Q4 2024 TeraWulf Inc Earnings Call

[music].

Operator: Greetings. Welcome to the Terrewolf 2024 4th Quarter Near-End Earnings Call.

Greetings and welcome to the terrible 'twenty 'twenty four fourth quarter and year end earnings call. At this time, all participants will be in listen only mode.

Operator: At this time, all participants will be in listen-only mode.

Operator: The question and answer session will follow the formal presentation. Anyone today should require operator's press star zero on your telephone keypad.

And answer session will follow the formal presentation.

If anyone today should require operator assistance. Please press star zero on your telephone keypad.

Operator: As a reminder, this conference is being recorded.

As a reminder, this conference is being recorded.

John Larkin: It is now my pleasure to introduce John Larkin, Senior Vice President, Director of Investor Relations.

Speaker Change: It's now my pleasure to introduce John Martin Senior Vice President Director of Investor Relations.

Operator: Thank you, Mr. Larkin. Thank you, Operator.

Mr. Lascar: Thank you Mr. Lascar, you may begin.

John Martin: Thank you operator, good morning, and welcome to the Taro was 2020 for fourth quarter and year end earnings call. Joining me today are chairman and CEO, Paul Prager and CFO Patrick Fleury before we get started please note that our remarks. Today may include forward looking statements. These statements are subject to risks and uncertainties and actual <unk>.

Paul Prager: Good morning and welcome to TeraWolf's 2024 fourth quarter and year-end earnings call.

Paul Prager: Joining me today are Chairman and CEO Paul Prager and CFO Patrick Fleury. Before we get started, please note that our remarks today may include forward-looking statements. These statements are subject to risks and uncertainties, and actual results may differ materially. During this call, we may use words like anticipate, could, enable, estimate, intend, expect, believe, potential, will, should, project, and similar expressions which indicate forward-looking statements. For a more comprehensive discussion of these and other risks, please refer to our filings with the SEC available on sec.gov and in the investor section of our website at terawolf.com. We will also reference certain non-GAAP financial measures today.

John Martin: <unk> may differ materially during this call. We may use words like anticipate could enable estimate intend expect believe potential will should project and similar expressions, which indicate forward looking statements for a more comprehensive discussion of these and other risks.

Please refer to our filings with the SEC available on S. E T Dot Gov and in the investors section of our website at <unk> Dot com.

John Martin: We will also reference certain non-GAAP financial measures today, please refer to our 10-K and 10-Q filings in our website for a full reconciliation of these non-GAAP performance measures to the most comparable GAAP measures.

Paul Prager: Please refer to our 10-K and 10-Q filings and our website for a full reconciliation of these non-GAAP performance measures to the most comparable GAAP measures.

Paul Prager: We will start this morning's call with prepared remarks from Paul and Patrick, followed by a Q&A session.

Speaker Change: I'll start this morning's call with prepared remarks from Paul and Patrick followed by a Q&A session I'll now turn the call over to our CEO Paul prayer.

Paul Prager: I'll now turn the call over to our CEO, Paul Prager. Thank you, John, and good morning, everyone. We appreciate your joining us today as we discuss our fourth quarter and full year 2024 financial results.

Paul prayer: Thank you John and good morning, everyone. We appreciate your joining us today as we discuss our fourth quarter and full year 2024 financial results.

Paul Prager: This past year was transformational for Terrible. Every milestone we achieved in 2024 was intentionally designed to enhance and extend our digital infrastructure. enabling us to support high-performance compute and AI workloads alongside Bitcoin mining, while continuing to prioritize the highest value use of our megawatts. We strengthened our financial position, optimized our mining operations, and took the first significant step in executing our long-term vision for Wolf Compute with the announcement of our first data center lease agreements with Core 42.

Paul prayer: This past year was transformational for terrible.

Paul prayer: Every milestone we achieved in 2024 was intentionally designed to enhance and extend our digital infrastructure, enabling us to support high performance computing and AI workloads alongside bitcoin mining, while continuing to prioritize the highest value use of their megawatts.

Paul prayer: We strengthened our financial position optimize our mining operations.

Paul prayer: Took the first significant step in executing our long term vision for Wolf compute with the announcement of our first data center lease agreements with core 40, Jim.

Paul Prager: Let's start with their wolf mining business. Our profitable mining operations leverage predominantly zero-carbon energy at our state-of-the-art Lake Mariner facility in upstate New York. In 2024, we doubled revenue and adjusted EBITDA year over year, driven by higher Bitcoin production and favorable Bitcoin prices. As of year-end, wolf mining achieved a hash rate of 9.7 exahash per second, powered by approximately 60,000 miners.

Paul prayer: Let's start with air Wolf mining business.

Paul prayer: Our profitable mining operations leverage predominantly zero carbon energy at our state of the Art Lake Mariner facility in upstate New York in.

Paul prayer: In 'twenty 'twenty, four we doubled revenue and adjusted EBITDA year over year, driven by higher bitcoin production and favorable bitcoin pricing.

As of yearend Wolf binding achieved a has rate of nine seven extra half per second powered by approximately 60000 miners.

Paul Prager: We have now received over 90% of our new S21 Prominers, which, once fully deployed in Mine and Building 5, will bring our total mining power utilization to 245 megawatts, increase our hash rate to 13.1 exahash per second, and improve our fleet efficiency to 18.2 joules per terahash. Despite challenges such as record network difficulty and the anticipated Bitcoin halving in April 2024, we successfully mined 423 Bitcoin in the fourth quarter and a total of 2,177 Bitcoin throughout the year.

Paul prayer: We have now received over 90% of our new F. 'twenty, one pro miners, which once fully deployed and minor building five will bring our total mining power utilization, the 245 megawatts increase or a half rate of 13.1 actually I ask for a second and improve our fleet of fish.

Paul prayer: You can see the 18.2 joules per tower at Ash.

Paul prayer: Despite challenges such as record network difficulty and the anticipated bitcoin having in April 'twenty 'twenty four we successfully mined 423 big points in the fourth quarter and a total of 2177 bitcoin throughout the year.

Paul Prager: A pivotal moment in 2024 was the sale of a Nautilus Cryptomine joint venture in October. This transaction delivered a 3.4 times return on our investment, and more importantly, freed up important capital to accelerate the build-out of our HPC hosting business at Lake Mariner. The proceeds were strategically allocated to developing the 20-megawatt co-location building 1, which we refer to as CV1, and upgrading our minor fleet. Additionally, we restructured a Lake Mariner ground lease, expanding the site area from 107 to 157 acres with a 35-year initial lease and a 45-year extension op. Crucially, this new agreement grants us exclusive rights to infrastructure capacity of up to 750 megawatts, ensuring we have the scalability needed to support both Bitcoin mining and HPC hosting.

Paul prayer: A pivotal moment in 2024 was the sale of our Nautilus Crypto mine joint venture in October.

Paul prayer: This transaction delivered a 3.4 times return on our investment and more importantly, freed up important capital to accelerate the buildout of our H P C hosting business at Lake Mariner.

Paul prayer: Proceeds were strategically allocated to developing the 20 megawatt co location building, one, which we referred to as C V. One and upgrading our minor fleet.

Additionally, we restructured our linked Mariner ground lease.

Pending the site area from 107 to 157 acres with a 35 year initial lease and a 45 year extension option.

Paul prayer: Crucially this new agreement grants us exclusive rights to infrastructure capacity of up to 750 megawatts, ensuring we have the scalability needed to support both bitcoin mining and HTC hosting.

Paul Prager: Our HPC hosting strategy has been in the making for some time, and in 2024, we reached a major inflection point. In December, we secured CORE42 as our first customer, signing a 10-year, 72.5 megawatt data center lease agreement with two five-year extension options, including a 3% annual escalator. CORE 42 also holds an option for additional power, exercisable through March 31, 2025. This partnership with one of the world's foremost digital infrastructure leaders underscores Terawolf's ability to provide scalable, low-cost, and energy-efficient compute capacity, exactly what the AI industry needs now. We remain laser-focused on scaling Wolf Compute to meet the demand for high-power density, liquid-cooled HPC, and AI compute infrastructure.

Paul prayer: Our H P. C hosting strategy has been in the making for some time and in 2024, we reached a major inflection point.

Paul prayer: In December we secured core 42 as that first customer signing a 10 year 72, and a half megawatt data center lease agreements with two five year extension options.

Paul prayer: Including a 3% annual escalator.

Paul prayer: Core 42 also holds an option for additional tower exercisable through March 31 2025.

Paul prayer: This partnership with one of the world's foremost digital infrastructure leaders.

Paul prayer: Underscores <unk> ability to provide scalable low cost and the energy efficient compute capacity exactly what the AI industry needs now.

Paul prayer: We remain laser focused on scaling wolf compute to meet the demand for high power density liquid cooled H P. C N AI compute infrastructure.

Paul Prager: While some headlines suggest hyperscaler demand is slowing, we continue to see enterprise demand from organizations with both the capital and the GPU supply necessary for large-scale AI deployment in the next 12 to 18 months. Our discussions with potential customers, ranging from neocloud companies to leading AI innovators, confirm a pressing need for ready-to-deploy, high-density compute capacity. with up to 85% of the world's private data residing in enterprise. Our strategy is to help these organizations unlock the value of their data through AI and advanced computing. Over the next three years, we aim to contract and deploy 100 to 150 megawatts of HCC hosting capacity annually, while actively identifying and securing additional sites that meet our stringent energy infrastructure criteria.

Paul prayer: While some headlines suggest hyper scaler demand is slowing we continue to see enterprise demand from organizations with both the capital and the GPU supply necessary for large scale AI deployment in the next 12 to 18 months.

Paul prayer: Our discussions with potential customers ranging from Neil cloud companies, the leading AI innovators confirmed a pressing need for ready to deploy high density compute capacity.

Paul prayer: With up to 85% of the world's private data residing in enterprises.

Paul prayer: Our strategy is to help these organizations unlock the value of their data through AI and advanced computing.

Paul prayer: Over the next three years.

Paul prayer: Aim to contract and deploy 100 to 150 megawatts. The H D C hosting capacity annually, while actively identifying and securing additional sites that meet our stringent energy infrastructure criteria.

Paul Prager: To provide context, our initial 72.5 megawatt contract with CORE42 will generate over $1 billion of revenue over the initial 10-year term, an average of $100 million of revenue per year. An incremental 100 to 150 megawatts of HPC revenue will generate $1.4 to $2.1 billion over 10 years for an incremental $140 to $210 million of revenue per year. Scalability is key to long-term value creation. It ensures not only stability and control, but also provides for significant cost advantages as we expand. By leveraging our own infrastructure and energy expertise, we are uniquely positioned to drive profitable growth, both in Bitcoin mining and AI compute hosting.

Paul prayer: To provide context, our initial 72 and a half megawatt contract with core 42.

Paul prayer: We'll generate over $1 billion of revenue over the initial 10 year term on an average of $100 million of revenue per year.

Paul prayer: An incremental 100 to 150 megawatts of H P. C revenue will generate one four to $2 $1 billion over 10 years or an incremental $140 million to $210 million of revenue per year.

Paul prayer: Gail ability is key to long term value creation and insurers not only stability and control, but also provides for significant cost advantages as we expand.

Paul prayer: By leveraging our owned infrastructure and energy expertise, we are uniquely positioned to drive profitable growth.

Paul prayer: And bitcoin mining and AI compute hosting.

Paul Prager: We continuously evaluate the highest and best use of our megawatts, and to the extent there are opportunities to convert some of our existing mining capacity to HPC hosting in an accretive, evaluated way, we will do so. Additionally, we are actively expanding our portfolio beyond the 750 megawatts available at Lake Mariner, leveraging a strong pipeline of opportunity. As part of this effort, we have initiated a process to integrate the Cayuga site, Lake Marina's sister site in upstate New York, offering the same strategic advantages in land, water, power, and fiber. We are prioritizing Cayuga in 2025 and expect this site will add 150 megawatts of capacity in 2026, which could be scaled to 400 megawatts by 2028.

Paul prayer: We continuously evaluate the highest and best use of our megawatts and to the extent there are opportunities to convert some of our existing mining capacity to HCC hosting in an accretive value added way, we will do so.

Paul prayer: Additionally, we are actively expanding our portfolio beyond the 750 megawatts available at like Mariner, leveraging our strong pipeline of opportunities.

Paul prayer: Part of this effort, we have initiated a process to integrate the Cayuga site Lake Mariners sister site in upstate New York offering the same strategic advantages and land water power and fiber.

Paul prayer: We are prioritizing Cayuga in 2025 and expect this site will add 150 megawatts of capacity in 2026, which can be scaled for 400 megawatts by 2028.

Paul Prager: As it is a related party transaction, the process for Cayuga will adhere to rigorous governance standards with oversight from our board and independent counsel and advisors to ensure full transparency and alignment with shareholder interests. Beyond Kyuger, a deep expertise in energy infrastructure enables us to efficiently evaluate additional site opportunities, including those with existing on-site generation. This disciplined approach to scaling, efficiency, and profitability is central to maximizing the value of our digital infrastructure platform.

Paul prayer: and others, and we will see you on June 29th, 2026, which can be scaled for 400 megawatts by 2028 to rigorous governance standards with oversight from our board and independent counsel and advisors to ensure full transparency and alignment with shareholder interests.

Paul Prager: Turning to our financial position, 2024 was a year of deliberate balance sheet optimization designed to provide flexibility as we scale. Specifically. We paid off our term loan, eliminating legacy debt. monetized our Nautilus JB, unlocking capital for reinvestment. raised capital through a $500 million convertible offering and extended our ground lease, securing a long-term foundation for expansion. We repurchased $150 million of stock buybacks on a board-approved $200 million authorization, the first return of capital by any public Bitcoin miner.

Paul Prager: Looking ahead to 2025, our focus is clear. One, energize Miner Building 5 and integrate our newly upgraded mining fleet. Two, execute on our Core 42 agreement, ensuring timely delivery of contracted capacity.

Paul Prager: Three. contract additional HTC hosting capacity with the goal of exiting 2026. with 200 to 250 megawatts of revenue-generating HPC compute capacity.

Paul Prager: and four. Secure project financing. of our HPC data center. We also remain opportunistic in our approach to capital allocation. In recent months, we repurchased approximately $150 million of stock, both in conjunction with our convertible offering and through open market transactions. Given the compelling value creation opportunity ahead, we will continue to assess market conditions and take action where appropriate and when allowed to maximize shareholder return.

Paul Prager: Finally, I want to recognize and thank the exceptional team at Terrible. Their dedication, expertise, and relentless execution have enabled the milestones we're discussing today. We have built a world-class company at the very intersection of energy and technology and I am incredibly proud to be part of this team.

Patrick Fleury: With that, I'll turn the call over to our CFO, Patrick Fleury, for a detailed financial review. Thank you, Paul. While my remarks for year-end would typically focus solely on annual results and year-over-year financial comparisons, our fiscal year 2023 results are less relevant given our over 94% growth in mining capacity year-over-year and the impact of the fourth Bitcoin mining halving event in April 2024.

Patrick Fleury: Therefore, in my remarks, I will focus on fourth quarter versus third quarter results in addition to year-over-year comparisons. In the fourth quarter of 2024, we self-mined 423 Bitcoin at Lake Mariner, or approximately 5 Bitcoin per day, a 24% decrease over the 555 Bitcoin mined in 3Q24. However, excluding the impact of the Nautilus sale, quarter over quarter self-mined Bitcoin at Lake Mariner was stable, declining 4% from 442 in 3Q24 to 423 in 4Q24. For fiscal year 2024, we mined 2,728 Bitcoin as compared to 3,343 Bitcoin in 2023. Our GAAP revenues saw growth of 29% quarter over quarter, reaching $35 million in 4Q24 from $27.1 million in 3Q24.

Paul prayer: In the fourth quarter of 2024, we self mined 423, bitcoin at Lake Mariner or approximately five bitcoin per day, a 24% decrease over the 555 bitcoin mined and three Q 'twenty four.

Paul prayer: Excluding the impact of the Nautilus sale quarter over quarter self mind Bitcoin at Lake Mary with stable declining 4% from 442, and three Q24 to 423 in four Q 'twenty four.

Paul prayer: For fiscal year 'twenty 'twenty, four we mined 2000, and 728 bitcoin as compared to 3343 bitcoin in 2023.

Paul prayer: Our GAAP revenues saw growth of 29% quarter over quarter, reaching 35 million and <unk> 24 from $27 1 million and three Q 'twenty four.

Patrick Fleury: are value per bitcoin self-mined in 4Q24, a non-GAAP metric that historically includes bitcoin mined at Nautilus, averaged $82,739 per bitcoin as compared to $61,075 in 3Q24. Our gap revenues year over year increased 102% from $69.2 million in 2023 to $140.1 million in 2024. Our GAAP cost of revenue, exclusive of depreciation, for 4Q24 was $19.6 million, a 34 percent increase over $14.7 million in 3Q24. The quarter-over-quarter increase was due to a 55 percent increase in realized power prices, from $0.038 per kilowatt hour in 3Q24, $0.059 per kilowatt hour in 4Q24, offset by demand response proceeds of $4.1 million in 3Q24 versus $1.3 million in 4Q24.

Paul prayer: Our value per bitcoin self mined in <unk> 'twenty for a non-GAAP metric that historically include bitcoin mined at Nautilus.

Paul prayer: Average 82739 for bitcoin as compared to 61075 and three Q 'twenty four.

Paul prayer: Our GAAP revenues year over year increase of 102% from $69 2 million in 2023 to $140 1 million in 2024.

Paul prayer: Our GAAP cost of revenue exclusive of depreciation for <unk> 24 was $19 6 million or 34% increase over $14 7 million and <unk> 20 for.

Paul prayer: The quarter over quarter increase was due to a 55% increase in realized power prices from $3.08 per kilowatt hour and three <unk> 20, 459 cents per kilowatt hour and <unk> 24, offset by demand response proceeds of $4 1 million and <unk> 24 versus 1.3.

Paul prayer: And for Q 'twenty four.

Patrick Fleury: Our GAAP cost of revenue, exclusive of depreciation, year over year, increased 129%, from $27.3 million in 2023 to $62.6 million in 2024, primarily due to the 77% increase in mining capacity from 110 megawatts at year-end 2023 to 195 megawatts at year-end 2024. Our power cost, or cost of energy per Bitcoin mined, a non-GAAP metric that historically includes Bitcoin mined at Nautilus, was $46,328 in 4Q24 compared to $30,448 in 3Q24, and $25,227 in 2024 compared to $8,676 in 2023. realized power price for fiscal year 2024 was 4.3 cents per kilowatt hour, approximately 4% lower than our 2024 guidance of 4.5 cents per kilowatt hour.

Paul prayer: Our GAAP cost of revenue exclusive of depreciation year over year increase of 129% from $27 3 million in 2023.

Paul prayer: $2 6 million in 2024, primarily due to the 77% increase in mining capacity from 110 megawatts a year end 2023 295 megawatts at year end 2024.

Paul prayer: Our power cost or cost of energy per bitcoin mind, a non-GAAP metric that historically include bitcoin minded Nautilus with 46328, and <unk> 24, compared to 30448 and three Q 'twenty for <unk>.

Paul prayer: And 25227 in 2024 compared to 8676 in 2023.

Paul prayer: Realized power price for fiscal year, 'twenty 'twenty four was $4.03 per kilowatt hour approximately 4% lower than our 2024 guidance of $4.05 per kilowatt hour.

Patrick Fleury: Operating expenses increased 69% quarter over quarter from $1.6 million in 3Q24 to $2.7 million in 4Q24. Annual operating expenses increased 55% year over year from $4.9 million in 2023 to $7.6 million in 2024. These quarterly and annual increases are primarily the result of increased staffing levels at Lake Mariner necessary to support our mining expansion, as well as our entry into HPC hosting activities. SG&A expenses increased quarter over quarter from $11.5 million in 3Q24 to $32.3 million in 4Q24, primarily due to stock-based compensation in 4Q24. Adjusting for stock-based compensation, SG&A increased quarter over quarter from $9.1 million in 3Q24 to $15.5 million in 4Q24.

Paul prayer: Operating expenses increased 69% quarter over quarter from $1 6 million and three Q24 to $2 7 million and <unk> 24.

Paul prayer: Annual operating expenses increased 55% year over year from $4 9 million in 2023 to $7 6 million in 2024.

Paul prayer: These quarterly and annual increases are primarily the result of increased staffing levels at Lake Mary are necessary to support our mining expansion as well as their entry in the H P C hosting activities.

Paul prayer: SG&A expenses increased quarter over quarter from $11 5 million and <unk> 24 to $32 3 million and <unk> 24, primarily due to stock based compensation and for Q 'twenty four.

Paul prayer: Adjusting for stock based compensation SG&A increased quarter over quarter from $9 1 million and three Q 'twenty four to $15 5 million and <unk> 24.

Patrick Fleury: For the year-over-year period, SG&A expenses increased from $37 million to $70.5 million. However, this increase was almost entirely due to a $25.2 million year-over-year increase in stock-based compensation. Adjusting for this item, SG&A increased 40% year-over-year from $31.1 million in 2023 to $39.7 million in 2024, primarily the result of increased employee compensation and benefits and higher staffing levels to support our mining expansion, as well as our entry into HPC hosting activity. Depreciation decreased slightly quarter over quarter, from 15.6 million in 3Q24 to 14.9 million in 4Q24. Year-over-year depreciation increased materially from $28.4 million in 2023 to $59.8 million in 2024, which was the result of an increase in mining capacity and infrastructure placed into service in 2024 at Lake Mariner Islands.

Paul prayer: For the year over year period, SG&A expenses increased from $37 million to $70 5 million. However, this increase was almost entirely due to a $25 2 million year over year increase in stock based compensation.

Adjusting for this item SG&A increased 40% year over year from $31 1 million in 2023 to $39 7 million in 2024, primarily as the result of increased employee compensation and benefits and higher staffing levels to support our mining expansion.

Paul prayer: As well as our entry into H B C hosting activities.

Paul prayer: Depreciation decreased slightly quarter over quarter from $15 6 million or <unk> 24 to $14 9 million and <unk> 24.

Paul prayer: Year over year depreciation increased materially from $28 4 million in 2023, and $59 8 million in 2024, which was the result of an increase in mining capacity and infrastructure are placed into service in 2020 for Lake Merritt.

Patrick Fleury: During 2024, we've recorded accelerated depreciation expense of $5.1 million related to a decrease in certain miners' estimated useful lives. Gain on fair value of digital currency in 4Q24 was $0.6 million compared to $0.9 million in 3Q24. For 2024, the company recorded a gain on fair value of digital currency of $2.2 million. Loss on disposal of PP&E in 4Q24 was $17.5 million compared to $0.4 million in 3Q24 and $17.8 million in 2024 compared to $1.2 million in 2023. These losses were related to disposals of miners and write-off of deposits on miners. Gap interest expense in 4Q24 and 3Q24 was $3.0 million and $0.4 million, respectively.

Paul prayer: During 2024, we recorded accelerated depreciation expense of $5 1 million related to a decrease in certain minors estimated useful lives.

Paul prayer: Gain on fair value of digital currency and <unk> 24 was zero point $6 million compared to 0.9 million and three Q 'twenty four.

Paul prayer: For 2024, the company recorded a gain on fair value of the digital currency of $2 2 million.

Paul prayer: Loss on disposal of PP&E, and <unk> 24 was $17 5 million compared to 0.4 million and <unk> 24, and $17 8 million in 2024 compared to $1 2 million in 2023.

Paul prayer: These losses were related to disposals of minors and write off of deposits on minors.

Paul prayer: GAAP interest expense and <unk> 24, and three Q 'twenty, four with 3.0 million 0.4 million respectively.

Patrick Fleury: Gap interest expense for 2024 and 2023 was $19.8 million and $34.8 million, which includes cash interest expense, approved interest on the 2.75% convertible senior notes due 2030, and amortization of debt issuance costs and debt discounts related to the term loan financing and convertible notes. Cash interest paid during 4Q24 was $0 and in 3Q24 was $0.7 million due to the full repayment of our debt on July 9th ahead of the December maturity. In connection with the voluntary prepayments of debt, the company incurred a $6.3 million loss on the extinguishment of debt in 2024. Other income of $2.6 million and $0.3 million in 4Q24 and 3Q24, respectively, and $3.9 million in 2024 reflects interest earned on cash held in our commercial banking account.

Paul prayer: GAAP interest expense for 2024, and 2023 was $19 8 million and $34 8 million, which includes cash interest expense accrued interest on the 275% convertible senior notes due 2030.

Paul prayer: And amortization of debt issuance cost and debt discount related to the term loan financing and convertible notes.

Paul prayer: Cash interest paid during <unk> 24 was zero and then three <unk> 24 was 0.7 million due to the full repayment of our debt on July 9th ahead of the December maturity.

Paul prayer: In connection with the voluntary prepayments of debt the company incurred $6 3 million loss on the extinguishment of debt in 2024.

Paul prayer: Other income of $2 6 million and 0.3 million and <unk> 24, and three <unk> 24, respectively, and $3 9 million in 2024 reflects the interest earned on cash held in our commercial banking accounts.

Patrick Fleury: In 4Q24 and 3Q24, we reported zero and a loss of $2.7 million, respectively, in equity and net income of invested net of tax. For the year 2024, we reported equity and net income of InvestE, net of tax, of $3.4 million, as compared to a $9.3 million loss in 2023. Historically, these amounts represent Terrell's proportional share of income or losses of the Nautilus joint venture. For the 2023 fiscal year, this amount includes an impairment loss of $13.6 million related to the distribution of minors from Nautilus to the company, whereby the minors were marked a fair value from book value on the date distributed.

Paul prayer: In <unk> 24, and three Q 'twenty, four we reported zero and a loss of $2 7 million, respectively in equity and net income of Investees net of tax.

Paul prayer: For the year 'twenty 'twenty four we reported equity and net income of Investees net of tax of $3 4 million as compared to a $9 3 million loss in 2023.

Paul prayer: Historically these amounts represent terrible proportional share of income or losses of the Nautilus joint venture.

Paul prayer: For the 2023 fiscal year. This amount includes an impairment loss of $13 6 million related to the distribution of miners from Nautilus to the company whereby the miners were marked to fair value from book value on the date distributed.

Patrick Fleury: Additionally, in 2024, the company recorded a gain on sale of equity interest in InvestE of $22.6 million as a result of the sale of its entire 25% equity interest in Nautilus, effective October 2, 2021. Our gap net loss in 4Q24 was $29.2 million compared to a net loss of $22.7 million in 3Q24. Our gap net loss for 2024 was $72.4 million compared to a net loss of $73.4 million in 2020. Our non-GAAP-adjusted EBITDA for 4Q24 was $2.5 million, down from $6.3 million in 3Q24. And 2024 adjusted EBITDA was $60.4 million, as compared to $31.9 million in 2023.

Paul prayer: Additionally in 2024, the company recorded a gain on sale of equity interest in investing of $22 6 million as a result of the sale of its entire 25% equity interest in Nautilus effective October 2nd.

Paul prayer: Yeah.

Paul prayer: Our GAAP net loss in the <unk> 24 was $29 2 million compared to a net loss of $22 7 million and <unk> 24.

Paul prayer: Our GAAP net loss for 2024 was $72 4 million compared to a net loss of $73 4 million in 2023.

Paul prayer: Our non-GAAP adjusted EBITDA for <unk>, 24 was $2 5 million down from $6 3 million and three Q 'twenty four and 'twenty 'twenty four adjusted EBITDA was $50 4 million as compared to $31 9 million in 2023.

Patrick Fleury: Turning our attention now to the balance sheet, as of December 31st, we held $274 million in cash with total assets amounting to $787 million and total liabilities of $543 million. Furthermore, this cash balance does not reflect $90 million of prepaid revenue from CORE 42 received in 1Q25. As disclosed on page 10 of our February investor presentation, we achieved a total cash cost of production of approximately $79,000 per Bitcoin in 4Q24.

Paul prayer: Turning our attention now to the balance sheet as of December 31st we held $274 million in cash with total assets amounting to 787 million and total liabilities of $543 million.

Paul prayer: Furthermore, this cash balance does not reflect $90 million of prepaid revenue from core 42 received in <unk> 25.

Paul prayer: As disclosed on page 10 of our February Investor presentation, We achieved a total cash cost of production of approximately 79000 for bitcoin and <unk> 24.

Patrick Fleury: Regarding our financial performance and operating performance in 4Q24. Lake Mariner was adversely impacted by a few anticipated and unanticipated factors. Number one, as discussed in our 3Q24 earnings call, we took a planned outage in November, which impacted approximately 5.2 exahash of mining capacity for one week, as we connected our ultra-high voltage redundant power feeds from the grid to support our HPC data infrastructure. Number two, we executed a minor refresh program with Bitmain, whereby approximately 1.3 exahash of minors under warranty were inoperable and replaced throughout 4Q24. And number three, we experienced elevated power prices in December.

Regarding our financial performance.

And operating performance in <unk> 'twenty for Lake.

Paul prayer: Blake Mariner was adversely impacted by a few anticipated and unanticipated factors.

Paul prayer: Number one.

Paul prayer: As discussed on our three Q24 earnings call. We took a planned outage in November which impacted approximately 5.2 at ash of mining capacity for one week as we connected our ultra high voltage redundant power feed from the grid to support our H P. C data intercept infrastructure.

Paul prayer: Number two we executed a minor refresh program with that name whereby approximately 1.3 ex ash of miners under warranty or inoperable and replaced throughout <unk> 24.

Paul prayer: And number three we experienced elevated power prices in December.

Patrick Fleury: On page 9 of the investor presentation, you will find our capital sources and uses bridge for 4Q24.

Paul prayer: On page nine of the Investor presentation, you will find our capital sources and uses bridge for <unk> 24.

Patrick Fleury: Regarding 2025 guidance. We are actively working with our partner and customer, Core 42, who has through March 31st, 2025, to execute an option for up to a further 135 megawatts of HPC hosting capacity. As such, we anticipate providing detailed 2025 guidance to the market as soon as practical.

Paul prayer: Regarding 2025 guidance.

Paul prayer: We are actively working with our partner and customer core 42, who has through March 31, 2025 to execute an option for up to a further 135 megawatts of HBC hosting capacity.

Paul prayer: As such we anticipate providing detailed 2025 guidance to the market as soon as practical.

Patrick Fleury: As a reminder, we are hosting our 4Q and full year 2024 earnings call today as opposed to late March given TeraWolf became a WICSI or Large Accredited Filer in 2024 and the corresponding 10k annual filing deadline moves from 90 days after year end to 60 days after year end. Absent complying with this SEC driven deadline, we would not be holding an investor update call today given the ongoing discussions with our HPC customer and partners.

Paul prayer: As a reminder, we are hosting our four <unk> and full year 2024 earnings call today as opposed to late March given Tara Wolf became a waxy or large accredited filer in 2024, and the corresponding 10-K annual filing deadline moved.

Paul prayer: 90 days after year end.

Paul prayer: Days after year end.

Paul prayer: Absent complying with this S E T driven deadline, we would not be holding an investor update call today, given the ongoing discussions with our HPT customer and partner.

Operator: With that, I'll turn it back over to the operator and we look forward to answering your question. Thank you.

Paul prayer: With that I'll turn it back over to the operator, and we look forward to answering your questions.

Thank you well now be conducting a question and answer session.

Operator: If you'd like to ask a question at this time, please press star 1 from your telephone keypad. and a confirmation tone will indicate your line is in the Let me press star 2 if you'd like to withdraw your question. Participants using speaker equipment, it may be necessary to pick up your handset before pressing the start key.

Speaker Change: You'd like to ask a question at this time. Please press star one from your telephone keypad and a confirmation tone will indicate your line is in the question queue.

Paul prayer: Let me press star two if he like to withdraw your question from the queue.

Paul prayer: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Operator: One moment, please, for our first.

Paul prayer: One moment please for our first question. Thank you.

Nick Giles: Thank you and our first question is from the line of Nick Giles with B. Reilly Securities. Thank you, operator. Good morning, everyone. Obviously, lots of headlines over the past week.

Paul prayer: Thank you and our first question is from the line of Nick Giles with B Riley Securities. Please proceed with your questions.

Speaker Change: Thank you operator, good morning, everyone.

Speaker Change: Obviously lots of headlines over the past week and in the scenario where training demand doesn't appears robust how is mariner position for inference.

Paul Prager: And in the scenario where training demand doesn't appear as robust, how is Mariner positioned for inference? Could economics differ?

Paul Prager: And how does how does this change your site acquisition strategy? We have spoken to our customers, and the existing contracting partner, CORE42, is looking forward to working with them. at how they are aggregating their customers for our site use, but they have indicated that both... Both are capable at the Lake Mariner site without any issue. Our price is our price. As you know, we're fully contracted. Great. That's good to hear.

Speaker Change: Could economics differ and how does how does this change your site acquisition strategy.

Speaker Change: Thanks, a lot.

Speaker Change: Okay.

Speaker Change: We have spoken to our customers.

And the existing contracting partner called 42.

Speaker Change: <unk> is looking.

Speaker Change: And how they are aggregating their customers for our site use but they have indicated that.

Speaker Change: Both.

Speaker Change: Both are capable at the Lake Mariner site.

Speaker Change: Without any issue that prices or prices you know we're fully contracted.

Speaker Change: Great that's good to hear.

Paul Prager: Maybe just on the additional site acquisitions, what geographies could appear most attractive? How should we think about scale? And would this be more brownfield or greenfield in nature?

Speaker Change: Maybe just on the additional site acquisitions.

Speaker Change: What geographies could appear most attractive how should we think about scale and would this be more brownfield or greenfield in nature.

Paul Prager: Well, the obvious priority is Cayuga. And we've initiated a process to integrate that into the company, which is very robust. And beyond that, you know, you should appreciate that the root of our company is energy development, ownership and operation. So, we're the only energy team out there in the space, and I think an added benefit or value that our team brings to the table is that we are not just looking at the sites that everybody else is looking at, but we're looking at sites that are somewhat challenged because they've got installed generation on the site that maybe needs upgrade or repowering or some environmental mitigation, or they're sites that are capable of housing installed generation.

Speaker Change: Well the obvious priority as Cayuga.

Speaker Change: And we've initiated the process to integrate that into the company, which is very robust.

Speaker Change: And beyond that.

Speaker Change: I appreciate that.

Speaker Change: Route of our company is energy development ownership and operation.

Speaker Change: So will you.

Speaker Change: The only energy team out there in the space.

Speaker Change: And I think.

Speaker Change: Added benefit we're where value then.

Speaker Change: Then our team brings to the table is that we are not just looking at the sites that everybody else is looking at.

Speaker Change: But we're looking at sites that are somewhat challenged because they've gotten stalled genera.

Speaker Change: Generation on the site.

That maybe needs upgrade where repowering or.

Speaker Change: Some environmental mitigation.

Speaker Change: Or the sites that are capable of housing.

Speaker Change: Install generation. So we have the unique skill set to sort of look at sites and figure out how they may best serve our customers.

Paul Prager: So, we have the unique skill set to sort of look at sites and figure out how they may best serve our customers. And because we could look at some troubled sites and figure that out from the energy perspective and the environmental perspective, I think that we're more competitive because we can source sites at a lower cost than others. That's very helpful, Paul. I appreciate that.

Speaker Change: And because we could look at some troubled sites and.

Speaker Change: And figure that out from the energy perspective in the environmental perspective, I think that we're more competitive because we can source sites at a lower cost than others.

That's very helpful. I appreciate that one more if I could would any decision to confer a bitcoin mining capacity to H P. C would that be driven more by H P. C demand a bitcoin mining economics are really a combination of the two.

Paul Prager: One more, if I could.

Paul Prager: Would any decision to convert Bitcoin mining capacity to HPC, would that be driven more by HPC demand, Bitcoin mining economics, or really a combination of the two? It will always be, you know, we'll always try and make the most prudent decision at the time, given our effort to achieve the highest value per megawatt. But I think we've been clear here that, you know, we are building out a world-class HPC AI data center business. That is our focus. When the right time is to re-energize what is currently mining into HPCAI, you know, that's a timing question that we'll have to figure out, basis on customer demand.

Speaker Change: It will always be you know, we'll always try and make the most prudent decision at the time.

Speaker Change: Given our effort to achieve the highest value per megawatt, but I think we've been clear here that we are building out a world class H P. C. AI data center business, but that is our focus.

Speaker Change: Hmm.

Speaker Change: When the right time is to re.

Speaker Change: Re energized what is currently mining into H T G I.

Speaker Change: That's the timing question that we'll have to figure out based upon customer demand.

Speaker Change: And.

Paul Prager: Bitcoin mining price. And it's not just the price of Bitcoin, it's the network difficulty. But we are very, very constructive right now that that will happen within the three years that we've projected, if not, if not much earlier, we we have tremendous customer demand for our sites. And it's because we have land, water, energy, the right price energy, you know, the right source of energy, primarily hydro and nuke, and the people to build out the data centers. So, you know, we're just seeing a lot of demand, and I don't anticipate that that will go away.

Speaker Change: But corn money price and it's not just the price of bitcoin. That's good network difficulty, but we are very very constructive right now, but that will happen within the three years that we've projected a if not if not much earlier, we have tremendous customer demand for <unk>.

Speaker Change: And.

Speaker Change: It's because we have land water.

Speaker Change: Energy are the right priced energy.

Speaker Change: You know right source of energy, primarily hydro and nuclear and the people to build out the data centers. So you know, we're just seeing a lot of demand and I don't anticipate that that will go away.

Operator: That's very good to hear.

Speaker Change: That's very good to hear I appreciate all the color and keep up the good work.

Operator: I appreciate all the color and keep up the good work.

Michael Grondahl: Our next questions are from the line of Mike Grondahl with Northland Securities.

Speaker Change: Our next questions are from the line of Mike Grondahl with Northland Securities. Please proceed with your questions.

Michael Grondahl: Pleased to see you. Hey, thanks guys. Um, two questions. Um, first question. 250 megawatts at Lake Tahoe. Have you begun marketing that yet and kind of what are the next steps there?

Mike Grondahl: Hey, Thanks, guys.

Speaker Change: Two questions first.

Speaker Change: First question the 250 megawatts at Lake Mariner, that's still available.

Speaker Change: Have you begun marketing that yet.

Speaker Change: Kind of what are the next steps there.

Paul Prager: And then secondly, on Cayuga. Could you state again what you said about first 150 megawatt was it available there, was it available in 2026 or ready to go in 2022. looking for Sure. Cayuga will be available from an energy perspective in 2026. Obviously, depending upon the needs of the customer, it takes some time to build the data center, but it will be energy available 2026, the first 150. And we're excited about it, and we're talking to customers about it. And with respect to the second 250, yeah, of course, we are speaking to customers that don't just have needs today, Mike, but they have needs next year and the following year.

Speaker Change: And then secondly.

Speaker Change: Cayuga.

Speaker Change: Could you state again, what you said about the first 150 megawatts of.

Speaker Change: Bailable there was it available in 2026 or ready to go in 2026, just looking for some clarity there.

Speaker Change: Sure Cayuga will be.

Speaker Change: Available from an energy perspective in 2020 six obviously, depending upon the needs of the customer. It takes some time to build the data center, but it will be energy available 2026th the first 150.

Speaker Change: And we're excited about it and we're talking to customers about it and with respect to them.

Speaker Change: The second of $2 50, Yeah of course, we are speaking to customers that or that they don't just have needs today, Mike, but they have needs next year and the following year end user really professional teams that are investing a ton of money and time in the design of these facilities as well as the units.

Paul Prager: And these are really professional teams that are investing a ton of money and time in the design of these facilities as well as the units to put in the racks. And so, We are talking to people that have long-term demand and that want to scale. So yeah, we're not marketing them per se, but we're in deep discussions with potential counterparties for the use of those megawatts.

Speaker Change: To put in the racks and so.

Speaker Change: We are talking to people to have long term demand.

Speaker Change: And that one is scale so yeah.

Speaker Change: Yeah. We are we are we're not marketing them per se, but we're in deep discussions with wood <unk> co.

Speaker Change: Potential counterparties for the use of those megawatts.

Operator: Great. Thank you.

Speaker Change: Great. Thank you.

Darren Aftahi: The next questions are from the line of Darren Aftahi with Roth Capital. Yeah, thanks for my questions this morning. Two, if I may. So first on the CB1, so the initial 72 megawatts.

Speaker Change: The next questions are from the line of Darren <unk> with Roth Capital. Please proceed with your questions.

Darren: Yeah. Thanks for taking my questions. Good morning, two if I may so first on the.

Darren: She'd be one so the initial 72 megawatts just any kind of color is that on track and it makes sense for when that buildings online and then hypothetically if there wasn't an exercise with a core 42 on the additional capacity excuse me you guys have a plan b and if you do can you indulge us on what that potential customer.

Paul Prager: And then hypothetically, if there wasn't an exercise with Corps 42 on the additional capacity, I assume you guys have a plan B, and if you do, can you indulge us on what that potential customer might look like in any kind of timeframe? Sure. Darren, good questions, but I want to refrain from commenting on conversations that we're currently having with our customer, Core 42, because currently there's nothing... definitive to share with you the market regarding those discussions. The pace of the deployment is heavily dependent upon the decisions that CORE42 makes with respect to their option for additional power, and until I have additional information from them, we're going to refrain from commenting on the specifics of that business, but we expect to be back in front of you and update the market in the near future as those decisions get made by our To the extent we had available power, I can assure you that we are in multiple dialogues and with potential counterparties.

Darren: Might look like and I kind of timeframe. Thanks.

Darren: Sure.

Darren: Sure.

Darren: Okay.

Speaker Change: Darrin good questions, but I want to refrain from commenting on conversations that we're currently having with.

Darren: Our customer call of 42.

Speaker Change: Because currently there's nothing definitive.

Definitive to share with you where the market regarding those discussions.

Speaker Change: The pace of the deployment and.

Speaker Change: Is heavily dependent upon the decisions core 42 mates with respect to their options for additional power.

Speaker Change: But until I have additional information from them, we're going to refrain from commenting on the specifics of that business, but.

Speaker Change: But we expect to be back in front of you and update the market in the new future in the near future as those decisions get made by a customer.

Speaker Change: To the extent, we had available power.

Speaker Change: I can assure you that we are in multiple dialogues and with potential counterparties. They all meet the same.

Paul Prager: They all meet the same quality that CORE42 and the Guarantor 242 have met for us, which is they're great credits, they're long-term contracts. They like our design, they have an NVIDIA allocation, and they want to grow and scale their business over the long course for multiple, multiple years. Those discussions are... are not – they're not immature.

Speaker Change: Quality.

Speaker Change: At the core of 42, and the guarantor at $2 42 have bet for US, which is they're great credits, they're long term contracts.

Speaker Change: They like our design they have an nvidia allocation.

Speaker Change: And they want to grow and scale their business over the long.

Speaker Change: The long course for multiple multiple years.

Speaker Change:

Speaker Change: Those discussions or.

Speaker Change: Or not.

Speaker Change: They're not immature there there Ben.

Paul Prager: There have been rounds and rounds and rounds of discussions, multiple site visits, and those discussions happen both between principals and respective counsel on a sort of, you know, two to three times a week basis, if that gives you any indication for how seriously we take the need to sort of meet the goals of our customers and get this power and data center set up for them.

Speaker Change: The rounds and rounds and rounds of discussions multiple site visits.

Speaker Change: And those discussions happen.

Speaker Change: Both between principles and respective counsel on a sort of you know.

Speaker Change: Two to three times a week basis, if that gives you any indication for how seriously we take the need to sort of.

Speaker Change: Meet the goals of our customers in and get this power and data center set up to them.

Speaker Change: Helpful. Thanks, Paul.

Brett Knoblauch: Our next questions come from the line of Brett Knoblauch with Cantor Fitzgerald. Please receive. Hi, guys, thanks for taking my question. I guess kind of a two parter here as you're looking to add additional capacity beyond Lake Cayuga. Can you maybe talk about what markets you would be looking at? In addition to that, to what extent are you thinking about the actual use case of the data centers, whether it be for training or inferencing, as it seems like the market is shifting a bit more towards inferencing, where location might matter a bit more?

Speaker Change: Our next questions come from the line of Brett <unk> with Cantor Fitzgerald. Please proceed with your question.

Brett: Hi, guys. Thanks for taking my question.

Brett: I guess kind of a two parter here as youre looking to add additional capacity beyond like how do you do.

Speaker Change: Can you talk about what markets you would be looking at and in addition to that to what extent are you thinking about the actual use case to other data centers when it whether it be for training or inference thing is it seems like the market is shifting a bit more towards the inferencing, where location might matter a bit more.

Paul Prager: Yeah, hi, Brett. So we've always emphasized that in order to be a credible player in the space, you needed to have not only a site with land, water energy access to fiber. You needed people who had the expertise, but you also needed to have an appreciation for the region and the regulatory regime of that state, municipality or region where you were going to focus. So beyond Cayuga, which obviously checks all those boxes, we're heavily focused in the West where we are looking at repowering some existing facilities that are known to us and working out there in Montana.

Brent: Yeah, Hi, Brent.

Speaker Change: So we we've always emphasized that in order to be a credible player in the space you need to have not only a site with land water.

Brent: Energy.

Brent: Access to fiber.

Brent: Needed people.

Brent: Who had the expertise you.

Brent: Also needed to have an appreciation for the region and the regulatory regime of of that state.

Brent: Our municipality or region, where you were going to focus.

Brent: So beyond tell you though.

Brent: Which obviously checks all those boxes were heavily.

Brent: Focused in.

Brent: In the West where we you know where we are looking at Repowering.

Brent: Some existing facilities that are known to us and.

Brent: And working out there in Montana.

Paul Prager: It is very compelling. In addition, we're really in the Mid-Atlantic where we have a strong history of both power generation and appreciation for the political and regulatory environment, as well as, you know, that's a high demand place that that not just the hyperscalers alone, but even, you know, a lot of the Colo customers want to sort of focus. their data center interest in. So, I would tell you that beyond New York, we're very interested in Montana. We're very interested in Maryland and Virginia. And we continue to look for opportunities elsewhere. There are a lot of, you know, there are a lot of sites available in Texas.

Brent: It is very compelling.

Brent: In addition, we are really focused in the mid Atlantic where we have a <unk>.

Brent: <unk> history of both.

Brent: Our power generation and an appreciation for.

Brent: The political and regulatory environment as well as you know that's.

Brent: Our high demands placed it.

Brent: Hum.

Brent: That not not just the Hyperscale is alone, but even you know a lot of the Colo Colo.

Brent: Colo customers want to sort of focus.

Speaker Change: There Doug Center interested so I would tell you that beyond New York were very interested in Montana, we're very interested in Maryland and Virginia.

Speaker Change: And we continue to look for opportunities.

Speaker Change: Opportunities elsewhere. There are a lot of you know there are a lot of sites available in Texas, we're looking at them.

Paul Prager: We're looking at them, but we're not there yet.

Speaker Change: We're not there yet.

Paul Prager: And we're even looking at a couple of sites that are abroad for some of the customers we have that have expressed an interest. in overseas locations. But near term, Cayuga's gotta come in and we're focused on Maryland-Virginia months.

Speaker Change: And we're even looking at a couple of sites that are abroad.

Speaker Change: For some of the customers we have that's expressed an interest.

Speaker Change: In overseas locations, but near term could you just got to come in and we're focused on Maryland, Virginia, Montana.

Speaker Change: Awesome. Thank you no. That's extremely helpful. And then I don't know if you guys set up but maybe just on the on the timing of the initial deal you signed with CT 42, I know, there's a couple of different buildings you guys have.

Speaker Change: What should we be expecting is for when those buildings will be energized in revenue start generating.

Speaker Change: Or did you say, we're gonna have to wait and see until what happens with the option.

Paul Prager: Yeah, as I mentioned, Darren, and, you know, you're my favorite, so I tell you and not answer Darren, but the answer is same answer, you know, until we get through some of the conversations we're having, Brett, with our customer and fully understand all the needs that they want to put upon this data, fulfill through the use of this data center, we're going to refrain from further comment until that's locked and loaded. And then we'll get before you right away. But, you know, these conversations are great, by the way, we're having with the customer, they are, they're, they're constantly evolving, their thinking is they get more and more customers with different kind of demands put upon them by those customers.

Speaker Change: Yeah, as I mentioned, Darren and you know you're my favorite so I would tell you and not answer Darren but the answer is same answer.

Speaker Change: Until we get through some of the conversations we're having Brett.

Speaker Change: With our customer and fully understand all the needs that they want to put upon this Dave is fulfilled through the use of this data center we're.

Speaker Change: We're going to refrain from further comment until.

Speaker Change: That's that's locked and loaded in and then we will get before you right away, but these conversations are great by the way, we're having with the customer.

Speaker Change: They are there they're constantly evolving their thinking as they get more and more customers with different kind of demands put upon them by those customers and they've got absolutely the best in business on site.

Paul Prager: And they've got absolutely, you know, the best in business on site, between their consultants, and of course, Dell and NVIDIA as well. So, um, It is a, it is a learning exercise. We're building serial model 0007 here. And, and so we want to make sure we can be as responsive as possible to core 42. And so we're letting them drive, drive the direction of what this data center and the final energy date will look like. Awesome.

Speaker Change: When theyre consultants and of course tell them in video as well so.

Speaker Change:

Speaker Change: It is a it is a learning exercise were building serial model 0007 year and and so we want to make sure we can be as responsive as possible to core 42, and so we're letting them drive drive the direction of what this.

Speaker Change: Data center.

Speaker Change: The final energy date will look like.

Brett Knoblauch: Thanks, Paul. Appreciate it.

Speaker Change: Awesome. Thanks, Paul appreciate it.

Martin Toner: The next questions are from the line of Martin Toner with ATP Capital. Good morning. Thanks so much for taking my question.

Speaker Change: The next questions are from the line of Martin Toner with ATP capital. Please proceed with your questions.

Martin Toner: Good morning, Thanks, so much for taking my question.

Speaker Change: <unk>.

Paul Prager: How long do you think the process for Cayuga might take? So, I mean, everybody in the management on the ground knows the Cayuga site very well. You know, it's a plant that, you know, these people actually operated as a power facility before they shut it down, mitigated it in cooperation with the state and made it ready or started the process to make it ready for data center conversion. But we have a very robust process. We, you know, the independent members of the board are tasked with, you know, hiring independent counsel, independent, you know, financial advisor, and there's a whole valuation process that has to go through, and that's then tested again by the board.

Speaker Change: How long do you think the process for Cayuga might take.

Speaker Change: Yeah.

Speaker Change: So I.

Speaker Change: I mean.

Speaker Change: Everybody in the NIM.

Speaker Change: <unk> been on the ground those because even side very well.

Speaker Change: You know, it's it's a plant that you know these these people actually operated as a <unk>.

Speaker Change: Power facility before they shut it down mitigate it in cooperation with the states and made it a ready.

Speaker Change: We started the process to make ready state incentive conversion.

Speaker Change: But we have a very robust process we.

The independent members of the board.

Speaker Change: Are tasked with hiring independent counsel independent financial adviser.

Speaker Change:

Speaker Change: And there's a whole valuation process that it has to go through and.

Speaker Change: And that's been tested again by the board.

Paul Prager: But. But they've been through the exercise in the past on a related party transaction. They know what to do, and they'll do their work and get to it. It's a great site. It's a site that we talk about with our customers all the time. It's something we committed to all of you over the course of the last year that at some point, you know, we would start to. move Cayuga in. And we now have the kind of demand that requires us to to sort of have more megawatts available to potential customers.

Speaker Change: But.

Speaker Change: But they've been through the exercise in the past on a related party transaction.

Speaker Change: They know what to do in in and they'll do their they'll do their work and get to it.

Speaker Change: Yeah.

Speaker Change: You know, it's great site, it's a site that we talk about with our customers all the time it's a.

Speaker Change: Something we committed to to all of you over the course of the last year that at some point, we would start to.

Speaker Change: Move Cayuga and and we now have the kind of demand that requires us to to sort of have more megawatts available to potential customers. So.

Paul Prager: So now's the time. Fantastic.

Speaker Change: Now is the time.

Speaker Change: Fantastic. Thank you very much for that Paul.

Paul Prager: Thank you very much for that Paul. Can you remind me, are you still waiting for approval for the second 250 megawatts of power at Lake Mariner or has that already happened? We've been in the queue for a little bit. It was anticipated to be near term. I would imagine it's at any time. The state's been great. We talk to them all the time. We don't see any issues.

Speaker Change: Can you remind me are you still waiting for approval from <unk> for the second 250 megawatts of power at like Mariner or has that already happened.

Speaker Change: We've been in the queue for a little bit it was anticipated to be.

Speaker Change: The near term.

I would imagine it's it's it's it's at any time.

Speaker Change: The state has been great and we talk to them all the time, we don't see any issues.

Paul Prager: Wonderful. Thanks so much.

Speaker Change: Wonderful. Thanks, so much that's it for me.

Operator: That's it for me.

Speaker Change: Yeah.

John Todaro: The next questions come from the line of John Todaro with Needham & Company. Hey guys, thanks for taking my question. First one as it relates to HPC, as you look to the other sites like Cayuga and beyond, just remind us of the customer strategy. Do you start entertaining some of the hyperscalers again? Or is your focus kind of more that core 42 type base? And then I have a follow up.

John Martin: The next questions come from the line of John <unk> with Needham <unk> Company. Please proceed with your question Hey, guys.

Speaker Change: Thanks for taking my question first one as it relates to H P. C. As you look to the other sites like how you're going beyond just remind us of the customer strategy do you start entertaining some of the Hyperscale. There's again or is your focus kind of more of that core 42 type base and then I have a follow up on costs.

Paul Prager: Sure. Our focus is still the Colo because, as opposed to other deals that you may be familiar with, or other developers who were, you know, out trying to figure out how to sell their sites, you know, we, we like the Colocation. It's the right, it's the right kind of partnership for Terrewolf. And of course, we like most, it's the highest yields for our customers. You know, we're, we're at 15 returns, as opposed to, you know, the hyperscaler, where maybe, maybe you're going to get 9%. That's number one. Number two is when you have a whole new site come online.

John Martin: Sure.

John Martin: Our focus is still to Colo because.

As opposed to other deals that.

John Martin: That you may be familiar with or other developers who were out trying to figure out how to sell their sites.

John Martin: We liked the co location, it's the right. It's the right kind of partnership for Daryl Wolfe.

John Martin: And of course, we like most its the highest yields for our customers you know where were at mid teens returns as opposed to you know the hyperscale or where maybe you're going to get 9%.

That's number one number two is when you have a whole new sites come online.

Paul Prager: Yeah, the hyperscalers, you know, and there are many now that have a real focused interest in New York State, I would tell you that. They really want to be there. So they'll, they'll show their interest. And to the extent they can, they can get to the kind of return profile that Terrewolf will require, we're happy to engage with anybody, as long as they're a great credit, have the right culture, and then get to our return profile. We would like them to be our customer.

John Martin: Yeah, the hyperscale or.

John Martin: And there are many now that have a real focused interest in New York State I would tell you that.

John Martin: Really want to be there.

John Martin:

John Martin: So they'll they'll show their interest and to the extent they can they can get to the kind of return profile that Taro Wolf will require we're happy to engage with anybody as long as they're a great credit.

John Martin: We have the right culture and they can get through our return profile we.

John Martin: We would like them to be our customer.

John Martin: But we're still really.

Paul Prager: But we're still really grateful that we selected the Colo model as our business model, because have a great relationship here with that customer, have great relationships with other possible accounting parties, and the returns to our investors are going to be superior. You know, one thing I want to tell you is, this is not a sprint. This is a long, long-term build-out of a business. And so, while I know a lot of our, you know, a lot of investors or maybe some speculators would like to see something happen overnight, this is about putting concrete in the ground and steel into the concrete.

John Martin: Grateful that we selected the Colo model as our business model because.

John Martin: Have a great relationship here with that customer a great relationships with other possible counterparties are.

John Martin: And the returns to our investors you're gonna be superior.

Speaker Change: Well one thing I wanted to tell you is.

Speaker Change: This is not a sprint this is a long.

Speaker Change: Long term.

Speaker Change: Build out of the business and so while I know a lot of there you know a lot of investors who are maybe some speculators, we'd like to see something happen overnight. This is about putting concrete in the ground and steel into the concrete and it takes a while and it takes a while to do it right to meet the needs.

Paul Prager: And it takes a while, and it takes a while to do it right to meet the needs of a very particular customer who has a right to be particular because they're investing billions of dollars in machinery to go into those things. So, you know, we're going to be very customer-focused. That's where we're headed here. But it will end up yielding the highest returns to our site.

Speaker Change: A very particular customer who has a right to be particular, Christy we're investing billions of dollars in machinery to go into those things. So you know we're gonna be very customer focused that's where we're headed here, but it will end up yielding the highest returns to our sites.

John Todaro: Great, thank you for that, understood. And then just a quick follow-up on cost. Power, I think I saw 5.9 cents per kilowatt hour for Q4. Should we expect that moving forward? And then just on the cash G&A side, is HPC a little front-loaded? Like, if you do sign an additional contract with Core 42, will we kind of keep the cash G&A flat here, or will you see some upticks still, maybe some hires that still need to come in on that?

Speaker Change: Great. Thank you for that understood and then just a quick follow up on costs power I think I saw a 5.9 cents per kilowatt hour for Q4 should we expect that moving forward and then just on the cash G&A side E. H P. C. A little Frontloaded like if you do sign an additional contract with core 42.

Speaker Change: When we kind of keep eight.

Speaker Change: Cash G&A flat here or will you see some uptick still maybe some hires that fill the need to come in on that.

Patrick Fleury: Patrick, I'm going to defer to you. Yeah, hi, John. Thanks for the question. So yeah, look, December just on power price first. As you know, Nautilus was locked in fixed two cent power. Lake Mariner is in New York Zone A and we have floating power. December was very cold in the region. January was very cold, like nationwide. So just to give you an idea, we did have a power spike, as I said in my remarks in December, that did continue into January. To give you perspective, we ran an analysis and based on the last 10 years of realized power prices at Lake Mariner, December's price was a two standard deviation event and January's was a two and a half standard deviation.

Speaker Change: Patrick alluded defer to you.

John Martin: Yeah, Hi, John.

John Martin: Thanks for the question. So yeah look December just on power price first.

John Martin: As you know Nautilus was locked in fixed to Sunpower Lake.

John Martin: Mariner is in New York Zone, a and we have floating power.

John Martin: December.

John Martin: It was very cold in the region January was very cold like nationwide. So.

John Martin: Just to give you an idea we did have a power spike as I said in my remarks in December that did continue into January to give you perspective, we ran an analysis and based on the last 10 years have realized power prices at Lake Mariner.

John Martin: <unk> price was a two standard deviation event in January it was a two and a half standard deviation event, so really abnormally high power prices.

Patrick Fleury: So really abnormally high power prices. Those have reverted. You can, it's not a secret. As you know, we are the most transparent of our peers out there. But you can pull up zone A, around the clock power on Bloomberg. It's on there every minute of every day. You can look at every month. You can look at quarterly. But that's what we use for our projections. If you were to pull that up today, it would show you, I think, the remainder of this year average is 5%. So, you know, a little bit elevated versus historical, but if you look at 27, if you look at 28, because the curve goes out.

John Martin: Those have reverted you can its not a secret as you know where we are the most transparent of our peers out there that you can pull up zone a around the clock power on Bloomberg. It's on there every minute of every day you can look at every month you can look at quarterly.

John Martin: But that's what we use for our projections. If you were to pull that up today. It would show you I think the remainder of this year average.

John Martin: Is <unk>.

John Martin: So you know a little bit elevated versus historical but if you look at 27. If you look at 28, because the curve goes out you know a number of different years solidly back in kind of the four and a half cents and that's where we think will be long term.

Patrick Fleury: a number of different years, you know, it's solidly back in kind of the four and a half cents and that's where we think we'll be.

Patrick Fleury: And your other question, I think, was on SG&A, correct? Yeah, exactly. I'm being front-loaded. Yeah, so look, so I think, you know, we guided last year, as you know, to 30, 30-ish million. We finished, I think, at 39, as I said in my remarks. So that increase and the increase that we have at Lake Mariner is a function of increased staffing levels. We've hired a lot of folks, both on the ground at Lake Mariner and in the C-suite to be able to handle, you know, the construction projects and customer demand and specialize in HVC. So I think sort of that run rate going forward is good.

John Martin: And your other question I think was on SG&A correct.

Speaker Change: Yeah, exactly and be in frontline so look.

Speaker Change: So I think you know we guided last year, you know to 30 Thirtyish million. We finished I think at 39 as I said in my remarks.

Speaker Change: So that increase and the increase that we have at Lake Mariner is a function of increased staffing levels.

Speaker Change: <unk> hired a lot of folks both on the ground at Lake Mariner and in the C suite to be able to handle the construction projects and customer demand and specialize and H B C. So.

Speaker Change: I think sort of that run rate going forward is it is good and as you know the the.

Patrick Fleury: And as you know, that run rate is built for a company that could have 750 to 1,000 megawatts of high-power compute. So I think as we move forward, the incremental margins are extremely high. So I think most of that cost base is now sort of in the company on a run rate basis. Got it.

Speaker Change: You know that.

Speaker Change: That run rate is built for a company that could have 750 to 1000 megawatts of high power compute so I think as we move forward the incremental margins are extremely high.

Speaker Change: I think most of that cost base is now sort of in the company on a run rate basis going forward.

Speaker Change: Got it that's super helpful. Thank you Patrick.

Patrick Fleury: That's super helpful. Thank you, Patrick.

Speaker Change: Yeah.

Kevin Cassidy: The next question is from Kevin Cassidy with Rosenblatt Securities. Yeah, thank you for taking my question. Just as the, you know, when you talk about the power, but what about the price of the Bitcoin coming down? Has that changed any of your plans for Bitcoin mining?

Speaker Change: The next questions come from line of Kevin Cassidy with Rosenblatt Securities. Please proceed with your question.

Speaker Change: Yeah. Thank you for taking my question.

Speaker Change: Just as the you know when you talk about the power, but what about the price of the bitcoin coming down has that changed any of your plans for a bitcoin mining and also my follow up question would be on the 10% of the miners that you're still waiting to bring in and deploy is there any issues with U S. Customs on those on that equipment.

Paul Prager: And also my follow-up question would be on the 10% of the miners that you're still waiting to bring in and deploy. Is there any issues with US customs on those, on that equipment?

<unk>.

Paul Prager: Hi, and thanks for your question. No issues at all. And with respect to the pricing, listen, the price is disappointing, but it's not as if it's been a lot of fun Bitcoin mining these days, given the network difficulty. So, no, it doesn't change our strategy, because our strategy, as announced a while ago, and earlier on this call, is our focus is to become the premier HVC AI data center company. We have the sites, we have the access to energy, we have the people, we're going to do it. And it's only a matter of time before we, we have some runway because of the tremendous scale of our Lake Merida site.

Speaker Change: Yes, hi, and thanks for your question no issues.

Speaker Change: At all and with respect to the pricing listen the price is disappointing, but it's.

Speaker Change: It's not as if it's been a lot of fun bitcoin mining these days given.

Speaker Change: The network difficulty.

Speaker Change: No it doesn't change our strategy, because our strategy as announced a while ago.

Speaker Change: And earlier on this call as our focus is to become the Premier H P. C. AI data Center company, we have the sites you have the access to energy.

Speaker Change: We have the people.

Speaker Change: We're going to do it.

Speaker Change: And it's only a matter of time.

Speaker Change: Before we are we have some runway because of the tremendous scale over a very like bearing a site.

Paul Prager: But it's a matter of time before, you know, if you want to stay in Bitcoin mining, you have to sort of reinvest in new machines. And I think that that is currently the natural time for us to sort of to move forward with HVC AI using the energy that's currently being used by Bitcoin mining. But, you know, we have a lot of demand from customers on the HVC AI side. And so it may be earlier than that, to be quite honest with you. And, but that's going to be driven by our demand and meeting the needs for our customers and HVC AI, far more than it's going to be by any decision to, that's based on the price of Bitcoin.

Speaker Change: But it's a matter of time before you know if you.

Speaker Change: You want to stay in bitcoin mining you'd have to sort of reinvest in new machines and I think that that is currently the natural time for us to sort of.

Speaker Change: To move forward with HPA I using the energy that's currently being used by bitcoin mining, but we have a lot of demand from customers on the HCC AI side and so it may be earlier than that.

Speaker Change: To be quite honest with you and but that's going to be driven by our demand.

And meeting the needs for our customers makes me G I.

Speaker Change: Far more than it's going to be by any decision to that's based on the price of bitcoin.

Operator: Okay, great. Thank you.

Speaker Change: Okay, great. Thank you.

Speaker Change: Thank you.

Bill Papanastasiou: The next question is from the line of Bill Papanastasiou with CIFL. Good morning and thank you for taking my question. Just have a quick question here. When searching for new sites, it seems like the market's somewhat realizing that there's an evolving set of criteria becoming more specific, whether it be with respect to training, inference, location, energization, timeline.

Speaker Change: Next question is from the line of Bill Popper nausea with Stifel. Please proceed with your questions.

Good morning, and thank you for taking my questions.

Speaker Change: Just a quick question here when searching for new sites. It seems like the market somewhat realizing that there's an evolving.

Speaker Change: Set of criteria, becoming more specific whether it would be.

Speaker Change: With respect to training in France location energized Asian timelines can.

Paul Prager: Can you shed some color in terms of the level of competition in sourcing new sites outside of the existing portfolio and how could that impact returns down the road? Thank you. Sure. As you may have heard, you know, because we mentioned this when we first announced the Core 42 deal, which we're still kind of pretty delighted about. You know, our customer went and looked at over 60 sites in the United States before they selected us. And they selected us based upon, you know, the site's huge, right? We have 1,800 acres there at Lake Mariner, like 400 plus acres at Cuyuga.

Speaker Change: Can you shed some color in terms of the level of competition in sourcing new sites outside of the existing portfolio and how could that impact returns down the road. Thank you.

Speaker Change: Sure.

Speaker Change: As you May have heard you know because we mentioned this when we first announced the core 42 deal, which was silicon pretty delighted about.

Speaker Change: Okay.

Speaker Change: You know our customer went and looked at over 60 sites in the United States before they selected us.

Speaker Change: And they selected us based upon the <unk>.

Speaker Change: It's huge right, we have 1800 acres zero Mariner.

Speaker Change: 400, plus acres of yoga.

Paul Prager: Historically low electricity pricing. The source of generation there is primarily hydro and nuke. The fact that we really were energy guys made a big difference for our customer. It's just not core to the data center business. And, um, I think that, um, some of the decisions recently, you know, you know, said aloud by some of the hyperscalers, indicate, hey, they want to really focus on their core business and not, you know, the energy side. They want to, you know, Microsoft mentioned, I think, in their most recent discussion, you know, they want to lease facilities. So we're their guy, you know, we're not their guy now in terms of, no, we don't have a customer in Microsoft at this point, but we're the type of person they're looking for to have a relationship with.

Speaker Change: Historically low electricity pricing.

Speaker Change: The source of generation there is primarily hydro a nuke.

Speaker Change: The fact that we really were energy guys made a big difference for our customer.

Speaker Change: It's just not core to the data center business and.

Speaker Change: I think that.

Speaker Change: Some of the.

Speaker Change: Citizens recently.

Speaker Change: Hum you know set allowed by some of the Hyperscale or indicate hey, they want to really focus on their core business.

Speaker Change: And not.

The energy side, they want at Microsoft mentioned I think in in their most recent discussion they want to lease facilities. So were their guy you know we're not there going on now in terms of DAU, we don't have a customer and you're into Microsoft at this point, but we're the type of person, they're looking for a temporal relationship with so I think that from a.

Paul Prager: So I think that from a competitive landscape perspective, we are situated very well right now because of the scale of our sites and the cost of our energy and the mix of our energy. And the fact that we're building these models, you know, for core 42 and all of the learning that takes place when you're doing that stays in house and that's appealing and compelling to other customers. Second, as I mentioned, listen, there are a lot of people out there, I mean there's so much hype out there about, you know, every land, real estate guy on the planet says, I got a site, I got a site, but, you know, it's really different when you understand what is required to bring power to a site?

Speaker Change: Competitive landscape perspective, we are.

Speaker Change: Situated very well right now because of the scale of our sites and the cost of our energy in the mix of her energy and the fact that we're building. These models for core 42, and all of the learning that takes place when youre doing that stays in house, and that's appealing and compelling to other customers.

Speaker Change: Second as I mentioned listen there are a lot of people out there I mean, there's so much hype out there about.

Speaker Change: Every land real estate Guy on the planet since I got a slide I got a site, but you know it's really different when you understand.

Speaker Change: What.

Speaker Change: What is required to bring power to a site what is required to bring back up our energy to make that available to a site. You know does decide have water will decide always have water.

Paul Prager: What is required to bring backup energy to make that available to a site? You know, does the site have water? Will the site always have water? And, you know. I think we're unique in terms of our ability to go to certain sites that are currently, maybe people look beyond them because they were former power plants, or they have the ability to be power plants, so there's too much to do there. We have actually designed and built combined cycle power plants, we've built coal plants, we've built wind, solar. It is the very genesis of and the foundation of our company.

Speaker Change: And you know.

Speaker Change: I think we're unique in terms of our ability to go to certain sites.

Speaker Change: That are currently.

Speaker Change: Maybe look.

Speaker Change: People look beyond them because they have they were former power plants or they they have the ability to be power plants. So there's too much to do there I mean, we have actually designed and built combined cycle power plant rebuilt coal plants, we built.

Speaker Change: Wind solar.

Speaker Change: It is the very Genesis of and the foundation of our company. So we could look at sites that a lot of other folks cannot.

Paul Prager: So we could look at sites that a lot of other folks cannot look at or can't handle or, you know, can't figure out how to do in a competitive I think that's a gigantic advantage for us, and so that is why I think the customers are coming to us to have these discussions. Appreciate that color, Paul.

Speaker Change: Look at where can handle or you know can't figure out how to do in a competitive way I think that's a gigantic advantage for us.

Speaker Change: And so.

Speaker Change: That is why I think the customers are.

Speaker Change: Coming to US you know too to have these discussions.

Speaker Change: I appreciate that color, Paul and then secondly, I'm not sure. If this was discussed but do.

Bill Papanastasiou: And then secondly, not sure if this was discussed, but do you mind taking a second to shed some color on where project financing efforts stand today? Thank you.

Speaker Change: Do you mind, taking a second to shed some color on where project financing efforts stand today. Thank you.

Paul Prager: I'll defer to Patrick, but I will tell you, you know, we engaged, as you know, J.P. Morgan and Morgan Stanley. I think they're fantastic. We've also hired Milbank as their project finance attorneys. They've been great. And we just, I just came back from a, you know, a conference in Fort Lauderdale where, you know, all the lenders in the project finance field were, and there was, you know, had a lot of meetings, which were great. But what I was excited about was the massive demand on the part of these lenders for product. We were told by at least, you know, more than half a dozen possible lenders, hey, you don't need to run a competitive process.

I'll defer to Patrick but I will tell you you know we we engaged as you know J P. Morgan of Morgan Stanley.

Speaker Change: I think they're fantastic. We've also hired Millbank is there a project finance attorneys.

Speaker Change: Great.

Speaker Change:

Speaker Change: And we just I just came back from a conference in Fort Lauderdale.

Speaker Change: Where you know all the lenders and the project finance field work and.

Speaker Change: As you know, there's not a ton of meetings, which were great.

Speaker Change: But what what I was excited about was the massive demand on the part of these lenders for product. We we were told by.

Speaker Change: At least you know more than half a dozen possible lenders hey, you don't need to run a competitive process. We could do the whole thing of course, we're going to run it.

Patrick Fleury: We could do the whole thing. Of course, we're going to run a competitive process. That's why we hired J.P. Morgan and Morgan Stanley. But it was really, you know, enlivening to hear that there's demand on the part of the investors, and they really know the space. I mean, I still think we're at, you know, 70 plus percent leverage. I still think it's going to be priced right.

Speaker Change: So that's why we hired JP Morgan of Morgan Stanley.

Speaker Change: But it was really a you know enlivening to hear that there is demand on the part of the investors and they really know the space I mean, I still think we're at.

Speaker Change: 70, plus percent leverage a single thing, it's going to be priced right, but again I wanted deferred or Patrick on more of the meat and potatoes in terms of the response.

Patrick Fleury: But again, I want to defer to Patrick on more of the meat and potatoes in terms of. Yeah, hey Bill, I would just say confidence level increases, as Paul mentioned, every day, every week, every month. Massive demand from folks that Paul mentioned, big credit funds to project lenders. You know, as you know, I come from that world. I spent almost 20 years in that seat. So a lot of contacts there, direct contacts. And our customer, the good news is our customer is currently being financed. And those terms are sort of broadly available in the market if you reach out and ask folks.

Patrick Fleury: Yeah, Hey, Bill I would just say confidence level increases that Paul mentioned every day every week every month massive demand from folks that Paul mentioned Big Big credit funds to project lenders you know as you know.

Patrick Fleury: I come from that World I spent almost 20 years in that seat. So a lot of contacts there direct contacts and.

Patrick Fleury: And our customer are the good news is our customers currently being financed and those terms are sort of broadly available in the market. If you reach out and ask folks and the pricing is very attractive so not only.

Patrick Fleury: And the pricing is very attractive. So not only, you know, is our confidence level increasing, but our customer, I think by the time, you know, we print our deal, there will be other markers out there for our customer in the US for lending deals. So really high level of confidence.

Patrick Fleury: Or is there a confidence level, increasing but or customer I think by the time, we print our deal there will be other markers out there for our customer in the U S. Four four lending deals so really high level of confidence.

Operator: Thank you, gentlemen.

Thank you gentlemen.

Patrick Fleury: Thank you at this time I'll turn the floor back to Paul Prager for closing remarks.

Paul Prager: At this time, I turn the floor back to Paul Prager for closing remarks. I want to thank you all again for joining us today. Tara Wolf is uniquely positioned to capitalize on the convergence of power and complexity. Our world-class infrastructure, industry-leading cost structure, and scalable-owned digital infrastructure provide a clear and lasting competitive advantage. Well, there is significant noise in the market about energy demand and hyperscaler strategies from day to day. The key takeaway is that we are witnessing the true integration of energy and technology. The market often expects immediate results, but the reality is that building large-scale, cutting-edge, and cost-effective digital infrastructure takes time, expertise, and precision.

Speaker Change: I want to thank you all again for joining us today.

Speaker Change: Carol is uniquely positioned to capitalize on the convergence of power and compute.

Speaker Change: Our world class infrastructure industry, leading cost structure and scalable owned digital infrastructure provide a clear and lasting competitive advantage.

Speaker Change: Well there is significant noise in the market about energy demand in Hyperscale, our strategies from day to day.

Speaker Change: The key takeaway is that we are witnessing the true integration of energy and technology.

Speaker Change: The market often expects immediate results, but the reality is that building large scale cutting edge and cost effective digital infrastructure takes time expertise and precision.

Paul Prager: Success in this industry requires deep domain knowledge, strategic foresight, patience, and disciplined execution. At TeraWolf, we remain laser-focused on executing our business plan to create long-term value. It's what I've been doing for over 30 years in the power sector. Securing long-term contracts with high-quality counterparties, locking in that profitability, generate steady returns in strong markets, and safeguard our economics during market time. As a significant investor in Teri Wolf, myself, I assure you that every decision we make is driven by our commitment to maximizing long-term shareholder value. Our mission is to deploy our megawatts where they generate the greatest return.

Speaker Change: Success in this industry requires deep domain knowledge strategic foresight pace.

Speaker Change: Patience and disciplined execution.

Speaker Change: A terrible we remain laser focused on executing our business plan to create long term value.

Speaker Change: It's what I've been doing for over 30 years in the power sector.

Speaker Change: Securing long term contracts with high quality counterparties locking in that profitability generate steady returns and strong markets and safeguard our economics during market downturns.

Speaker Change: As a significant investor and Carol walked myself I assure you that every decision we make is driven by our commitment to maximizing long term shareholder value.

Speaker Change: Our mission is to deploy our megawatts, where they generate the greatest returns whether through bitcoin mining or AI compute and we look forward to executing on this vision in 2025 and beyond.

Paul Prager: whether through bitcoin mining or AI compute.

Paul Prager: And we look forward to executing on this vision in 2025 and beyond.

Paul Prager: And I was a young junior officer, like, 40 years ago, learning to qualify as an officer of the deck in the Navy. And I was on the bridge driving the ship in the Western Pacific. And there was a moment when we had just departed the channel, heading out to sea, there were just a lot of inputs, and I wasn't as confident. And there were just too many navigation aids, a ton of contacts, weather coming in. And the skipper could see I was nervous, but he said, Prager, I'm leaving to the bridge. Go get some shut-eye.

Speaker Change: When I was young Junior officer, like 40 years ago learning to qualify as an officer of the deck in the Navy and I was on the bridge driving the ship and the Western Pacific.

Speaker Change: And there was a moment when we had just departed the channel heading out to sea. There were just a lot of inputs and I wasn't confident.

Speaker Change: And there were just too many navigation AIDS a ton of contacts whether coming in and the skipper could see I was nervous, but he said Craig or I'm, leaving to the bridge they'll get some shut eye you got this keep doing what youre doing maintain course and speed.

Paul Prager: You got this. Keep doing what you're doing. Maintain course and speed. Well, there is certainly a lot of noise out there. We've been living it pretty hard the last month or so. Some of it's hype, a lot of it's market volatility, and some of it is that speculators simply don't appreciate this is not a sprint. This is about building a business with long-term, steady, and predictable cash flows. So here is what I know. We have scalable sites with access to energy, water, and fiber. We have the people to build the best-in-class data center. We've contracted a world-quality credit as a customer, and we are deep in discussions with several others similar.

Speaker Change: Well there is certainly a lot of noise out there we've been living it pretty hard the last month or so some of it's hype a lot of its market volatility.

Speaker Change: Some of it is that speculators simply don't appreciate this is not a sprint.

Speaker Change: This is about building a business with long term steady and predictable cash flows.

Speaker Change: So here's what I know.

Speaker Change: We have scalable sites with access to energy water and fiber.

Speaker Change: We have the people to build the best in class data centers, we've contracted a world quality credit as a customer and we are deep in discussions with several others similar.

Paul Prager: So we are where we are today, and we are going to maintain course and speed. And I thank you for your investment, trust, and support.

Speaker Change: So we are where we are today and we are going to maintain course and speed and I. Thank you for your investment Trust and support.

Operator: Thank you.

Speaker Change: Thank you.

Speaker Change: Thank you. This does conclude today's teleconference. We thank you for your participation you may now disconnect your lines at this time.

Operator: This does conclude today's teleconference. We thank you for your participation.

Operator: You may now disconnect your lines.