CLSK

CleanSpark, Inc. (CLSK) - Q1 2026 (Ended Dec 31, 2025) Filing Summary

Business Context and Reporting Period

CleanSpark, Inc. is a data center developer and infrastructure operator focused on bitcoin mining, with expanding capabilities in high-performance computing (HPC) and artificial intelligence (AI). This Form 10-Q covers the quarterly period ended December 31, 2025. The company operates a single reportable segment: bitcoin mining. As of the period end, the company held approximately 11,452 bitcoin and operated a fleet with an average hashrate of 47.1 EH/s.

Key Financial Metrics

Note: Net loss includes a $246.8 million unrealized loss on the fair value of bitcoin and a $103.6 million loss on bitcoin collateral.

Material Changes vs. Prior Period

• Revenue Growth: Bitcoin mining revenue increased 12% year-over-year to $181.2 million, driven by a higher average bitcoin price ($99,700 vs. $83,400) despite a slight decrease in total bitcoin mined (1,817 vs. 1,945).
• Profitability Shift: The company swung from a net income of $246.8 million in Q1 2025 to a net loss of $378.7 million in Q1 2026. This was primarily due to a $465 million swing in the fair value of bitcoin (from a gain to a loss) and a $146 million swing in bitcoin collateral valuation.
• Cost Increases: Cost of revenues rose 36% to $95.6 million, largely due to increased energy costs ($95.5 million) associated with expanded operations. Depreciation and amortization increased 61% to $106.3 million due to a larger miner fleet.
• Debt Expansion: Total debt increased significantly to $1.79 billion following the issuance of $1.15 billion in 2032 Convertible Senior Notes in November 2025. Proceeds were used to repay the Coinbase line of credit and repurchase $460 million of common stock.
• Liquidity: Cash and cash equivalents surged to $458.1 million, up from $42.9 million at the end of the prior fiscal year (Sept 30, 2025), driven by debt proceeds and bitcoin sales.

Guidance, Outlook, and Risks

• Strategic Expansion: The company is actively diversifying into AI and HPC data center hosting. In October 2025, it acquired property in Texas with 285 MW of power capacity for this purpose. It also acquired land in South Dakota in December 2025.
• Treasury Management: CleanSpark employs a "Digital Asset Management" (DAM) strategy using derivatives (covered calls, futures) to generate liquidity and hedge volatility without selling core bitcoin holdings. This generated $13.2 million in premium proceeds during the quarter.
• Key Risks:
  • Bitcoin Volatility: A 10% change in bitcoin price would impact the fair value of holdings by approximately $115 million.
  • Tariff Liability: The company faces potential import tariffs of up to $185 million on miners imported from April 2024 onward, alleging Chinese origin. The company disputes this and has not accrued a provision.
  • Legal Proceedings: Ongoing class action litigation regarding the 2020 ATL Data Centers acquisition and shareholder derivative actions remain pending.
  • Regulatory Environment: Risks related to evolving regulations on crypto assets and energy usage.

Investor Verification Checklist

• Bitcoin Price Sensitivity: Verify the impact of current bitcoin market prices on the company's unrealized gains/losses and balance sheet valuation.
• Tariff Exposure: Monitor the status of the U.S. Customs and Border Protection (CBP) tariff dispute regarding miner origins and potential cash outflows.
• Debt Covenants: Review the terms of the new 2032 Convertible Notes and existing credit facilities for compliance with financial covenants.
• AI/HPC Revenue: Track the timeline for revenue recognition from new AI and HPC data center projects, as current revenue remains 100% bitcoin mining.
• Legal Outcomes: Follow developments in the Hasthantra class action and Smith derivative lawsuits for potential settlement costs.