CLSK — Q3 2026 Financial Report Analysis

CleanSpark lost $239.8 million in its fiscal third quarter of 2026 (the three months to June 30, 2026; CleanSpark's fiscal year ends September 30), against a $257.4 million profit a year earlier. Revenue, all of it from Bitcoin mining, fell 30.5% to $138.0 million. Two things drove the swing. Bitcoin's price fell, which shrank what each mined coin was worth and forced a large markdown of the coins CleanSpark already holds. And the company mined fewer coins, because the rest of the network added computing power faster than CleanSpark did. Strip out the Bitcoin price markdowns and the mining business still lost money once equipment wear and tear is counted. That helps explain why management is moving power at its Sandersville, Georgia site from mining to an AI data center lease.

At a glance

• $71,692 revenue per Bitcoin mined vs $96,277 all-in cost to mine one. Counting miner depreciation (the cost of the machines spread over their three-year life), each coin cost about $24,600 more to produce than it sold for. A year ago, each coin earned about $12,300 more than it cost.
• $132.8 million of the $242.8 million pre-tax loss (about 55%) came from Bitcoin price markdowns. That is $116.3 million on coins held plus $16.5 million on coins posted as collateral. The rest, about $110 million, is the operating business: mining margins, depreciation and rising overhead.
• Hashrate fell to 42.6 EH/s from 45.3 EH/s, while the whole network grew to 976 EH/s from 881. Hashrate is the computing power a miner contributes to the network. CleanSpark's share of global hashrate, which sets its share of new Bitcoin, dropped to 4.36% from 5.14%.

Key figures

In 2025 the operating margin was above 100% because a $268.7 million Bitcoin markdown gain is booked inside operating costs as a negative expense. That is also why the 2026 margin is so deeply negative. Bitcoin held excludes 1,719 coins posted as collateral with lenders and counterparties. The filing gives the coin count only at the fiscal year-end, not at June 30, 2025.

Takeaway: The Bitcoin price markdown makes the loss look bigger, but it isn't the whole story. Even with the markdowns on coins held excluded, operating loss still widened to $116.1 million from $22.5 million. Each coin now costs more to mine, depreciation included, than it sells for. CleanSpark is now a heavily indebted company whose mining arm does not cover its own costs at a Bitcoin price near $58,500. Its investment case now rests on turning power capacity into data center leases.

Why revenue fell: price and share both moved against it

Mining revenue has two drivers: how many coins you mine and what each is worth on the day it is mined. Both fell:

• Price: CleanSpark's average realized price fell to $71,881 per coin from $98,736. Bitcoin traded between $58,000 and $82,814 during the quarter.
• Volume: CleanSpark mined 1,920 coins vs 2,012. In the filing's words, the rise in global hashrate meant "a decline in our relative share of total network computational power." CleanSpark had 225,137 miners running at June 30, down from 241,227 a year earlier, out of 326,530 owned. The idle machines are mostly waiting to be installed at expansion sites, relocated or repaired. The running fleet did get more efficient: 15.8 joules per terahash vs 16.2, meaning less electricity for the same computing work.

Costs did not fall with revenue. Energy, the main cash cost, was $85.3 million against $89.9 million a year earlier. The average power price was 5.3 cents per kWh vs 5.6 cents, so the energy cost per coin was flat at about $44,400. Because each coin was worth less, energy ate 61.8% of mining revenue, up from 45.3%. Revenue minus cost of revenues, a rough mining gross margin, fell to $52.5 million (38.1% of revenue) from $108.5 million (54.6%).

Depreciation rose 17% to $111.0 million as more machines entered service over the past year. On a per-coin basis, miner depreciation climbed to $51,871 from $41,601. Management says it leaves depreciation out when deciding whether to keep a machine running, since that cost is already spent. But the machines last only about three years and must be replaced, so the all-in figure is the better measure of whether mining pays for itself.

What the headline numbers hide

How Bitcoin accounting moves the profit line. Since a 2023 accounting rule change (ASC 350-60), companies record the Bitcoin they hold at its market price on the last day of each quarter. Any rise or fall flows straight into profit, even if no coin is sold. Bitcoin went from roughly $68,200 at March 31 to roughly $58,500 at June 30. That produced a $116.3 million loss on CleanSpark's coins and a further $16.5 million loss on coins posted as collateral. A year earlier the same mechanism worked the other way: the price rose from $82,500 to $107,200, producing $268.7 million plus $31.4 million of gains. About $433 million of the $518 million year-over-year swing in pre-tax results comes from the Bitcoin price marks alone. The fair-value line mixes paper and realized results. The quarter included $76.5 million of realized losses on coins disposed of below their recorded cost. CleanSpark's coins carry an average cost basis of $90,188 against a June 30 market value of $58,524.

Excluding the price marks, the trend is still down. The quarter's operating loss without the Bitcoin fair-value line was $116.1 million, compared with $22.5 million a year ago. Adjusted EBITDA is the company's preferred profit measure, which strips out depreciation, stock compensation and other items. CleanSpark reports it at -$113.0 million and does not remove the Bitcoin marks. Our own calculation adds back the two Bitcoin mark lines. On that basis adjusted EBITDA was about $19.8 million, down from about $77.7 million: still positive before depreciation, but much thinner.

Overhead is rising while revenue falls. Payroll was $27.8 million, up 70%, but most of that was non-cash stock compensation, which rose to $15.3 million from $4.5 million as a new long-term incentive plan began to be expensed. Cash payroll rose 5% to $12.5 million. Professional fees more than doubled to $7.1 million, which the filing says were incurred "in connection with evaluating and developing our HPC and AI initiatives." Cash overhead, meaning payroll excluding stock compensation, G&A and professional fees, totalled about $37.9 million. That consumed most of the $52.5 million left after energy costs, before any spending on machines or buildings.

Cash flow vs. income. Mined coins are revenue but not cash, so CleanSpark's reported operating cash flow is always negative. Over nine months, operations used $409.3 million. The real funding came from selling $471.3 million of Bitcoin and from borrowing. Over the same nine months the net loss was $996.9 million, mostly from price marks that did not cost cash.

Debt replaced equity, and the buyback came with future dilution risk. In November 2025 CleanSpark issued $1.15 billion of 0% convertible notes due 2032. Convertible notes are loans that holders can swap for shares if the stock rises above a set price, here about $19.16. It used $460 million of the proceeds to buy back 30.6 million shares from investors. As a result:

• Diluted EPS this quarter is spread over fewer shares: 268.4 million weighted basic shares vs 281.0 million a year ago.
• Long-term debt rose to $1.78 billion from $645 million at September 30, 2025.
• Stockholders' equity fell to $761.3 million from $2.18 billion. The drop mainly reflects the nine-month loss of $1.03 billion attributable to common shareholders and $463 million of buybacks, partly offset by stock issued for compensation and acquisitions.

The two convertible issues (2030 and 2032) could convert into about 104 million shares at their conversion prices, against 256.8 million shares outstanding. CleanSpark can choose to settle conversions in cash instead. Holders of the 2030 notes can also demand repayment of their $650 million at face value on June 15, 2028. Because both note issues pay no coupon, quarterly interest expense was only $2.0 million.

One-offs. The quarter included $2.9 million of losses on disposed equipment, $1.5 million of indirect tax contingency expense, and $5.0 million of financing and business-development fees. None is large next to the Bitcoin marks. The quarter's tax benefit was small: $3.0 million on a $242.8 million pre-tax loss. The deferred tax liability that had absorbed earlier losses has almost run out, falling to $0.6 million from $44.9 million at September 30.

What changed after the quarter

The Sandersville lease. On July 10, 2026, CleanSpark signed a 20-year triple-net lease with a global technology company for 175 MW of IT load at its Sandersville, Georgia campus. Triple-net means the tenant pays the property's running costs. The company's August 6 earnings release puts the lease's value at $6.6 billion. The tenant also signed a letter of intent and exclusivity covering CleanSpark's entire 718-acre Texas portfolio, with up to 885 MW of secured and planned power. CleanSpark plans to shut down Bitcoin mining at Sandersville during fiscal 2028 and move that power to the data center. The 10-Q warns it is still evaluating a possible impairment of the Sandersville mining equipment. Any charge would appear in the fiscal 2026 10-K, and it cannot yet estimate the amount.

A large, expensive new loan. The 10-Q said Sandersville would need "project-based debt financing." On September 25, 2026, a CleanSpark subsidiary closed $2.276 billion of 7.875% senior secured notes due 2031, issued at 98.5% of face value, per an 8-K filed that day. The money will fund the rest of the Sandersville build, reimburse CleanSpark's earlier equity contributions and fund debt-service reserves. At that coupon, interest comes to about $179 million a year. That compares with $2.0 million of interest expense this quarter. After this deal, the company's cost of debt rests on lease income from the data center, not on Bitcoin.

Outlook

The 10-Q gives no hashrate target or revenue guidance. Management says existing cash ($202.6 million) and Bitcoin ($814.9 million including collateral), plus cash from operations and future financing, cover the next 12 months. It also says the AI strategy will need more capital, debt or equity.

Our read: the mining business is shrinking in relative terms. Hashrate is 15% below the 50 EH/s peak of fiscal 2025, and network share keeps sliding as global hashrate grows. Unless Bitcoin recovers well above the ~$96,000 all-in cost to mine a coin, the mining arm consumes capital rather than producing it. The real swing factors are the AI lease side: whether Sandersville is delivered on schedule, whether the Texas letter of intent becomes a signed lease, and how large the Sandersville impairment turns out to be.

What to watch in the fiscal 2026 10-K, likely due in late November (last year's was filed November 25, 2025):

• The size of any Sandersville impairment charge
• Bitcoin's price at September 30 versus $58,500, which sets the next fair-value mark
• Whether the coin count keeps rising or is sold down to fund overhead
• How the new secured notes appear on the balance sheet