Company: BTBT
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001213900-25-110383
Chunk: 34

Company: Bit Digital, Inc
Filing Date: 2025-11-14
Form: 10-Q
Item: Item 1
Chunk 34
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 over the expected period of benefit and commission expense payable included in Other current assets
and Other long-term liabilities.

The
Company capitalized lease expense incurred in December 2023 that are directly related to fulfilling its cloud services which commenced
operations in January 2024. The lease expense is directly related to fulfilling customer contracts and is expected to be recovered. The
capitalized lease expense was reclassified as lease expense in January 2024.

Deferred
Revenue

Deferred
revenue primarily pertains to prepayments received from customers for services that have not yet commenced as of September 30, 2025.
Deferred revenues are recognized as revenue when recognition criteria have been met.

15

Remaining
performance obligation

Remaining
performance obligations represent the transaction price of contracts for work that have not yet been performed. The amount represents
estimated revenue expected to be recognized in the future related to the unsatisfied portion of the performance obligation.

Cost
of revenue

The
Company’s cost of revenue consists primarily of (i) direct production costs related to mining operations, including electricity
costs, profit-sharing fees/variable performance fees and/or other relevant costs paid to our hosting facilities, (ii) direct production
costs related to our cloud services, including electricity costs, data center lease costs, and other relevant costs, (iii) direct production
costs related to our colocation services, including electricity costs, lease costs, data center employees’ wage expenses and other
relevant costs, and (iv) direct cost related to ETH staking business, including service fees payable to the service provider. 

Cost
revenue excludes depreciation expenses, which are separately stated in the Company’s consolidated statements of operations.

Foreign
currency

Accounts
expressed in foreign currencies are translated into U.S. dollars. Functional currency assets and liabilities are translated into U.S.
dollars generally using rates of exchange prevailing at the balance sheet date of each respective subsidiary and the related translation
adjustments are recorded as a separate component of Accumulated other comprehensive income, net of any related taxes, in total shareholders’
equity. Income statement accounts expressed in functional currencies are translated using average exchange rates during the period. Functional
currencies are generally the currencies of the local operating environment. Financial statement accounts expressed in currencies other
than the functional currency of a consolidated entity are remeasured into that entity’s functional currency resulting in exchange
gains or losses recorded in other income (expense), net.

Operating
segments

Operating
segments are defined as components of an entity for