CleanSpark (Nasdaq: CLSK) reported fiscal Q3 2026 revenue of $138.0 million for the quarter ended June 30, down 30.5% from $198.6 million, while diluted EPS swung to a loss of $0.89 from income of $0.78 a year earlier. Net loss reached $239.8 million as bitcoin valuation losses, weaker mining economics and higher operating expenses weighed on results.

Core financial results

Revenue fell by $60.6 million year over year, while cost of revenues excluding depreciation and amortization declined only about 5.2% to $85.5 million. As a result, revenue less reported cost of revenues fell to approximately $52.5 million from $108.5 million, with the corresponding margin narrowing to about 38.1% from 54.6%.

The earnings reversal also reflected a $116.3 million fair-value loss on bitcoin, compared with a $268.7 million gain in the prior-year quarter. Depreciation and amortization, payroll expenses and professional fees all increased.

Revenue less cost of revenues is a calculated measure rather than company-reported gross profit, and the reported cost figure excludes depreciation and amortization.

Bitcoin valuation explains most of the earnings swing, but not all of it

The change in bitcoin accounting was the largest contributor to the year-over-year decline. The company moved from a $268.7 million fair-value gain on bitcoin to a $116.3 million loss, representing an approximately $384.9 million negative swing. Bitcoin collateral also moved from a $31.4 million gain to a $16.5 million loss, another negative swing of approximately $47.9 million.

Together, those two items account for about $432.8 million of the $518.3 million year-over-year deterioration in pretax results. However, the quarter also showed underlying operating pressure: the calculated revenue spread after cost of revenues contracted by about $56.0 million, depreciation and amortization rose to $111.0 million from $94.9 million, and payroll expenses increased to $27.8 million from $16.4 million.

Investors should also note that CleanSpark does not exclude bitcoin fair-value changes or bitcoin collateral gains and losses from adjusted EBITDA. Consequently, the decline in adjusted EBITDA to negative $113.0 million still reflects substantial bitcoin valuation volatility and should not be interpreted as a measure fully separated from those effects.

Sandersville supports diversification beyond bitcoin mining

CleanSpark highlighted a signed 20-year, $6.6 billion triple-net lease at Sandersville with a tenant described as high investment-grade. The company said it had fully funded the anticipated equity portion of the project and ordered and prepaid the long-lead equipment required to meet the planned ready-for-service schedule.

The agreement supports management’s effort to develop CleanSpark into a diversified digital infrastructure platform with longer-duration contracted cash flows. However, all $138.0 million of fiscal Q3 revenue was still reported as bitcoin mining revenue, so Sandersville had not yet diversified the quarter’s reported revenue base. The release did not provide a specific ready-for-service date or quarterly revenue contribution for the project.

Balance sheet carries more cash and substantially more debt

CleanSpark ended June with $202.6 million in cash, up from $43.0 million at September 30, 2025. It also reported $814.9 million of total bitcoin HODL value, including current and non-current bitcoin and bitcoin held by counterparties under collateral arrangements. Reported working capital was $761 million.

At the same time, long-term debt net of discounts and issuance costs rose to $1.78 billion from $644.6 million at fiscal year-end. Total stockholders’ equity fell to $761.3 million from $2.18 billion, alongside the increase in accumulated deficit and the rise in treasury stock at cost to $608.2 million from $145.0 million. The higher cash balance therefore needs to be considered together with materially greater leverage and a smaller equity base.

Investor risks to monitor

• Continued pressure on mining economics: Bitcoin mining remained the company’s only reported source of quarterly revenue, and management described current mining economics as challenging. Further pressure could continue to affect revenue and the spread over mining costs.
• Bitcoin and collateral valuation volatility: Fair-value changes were responsible for most of the earnings reversal and remain included in adjusted EBITDA, creating substantial volatility across both GAAP and non-GAAP results.
• Higher balance-sheet leverage: Long-term debt increased materially while stockholders’ equity declined. Continued operating losses or additional infrastructure commitments could increase financial pressure.
• Sandersville execution: Although anticipated equity funding and long-lead equipment have been secured, the project remains exposed to construction, permitting, utility, supply-chain, cost and tenant-performance risks before it can generate the intended cash flows.

Summary

CleanSpark’s fiscal Q3 2026 results combined a 30.5% revenue decline with a sharp reversal in bitcoin valuation effects, producing a $239.8 million net loss. Bitcoin accounting explains most of the earnings swing, but the contraction in revenue after mining costs and higher operating expenses show that the pressure was not purely non-cash. The central issues ahead are whether mining economics stabilize, whether the Sandersville lease begins converting infrastructure into contracted cash flow, and how the company manages its expanded debt load.

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