount in cash equal to the greater of (i)
22
Table of Contents
As mentioned in Note 2. Basis of presentation, summary of significant accounting policies and recent accounting pronouncements – Convertible instruments and Derivatives, the Company has identified and separated an embedded derivative, the Contingent Repurchase Right, from the convertible note. The remaining debt host contract is discounted by the initial fair value of the separated embedded derivative from the convertible note of nil and is offset by issuance costs. The debt host contract of the convertible note is subsequently measured at amortized cost, and the debt discount and issuance costs are amortized to interest expense over the expected term of the host contract using the effective interest method. The convertible note has an effective interest rate of
Two Prime Credit Facility
On August 25, 2025, the Company entered into a credit agreement (the “Two Prime Credit Agreement”) with Two Prime Lending Limited (“Two Prime”).
The Two Prime Credit Agreement provides for a revolving credit facility of up to $
As of March 31, 2026, the Company had
Other financial liability
In February 2025, a consolidated subsidiary of the Company entered into a simple agreement for future equity (“SAFE agreement”) for a purchase amount of $
As of March 31, 2026, solely for the purposes of estimating the fair value of the SAFE agreement, the Company estimated an equity conversion probability of
| | | |
| | March 31, 2026 | |
Risk-free interest rate | | % | |
Credit spread | | | % |
23
Table of Contents
The following table provides a summary of activity and change in fair value of the SAFE agreement (Level 3 liability):
| | | | | | | |
| | Three Months Ended | | ||||
| | March 31, | | ||||
(in USD thousands) | | 2026 | | 2025 | | ||
Balance, beginning of period | | $ | | | $ | — | |
Additions | | | — | | | | |
Change in fair value | | | | | | ( | |
Balance, end of period | | $ | | | $ | | |
Note 10. Derivatives
The following table presents the Company’s Unaudited Condensed Consolidated Balance Sheets classification of derivatives carried at fair value:
| | | | | | | | | | | | | |
(in USD thousands) | | | March 31, 2026 | | December 31, 2025 | ||||||||
Derivative | Balance Sheet Line | | Asset | | Liability | | Asset | | Liability | ||||
Derivatives not designated as hedging instruments: | | | | | | | | | | | | | |
Bitcoin redemption and put options | Derivative assets | | $ | | | $ | — | | $ | | | $ | — |
Warrant liability | Warrant liability | | | — | | | | | | — | | | |
Total derivatives | | | $ | | | $ | | | $ | | | $ | |
The following table presents the effect of derivatives on the Company’s Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss:
| | | | | | | |
| | | Three Months Ended | ||||
(in USD thousands) | | | March 31, | ||||
Derivative | Statement of Operations Line | | 2026 | | 2025 | ||
Derivatives not designated as hedging instruments: | | | | | | | |
Bitcoin redemption and put options | Gain on derivatives | | $ | | | $ | |
Covered call options | Gain on derivatives | | | — | | | |
Warrant liability | Gain on warrant liability | | | | | | — |
Total derivatives | | | $ | | | $ | |
Bitcoin redemption and put options
During December 2024, the Company pledged approximately
24
Table of Contents
As part of the 2025 ABTC Bitmain Purchase Agreement, in August, September, and October 2025, American Bitcoin pledged Bitcoin with Bitmain in connection with a purchase of approximately
In February 2026, in connection with the 2026 ABTC Bitmain Purchase Agreement, American Bitcoin pledged approximately
The following table provides a summary of activity and change in fair value of the Company’s Bitcoin redemption and put options (previously a Level 3 derivative asset):
| | | | | | |
| | Three Months Ended | ||||
| | March 31, | ||||
(in USD thousands) | | 2026 | | 2025 | ||
Balance, beginning of period | | $ | — | | $ | |
Additions | | | — | | | — |
Transfer out of Level 3 (1) | | | — | | | ( |
Balance, end of period | | $ | — | | $ | — |
(1) | The Bitcoin redemption and put options were transferred out of Level 3 due to changes in the observability of inputs used in the valuation. |
Covered call options
As noted in Note 2. Basis of presentation, summary of significant accounting policies and recent accounting pronouncements – Derivatives, from time to time, the Company has sold covered call options on Bitcoin to generate cash flow on a portion of its digital assets. In connection with these covered call options, the Company has pledged Bitcoin as collateral with
25
Table of Contents
Separated embedded derivative from the convertible note
In June 2024, as noted in Note 2. Basis of presentation, summary of significant accounting policies and recent accounting pronouncements – Convertible instruments and Note 9. Loans, notes payable, and other financial liabilities the Company issued a convertible note, the Coatue Note, with embedded derivatives and separated the Contingent Repurchase Right embedded derivative. The separated embedded derivative from the convertible note was separated from its debt host contract and was accounted for as a derivative liability carried at fair value in accordance with ASC 815. As noted in Note 2. Basis of presentation, summary of significant accounting policies and recent accounting pronouncements – Fair value measurement, the separated embedded derivative from the convertible note is a Level 3 liability. A significant unobservable input included in the fair value estimate of the separated embedded derivative from the convertible note is management’s estimate of the Contingent Repurchase Right’s probability of occurrence, which was remote as at inception and March 31, 2026. As such, the initial fair value of the separated embedded derivative from the convertible note was
As of March 31, 2026, the Company estimated the fair value of the separated embedded derivative from the convertible note using the PDE Model with the following inputs and inputs noted in the paragraph above:
| | | |
| | March 31, 2026 | |
Dividend yield | | — | % |
Implied volatility | | | % |
Risk-free interest rate | | | % |
Credit spread | | | % |
Warrant liability
On March 31, 2025, a wholly owned subsidiary of the Company contributed substantially all of the Company’s ASIC miners to American Data Centers Inc. in exchange for an
On May 9, 2025, Gryphon Digital Mining, Inc., a Delaware corporation (“Gryphon”), GDM Merger Sub I Inc., a Delaware corporation and wholly owned direct subsidiary of Gryphon (“Merger Sub Inc.”), GDM Merger Sub II LLC, a Delaware limited liability company and wholly owned direct subsidiary of Gryphon (“Merger Sub LLC”), and Historical ABTC, a majority owned subsidiary of the Company, entered into an Agreement and Plan of Merger (the “ABTC Merger Agreement”).
On September 3, 2025, in accordance with the terms of the ABTC Merger Agreement, among other things, (i) Merger Sub Inc. merged with and into Historical ABTC, with Historical ABTC surviving the merger (the “First Merger”) as a wholly owned direct subsidiary of Gryphon (the corporation surviving the First Merger, the “First Merger Surviving Corporation”) and (ii) immediately after the First Merger, the First Merger Surviving Corporation merged with and into Merger Sub LLC, with Merger Sub LLC surviving the merger (the “Second Merger” and, taken together with the First Merger, the “ABTC Merger”) as a wholly owned direct subsidiary of Gryphon. Gryphon was renamed American Bitcoin Corp. after the completion of the ABTC Merger (the “Closing”).
In connection with the ABTC Merger, warrants to purchase Gryphon common stock (the “ABTC-Gryphon Warrants”) outstanding immediately before the ABTC Merger were assumed by American Bitcoin. Post-ABTC Merger, the warrant holders are entitled to receive, upon exercise, in lieu of Gryphon common stock, shares of Class A common stock of American Bitcoin. The ABTC-Gryphon Warrants have an exercise price of $
In connection with the ABTC Merger, American Bitcoin assumed
26
Table of Contents
The ABTC-Gryphon Warrants meet the definition of a derivative under ASC 815, and due to the terms of the warrants, are required to be liability classified. The ABTC-Gryphon Warrant liabilities are carried at fair value, and are Level 3 liabilities as noted in Note 2. Basis of presentation, summary of significant accounting policies and recent accounting pronouncements.
As of March 31, 2026, the Company estimated the fair value of the ABTC-Gryphon Warrant liability using the Black-Scholes pricing model with the following inputs:
| | | | |
| | | March 31, 2026 | |
Exercise price | | $ | | |
Expected price volatility | | | | % |
Risk-free interest rate | | | % | |
Expected term (in years) | | | | |
Dividend yield | | | — | % |
The following table provides a summary of activity and change in fair value of the Company’s warrant liability (Level 3 derivative liability), and there was no activity during the three months ended March 31, 2025:
| | | |
| | Three Months Ended | |
(in USD thousands) | | March 31, 2026 | |
Balance, beginning of period | | $ | |
Change in fair value | | | ( |
Balance, end of period | | $ | |
Note 11. Leases
The Company’s operating leases are for its offices and certain of its mining facilities and data centers. The Company’s subsidiaries previously had finance leases, which were primarily related to equipment used at its data centers and the power plant located in Iroquois Falls, Ontario under the Far North JV. As of December 31, 2025, the Company classified the right-of-use asset and lease liability related to the finance lease as assets and liabilities held for sale due to the Far North JV sale described in Note 3. Far North JV sale. The Company does not have any finance leases as of March 31, 2026.
The following table shows the right-of-use assets and lease liabilities as of March 31, 2026 and December 31, 2025:
| | | | | | |
| | March 31, | | December 31, | ||
(in USD thousands) | | 2026 | | 2025 | ||
Right-of-use assets: | | | | | | |
Operating leases | | $ | | | $ | |
Total right-of-use assets | | $ | | | $ | |
| | | | | | |
Lease liabilities: | | | | | | |
Operating leases | | $ | | | $ | |
Total lease liabilities | | $ | | | $ | |
The Company no longer has a finance lease as of March 31, 2026 due to the sale of the Far North JV as noted in Note 3. Far North JV sale.
27
Table of Contents
The Company’s lease costs are comprised of the following:
| | | | | | |
| | Three Months Ended | ||||
| | March 31, | ||||
(in USD thousands) | | 2026 | | 2025 | ||
Operating leases | | | | | | |
Operating lease cost | | $ | | | $ | |
Variable lease cost | | | | | | |
Operating lease expense | | | | | | |
Short-term lease expense | | | | | | |
Total operating lease expense | | | | | | |
Finance leases | | | | | | |
Amortization of financed assets | | | — | | | |
Interest on lease obligations | | | | | | |
Total finance lease expense | |
| | |
| |
Total lease expense | | $ | | | $ | |
The following table presents supplemental lease information:
| | | | | | | | |
| | Three Months Ended | | |||||
| | March 31, | | |||||
(in USD thousands) | | 2026 | | | 2025 | | ||
Operating cash outflows – operating leases | | $ | | | | $ | | |
Operating cash outflows – finance leases | | $ | | | | $ | | |
Financing cash outflows – finance leases | | $ | | | | $ | | |
| | | | | | | | |
Right-of-use assets obtained in exchange for operating lease liabilities | | $ | — | | | $ | | |
| | | | | | | | |
| | Three Months Ended | | |||||
| | March 31, | | |||||
| | 2026 | | | 2025 | | ||
Weighted-average remaining lease term – operating leases (in years) | | | | | | | ||
Weighted-average remaining lease term – finance leases (in years) | | | — | | | | | |
Weighted-average discount rate(1) – operating leases | |
| | % | |
| | % |
Weighted average discount rate – finance leases | |
| — | % | |
| | % |
(1) | The Company’s operating leases do not provide an implicit rate, therefore the Company uses the incremental borrowing rate at the lease commencement date in determining the present value of lease payments. The incremental borrowing rate represents an estimate of the interest rate the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis for similar assets over the term of the lease. |
The following table presents the Company’s future minimum operating lease payments as of March 31, 2026:
| | | |
| | Operating | |
(in USD thousands) | | Leases | |
Remainder of 2026 | | $ | |
2027 | |
| |
2028 | |
| |
2029 | |
| |
2030 | | | |
Thereafter | | | |
Total undiscounted lease payments | |
| |
Less present value discount | |
| ( |
Present value of operating lease liabilities | | $ | |
As of March 31, 2026, there were
28
Table of Contents
Note 12. Equity
Authorized shares
The Company’s certificate of incorporation, as amended, authorized
Common stock
At-the-Market Offering and Stock Repurchase Programs
On December 4, 2024, the Company entered into a Controlled Equity Offering Sales Agreement to establish an at-the-market equity program (the “2024 ATM”), allowing the Company to offer and sell up to $
On August 22, 2025, the Company established a $
Common stock warrants
In connection with the business combination of Hut 8 Mining Corp. (“Legacy Hut”) and U.S. Data Mining Group, Inc. (“USBTC”) on November 30, 2023 (the “Business Combination”), warrants to purchase Legacy Hut common shares outstanding immediately before the Business Combination were assumed by the Company. Post-Business Combination, the warrant holders are entitled to receive, upon exercise, in lieu of Legacy Hut common shares, shares of common stock of the Company at an exchange ratio of
The warrants assumed in the Business Combination expire on September 17, 2026.
Transactions involving the Company’s equity-classified warrants are summarized as follows:
| | | | | | | | |
| | | | Weighted average | | Weighted average | ||
| | Number of | | exercise price | | remaining contractual | ||
(in thousands, except share and per share amounts) | | shares | | (per share) | | life (in years) | ||
Outstanding as of December 31, 2025 | | | | $ | | | | |
Outstanding as of March 31, 2026 | | | | $ | | | | |
29
Table of Contents
American Bitcoin non-controlling interest
On September 3, 2025, American Bitcoin entered into a Controlled Equity Offering Sales Agreement to establish an at-the-market equity program (the “American Bitcoin 2025 ATM”), allowing American Bitcoin to offer and sell up to $
During the three months ended March 31, 2026, American Bitcoin issued shares of its Class A common stock to third parties, as disclosed above in this note, thereby reducing the Company’s ownership percentage in American Bitcoin. The Company continues to maintain control of American Bitcoin after these share issuances, and the issuances were accounted for as equity transactions under FASB ASC Topic 810, Consolidation (“ASC 810”). These share issuances by American Bitcoin are also accounted for under FASB ASC Topic 740, Income Taxes (“ASC 740”) by assessing the deferred tax consequences of the outside basis difference. The tax impact of the difference between the fair value of the consideration received and the amount by which the non-controlling interest is adjusted is recognized in equity. Accordingly, the Company recorded $
Far North JV non-controlling interest
As described in Note 3. Far North JV sale, the Company sold its ownership in the Far North JV on February 2, 2026. Immediately prior to the sale, (1) the non-controlling interest exercised
The following table summarizes the effect of changes in ownership of American Bitcoin and the Far North JV on equity attributable to Hut 8 Corp. for the periods presented:
| | | | | | |
| | Three Months Ended | ||||
| | March 31, | ||||
(in USD thousands) | | 2026 | | 2025 | ||
Net loss attributable to Hut 8 Corp. | | $ | ( | | $ | ( |
Additional paid-in capital: | | | | | | |
Increase in additional paid-in capital from the issuance of Class A common stock by American Bitcoin, net of issuance costs | | | | | | — |
Decrease in additional paid-in capital from deferred income tax on American Bitcoin Corp. – equity transactions | | | ( | | | — |
Decrease in additional paid-in capital from the exercise of Penny Warrants issued by the Far North JV | | | ( | | | — |
Decrease in additional paid-in capital from the non-controlling interest acquisition prior to the sale of the Far North JV | | | ( | | | — |
Changes from net loss attributable to Hut 8 Corp. and total effect of changes in ownership of American Bitcoin and the Far North JV on equity attributable to Hut 8 Corp. | | $ | ( | | $ | ( |
30
Table of Contents
ABTC-Akerna Warrants
In connection with the ABTC Merger on September 3, 2025, warrants to purchase shares of Gryphon common stock originally issued by and assumed from Akerna Corp. (the “ABTC-Akerna Common Warrants”) and warrants issued to underwriters to purchase shares of Gryphon common stock originally issued by and assumed from Akerna Corp. (the “ABTC-Akerna Underwriter Warrants” and, collectively with the ABTC-Akerna Common Warrants, the “ABTC-Akerna Warrants”) outstanding immediately before the ABTC Merger were assumed by American Bitcoin. Post-ABTC Merger, the warrant holders are entitled to receive, upon exercise, in lieu of Gryphon common stock, American Bitcoin Class A common stock, at an exchange ratio of
The ABTC-Akerna Common Warrants and ABTC-Akerna Underwriter Warrants assumed in the ABTC Merger expire on July 5, 2027 and June 29, 2027, respectively.
Transactions involving the Company’s equity-classified ABTC-Akerna Warrants are summarized as follows:
| | | | | | | | |
| | | | Weighted average | | Weighted average | ||
| | Number of | | exercise price | | remaining contractual | ||
(in thousands, except share and per share amounts) | | shares | | (per share) | | life (in years) | ||
Outstanding as of December 31, 2025 | | | | $ | | | | |
Outstanding as of March 31, 2026 | | | | $ | | | | |
Subsidiary Penny Warrants
In 2025, the Far North JV, a consolidated subsidiary of the Company, issued
The subsidiary Penny Warrants were issued in connection with finance lease payment deferral elections by a subsidiary of the Far North JV, and accordingly, the corresponding cost was capitalized to the associated right-of-use asset in connection with lease remeasurements. The weighted average issuance-date fair value of the subsidiary Penny Warrants was $
The subsidiary Penny Warrants were exercised in February 2026 in connection with the sale of the Far North JV; refer to Note 3. Far North JV sale for further information on the Far North JV sale.
31
Table of Contents
Transactions involving the Company’s equity-classified subsidiary Penny Warrants are summarized as follows:
| | | | | | | | | | | |
| | Number of | | Weighted average | | Aggregate | | Weighted average | |||
| | shares of | | exercise price | | intrinsic | | remaining contractual | |||
(in USD thousands, except share and per share amounts) | | Far North JV | | (per share) | | value | | life (in years) | |||
Outstanding as of December 31, 2025 | | | | $ | (1) | | $ | | | | |
Exercised | | ( | | | (1) | | | | | | |
Outstanding as of March 31, 2026 | | — | | $ | — | | $ | — | | | — |
(1) | Represents little cash consideration of less than a penny per share. |
Accumulated other comprehensive loss
The changes in accumulated other comprehensive loss, net of tax, is as follows:
| | | | | | | | | |
| | December 31, | | Net | | March 31, | |||
(in USD thousands) | | 2025 | | Change | | 2026 | |||
Foreign currency translation adjustment loss | | $ | ( | | $ | ( | | $ | ( |
Total | | $ | ( | | $ | ( | | $ | ( |
Note 13. Stock-based compensation
In connection with the Business Combination, the Company adopted the 2023 Plan, the Hut 8 Corp. Rollover Option Plan (the “2021 Plan”), and the Hut 8 Mining Corp. Omnibus Long-Term Incentive Plan (the “2018 Plan”). Under the 2023 Plan, stock options, stock appreciation rights, restricted stock, restricted stock units, performance stock units, deferred stock units, other stock-based awards, and stock bonuses of the Company can be granted to employees, consultants, and directors of the Company and its affiliates. Cancelled and forfeited awards are returned to the 2023 Plan for future awards.
On March 16, 2021, USBTC established the USBTC 2021 Equity Incentive Plan. This plan allowed USBTC to award stock options, stock appreciation rights, restricted awards, and performance awards to employees, consultants, and directors of USBTC and its affiliates and cancelled and forfeited awards were returned to the plan for future awards. The 2021 Plan is identical to the USBTC 2021 Equity Incentive Plan except for conforming changes to account for the Business Combination.
The 2018 Plan was originally established by Legacy Hut on February 15, 2018 to allow Legacy Hut to award stock options and restricted share units to employees, consultants, service providers, and directors of Legacy Hut and its affiliates, as well as deferred share units to employees and directors of Legacy Hut.
In connection with the Business Combination, USBTC stock options outstanding immediately before the Business Combination were exchanged for
In connection with the Business Combination, equity awards outstanding under the 2018 Plan were amended such that (1) restricted share units and deferred share units were amended to settle in shares of the Company’s common stock under the 2018 Plan and (2) stock options were cancelled and reissued under the 2023 Plan, all at an exchange ratio of
32
Table of Contents
As of March 31, 2026, restricted stock units, deferred stock units, performance stock units, and stock options have been granted under the 2023 Plan.
The Company’s stock-based compensation expense recognized during the three months ended March 31, 2026 and March 31, 2025 in the Consolidated Statements of Operations and Comprehensive Loss is as follows:
| | | | | | |
| | Three Months Ended | ||||
| | March 31, | ||||
(in USD thousands) | | 2026 | | 2025 | ||
Stock options | | $ | | | $ | |
Restricted stock units | | | | | | |
Performance stock units | | | | | | |
Total stock-based compensation expense recognized in the Consolidated Statements of Operations and Comprehensive Loss | | $ | | | $ | |
Stock-based compensation capitalized in property and equipment, net | | $ | | | $ | — |
Stock options
The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option pricing model for stock option grants without any market-based vest conditions, and using a Monte Carlo simulation model for stock option grants with any market-based vest condition.
In March 2025, the Company granted
The market-based vest conditions of the stock options granted during March 2025 are considered “market conditions” under FASB ASC Topic 718, Compensation—Stock Compensation (“ASC 718”), and as such, the Company used a Monte Carlo simulation model to determine the grant-date fair value of stock options with a market condition. The Monte Carlo simulation takes into account the probability that the market condition will be achieved based on predicted stock price paths of the Company in addition to the assumptions in the table below.
| | | |
| | Three Months Ended | |
| | March 31, | |
| | 2025 | |
Dividend yield | | — | % |
Expected price volatility | | | % |
Risk-free interest rate | | | % |
Expected term (in years) | | |
As of March 31, 2026, there were
33
Table of Contents
A summary of stock options for the three months ended March 31, 2026 and March 31, 2025 is as follows:
| | | | | | | | | | |
| | | | | | | | Weighted | ||
| | | | Weighted average | | | | | average remaining | |
| | Number of | | exercise price | | Aggregate | | contractual life | ||
(in USD thousands, except share and per share amounts) | | shares | | (per share) | | intrinsic value | | (in years) | ||
Outstanding as of December 31, 2025 | | | | $ | | | $ | | | |
Exercised | | ( | | | | | | | | |
Forfeited, canceled, or expired | | ( | | | | | | | | |
Outstanding as of March 31, 2026 | | | | $ | | | $ | | | |
Vested and exercisable as of March 31, 2026 | | | | $ | | | $ | | | |
| | | | | | | | | | |
| | | | | | | | Weighted | ||
| | | | Weighted average | | | | | average remaining | |
| | Number of | | exercise price | | Aggregate | | contractual life | ||
(in USD thousands, except share and per share amounts) | | shares | | (per share) | | intrinsic value | | (in years) | ||
Outstanding as of December 31, 2024 | | | | $ | | | $ | | | |
Granted | | | | | | | | | | |
Exercised | | ( | | | | | | | | |
Forfeited, canceled, or expired | | ( | | | | | | | | |
Outstanding as of March 31, 2025 | | | | $ | | | $ | | | |
Vested and exercisable as of March 31, 2025 | | | | $ | | | $ | | | |
The Company had approximately $
Restricted stock units
Restricted stock units granted under the 2023 Plan, and those governed under the 2018 Plan that may settle in shares of common stock of the Company, entitle recipients to receive a number of shares of the Company’s common stock over a vesting period, according to each respective restricted stock unit agreement. At the Company’s discretion, restricted stock units may be settled in shares of common stock or cash in lieu of settling in shares or a combination of shares of common stock and cash. The Company currently does not intend to settle any restricted stock units in cash or in a combination of shares of common stock and cash.
For restricted stock units under the 2023 Plan, stock-based compensation expense related to share-settled restricted stock units is based on the fair value of the Company’s common stock on the date of grant. For restricted stock units under the 2018 Plan, the stock-based compensation expense is based on the fair value of the Company’s common stock on the date of the consummation of the Business Combination. The Company recognizes stock-based compensation expense associated with such share-settled restricted stock unit awards on a graded basis over the awards’ service-based vesting tranches. Share-settled restricted stock unit awards generally vest in equal annual installments over a
34
Table of Contents
The following table presents a summary of the activity of the service-based restricted stock units:
| | | | | | | | |
| | | | Weighted average | | | ||
| | Number of | | grant-date | | Aggregate | ||
(in USD thousands, except share and per share amounts) | | units | | fair value | | intrinsic value | ||
Unvested as of December 31, 2025 | | | | $ | | | $ | |
Granted | | | | | | | | |
Vested | | ( | | | | | | |
Forfeited | | ( | | | | | | |
Unvested as of March 31, 2026 | | | | $ | | | $ | |
| | | | | | | | |
| | | | Weighted average | | | ||
| | Number of | | grant-date | | Aggregate | ||
(in USD thousands, except share and per share amounts) | | units | | fair value | | intrinsic value | ||
Unvested as of December 31, 2024 | | | | $ | | | $ | |
Granted | | | | | | | | |
Vested | | ( | | | | | | |
Forfeited | | ( | | | | | | |
Unvested as of March 31, 2025 | | | | $ | | | $ | |
The Company had approximately $
Deferred stock units
Deferred stock units granted under the 2023 Plan, and those governed under the 2018 Plan that are settleable in shares of common stock of the Company, entitled recipients to receive a number of shares of the Company’s common stock over a vesting period if applicable, as per each respective deferred stock unit agreement. At the Company’s discretion, deferred stock units may be settled in shares of common stock or cash in lieu of settling in shares or a combination of shares of common stock and cash. The Company currently does not intend to settle any deferred stock units in cash or in a combination of shares of common stock and cash.
For deferred stock units under the 2023 Plan, the stock-based compensation expense related to share-settled deferred stock units is based on the fair value of the Company’s common stock on the date of grant. For deferred stock units under the 2018 Plan, the stock-based compensation expense is based on the fair value of the Company’s common stock on the date of the consummation of the Business Combination. The Company recognizes stock-based compensation expense associated with such share-settled deferred stock unit awards on a graded basis over the awards’ vesting tranches. Share-settled deferred stock unit awards granted to date were granted in vested state and can only be settled for shares of common stock of the Company upon the participant’s departure from the Company.
The following table presents a summary of the activity of the deferred stock units:
| | | | | | | | |
| | | | Weighted average | | | ||
| | Number of | | grant-date | | Aggregate | ||
(in USD thousands, except share and per share amounts) | | units | | fair value | | intrinsic value | ||
Vested and outstanding as of December 31, 2025 | | | | $ | | | $ | |
Vested and outstanding as of March 31, 2026 | | | | $ | | | $ | |
35
Table of Contents
| | | | | | | | |
| | | | Weighted average | | | ||
| | Number of | | grant-date | | Aggregate | ||
(in USD thousands, except share and per share amounts) | | units | | fair value | | intrinsic value | ||
Vested and outstanding as of December 31, 2024 | | | | $ | | | $ | |
Vested and outstanding as of March 31, 2025 | | | | $ | | | $ | |
There was
Performance stock units
Performance stock units granted under the 2023 Plan entitle recipients to receive a number of shares of the Company’s common stock based on market, performance, and/or service conditions as per each respective performance stock unit agreement. At the Company’s discretion, performance stock units may be settled in shares of common stock or cash in lieu of settling in shares or a combination of shares of common stock and cash. The Company currently does not intend to settle any performance stock units in cash or in a combination of shares of common stock and cash.
In February 2026, the Company granted
The Company recognizes stock-based compensation expense associated with performance stock unit awards on a graded basis over the later of the awards’ time-based service condition and, if applicable, market-based derived service period per tranche. Stock-based compensation expense associated with performance stock units with market-based vest conditions is not adjusted in future periods for the success or failure to achieve the specified market conditions, and for awards with performance-based vest conditions, it is only recognized if the performance-based vest conditions are considered probable of being satisfied.
The following table presents a summary of the activity of the performance stock units:
| | | | | | | | |
| | | | Weighted average | | | ||
| | Number of | | grant-date | | Aggregate | ||
(in USD thousands, except share and per share amounts) | | units | | fair value | | intrinsic value | ||
Unvested as of December 31, 2025 | | | | $ | | | $ | |
Granted | | | | | | | | |
Forfeited | | ( | | | | | | |
Unvested as of March 31, 2026 | | | | $ | | | $ | |
| | | | | | | | |
| | | | Weighted average | | | ||
| | Number of | | grant-date | | Aggregate | ||
(in USD thousands, except share and per share amounts) | | units | | fair value | | intrinsic value | ||
Unvested as of December 31, 2024 | | | | $ | | | $ | |
Unvested as of March 31, 2025 | | | | $ | | | $ | |
As of March 31, 2026 and March 31, 2025, unrecognized stock-based compensation expense related to the Company’s performance stock units with market-based vest conditions and performance-based vest conditions considered probable of vesting was $
36
Table of Contents
American Bitcoin stock-based compensation
In connection with the ABTC Merger on September 3, 2025, American Bitcoin adopted the Amended and Restated American Bitcoin Corp. 2025 Omnibus Incentive Plan (the “ABTC 2025 Plan”), which amended and restated the predecessor Gryphon Digital Mining, Inc. 2024 Omnibus Incentive Plan. The ABTC 2025 Plan provides for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, performance grants, and other stock-based awards to employees, consultants, and directors of American Bitcoin, and its affiliates. As of the ABTC 2025 Plan’s effective date,
The following table presents a summary of the activity of the American Bitcoin restricted stock units:
| | | | | | | | |
| | | | Weighted average | | | ||
| | Number of | | grant-date | | Aggregate | ||
(in USD thousands, except share and per share amounts) | | units | | fair value | | intrinsic value | ||
Unvested as of December 31, 2025 | | — | | $ | — | | $ | |
Granted | | | | | | | | |
Unvested as of March 31, 2026 | | | | $ | | | $ | |
As of March 31, 2026, unrecognized stock-based compensation expense related to the American Bitcoin restricted stock units was $
Note 14. Net loss per share of common stock
Basic and diluted net loss per share attributable to common stockholders is computed in accordance to Note 2. Basis of presentation, summary of significant accounting policies and recent accounting pronouncements – Net loss per share attributable to common stockholders.
The following table presents potentially dilutive securities that were not included in the computation of diluted net loss per share of common stock as their inclusion would have been anti-dilutive:
| | | | |
| | Three Months Ended | ||
| | March 31, | ||
| | 2026 | | 2025 |
Stock options | | | | |
Restricted stock units | | | | |
Deferred stock units | | | | |
Performance stock units | | | | |
Warrants | | | | |
Convertible note and separated embedded derivative from the convertible note | | | | |
Total | | | | |
37
Table of Contents
The following is a reconciliation of the denominator of the basic and diluted net loss per share of common stock computations for the periods presented:
| | | | | | |
| | Three Months Ended | ||||
| | March 31, | ||||
(in USD thousands, except share and per share amounts) | | 2026 | | 2025 | ||
Numerator: | | | | | | |
Net loss attributable to Hut 8 Corp. | | $ | ( | | $ | ( |
Subsidiary Penny Warrant adjustment to net loss attributable to Hut 8 Corp.(1) | | | ( | | | |
Net loss attributable to Hut 8 Corp. – basic and diluted | | $ | ( | | $ | ( |
| | | | | | |
Denominator: | | | | | | |
Weighted average shares of common stock outstanding – basic | | | | | | |
Dilutive impact of outstanding equity awards | | | — | | | — |
Dilutive impact of convertible note | | | — | | | — |
Weighted average shares of common stock outstanding – diluted | | | | | | |
Net loss per share of common stock: | | | | | | |
Basic attributable to Hut 8 Corp. (2) | | $ | ( | | $ | ( |
Diluted attributable to Hut 8 Corp.(3) | | $ | ( | | $ | ( |
(1) | Calculated as the difference between Far North JV’s, a consolidated subsidiary that issued Penny Warrants, net income (loss) attributable to Hut 8 Corp. under ASC 260 inclusive of the impact of the Penny Warrants less Far North JV’s net income (loss) attributable to Hut 8 Corp. |
(2) | Calculated as net loss attributable to Hut 8 Corp. – basic, divided by weighted average shares of common stock outstanding – basic |
(3) | Calculated as net loss attributable to Hut 8 Corp. – diluted, divided by weighted average shares of common stock outstanding – diluted |
Note 15. Income taxes
For the three months ended March 31, 2026, the Company determined that the estimated annual effective tax rate could not be reliably estimated and, accordingly, computed its tax provision using the discrete method, treating the year-to-date period as if it were an annual period. For the three months ended March 31, 2025, the Company computed its tax provision using the estimated annual effective tax rate method.
For the three months ended March 31, 2026, the Company’s income tax benefit and effective tax rate were $
For the three months ended March 31, 2025, the Company’s income tax benefit and effective tax rate were $
The Company is subject to U.S. federal income taxes as well as income taxes in various state jurisdictions and in Canada. The Company’s tax returns for tax years beginning 2021 remain subject to potential examination by the taxing authorities.
Note 16. Concentrations
The Company has only mined Bitcoin during the three months ended March 31, 2026 and March 31, 2025. Therefore,
38
Table of Contents
Note 17. Related party transactions
Parties are considered related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. This includes equity method investment entities. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. The Company discloses all known related party transactions.
The Company provides services to TZRC, an equity method investment entity (refer to Note 8. Investment in unconsolidated joint venture for additional information on the equity method investment entity), in exchange for fees under a PMA. The Company also has a SAFE agreement with a related party as described in Note 9. Loans, notes payable, and other financial liabilities.
Note 18. Commitments and contingencies
Bitmain Purchase Agreement, 2025 ABTC Bitmain Purchase Agreement and 2026 ABTC Bitmain Purchase Agreement
The Bitmain Purchase Agreement prior to the expiry of its Bitcoin redemption option, 2025 ABTC Bitmain Purchase Agreement, and 2026 ABTC Bitmain Purchase Agreement include the following financial commitments: Bitcoin redemption and put options, recognized as derivative assets under ASC 815, measured at fair value at each reporting period, Miner purchase liability representing a commitment to settle the obligation in cash if the redemption right is exercised before expiration, and a derecognition of Digital assets – pledged for miner purchase if the redemption right is not exercised. See Note 5. Digital assets for further information on the purchase agreements with Bitmain.
Legal and regulatory matters
The Company and its subsidiaries are subject at times to various claims, lawsuits, and governmental proceedings relating to the Company’s business and transactions arising in the ordinary course of business. The Company cannot predict the final outcome of such proceedings. Where appropriate, the Company vigorously defends such claims, lawsuits, and proceedings. Some of these claims, lawsuits, and proceedings seek damages, including consequential, exemplary, or punitive damages, in amounts that could, if awarded, be significant. Certain of the claims, lawsuits, and proceedings arising in ordinary course of business are covered by the Company’s insurance program. The Company maintains property and various types of liability insurance in an effort to protect the Company from such claims. In terms of any matters where there is no insurance coverage available to the Company, or where coverage is available and the Company maintains a retention or deductible associated with such insurance or elects not to purchase such insurance, the Company may establish an accrual for such loss, retention, or deductible based on current available information. In accordance with accounting guidance, if it is probable that an asset has been impaired or a liability has been incurred as of the date of the financial statements and the amount of loss is reasonably estimable, then an accrual for the cost to resolve or settle these claims is recorded by the Company in the accompanying Unaudited Condensed Consolidated Balance Sheets. If it is reasonably possible that an asset may be impaired as of the date of the financial statement, then the Company discloses the range of possible loss. Expenses related to the defense of such claims are recorded by the Company as incurred and included in the accompanying Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss. Management, with the assistance of outside counsel, may from time to time adjust such accruals according to new developments in the matter, court rulings, or changes in the strategy affecting the Company’s defense of such matters. On the basis of current information, the Company does not believe there is a reasonable possibility that any material loss will result from any claims, lawsuits, and proceedings to which the Company is subject to either individually or in the aggregate.
39
Table of Contents
Securities Litigation
In February and March 2024, two purported securities class actions were filed in the U.S. District Court for the Southern District of New York against the Company and certain of its current and former officers. The two class actions were consolidated into In re Hut 8 Corp. Securities Litigation, Case No. 24-cv-00904 (VM), and a lead plaintiff was appointed on April 19, 2024. The lead plaintiff filed a consolidated amended complaint on June 14, 2024. The consolidated amended complaint alleges violations of Sections 11 and 15 of the Securities Act of 1933 (the “Securities Act”) and Section 10(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and Rule 10b-5 promulgated thereunder, and Section 20(a) of the Exchange Act. On December 2, 2024, the defendants filed a motion to dismiss the consolidated amended complaint. On January 16, 2025, the lead plaintiff opposed the motion. On February 18, 2025, the defendants filed a reply in further support of the motion to dismiss. On September 12, 2025, the U.S. District Court for the Southern District of New York issued a decision, dismissing all fraud-based Exchange Act claims and most Securities Act claims, leaving two Section 11 and Section 15 claims tied to King Mountain disclosures. On October 24, 2025, the defendants answered the surviving allegations in the amended complaint and amended their answer on November 14, 2025. On February 4, 2026, at the parties’ request, the court stayed all proceedings through April 15, 2026. On April 15, 2026, at the parties’ request, the court extended the stay of all proceedings through May 22, 2026.
Since the filing of the securities class actions, shareholder derivative suits were filed against the Company, its directors and certain of its current and former officers in the U.S. District Courts for the Southern District of New York, the District of Delaware, the Southern District of Florida, and the Delaware Court of Chancery alleging derivative claims for breach of fiduciary duties, unjust enrichment, waste of corporate assets, and violations of the Exchange Act, including Section 10(b). All derivative actions in the Southern District of New York were voluntarily dismissed or transferred to the District of Delaware. All derivative actions in the District of Delaware were voluntarily dismissed or dismissed by the court without prejudice. The Southern District of Florida consolidated and stayed
On December 1, 2025, a purported former shareholder filed a putative class action against Hut 8 and certain of its current and former officers in the Ontario Superior Court of Justice in Canada. The statement of claim alleges that Hut 8 made misrepresentations in connection with the November 2023 business combination of Hut 8 Mining Corp. and USBTC and asserts causes of action under the common law and the Ontario Securities Act.
The Company disputes the claims in these cases and intends to vigorously defend against them. Based on the preliminary nature of these proceedings, the outcome of these matters remains uncertain, and the Company cannot estimate the potential impact, if any, on its business or financial statements at this time.
Note 19. Subsequent events
The Company has completed an evaluation of all subsequent events after the balance sheet date up to the date that the Unaudited Condensed Consolidated Financial Statements were available to be issued. Except as described above and below, the Company has concluded no other subsequent events have occurred that require disclosure.
In April 2026, the Company’s wholly-owned subsidiary, Hut 8 DC LLC (the “Issuer”), closed a $
In May 2026, the Company entered into a $
40
Table of Contents
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read together with our Unaudited Condensed Consolidated Financial Statements and the related notes and the other financial information included elsewhere in this Quarterly Report and with our Audited Consolidated Financial Statements included in our Annual Report. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual business, financial condition, and results of operations could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those discussed below and elsewhere in this Quarterly Report and in the Annual Report, particularly under “Item 1A. Risk Factors.” See also “Cautionary Statement Regarding Forward-Looking Statements.” Our historical results are not necessarily indicative of the results that may be expected for any period in the future.
Business Overview
Hut 8 is an energy infrastructure platform integrating power, digital infrastructure, and compute at scale to fuel next-generation, energy-intensive technologies such as AI, high-performance computing, and ASIC compute. The Company develops, commercializes, and operates industrial-scale energy and data center infrastructure through a power-first, innovation-driven approach.
Q1 2026 Highlights
| ● | Beacon Point Lease. We entered into a long-term triple-net lease with a multi-trillion-dollar market capitalization, high-investment-grade technology company at our Beacon Point Campus, located in Nueces County, Texas, representing a significant infrastructure partnership with a base contract value of approximately $9.8 billion over a 15-year term, inclusive of 3% annual rent escalations and expected to generate average annual net operating income (“NOI”) of approximately $655.0 million. The agreement includes three 5-year renewal options, extending potential total contract value to approximately $25.1 billion. Initial delivery is expected in Q3 2027. We intend to support the development of Beacon Point with non-recourse, project-level financing with the aim of optimizing cost of capital at the asset level and maintaining disciplined long-term leverage metrics at the corporate level. |
The Beacon Point campus is designed for scalability, with approvals for up to 1,000 MW of utility capacity. The initial 352 MW IT load (approximately 500 MW utility capacity) represents the first phase of commercialization and provides significant runway for potential campus expansion and revenue growth.
| ● | $3.25 Billion River Bend Financing. On April 30, 2026, our wholly-owned subsidiary, Hut 8 DC LLC (the “Issuer”), closed a $3.25 billion private offering of 6.192% senior secured notes due November 15, 2042 (the “Notes”). Proceeds will be used to fund the development of a turnkey data center with 245 megawatts of critical IT capacity supported by 330 megawatts of utility capacity, and associated substation at the River Bend campus, reimburse prior equity contributions, and cover debt service reserves and transaction costs. The Notes are rated BBB− with a Positive Outlook by S&P Global Ratings and BBB− with a Stable Outlook by Fitch Ratings, and represent the first investment-grade project bond ever issued for a construction-stage data center project. The Notes carry semi-annual interest payments beginning November 15, 2026, and include scheduled amortization starting May 15, 2028. Structured as senior secured, project-level debt with first-priority liens on substantially all Issuer assets and equity pledges, the Notes are non-recourse to the parent company, reinforcing a financing approach that isolates risk while advancing large-scale digital infrastructure expansion. |
| ● | FalconX Master Lender Agreement. In May 2026, we entered into a $200.0 million Bitcoin-collateralized term loan with FalconX Charlie, Inc. (“FalconX”), maturing in April 2027 and bearing a fixed interest rate of 7.00%. The facility is structured with an initial collateral ratio of 143%, with margin call and liquidation thresholds at 130% and 105%, respectively. The loan includes a prepayment option after six months without penalty, while early repayment prior to that period is subject to a 0.125%–0.25% fee depending on the circumstances. The funds from this loan were used to simultaneously pay off the loan with Coinbase Credit, Inc. (“Coinbase”), which carried an interest rate of 9.00%. This resulted in a reduction in borrowing costs and the termination of the Coinbase loan. |
41
Table of Contents
| ● | Reenergization of Drumheller Site. In March 2026, our site in Drumheller, Alberta was reenergized in anticipation of the delivery and deployment of ~11,298 Bitcoin miners from American Bitcoin, representing ~3.05 exahash per second (“EH/s”) at ~13.5 joules per terahash (“J/TH”). The site, which previously mined Bitcoin, had been non-operational since March 2024 due to elevated energy costs and underlying voltage issues impacting profitability. The delivery and deployment of the Bitcoin miners was completed in April 2026, increasing American Bitcoin’s total owned fleet capacity from ~25.0 to ~28.1 EH/s while improving overall portfolio efficiency from ~16.3 to ~16.0 J/TH. The decision to reenergize was based on an improvement in power pricing in Alberta along with cost-efficient path to fix the previous voltage issues and a path to an attractive commercial agreement with American Bitcoin. |
| ● | Far North Sale. In February 2026, we completed the divestiture of our Far North joint venture (the “Far North JV”) with Macquarie Group Limited (“Macquarie”), consisting of four power generation assets in Ontario, Canada totaling approximately 310 MW of capacity. The assets had been classified as held for sale as of December 31, 2025. Upon closing, we recognized a gain of $33.6 million, net of transaction fees. Total proceeds were $75.4 million (C$105.1 million), which were used to settle a $27.9 million (C$38.9 million) lease liability related to equipment at Iroquois Falls, inclusive of indirect taxes, and fund a $10.0 million (C$13.9 million) buyout of the non-controlling interest. |
Key Factors Affecting Our Performance
Power constraints
Access to energy is a key factor affecting our ability to meet growing demand for high performance computing (“HPC”), artificial intelligence (“AI”), and application specific integrated circuit (“ASIC”) compute and to scale our digital infrastructure platform. Power is the foundation of our operations. We acquire, develop, and manage critical energy assets such as interconnects, powered land, and other electrical infrastructure to address the load demands of energy-intensive applications. As competition for power intensifies, our performance depends on originating, commercializing, and optimizing energy capacity at scale. We believe our experience in power origination, infrastructure design, and load optimization positions us to manage these constraints and support continued growth. Our portfolio currently provides access to competitively priced electrical power in the regions where we operate; however, there is no guarantee that we will be able to procure additional power on similar terms, or at all. Market prices for power, capacity, and ancillary services are unpredictable and tend to fluctuate substantially. See “Risk Factors—Risks Related to Our Business and Operations—We are subject to risks associated with our need for significant electrical power” in the Annual Report.
Expansion into AI infrastructure services and other energy-intensive use cases
A key factor affecting our performance is our ability to expand into AI infrastructure services and other energy-intensive use cases. We are leveraging our existing development and operational expertise to develop data centers that support specialized workloads for enterprise and hyperscale customers and other next-generation, energy-intensive use cases. Success in this area depends on various factors, including our ability to develop future sites, secure and retain customers, manage capital efficiently, and compete effectively in emerging technology markets. While this expansion may increase operating and capital costs and expose us to execution and market risks, management believes our experience in power origination, development, and management in large-scale digital infrastructure development position us to capture long-term growth opportunities in the evolving AI sector and other next-generation, energy-intensive use cases.
Price of Bitcoin
While we are migrating towards less volatile, lower cost-of-capital businesses, such as data centers, our current financials remain heavily dependent on the price of Bitcoin, which has historically experienced significant volatility. Our exposure is driven primarily by the Bitcoin held on our consolidated balance sheet, including Bitcoin held directly by us and American Bitcoin in our respective strategic reserves. In addition, our consolidated results reflect American Bitcoin’s activities as a Bitcoin accumulation platform and its strategy of purchasing and holding Bitcoin. Lastly, we generate revenue from Bitcoin rewards that are earned through mining operations at our facilities, the majority of which are conducted through American Bitcoin.
42
Table of Contents
Under ASU 2023-08, Intangibles—Goodwill and Other—Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets (“ASU 2023-08”), Bitcoin is revalued at fair value at the end of each reporting period, with changes in fair value recognized in net income. As a result, fluctuations in Bitcoin prices may impact our consolidated financial performance, including mark-to-market adjustments on Bitcoin, but does not reflect changes in our core operating performance.
Bitcoin network difficulty and hashrate
Our consolidated business is not only impacted by the volatility in Bitcoin prices, but American Bitcoin is also affected by increases in the competition for Bitcoin production, specifically for ASIC compute. This increased competition is described as the network hashrate resulting from the growth in the overall quantity and quality of miners working to solve blocks on the Bitcoin blockchain, and the difficulty index associated with the secure hashing algorithm employed in solving the blocks. Increased difficulty reduces the mining proceeds of the equipment proportionally and eventually requires Bitcoin miners like American Bitcoin, to upgrade their equipment to remain profitable and compete effectively with other miners. Conversely, a decline in network hashrate results in a decrease in difficulty, increasing mining proceeds and profitability.
Block reward and halving
The current Bitcoin reward for solving a block is 3.125 Bitcoin. The Bitcoin network is programmed such that the Bitcoin block reward is halved every 210,000 blocks mined, or approximately every four years. This reduction in reward spreads out the release of Bitcoin over a long period of time as fewer Bitcoin are mined with each halving event. Bitcoin halving events impact the number of Bitcoin that we mine, including through American Bitcoin which, in turn, may have a potential impact on our results of operations. The last halving event occurred in April 2024, and the next halving event is expected to occur in 2028.
Key Performance Indicators
In addition to our financial results and generally accepted accounting principles in the United States of America (“GAAP”) financial measures, we use certain key performance indicators to evaluate our business, identify trends, and make strategic decisions. Certain Key Performance Indicators for the prior period were reclassified to align with updated definitions.
The following table presents our key performance indicators for the three months ended March 31, 2026 and 2025.
| | | | | | |
| | As of | ||||
| | March 31, | ||||
| | 2026 | | 2025 | ||
Energy Capacity Under Diligence | | | 4,345 MW | | | 7,890 MW |
Energy Capacity Under Exclusivity | | | 1,500 MW | | | 2,613 MW |
Energy Capacity Under Development | | | 1,230 MW | | | — MW |
Energy Capacity Under Construction | | | 330 MW | | | 205 MW |
Energy Capacity Under Management | | | 710 MW | | | 815 MW |
Energy Capacity Under Diligence
Energy Capacity Under Diligence represents sites identified for large-load use cases such as AI, HPC, ASIC compute, industrial applications such as next generation manufacturing, and other energy-intensive technologies. At this stage, we assess site potential by engaging with utilities, landowners, power generators, local, state and regulatory bodies, and other stakeholders to evaluate critical factors, including power availability, infrastructure readiness, fiber connectivity, and overall commercial viability. This metric allows management to better understand our potential opportunities, allowing us to remain selective in our investment decisions while positioning us to respond to market demand signals and emerging opportunities. Energy Capacity Under Diligence as of March 31, 2026, was 4,345 MW compared to 7,890 MW as of March 31, 2025. The net decrease reflects both the advancement of certain sites into other development categories and the removal of sites that no longer met our strategic, commercial, infrastructure, or regulatory criteria.
43
Table of Contents
Energy Capacity Under Exclusivity
Energy Capacity Under Exclusivity represents sites where we have secured a clear path to ownership through either: (i) an exclusivity agreement that prevents the sale of designated land and power capacity to another party or (ii) a tendered interconnection agreement, confirming a viable path to securing power and infrastructure for deployment. Management monitors Energy Capacity Under Exclusivity to evaluate potential near-term opportunities prior to making additional investment commitments. Energy Capacity Under Exclusivity as of March 31, 2026 was 1,500 MW compared to 2,613 MW as of March 31, 2025. The net decrease reflects both the advancement of certain sites into other development categories and the removal of sites that no longer met our strategic, commercial, infrastructure, or regulatory criteria.
Energy Capacity Under Development
Energy Capacity Under Development represents sites where we are actively investing in development and commercialization by executing definitive land and/or power agreements, advancing site design and infrastructure buildout, and engaging with prospective customers. This phase is monitored by management as it represents the projects that are closest to commencing construction. Energy Capacity Under Development as of March 31, 2026 was 1,230 MW compared to 0 MW as of March 31, 2025. The growth was driven by an increase of 1,230 MW in capacity advancing from exclusivity to development, including two sites in Texas totaling 1,180 MW, and one 50 MW site in Illinois.
Energy Capacity Under Construction
Energy Capacity Under Construction represents sites where we have executed a definitive offtake or other commercial agreements and commenced construction activities. This stage includes oversight of contractors, equipment delivery, and commissioning schedules to ensure projects are completed safely, on time, and within budget. Progress at this stage is closely monitored to manage capital deployment and align project delivery with customer timelines and market demand. Energy capacity under construction as of March 31, 2026 was 330 MW related to the River Bend site compared to 205 MW as of March 31, 2025, related to the Vega site which was energized and moved to Energy Capacity Under Management in June 2025.
Energy Capacity Under Management
Energy Capacity Under Management comprises all power-related assets, including power generation, managed services, ASIC and Central Processing Unit (“CPU”) infrastructure, ASIC compute, traditional cloud, and non-operational sites. Management uses this metric to assess total energy capacity utilization across our operations and to support efficient resource allocation. Energy Capacity Under Management was 710 MW as of March 31, 2026, compared to 815 MW as of March 31, 2025. The decrease was primarily driven by the divesture of the Far North JV in February 2026, which consisted of four power generation assets in Ontario totaling approximately 310 MW, partially offset by the energization of our 205 MW Vega site in June 2025.
Non-GAAP Financial Measures
In addition to our results determined in accordance with GAAP, we rely on Adjusted EBITDA to evaluate our business, measure our performance, and make strategic decisions. Adjusted EBITDA is a non-GAAP financial measure. We define Adjusted EBITDA as net loss, adjusted for impacts of interest expense, income tax benefit, depreciation and amortization, our share of unconsolidated joint venture depreciation and amortization, foreign exchange loss or gain, loss on sale of property and equipment, gain on derivatives, loss or gain on other financial liability, gain on warrant liability, gain on sale of Far North JV, net of transaction costs, the removal of non-recurring transactions, asset contribution costs, loss attributable to non-controlling interests, and stock-based compensation expense in the period presented. You are encouraged to evaluate each of these adjustments and the reasons our Board and management team consider them appropriate for supplemental analysis.
44
Table of Contents
Our board of directors and management team use Adjusted EBITDA to assess our financial performance because it allows them to compare our operating performance on a consistent basis across periods by removing the effects of our capital structure (such as varying levels of interest expense and income), asset base (such as depreciation and amortization), and other items (such as non-recurring transactions mentioned above) that impact the comparability of financial results from period to period.
Net loss is the GAAP measure most directly comparable to Adjusted EBITDA. In evaluating Adjusted EBITDA, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in such presentation. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. There can be no assurance that we will not modify the presentation of Adjusted EBITDA in the future, and any such modification may be material. Adjusted EBITDA has important limitations as an analytical tool and you should not consider Adjusted EBITDA in isolation or as a substitute for analysis of our results as reported under GAAP. Because Adjusted EBITDA may be defined differently by other companies in our industry, our definition of this non-GAAP financial measure may not be comparable to similarly titled measures of other companies, thereby diminishing its utility.
For a reconciliation to our most directly comparable financial measure calculated and presented in accordance with GAAP, please see “—Results of Operations” below.
Business Segments
We have four reportable business segments: Power, Digital Infrastructure, Compute, and Other.
Power
The Power business segment consists of Power Generation and Managed Services.
Power Generation
In February 2026, we completed the divestiture of the Far North JV, and accordingly no longer generate revenue from these assets. We previously generated revenue from our 80.1% interest in the Far North JV, which acquired the four natural gas power plants in Ontario, Canada in February 2024. The power generation facilities are connected to the Independent Electricity System Operator, which operates Ontario’s power grid, and primarily generated revenue from capacity and electricity sales. Revenue generated from capacity and electricity sales was variable and depended on several factors, including generation capacity in the market, the supply and demand for electricity, and the prevailing price of natural gas.
Managed Services
Our Managed Services business provides institutional partners with an end-to-end partnership model for energy infrastructure development, including:
| ● | Project inception: site design, procurement, and construction management; |
| ● | Project operationalization: software automation, process design, personnel hiring, and team training; |
| ● | Revenue management: utilities contracts, hosting operations, and customer management; |
| ● | Project optimization: energy portfolio optimization and strategic initiatives; and/or |
| ● | Compliance and reporting: finance, accounting, and safety. |
Cash flows in our Managed Services business are generated through a fee structure that is typically fixed based on power capacity under management, with reimbursement of passthrough costs. In addition to the fixed fee, under certain agreements, further cash flows may be driven from incentive bonuses and certain energy management services.
As of March 31, 2026, we managed 280 MW of energy capacity under this program at one site in the United States owned by the King Mountain JV.
45
Table of Contents
Starting April 1, 2025, we began operating as the exclusive provider of managed services to American Bitcoin via the execution of a Master Managed Services Agreement (“MSA”). Under the MSA, we provide American Bitcoin with management, oversight, strategy, compliance, operational, and other services for American Bitcoin’s mining operations. These operations are colocated at our facilities. The fee structure typically consists of (i) a fixed fee of $1.250/kW-month based on the power capacity of each facility, as well as (ii) designated site level reimbursements. As American Bitcoin is a consolidated subsidiary, all fees under the MSA are eliminated in consolidation.
Digital Infrastructure
Under our ASIC infrastructure business, we enter into contracts to host and operate mining equipment on behalf of third parties within our facilities. These services include the provision, if applicable, and hosting of mining equipment as well as the monitoring, troubleshooting, repair, and maintenance of such equipment. Revenues from ASIC infrastructure services are generated through fees that may be fixed or based on profit-sharing arrangements, often with reimbursement for certain pass-through costs, such as electricity.
Starting April 1, 2025, we began operating as the exclusive provider of ASIC infrastructure services to American Bitcoin via the execution of a Master Colocation Services Agreement (“CSA”). Under the CSA, we provide ASIC infrastructure services for American Bitcoin’s miners at our facilities. The fee structure typically includes (i) a fixed monthly fee that targets a 25% yield on cost of each facility as of the start of the specific service order under the CSA, subject to an annual increase, as well as (ii) infrastructure-related site level reimbursements. As American Bitcoin is a consolidated subsidiary, all fees under the CSA are eliminated in consolidation.
During 2024, we entered into an ASIC colocation contract with Bitmain Technologies Georgia Limited (“Bitmain”) to host miners at our Vega site. The agreement featured a fixed hosting fee with an option for us to purchase all or a portion of the hosted machines in up to three tranches at a fixed price within six months of energization of the relevant tranches. We completed energization of the miners during June and July 2025. In August 2025, pursuant to our Put Option Agreement with American Bitcoin entered into on March 31, 2025 (the “Put Option Agreement”), we assigned our option to purchase the hosted machines to American Bitcoin. In August 2025, American Bitcoin exercised this option to purchase all of the Bitmain miners hosted at the Vega site, where we then began to provide ASIC infrastructure services to American Bitcoin under the CSA.
Through our Hut 8 Canada business, we provide data center and cloud infrastructure services, including colocation solutions, supported by approximately 3 MW of energy capacity and more than 36,000 square feet of geo-diverse data center space across five locations in Canada. These services support customers operating compute, storage, and network workloads across traditional enterprise, B2B, machine learning, visual effects, and AI. Our CPU infrastructure offering is delivered in Mississauga, Ontario; Vaughan, Ontario; Kelowna, British Columbia; and two locations in Vancouver, British Columbia. The facilities are powered predominately by emission-free energy sources. This segment serves computing needs unrelated to ASIC Compute. These data centers are carrier neutral with network diversity and redundancy from multiple telecommunications providers.
Our CPU infrastructure business is based on a fixed-fee model. Customers pay a fixed recurring monthly fee based on a set amount of resources assigned.
We are expanding our Digital Infrastructure platform to support AI and other high-performance computing workloads through purpose-built data centers, beginning with the development of our River Bend campus in Louisiana and our Beacon Point campus in Texas.
Compute
Our Compute segment comprises operating businesses that deploy and monetize compute assets across next-generation energy-intensive technology end markets. We generate revenue through the operation of owned compute infrastructure and the provision of compute-based services, with economics driven by hardware utilization, operating efficiency, and market demand. The Compute business segment consists of ASIC Compute, Traditional Cloud, and AI Cloud.
46
Table of Contents
ASIC Compute
The ASIC Compute segment reflects revenue generated primarily by American Bitcoin.
Our ASIC Compute business spanned six sites as of March 31, 2026, which are primarily occupied by American Bitcoin miners and hosted at facilities supported by our ASIC Infrastructure:
| ● | five sites with facilities we own and/or lease, and operate: (1) Alpha (Niagara Falls, New York), (2) Medicine Hat (Medicine Hat, Alberta), (3) Salt Creek (Orla, Texas), (4) Vega (Amarillo, Texas), and (5) Drumheller (Drumheller, Alberta); and |
| ● | one site that we own through a 50% joint venture, King Mountain (McCamey, Texas). |
Bitcoin rewards are received from mining activity through third-party mining pool operators, which allow miners to combine their processing power, increasing their chances of solving a block and getting paid by the network. We provide computing power to mining pools, which use this computing power to operate nodes and validate blocks on the blockchain. The pools then distribute our pro-rata share of Bitcoin mined to us based on the computing power we contribute.
During February and March 2025, our mining activity was reduced due to a planned fleet upgrade, which was completed on April 4, 2025. The fleet upgrade resulted in higher efficiency Antminer S21+ miners at our Salt Creek and Medicine Hat sites, which improved ASIC Compute operations.
On March 31, 2025, we launched American Bitcoin. Beginning April 1, 2025, ASIC Compute operations previously reported under our Compute segment remain under this segment but operate generally through our majority-owned subsidiary, American Bitcoin.
On August 5, 2025, American Bitcoin entered into an On-Rack Sales and Purchase Agreement (the “2025 ABTC Bitmain Purchase Agreement”) with Bitmain to purchase up to approximately 17,280 Bitmain Antminer U3S21EXPH ASIC miners (collectively, the “Bitmain Miners”), representing a total of approximately 14.86 EH/s. Concurrently with the execution of the 2025 ABTC Bitmain Purchase Agreement, American Bitcoin purchased 16,299 of the Bitmain Miners, representing a total of approximately 14.02 EH/s, for a total purchase price of approximately $314 million, paid through the pledge of Bitcoin at a mutually agreed upon fixed price. In September 2025, American Bitcoin purchased the remaining 981 Bitmain Miners for a total purchase price of $18.9 million, also paid through the pledge of Bitcoin at a mutually agreed upon fixed price. The Bitcoin pledged under the 2025 ABTC Bitmain Purchase Agreement has a redemption period of approximately 24 months from each pledge date.
In March 2026, our site in Drumheller, Alberta was reenergized in anticipation of the delivery and deployment of approximately 11,298 Bitcoin miners from American Bitcoin, representing approximately 3.05 EH/s at approximately 13.5 J/TH, for a total purchase price of $49.4 million, paid through the pledge of Bitcoin at a mutually agreed upon fixed price. The delivery and deployment of these Bitcoin miners was completed in April 2026, increasing American Bitcoin’s total owned fleet capacity from approximately 25.1 to approximately 28.1 EH/s while improving overall portfolio efficiency from approximately 16.3 to approximately 16.0 J/TH. The Bitcoin pledged for this purchase has a redemption period of approximately 24 months from the applicable pledge date. American Bitcoin may elect to extend the pledge period for an additional 12 months.
Traditional Cloud
Our Traditional Cloud segment reflects revenue generated by Hut 8 Canada. Traditional Cloud services support both public and private cloud deployments, managed backup, business continuity and disaster recovery services, and high-performance, high-capacity storage solutions at our five HPC locations across Canada. We employ a consumption-based fee structure where customers commit to a baseline level of compute, storage, network, or power usage as defined in their service agreements. Any usage beyond this baseline is typically billed incrementally, so costs are aligned with actual resource consumption and customers are afforded flexibility as their needs evolve.
47
Table of Contents
AI Cloud
Our AI Cloud assets are deployed under our wholly owned subsidiary, Highrise AI, Inc., at a third-party colocation site near Chicago, Illinois. This segment generates recurring revenue through contracts where customers pay for access to graphics processing units (“GPU”) compute resources under on-demand or committed-use arrangements.
Other
Our Other reporting segment included activities that fall outside the scope of our Power, Digital Infrastructure, and Compute layers.
Equipment Sales and Repairs
We may sell mining equipment when profitable opportunities arise (e.g., if market prices exceed our procurement cost). We may also repair miners for third parties in exchange for a fees, as we have a fully equipped, MicroBT-certified repair center space at our Medicine Hat site.
48
Table of Contents
Results of Operations
Three Months Ended March 31, 2026 and 2025
| | | | | | | | | |
| | Three Months Ended |
| | | ||||
| | March 31, | | | Increase | ||||
(in USD thousands) | | 2026 | | 2025 | | | (Decrease) | ||
Revenue: | | | | | | | | | |
Power | | $ | 3,740 | | $ | 4,380 | | $ | (640) |
Digital Infrastructure | | | 1,303 | | | 1,317 | | | (14) |
Compute | | | 65,974 |
| | 16,118 | | | 49,856 |
Total revenue | |
| 71,017 |
| | 21,815 | | | 49,202 |
| | | | | | | | | |
Cost of revenue (exclusive of depreciation and amortization shown below): | | | | | | | | | |
Cost of revenue – Power | | | 2,107 | | | 3,628 | | | (1,521) |
Cost of revenue – Digital Infrastructure | | | 1,546 | | | 1,559 | | | (13) |
Cost of revenue – Compute | | | 21,895 | | | 13,472 | | | 8,423 |
Total cost of revenue | | | 25,548 | | | 18,659 | | | 6,889 |
| | | | | | | | | |
Operating expenses: | |
| | | | | | | |
Depreciation and amortization | | | 38,442 | | | 14,899 | | | 23,543 |
General and administrative expenses | | | 81,740 | | | 21,059 | | | 60,681 |
Loss on digital assets | | | 295,657 |
| | 112,394 | | | 183,263 |
Loss on sale of property and equipment | | | — |
| | 2,454 | | | (2,454) |
Total operating expense | | | 415,839 | | | 150,806 | | | 265,033 |
Operating loss | | | (370,370) | | | (147,650) | | | (222,720) |
| | | | | | | | | |
Other income (expense): | |
| | | | | | | |
Foreign exchange (loss) gain | | | (2,720) | | | 9 | | | (2,729) |
Interest expense | | | (9,243) | | | (7,469) | | | (1,774) |
Asset contribution costs | | | — | | | (22,780) | | | 22,780 |
Gain on derivatives | | | 40,817 | | | 20,862 | | | 19,955 |
(Loss) gain on other financial liability | | | (661) | | | 1,139 | | | (1,800) |
Gain on warrant liability | | | 69 | | | — | | | 69 |
Gain on sale of Far North JV, net of transaction costs | | | 33,601 | | | — | | | 33,601 |
Equity in earnings of unconsolidated joint venture | |
| 6,430 |
| | 1,365 | | | 5,065 |
Total other income (expense) | |
| 68,293 |
| | (6,874) | | | 75,167 |
| |
| | | | | | | |
Net loss before taxes | | | (302,077) | | | (154,524) | | | (147,553) |
| | | | | | | | | |
Income tax benefit | | | 48,942 | | | 20,205 | | | 28,737 |
| | | | | | | | | |
Net loss | | $ | (253,135) | | $ | (134,319) | | $ | (118,816) |
| | | | | | | | | |
Less: Net loss attributable to non-controlling interests | | | 33,286 | | | 430 | | | 32,856 |
Net loss attributable to Hut 8 Corp. | | $ | (219,849) | | $ | (133,889) | | $ | (85,960) |
| | | | | | | | | |
Net loss | | $ | (253,135) | | $ | (134,319) | | $ | (118,816) |
Other comprehensive (loss) income: | | | | | | | | | |
Foreign currency translation adjustments | | | (9,310) | | | 1,187 | | | (10,497) |
Total comprehensive loss | | | (262,445) | | | (133,132) | | | (129,313) |
Less: Comprehensive loss attributable to non-controlling interest | | | 33,281 | | | 431 | | | 32,850 |
Comprehensive loss attributable to Hut 8 Corp. | | $ | (229,164) | | $ | (132,701) | | $ | (96,463) |
49
Table of Contents
Adjusted EBITDA reconciliation:
| | | | | | | | | |
| | Three Months Ended | | | | ||||
| | March 31, |
| Increase | |||||
(in USD thousands) | | 2026 | | 2025 | | (Decrease) | |||
Net loss | | $ | (253,135) | | $ | (134,319) | | $ | (118,816) |
Interest expense | |
| 9,243 | | | 7,469 | | | 1,774 |
Income tax benefit | |
| (48,942) | | | (20,205) | | | (28,737) |
Depreciation and amortization | |
| 38,442 | | | 14,899 | | | 23,543 |
Share of unconsolidated joint venture depreciation, amortization, net of basis adjustments (1) | |
| 2,159 | | | 5,485 | | | (3,326) |
Foreign exchange loss (gain) | | | 2,720 | | | (9) | | | 2,729 |
Loss on sale of property and equipment | | | — | | | 2,454 | | | (2,454) |
Gain on derivatives | | | (40,817) | | | (20,862) | | | (19,955) |
Loss (gain) on other financial liability | | | 661 | | | (1,139) | | | 1,800 |
Gain on warrant liability | | | (69) | | | — | | | (69) |
Gain on sale of Far North JV, net of transaction costs | | | (33,601) | | | — | | | (33,601) |
Non-recurring transactions (2) | | | — | | | 1,485 | | | (1,485) |
Asset contribution costs | | | — | | | 22,780 | | | (22,780) |
Loss attributable to non-controlling interest | | | 21,953 | | | 473 | | | 21,480 |
Stock-based compensation expense | |
| 50,874 | | | 3,793 | | | 47,081 |
Adjusted EBITDA | | $ | (250,512) | | $ | (117,696) | | $ | (132,816) |
(1) | Net of the accretion of fair value differences of depreciable and amortizable assets included in equity in earnings of unconsolidated joint venture in the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss in accordance with ASC 323. See Note 8. Investment in unconsolidated joint venture of our Unaudited Condensed Consolidated Financial Statements for further detail. |
(2) | There were no non-recurring transactions for the three months ended March 31, 2026. Non-recurring transactions for the three months ended March 31, 2025 represent approximately $1.5 million of restructuring costs and ABTC related transaction costs. |
Revenue
Total revenue was $71.0 million and $21.8 million for the three months ended March 31, 2026, and 2025, respectively, and consisted of Power, Digital Infrastructure, and Compute.
Power
Power revenue was $3.7 million and $4.4 million for the three months ended March 31, 2026 and 2025, respectively. This $0.7 million decrease was primarily driven by a $0.7 million decrease in electricity sales resulting from the sale of Far North JV in February 2026, compared to a full quarter of Far North JV activity in 2025.
Digital Infrastructure
Digital Infrastructure revenue was $1.3 million for both the three months ended March 31, 2026, consistent with prior period.
Compute
Compute revenue was $66.0 million and $16.1 million for the three months ended March 31, 2026 and 2025, respectively, representing an increase of $49.9 million. The increase was primarily driven by higher ASIC Compute revenue, reflecting an increase in Bitcoin mined from approximately 135 to approximately 817, partially offset by a decrease in average revenue per Bitcoin mined from approximately $91,512 to approximately $76,077. The increase in Bitcoin mined was primarily attributable to improved uptime following the fleet upgrade completed in April 2025 at the Salt Creek and Medicine Hat locations, as well as the commencement of ASIC Compute operations at the Vega site in August 2025.
Cost of Revenue
Total cost of revenue was $25.5 million and $18.7 million for the three months ended March 31, 2026 and 2025, respectively, and consisted of Power, Digital Infrastructure, and Compute.
50
Table of Contents
Power
Power cost of revenue was $2.1 million and $3.6 million for the three months ended March 31, 2026 and 2025, respectively. The $1.5 million decrease was primarily driven by lower electricity sales of $1.8 million following the divestiture of the Far North JV in February 2026, partially offset by a $0.3 million increase in Managed Services cost of revenue.
Digital Infrastructure
Digital Infrastructure cost of revenue was $1.5 million and $1.6 million for the three months ended March 31, 2026 and 2025, respectively. The cost of revenue was consistent.
Compute
Compute cost of revenue was $21.9 million and $13.5 million for the three months ended March 31, 2026 and 2025, respectively. This $8.4 million increase was primarily driven by (i) an $8.0 million increase in ASIC Compute costs due to higher uptime as a result of the fleet upgrade that was completed in April 2025 at the Salt Creek and Medicine Hat sites, as well as the energization of the Vega site in June 2025, and (ii) a $0.4 million increase in AI Cloud costs.
Depreciation and Amortization
Depreciation and amortization expense was $38.4 million and $14.9 million for the three months ended March 31, 2026 and 2025, respectively. This $23.5 million increase was primarily driven by $19.9 million of higher depreciation on American Bitcoin’s ASIC miners as a result of the fleet upgrade that was completed in April 2025 at our Salt Creek and Medicine Hat sites, as well as American Bitcoin’s purchase of the Bitmain Miners at the Vega site in August 2025, and $6.2 million of depreciation of our mining infrastructure and related machinery and equipment related to the construction and energization of our Vega site in June 2025. These increases were partially offset by a decrease in depreciation of power plant assets as they were sold in the Far North JV sale in February 2026.
General and Administrative Expenses
General and administrative expenses were $81.7 million and $21.1 million for the three months ended March 31, 2026 and 2025, respectively. This $60.6 million increase was primarily driven by (i) a $47.1 million increase in share based payments related expense, (ii) a $7.0 million increase in salary and benefit expenses due to added headcount to support our growth initiatives, (iii) a $4.2 million increase in professional fees primarily due to legal and tax expenses incurred to support the execution of our growth plan, and (iv) a $1.9 million increase in insurance expenses primarily due to the increase in our asset base. These increases were partially offset by a $1.3 million decrease in transaction costs related to the merger between Gryphon Digital Mining, Inc. and American Bitcoin, which closed in September 2025.
Loss on Digital Assets
Losses on digital assets were $295.7 million and $112.4 million for the three months ended March 31, 2026 and 2025, respectively. The unfavorable variance was primarily driven by a larger decrease in the price of Bitcoin in the three months ended March 31, 2026 when compared to the three months ended March 31, 2025. In the three months ended March 31, 2026, Bitcoin price declined from approximately $87,498 to approximately $68,222. In the three months ended March 31, 2025, Bitcoin price declined from approximately $93,354 to approximately $82,534.
51
Table of Contents
Other Income (Expense)
Other income was $68.3 million for the three months ended March 31, 2026, compared to other expense of $6.9 million for the three months ended March 31, 2025. This $75.2 million increase was primarily driven by (i) a $33.6 million gain related to the sale of Far North Power Corp, (ii) a $22.8 million decrease in asset contribution costs related to non-controlling interest portion of our March 31, 2025 contribution of substantially all of our ASIC miners in exchange for 80% of American Data Centers Inc., as part of the launch of American Bitcoin, (iii) a $20.0 million increase in the gains on derivatives due to an increase in pledged Bitcoin for miner purchases at American Bitcoin, (iv) a $5.1 million increase in equity in earnings of unconsolidated joint venture. These gains were partially offset by (i) a $2.7 million increase in foreign exchange loss, (ii) a $1.8 million increase in interest expense due to higher average outstanding debt, and (iii) a $1.8 million decrease in gain on other financial liability.
Income Tax Benefit
Our income tax benefit was $48.9 million and $20.2 million for the three months ended March 31, 2026 and 2025, respectively. This $28.7 million increase was primarily driven by deferred taxes related to the losses on digital assets and the valuation allowance recognized in the three months ended March 31, 2025.
King Mountain JV
The King Mountain JV is a 50/50 joint venture with one of the world’s largest renewable energy producers. The King Mountain JV has 280 MW of self-mining and hosting operations located behind-the-meter at a wind farm in McCamey, Texas.
As of March 31, 2026, the King Mountain JV owned approximately 18,000 miners for self-mining (about 1.8EH/s) and hosted approximately 52,159 miners (about 11.22 EH/s) for a single hosting customer at its King Mountain site, which has a total capacity of 280 MW.
We account for the King Mountain JV using the equity method of accounting, resulting in reporting the King Mountain JV as an unconsolidated joint venture. Additionally, our 50% portion of any distributions from the King Mountain JV are used to pay down the TZRC Secured Promissory Note. See Note 8. Investment in unconsolidated joint venture and Note 9. Loans, notes payable, and other financial liabilities to the Unaudited Condensed Consolidated Financial Statements found elsewhere in this Quarterly Report for additional information on the King Mountain JV and TZRC Secured Promissory Note.
Below are the condensed consolidated income statements for the King Mountain JV for the three months ended March 31, 2026 and March 31, 2025.
| | | | | | |
Condensed Consolidated Income Statement | ||||||
| | Three Months Ended | ||||
| | March 31, | ||||
(in USD thousands) | | 2026 | | 2025 | ||
Total revenue, net | | $ | 30,921 | | $ | 33,913 |
Gross profit | | | 14,102 | | | 14,833 |
Net income (loss) | | | 9,374 | | | (756) |
Net income (loss) attributable to investee | | | 4,687 | | | (378) |
Our board of directors and management team also evaluate Adjusted EBITDA for the King Mountain JV, which is a non-GAAP financial measure. We define Adjusted EBITDA as net income (loss) before depreciation and amortization and interest income. We use Adjusted EBITDA to assess the King Mountain JV’s financial performance because it allows us to compare the operating performance on a consistent basis across periods by removing the effects of the King Mountain JV’s capital structure.
52
Table of Contents
Net income (loss) is the GAAP measure most directly comparable to Adjusted EBITDA. This non-GAAP financial measure should not be considered as an alternative to the most directly comparable GAAP financial measure. In evaluating Adjusted EBITDA, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in such presentation. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. There can be no assurance that we will not modify the presentation of Adjusted EBITDA in the future, and any such modification may be material. Adjusted EBITDA has important limitations as an analytical tool, and you should not consider Adjusted EBITDA in isolation or as a substitute for analysis of our results as reported under GAAP. Because Adjusted EBITDA may be defined differently by other companies in our industry, our definition of this non-GAAP financial measure may not be comparable to similarly titled measures of other companies, thereby diminishing its utility.
| | | | | |
| Three Months Ended | ||||
| March 31, | ||||
(in USD thousands) | 2026 | | 2025 | ||
Net income (loss) | $ | 9,374 | | $ | (756) |
Depreciation and amortization |
| 4,318 |
|
| 15,706 |
Interest income | | (416) | | | (975) |
Adjusted EBITDA | $ | 13,276 | | $ | 13,975 |
Liquidity and Capital Resources
Our primary sources of liquidity include cash and cash equivalents, debt facilities, Bitcoin held on our balance sheet, equity issuances, senior secured notes, and cash flows from operations. We have secured significant project-level financing, including the $3.25 billion senior secured notes issued by a wholly-owned subsidiary of ours in April 2026 to fund development at our River Bend campus, and maintain relationships with established capital providers to support our development initiatives and infrastructure buildouts.
Historically, our primary cash needs have been for working capital to support growth initiatives, including infrastructure purchases and development, acquisitions, and equipment financing, including the purchase of additional Bitcoin miners. Going forward, we will continue to prioritize infrastructure development while our ASIC compute operations will mainly be conducted through American Bitcoin, our consolidated subsidiary. In addition to equipment financing for the purchase of additional Bitcoin miners, American Bitcoin’s primary cash needs are to support its Bitcoin accumulation efforts, including at-market purchases of Bitcoin. Our infrastructure development needs include the development of our River Bend and Beacon Point facilities, each of which is expected to require a multi-billion-dollar capital investment.
As of March 31, 2026, we had access to $200.0 million from the Two Prime Credit Agreement. We did not draw on this facility during the three months ended March 31, 2026.
In May 2026, we entered into a $200.0 million Bitcoin-collateralized term loan with FalconX, maturing in April 2027 and bearing a fixed interest rate of 7.00%. The facility is structured with an initial collateral ratio of 143%, with margin call and liquidation thresholds at 130% and 105%, respectively. The loan includes a prepayment option after six months without penalty, while early repayment prior to that period is subject to a 0.125%–0.25% fee depending on the circumstances. Proceeds from the facility were used to pay off our loan with Coinbase, which bore a 9.00% interest rate and has since been terminated.
On August 22, 2025, we established our $1.0 billion 2025 ATM, which replaced our prior $500 million 2024 ATM program that launched on December 4, 2024. As of August 22, 2025, prior to its termination, we had issued and sold shares under the 2024 ATM for gross proceeds of $299.4 million at a weighted average price of $27.83 per share. As of March 31, 2026 we issued and sold 6,121,993 shares under the 2025 ATM for gross proceeds of $304.3 million at a weighted average issuance price of $49.71 per share.
On September 3, 2025, American Bitcoin established a $2.1 billion at-the-market equity program (the “American Bitcoin 2025 ATM”). As of March 31, 2026, American Bitcoin issued and sold 149,553,691 shares of Class A common stock under the American Bitcoin 2025 ATM for gross proceeds of $351.5 million at a weighted average issuance price per share of $2.35.
53
Table of Contents
Our ability to meet our anticipated cash requirements will depend on various factors including our ability to maintain our existing business, enter into new lines of business, provide new offerings, compete with existing and new competitors in existing and new markets and offerings, acquire new businesses or pursue strategic transactions, access public and private capital markets, and respond to global and domestic economic, geopolitical, social conditions and their impact on demand for our offerings.
We believe that cash flows generated from operations, Bitcoin held on our consolidated balance sheet, and other financing sources will be sufficient to meet our anticipated short-term liquidity requirements. For the construction of our River Bend and Beacon Point data center facilities, we expect to fund capital expenditures through a combination of cash and Bitcoin on hand, as well as project level financing (including, in the case of River Bend, the recently completed bond issuance). Over the long term, we expect to rely on access to public and private capital markets to fund growth initiatives not supported by operating cash flows, cash on hand, Bitcoin holdings, or available debt and project-level financing.
Cash Flows
The following table summarizes our cash flows for the periods indicated:
| | | | | | |
| | Three Months Ended | ||||
| | March 31, | ||||
(in USD thousands) | | 2026 | | 2025 | ||
Cash flows used in operating activities | | $ | (27,222) | | $ | (33,849) |
Cash flows used in investing activities | | | (51,172) | | | (58,236) |
Cash flows provided by financing activities | | | 190,997 | | | 115,519 |
Operating Activities
Net cash used in operating activities was $27.2 million for the three months ended March 31, 2026, resulting from a net loss of $253.1 million, offset by the deduction of non-cash adjustments of $204.2 million and favorable changes in assets and liabilities of $21.7 million. Net cash used in operating activities was $33.8 million for the three months ended March 31, 2025, resulting from net loss of $134.3 million, offset by non-cash adjustments of $107.8 million and unfavorable changes in assets and liabilities of $7.3 million.
Investing Activities
Net cash used in investing activities totaled $51.2 million for the three months ended March 31, 2026, primarily consisting of (i) $61.3 million in Bitcoin purchases at American Bitcoin, (ii) $36.6 million in property and equipment purchases, and (iii) $16.8 million in deposits made for future site purchases, development, and capital expenditures. These outflows were partially offset by $63.6 million in proceeds from the sale of the Far North JV. Net cash used in investing activities totaled $58.2 million for the three months ended March 31, 2025, primarily consisting of $63.3 million in property and equipment purchases, and $0.9 million in additions to intangible assets. These outflows were partially offset by $3.4 million in proceeds from Bitcoin sales and $2.6 million in proceeds from the sale of property and equipment.
Financing Activities
Net cash provided by financing activities was $191.0 million for the three months ended March 31, 2026, primarily consisting of $120.1 million in net proceeds from the issuance of common stock through our 2025 ATM, and $110.5 million in net proceeds from the issuance of American Bitcoin’s Class A common stock through the American Bitcoin 2025 ATM. These inflows were partially offset by (i) $20.8 million in repayment of finance lease related to the settlement of a finance lease obligation in connection with the sale of the Far North JV, (ii) $9.9 million in cash paid to buyout the non-controlling interest of Far North JV, (iii) $8.0 million in repayment of loans payable, and (iv) $0.9 million in principal payments on financial lease. Net cash provided by financing activities was $115.5 million for the three months ended March 31, 2025, primarily consisting of $112.0 million in net proceeds from the issuance of common stock through our 2024 ATM and $3.5 million in proceeds from funding in relation to our AI Cloud business segment.
54
Table of Contents
Critical Accounting Policies and Estimates
Our management’s discussion and analysis of our financial condition and results of operations is based on our Unaudited Condensed Consolidated Financial Statements, which have been prepared in accordance with GAAP. The preparation of these Unaudited Condensed Consolidated Financial Statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses, as well as related disclosures. We evaluate our estimates and assumptions on an ongoing basis and base them on historical experience and other factors we believe to be reasonable under the circumstances. Because these estimates involve judgments about future events and are inherently uncertain, actual results may differ materially from those estimates. Changes in these estimates or assumptions could have a material impact on our results of operations, financial position, and statement of cash flows.
While our significant accounting policies are described in more detail in Note 2. Basis of presentation, summary of significant accounting policies and recent accounting pronouncements, included elsewhere in this Quarterly Report, we believe the following accounting policies and estimates are most critical to understanding and evaluating this management discussion and analysis:
Digital Assets
Accounting for digital assets requires significant judgment, including classification, measurement, presentation, and the determination of fair value. Digital assets pledged as collateral, including under arrangements with Bitmain, require additional judgment in evaluating the appropriate accounting treatment, including whether such assets remain recognized on our Consolidated Balance Sheets. Pledged digital assets remain recognized because we retain ownership and continue to be exposed to changes in market value.
Stock-Based Compensation
We recognize compensation expense for all stock-based payment awards made to employees, directors, consultants, and service providers, if any, including incentive stock options, non-qualified stock options, stock awards, and stock units based upon the estimated grant-date fair value of the awards. For more complex performance awards, including awards with market-based performance conditions, we employ a Monte Carlo simulation valuation method to calculate the fair value of the awards based on the most likely outcome. Under the Monte Carlo simulation, a number of variables and assumptions are used including, but not limited to, the expected stock price volatility over the term of the award, the risk-free rate, and dividend yield, if any.
Finite-Lived Intangible Assets
We evaluate the useful lives of our intangible assets to determine if they are finite or indefinite-lived. Reaching a determination on useful life requires significant judgments and assumptions regarding the future effects of obsolescence, demand, competition, and other economic factors. Finite-lived intangible assets are amortized over their estimated useful lives and evaluated for impairment at least annually, or when events or changes in circumstances indicate that their carrying amounts may not be recoverable. Determining useful lives and assessing recoverability require management judgment and the use of estimates, including assumptions regarding future cash flows and economic conditions. Changes in these assumptions could materially affect amortization expense or result in impairment charges in future periods.
55
Table of Contents
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Tariff Risk
Changes in government and economic policies, incentives, trade regulations, or tariffs may have a material impact on equipment that we import. While the final scope, timing, and application of recently announced or proposed changes in U.S. trade policy remain uncertain, increases in tariffs on imported equipment, as well as the potential imposition of retaliatory tariffs by foreign jurisdictions, could materially increase our equipment and infrastructure costs or limit the availability of certain components. Such developments could adversely affect our ability to procure equipment on a timely basis or at cost-effective levels, which in turn may impact project timelines, capital expenditures, and operating margins. We continuously monitor developments in trade policy and may adjust our procurement strategies, sourcing arrangements, or deployment plans in response to such changes; however, there can be no assurance that such actions will fully mitigate the impact of adverse tariff or trade policy developments.
Foreign Exchange Risk
Foreign exchange risk arises from fluctuations in currency exchange rates that impact our results of operations, financial position, and cash flows. A portion of our operations is conducted through Hut 8 Canada, and we incur operating expenses, capital expenditures, and other costs denominated primarily in Canadian dollars, while our reporting currency is the U.S. dollar. In addition, a significant portion of our Bitcoin holdings are held by our Canadian subsidiary.
Changes in the U.S. dollar and Canadian dollar exchange rate may affect the U.S. dollar value of our operating costs, capital expenditures, intercompany balances, and the translation of the financial results and Bitcoin holdings of Hut 8 Canada into U.S. dollars for financial reporting purposes. Adverse movements in foreign exchange rates could increase our costs or reduce reported revenues, asset values, and earnings. While we may seek to manage foreign exchange exposure through operational strategies from time to time, we do not currently engage in foreign currency hedging activities and therefore remain exposed to fluctuations in exchange rates.
Market Price Risk of Bitcoin
We hold a significant amount of Bitcoin; therefore, we are exposed to the impact of market price changes in Bitcoin.
As of March 31, 2026, we held approximately 16,332 Bitcoin, comprising approximately 9,311 Bitcoin held by Hut 8 and approximately 7,021 Bitcoin held by American Bitcoin. Based on a fair value of approximately $68,222 per Bitcoin, the aggregate fair value of these holdings as of March 31, 2026 was approximately $1.11 billion. Declines in the fair market value of Bitcoin will impact the cash value that would be realized if we were to sell our Bitcoin for cash, therefore having a negative impact on our liquidity.
Custodian Risk
Our Bitcoin is held with third-party custodians, Coinbase Custody, NYDIG, Anchorage, and BitGo, which we select based on various factors, including their financial strength and industry reputation. Custodian risk refers to the potential loss, theft, or misappropriation of our Bitcoin assets due to operational failures, cybersecurity breaches, or financial difficulties experienced by these third parties. Although we periodically monitor the financial health, insurance coverage, and security measures of our custodians, reliance on such third parties inherently exposes us to risks that we cannot fully mitigate.
56
Table of Contents
Credit Risk
Credit risk arises from our practice of pledging Bitcoin as collateral in transactions with counterparties. We mitigate this risk by engaging with counterparties that we believe possess strong creditworthiness based on their size, credit quality, and reputation, among other factors. During the three months ended March 31, 2026. we have not incurred any material loss from such transactions. However, there remains a risk that a counterparty could default on its obligations to us, which might result in a material loss. We continually assess the credit risk associated with our counterparties and, if necessary, recognize a loss provision or write-down. Credit risk also arises from us placing our cash and demand deposits in financial institutions. Although we strive to limit our exposure by placing cash and demand deposits with financial institutions with a high credit standing, there can be no assurances that we are able to mitigate our credit risk. In addition, we are exposed to credit risk associated with the creditworthiness of our customers and other counterparties, as non-performance or financial deterioration of these parties could adversely impact cash flows and liquidity.
Interest Rate Risk
Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates.
We have one loan that maintains a variable interest rate, the TZRC Secured Promissory Note, which includes a maximum interest rate of 15.25%. As a result, changes in market interest rates could affect our operations over certain periods and may also impact our ability to finance projects. For more information regarding the TZRC Secured Promissory Note, see Note 9. Loans, notes payable, and other financial liabilities to the Unaudited Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report.
We also earn interest income on the cash balances at variable rates. Changes in the short-term interest rates are not expected to have a material impact on the fair value of our cash balances.
We may enter into project-level financing arrangements that include floating rate components, including rates based on a Secured Overnight Financing Rate benchmark. To the extent that we enter into such arrangements, our exposure to interest rate variability could increase. We may seek to manage a portion of this exposure through the use of financial hedging instruments; however, such instruments may not be available on acceptable terms, may not be effective in mitigating interest rate risk, or may introduce additional risks.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15(e) under the Exchange Act, as of the end of the period covered by this report.
Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of March 31, 2026, our disclosure controls and procedures are designed at a reasonable assurance level and are effective to provide reasonable assurance that information required to be disclosed in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the specified time periods, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting that occurred during the three months ended March 31, 2026 that materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.
57
Table of Contents
PART II – OTHER INFORMATION
Item 1. Legal Proceedings
For a description of material legal proceedings in which we are involved, see Note 18. Commitments and contingencies to our Unaudited Condensed Consolidated Financial statements included elsewhere in this Quarterly Report, which is incorporated herein by reference.
We are not presently a party to any other legal or regulatory proceedings that in the opinion of our management, if determined adversely to us, would individually or taken together have a material adverse effect on our business, financial condition, or results of operations. However, we are subject to regulatory oversight by numerous federal, state, provincial, local, and other regulators and we are, and we may become, subject to various legal proceedings, inquiries, investigations, and demand letters that arise in the course of our business. See “Risk Factors—Risks Related to Certain Regulations and Laws, Including Tax Laws—We are involved in legal proceedings from time to time, which could adversely affect us” in the Annual Report.
Item 1A. Risk Factors
As of the date of this Quarterly Report, there have been no material changes from the risk factors set forth in Part I, Item IA of the Annual Report. We are subject to various risks and uncertainties that could materially adversely affect our business, financial condition, results of operations, and the trading price of our common stock. You should carefully read and consider the risks and uncertainties included in the Annual Report, together with all of the other information in the Annual Report and this Quarterly Report, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes, and other documents that we file with the SEC. The risks and uncertainties described in these reports may not be the only ones we face. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business, financial condition, or results of operations. The factors discussed in these reports, among others, could cause our actual results to differ materially from historical results and those expressed in forward-looking statements made by us or on our behalf in filings with the SEC, press releases, communications with investors, and oral statements.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
FalconX
On May 1, 2026 (the “Loan Effective Date”), Hut 8 Mining Corp., a British Columbia corporation and a wholly-owned subsidiary of the Company (the “Borrower”), entered into a master lender agreement and associated term sheet (collectively, the “Credit Agreement”) by and among the Borrower, as borrower and FalconX Charlie, Inc. (the “Lender”), as lender.
58
Table of Contents
The Credit Agreement provides for a prepayable term loan of $200.0 million. Amounts borrowed under the Credit Agreement will bear interest at a rate equal to 7.00% per annum. The term loan will mature on April 30, 2027 (the “Maturity Date”). The Borrower may prepay any outstanding amounts borrowed, in whole or in part, without premium or penalty, at any time six (6) months after the Loan Effective Date. Any amount prepaid prior to six (6) months after the Loan Effective Date will be subject to an early prepayment fee of 0.125% or 0.25% of the amounts prepaid depending on the reason for such prepayment.
The funds made available pursuant to the Credit Agreement are expected to be used for general corporate purposes. The Borrower’s obligations under the Credit Agreement are secured by its interest in certain Bitcoin (the “Collateral”) held in the custody of BitGo Bank & Trust, National Association (the “Custodian”) and Lender’s recourse under the Credit Agreement is limited to the Collateral subject to customary exceptions for fraud and willful malfeasance of the Borrower.
If the ratio between the fair value of the Collateral and the aggregate principal amount outstanding under the term loan (the “Actual Collateral Ratio”) at any time during the term is less than 130%, Lender shall have the right to require the Borrower by way of a margin call to provide the Lender with additional collateral to cause the Actual Collateral Ratio to be equal to 143% after taking into account the additional collateral. The Credit Agreement also establishes a 105% minimum collateral threshold, below which the Lender may, following required margin notifications and subject to defined contractual parameters, declare an event of default and liquidate pledged collateral to satisfy outstanding obligations.
The Borrower has the right to request that a portion of the Collateral be released by the Custodian if the Actual Collateral Ratio is equal to or greater than 163% for a continuous period of thirty (30) days or more, such that the Actual Collateral Ratio is equal to 143% after taking into account the release of Collateral.
The Custodian does not have any right to lend, pledge, hypothecate or re-hypothecate the posted Collateral. If certain events of default as defined in the Credit Agreement occur, Lender may exercise all of the rights, powers and remedies in respect of the Collateral of a secured party under applicable law, including, without limitation, the right to use the Collateral to satisfy payments outstanding, transfer the Collateral into Lender’s operating account, and sell, assign, or otherwise dispose of the Collateral.
The foregoing description of the Credit Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Credit Agreement, filed as Exhibit 10.2 to this Quarterly Report on Form 10-Q.
59
Table of Contents
Item 6. Exhibits
| | | | | |
Exhibit | | | Incorporated by Reference | ||
Number | | Description | Form | Exhibit | Filing Date |
3.1 | | Amended and Restated Certificate of Incorporation of Hut 8 Corp. | 8-K | 3.1 | 12/01/2023 |
3.2 | | Amended and Restated Bylaws of Hut 8 Corp. | 8-K | 3.2 | 12/01/2023 |
10.1 | | Amendment No 1. to the Controlled Equity OfferingSM Sales Agreement, dated February 25, 2026, by and among the Company and Cantor Fitzgerald & Co., Keefe, Bruyette & Woods, Inc., Virtu Americas LLC, The Benchmark Company, LLC, BTIG, LLC, Canaccord Genuity LLC, Craig-Hallum Capital Group LLC, Maxim Group LLC, Needham & Company, LLC, Roth Capital Partners, LLC, Cantor Fitzgerald Canada Corporation, Stifel Nicolaus Canada Inc., Virtu Canada Corp. and Canaccord Genuity Corp. | 8-K | 1.1 | 02/25/2026 |
10.2* | | Master Lending Agreement, dated as of May 1, 2026, between Hut 8 Mining Corp. and FalconX Charlie, Inc. | | | |
31.1 | | Certification of Principal Executive Officer of Hut 8 Corp. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | | | |
31.2 | | Certification of Principal Financial and Accounting Officer of Hut 8 Corp. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | | | |
32.1** | | Certification of Principal Executive Officer and Principal Financial and Accounting Officer of Hut 8 Corp. pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | | | |
101 | | Inline Interactive Data File. | | | |
104 | | Cover Page Interactive Data File. | | | |
* | Pursuant to Item 601(b)(10), as applicable, of Regulation S-K, certain portions of this exhibit were redacted. Hut 8 Corp. hereby agrees to furnish a copy of any redacted information to the SEC upon request. |
** | Furnished herewith and not deemed to be “filed” for purposes of Section 18 of the Exchange Act, and shall not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act (whether made before or after the date of the Quarterly Report), irrespective of any general incorporation language contained in such filing. |
60
Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: May 6, 2026 | HUT 8 CORP. | |
| | |
| By: | /s/ Sean Glennan |
| | Sean Glennan Principal Financial Officer and Authorized Signatory |
| | |
| |
61