Q4 2024 Riot Platforms Inc Earnings Call

February 24, 2025

Investments have been placed in listen only mode until the question and answer session begins following the company's presentation of its prepared remarks. Please also be advised that today's call is being recorded.

Speaker Change: I'd now like to hand, the conference over to Phil Mcpherson, Vice President of capital markets and Investor Relations at riot platforms. Please go ahead.

Speaker Change: Thank you Michelle good afternoon, and welcome to REIT platforms fourth quarter and full year 2024 earnings Conference call. My name is Phil Mcpherson, Vice President of capital markets and Investor Relations and joining me on today's call from Ryan or Jason less CEO, Collin <unk>, CFO and Jason Chung Executive Vice.

Speaker Change: President and head of corporate development and strategy on.

Speaker Change: On the right Investor Relations website, you can find our fourth quarter and full year 2024 earnings press release and accompanying earnings presentation, which are intended to supplement todays prepared remarks, and which includes discussion of certain non-GAAP items non-GAAP financial measures provided should not be considered as a substitute for or superior.

Speaker Change: To the measures of financial performance prepared in accordance with GAAP are included as additional clarifying items to aid investors in further understanding the company's fourth quarter and full year 2020 for performance.

Speaker Change: During today's call, we will be making forward looking statements regarding potential future events. These statements are based on management's current expectations and assumptions and are subject to risks and uncertainties actual results could materially differ due to factors discussed in today's earnings press release and comments and responses, meaning during today's call.

And in the risk factors section of our Form 10-K, and Form 10-Q, including for the year ended December 31, 2024, which will be filed later today as well as other filings with the Securities and Exchange Commission.

Jason Chung: With that I will turn the call over to Jason.

Speaker Change: <unk> of REIT platforms.

Thank you Phil and good afternoon, everyone.

Speaker Change: Before we dive into Ryan 2024 results I would like to reflect on the industry as a whole.

Speaker Change: When Ryan began mining bitcoin in 2017, the entire network cash rate was just three ex ash.

Speaker Change: By 2024, Ryan alone grew our self binding hash rate by $19, one <unk> to a total of $31 five ex ash, while the global network reached an all time high of over 750 ex ash.

Speaker Change: In January of 2024, the approval of the Bitcoin Etfs brought further institutional adoption, resulting in the most successful launch of Etfs ever as measured by AUM Budge.

Speaker Change: By July of 2024 points have become a key topic during the presidential election, and post election, Bitcoin hit new all time highs of 75000, and then $100.

My name is stomach person vice president of capital markets and Investor Relations and joining me on today's call from Ryan or Jason less CEO colony, CFO, and Jason <unk> Executive Vice President and head of corporate development and strategy on.

Speaker Change: Ryan has been mining bitcoin since 2017 with conviction in this long term value proposition.

Speaker Change: In January 2024, <unk> stopped selling big quaint produced through our mining activities in order to retain more bitcoin.

On the right Investor Relations website, you can find our fourth quarter and full year 2024 earnings press release and accompanying earnings presentation, which are intended to supplement todays prepared remarks, and which include a discussion of certain non-GAAP items non-GAAP financial measures provided should not be considered as a substitute for or superior.

Speaker Change: Additionally, we purchased <unk> for the first time in December 2024, following our inaugural successful convertible debt offering ultimately, adding over 10000 bitcoin to our balance sheet over the course of the year ending 2024 was 17722 bitcoin worth.

To the measures of financial performance prepared in accordance with GAAP are included as additional clarifying items to aid investors in further understanding the company's fourth quarter and full year 2020 for performance.

Speaker Change: One $7 billion base.

Speaker Change: Based on the bitcoin price of 93354.

Speaker Change: On December one 2024.

Speaker Change: Our efforts to maximize the value of our unique power assets does not mean, we have changed our long term view on bitcoin.

During today's call, we will be making forward looking statements regarding potential future events. These statements are based on management's current expectations and assumptions and are subject to risks and uncertainties actual results could materially differ due to factors discussed in today's earnings press release and comments and responses mainly during today's call.

Speaker Change: <unk> currently maintains approximately 4% of the global network and we will continue to pursue a compounding increase in the value of bitcoin held per share as a key operating metric while seeking to maximize the value of all of our assets for our shareholders.

Speaker Change: In 2020 for AI HBC demand for access to power resulted in bitcoin mining power assets being converted into AI HTC use.

Speaker Change: With that I will turn the call over to Jason Lang CEO of REIT platforms.

Speaker Change: This has continued into 2025, increasing the value of large scale sites with secured access to power near major metropolitan areas.

Jason Lang: Thank you Phil and good afternoon, everyone.

Jason Lang: Before we dive into right 2024 results I would like to reflect on the industry as a whole.

Speaker Change: Such as our Corsicana and Raphael facilities.

Jason Lang: When Wyatt began mining bitcoin in 2017, the entire network cash rate was just three excess cash.

Speaker Change: There is a unique timely opportunity provide shareholders to benefit from the value of our assets and to maximize shareholder value and I'm excited to share further updates on our aggressive pursuit of this opportunity.

Jason Lang: By 2024, right alone grew our self bonding hash rates by 19.1 extra half to a total of 31 five extra cash while the global network reached an all time high of over 750 extra cash.

Speaker Change: I would like to start by reviewing <unk> key accomplishments during 2024.

Speaker Change: We successfully energized the corsicana facility.

Jason Lang: In January of 2024, the approval of the Bitcoin Etfs watched further institutional adoption, resulting in the most successful launch of Etfs ever as measured by <unk>.

Speaker Change: Following an approximately 24 months of development riot successfully energized.

Speaker Change: 400 megawatt substation develop for buildings and deployed immersion systems and miners ending the year with approximately 14, Exxon hash of self mining hash rate at the Corsicana facility alone.

Jason Lang: By July of 2024, Breakpoint had become a key topic during the presidential election, and post election, Bitcoin hit new all time highs of 75000, and then $100.

Speaker Change: Our bitcoin yield strategy.

Speaker Change: In January of 2024, with ETF approvals imminent in the 'twenty 'twenty four having approaching them.

Jason Lang: Why it has been mining big points since 2017 with conviction in the long term value proposition.

Speaker Change: Its decision to retain all mindset coin and focus on increasing bitcoin per share I E bitcoin yield.

Jason Lang: In January 2024, right stopped selling bitcoin produced store mining activities in order to retain more bitcoin.

This resulted in a nearly 40% bitcoin yield in 2024 and more than $100 million.

Jason Lang: Additionally, we purchased breakpoint for the first time in December 2020 for Halloween, our inaugural successful convertible debt offering ultimately, adding over 10000 big point to our balance sheet over the course of the year ending 2024 was 17722 bitcoin worse.

Speaker Change: And incremental asset value appreciation in 2024 alone.

Speaker Change: Our convertible senior notes offering.

Speaker Change: In line with rise bitcoin yield strategy and target to continue to increase bitcoin held per share.

It was able to take advantage of favorable market conditions and issue our inaugural convertible senior notes offering.

Jason Lang: One 7 billion.

Jason Lang: Based on the bitcoin price of 93354.

Speaker Change: This issuance lowered our cost of capital expanded our institutional investor base and proceeds were utilized to acquire bitcoin and further enhance bitcoin yield.

Jason Lang: On December one 2024.

Jason Lang: Our efforts to maximize the value of our unique power assets does not mean, we have changed our long term view on bitcoin right. Currently maintains approximately 4% of the global network and we will continue to pursue a compounding increase in the value of bitcoin held per share as a key operating metric.

Speaker Change: The block mining acquisition. This is <unk> first acquisition in more than two years and our first business expansion outside of Texas into an attractive new jurisdiction offering 60 megawatts of current mining operations and expansion opportunities to 305 megawatts and beyond.

Jason Lang: While seeking to maximize the value of all of our assets for our shareholders.

Jason Lang: In 2020 for AI HBC demand for access to power resulted in bitcoin mining power assets. These converted into AI HTC.

Speaker Change: Finally, the <unk> acquisition, our most recent acquisition, which supplements our engineering business, while also enhancing our core operating capabilities.

Jason Lang: This has continued into 2025, increasing the value of large scale sites with secured access to power near major metropolitan areas.

Speaker Change: For 2025, we expect to grow our bitcoin mining hatch rate by approximately 22%, while aggressively pursuing AI HBC opportunities to maximize the value of our unique assets. We believe that this approach will bring the most value to our shareholders, while allowing us to remain flexible as market.

Jason Lang: Such as our Corsicana and Raphael facilities.

Jason Lang: There is a unique timely opportunity for Ryan shareholders to benefit from the value of our assets and to maximize shareholder value and I'm excited to share further updates on our aggressive pursuit of this opportunity.

Speaker Change: Opportunities continue to present themselves.

Colin: With a strong balance sheet, a solid operating team and our management team focused on value creation I am truly excited at the past. We have ahead of ourselves with that I would like to now turn the call over to Colin.

Jason Lang: I would like to start by reviewing life's key accomplishments during 2024.

Jason Lang: We successfully energized the corsicana facility.

Jason Lang: Following an approximately 24 months of development riot successfully energized.

Colin: CFO of REIT platforms.

Colin: Thank you Jason I'm excited to present <unk> financial results for the fourth quarter and fiscal year ending 2024.

400 megawatt substation developed for buildings and deployed immersion systems and miners ending the year with approximately 14 Exxon has a self mining hash rate at the Corsicana facility alone.

Colin: For ease of reference we have highlighted key metrics on slide six which presents a snapshot of key financial and operating metrics for the full year 2024.

Jason Lang: Bitcoin yield strategy.

Jason Lang: In January of 2024, with ETF approvals eminent in the 'twenty 'twenty four having approaching them why its decision to retain all mindset coin and focus on increasing that quaint per share I E. Eight joint yield has resulted in a nearly 40% bitcoin yield in 2024 and more than.

Colin: However, let's just jump into the details on the following slides.

Colin: During 2024, right increased itself mining hash rate from $12 four extra harsh to 31, five extra harsh representing a 154% increase over the course of the year and outpacing the increase in the global harsh rate, which rose by 67%.

Jason Lang: $100 million.

Jason Lang: An incremental asset value appreciation in 2024.

Jason Lang: Our convertible senior notes offering.

Colin: In 2024.

Colin: Furthermore, in 2024, right produced 4828, bitcoin, 27% lower than the Bitcoin produced in 2023, primarily as a result of the 2024 having event in April.

Jason Lang: In line with Rice, bitcoin yield strategy and target to continue to increase bitcoin held per share riot was able to take advantage of favorable market conditions and issue our inaugural convertible senior notes offering.

Colin: However, in spite of the staples, having right ended the year producing approximately $16 six bitcoin per day as compared to $16 eight bit quaint per day at the start of the year.

This issuance lowered our cost of capital expanded our institutional investor base and proceeds were utilized to acquire bitcoin and further enhance breakpoint in yield.

Jason Lang: The block mining acquisition. This is why its first acquisition in more than two years and our first business expansion outside of Texas into an attractive new jurisdiction offerings 60 megawatts of current mining operations and expansion opportunities to 305 megawatts and beyond.

Colin: In January of this past year right stop selling between produced in order to increase our <unk> holdings I hit on having.

Colin: In conjunction with this december's convertible note offering proceeds from which were used to acquire bitcoin in the spot market.

Colin: He is bitcoin holdings per million fully diluted shares from 31 eight to $44 three representing an increase in bitcoin yield of 39% for the year.

Jason Lang: The <unk> acquisition, our most recent acquisition, which supplements our engineering business, while also enhancing our core operating capabilities.

Colin: Going forward, we will continue to focus on increasing bitcoin yield in order to ensure that our shareholders are able to participate in the long term value creation opportunity.

Jason Lang: Our 2025, we expect to grow our bitcoin mining hatch rate by approximately 22%, while aggressively pursuing AI HBC opportunities to maximize the value of our unique assets. We believe that this approach will bring the most value to our shareholders, while allowing us to remain flexible as market.

Colin: We believe that <unk> represents.

Ryan: Ryan ended 2024, holding 17722, bitcoin and increase of 141% relative to the 7362 big coin that we held at the end.

Speaker Change: Opportunities continue to present themselves with a strong balance sheet, a solid operating team and our management team focused on value creation I am truly excited at the past. We have ahead of ourselves with that I would like to now turn the call over to Collin <unk> CFO of prior platforms.

Colin: Three.

Colin: And Ryan continues to retain 100% of all self mine bitcoin.

Colin: For the full year 2024 reported total revenue of $376 7 million as compared to $287 million for 2023.

Collin: Thank you Jason I'm excited to present <unk> financial results for the fourth quarter and fiscal year ending 2024.

Colin: 34% increase year over year.

Colin: This increase was primarily driven by higher bitcoin prices.

Speaker Change: For ease of reference we have highlighted key metrics on slide six which presents a snapshot of key financial and operating metrics for the full year 2024.

Colin: Gross profit for the full year 2024 was $147 6 million as compared to gross profit of $97 6 million for the full year 2023.

Collin: However, let's just jump into the details on the following slides.

Colin: non-GAAP adjusted EBITDA for the full year 2024 was $463 2 million as compared to non-GAAP adjusted EBITDA of $214 million for the full year 2023.

Collin: During 2024, right increased itself mining high Street from $12 four <unk> to 31, five extra harsh representing a 154% increase over the course of the year and outpacing the increase in the global harsh rate, which rose by 67% in <unk>.

Right adopted Fasb's final standard on crypto assets issued in December 2023, under which right now recognizes.

Collin: 24.

Collin: Furthermore, in 2024, right produced 4828, bitcoin, 27% lower than the Bitcoin produced in 2023, primarily as a result of the 2024 having event in April.

Colin: The coin held at fair value and with changes in fair value are now recognized in income.

Colin: As a reference the bitcoin price at the end of 2023 was 42265.

Collin: However, in spite of the staples, having right ended the year producing approximately $16 six bitcoin per day as compared to $16 eight <unk> per day at the start of the year.

Colin: And the price at the end of 2024 was $93354.

Colin: This resulted in a mark to market upward adjustment of $458 7 million for 2000.

In January of this past year right stop selling be quaint produced.

Colin: Net income for the full year 2024 was $109 4 million or <unk> 40 per share compared to a net loss of $49 5 million or 28 per share for the full year 2023.

Collin: Increase our <unk> holdings.

Collin: <unk>.

In conjunction with this december's convertible note offering proceeds from which were used to acquire bitcoin in the spot market we have.

Collin: <unk> holdings per 1 million fully diluted shares from $31 eight to $44 three representing an increase in bitcoin yield up 39% for the year.

Colin: Full year 2024 net income includes non.

Colin: Compensation expense of $125 2 million.

Colin: Unrealized loss of marketable equity securities of $69 9 million and depreciation and amortization of $212 million.

Collin: Going forward, we will continue to focus on increasing the corn yield in order to ensure that our shareholders are able to participate in the long term value creation opportunity that we believe that <unk> represents.

Colin: As a reminder, beginning in the first quarter of 'twenty 'twenty four we adjusted our depreciation schedule for mining hardware from a two year two or three year schedule based on our evaluation of our own operational history.

Collin: Right ended 2024, holding 17722, bitcoin and increase of 141% relative to the 7362 bitcoin that we held at the end.

Colin: For the full year 2020 for bitcoin mining revenue totaled $321 million a.

Collin: And Ryan continues to retain 100% of all South mine bitcoin.

Colin: A 70% increase relative to the full year 2023, bitcoin mining revenue of $189 million.

Collin: For the full year 2024 reported total revenue of $376 7 million as compared to $280 7 million for 2023 a.

Colin: The coin mining cost of revenue primarily consists of direct production cost of bitcoin mining operations, including electricity labor insurance and other expenses, but excluding depreciation and amortization.

Collin: 34% increase year over year.

Collin: This increase was primarily driven by higher bitcoin prices.

Colin: The coin mining gross profit for the quarter was $165 5 million, representing a margin of 52% as compared to $153 6 million or a margin of 87% for the full year 2023.

Collin: Gross profit for the full year 2024 was $147 6 million as compared to gross profit of $97 6 million for the full year 2023.

Collin: non-GAAP adjusted EBITDA for the full year 2024 was $463 2 million as compared to non-GAAP adjusted EBITDA of $214 million for the full year 2023.

Colin: Cost to mine, excluding depreciation in the fourth quarter totaled $42011 per bitcoin.

Colin: Which power cost amounted to 33.

Collin: Ryan adopted Fasb's final standard on crypto assets issued in December 2023, under which right now recognizes.

Colin: $281 per bitcoin or 79% of total cost for bitcoin.

Collin: Coin held at fair value and with changes in fair value are now recognized in income.

Colin: Quarter over quarter power costs increased from $3 one per kilowatt hour to three eight cents per kilowatt hour as a greater proportion of our power was procured up of course accounted facility.

Collin: As a reference the bitcoin prices at the end of 2023 was 42265.

Collin: And the price at the end of 2024 was $93354.

Colin: Market rates, which at the times purchased were on average elevated relative to the fixed rate under ppas of the Rockville facility.

Collin: This resulted in a mark to market upward adjustment of $458 7 million for 2000.

Colin: With proportionately fewer offsetting power credits than in the previous quarter.

Collin: Net income for the full year 2024 was $109 4 million or <unk> 40 per share compared to a net loss of $49 5 million or 28 per share for the full year 2023.

Colin: For the full year 2024, we achieved an all in cost of power of $3.04 per kilowatt hour, which remains one of the lowest in the industry.

Colin: Direct non power costs, which include direct labor minor insurance minor minor related equipment repairs land lease and related property taxes network costs and other utility expenses totaled $8730 or 21%.

Collin: Full year 2024 net income includes non.

Collin: Compensation expense of $125 2 million.

Collin: Unrealized loss on marketable equity securities of $69 1 million and depreciation and amortization of $212 million.

Colin: Perfect.

Colin: Down from the third quarter of 2024, when direct non power costs accounted for 25% of total costs.

Collin: As a reminder, beginning in the first quarter of 2024, we adjusted our depreciation schedule for mining hardware from a two year two or three year schedule based on our evaluation of our own operational history.

Colin: This drop is a result of <unk> continuing to achieve economies of scale and our operating facilities.

Colin: As Rod continues to grow harsh rate, we expect to see non power direct costs as a percentage of the total cost per bitcoin to trend lower.

Collin: For the full year 2024, bitcoin mining revenue totaled $321 million a.

Collin: A 70% increase relative to the full year 2023, bitcoin mining revenue of $189 million.

Jason Chung: I'd now like to turn the call over to Jason chunk.

Speaker Change: Ryan EVP and head of offer.

Speaker Change: Corporate development and strategy to discuss our most recent acquisition.

Collin: Mining cost of revenue primarily consists of direct production cost of bitcoin mining operations, including electricity labor insurance and other expenses, but excluding depreciation and amortization.

Thanks, Colin I am excited to share information on ROI. Its latest acquisition. This past December we closed the acquisition of <unk> solutions for $52 million in cash consideration at closing.

Collin: The Queen mining gross profit for the quarter was $165 5 million, representing a margin of 52% as compared to $163 6 million or a margin of 87% for the full year 2023.

Speaker Change: <unk> solutions based in Houston, Texas is a leading provider of consulting commissioning and procurement services designed to support electrical project needs for Substations from low voltage to high voltage.

Collin: Cost to mine, excluding depreciation in the fourth quarter totaled $42011 per bitcoin.

Speaker Change: <unk> employs approximately 50 employees and services power plants Transformers substation equipment and switch gears for a blue chip roster of clients, which include Firstenergy, Hitachi Hyundai and Toshiba among many others.

Collin: Which power cost amounted to 33.

Collin: $281 per bit coin or 79% with total cost perfect client.

Speaker Change: In 2024, <unk> generated $28 $2 million in revenue, a 31% increase over 2023 revenue of $21 5 million.

Collin: Quarter over quarter power costs increased from $3.01 per kilowatt hour to three eight cents per kilowatt hour as a greater proportion of our power was procured up of course, the cana facility at spot market rates, which at the times purchased were on average elevated relative to the fixed rate.

Speaker Change: And $4 6 million and EBITDA, representing margins north of 16%.

Speaker Change: Okay.

Speaker Change: The acquisition of <unk> solutions offers a number of strategic benefits for riot and significantly bolsters, our engineering business.

Collin: Under Ppas at the Rockville facility.

Collin: With proportionately fewer offsetting higher credits than in the previous quarter.

Speaker Change: More specifically, our engineering business Esf's Medtronic will now have the ability to add higher margin recurring services revenues to customers.

Collin: For the full year 2024, we achieved an all in cost of power of $3.04 per kilowatt hour, which remains one of the lowest in the industry.

Speaker Change: <unk> services expertise and maintenance servicing training and repair can now be offered on equipment manufactured by Esf's Medtronic, while the counter cyclical profile of the services business relative to Esf's Med <unk> business is also expected to reduce overall revenue volatility and our engineering business.

Collin: Direct non power costs, which include direct labor minor insurance minor minor related equipment repairs land lease and related property taxes network costs and other utility expenses totaled $8730 or 21%.

Speaker Change: Going forward.

Speaker Change: With this acquisition right has now brought in house expertise in developing maintaining and servicing medium and high voltage Substations, which will further derisk infrastructure development and save costs, while also improving our ability to perform on site maintenance on switch gears and most importantly.

Collin: Yes.

Collin: Down from the third quarter of 2024, when direct non power costs accounted for 25% of total costs.

Collin: This drop is a result of Rai continuing to achieve economies of scale and our operating facilities.

Collin: As Rod continues to grow has rate, we expect to see non power direct costs as a percentage of total cost per bit coin to trend lower.

Speaker Change: Leading to further improvements in the operating uptime for bitcoin mining business.

Jason Chunk: I'd now like to turn the call over to Jason chunk.

Speaker Change: In 2024, Reits engineering business generated $38 $5 million in revenue down from $64 3 million in 2023.

Jason Chunk: <unk> EVP and head of offer.

Jason Chunk: Corporate development and strategy to discuss our most recent acquisition.

Speaker Change: This reduction in topline revenue was largely driven by one large manufacturing contract for a governmental entity, which took longer than anticipated.

Speaker Change: Thanks, Colin I am excited to share information on riots latest acquisition. This past December we closed the acquisition of <unk> solutions for $52 million in cash consideration at closing.

Speaker Change: To complete due to supply chain constraints during the year, which resulted in decreased receipts of materials and delayed recognition of revenue.

Speaker Change: The custom electrical products manufactured by Reits engineering business, such as switch gear and power distribution centers are particularly important components and data center development and in power generation and distribution facilities and there has been a significant increase in demand for these products due to the continued increase in <unk>.

Speaker Change: <unk> employees, approximately 50 employees and services power plants, Transformers substation equipment and switch gears for a blue chip roster of clients, which include Firstenergy, Hitachi Hyundai and Toshiba among many others.

Speaker Change: AIA HBC data center development, and the continuing continually increasing demand for power.

Speaker Change: With our now expanded engineering business products and services capabilities.

Speaker Change: In 2024 for a generated $28 $2 million in revenue with 31% increase over 2023 revenue of $21 5 million.

Speaker Change: <unk> is well positioned to capitalize on this growing demand and alongside the recent acquisition of <unk> solutions has a clear path towards reaching $100 million in revenue in 2025, while also increased meaningfully.

Speaker Change: And $4 6 million in EBITDA, representing margins north of 16%.

Jason lists: With that I'd now like to turn the call back over to Jason lists.

Speaker Change: Okay.

Speaker Change: The acquisition of <unk> solutions offers a number of strategic benefits for riot and significantly bolsters, our engineering business.

Speaker Change: Thank you Jason.

Speaker Change: Now I'd like to turn the presentation to our Treasury strategy.

Speaker Change: More specifically, our engineering business Esf's Medtronic will now have the ability to add higher margin recurring services revenues to customers.

Speaker Change: While it continues to hold all of itself mine Bitcoin in 2024, holding all of our bitcoin versus selling at the time. It was mine resulted in an increase of $120 million in value are bullish belief in bitcoin has not wavered and we believe that holding bitcoin increasing bitcoin yield will result.

Speaker Change: <unk> services expertise and maintenance servicing training and repair can now be offered on equipment manufactured by Esf's Medtronic, while the counter cyclical profile of the services business relative to Esf's Metro <unk> business is also expected to reduce overall revenue volatility and our engineering business.

Speaker Change: And greater shareholder value over time.

Speaker Change: This slide demonstrates the Dell so we achieve on holding bitcoin production over the year versus selling it at various end of year pick when prices.

Speaker Change: Going forward.

Speaker Change: One of the tenants a right strategy has been to maintain a strong balance sheet underpinned by our growing bitcoin balance since 2018.

Speaker Change: This has allowed riot to act opportunistically and grow our portfolio of assets, which in turn has created the new opportunity set that we are executing on today.

Speaker Change: Leading to further improvements in the operating uptime for bitcoin mining business.

Speaker Change: While riot has always been conservative with regards to long term debt, we increased the value of our bitcoin and the attractive terms in the convertible debt market led to our inaugural issuance in December 2024, we view this as a method to utilize our strong balance sheet to acquire more bitcoin at all.

Speaker Change: In 2024, Reits engineering business generated $38 $5 million in revenue down from $64 3 million in 2023.

Speaker Change: This reduction in topline revenue was largely driven by one large manufacturing contract for a governmental entity, which took longer to.

Speaker Change: Attractive cost of capital.

Speaker Change: To complete due to supply chain constraints during the year, which resulted in decreased receipts of materials and delayed recognition of revenue.

Speaker Change: Our internal policy is to not take on additional debt such that doing so would exceed a 40% debt to bitcoin value ratio.

Speaker Change: The custom electrical products manufactured by Reits engineering business, such as switch gear and power distribution centers are particularly important components in data Center development, and then power generation and distribution facilities and there has been a significant increase in demand for these products due to the continued increase in <unk>.

Speaker Change: We feel this limit on leverage is prudent and allows us to create additional value for our shareholders. Further as we continue to increase our bitcoin balance every month by retaining production from our mining operations, we are organically deleveraging over time.

Speaker Change: For 2025.

Speaker Change: AIA HBC data center development, and the continuing continually increasing demand for power.

Speaker Change: Anticipated capital expenditures totaling $198 million.

Speaker Change: With our now expanded engineering business products and services capabilities.

Speaker Change: While we have halted the bitcoin mining expansion of corsicana existing expenses, primarily consisting of the 600 megawatt substation development continue <unk>.

Speaker Change: Additionally, we continue developing the various facilities that comprise our Kentucky operations, including $23 million on infrastructure expense and a $110 million on minors. However, it's important to note that $35 million of that is for deposits, perhaps right coming online in the first half of 2026.

Jason Liss: With that I'd now like to turn the call back over to Jason lists.

Speaker Change: Thank you Jason.

Now I'd like to turn the presentation to our Treasury strategy.

While it continues to hold all of itself mine Bitcoin in 2024, holding all of our bitcoin versus selling at the time. It was mine resulted in an increase of $120 million in value.

Speaker Change: As a result of these investments and our efforts on the ground. We expect to end 2025 with $38 four extra hash and deployed harsh rate a 22% increase over the 31 five extra cash we ended the year 2024 with <unk>.

Speaker Change: Our bullish belief in bitcoin has not wavered, and we believe that holding bitcoin, increasing bitcoin yield will result in greater shareholder value over time.

Speaker Change: We expect this to approximately matched the pace of global network cash rate growth this year, maintaining our approximate 4% share of the overall network.

Speaker Change: This slide demonstrates the delta we achieve on holding breakpoint production over the year versus selling it at various end of year bitcoin prices.

Okay.

Speaker Change: In 2020 for the rapid growth of AI applications, and the resulting increase in demand for large scale access to power needed for large language models and influenced compute became a dominant market theme.

Speaker Change: One of the tenets of REIT strategy has been to maintain a strong balance sheet underpinned by our growing bitcoin balance since 2018.

Speaker Change: This has allowed right to act opportunistically and grow our portfolio of assets, which in turn has created the new opportunity set that we are executing on today.

Speaker Change: We have long viewed our bitcoin mining business as being at the forefront of the convergence of energy and found money.

Speaker Change: With the emergence of AI HTC.

Speaker Change: Now find ourselves at the center of the convergence of energy and high performance compute.

As such.

Speaker Change: <unk> uniquely positioned portfolio of high quality energy assets can now be viewed through a wider lens.

Speaker Change: The core of REIT strategy has been to take a vertically integrated approach to securing developing and operating energy infrastructure for bitcoin mining.

Speaker Change: Attractive cost of capital.

Our internal policy is to not take on additional debt such that doing so would exceed a 40% debt to bitcoin value ratio.

Speaker Change: This focus has led to REIT owning and operating two premier power assets, which now formed the basis for the expanded opportunity set uniquely available today to explore all opportunities available to us to maximize the value of energy assets across our portfolio.

Speaker Change: The market has already taken notice of the value of AI HBC contracts and is rewarded those companies, which have made this pivot with elevated valuation multiples.

Speaker Change: Organically deleveraging over time.

Speaker Change: For 2025, right anticipated capital expenditures totaling $198 million.

Speaker Change: The chart on page 21, demonstrating both the valuation multiple expansion some of our public peers have experienced as they have pivoted parts of the power assets to also include AI HCC as well as the lagging valuation multiple seen by the remaining bitcoin mining pure play players.

Speaker Change: We have halted the bitcoin mining expansion of corsicana existing expenses, primarily consisting of the 600 megawatt substation development continue.

Speaker Change: Additionally, we continue developing the various facilities that comprise our Kentucky operations, including $23 million in infrastructure expense and $110 million on minors. However, it's important to note that $35 million of that is for deposits, perhaps rate coming online in the first half of 2026.

Speaker Change: While revenues from Bitcoin mining can exhibit volatility in the near term AIA HTC contracts offer long term predictable cash flow with credible counterparties, which can reduce the overall volatility in our financial performance and towards the market assigns higher valuation multiples.

Speaker Change: As a result of these investments and our efforts on the ground. We expect to end 2025 with $38 four extra hash and deployed harsh rate.

Speaker Change: Yeah.

Speaker Change: One of the most active themes, we see in the market today relates to the significant need for power face by the major hyperscale in their arms race to deploy more high performance compute capacity and the associated capital expense expenditure plans.

Speaker Change: A 22% increase over the 31 five extra cash we ended the year 2024 with <unk>.

Speaker Change: We expect this to approximately match the pace of global network cash rate growth this year, maintaining our approximate 4% share of the overall network.

Speaker Change: <unk> committed to in order to achieve their goals.

Speaker Change: Microsoft Meta and alphabet alone have collectively committed to more than $200 billion in spending plan. This year with the rest of the industry closely following suit.

Speaker Change: Okay.

Speaker Change: In order to meet their aggressive growth targets hyper scaler space immediate need for large scale access to power with industry forecast, calling for nearly 30 gigawatts of additional power demand over the next five years.

Speaker Change: We have long viewed our bitcoin mining business as being at the forefront of the convergence of energy and sound money with.

Speaker Change: With the emergence of AI HTC, we now find ourselves at the center of the convergence of energy and high performance compute.

Speaker Change: As I will get into riot has a clear and unique opportunity to capitalize on this tremendous demand imbalance.

Speaker Change: As such riots uniquely positioned portfolio of high quality energy assets can now be viewed through a wider lens.

Speaker Change: As Hyperscale, there's continue to search for large scale access to power, they particularly prioritize three key attributes one proximity to major markets.

Speaker Change: The core of riots strategy has been to take a vertically integrated approach to securing developing and operating energy infrastructure for bitcoin mining.

Speaker Change: Speed to market to deploy compute quickly and three large scale access to power in the one hundreds of megawatts.

Speaker Change: This focus has led to REIT owning and operating two premier power assets, which now form the basis for the expanded opportunity set uniquely available today to explore all opportunities available to us to maximize the value of energy assets across our portfolio.

Speaker Change: <unk> primary assets in Rockdale, and Corsicana are particularly well suited to satisfy each of these key requirements, which I will get into shortly.

Speaker Change: Yeah.

Speaker Change: We believe the Corsicana facility offers the most compelling opportunity available today for hyperscale or to get immediate access to large scale power all in close proximity to Dallas one of the most sought after data center markets in the country.

Speaker Change: The market has already taken notice of the value of AI HCC contracts and is rewarded those companies, which have made this pivot with elevated valuation multiples.

Speaker Change: The chart on page 21 demonstrates both the valuation multiple expansion some of our public peers have experienced as they have pivoted parts of the power assets to also include AI HCC as well as the lagging valuation multiple seen by the remaining bitcoin mining pure play players.

Speaker Change: This gives hyperscale is access to existing connectivity hub and lower latency.

Speaker Change: Most importantly, corsicana has 400 megawatts of power that can be utilized today and we're actively developing an additional 600 megawatt substation to be really ready in early 2026.

Speaker Change: Okay.

Speaker Change: Combined this is one gigawatt of power that can be available for a hyperscale or to deploy almost immediately which when combined with this location. We believe makes corsicana, an extremely rare offering.

Speaker Change: In addition, we own the land at Corsicana, we have access to water with that access growing further and multiple redundant sources of fiber available today.

Speaker Change: These are the key criteria Hyperscale is our first looking at when evaluating sites and we think corsicana is extremely well suited.

Speaker Change: <unk> two in order to achieve their goals.

Speaker Change: Microsoft Meta and alphabet alone has collectively committed to more than $200 billion in spending plan. This year with the rest of the industry closely following suit.

Speaker Change: For many of the same reasons corsicana is uniquely well positioned to attract hyperscale.

Speaker Change: We believe that Rockdale represents an exciting opportunity as well.

Speaker Change: At Rockdale, we have.

Speaker Change: 700 megawatt substation already developed and capacity that can be made immediately available.

Speaker Change: Current Rockdale site stands more than 200 acres, most of which is cleared open land, which a hyperscale or could begin immediate development on in order to take advantage of this large scale access to power.

Speaker Change: I will get into riot has a clear and unique opportunity to capitalize on this tremendous demand imbalance.

Speaker Change: Similar to Corsicana Rockdale is located just 45 miles from Austin, which also represents a major data center market, which hyperscale are seeking proximity Stu.

As Hyperscale is continue to search for large scale access to power, particularly prioritize three key attributes one proximity to major markets.

Speaker Change: We also believe the relatively short distance between the Rockdale and corsicana facilities at about 100 miles creates another compelling opportunity for one hyperscale or to deploy up to one seven gigawatts of power across the two sites that are not only in close proximity to each other but.

Speaker Change: To speed to market to deploy compute quickly and three large scale access to power in the one hundreds of megawatts.

Speaker Change: <unk> primary assets in Rockville, and Corsicana are particularly well suited to satisfy each of these key requirements, which I will get into shortly.

Speaker Change: Two major data center market.

Speaker Change: Okay.

Speaker Change: Late last year <unk> began to receive inbound inquiries from Hyperscale are interested in exploring opportunities related to our power assets.

Speaker Change: And as these discussions progressed it became clear to us that there was a significant opportunity at hand.

As a result and since then.

Speaker Change: This gives hyperscale is access to existing connectivity hub and lower latency.

Speaker Change: We have taken a number of steps to capitalize on this tremendous opportunity presented to us.

Speaker Change: First this past January we engaged <unk>, a leading telecommunications strategy consultancy to help us conduct a study to evaluate the feasibility of utilizing our corsicana site.

Speaker Change: Combined this is one gigawatt of power that can be available for a hyperscale or to deploy almost immediately which when combined with dislocation. We believe makes corsicana, an extremely rare offering.

Speaker Change: C uses.

Speaker Change: This study has now been underway for a number of weeks and is expected to conclude next month.

Speaker Change: Second earlier this month, we made meaningful changes to our board of directors with the addition of three new independent directors directors and the expansion of our board to include six directors in total.

Speaker Change: In addition, we own Atlanta Corsicana, we have access to water with that access growing further and multiple redundant sources of fiber available today.

Speaker Change: The new independent directors, who have joined our board come with a unique set of skills, including significant data center development expertise deep real asset development.

These are the key criteria Hyperscale is our first looking at when evaluating sites and we think corsicana is extremely well suited.

Speaker Change: Capital allocation experience and broad corporate governance experience.

Speaker Change: For many of the same reasons corsicana is uniquely well positioned to attract hyperscale.

Speaker Change: Our newly constituted board will continue to oversee and advise the management team on this and other key initiatives at riot.

Speaker Change: We believe that Rockdale represents an exciting opportunity as well.

Speaker Change: At Rockdale, we have.

Speaker Change: 700 megawatt substation already developed and capacity that can be made immediately available.

Speaker Change: Third we have engaged evercore and Northland as our financial advisors to advise us on engaging with potential <unk> partners and a value maximizing approach.

Speaker Change: Rockville site stands more than 200 acres, most of which is cleared open land, which are hyper scaler could begin immediate development on in order to take advantage of this large scale access to power.

Speaker Change: Both firm has significant experience and strong relationships with Hyperscale.

Speaker Change: Data center developers and financing partners and in advising companies like riot.

Speaker Change: Similar to Corsicana Rockdale is located just 45 miles from Austin, which also represents a major data center market, which hyperscale are seeking proximity Stu.

Speaker Change: Fourth.

Speaker Change: Although we previously announced a halt to the phase two expansion of bitcoin mining at our Corsicana facility. It is important to highlight that we continue to develop the additional 600 megawatt substation on site to ensure that we enhanced the attractiveness of the sites Hyperscale and data center operators we are.

Speaker Change: We also believe the relatively short distance between the Rockdale and corsicana facilities at about 100 miles creates another compelling opportunity for one hyper scaler to deploy up to one seven gigawatts of power across the two sites that are not only in close proximity to each other but.

Speaker Change: Taking concrete steps to ensure that we are maximizing the value of the opportunity available to us today and we'll provide further updates on our progress as they occur.

Speaker Change: Two major data center market.

Speaker Change: Late last year via began to receive inbound inquiries from Hyperscale are interested in exploring opportunities related to our power assets and as these discussions progressed it became clear to us that there was a significant opportunity at hand.

Speaker Change: As a result of the foundation, we have built over the previous years, we believe that 2025 will be an exciting and rewarding year for riot shareholders. We are dedicating a tremendous amount of resources towards executing on AI HBC opportunities.

Speaker Change: As a result, and since then we have taken a number of steps to capitalize on this tremendous opportunity presented to us.

Speaker Change: We also continue to remain focused on increasing bitcoin yield driven by a bitcoin mining operations and prudent capital strategy.

Speaker Change: First this past January we engaged <unk>, a leading telecommunications strategy consultancy to help us conduct a study to evaluate the feasibility of utilizing our corsicana site.

Speaker Change: Underpinning our mining operations is our industry, leading low cost of power, which riot continues to demonstrate exceptional results over a now multiyear track record.

Speaker Change: For the past few quarters, we've talked about our focus on operational efficiency and the results of these efforts have taken shape over the past few months as demonstrated in our monthly production results.

Speaker Change: C uses.

Speaker Change: This study has now been underway for a number of weeks and is expected to conclude next month.

Speaker Change: Operational excellence continues to be one of our priorities and our teams are hard at work to drive top tier results.

Speaker Change: In closing myself and the rest of the riot team could not be more excited about the direction. The company is heading.

Speaker Change: The new independent directors, who have joined our board come with a unique set of skills, including significant data center development expertise deep real asset development.

Speaker Change: Have the assets the capital and the right team to execute on significant growth of shareholder value.

Speaker Change: Capital allocation experience and broad corporate governance experience.

Speaker Change: Thank you all for listening to our presentation, we would now like to open the call to questions operator.

Our newly constituted board will continue to oversee and advise the management team on this and other key initiatives at riot.

Speaker Change: Thank you if you'd like to ask a question. Please press star one one.

Speaker Change: If your question has been answered and you'd like to remove yourself from the queue. Please press star one again.

Speaker Change: Third we have engaged evercore and Northland as our financial advisor.

Greg Lewis: Our first question comes from Greg Lewis with <unk>. Your line is open.

Speaker Change: Advise us on engaging with potential <unk> partners and the value maximizing approach.

Greg Lewis: Yes, Thank you and good afternoon, and thanks for taking my questions.

Speaker Change: Our firm has significant experience and strong relationships with Hyperscale.

Jason: Jason Thank you for the presentation definitely little more insightful than in previous.

Speaker Change: Data center developers and financing partners and in advising companies like Brian.

Speaker Change: Previous quarters I guess my first question is around the <unk> opportunity and I know <unk> been talking about this on and off for a while now but.

Speaker Change: Fourth.

Although we previously announced a halt to the phase two expansion of bitcoin mining at our Corsicana facility. It is important to highlight that we continue to develop the additional 600 megawatt substation onsite to ensure that we enhanced the attractiveness of the sites to Hyperscale and data center operators we are.

Speaker Change: As you as you look at the landscape I think from from going back to last year. There was always this expectation of a requirement of prompt power.

Speaker Change: Where there was a window as you've as you've engaged in add increasing conversations with more hyperscale.

Speaker Change: Taking concrete steps to ensure that we're maximizing the value of the opportunity available to us today and we'll provide further updates on our progress as they occur.

Speaker Change: Are you seeing that.

Speaker Change: Window potentially widening I E. It's great to have power in 2025, but having power.

Speaker Change: Okay.

As a result of the foundation, we have built over the previous years, we believe that 2025 will be an exciting and rewarding year for riot shareholders. We are dedicating a tremendous amount of resources towards executing on AI HBC opportunities.

Speaker Change: And further out years is almost just as valuable.

Speaker Change: Yes, Greg I think the power is extremely valuable in 2020 by any power available putting into 'twenty six 'twenty seven is extremely valuable as well as highlighted in the presentation Youre looking at about 30 Gigawatts of AI HBC demand.

Speaker Change: We also continue to remain focused on increasing bitcoin yield driven by our bitcoin mining operations and prudent capital strategy.

Speaker Change: And that just aia's for steel demand alone over the next five years.

Speaker Change: Underpinning our mining operations is our industry, leading low cost of power, which Ryan continues to demonstrate exceptional results over our now multiyear track record.

Speaker Change: <unk> mission.

Speaker Change: New Interconnects take four or five years to get approved Logmein substation items. Those are taking four to five years to get shipped now and transmission cannot keep up with the growth. So capacity in 2025 come in a real premium which is why we think our assets are so valuable both with hundreds of megawatts available.

Speaker Change: Operational excellence continues to be one of our priorities and our teams are hard at work to drive top tier results.

Speaker Change: And continuing.

Speaker Change: Due to grow into 2000.

Speaker Change: <unk> simple real.

Speaker Change: In closing myself and the rest of the riot team could not be more excited about the direction. The company is heading.

Speaker Change: Looking for a solution to and riot.

Speaker Change: Very well positioned to be that solution for hyperscale.

Speaker Change: Have the assets the capital and the right team to execute on significant growth of shareholder value.

Speaker Change: Okay, great. Thank you for that and then the other question is obviously, we are engaging with.

Speaker Change: Hyperscale orders and signing up.

Speaker Change: Thank you all for listening to our presentation, we would now like to open the call to questions operator.

Speaker Change: Potentially signing up HBC transactions, what is there kind of a dual process ie is riots kind of talking with <unk>.

Speaker Change: Thank you if you'd like to ask a question. Please press star one one.

Speaker Change: <unk> and some of the company and some of the companies our suppliers that would help build these facilities or is it kind of let's get the hyperscale or in first and then figure out kind of let them lead the build out of the conversion or the build out of the Greenfield site.

Speaker Change: If your question has been answered and you'd like to remove yourself from the queue. Please press star one again.

Speaker Change: Our first question comes from Greg Lewis with <unk>. Your line is open.

Greg Lewis: Yes, Thank you and good afternoon, and thanks for taking my questions.

Speaker Change: Jason Thank you for the presentation definitely little more insightful than in previous.

Speaker Change: Greg I would say we have multiple tracks going on at once there is a number of ways that these opportunities could materialize and we're keeping our options wide open in order to make sure we get the value maximizing approach we've received interest from Hyperscale and large AI companies. These discussions have been ongoing.

Speaker Change: Previous quarters I guess my first question is around the <unk> opportunity and I know <unk> been talking about this on and off for a while now but.

Speaker Change: As you as you look at the landscape I think from from going back to last year. There was always this expectation of a requirement of prompt power.

Speaker Change: With our new financial partners, we're now reaching up to.

Speaker Change: Additional infrastructure partners and financing partners as well so a lot of going on in the mix and where we're going to end up too.

Speaker Change: Where there was a window as you've as you've engaged in add increasing conversations with more hyperscale.

Speaker Change: Are you seeing that.

Speaker Change: The path that maximizes value after surveying kind of the whole market here, but as I highlighted in parallel we're continuing to build up capacity at the site.

Speaker Change: Window potentially widening I E. You know hey, it's great to have power.

Speaker Change: Power in 2025, but having power.

Speaker Change: Pursuing on what would be the first stage of the developed development anyways. So.

Speaker Change: The further out years is almost just as valuable.

Speaker Change: I would say multiple tracks being rundown at once.

Greg Lewis: Yes, Greg I think the power is extremely valuable in 2020 by any power payable putting in 'twenty six 'twenty seven.

Speaker Change: Okay Super helpful. Thank you guys have a great day.

Greg Lewis: Thank you Greg.

Speaker Change: Thank you. Our next question comes from Nick <unk> with B Riley Securities. Your line is open.

Greg Lewis: Extremely valuable as well as highlighted in the presentation Youre looking at about 30 Gigawatts of AI HBC demand.

Greg Lewis: Yeah.

Greg Lewis: That's just aia's for steel demand alone over the next five years.

Greg Lewis: Thanks, operator, good afternoon, everyone.

Greg Lewis: My first question is.

Greg Lewis: <unk> mission.

Greg Lewis: New Interconnects take four or five years to get approved Logmein substation items. Those are taking four to five years to get shipped now and transmission cannot keep up with the growth. So capacity in 2025 command a real premium which is why we think our assets are so valuable both with hundreds of megawatts available today.

Greg Lewis: As hyper scaler.

Greg Lewis: Rates for readily available capacity at scale, there's a clear desire to build large scale campuses.

Greg Lewis: And this does require.

Greg Lewis: It requires significant amounts of land. So I was curious to what extent corsicana could accommodate additional capacity beyond the targeted one gigawatt or based on your earlier comments could rockdale be better positioned from this perspective, thanks very much.

Greg Lewis: And continuing.

Greg Lewis: Due to the ground.

Greg Lewis: Simple real.

So we think the corsicana is an amazing site because it is the one one gigawatt interconnect approved it has the power capacity available today, it's expanding we have dual sources of fiber water close to major data center market.

Greg Lewis: Looking for a solution to you and Ryan.

Greg Lewis: Very well positioned to be that solution for hyperscale.

Okay, great. Thank you for that and then the other question is obviously, we're engaging with.

Greg Lewis: Hyperscale orders and signing up.

Greg Lewis: We're really excited about what <unk> can mean in these discussions so when you think about land for AIA to proceed developments there as kind of a spectrum of whats these things can take in that.

Greg Lewis: Potentially signing up HBC transactions, what is there kind of a dol process Ie is riots kind of talking with <unk>.

Greg Lewis: <unk> and some of the company and some of the companies our suppliers that would help build these facilities or is it kind of let's get the hyper scaler in first and then figure out kind of let them leave the build out of the conversion or the build out of the Greenfield site.

Greg Lewis: Impacts design decisions the more land you have generally the cheaper it is to build the ease of use from a lay out and claim perspective.

Greg Lewis: The less then you have the more next generation kind of rack and pulling technologies that you end up using that can kind of be more expensive, but nonetheless.

Greg Lewis: Greg I would say we have multiple tracks going on at once there is a number of ways that these opportunities can materialize and we're keeping our options wide open in order to make sure we get the value maximizing approach we've received interest from Hyperscale and large AI companies. These discussions have been ongoing.

Greg Lewis: We have.

Greg Lewis: You know do we have a lot of land at Rockdale, we have a good amount Atlantic Corsicana, and we're expanding that land portfolio at Corsicana right now as well and the final point I'll make is often times when hyperscale or talking about campuses. They don't always generally mean, they are directly adjacent to each other sometimes they are.

Greg Lewis: With our new financial partners, we're now reaching up to.

Greg Lewis: Additional infrastructure partners and financing partners as well so a lot of going on in the mix and where we're going to end up too.

Many sometimes up to 100 miles apart. So we are increasing our land portfolio in order to increase the optionality of what we can do here in this endeavor.

Greg Lewis: The path that maximizes value after surveying kind of the whole market here, but as I highlighted in parallel we're continuing to build out capacity at the site.

Greg Lewis: Jason that's super helpful. I appreciate those comments.

Greg Lewis: Pursuing on what would be the first stage of the developed development anyways. So.

Speaker Change: My next question was.

Speaker Change: We've seen the economics vary to some degree in the deals that have been announced so what's your main priority as you think about terms of any potential <unk> deal is it margins capital contribution.

I would say multiple tracks being run down at once.

Speaker Change: Okay Super helpful. Thank you guys have a great day.

Greg Lewis: Thank you Greg.

Speaker Change: Thank you. Our next question comes from Nick <unk> with B Riley Securities. Your line is open.

Speaker Change: Ration.

Speaker Change: Size or kind of all of the above.

Speaker Change: Well, Nick I'd say, a key part to getting a project of this scale done hundreds of megawatts Gigawatts that were talking about financing is a key thing so to be successful at financing you really need a blue chip counterparties someone who's a very well.

Greg Lewis: Okay.

Greg Lewis: Thanks, operator, good afternoon, everyone.

Greg Lewis: My first question is no.

Speaker Change: As hyper scaler.

Speaker Change: Rates for readily available capacity at scale, there's a clear desire to build large scale campuses.

Speaker Change: Very well capitalized that we would be able to securitize. The cash flows on the best possible terms and further we're talking about hundreds of megawatts, that's really only attracting the largest player in this space. So in addition to driving the financing terms the type of Counterparties.

Speaker Change: And this does require significant amounts of land. So I was curious to what extent corsicana could accommodate additional capacity beyond the targeted one gigawatt or based on your earlier comments could rockdale be better positioned from this perspective, thanks very much.

Speaker Change: We would enter into is really going to have a big impact in driving valuations. So yes. As you can see one of the key points and hammering on that we think about is the type of counterparty is necessary in order to maximize shareholder.

Speaker Change: So we think the corsicana is an amazing site because it has the one one gigawatt interconnect approved but has the power capacity available today, it's expanding we have dual sources of fiber water close to major Dennis or data center market, where we are.

Speaker Change: <unk> here.

Speaker Change: As far as some of the other terms there is a whole mix of how all of these things can be played together I think it's kind of too early to say, which one may be more or less important than another at the end of the day, what's important to note is corsicana and rockdale, but specifically corsicana is.

Speaker Change: We're really excited about what <unk> can mean in these discussions so when you think about land for AIA to proceed developments there as kind of a spectrum of whats. These things can take and that impacts design decisions. The more lanes you have generally the cheaper it is to build the ease of use from Alere lay out in <unk>.

Speaker Change: <unk> well positioned.

Speaker Change: Claim perspective.

Speaker Change: We think this is a premier asset that commands a premium for its quality and its timing to getting power online and that's something obviously, the hyperscale are prioritizing and that.

Speaker Change: The less then you have the more next generation kind of rack and pulling technologies that you end up using that can kind of be more expensive, but nonetheless.

Speaker Change: We have.

Speaker Change: You noted we have a lot of land at Rockdale, we have a good amount of Atlantic Corsicana, and we are expanding land portfolio at Corsicana right now as well and the final point I'll make is often times when hyper scaler or talking about campuses. They don't always generally mean, they are directly adjacent to each other sometimes they are.

Speaker Change: These attributes will ultimately lead to better deal terms.

Speaker Change: The value of those assets.

Jason Chung: Jason I really appreciate all the color continued best of luck.

Speaker Change: Thank you Nick.

Speaker Change: Thank you. Our next question comes from Darren <unk> with Roth. Your line is open.

Speaker Change: Many sometimes up to 100 miles apart. So we are increasing our land portfolio in order to increase the optionality of what we can do here in this endeavor.

Speaker Change: Yeah, Hey, guys. Thanks for taking my questions.

Speaker Change: First of all I may Jason on your comments about of course, you cannot charge.

Speaker Change: By procuring additional land.

Jason: Jason That's Super helpful. I appreciate those comments my next question was weak.

Speaker Change: Any kind of indulgence on how how large of an additional plant that would be and is that something that the counterparties, you're potentially talking to kind of ask for.

Jason: We've seen the economics vary to some degree in the deals that have been announced so what's your main priority as you think about terms of any potential <unk> deal is it margins capital contribution.

Speaker Change: We have spoken to Counterparties to summit matters to summit it doesn't.

Jason: Duration.

Speaker Change: I touched on earlier it ultimately depends on the type of build out that youre looking to do the technology with data Center development is becoming very efficient with density.

Jason: Size or kind of all of the above.

Yes.

Jason: Well, Nick I'd say.

Jason: Key part to getting a project of this scale done hundreds of megawatts Gigawatts that were talking about financing is a key thing so to be successful at financing you really need a blue chip counterparties someone who is very well.

Speaker Change: Our onto 100, 200 kilowatt racks Val d'or.

Speaker Change: Chip liquid cooling all of these components all of these technologies are improving density so it kind of depends.

Jason: Very well capitalized that we would be able to securitize. The cash flows on the best possible terms and further we're talking about hundreds of megawatts, that's really only attracting the largest player in this space. So in addition to driving the financing terms the type of Counterparties.

Speaker Change: Different types of customers have different needs for the plan. Nonetheless, our focus is on increasing maximizing the optionality that we have so I don't have a specific number for you, but I can tell you we're procuring the hundreds of acres in order to.

Jason: We would enter into is really going to have a big impact in driving valuations. So yes. As you can see one of the key points and hammering on that we think about is the type of counterparty is necessary in order to maximize shareholder.

Speaker Change: Like I said make sure we can accommodate as wide of a market is possible.

Speaker Change: Great and then one more if I may just in the deck you kind of.

Speaker Change: Advertising of course, Canada advertising Rockdale.

Speaker Change: Since you're talking about maybe doing a fiber loop into advertising whole campus. So I guess as it stands today Rockdale has always been a bitcoin mining facility is there a scenario analysis economically where you would flip the switch and.

Jason: <unk> here.

Jason: As far as some of the other terms there is a whole mix of how all of these things can be played together I think it's kind of too early to say, which one may be more or less important than another at the end of the day, what's important to note is corsicana and Rockdale, specifically corsicana is.

Speaker Change: Completely make that an HBC campus.

Speaker Change: Yeah.

Speaker Change: <unk>.

Speaker Change: If the opportunity was there.

Jason: Really well positioned.

Speaker Change: Two.

Speaker Change: There was interest in that site and the economics made sense to take over the capacity that we had there we would certainly be interested in that I think.

Jason: We think this is a premier asset that commands a premium for its quality and its timing to getting power online and that's something obviously, the hyperscale are prioritizing and that.

When you think about 30 gigawatts of demand.

Speaker Change: One gigawatt of course, Makena, and then 700 megawatts of Raphael represents a really meaningful portion of something that critical to fill that demand one seven gigawatts would be about 5%. If someone had both of those sites, 5% of hyper scaler AI demand over the next five years I think that would give those players.

Jason: These attributes will ultimately lead to better deal terms.

Jason: The value of those assets.

Jason I really appreciate all the color continued best of luck.

Speaker Change: Thank you Nick.

Speaker Change: Thank you. Our next question comes from Darren <unk> with Roth. Your line is open.

Speaker Change: Real strategic advantage. So if there is that interest and the economics are there to convert the site, we will certainly be looking and evaluating that closely.

Speaker Change: Yeah, Hey, guys. Thanks for taking my questions.

Speaker Change: First of all I may Jason on your comments about corsicana.

Great. Thanks, Jason.

Speaker Change: By procuring additional land.

Jason: Thanks Darren.

Speaker Change: Any kind of indulgence on how how large of an additional plant that would be and is that something that the counterparties, you're potentially talking to kind of ask for.

Speaker Change: Thank you.

Speaker Change: Our next question comes from Brett <unk> with Cantor Fitzgerald. Your line is open.

Speaker Change: Hi, guys.

Speaker Change: Maybe my first question similar to the left is all of course economy on the table, if any hyperscale or one of the four gigawatt there.

Speaker Change: We have spoken to Counterparties to summit matters to summit it doesn't.

Speaker Change: I touched on earlier it ultimately depends on the type of buildup that youre looking to do the technology with data Center development is becoming very efficient with density.

Speaker Change: So we have the 600 megawatts thats been unutilized as being developed right now that would be the least friction way to accomplish a deal.

Speaker Change: 100, 200 kilowatt racks now.

Speaker Change: If there was someone that was interested in the full one gigawatt taking over the entire site as it is and have the economics to make that reiterate shareholders. Yes.

Speaker Change: Chip liquid cooling all of these components all of these technologies are improving density so it kind of depends.

Speaker Change: Different types of customers have different needs for the slant. Nonetheless, our focus is on increasing maximizing the optionality that we have so I don't have a specific number for you, but I can tell you. We're procuring the one hundreds of acres in order to.

Speaker Change: Definitely look at that and.

It's always possible that presents itself because that's a lot of power coming online 400 megawatts now and then that remaining 600 megawatts of 12 months from now or approximately 12 months from now so.

Speaker Change: We're assessing demand and we are going to maximize the value of these assets.

Speaker Change: Like I said make sure we can accommodate as wide of a market is possible.

Speaker Change: Understood and then maybe just on the power agreement in place at these sites do they need to be altered to support AI HBC and maybe in particular with Rockdale does like Youre participation and a lot of demand response and curtailment programs does that.

Speaker Change: Great and then one more if I may I guess in the deck you kind of.

Speaker Change: Advertising of course, Canada advertising Rockdale.

Speaker Change: Since you're talking about maybe doing a fiber loop into advertising whole campus. So I guess as it stands today Rockdale has always been a bitcoin mining facility.

Speaker Change: They're a scenario analysis economically where you would flip the switch and.

Speaker Change: Need to switch from maybe a flexibility to Perm Lou.

Speaker Change: Completely make that an HBC campus.

Speaker Change: No they do not need to be altered.

Speaker Change: Our power supply agreements do not require any participation in demand response everything we do there is voluntary as a part of our power strategy that works with bitcoin mining because its interruptible load, obviously that doesn't work with AAV species. So we do that with bitcoin mining voluntarily to drive the best economics, but.

Speaker Change: Yeah.

Speaker Change: <unk>.

Speaker Change: If the opportunity was there.

Speaker Change: Two.

Speaker Change: There was interest in that site and the economics made sense to take over the capacity that we have there we would certainly be interested in that I think.

Speaker Change: When you think about 30 gigawatts of demand.

Speaker Change: Not a requirement as a part of our power supply agreements.

Speaker Change: One gigawatt of CT scanner, and then 700 megawatts of Raphael represents a really meaningful portion of something that could help to fill that demand one seven gigawatts would be about 5% and someone had both of those sites, 5% of hyper scaler AI demand over the next five years I think that would give those players.

Speaker Change: Perfect. Thanks, guys really appreciate it.

Speaker Change: Thanks, Brett.

Speaker Change: Thank you. Our next question comes from Reggie Smith with J P. M. Your line is open.

Speaker Change: Hey, guys. Thanks for taking the question.

Reggie Smith: Congrats on the quarter and the year.

Speaker Change: A real strategic advantage so.

A question I was looking at your Opex trends and I know.

Speaker Change: There is that interest and the economics are there to convert the site, we will certainly be looking and evaluating that closely.

Reggie Smith: I don't want to rain on your parade or anything like that but noted we look at SG&A minus dot com and we've seen that number grow sequentially each quarter. It sounds like you've done some acquisitions there may be some deal costs in there, but like what's driving that how are you benchmarking.

Speaker Change: Great. Thanks, Jason.

Thanks Darren.

Speaker Change: Thank you.

Speaker Change: Our next question comes from Brett Knoblauch with Cantor Fitzgerald. Your line is open.

Reggie Smith:

Speaker Change: Hi, guys.

Reggie Smith: Opex growth and things of that nature and I was curious if you had an employee count because I was trying to calculate dot comp per employee.

Speaker Change: Maybe my first question similar to the left is all of course, the economy on the table hyperscale or one of the four gigawatt there.

Reggie Smith: I'll follow up thank you.

Speaker Change: Well so we have the 600 megawatts that's been Unutilized as being developed right now that would be the least.

Reggie Smith: Okay, so working backwards.

Reggie Smith: Don't have exact employee count for you it will be in the 10-K, which should be filed.

Speaker Change: <unk> friction way to accomplish a deal.

Reggie Smith: Very shortly here.

Speaker Change: But if there was someone that was interested in the full one gigawatt taking over the entire site as it is and have the economics to make that reiterate shareholders. Yes.

Reggie Smith: As far as G&A goes so our G&A has been elevated both in 'twenty, three and 'twenty four I'm, sorry, Q3, and Q4 2024 due to onetime M&A legal litigation expenses.

Speaker Change: Definitely look at that and.

Speaker Change: It's always possible that presents itself because that's a lot of power coming online 400 megawatts now and then that remaining 600 megawatts 12 months from now approximately 12 months from now so.

Reggie Smith: Not recurring expenses for running our business is not a part of running a bitcoin mining operation <unk> operation, So that was pretty meaningful in <unk>.

Speaker Change: We're assessing demand and we are going to maximize the value of these assets.

Reggie Smith: Especially Q4, we had approximately $22 million and one off costs like I said, mainly litigation expense.

Speaker Change: Understood and then maybe just on the power agreements in place at these sites do they need to be altered to support AI HBC and maybe in particular with Rockdale.

Reggie Smith: Stock based advisory services that was closing out a three year engagement, we had some M&A expenses as well. So obviously, we would like our litigation tied up in a timely manner. So we're not.

Speaker Change: Your participation in a lot of demand response, and curtailment programs does that.

Reggie Smith: <unk> expenses anymore, and we can get cash SG&A down.

Speaker Change: Need to switch from maybe a flexible at the farm level.

Speaker Change: No they do not need to be altered our power supply agreements do not require any participation in demand response everything we do there is voluntary as part of our power strategy that works with bitcoin mining because it's the interruptible load obviously that doesn't work with AAV species. So we do that with bitcoin mining voluntarily to drive the best.

Reggie Smith: Possible to handicap, like where you would like that to be kind of on a on a run rate a go forward basis like stripping out all the noise like what do you think you can run.

Speaker Change: Economics, but not.

Reggie Smith: Of course, the Cana.

Speaker Change: Requirement as a part of our power supply agreements.

Reggie Smith: Facility in your Rockdale and and everything that's going on.

Sure.

Speaker Change: Perfect. Thanks, guys really appreciate it.

Reggie Smith: So first to note how the expenses are allocated there is a split between.

Thanks, Brett.

Thank you. Our next question comes from Reggie Smith with J P. M. Your line is open.

Reggie Smith: Direct operating costs those are in cost of goods. In addition to power all of the power of the business expense and then we have some other kind of more corporate operating expenses facility wide expenses that fall under SG&A, but to directly get to your question. We think our 2024 cash run rate per quarter is going to be.

Reggie Smith: Hey, guys. Thanks for taking the question.

Speaker Change: <unk> on the quarter and the year.

Reggie Smith: The question I was looking at your Opex trends and I know.

Reggie Smith: You don't want to rain on the parade or anything like that but notice.

Reggie Smith: We looked at SG&A minus stock comp and we've seen that number grow sequentially each quarter. It sounds like you've done some acquisitions there may be some deal costs in there but.

Reggie Smith: In line to modestly above what our previous Q4 2024 run rate guidance was which is approximately 30% to $33 million.

Reggie Smith: Very difficult to anticipate what litigation or onetime maybe M&A items by fee or advisory fees.

Reggie Smith: What's driving that how are you benchmarking.

Reggie Smith: Opex growth and things of that nature and I was curious if you had an employee count because I was trying to calculate.

Reggie Smith: That may pop up but on a run rate basis. That's what we are looking at per quarter $30 million to $33 million cash and.

Reggie Smith: Comp per employee.

Reggie Smith: Follow ups. Thank you.

Reggie Smith: Okay, so working backwards.

Reggie Smith: We're focused on optimizing that especially relative to our overall.

Reggie Smith: Don't have exact employee counted for you it will be in the 10-K, which should be filed.

Reggie Smith: Okay, Great and then if I can get one more in.

Reggie Smith: Very shortly here.

Reggie Smith: As far as G&A goes so our G&A has been elevated both in 'twenty, three and 'twenty four I'm, sorry, Q3, and Q4 2024 due to onetime M&A.

Reggie Smith: I would.

Reggie Smith: Curious.

Reggie Smith: <unk> spoken with him, but giving any guidance on like how long it may take to finalize the deal.

Reggie Smith: I'm, just kind of thinking through like how quickly something could get done or how long might a drag on and it sounds like and maybe I'm reading too much into this but.

Reggie Smith: Legal litigation expenses.

Reggie Smith: Recurrent expenses for running our business the amount of part of running a bitcoin mining operation <unk> operation, So that was pretty meaningful.

Reggie Smith: If something isn't done by late 'twenty. Five then you would then consider.

Especially Q4, we had.

Going back to kind of bitcoin mining alright, plenty of bitcoin mining operation because it sounds like you've given.

Reggie Smith: Approximately $22 million and one off costs.

Reggie Smith: Feel comfortable with where your hedge rate will be relative to the network hash rate am I thinking about that right.

Reggie Smith: I said, mainly litigation expense.

Reggie Smith: We have some.

Reggie Smith: Well I don't think we're thinking of.

Reggie Smith: We need to get.

Reggie Smith: If there wasn't.

Reggie Smith: <unk> be fully spoken for by the end of this year and we would resume bitcoin mining I think were basically based on the demand and the quality of assets that we have we're pretty optimistic.

Reggie Smith: <unk> expenses anymore, and we can get cash SG&A down.

Reggie Smith: And I have an employee count for you. Thanks to help in the room here of 783 full time employees got it okay that makes sense alright. So it sounds like there is some one timers is it possible to handicap like where you would like that to be kind of on a on a run rate a go forward basis like stripping out all the noise like what do you think you can.

About getting something done how long that takes is probably unpredictable from a suite.

Reggie Smith: The nuts to completion, but there are going to be steps along the way.

Reggie Smith: Depending on the ultimate deal structure that comes through multiple steps could include signing a lease having a development partner for example, securing financing for example, and those could occur in a number of orders so.

Reggie Smith: Run.

Reggie Smith: Of course, the Cana.

Reggie Smith: <unk> facility in your Rockdale and everything that's going on.

Reggie Smith: Where we're really aggressively pursuing this we wanted to communicate updates as they occur.

Reggie Smith: Yes.

Reggie Smith: So first to note how the expenses are allocated.

Reggie Smith: But we are thinking about this as we need to get this done by X date or to go back to Bitcoin mining. We think these assets are really exciting for AI HBC datacenter development, and we want to get something meaningful done there.

Speaker Change: The split between.

Speaker Change: Direct operating costs those are in cost of goods. In addition to power all of the power of the business expense and then we have some other kind of more corporate operating expenses facility wide expenses that fall under SG&A, but to directly get to your question. We think our 2024 cash run rate quarter.

Reggie Smith: Got it great and I guess.

Reggie Smith: That's only congratulate you guys I know, we had talked previous quarters about improving uptime and operations you guys have done a good job of that so I wanted to.

Speaker Change: Going to be in line to modestly above what our previous Q4 2024 run rate guidance was which is approximately 30% to $33 million.

Reggie Smith: How does that so a great great job on that and I look forward for more updates on the on the ACC staff.

Reggie Smith: Thank you.

Thank you Rajeev appreciate that all the credit goes to the guys in the field guys and gals in the field working hard to improve operations every day.

Speaker Change: It's very difficult to anticipate what litigation or onetime maybe M&A items might be our advisory fee.

Mike Grondahl: Thank you. Our next question comes from Mike Grondahl with Northland. Your line is open.

Speaker Change: That may pop up but.

Speaker Change: On a run rate basis, that's what we are looking at per quarter $30 million to $33 million cash and.

Speaker Change: Hey, guys. Thank you two questions.

Mike Grondahl: The first one.

Speaker Change: We're focused on optimizing that especially relative to our overall.

Mike Grondahl: Can you provide a little bit more color I guess my specific question is on the 400 megawatts.

Speaker Change: Yes.

Speaker Change: Got it okay, great and then if I can get one more in.

Mike Grondahl: Of course, the Cana and the 700 at Rockdale have you gotten specific interest for that power, yet or would you say it all kind of so far relates to the 600 megawatts of course the Cana.

Speaker Change: I was.

Speaker Change: Curious.

Speaker Change: <unk> spoken with all that giving you any guidance on like how long it may take to finalize a deal.

Speaker Change: I'm, just kind of thinking through like how quickly something could get done or how long might a drag on and it sounds like and maybe I'm reading too much into this that.

Mike Grondahl: And then secondly, any operational goals for 25 on the on the mining side.

Speaker Change: If something isn't done by late 'twenty. Five then you would then consider.

Mike Grondahl: So starting backwards with your question there, Mike our operational goals and the bitcoin mining side, we're looking to increase our harsh rate by approximately 22%. This year, that's really driven by expansion of our Kentucky facilities.

Speaker Change: Going back to kind of bitcoin mining plenty of bitcoin mining operation because it sounds like you've given.

Speaker Change: We're comfortable with where your hedge rate will be relative to the network hash rate am I thinking about that right.

Speaker Change: Well I don't think we're thinking of.

Mike Grondahl: We're focused on operational excellence, we want to continue executing on our power synergy and improving uptime.

We need to get.

Speaker Change: If there was it.

Mike Grondahl: Months goes on so we have a good amount of work ahead of us to improve that business line as well and I think we are.

Speaker Change: <unk> be fully spoken for by the end of this year, we would resume bitcoin mining I think.

Speaker Change: Based on the demand and the quality of assets that we have we're pretty optimistic about.

Mike Grondahl: We're making all the right moves to show better results there.

Speaker Change: About getting something done how long that takes is probably unpredictable from a suite.

Mike Grondahl: And hit those growth targets in bitcoin mining and ended the year with $38 for excess cash.

Speaker Change: And not to completion, but there are going to be steps along the way.

Mike Grondahl: As far as the interest in the power I would say that hyperscale or large companies I've seen our access to power and they are interested in getting some piece of it.

Speaker Change: Depending on the ultimate Youll structure that comes through multiple steps can include signing a lease having a development partner for example, securing financing for example, and those can occur in a number of orders so.

Speaker Change: The inquiry.

Speaker Change: Not necessarily been specific as we want in your next 600 or we want the 400 year or anything like that it's more of hey, we need power fast we want to have a conversation of how that work with your assets.

Speaker Change: Sure.

Speaker Change: Aggressively pursuing this we wanted to communicate updates as they occur but.

But we are thinking about this as we need to get this done by X date or to go back to Bitcoin mining. We think these assets are really exciting for AIA HBC data center development, and we want to get something meaningful gotten there.

Speaker Change: Got it Okay, hey, thanks a lot.

Speaker Change: Okay.

Speaker Change: Thank you. Our next question comes from John <unk> with Needham Your line is open.

John: Hey, guys. Thanks for taking my question I have two so I know, it's early days and the combos and I hear you on all the demand out there and what everyone's expecting.

Speaker Change: Got it great and I guess.

Speaker Change: That's only congratulate you guys I know, we had talked previous quarters about improving uptime on operations you guys have done a good job of that so I wanted to.

Speaker Change: Now does that so a great great job on that and I look forward for more updates on the HCC side right.

John: But I think the market is starting to question some of that demand, especially on days like today. So.

Speaker Change: Thank you Rajeev appreciate that all the credit goes to the guys in the field guys and gals in the field working hard to improve operations every day.

John: First question is just as those conversations with Hyperscale is have gone have you noticed any change recently versus maybe a few weeks ago or a month or so ago, just kind of any tea leaves there. So that's my first question.

Speaker Change: Thank you. Our next question comes from Mike Grondahl with Northland. Your line is open.

Mike Grondahl: Hey, guys. Thank you two questions.

John: We have not seen any change yet.

Speaker Change: The first one.

John: Expanding the scope of the Counterparties, we are talking to now in conjunction with our financial advisors Evercore and.

Speaker Change: Can you provide a little bit more color I guess my specific question is on the 400 megawatts.

John: Northland I don't want to make sure we get the full this view of the market here, but.

Speaker Change: Of course, the Cana and the 700 at Rockdale.

Speaker Change: Have you gotten specific interest for that power, yet or would you say it all kind of so far relates to the 600 megawatts of corsicana.

John: I think theres been lots of new stories on IH II.

John: Demand and how that's fluctuated.

John: So to start with.

John: About Microsoft today seems very quickly without a lot of that was disputed and.

Speaker Change: And then secondly, any operational goals for 25 on the on the mining side.

John: <unk>.

John: Leading our misunderstood information to start but I'd also point out to developments like <unk> III is now the number one.

Speaker Change: Yes.

Speaker Change: So starting.

Speaker Change: Backwards with your question there Mike operational goals on the Bitcoin mining side, we're looking to increase our harsh rate by approximately 22%. This year, that's really driven by expansion at our Kentucky facilities.

John: Right It AI and.

John: And how did they achieve the results and that AI and they did a significant amount of pre training because FAA got it.

Speaker Change: Focus on operational excellence, we want to continue executing on our power synergy and improving uptime at.

John: <unk> going on.

John: Nvidia Gpus up fast.

John: Even though there is efficiency gains has been has had or been studied it still means that large scale access to power and then by extension compute <unk> hyperscale or Skus AI developers and edge in these products. So.

Speaker Change: At months goes on so we have a good amount of work ahead of us to improve that business line as well and I think where we are.

Speaker Change: We're making all the right moves to show better results there.

Speaker Change: And hit those growth targets in bitcoin mining and ended the year with $38 for excess cash.

John: As long as there is demand for AI, which I only believe is going to continue I think we're going to continue to see increased demand for power to build data centers to get a competitive edge in that sector.

Speaker Change: As far as the interest in the power I would say that hyper scaler large companies I've seen our access to power and they are interested in getting some piece of it it has it.

John: That's great and then my next question.

Speaker Change: Not necessarily been specific as we want in your next 600 or we want the 400 here or anything like that it's more of hey, we need power fast we want to have a conversation of how might that work with your assets.

Speaker Change: So just try and frame it again for US I know you guys have made the argument before how the <unk> business complements hp's see because I see you're basically doubling down in bitcoin, especially on the takeaway on the balance sheet, but then went aggressively go at HPT and it seems like at least from the investors we talk to the guys who like HTC don't really.

Speaker Change: Got it Okay, hey, thanks a lot.

Speaker Change: Thank you. Our next question comes from John <unk> with Needham Your line is open.

John: Bitcoin, so do you spin off one of them or or or.

Speaker Change: Hey, guys. Thanks for taking my question.

Speaker Change: How do they complement each other I guess.

Speaker Change: Two so I know, it's early days and the combos and I hear you on all the demand out there and what everyone's expecting.

Speaker Change: I'd say today riots basically positioned itself at the center of too rapidly growing industries, we have bitcoin and we have AI HBC datacenter demand, which is a very common theme.

Speaker Change: But I think the market is starting to question some of that demand, especially on days like today. So.

Speaker Change: Bitcoins rapid rise to institutional adoption and the price appreciation is what has positioned riot as uniquely one of the handful of companies that has direct exposure to bitcoin.

Speaker Change: First question is just as those conversations with Hyperscale is have gone have you noticed any change recently versus maybe a few weeks ago or a month or so ago.

Speaker Change: Any tea leaves there. So that's my first question.

Speaker Change: This our bitcoin balance in addition to our bitcoin mining business has provided right with the framework to raise capital at attractive levels and invest in projects like corsicana growing rockdale and that has.

Speaker Change: We have not seen any change yet.

Speaker Change: Expanding the scope of the Counterparties, we are talking to now in conjunction with our financial advisors Evercore.

Speaker Change: Sure.

Speaker Change: Resulted in the opportunity set today, we think we can create a lot of value from that so with the HCC opportunity. This gives us another way.

Speaker Change: Northland I don't want to make sure we get the full this view of the market here, but.

Speaker Change: I think theres been lots of new stories on AI.

Speaker Change: The better way to use energy assets and generate.

Speaker Change: Demand and how that's fluctuated.

Speaker Change: Substantial economics returns and I think being flexible and opportunistic as what.

Speaker Change: So to start with.

Speaker Change: The news about Microsoft today, It seems very quickly without a lot of that was disputed and.

Speaker Change: Going to give our shareholders.

Speaker Change: Diversified path to greater returns so.

Speaker Change: <unk>.

Speaker Change: <unk> are misunderstood information to start but I'd also point out to developments like <unk> III is now the number one.

John: John I would say that bitcoin is the reactor that has grown our business and grown our assets in Ghana point, where we can do this and we believe it's going to continue generating opportunities for us and <unk>.

Speaker Change: Great AI and.

Speaker Change: And how did they achieve the results and that AI and they did a significant amount of pre training because FAA got it.

John: Having the ability to develop AI HBC datacenters or do deals in that sector is just another.

Speaker Change: And going on.

Speaker Change: Nvidia Gpus up bass, so even though theres efficiency gains being pad are being studied it still means that large scale access to power and then by extension compute gives hyperscale or skus AI developers and edge in these products. So.

John: Super exciting way in which we can increase value.

John: Great Thanks for that and congrats on the quarter guys.

Thank you.

Speaker Change: Thank you. Our next question comes from Martin <unk> with HEB capital markets. Your line is open.

Speaker Change: As long as there is demand for AI, which I only believe is going to continue I think we're going to continue to see increased demand for power to build data centers to get a competitive edge in that sector.

John: Yes.

John: Thank you so much for taking the question congrats on the.

John: Deal.

John: The improved efficiency this quarter.

Speaker Change: That's great and then my next question.

John: Thank you Martin.

John: A quick question on the.

Speaker Change: So just try and frame it again for US I know you guys have made the argument before how the.

John: The deal and $100 million run rate.

Speaker Change: The <unk> business complements HTC, because I see you're basically doubling down in bitcoin, especially on pick one on the balance sheet, but then went aggressively go at HPT and it seems like at least from the investors we talk to the guys, who like HTC don't really like bitcoin. So do your spin off one of them or or or.

John: And the margins just wondering.

John: When might you expect this business to produce like industry margins more in line with the industry and more in line with the acquired company.

Jason Chung: Thanks, Martin I'm going to turn that question over to adjacent Chung.

Speaker Change: Or how do they complement each other I guess.

Jason Chung: EVP and head of corporate development.

Speaker Change: Well I would say today riots basically positioned itself at the center of too rapidly growing industries, we have bitcoin and we have AI HBC datacenter demand, which is a very common theme.

Speaker Change: Hey, Martin.

Speaker Change: Interesting question, we definitely see if we think about what the engineering business is today.

Speaker Change: Following the acquisition of <unk> solutions.

Speaker Change: The services business by by nature tends to have higher margins and so we definitely see that higher margin profile.

Speaker Change: Demonstrated by their financial performance.

Speaker Change: There are at the center of the.

Speaker Change: This.

Speaker Change: Our bitcoin balance in addition to our bitcoin mining business has provided right with the framework to raise capital at attractive levels and invest in projects by Corsicana.

Speaker Change: Incredible growth, we've seen demand for power generation and data center development. So.

Speaker Change: We have seen historically their topline continues to grow while they've been able to maintain margins and we definitely expect to see that continue going forward and I think that really forms the basis for.

Speaker Change: Growing rockdale and that has.

Speaker Change: Resulted in the opportunity set today, we think we can create a lot of value from that so with the HCC opportunity. This gives us another way.

Speaker Change: The sort of high level view, we have around 2025 performance on the engineering side.

Speaker Change: Seemingly better way to use energy assets and generate.

Speaker Change: The other part of that the other component to that as the Metro business, where now that we've gotten this one particular contract behind us we expect that business to recover meaningfully.

Speaker Change: Substantial economics returns and I think being flexible and opportunistic as what is going to give our shareholders a diversified path to greater returns. So.

Speaker Change: And so if you look at where they were call it in 2023.

Speaker Change: John I would say that bitcoin is the reactor that has grown our business and grown our assets in Ghana point, where we can do this.

Speaker Change: Topline there similar margins, but now we're combining the <unk> business.

Speaker Change: With the top line that's expected to continue to grow strongly this year.

Speaker Change: We believe it is going to continue generating opportunities for us and.

Speaker Change: Having the ability to develop AI HBC datacenters or do deals in that sector is just another.

Speaker Change: And maintain healthy margin.

Speaker Change: On a combined pro forma basis, we think that the engineering business will show significant improvement in margins than as you. Then if you kind of look out further we continue to.

Speaker Change: Super exciting way in which we can increase value.

Speaker Change: Great Thanks for that and congrats on the quarter guys.

Speaker Change: See some some really interesting synergy opportunities in combining these two businesses.

Thank you.

Speaker Change: Thank you. Our next question comes from Martin <unk> with HEB capital markets. Your line is open.

Speaker Change: Both on the cost savings side and cross selling.

Speaker Change: And even just given the <unk> solutions based in Houston, where we think some of the capacity issues that are currently constrained the USS Metro business can potentially be alleviated. So I think there's some really interesting.

Speaker Change: Thank you so much for taking the question congrats on the.

Speaker Change: Deal.

Speaker Change: Improved efficiency this quarter.

Speaker Change: Near to mid term opportunities to increase that margin profile. Even further now that you've got the two businesses together.

Thank you Martin.

Speaker Change: A quick question on the.

Speaker Change: The deal and $100 million run rate.

Speaker Change: That's great. Thanks for listening to me.

Speaker Change: And the margins just wondering.

Speaker Change: Thank you.

Speaker Change: Yes.

Speaker Change: When might you expect this business to produce like industry margins more in line with the industry and more in line with the acquired company.

Operator: Thank you. Our next question comes from Patrick Moly with Piper Sandler Your line is open.

Patrick Moly: Yes, good evening, Thanks for taking my question.

Speaker Change: I have one on the Rockdale site.

Speaker Change: Thanks, Martin I'm going to turn that question over to Jason Chung.

Speaker Change: If I'm not mistaken I think that you currently lease that site you don't own it outright.

Jason Chung: EVP and head of corporate development.

Speaker Change: Hey, Martin.

Speaker Change: Interesting question, we definitely see if we think about what the engineering business is today.

Speaker Change: You do of course, a canister I'm just can you maybe just talk about the specifics of that.

Speaker Change: Lease and whether the fact that you lease that land makes it any less attracted to hyperscale is when they're thinking about.

Speaker Change: Following the acquisition of <unk> solutions.

The services business by by nature tends to have higher margins and so we definitely see that higher merch margin profile.

Speaker Change: Choosing a site for the data center.

Speaker Change: Yes, Patrick so you're correct.

Speaker Change: Corsicana, we own the land at Rockdale, where on a land lease that is on a pretty long term them. The initial term of 10 years and then there are multiple 10 year renewals at our option.

Speaker Change: Demonstrated by their financial performance.

Speaker Change: They are at the center of this.

Speaker Change: Incredible growth, we've seen demand for power generation and data center development. So.

Speaker Change: I think its a total 40 or 50 years in total on there. So it's a pretty long term crown.

Speaker Change: I think what would impact deals areas. The type of deal that's getting done I think it depends on.

Speaker Change: The sort of high level view, we have around 2025 performance on the engineering side.

Speaker Change: What the level of involvement from the customer would be I think ultimately drives whether or not rockdale and the fact that the land lease.

Speaker Change: Impacts if it's viable for them, but at the end of the day. The major theme here is constraint on power and.

Speaker Change: And so if you look at where they were call it in 2023.

Speaker Change: Topline there similar margins, but now we're combining the <unk> business.

Speaker Change: We believe that as that constraint becomes more and more real and these hyperscale or AI companies are competing with each other for capacity factors like that may start to become less if it means getting capacity on sooner.

Speaker Change: With the topline that's expected to continue to grow strongly this year.

Speaker Change: And maintained healthy margins.

Speaker Change: On a sort of combined pro forma basis, we think that's engineering business will show significant improvement in margins than as you. Then if you kind of look out further we continue to.

Speaker Change: Okay got it and then just a follow up.

Speaker Change: Obviously going to vary by.

Speaker Change: The needs of the tenant, but some of the similar deals.

Speaker Change: See some some really interesting synergy opportunities in combining these two businesses.

You can get done in this space have been north of.

Speaker Change: 10 year lease terms or sorry, 10 year terms on the AI HBC deals. So based on your conversations can you talk.

Speaker Change: Both on the cost savings side and cross selling.

Speaker Change: About how long do you think.

Speaker Change: <unk>.

Speaker Change: Ah contract if you were to sign one could potentially be.

Speaker Change: That come in at all as some of these questions have arisen about longer term demand.

Speaker Change: Near to mid term opportunities to increase that margin profile. Even further now that you've got the two businesses together.

Speaker Change: Anything on kind of like the length of some of the some of these deal terms it would be great. Thanks.

Speaker Change: Yes, I think long term demand is I'm sorry, the long term of an agreement is a key point and that's both for customers and for US we're going to be building infrastructure, we are going to be spending capital on this and they are good terms available today, we want a long term agreement to lock that in and give ourselves the visibility.

Speaker Change: That's great. Thanks for retrofit for me.

Speaker Change: Thank you.

Speaker Change: Yes.

Operator: Thank you. Our next question comes from Patrick Mali with Piper Sandler Your line is open.

Patrick Mali: Yes, good evening, thanks for taking the question.

Operator: I have one on the Rockdale site.

Speaker Change: Of the financial return.

Operator: If I'm not mistaken I think that you currently lease that site you don't own it outright.

Speaker Change: Assets over a long term so.

Speaker Change: Think both sides are similarly interested in having long term agreements or 10 years and beyond.

Operator: You do of course, the canister I'm just can you maybe just talk about the specifics of that.

Speaker Change: Alright, great. That's it for me thanks, guys.

Operator: And whether the fact that you lease that land makes it any less attracted to hyperscale is when they're thinking about.

Speaker Change: Thank you.

Operator: Choosing a site for the data center.

Speaker Change: Next question comes from Bill <unk> with <unk>. Your line is open.

Operator: Yes, Patrick so you're correct.

Operator: Corsicana, we own the land at Rockdale, where on a land lease that is on a pretty long term them. The initial term of 10 years and then there are multiple 10 year renewals at our option.

Speaker Change: Good evening gentlemen, congrats on the deal and thanks for taking my questions.

Speaker Change: My first question is with respect to driving higher Bitcoin Gilles.

Speaker Change: Curious to hear how the company's thinking about dilution going forward to drive a higher bitcoin per share.

Operator: I think a total of 40 or 50 years in total on there. So it's a pretty long term crown.

Speaker Change: And could we see right issuing other forms of structured products down the road.

Operator: I think what would impact deal there is the type of deal that's getting done I think it depends on.

Speaker Change: So minimizing dilution is a key part of being successful at bitcoin yield the core part that drives it for US is a big one minor is.

Operator: What the level of involvement from the customer would be I think ultimately drives whether or not rockdale and the fact that the land is lease.

Speaker Change: Our mining operations were achieving a very low direct cost of production.

Operator: That impacts if it's viable for them, but at the end of the day. The major theme here is constraint on power and.

Speaker Change: That is what is.

Speaker Change: The basis of forms how we organically generate pick one yield and of course, we're always going to look to raise capital in the least dilutive lowest cost cost of capital manner in order to enhance between yield and it's a reason why this metric is powerful we think it helps hold teams such as ourselves accountable to making dilution is.

Operator: We believe that as that constraint becomes more and more real and these hyper scaler AI companies are competing with each other for capacity factors like that may start to become less if it means getting capacity on sooner.

Speaker Change: Okay got it and then just a follow up it's obviously going to vary by.

Speaker Change: Minimal as possible so.

Speaker Change: That leads to how we think about going into the market with equity you'll you'll notice over the past few months or so we've been very light with our ATM.

The needs of the tenant, but some of the similar deals.

Speaker Change: You can get done in this space have been north of.

Speaker Change: 10 year lease terms or sorry, 10 year terms on the HBC deals. So based on your conversations can you talk.

Speaker Change: One program. It also is what drives us to find additional forms of financing.

Speaker Change: With our assets and the things that we've.

Speaker Change: About how long do you think.

Speaker Change: Buildup in Uruguay and.

Speaker Change: We are well positioned to find alternative forms of financing all of this contributes to driving a bitcoin yield.

Speaker Change: <unk>.

Speaker Change: Our contracted you would assign one could potentially be.

Speaker Change: That come in at all as some of these questions have arisen about longer term demand.

Speaker Change: As far as other kind of structured products.

Speaker Change: Senior living just the things I like what our strategy has done.

Anything on kind of like the length of some of the some of these deal terms it would be great. Thanks.

Speaker Change: That's not something that we've looked to closely at yet.

Speaker Change: Yes, I think long term demand is I'm sorry, the long term of an agreement is a key point and that's both for customers and for US we're going to be building infrastructure. If we're going to be spending capital on this and there are good terms available today, we want a long term agreement to lock that in and give ourselves the visibility.

Speaker Change: Our main focus has been the HCC opportunity right now, but I think we'll closely monitor how these products come about and see what investor market demand looks like for them.

I appreciate that color and then secondly, and I apologize if I missed this earlier in the call, but can you share some more color on how the design and engineering aspects of the AI HBC data center looks like what do you need to hire or partner with more external parties to get it up and running I'm curious to hear what the plan is there. Thanks.

Speaker Change: Of the financial return.

Speaker Change: Assets over a long term so.

Think both sides are similarly interested in having long term agreements or 10 years and beyond.

Alright, great. That's it for me thanks, guys.

Speaker Change: So I think it will ultimately depend bill on the type of deal that comes together and we've talked about earlier.

Speaker Change: Thank you.

Speaker Change: Next question comes from Bill Popper Sonesta, Sue with VW. Your line is open.

Speaker Change: We want to pursue what maximizes the most value on a risk adjusted basis and there is multiple different avenues in which we can execute there and some of these avenues, we already have a team in place to do that we're building out our power capacity very well.

Speaker Change: Yes.

Sue: Good evening gentlemen, congrats on the deal and thanks for taking my questions.

Sue: My first question is with respect to driving higher Bitcoin Gilles.

Speaker Change: Exceptionally good at that and the acquisition of <unk>. It makes us even better ability filling out what you would say, it's a powered shell of an infrastructure.

Sue: I'm curious to hear how the company's thinking about dilution going forward to drive a higher bitcoin per share.

Sue: And could we see right issuing other forms of structured products down the road.

Speaker Change: Data Center development no further riot in bitcoin mining, we've developed our infrastructure there with state of the art can we took each of <unk> and that experience translates into supporting data center development, especially with the type of state of the art coin techniques. We're seeing now so I think we have a good amount of talent. Nonetheless, we are focused on.

Sue: So minimizing dilution is a key part of being successful at bitcoin yield the core part that drives it for US is a big one minor is our mining operations were achieving a very low direct cost of production.

Sue: That is what is.

Speaker Change: Bringing on additional help to support and execution, there and we're working on that from both internal and third party perspectives.

Sue: The basis of forms how we organically generate pick one yield and of course, we're always going to be looked at were raised capital in the least dilutive lowest cost cost of capital manner in order to enhance pick one and it's a reason why this metric is powerful we think it helps hold teams such as ourselves accountable to making dilution is.

Speaker Change: Sure.

Speaker Change: Awesome. Thanks for the color looking forward to the feasibility study next month.

Bill: Thank you Bill.

Speaker Change: Thank you. Our next question comes from Joe Flynn with Compass Compass point research and trading your line is open.

Sue: Minimal as possible so.

Sue: That leads to how we think about going into the market with equity you'll you'll notice over the past few months or so we've been very light.

Speaker Change: Hi, Thanks for the question.

Speaker Change: Wondering maybe based on early conversations with your.

Sue: One program. It also is what drives us to find additional forms of financing.

Speaker Change: Consultants, if theres any operational metrics you can share such as.

Sue: With our assets and the things that we've built up here we are.

Speaker Change: Ultimately what.

Speaker Change: You'll be able to deliver at and your build cost per megawatt and how that could be different between the 600 megawatts that of course, Canada and the Rockdale site given.

Sue: Well positioned to find alternative forms of financing all of this contributes to driving a bitcoin yield.

Sue: As far as other kind of structured products.

Speaker Change: Already existing power infrastructure.

Sue: Senior living to the things I like what our strategy has done.

Speaker Change: Thanks.

Speaker Change: Yes, I think it's probably too early to comment on what we used to look like especially since the technology is changing so rapidly and it is going to depend a lot on what the type of customer would be I think bulk rockdale corsicana are in very similar comments only being 100 miles from each other so.

Sue: That's not something that we've look too closely at yes.

Sue: Our main focus has been the HCC opportunity right now, but I think we will closely monitor how these products come about and see what investor market demand looks like for them.

Speaker Change: I appreciate that color and then secondly, and apologies if I missed this earlier in the call, but can you share some more color on how the design and engineering aspects of the AI HBC datacenter could look like what do you need to hire or partner with more external parties to get it up and running curious to hear what the plan is there. Thanks.

Speaker Change: It would be similar on both sides at both sites, though we have very sufficient access to water, especially at Rockdale. So we have the ability to support.

Speaker Change: A wide variety of QE technologies, there so Joe I Couldnt tell you what it would be like just yet.

Speaker Change: So I think it will ultimately depend bill on the type of deal that comes together, how do we talked about earlier.

Speaker Change: I think the conversations we need to advance further we would have to be kind of in the design phase to know what that particular customer is looking to accomplish.

Speaker Change: Want to pursue what maximizes the most value on a risk adjusted basis, and there's multiple different avenues in which we can execute there and some of these avenues, we already have a team in place to do that and we're building out our power capacity very well.

Speaker Change: And then just.

Speaker Change: Going back to just maximize maximizing the value of the sites does.

Speaker Change: Does that include potential.

Speaker Change: <unk> sales.

Speaker Change: Capacity and.

Speaker Change: Like on that front or have you been approached or even gotten offers for.

Speaker Change: Exceptionally good at that and the acquisition of <unk>. It makes us even better ability filling out what you would say its the powered shell of an infrastructure.

Speaker Change: Yes.

Speaker Change: An outright asset sale.

Speaker Change: There is a whole spectrum of potential deal structure here it could be on one hand, it could be lease land it could be a powered shell it couldnt be building something to suit a basically a largest compete complete data center and then the bigger some of the spectrum would be an outright sale of the asset. So we're open.

Speaker Change: Data Center development no further riot in bitcoin mining well, we've developed our infrastructure there with state of the art can we took each of <unk> and that experience translates into supporting data center development, especially with the type of state of the art coin techniques. We're seeing there. So I think we havent good amount of talent. Nonetheless, we are focused on.

Speaker Change: To all of these as we progress.

Speaker Change: Bringing on additional help to support and execution, there and we're working on that from both internal and third party perspectives.

Speaker Change: Discussions here and we're driving we want to drive a strong competitive process here, while we've engaged evercore Northland to give us the most broader most broad penetration to the market we can.

Speaker Change: Awesome. Thanks for the color looking forward to the feasibility study next month.

Speaker Change: Yeah.

Speaker Change: Thank you Bill.

Speaker Change: Great. Thanks.

Speaker Change: Thanks, Tom.

Speaker Change: Thank you. Our next question comes from Joe Flynn with Compass.

Speaker Change: Thank you that's all the time, we have for questions I'd like to turn the call back over to Phil Macpherson for closing remarks.

Speaker Change: <unk> point research and trading your line is open.

Phil Macpherson: I'd like to thank everybody for tuning in today to our earnings conference call. We look forward to updating you on future <unk>.

Speaker Change: Hi, Thanks for the question.

Speaker Change: I'm wondering maybe based on early conversations with your.

Vince: Vince for riot platforms as always you can contact us at IR at <unk> Dot Inc. For any other future questions and we'll talk soon thank you.

Speaker Change: Consultants, if theres any operational metrics you can share such as.

Speaker Change: Wow.

Speaker Change: Youll be able to deliver at and your build cost per megawatt and how that could be different between the 600 megawatts of course, Canada and the Rockdale site given.

Vince: Thank you for your participation. This does conclude the program and you may now disconnect good day.

Speaker Change: Already existing power infrastructure.

Thanks.

Speaker Change: Yes, I think it's probably too early to comment on what we used to look like especially since the technology is changing so rapidly and it's going to depend a lot on what the type of customer would be I think both Rockville corsicana are in very similar comments only being 100 miles from each other so there will be <unk>.

Speaker Change: Similar on both sides at both sites, though we have very sufficient access to water, especially at Rockdale. So we have the ability to support.

A wide variety of technologies, there so Joe I Couldnt tell you what it would be like just yet.

Speaker Change: I think the conversations we need to advance further we would have to be kind of in the design phase to know what that particular customer is looking to accomplish.

Speaker Change: And then just.

Speaker Change: Going back to just maximize.

Speaker Change: Providing the value of the sites.

Does that include potential.

Speaker Change: <unk> sales.

Speaker Change: Capacity and.

Speaker Change: Mike on that front or have you been approached or even gotten offers for.

Speaker Change: Yes.

Speaker Change: An outright asset sale.

Speaker Change: There is a whole spectrum potential deal structure here it could be on one hand, it could be lease land it could be a powered shell we could be building something to suit a basically a largest compete complete data center and then the biggest under the spectrum would be an outright sale of the asset. So we're open.

Speaker Change: To all of these as we progressing.

Speaker Change: Yeah.

Speaker Change: Great. Thanks.

Speaker Change: Thanks, Tom.

Speaker Change: Thank you that's all the time, we have for questions I'd like to turn the call back over to Phil Macpherson for closing remarks.

Phil Macpherson: I'd like to thank everybody for tuning in today to our earnings conference call. We look forward to updating you on future <unk>.

Speaker Change: Vince for REIT platforms as always you can contact us at IR at <unk> dot anchor for any other future questions and we'll talk soon thank you.

Speaker Change: Thank you for your participation. This does conclude the program and you may now disconnect good day.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Yeah.

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