Q3 2025 IREN Ltd Earnings Call

Okay.

Operator: Good day and thank you for standing by.

Good day, and thank you for standing by and welcome to the IRA in Q3, FY 'twenty five results conference call at this time all parties.

Operator: Welcome to the IREN Q3 FY25 results conference call. At this time, all participants are in a listen-only mode. Please be advised that today's conference is being recorded.

Rents are in a listen only mode. Please be advised that today's conference is being recorded after the speaker's presentation there'll be a question and answer session.

Operator: After the speaker's presentation, there will be a question and answer session. To ask a question, please press star 1 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 1 again.

Speaker Change: Ask a question. Please press star one one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again I would not like to hand, the conference over to your Speaker today, Mike Bauer director of Investor Relations.

Josh: I would now like to hand the conference over to your speaker today, Mike Power, Director Investor Relations. Thank you, Josh. Good afternoon, and welcome to IREN's third quarter FY25 results presentation.

Speaker Change: Thank you Josh good afternoon, and welcome to Orange third quarter FY 'twenty five results presentation. My name is Mike Paluch director of Investor Relations and with me on the call today are Daniel Roberts co founder and co CEO, Linda New Sephora, CFO and Ken Draper Chief Commercial officer.

Mike Power: My name is Mike Power, Director of Investor Relations, and with me on the call today are Daniel Roberts, co-founder and co-CEO, Belinda Nucifora, CFO, and Kent Draper, Chief Commercial Officer.

Mike Power: Before we begin, please note this call is being webcast live with an accompanying presentation. For those that have dialed in via phone, you can elect to ask a question via the moderator after our presentation.

Speaker Change: Before we begin please note this call is being webcast live within the accompanying presentation to those that have dialed in by phone you can elect to do ask a question by the moderate after our presentation.

Mike Power: I would like to remind you that certain statements that we make during the conference call may constitute forward-looking statements, and IRINN cautions listeners that forward-looking information and statements are based on certain assumptions and risk factors that could cause actual results to differ materially from the expectations of the company. Listeners should not place undue reliance on forward-looking information or statements. Please refer to the disclaimer on slide two of the accompanying presentation for more information.

I would like to remind you that certain statements that we make during the conference call may constitute forward looking statements and iron cautions listeners that forward looking information and statements are based on certain assumptions and risk factors that could cause actual results to differ materially from the expectations of the company listeners should not place undue.

Speaker Change: Reliance on forward looking information or statements. Please refer to the disclaimer on slide two of the accompanying presentation for more information.

Dan Roberts: Thank you and I will turn the call over to Dan Roberts. Thanks, Mike. Good afternoon, everyone.

Dan robots: You and I will turn the call over to Dan robots.

Daniel Roberts: Thanks, Marc Good afternoon, everyone and thank you for joining <unk> third quarter FY 'twenty five earnings call I'm, Daniel robots co founder <unk> CEO.

Dan Roberts: And thank you for joining IRINN's third quarter FY25 earnings call. I'm Daniel Roberts, co-founder, co-CEO of IRINN. And today we will provide an update on our financial results for the quarter ended 31 March 2025, along with some operational highlights and some strategic updates from both our Bitcoin mining business and our AI infrastructure vertical. We'll then end the call with Q&A. starting the show. with the highlights. Q3 was another strong quarter, operationally and financially. We delivered our second consecutive quarter of profit after tax, where we posted $24 million in net profit. This reflects a 28% growth quarter on quarter.

Daniel Roberts: Of Arden today, we will provide an update on our financial results for the quarter ended 31 March 2025, along with some operational highlights.

And some strategic updates from bite that bitcoin mining business and our AI infrastructure vertical well.

Daniel Roberts: Well, they didnt Nicole we'd Q&A.

Daniel Roberts: Sorry.

Daniel Roberts: Starting.

Daniel Roberts: Read the highlights Q3 was another strong quarter operationally and financially.

Daniel Roberts: We delivered our second consecutive quarter of profit after tax where we posted $24 million net profit. This reflects a 28% growth quarter on quarter.

Dan Roberts: Revenue then hit a record $148 million for the quarter, driven by growth in both our Bitcoin mining and our AI cloud segment. EBITDA came in at just under $83 million, also a record for us. Operationally, we continued our cadence of delivering 50 megawatts every month of data centers with the energization of Childress Phase 4. And during the quarter, we averaged 29.4 exahash of operating mining capacity. which represents a nearly 5x uplift year on year. So these results reinforce both the earnings power of our growing data centre platform, along with the strength of our procurement engineering, construction, mining and AI teams, who simply continue to execute.

Daniel Roberts: Revenue than hit a record 148 million.

Speaker Change: Dallas for the quarter.

Speaker Change: Driven by growth in both at <unk>, and our AI cloud segments.

Speaker Change: EBITDA came in at just under $83 million also a record for us.

Speaker Change: Operationally, we continued our cadence of delivering 50 megawatts every mountains of data centers with the Energizer I shouldn't have children faithful.

Speaker Change: And during the quarter, we averaged 29.4 extra hash all operating mining capacity.

Speaker Change: Which represents a nearly five X uplift year on year.

Speaker Change: So these results were reinforced by the earnings power of our growing data center platform, along with the stripes, all that procurement engineering construction mining and IR teams.

Speaker Change: Simply continue to execute.

Dan Roberts: We anticipate this earnings momentum to continue into fiscal Q4 as we further progress on our key growth initiatives, which I'll now come on to. So looking forward, our strategy is anchored across value-accretive investments in both Bitcoin mining and AI infrastructure. On Bitcoin mining, we're on track to reach 50x a hash of installed capacity by June 30. That milestone represents a 4x increase from only 10x a hash in June last year and cements us as one of the world's largest and importantly lowest cost Bitcoin producers globally. But we're pausing further mining expansion at that point. That decision is deliberate.

Speaker Change: We anticipate these earnings my mates M to continue into fiscal Q4.

Speaker Change: As we further progress on our key growth initiatives, which are now traveled to.

Speaker Change: So looking forward our strategy is anchored.

Speaker Change: Cross value accretive investments in buy bitcoin mining and infrastructure.

Speaker Change: Decoy Mani we're on track to reach 50 X a hash of installed capacity by June 30.

Speaker Change: That milestone represent the four X increase.

Speaker Change: <unk> in June last year.

Speaker Change: And submit sources, one of the worlds largest and importantly lowest cost be coin producers globally.

Speaker Change: But we are pausing further mining expansion at that point.

Speaker Change: That decision is deliberate while night mining remains highly profitable, we see more compelling shareholder value creation in AI infrastructure.

Dan Roberts: While mining remains highly profitable, we see more compelling shareholder value creation in AI infrastructure. and we want to be disciplined in capital allocation. In AI Cloud, momentum continues. Revenues are increasing, underpinned by new contracts and customer attention. Our GPU fleet has been running at or near full utilisation with hardware level margins north of 95%.

Speaker Change: And we want to be disciplined in capital allocation.

Speaker Change: In our cloud momentum continues remedies are increasing underpinned by new contracts and customer attention.

Speaker Change: Our GPU places being running at or need full utilization with hardware level margins north of 95%.

Dan Roberts: Kent will speak to this more shortly. In our AI datacenters vertical, we're advancing two significant buildouts. Horizon One, a 50 megawatt liquid cooled datacenter targeting Q4 2025 delivery. It's been designed and built for next generation AI workloads, supporting 200 kilowatt racks, which is around 20 times the rack density of traditional datacenters.

Kate: Kate will speak to this more shortly.

Kate: In our AI data centers, it's vertical we're advancing two significant build outs horizon won.

Kate: A 50 megawatt liquid cooled data center targeting Q4 2025 delivery.

Kate: It's been designed and built for next generation AI workloads supporting 200 kilowatt racks, which is around 20 times. The rack density of traditional data centers.

Dan Roberts: Again, we'll talk a little bit more to rap density later in the presentation. The second significant build out is Sweetwater, our two gigawatt flagship data center hub in West Texas. 1400 megawatts at Sweetwater One is on track for energisation in less than a year now, April 2026. The power is contracted, long lead equipment is secured and site preparation and construction is underway.

Kate: Again, we'll talk a little bit more direct its the later in the presentation.

Kate: The second significant build out is sweet water.

Kate: Our two gigawatt flagship data center hub in West Texas.

Kate: 800 megawatts at Sweetwater, one is on track to energize the Asian.

Kate: In less than a year now April 2026.

Kate: Paris contracted long lead equipment has secured and site preparation and construction is underway.

Dan Roberts: Finally, a few notes on funding and structure. So, first, we continue to practise disciplined capital allocation, particularly in the face of broader market volatility like we've seen over the past few months. Our decision to pause on further mining CapEx is a good example of this discipline in action. We've also engaged advisors across multiple debt financing workstreams. Discussions are active and we expect execution in the coming months as markets continue to stabilize. And finally, as previously noted, we will be transitioning to a U.S. domestic issuer status from the 1st of July this year. That will align our reporting with U.S.

Kate: Finally, a few nights on funding and structure.

Kate: First we continue to practice disciplined capital allocation.

Kate: In the face of broad out market volatility like we've seen over the past few months.

Kate: Our decision to pause on further mining Capex is a good example of this disappointing action.

Kate: We've also engaged advisers across multiple debt financing work streams discs.

Kate: Discussions are active and we expect execution in the coming months as markets continue to stabilize.

And finally as previously noted we will be transitioning to a U S. Domestic issuer status from the first of July this year that will align our reporting with U S. GAAP and reflect our increased U S asset footprint, along with the increased U S Investor base.

Dan Roberts: GAAP and reflect our increased U.S. asset footprint along with the increased U.S. investor base.

Dan Roberts: So in summary, record performance this quarter, consecutive profitability, near-term milestones all on track, and clearly a capital discipline lens as we focus on high return infrastructure growth and value creation for shareholders in the AI space going forward.

Kate: So in summary record performance this quarter consecutive profitability near term milestones all on track.

Kate: And clearly a capital disciplined lens as we focused on high return infrastructure growth and value creation for shareholders in the IR space going forward.

Dan Roberts: So to talk a little bit about Bitcoin mining. This slide speaks to the performance both in absolute financial terms and in efficiency, especially in our mining segment. What we're showing here is not just growth but how we're executing well across many multiple key operating and financial metrics. Despite macro headwinds, we're maintaining margins, we're scaling and we're using operating cash flow to help fund our growth in the AI vertical. So let's start with the headline figures. We averaged 29.4 exa-hash in operating hash rate this quarter. That's up 30% from second quarter and is driven by the continued build out at our children's site and the deployment of new generation hardware.

Kate: So to talk a little bit about bitcoin mining.

Kate: Yes.

Kate: This slide speaks to the performance by the absolute financial terms.

Kate: And inefficiency, especially in our mining segment.

Kate: What we're showing here is not just growth, but how were executing well across many multiple key operating and financial metrics.

Kate: Despite macro headwinds, where many maintaining margins with scaling and we're using operating cash flow to help fund our growth in the <unk> vertical.

Kate: So let's start with the headline figures, we averaged 29.4 extra hash in operating hatch rate this quarter.

Kate: That's up 30%.

Kate: Second quarter.

Kate: He is driven by the continued build out at our children sought and the deployment of new generation hardware.

Dan Roberts: What we've also seen is 326% year-on-year hash rate growth against only a 40% increase in network difficulty. reinforcing that we're not just growing, we're outpacing the industry and we're growing our market share. All of this feeds directly into revenue and earnings growth. We continue to lead the sector on efficiency. Our fleet level efficiency remains best in class at 15 joules per terahash. Our power costs averaged 3.3 cents per kilowatt hour at Childress last quarter and are among the lowest of any scaled miner globally. They're assisted by our energy market intelligence and software driven optimisation during price spikes or curtailment events.

Kate: What we've also seen is 326% year on year hash rate growth against only a 40% increase in network difficulty.

Kate: Reinforcing that we're not just growing we're outpacing the industry and we're growing that market share.

Kate: All of this feeds directly into revenue and earnings growth.

Kate: We continue to lead the sector on efficiency F fleet level efficiency remains best in class at 15 joules per tear ash.

Kate: Our power costs averaged three three cents per kilowatt hour Childress last quarter and.

Kate: And are among the lowest of any scaled monarch globally.

Kate: Assisted by our energy market intelligence and software driven optimization.

Kate: During cross shop spikes or Kotila curtailment events.

Dan Roberts: So all of this translates to strong operational leverage. And as you can see, as we continue to add scale, our unit economics hold up and even improve in some cases. But perhaps just as important as this margin is how we fund growth from this point. So as many of you will know on this call, we've made a deliberate choice to support our growth, including the growth in AI, using cash flows from daily Bitcoin liquidation, rather than raising dilutive equity unnecessarily. On the top right, you can see what all of this efficiency, all of this profitability looks like in different metrics.

So all of this translates to strong operational leverage.

Kate: And as you can say as we continue to add scale, our unit economics hold up and even improved in some cases.

Kate: Okay.

Perhaps just as important as this margin is how we fund the growth from this point.

Kate: So as many of you will know on this call we've made a deliberate choice to support our growth, including the growth in AI.

Kate: Using cash flows from daily bitcoin liquidation, rather than raising diluted equity unnecessarily.

Kate: On the top right you can see what all of these efficiency all of its profitability looks like in different metrics.

Dan Roberts: So our all in hash cost. $23 per petahash per day. versus an average cash price or a revenue of 54% representing over a 50% gross margin even on a fully loaded cost basis which includes all indirect direct help ex all in. To look at it a different way, on a per Bitcoin basis, our all in cash costs, direct, indirect costs, all in was $41,000. as compared to $93,000 in realised revenue per Bitcoin mined this quarter. And again, realised, we liquidated, we achieved an actual price of $93,000 against an actual all-in cost of $41,000. So that's gross profit per Bitcoin of roughly $52,000 for the quarter, locked in cash.

Kate: Our all in cash cost.

Kate: With $23 per <unk> per day.

Kate: Versus an average cash price or a revenue of 54% representing over 50% gross margin even on a fully loaded cost basis, which includes all indirect direct opex all of them.

Kate: So look at it a different way on a per bitcoin basis, our all in cash cost direct indirect costs all in with $41000.

Kate: As compared to $93000 in realized revenue per bitcoin mines this quarter and again realize we liquidated we achieved an actual price of 93000 against the actual all in cost.

Kate: 41000, so that's gross profit decline of roughly $52000 for the quarter locked in cash.

Dan Roberts: These margins are top tier clearly in the industry and also include all the cash costs for our AI business vertical. So they give us a strong buffer in the face of network or price volatility and give us a great platform to scale further from this point onwards, particularly noting that we had an average of 29.4 exahash last quarter, and we are within weeks of hitting 50 exahash. So, exciting times. So if we turn our mind to the financials along the bottom, revenue grew from roughly $120 million in Q2 to $148 million in Q3, up 24%.

Kate: These margins are top tier clearly in the industry and also include all the cash costs for our IR business vertical.

Kate: So that gives us a strong buffer in the face of network of Prost volatility and give us a great platform to scale further from this point onwards, particularly noting that we had an average of $29 four <unk> last quarter.

Kate: And we are within weeks of hitting peak Dx ash.

Kate: So exciting times.

Speaker Change: Sorry, if we train them on to the financials, along the bottom revenue grew from roughly $120 million in Q2 to $148 million in Q3 up 24% adjusted EBITDA from 62 million to $83 million.

Dan Roberts: Adjusted EBITDA from 62 million to 83 million. And on a statutory basis, EBITDA also rose 32% to $82.7 million. Finally, profit after tax, we saw an increase of 28% from a profit after tax last quarter of $18.9 million to a profit after tax this quarter of $24.2 million. So these results, they're not just about growth, they're about quality of earnings. We're expanding while keeping costs maintained and margins pretty resilient. So we're excited about the expansion ahead as we round out from what you've seen here as an average of 29.4x hash to hitting 50x hash in the next few weeks.

Speaker Change: And on a statutory basis EBITDA also rose 32%.

Speaker Change: To $82 $7 million.

Speaker Change: Finally profit after tax we saw an increase of 28% from a profit after tax last quarter of $18 9 million to a profit after tax this quarter of $24 2 million.

Speaker Change: So these results are not just about right there about quality of earnings we're expanding while keeping costs maintained and margins pretty resilient. So we're excited about the expansion ahead as we round out from what you've seen here is an average of $29 four at cash <unk> Dx ash in the next few weeks.

Dan Roberts: So in summary, we're operating efficiently, profitably, we're utilising operating cash flows to support funding our next phase of growth. as we scale AI infrastructure. on the 50X a hash.

Speaker Change: So in summary, we're operating efficiently profitably, we're utilizing operating cash flows to support funding our next phase of growth.

Speaker Change: As we scale AI infrastructure.

Speaker Change: On the <unk>.

Dan Roberts: So now to talk about our progress towards that key near-term milestone, which I've mentioned a couple of times, achieving 50x the hash of installed Bitcoin mining capacity by the end of June. It also highlights how this sets us up, again, as I mentioned earlier, it's one of the largest and lowest cost miners globally, with substantial free cash flow available to support our AI strategy going forward. So as of April 16th, 2025, we reached 40x ash of installed capacity. What's really interesting is that's up from just one, one exohash in December 2022, representing a 40X growth in less than two and a half years.

Speaker Change: So now let's talk about our progress towards that key near term milestone, which I've mentioned a couple of times, achieving 50 extra hash of installed be coy Monte capacity by.

Speaker Change: By the end of June.

Speaker Change: It also highlights how this sets us up again as I mentioned earlier, it's one of the largest lowest cost minus globally with substantial free cash flow available to support our ILS strategy going forward.

Speaker Change: So as of April <unk> 2025, we reached 40 ex ash of installed capacity.

Speaker Change: What's really interesting is that up from just one one exit hash in December 2022, representing.

Speaker Change: Representing a 40 X growth in less than two and a half fees.

Dan Roberts: So the right-hand chart shows this visually with our installed hash rate tracking a 361% cumulative average growth rate since December 2022. simply a testament to our team's execution capabilities. So we're now on the final leg towards this 50X a hash target. The data centre's phase five of our children's campus, an additional 150 megawatts of capacity is nearing completion. Primary substation is already on site and nearing energisation. So that's the 138 to 34 and a half kV transformation. And then the bulk substation, we've completed the key upgrades and a second 345 kV to 138 kV. So this is the higher voltage substation is scheduled for delivery imminently.

Speaker Change: So the right hand chart shows these visually with our installed passed right tracking a 361% Q.

Speaker Change: Cumulative average growth rate since December 2022.

Speaker Change: Simply a testament to our team's execution capabilities.

Speaker Change: So we're now in the final leg toward the <unk> target.

Speaker Change: The data centers phase five of our children campus and an additional 150 megawatts of capacity is nearing completion.

Farmery substation is already on start and nearing <unk>. So thats, the 138 to 34 and a half kv transformation and then the bulk substation. We've completed the key upgrades and a second $3 45 kv to 130 8-K base. So this is the high voltage substation is scheduled for delivery.

Dan Roberts: So this is important because not only does it support the full 750 megawatt deployment, but it also creates and provides some additional redundancy as we head into alternate applications for this site, which we'll come on to later in the presentation. In terms of miners, all the hardware is procured, it's been secured for a little while, it's now scheduled for shipping from South East Asia and is scheduled to land well within the 90 day tariff pause for reciprocal duties.

Speaker Change: Every immediately so this is important because not only does it support the full 750 megawatt deployment.

Speaker Change: It also creates and provide some additional redundancy as we head into alternate applications for these sites, which will come onto later in the presentation.

Speaker Change: In terms of miners all the hardware procured.

Speaker Change: Being secured for a little while it's now scheduled for shipping from Southeast Asia.

Speaker Change: And is scheduled to land well within that 90 day tariff pause for reciprocal duties. So that's a bit of a week.

Dan Roberts: So that's a bit of a whim. Our 450X has deployment. Current market conditions, as you can see in that table, based on a $95,000 Bitcoin price at least, supports $588 million in illustrative adjusted EBITDA. The table at the bottom right walks through this. So at 40 exahash where we are today, we estimate adjusted EBITDA of around $450 million, already delivering a 60% margin. At 50 exahash, given the unit economics, driven by scale efficiencies, that fixed cost leverage, that rises to $5588 million and a 62% margin. So these aren't projections, clearly we don't know where Bitcoin price will be, but they do illustrate the underlying profitability of our mining business and some of the resilience going forward.

Speaker Change:

Speaker Change: A full 58 has deployment.

Speaker Change: With current market conditions as you can say in that table based on our $95000 Bitcoin profit late supports $588 million in illustrative adjusted EBITDA.

Speaker Change: Table at the bottom right walks through this so at 40 ex hatchway we are today.

Speaker Change: We estimate adjusted EBITDA of around $450 million already delivering a 60% margin at CTX hash given the unit economics, driven by scale efficiencies that fixed cost leverage that rises to 50 $588 million and a 62% margin. So these.

Speaker Change: Projections, clearly, we don't know where the corn price will be but I do illustrate the underlying profitability of our mining business and some of the resilience going forward.

Dan Roberts: So at this point, yes, we have made a deliberate decision, despite all this, to pause expansion beyond 50 exahash, even though we had originally contemplated the 52 exahash. The reason for this decision, firstly, it saves us around $43 million of near-term hardware CapEx. Secondly, it allows us to reallocate capital and internal resources importantly towards liquid cool AI data centers. And finally, we still preserve that strategic flexibility depending on the Bitcoin price, depending on network difficulty, depending on unit economics to resume this growth in the future. But for right now, we've built out scale and we're now switching our focus to maximizing return on invested capital.

Speaker Change: At this point, yes, we have made a deliberate decision. Despite all this to pause expansion beyond 50 ex cash even though we had originally contemplated a 52 X Nash.

Speaker Change: The reason for this decision firstly, it saves us around $43 million of knee term hardware capex.

Speaker Change: Secondly, it allows us to reallocate capital and internal resources importantly towards liquid Cole II data centers.

Speaker Change: And finally, we still preserve that strategic flexibility, depending on the bitcoin price depending on network difficulty depending on unit economics to resume this growth in the future.

Speaker Change: But for right now we've built up scale and we're now switching our focus to maximizing return on invested capital and wasted the best opportunity to do that in the IR vertical in the meantime.

Dan Roberts: And we see the best opportunity to do that in the AI vertical in the near term. So we're now one of the largest and lowest cost Bitcoin miners globally that positions us with meaningful and consistent cash flows, which is particularly valuable in capital intensive sectors like AI infrastructure. So our ability to generate that cash allows us to self fund some of the high margin, high growth verticals, such as AI cloud, such as AI liquid cooled data centers, and allow us to minimize dilution for shareholders going forward. So we're delivering scale, we're controlling costs, and we're using this platform to drive the next phase of our growth in AI infrastructure.

Speaker Change: So we're now one of the largest and lowest coffee quite minus globally that positions us with meaningful and consistent cash flows, which is particularly valuable in capital intensive sectors like AI infrastructure. So our ability to generate that cash allows us to self fund some of the high margin high.

Speaker Change: Verticals, such as AI cloud, such as AI liquid cooled data centers.

Speaker Change: It allow us to minimize dilution for shareholders going forward. So we're delivering scale, but controlling costs and we are using this platform to drive the next phase of our growth NII infrastructure.

Dan Roberts: So this is what makes 50x a hash clearly not a stopping point or an end point, but a great place for us to pause and really drive growth in a new vertical.

Speaker Change: So this is what makes 50 ex ash clearly not a stopping point or an endpoint.

At a great place for us to pause and really drive growth in a new vertical.

Kent Draper: Now over to Kent to talk about one of those verticals. Thanks, Dan. As Dan alluded to, our AI cloud service is one of two AI verticals that we're scaling today, and demonstrates our ability to develop and scale AI infrastructure quickly, which is critical to our success in such an agile market. For context, we launched our AI Cloud Service, or Iron Cloud as it's now known, as a proof of concept back in August 2023 to support our broader AI infrastructure ambition. Our initial deployment began with 248 NVIDIA H100 GPUs in early 2024 and scaled to 1,896 H100 and H200 GPUs all within less than 12 months.

Kent: Now over to Kent to talk about one of those vehicles.

Kent: Thanks, Dan as Dan.

Kent: And it related to our AI cloud service as one of two II vehicles that with scaling today and demonstrates our ability to develop and scale AI infrastructure quickly, which is critical to our success in such an agile markets.

Kent: For context, we launched out.

Kent: Cloud service or iron cloud as it's now known as a proof of concept back in August 2023 to support our broader infrastructure ambitions.

Kent: Our initial deployment began with 248 <unk> hundred Gpus in early 2024 and scale to 1996, <unk> hundred and <unk> 200, Gpus, all within less than 12 months.

Kent Draper: Today, the platform is supporting both training and inference workloads for a range of AI native customers on both a reserved and on-demand basis. All of this was enabled by the versatility of our proprietary data center design and delivery capabilities. The GPUs for Iron Cloud were installed in our 50 megawatt data center in Prince George, British Columbia, which had solely been operating Bitcoin mining workloads up to that point. to transition from ASICs to GPUs to just six to eight weeks with minimal incremental cap air. This flexibility to easily pivot between Bitcoin and AI workloads with speed is one of the major factors giving us a competitive edge in the industry.

Kent: Today, the platform and supporting by training and inference workloads for a range of AI native customers on both the reserves and on demand basis.

Kent: All of this was enabled by the versatility of our proprietary data center design and delivery capabilities.

Kent: The Gpus for iron cloud or installed in our 50 megawatt data center in Prince George British Columbia, which had solely being operating bitcoin mining work loads up to that point.

Kent: The transition from <unk> to Gpus to just six to eight weeks with minimal incremental capex.

Kent: This flexibility to easily pivot between <unk> and.

Kent: NII of one of our clients with speed is one of the major factors, giving us a competitive edge in the industry.

Kent Draper: We're able to respond extremely rapidly to shifts in market demand and rapid GPU cycles. Importantly, while the Prince George site is supporting AI-cooled GPUs today, it also has flexibility to accommodate liquid-cooled configurations in the future, giving us versatility for both current-gen and next-gen GPUs should we expand deployments further.

Kent: We're able to respond extremely rapidly to shifts in market demand and rapid GPU cycles.

Kent: Importantly, while the Prince George side is supporting II.

Kent: <unk> Gpus today. It also has flexibility to accommodate liquid cooled configurations in the future, giving us versatility for both current Gen and Nextgen Gpus should we expand deployments fed up.

Kent: Okay.

Kent Draper: In terms of our expertise, scaling infrastructure is one thing, doing it reliably and repeatedly is another. And that's why we've invested and continuing to invest in a growing in-house AI infrastructure team across North America. From network architects, InfiniBand engineers, cybersecurity specialists, DevOps, and cloud go-to-market teams, we've assembled a team with significant depth and range. These aren't third-party contractors. This is all internal talent that we're scaling along with the platform. Additionally, we built strong, direct relationships with key ecosystem partners. NVIDIA for GPUs and networking, Dell, Lenovo and Supermicro for servers and hardware, Intel for CPUs and Weka for high-performance storage solutions.

Kent: In terms of our expertise scaling infrastructure is one thing doing it reliably reliably and repeatedly is another and that's why we've invested in continuing to invest in our growing in house AI infrastructure team across North America.

Kent: From network architects and abandon engineers cyber security specialists Dev ops and cloud go to market teams, we've assembled a team with significant depth and range lays on third party contractors. This is all internal talent that we are scaling along with the platform.

Kent: Additionally, we built strong direct relationships with key ecosystem partners in.

Kent: Nvidia Gpus and networking Dell, Lenovo and supermicro for servers and hardware Intel Cpus and wake up for high performance storage solutions.

Kent Draper: These relationships are foundational to how we scale, not just through procurement, but through roadmap alignment and co-design. The image that you can see on the right here shows our Prince George facility in action. It's one of the few real world deployments where Bitcoin and AI workloads are operating side by side, connected using shared infrastructure, but independently optimised. So IronCloud gives us a unique edge. It gives us a proven ability to deliver real AI infrastructure, not just plan it. It provides internal expertise for deploying, operating and optimizing this infrastructure. And it's these capabilities that we're now scaling up at HorizonOne and Sweetwater.

Kent: These relationships are foundational to how we scale.

Not just through procurement, but toy roadmap alignment and color design.

Kent: The image that you can say on the right shows our Prince George facility in action. It's one of the few real world deployments, where big coin NII workloads are operating side by side.

Kent: Connected using shared infrastructure, but independently optimized.

Kent: So iron cloud gives us a unique edge it gives us a proven ability to deliver real AI infrastructure not just planted.

It provides internal expertise that deploying operating and optimizing this infrastructure.

Kent: And in today's capabilities that we now scaling up at horizon, one and slate water.

Kent Draper: Moving to the next slide. We saw increased customer engagement during the quarter within our AI cloud services business. And today our GPU fleet is running at or near full utilization with new contract wins post-quarter end. We're seeing a mix of on-demand and multi-year terms, ranging from short-term flexibility up to three-year commitment.

Kent: Moving to the next slide.

We saw increased customer engagement during the quarter within our cloud services business and today, our GPU flight is running at or near full.

Kent: Full utilization with new contract wins post quarter end.

Kent: We're seeing a mix of on demand and multi year terms ranging from short term flexibility up to three year commitments.

Kent Draper: Perhaps most exciting for us, we're now supplying white-labeled compute to leading USAI cloud providers, supporting both training and inference workloads. This validates both the technical quality of our infrastructure and the depth of our engineering and operations teams experience. and is also proving to help strengthen our AI co-location pipeline. At Prince George, we still have an additional 47 megawatts of air-cooled capacity. That's enough to support over 20,000 NVIDIA B200s, which are currently in high demand for imprint scale workloads. We're in active dialogue with customers around these deployments and continue to evaluate opportunities, including by deploying small clusters of latest generation GPUs for internal and customer testing.

Kent: Perhaps most exciting for us we're now supplying white label compute to leading U S cloud providers supporting both training and inference workloads.

Kent: Validates both the technical quality of our infrastructure and the depth of our engineering and operations teams experience and is also proving to help strengthen our AI colocation pipeline.

Kent: And Prince George we still have an additional 47 megawatts of air cooled capacity.

Kent: That's enough to support over 20000 in video beta hundreds, which are currently in high demand for in print scale workloads.

Kent: We're in active dialogue with customers around these deployments and continue to evaluate opportunities, including by deploying small clusters of latest generation Gpus for internal and customer testing.

Kent Draper: All of this activity sits within an investment framework focused on risk-adjusted returns. We're optimising the sources and uses of capital and view debt and GPU financing as a very realistic path to scale. On the right-hand side here, you can see 33% quarter-on-quarter revenue growth in our AI cloud segment, building on the foundation that we established with IronCloud last year. Our 97% hardware profit margins, which reflects revenue less electricity costs, highlight the strong margins that we're able to achieve via our vertical integration and ownership of our data centres.

Kent: All of this activity sits within an investment framework focused on risk adjusted returns we are optimizing the sources and uses of capital and view that and GPU financing is a very realistic path to scale.

Kent: On the right hand side, you can see 33% quarter on quarter revenue growth in our <unk>.

Kent: AI cloud segment.

Kent: Building on the foundation that we established with Iron cloud last year.

Kent: And 97% hardware profit margins, which reflects revenue less electricity costs highlight the strong margins that we're able to achieve bar at vertical integration and ownership of our data centers.

Kent Draper: The photo below from Prince George, where our GPU and ASIC halls operate side-by-side, shows the modularity and flexibility of our infrastructure model. So we're not just building this infrastructure, we're actively monetising it. And we're doing it efficiently with our own data centres and reinvestment of cash flows from Bitcoin mining. This is what sets us apart in the current market and provides a solid foundation for our entry into the AI data centre market.

Kent: The Fido bely from Prince George, whereas GPU and I think holds operate side by side shows the modularity and flexibility of our infrastructure model.

So we're not just building this infrastructure, we're actively monetizing it and we're doing it efficiently with our own data centers and reinvestment of cash flows from bitcoin mining.

Kent: This is what sets us apart in the current market and provides a solid foundation for our entry into the IRI data center market and I will pass back to Dan for more detail.

Dan Roberts: And I'll pass back to Dan for more detail. Thanks, Kent. So that talks about AI cloud.

Dan robots: Thanks, Kent.

Speaker Change: So that talks about AI cloud now I'm going to talk a little bit about the infrastructure and the colocation opportunity specifically behind that.

Dan Roberts: Now I'm going to talk a little bit about the infrastructure and the co-location opportunities specifically behind that. So what we're showing on this slide is the fundamental, I guess, why behind our pursuit and our focus of AI infrastructure. So I think it's clear that the demand profile for AI compute is unlike anything that we've seen before across broader infrastructure. And I don't think it's exactly speculative anymore, particularly given what we're seeing in the market. And what we're seeing is this shift is happening fast and it's really becoming at scale. And what we're seeing is the markets are simply not ready to serve it.

Speaker Change: What we're showing on this slide is the fundamental I guess why behind App, a huge focus of AI infrastructure.

Speaker Change: So I think it's clear that the demand profile for IR compute is unlike anything that we've seen before across broader infrastructure.

Speaker Change: I don't think its exactly speculative anymore, particularly given what we've seen in the market.

Speaker Change: And what we say is this shift is happening fast and it's really becoming at scale and what we're saying is the market is just simply not ready to serve it.

Dan Roberts: So I'll come on to that a little bit more.

Speaker Change: So I'll come on to that a little bit more of a if we look at the left hand side forecast global II users.

Dan Roberts: But if we look at the left hand side forecast global AI users, starting with the demand side, it's projected to triple from 346 million to over 950 million in the next five years. And this growth is not driven just by consumers like it's all on ChatGPT, but also by enterprises embedding LLMs and other AI tools into everyday use and everything from medical imaging to call centres for software development. The expansion of this user base ultimately leads directly to compute growth. And as we see inference workloads scale in production environments, they require persistent infrastructure, not just burst compute for training, which what brings us to what's on the right hand side of the slide.

Speaker Change: Starting with the demand side, it's projected to triple from 346 million to over $950 million in the next five years and this growth is not driven just by consumers like it sold on <unk>, but also by enterprises embedding <unk>.

And other IR tools into everyday use and everything from medical imaging to KOL centers to software developments.

Speaker Change: The expansion of these user base.

Speaker Change: Ultimately leads directly to compute growth.

Speaker Change: And as we see inference workloads scaling production environments, they require to system infrastructure not as burst compete for trial.

Speaker Change: Which brings us to what's on the right hand side.

Dan Roberts: So here we show that user growth translates to global AI data center demand. expected to grow three and a half times in the next five years. So that sounds like a big number, but what's even bigger, if you understand energy market and the scale of what this really represents in terms of real world infrastructure, 44 gigawatts today to 156 gigawatts in 2030. So that's more than 100 gigawatts of new infrastructure required globally. And today's traditional data center players simply aren't set up to deliver that at the required scale, speed, or density. So our 2.9 gigawatts that we've secured, that we've worked really hard over the last six years to secure, it's a big number.

Speaker Change: The slide.

Speaker Change: So here, we show that user growth translates to global II data center demand.

Speaker Change: Expected to grow three five times in the next five years.

Speaker Change: So that sounds like a big number, but what's even bigger if you understand energy market and the scale of what this really represents in terms of real world infrastructure.

Speaker Change: 44, Gigawatts today to 156 Gigawatts in 2030, so that's more than 100 gigawatts of new infrastructure required globally.

Speaker Change: And today's traditional data center players simply op set up to deliver that at the required scale speed.

Speaker Change: Or density.

Speaker Change: At $2 nine Gigawatts that we've secured that we've worked really hard over the last six years to secure it.

Dan Roberts: We all know it's a really, really big number, but in the context of 100 gigawatts, it's still small. So it sets us up for a really interesting few years ahead. So meeting this demand. requires a fundamentally new class of infrastructure, so new designs, rack densities for AI have jumped 225% year-on-year. and continue to look like they're going to climb. Traditional data center designs simply do not work anymore. They're faster construction cycles. The customers want sites built in nine to 12 months, not two to three years. So that's really forcing a rethink of how infrastructure is designed and delivered in this sector.

Speaker Change: Big number we all know, it's a really really big number but in the context of 100 Gigawatts, it's still small.

Speaker Change: It sets us up for really interesting fees ahead, so meeting this demand.

Speaker Change: Requires a fundamentally new class of infrastructure, so new designs wrapped entities.

Speaker Change: <unk> jumped 225% year on year.

Speaker Change: And continue to look like Theyre going to climb traditional data center design simply do not work anymore.

Speaker Change: Foster construction cycles, our customers want sites built in nine to 12 months not two to three years. So that's really forcing a raytheon <unk> infrastructure is designed and delivered in the sector.

Dan Roberts: And we're seeing scale. The industry is now talking about 50 to 1,000 megawatt clusters, with customers asking for 250 megawatts or more across multi-year rollout. all of this is happening live time and the scale and the intensity just continues to climb month on month.

Speaker Change: And we're seeing scale. The industry is now talking about 50 to 1000 megawatt costas with customers asking for 250 megawatts or more across multiyear rollouts.

Speaker Change: All of this is happening live time, and the scale and the intensity discontinued declined muscle not.

Dan Roberts: So grid connectivity, this is really a gating factor. A greenfield hyperscale site can take up to five to seven years just to secure that transmission access and energisation. So that is the critical bottleneck and it's where we clearly believe Iron has a competitive advantage along with a few other points which we'll get to. So we are clearly well positioned to meet this demand. We've got 2.9 megawatts of secured power capacity already contracted including those large scale grid connections at Childress and Sweetwater. We own our own land which means we're not reliant on M&A. We're not reliant on third-party developers and we can move quickly when customer demand materialises and is contracted and importantly retain the upside on the infrastructure development.

Speaker Change: So grid connectivity this is really a gating factor.

Speaker Change: Greenfield <unk> saw it can take up to five to seven years, just to secure that transmission access.

Speaker Change: <unk> so that is the critical bottleneck.

Speaker Change: Where we clearly believe our and has a competitive advantage.

Along with a few other points, which will get too so.

Speaker Change: We are clearly well positioned to meet this demand we've got 929 megawatts of secured power capacity already contracted.

Speaker Change: Including those large scale grid connections at children's and Sweetwater.

Speaker Change: We own our own land, which means we're not reliant on M&A, we're not reliant on third party developers and we can move quickly when customer demand materializes and this contract in.

Speaker Change: Importantly, retain the upside on the infrastructure development.

Dan Roberts: So I guess my message here is the demand is real. It's growing more and more real week by week. And it's infrastructure constraint. We've got the land. We've got the power. And importantly, we've got the engineering and the execution capabilities to capture a good share of this growth. And we're making it happen right now.

Speaker Change: So I guess my message here is the demand is real it is growing more and more real weight by weight and its infrastructure constraints, we've got the land.

Speaker Change: We've got the power and importantly, we've got the engineering and the execution capabilities to capture a good share of this growth and we're making it happen right now.

Dan Roberts: So if we zoom out briefly and look at how we are positioned to address one of these biggest barriers to adoption. So it's not just about the GPUs, it's about the ability to deploy those GPUs with power, cooling, permitting, and speed. And that's where most of the market is getting stuck today. So we've spent years assembling the fundamental and foundational ingredients for this. We've secured those large scale sites that I mentioned. They're very quickly becoming strategic emerging AI hubs, particularly in West Texas. We've got a track record in high density data center delivery going back to 2018.

Speaker Change: So.

Speaker Change: If we zoom out briefly and look at how we are positioned to address one of the biggest barriers to adoption.

Speaker Change: Not just about the Gpus, it's about the ability to deploy those gpus, we power cooling permitting and speed and that's where most of the market is giving stock today. So we've spent years assembly.

Speaker Change: Fundamental and foundational ingredients for this we secure those large scale thoughts that I mentioned.

Speaker Change: It's very quickly becoming strategic emerging II hubs, particularly in West, Texas, We've got a track record in high density data center delivery going back to 2018. This is not our first rodeo we have been doing power dense data centers.

Dan Roberts: This is not our first rodeo. We have been doing power dense data centers for seven years. Those of you who have followed us for that time understand that yes, we had origins and our roots in Bitcoin mining, but we never went down the path of secans, old abandoned warehouses, shipping containers. We've built multifunctional data centers from day one. And a testament to that, again, I'll repeat it. In Prince George, in the same data center we originally built we have Bitcoin mining racks operating right next to latest generation Nvidia GPUs servicing AI customers. The exact same data centers.

Speaker Change: The seven years those of you who have followed us for that time understand that yes, we had our engines and our roots in bitcoin mining, but we never went down the path of <unk> old abandoned warehouses shipping containers.

Speaker Change: We built multi functional data centers from Daiwa and a testament to that again I'll repeat it in Prince George in the same data center, we originally built.

Speaker Change: We have bitcoin mining Rex operating right next to latest generation latest latest generation Nvidia Gpus servicing IR customers. The exact same data centers that is experiencing engineering designing deploying and then operating power dense data centers.

Dan Roberts: So this experience in engineering, designing, deploying, and then operating power dense data centers is what our business was set up to do. And it's part of our foundation and we're continuing to do it. The only difference is we're continuing to iterate on that power dense design to service these future workloads. So that in-house development and procurement team is critical. It gives us a direct control over the project pacing. It reduces reliance on third parties. We don't need to sign big contracts with third parties and outsource all of this. It de-risks those execution timelines. But critically, we still work with tier one engineering.

Speaker Change: Is what our business was set up to do and it's part of our foundation and we are continuing to do it. The only difference is we're continuing to iterate on that power that is designed to service. These feature workloads. So that in house development and procurement team is critical it gives us a direct control over the project pricing.

Speaker Change: It reduces our reliance on third parties, we don't need to sign big contracts with third parties and outsource all of this it de risks the execution timelines, but critically we still work with tier one engineering.

Dan Roberts: Tier 1 OEM, Tier 1 EPCM partners where it makes sense and they're already engraged on Horizon and the Sweetwater Project. So all of this is what allows us to move with certainty, compress timelines and meet the most demanding specs, whether it's 200 kilowatt racks, whether it's liquid cooling or multi-hundred megawatt campuses. And today we've got 2.9 gigawatts of aggregate power capacity across those sites to service it.

Speaker Change: Tier one OEM tier one APC and partners, where it makes sense and theyre already engaged on horizon in the Sweetwater projects.

Speaker Change: So all of this is what allows us to move with certainty.

Speaker Change: Press timelines.

Speaker Change: And meet the most demanding specs, whether its 200 kilowatt racks, whether its liquid cooling a multi hundred megawatt campuses.

Speaker Change: And today, we've got two nine gigawatts of aggregate power capacity across those thoughts to services. So I guess my message here is simple we're not just a site developer we haven't designed simply options on land and got Lucky around this power.

Dan Roberts: So I guess my message here is simple. We're not just a site developer. We haven't just signed simply options on land and gotten lucky around this power. We're a builder, we're an operator. We've been doing this for seven years. We've structured the company to scale infrastructure in the power dense HPC space simply as fast as customers can commit. So while the demand is clearly global supplies constrained and we've got the power, we've got the partners, we've got the execution track record to meet that demand at scale.

Speaker Change: At build out where an operator, we've been doing this for seven years, we've structured the company to scale infrastructure in the power dense HBC space.

Speaker Change: As fast as customers can commit so while the demand is clearly global supply is constrained and we've got the power. We've got the partners. We've got the execution track record.

Speaker Change: To meet that demand at scale.

Dan Roberts: So the next major milestone in our infrastructure rollout is Horizon 1, 50 megawatts of liquid cooled AI data centers in Childress, which is currently under development and due for delivery in quarter four this year. So as we've mentioned, there's a growing scarcity of sites capable of supporting liquid cooled GPUs at scale. So this is specifically designed to cater to NVIDIA's Blackwell platform. But also beyond with rack density of 200 kilowatts. per rack. So this aligns with the next generation of model training and customer interest has well exceeded the initial 50 megawatt data centre. We've got multiple customers actively engaged in due diligence, actively engaged in commercial negotiations.

Speaker Change: So the next major milestone in our infrastructure rollout is horizon 150 megawatts of liquid cooled II data centers in children, which is currently under development and chief delivery in quarter four this year.

Speaker Change: So as we've mentioned that the growing scarcity of sites capable of supporting liquid GP co Gpus at scale.

Speaker Change: So this is specifically designed to cater to Nvidia is Blackwell platform, but also beyond with rack density of 200 kilowatts.

Speaker Change: Iraq. So this aligns with the next generation of model training.

Speaker Change: And customer interest has well exceeded the initial 50 megawatt data center, we've got multiple customers actively engaged and Jude diligence actively engaged in commercial negotiations. So it is clear that there is a clean cap in the market and we're looking to fill it.

Dan Roberts: So it is clear that there is a clear gap in the market and we're looking to fill it. So in terms of the specs, just to recap, it's 50 megawatts approximately of IT load for phase one. We're designing it for 200 kilowatts of rack density. And to put that in perspective, that's compared to only 130 kilowatt for the new generation black wells that have been released over the course of this year. We've got full UPS and diesel backup systems, sub-six millisecond round-trip latency to Dallas, which supports both AI training along with latency-sensitive inference workloads. And finally, Forecast CapEx unchanged, $6 to $7 million per megawatt of IT load, which we continue to gain conviction is very competitive for liquid-cooled data-centred deployments in the current market.

Speaker Change: So in terms of the specs.

Speaker Change: Right.

Speaker Change: It's 50 megawatts approximately of our tailored for phase one.

We're designing at the 200 kilowatts of rack density and put that in perspective that's.

Compared to only 130 kilowatt.

Speaker Change: For the new generation Black wells that are being released over the course of this year.

Speaker Change: Full year, EPS and diesel backup systems sub six millisecond round trip licensee to Dallas, which support both AI training along with licensee sensitive inference workloads.

Speaker Change: And finally forecast capex unchanged $6 million to $7 million per megawatt.

Speaker Change: RJ light, which we continue to gain conviction is very competitive the liquid cooled data center deployments in the current market.

Dan Roberts: So clearly securing an anchor customer for Horizon One is a top priority. It catalyzes our formal entry into the AI data center co-location market and importantly builds confidence for the broader site development opportunity across the full 750 megawatts available at Childress. It also further differentiates us in the market as we prepare to bring sweet water online. in April 2026 and the 1.4 gigawatts immediately available at that point. In terms of financing, we're actively exploring pathways that optimise for capital efficiency. So that includes customer pre payments, project level debt, corporate level debt, equipment, leasing and convertibles.

Speaker Change: So clearly securing a nike customer for horizon, one is the top priority at <unk>.

Speaker Change: <unk> is a formal entry into AI data center Colocation market, and importantly builds confidence for the broadest sought development opportunity across the full 750 megawatts available at Childress.

It also further differentiates us in the market as we prepare to bring Sweetwater online.

Speaker Change: In April 2026, and the one four gigawatts immediately available at that point.

Speaker Change: In terms of financing we are actively exploring pathway is to optimize the capital efficiency. So that includes customer prepayments project level debt corporate level debt equipment leasing and convertibles. So we're also open to joint ventures, particularly with infrastructure capital providers.

Dan Roberts: So we're also open to joint ventures, particularly with infrastructure capital providers, as long as they're aligned with our long term control strategy. So in terms of milestones, the project's progressing along a well-defined delivery schedule. It's on track. So we're looking to start earthworks and grading in the coming weeks. In the third quarter, we'll start preparing structure, cooling and the electrical system. And then in Q4, we expect final delivery and readiness for occupancy. So, long lead items already ordered, procurement team's very active. We remain on track to deliver Horizon One on the original schedule that we outlined.

Speaker Change: As long as they are aligned with our long term controls strategy.

Speaker Change: So in terms of milestones the project's progressing along a well defined delivery schedule. It's on track.

Speaker Change: So we're looking to start earthworks and grading in the coming weeks.

Speaker Change: In the third quarter, we will start preparing structure cooling and the electrical system.

Speaker Change: And then in Q4.

Speaker Change: Final delivery and readiness for occupancy.

Speaker Change: So that long lead items already ordered procurement teams very active we remain track on track to deliver horizon one.

Speaker Change: On the original schedule that we outlined.

Dan Roberts: So Horizon One's our first at-scale AI data centre. And it's also the model for how we can potentially develop and scale across our broader platform, including Sweetwater. So we've locked it all in. Now it's about executing over the coming months.

Speaker Change: So horizon, one first at scale II data center.

Speaker Change: And it's also the model for how we can potentially develop and scale across our broader platform, including Sweetwater.

Speaker Change: So we've looked at all in <unk>.

Speaker Change: It's a matter of executing over the coming months.

Dan Roberts: So this slide brings the focus back to the 750 megawatts at Tewodrus and our roadmap for potentially transforming this entire site into a world-class liquid-cooled AI campus. So three main things to take away. Firstly, customer interest, as I mentioned, already exceeds the Horizon One's initial 50 megawatt capacity. This just validates and reinforces our decision to invest ahead of the curve and make the commitment to build out this capacity. and also reinforces why we've already begun work on expanding capacity across the broader campus. Site design is now underway for a full 750 megawatt transformation. So this is not just additional racks, it's a complete reconfiguration of the site for liquid-cooled AI workloads.

Speaker Change: So this slide brings.

<unk> brings the focus back to the 750 megawatts at <unk> and our roadmap for potentially transforming this entire thought into.

Into a world class liquid cooled IR campus.

Speaker Change: The three main things to take away firstly customer interest as I mentioned already exceeds the horizon. Once initial 50 megawatt capacity.

Speaker Change: This just validates and reinforces our decision to invest ahead of the curve and make the commitment to build out this capacity.

Speaker Change: And also reinforces why we've already begun work on.

Speaker Change: On expanding capacity across the broader campus.

Speaker Change: <unk> is now underway for a full 750 megawatt transformation. So this is not just additional Rex it's a complete reconfiguration of the liquid cooled AI workloads.

Dan Roberts: Associated upgrades to power redundancy, cooling infrastructure, network architecture. Thirdly, we're future-proofing. As I mentioned before, 200 kilowatt rack densities as compared to the 130 kilowatts required for black wells. Well above what we're expected to require for the next generation. setting us apart from traditional data centers even further. that are really struggling to handle this basic level of density.

Speaker Change: She added upgrades to powered NC cooling infrastructure network architecture.

Speaker Change: Thirdly with future proofing as I mentioned before 200 kilowatt rack density as compared to the 130 kilowatts required for black oils.

Speaker Change: Well above what we're expected to require for the next generation.

Speaker Change: Setting us apart from traditional data centers even further.

Speaker Change: They are really struggling to handle this basic level of that density.

Dan Roberts: So I think the quote here captures the design philosophy. So the project's not being engineered just for what we need now and what we need over the next six to 12 months, both based on the roadmap we're seeing on the GPU side, but what we think AI will demand next. So we're not just catching up, we're building ahead of the curve. And this is a real step change in capability and what we're offering the market. Top right you can see a real photo of the Childress site as of April, clearly very active nearing completion of multiple new buildings and below that is a rendering of the 750 megawatt horizon concept illustrating how the site might be evolved to accommodate 750 megawatts of liquid cooling, high rack density and AI specific workloads.

Speaker Change: So I think the quality captures the design philosophy.

Speaker Change: <unk> not been engineered just for what we need now and what we need over the next six to 12 months, but based on the roadmap with same.

Speaker Change: On the GPU side.

Speaker Change: But what we think IR will demand Nick So we're not just catching up with building ahead of the curve and this is a real step change in capability and what we're offering the market.

Speaker Change: Top right you can see a real photo off that you would've thought as of April clearly very active nearing completion of multiple newbuild buildings and below that is a rendering of the 750 megawatt horizon concept illustrating how the thought might be evolved to accommodate 750 megawatts of liquid cooling <unk>.

Speaker Change: Entity in IR specific workloads.

Dan Roberts: So in context, we own the land, we own the substation, the infrastructure. We're building to rack level specifications required by future workloads, not just what fits today. And it positions us, Horizon and Childress, to be one of the few potential large scale liquid-cooled AI campuses in North America.

Speaker Change: So in context, we are in the land we are in the substation. The infrastructure, we're building to rack level specifications required by future work loads not just what fits today and it positions us horizon in children to be one of the few potential large scale liquid cooled IR campuses in North America.

Dan Roberts: So this is a blueprint, not just for Childress, but also for Sweetwater and how we can potentially scale our broader platform to meet this rising demand. So Swinkwater is our flagship AI site, which we've mentioned for the last year or so now. And it's a very rare combination of secured land, grid-scale power and site readiness that is well in motion. So to recap some of the fundamentals. 1800 acres with up to 2 gigawatts of high-voltage power capacity already secured through binding contractual agreement. That's enough capacity to support over 700,000 next generation GPUs, including those liquid-cooled Blackwell GB200.

Speaker Change: So this is a blueprint not just for children, but also for Sweetwater and how it can potentially scale a broader platform to meet this rising demand.

Speaker Change: So sweet water is our flagship IR thought, which we've mentioned for the last year or so now and it's a very rare combination of secured land.

Speaker Change: Grid scalp, how and site readiness that is well in motion so to recap some of the fundamentals.

Speaker Change: 1800 icons.

Speaker Change: Up to two Gigawatts of high voltage power capacity already secured through binding contractual agreements.

Speaker Change: That's enough capacity to support over 700000 next generation Gpus, including those liquid cooled Blackwell JV two hundreds.

Dan Roberts: Substation, site-level civil works are already well underway. So we're not waiting on paperwork. We're not waiting on anything else. We're actively building this at the moment and preparing the site for construction.

Speaker Change: Substation sought level civil works are already well underway. So we're not waiting on pipe or work, we're not waiting on anything else. We're actively building this at the moment and preparing the site for construction.

Dan Roberts: So it does feel like we might be entering a super cycle of AI infrastructure build out, particularly when you look at these forecasts of 125 gigawatts, not megawatts, of AI data center capacity over the next five years, over five trillion dollars of capital, compute energy, land cooling, networking. And this is where Sweetwater stands out. Most of that demand is bottlenecked by land use, zoning, grid connection, politics. And at Sweetwater, we've solved for those constraints. So the site has the potential to support up to $70 billion in end-user AI infrastructure investment, $70 billion. That's the development site that we've been actively incubating and are preparing.

Speaker Change: So it does feel like we bought be entering a super cycle of AI infrastructure build out, particularly when you look at a forecast of 125 gigawatts not megawatts at the IRI data center capacity over the next five years.

Speaker Change: Over <unk> five trillion dollars.

Speaker Change: Of capital compute energy land cooling networking and this is where sweetwater stands out.

Speaker Change: Most of that demand is bottleneck by land used zoning grid connection politics, and a suite of water we sold for those constraints.

Speaker Change: So the <unk> has the potential to support up to $70 billion.

Speaker Change: In end user II infrastructure investment $70 billion. That's the development thought that we've been executing actively incubating and now preparing.

Dan Roberts: So the initial energisation is targeted for April next year, all long-lead substation equipments on order. The looped fibre connection between Sweetwater 1 of 1.4 gigawatts and Sweetwater 2 of 600 megawatts is already designed. And the flexibility to scale in 1 to 500 megawatt increments gives us a lot of agility to align CAPEX with customer commitments and the discussions that we're having. So there are very few sites in North America or even globally with this unique combination of scale, power, land, control and readiness. We own the land, we've secured the interconnect and we've started the site readiness.

Speaker Change: So the initial <unk> is targeted at the IPO next year, all long laid substation equipment on order the loop by the connection between Sweetwater one of one four gigawatts since weight. What it shows 600 megawatts is already designed and the flexibility to skylake one to 500 megawatt increments gives us a lot of agility to align capex.

Speaker Change: X with customer commitments and the discussions that we're having.

Speaker Change: So there are very few sites in North America, or even globally with this unique combination of scale.

Speaker Change: Our land control and readiness, we are in the land we secured the interconnect and we've started the site readiness. We believe sweet water is one of the most advanced and actionable IR clan tests in development today, so with horizon, leading our first delivery and Sweetwater are anchoring our medium term.

Dan Roberts: We believe Sweetwater is one of the most advanced and actionable AI campus in development today. So with Horizon leading our first delivery and Sweetwater anchoring our medium term growth pipeline, we really believe we're well positioned to meet this market momentum in AI.

Speaker Change: Growth pipeline, we really believe we are well positioned to make this market momentum in IR over to.

Kent Draper: Over to Kent now to touch on CapEx and funding. Thanks. This next slide outlines how we're funding growth and in particular how our business model provides a unique combination of internal cash flow and external funding flexibility. As of April 30, we had $160 million in cash on the balance sheet. This, combined with strong cash flows from Bitcoin mining and our AI cloud, provides significant funding support for our next phase of growth.

Speaker Change: Now to touch on Capex and funded.

Speaker Change: Thanks.

Speaker Change: Next slide outlines highway funding grades and in particular, how our business model provides a unique combination of it.

Internal cash flow and external funding flexibility.

Speaker Change: As of April 30, we had $160 million in cash on the balance sheet.

Speaker Change: This combined with strong cash flows from bitcoin mining and our AI cloud provide significant funding support <unk> next phase of growth.

Kent Draper: We estimate a net funding requirement of up to $250 million over the remainder of 2025, primarily to support the expansion to 50 Exahash, which is already nearly complete, delivery of Horizon One, our first liquid-cooled AI data centre, targeting energisation in Q4 2025, and substation development and site preparation at Sweetwater to prepare for energisation in April 2026. In terms of capital markets, we've engaged advisors across multiple debt financing workstreams, and we expect execution in the coming months as markets continue to stabilise. The important point here is we're not reliant on equity issuance to grow. We have a strong balance sheet, significant tangible assets, cash generating operations, and access to diversified capital channels.

Speaker Change: We estimate a net funding requirement of up to $250 million over the remainder of 2025, primarily to support the expansion to <unk>, which is already nearly complete.

Speaker Change: Liberty of Horizon, one App first liquid cold AI data center.

Targeting <unk> in Q4, 2025, and substation development and site preparation of Sweetwater to prepare for Energizer <unk> in April 2026.

Speaker Change: In terms of capital markets, we've engaged advisers across multiple debt financing work streams, and we expect to execution in the coming months as markets continue to stabilize.

Speaker Change: The important important point here is we're not reliant on equity issuance to grow we have a strong balance sheet significant tangible assets cash generating operations and access to Douglas supplied capital channels.

Kent Draper: This capital strategy gives us flexibility to continue scaling AI infrastructure and maximise returns from the platform that we build.

Speaker Change: Capital strategy gives us flexibility to continue scaling AI infrastructure and maximize returns from the platform that we built.

Kent Draper: In terms of illustrative cash flows, the table below shows illustrative annualised adjusted EBITDA outputs under various Bitcoin price assumptions, holding other inputs constant. At the current total network hash rate and the $95,000 Bitcoin price, we show $942 million in mining revenue. After subtracting power, OPEX, REX, and layering in our AI cloud contribution of $28 million, we arrive at a $616 million adjusted EBITDA figure. You can also see that even at lower prices, for example, $60,000 Bitcoin, we still deliver nearly $270 million in adjusted EBITDA. This is thanks to our low cost power, lean cost structure, and best in class hardware efficiency to help smooth that exposure.

Speaker Change: In terms of illustrative cash flows the table below shows illustrative annualized adjusted EBITDA outputs under various bitcoin price assumptions.

Speaker Change: Holding other inputs constant.

Speaker Change: And the current total network cash right and a $95000 of bitcoin price, we saw $943 million in mining revenue.

Speaker Change: After subtracting power Opex racks, and layering in our AI cloud contribution of $28 million, we arrive at a $616 million adjusted EBITDA figure.

Speaker Change: You can also say that even at lower prices for example, $60000 Bitcoin, we still delivered nearly $270 million in adjusted EBITDA.

Speaker Change: This is thanks to our low cost power lean cost structure and best in class hardware efficiency to help smooth that exposure.

Belinda Nucifora: I'll now pass over to Belinda to walk through the financial results. Good morning to those in Sydney and good afternoon to those in North America. Thank you for joining us for our Q3 FY25 earnings update. As Dan mentioned at the start of the presentation, during the quarter, we reported consecutive quarters of profit after tax of $24.2 million for Q3 and $18.9 million for Q2. We delivered record mining revenue of $141.2 million and recorded record adjusted EBITDA of $83.3 million and EBITDA of $82.7 million. The average operating hash rate increased by 30% from 22.6 exahash to 29.4 exahash and we mined 1514 Bitcoin at an average realised price of $93.3k.

Speaker Change: I'll now pass over to Linda to walk through the financial results.

Speaker Change: Oh.

Linda: Good morning.

Linda: And good afternoon size in North America. Thank you for joining us for <unk> FY 'twenty five earnings update.

Daniel Roberts: Dan mentioned at the start of the presentation during the quarter, we reported consecutive quarters of profit after tax since 24, <unk> and $18 9 million in <unk>.

Daniel Roberts: We delivered record mining revenue of 141 million and recorded record adjusted EBITDA of $88 3 million and EBITDA of $82 7 million.

Daniel Roberts: The average operating cash rate increased by 10, 8% from 22, six access to $29 four extra hash and we mined 1514 decline at an average realized price of $93 <unk>.

Belinda Nucifora: During the quarter, the total net electricity cost increased by 30%, from $28.9 million to $36.5 million, in line with the increased megawatt usage at Children's. During the quarter, the power prices remained relatively flat at $0.036 per kilowatt hour. The average net electricity cost of Bitcoin mined was $24K. Other costs of $25.3 million remained relatively flat despite a business today that continues to deliver significant growth and continues to support the projected continued expansion across our AI vertical, as well as the costs associated with regulatory and compliance obligations.

Daniel Roberts: During the quarter the title Ned electric J costs increased by 30% from $28 9 million to $36 5 million in line with the increased megawatt easyjet at Childress.

Daniel Roberts: During the quarter the power prices remained relatively flat at three six points.

Daniel Roberts: Great. Thank.

Speaker Change: Thank you kilowatt hour.

Speaker Change: Yes, fridge net electricity costs of Bitcoin mines was 24.

Speaker Change: <unk>.

Speaker Change: Other cost of $25 3 million remained relatively flat. Despite a business today that continues to deliver significant and continues to support the projected continued expansion across our AI vertical.

Speaker Change: As well as the cost associated with regulatory and compliance obligations.

Belinda Nucifora: Moving to our cash flows, I wanted to note that our consolidated cash flow statements are now presented in line with IFRS Requiring the proceeds from the sale of Bitcoin mine to be classified as cash flow from investing activities. As such, IRINN filed a 20FA on March 20 of this year for the period ended 30 June 2024, along with a 6KA for the previous two quarters of this financial year, restating its cash flows to reflect this. The closing cash at bank at 31st of March 2025 was $184.3 million with receipts from Bitcoin mining activities of $141.2 and AI cloud services of $3.8 million.

Speaker Change: Moving to our cash flows I wanted Tonight that our consolidated cash flow statement are now presented in line with express.

Speaker Change: Requiring the proceeds from this style of Bitcoin mine say classified as cash flow from investing activities.

Speaker Change: As such our IND filed 20-F on March 20, <unk> of the period, ending Saturday change by 'twenty four.

Speaker Change: The 6K, a previous shape audience of this financial year restating its cash flows to reflect this.

Speaker Change: The closing cash at bank at 30, <unk> March 2025 was $194 3 million with receipts from bitcoin mining activities at the 141 say NII cloud services of $3 8 million.

Belinda Nucifora: We had a decrease in cash flow used in operating activities of $11.6 million, which was primarily due to a decrease in our annual insurance payments of $9 million that was made in Q2. We had an increase in net cash used in investing activities of $234.8 million, primarily due to significant milestone payments made on mining hardware. had a decrease in net cash from financing activities of $349.9 million, primarily due to the net proceeds from the convertible notes that were received in Q2. During the second quarter, by the ATM, the company issued 10 million shares to gross proceeds of $110.9 million.

Speaker Change: We had a decrease in cash flow used in operating activities of 11, 6 million, which was primarily J J a decrease in our annual insurance payments of 9 million that was 19 <unk>.

Speaker Change: We had an increase in net cash used in investing activities of $234 8 million, primarily due to a significant milestone payments nine mining hardware.

Had a decrease in net cash from financing activities of $349 9 million, primarily Jason the net proceeds from the convertible.

Speaker Change: Raising Qi <unk>.

Speaker Change: During the second quarter.

Speaker Change: By the AGM the company issued 10 million shares too pricey.

Speaker Change: $110 9 million.

Belinda Nucifora: And since the balance sheet, we've issued a further $17.4 million to gross proceeds of $107.6 million.

Speaker Change: And since the balance sheet, we issued a set of $17 4 million. It's a gross price of 107 6 million.

Belinda Nucifora: Moving to the balance sheet. As at 31st of March 2025, the total assets recognised were $2 billion, including property, plant and equipment of $1.6 billion, which provides a strong balance sheet to support future growth. In relation to the $440 million convertible note issued on the 6th of December 2024, in accordance with IFRS, we reported a current liability of $346.2 million, including an embedded derivative of $23.7 million, and a current asset of $11.7 million for the capped call, and a non-current asset of $34.7 million in relation to the prepaid forward that would enter into concurrently with the convertible note.

Speaker Change: Moving to the balance sheet.

Speaker Change: As at 30, <unk> March 2025, the title assets recognized let's say billion, including property plant and equipment of $1 6 billion, which provides a strong balance sheet to support future growth.

Speaker Change: In relation to the 440 million convertible note issued on the six it's.

Speaker Change: December 2024 in accordance with <unk>, we reported a current liability of $346 <unk> million, including an embedded derivatives is $23 7 million.

Speaker Change: The current asset of 11.

Speaker Change: 7 million with a capped call and a non current asset of steady $4 7 million in relation to the prepaid forward that would enter didn't say concurrently with the convertible notes.

Belinda Nucifora: As iron transitions to US GAAP reporting from 1 July 2025, the accounting for the convertible notes, capped call and prepaid forward will be reassessed in line with applicable accounting standards. Total equity increased to $1.4 billion with 10 million shares sold under the ATM during the quarter.

Speaker Change: As our transition to U S. GAAP reporting from one July 2025, K accounting for the convertible night capped call.

Speaker Change: And pray types of OLED will be reassessed in line with applicable accounting standards.

Speaker Change: Total equity increased to one 4 billion, which 10 million shares sold under the ATM share in the quarter.

Mike Power: So I'll now hand back over to Mike to commence the Q&A. Thank you.

Speaker Change: So I'll now hand back I thought some mics to commence the Q&A.

Speaker Change: Yeah.

Operator: As a reminder, to ask a question, please press star 1 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 1 again. One moment for questions.

Thank you as a reminder to ask a question. Please press star one one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again, one moment for questions.

Nick Giles: Our first question comes from Nick Giles with B-Riley Securities, you may proceed. Thanks, operator, and good afternoon, everyone. Thanks for the comprehensive presentation today.

Speaker Change: Our first question comes from Nick <unk> with B Riley Securities You May proceed.

Speaker Change: Okay.

Speaker Change: Thanks, operator, and good afternoon, everyone.

Speaker Change: Thanks for the comprehensive presentation today.

Dan Roberts: My first question, Dan, you used the words ahead of the curve, and it made me think of Dennis and his team were really ahead of the curve on building out an ecosystem required in AI cloud services. And so my question is, ultimately, how should we think about your appetite to fill out the available capacity of Prince George and growth beyond that? When I look at slide 16 on the CapEx site, I see the 50x hash horizon one in Sweetwater, but I don't see anything explicit on the GPU side. So thank you very much. Thanks Nick.

Speaker Change: My first question Dan you used the words ahead of the curve and it made me think of Dennis and his team. We're really ahead of the curve on building out an ecosystem required in AI cloud services and so my question is ultimately how should we think about your appetite to fill up the available capacity of <unk>.

George: George and growth beyond that.

George: I look at slide 16 on the Capex side I see the <unk> horizon, one in Sweetwater, but I don't see anything.

George: Explicit on the GPU side. So thank you very much.

Dan Roberts: Yes, you're right. Those facilities were designed from day one to accommodate rack densities of 70 to 80 kilowatt air-cooled and have been successfully operating NVIDIA H100s and H200s there over the last 12-15 months. The opportunity to scale there is clear. In terms of scaling our AI cloud, we're very focused on capital and risk-adjusted returns. So it's all about matching sources and uses, quite frankly. The demand is there on a spot basis. Do we want to incur GPU financing to finance revenues that are short-term? There's a risk profile attached to that. Do we want to use equity to finance further growth in our AI cloud?

George: Thanks, Nick.

George: Yes, yes, you're right those facilities were designed from day one.

George: To accommodate rack cities of 70 to 80 kilowatt air cooled and have been successfully operating Nvidia <unk> hundreds and <unk> two hundreds there over the last 12 15 months.

George: The opportunity to scale there is clear.

George: In terms of scaling our cloud we're very focused on.

George: Capital.

George: And risk adjusted returns so it's all about matching sources and uses quite frankly the.

George: The demand is there on a spot basis.

George: Do we want to encourage GP financing to finance revenues that are short term denied.

George: Deny that there is a risk profile attached to that do we want to use equity to finance further growth growth in our <unk> cloud.

Dan Roberts: Never say never, but given the tools we've got, given the scale, given the access to GPU financing, I think our strong preference is to try and match debt with customer contracts as a way of growing that AI cloud vertical out. And we're looking at that in parallel, both the GPU financing, as well as multiple contract conversations with customers, particularly around Blackwells in the 1000 GPU plus clusters. So we're looking at all that in parallel with customer conversations on Horizon and Sweetwater.

George: Never say never a bit.

Given the tools, we've got given the scale given the access to GP financing.

George: I think you have strong preferences to try and match that with customer contracts as a way of growing that cloud vertical apps and we're looking at that in parallel both the GP financing as well as multiple contract conversations with customers, particularly around black wells.

George: Even a 1000 megawatt thousand GPU plus clusters. So we're looking at all of that in parallel we have customer conversations on horizon Sweetwater.

George: Yeah.

Nick Giles: Great, I appreciate that.

George: Great I appreciate that.

Nick Giles: My second question is, you know, you noted being open to JVs, and so I was curious at what stage it could make sense to bring a partner in. Is this something that could accelerate a definitive agreement at Horizon 1, for instance, or would it be more related to additional scaling later on? It could be anything, but clearly when you've got a $70 billion development project at Sweetwater, we can't deliver all that capital in our current state and with our current market capitalisation. So we would need to bring in further partners, absolutely on the project financing and debt side, but also potentially on the equity side.

George: My second question is.

Speaker Change: Otis being open to <unk> and so I was curious at what stage it could make sense to bring a partner in is is this something that could accelerate it definitive agreement at horizon, One for instance, or would it be more related to <unk>.

George: Additional scaling later on.

George: It could be anything, but clearly when you've got a $70 billion development.

George: <unk>.

George: Sweetwater.

George: We cant deliver all of that capital in our current state and with our current market capitalization.

George: So we would need to bring in further partners.

George: Absolutely on the project financing and debt side, but also potentially on the equity side and like all of this is all about options and running through the scenarios in front of you. So how do you finance this.

Dan Roberts: And like all of this, it's all about options and running through the scenarios in front of you.

Dan Roberts: So how do you finance this? We've got equity in iron, given our current market cap and cost of equity. Clearly there's a cost to that, which we've got to be very sensitive to. When you're dealing with private infrastructure players, their cost of capital, if you can get the risk profile right, is substantially lower. I mean, that's a lot of our backgrounds in private infrastructure. So being able to bring that in where it may make sense to complement what we've built in a listed environment may deliver better value accretion to shareholders. There's also a control aspect, so we just need to be careful around whether we want to engage with third party equity and enter into those joint ventures.

George: We've got equity.

George: Given our current market cap and cost of equity clearly there is a cost to that which was going to be very sensitive to.

George: When youre dealing with private infrastructure players that cost of capital if you can get the risk profile rise.

George: Is substantially lower I mean, thats a lot of our backgrounds in private infrastructure side.

George: Now to bring that in where it may make sense.

George: To complement what we built in a listed environment may deliver a better value accretion to shareholders.

George: There is also a control aspects. So we just need to be careful around whether we want to engage with third party equity and enter into those <unk>.

Dan Roberts: But given where we're at with those customer conversations, given the prospects we're seeing in debt financing instruments and multiple different types, we're pretty optimistic about financing the capital associated with these developments. And really it's about the customer side in the short term.

George: Benches.

George: But given where we're at with those customer conversations given the prospects were seen in debt financing instruments and multiple different tubs.

George: We're pretty optimistic about financing the capital associated with these developments and really it's about the customer side in the short term.

Nick Giles: It's good to hear. Appreciate all the details, so keep up the good work. Thanks, D.

George: Good to hear.

George: Appreciate all the detail so keep up the good work.

Nick So: Thanks, Nick.

Reggie Smith: Thank you. Our next question comes from Reggie Smith with J.P. Morgan. You may proceed. Reggie, your line is now open. Sorry, I was on mute. Congrats on the quarter. It's pretty remarkable that you guys have been able to scale your Bitcoin hash rate while still pursuing HVC. So I wanted to give you guys kudos for that. And two quick questions.

Speaker Change: Thank you. Our next question comes from Reggie Smith with Jpmorgan you May proceed.

Speaker Change: <unk> Your line is now open.

Speaker Change: Sorry, I was on mute.

Speaker Change: <unk> on the quarter.

Speaker Change: It's pretty remarkable as you guys have been able to scale your bitcoin.

Speaker Change: Has rate, while while still pursuing <unk>.

Speaker Change: Wanted to give you guys kudos for that well two quick questions one.

Kent Draper: One, I noticed that some of you guys called out the growth in your AI Cloud business. I was curious if you could provide some details on how you guys are performing there from an uptime and utilization perspective, like what APIs do you track and how that performance kind of benchmarks against, I guess, industry norms and expectations. I think that's probably a very important selling point as you engage customers. Yeah, I'm happy, happy to take that one. Yeah, we track a full range of metrics across the operations of that AI cloud services business. We have focused a lot within the operations on automation, as well as telemetry and being able to record a huge amount of data that we're continually feeding back into the way we operate and maintain these systems to make sure that we're improving and maintaining performance levels over time.

I noticed you guys called out the growth in your AI cloud business I was curious if you could provide some details on.

Speaker Change: On how you guys are performing there from an uptime.

Speaker Change: Utilization perspective.

Speaker Change: What Kpis, you track and how that performance kind of benchmarks against I guess industry norms and expectations I think that's probably a very important selling point as you as you engage customers.

Speaker Change: Yes, Im happy to take that one.

Speaker Change: We track our full range of metrics across our operations of that cloud services business.

Speaker Change: We have focused a lot within the operations on the automation as well as.

Speaker Change: Telemetry and being able to record a huge amount of data that we are continually fading back into.

Speaker Change: The way, we operate and maintain these systems to make sure that we are improving.

Speaker Change: Maintaining performance levels over time.

Kent Draper: In terms of how we've been performing, we get continual feedback from our customers that we are among the best of their cloud providers. And in some instances, very clear feedback that both the uptime and our response to any issues that they have is extremely favorable compared to other providers that they're using. And ultimately, the proof is in the pudding with these operations. And as I mentioned, while I was presenting earlier, we are seeing, in particular, this uptake of white labeling our GPUs for other cloud service providers. Now, they obviously have extremely good insight into technical capabilities and performance levels.

Speaker Change: In terms of highway ban performing we get continual feedback from our customers that.

Speaker Change: We are among the best of the cloud providers.

Speaker Change: And in some instances, yeah, very clear feedback that the uptime and our response to any issues that they have.

Speaker Change: <unk> is extremely favorable compared to other providers that they are using and ultimately the proof is in the pudding with these operations and as I mentioned, while while I was presenting earlier.

Speaker Change: We are saying in particular this uptake of white labeling at J P use for other cloud service providers now by obviously have yes.

Speaker Change: Extremely good insight into technical capabilities and performance levels and the fact that they are.

Reggie Smith: And the fact that they are contracting with us for capacity, I think, provides a very good sign that our performance and operating levels are extremely good. That's good. That's good to hear.

Speaker Change: You are contracting with us for capacity.

Speaker Change: <unk> provides a very good sign that our outperformance in operating levels extra.

Speaker Change: Extremely good.

Speaker Change: Okay. That's good that's good to hear.

Reggie Smith: If I could sneak one more in. Obviously, you guys are having discussions with potential tenants at Horizon One. What milestones or signals are you looking for in the coming months to indicate that you're moving closer to a formal agreement? And then maybe talk a little bit about how the conversations have changed more recently versus what you may have been discussing a few months ago. How the texture of the conversations or whatever. Any insights you could provide there to give us a sense of how things are moving forward? Progressing and what that looks like as you as you move through the discussions.

Speaker Change: If I can sneak one more.

Speaker Change: Dan.

Speaker Change: Obviously, you guys are having discussions with potential tenants in horizon one.

Speaker Change: What what milestones of signals are you looking for in the coming months to indicate that you are moving.

Speaker Change: Closer to a formal agreement.

Speaker Change: And then maybe talk a little bit about how the conversations have changed.

Speaker Change: More recently versus what you may have been discussing a few months ago.

Speaker Change: The texture of the tabulations or whatever any any any insights you can provide there to give us a sense of how things are.

Progressing and what that looks like as you move through the discussions thank you.

Dan Roberts: Thank you Yeah, I'm happy to handle this kit and then you can add anything in. So there's conversations with multiple customers ongoing, and I appreciate that's a bit of a hand wavy statement. So to add a little bit more detail, there's been. multiple site visits, like several, lots of detailed due diligence, contractual negotiations, discussions of exclusivities and ROFAs, etc. We're in the advanced stage of negotiation with several at the moment, and we're just working through it. So we're highly confident of contracting ahead of commissioning in Q4. Clearly we're not going to earn revenue before then anyway.

Speaker Change: Yes, Im happy to handle this kit and then you can add anything.

Speaker Change: So.

Speaker Change: These conversations with multiple customers on ongoing.

Speaker Change: That's a bit of a hand wavy statements I'd add a little bit more detail.

Speaker Change: <unk>.

Speaker Change: Multiple site visits but several.

Speaker Change: Lots of detailed due diligence.

Speaker Change: Contractual negotiations.

Speaker Change: Discussions of exclusivity and roche's et cetera.

Speaker Change: We're in the advanced stage of negotiation with several at the moment.

Speaker Change: And we're just working through it so.

Speaker Change: We're highly confident of contracting ahead of commissioning in Q4, clearly we're not going to earn revenue before then anyway.

Dan Roberts: So a lot of it is just making sure that we do the right deal with the right counterparty on the right terms. We get all the technical detail right. We get the contracting structure right. And importantly, there's a lot of conversation with these customers around pathway to scale. So most of these customers, if not all, are not interested in 50 megawatts. They're interested in the fact that this site can scale generally around to that two to 250 megawatt mark over the coming period. But equally, some of them are looking beyond that. So that's where we spoke about the 750 megawatts potentially all becoming liquid cool AI data center capacity, looking at what we're hearing from the customers.

Speaker Change: So a lot of it is just making sure that we do the right deal with the rock counterparty on the right terms, we get all the technical detail Raj, we get the contracting structure Rod and importantly, there is a lot of conversation with these customers around pathway to scale. So most of these customers if not all are not interested in <unk>.

Speaker Change: Megawatts. They are interested in the fact that the stock can scale journey.

Speaker Change: Generally rounds that two to 250 megawatt mark Okay.

Speaker Change: Coming periods.

Equally some of them are looking beyond that so that's why we spoke about the 750 megawatts potentially all becoming liquid cool AI data center capacity looking at what we're hearing from the customers. I mean, there is a book and we might be sitting here two years and there's none will be quite a bit.

Kent Draper: I mean, there's a bookend. We might be sitting here two years and there's no more Bitcoin. But that's just the reality of what we're doing. We're not religious. We're not wedded to anything other than driving the highest creation of value for ourselves and shareholders. And that's driving the decision making. Yeah, one thing I'd add to that is in addition to those ongoing conversations that Dan mentioned and site visits and technical DD, we continue to see good levels of demand from new potential customers. So we continue to see a lot of inquiries from customers that we haven't previously interacted with.

Speaker Change: That's just the reality of what we're doing we're not religious we're not weighted to anything other than driving the highest creation of value for ourselves and shareholders and that's driving the decision, making so we can track full 750 megawatts on better risk adjusted terms that would be quite money with us.

Speaker Change: Yes.

Speaker Change: I would add to that.

Speaker Change: In addition to.

Speaker Change: Going conversations that Dan mentioned in site visits and technical day day, we continue to say good levels of demand from new potential customers and we continue to say a lot of.

Speaker Change: Inquiries from customers that we havent private say interacted.

Kent Draper: So it does seem clear to us that the level of demand, particularly in the near term for liquid cooled data centres, is driving a lot of those interactions.

Speaker Change: It does same got cleared to offset that.

Speaker Change: All of demand, particularly in the near term for liquid KOL data centers.

Speaker Change: Is driving a lot of those interactions.

Reggie Smith: Got it. That makes sense.

Speaker Change: Got it that makes sense, Okay decided to transfer transform would you be able to kind of continue to run bitcoin mining until full cutover occurred or like how would that how would that work.

Kent Draper: If you decided to transform, would you be able to kind of continue to run Bitcoin mining until a full cutover occurred? Or like, how would that work? Yeah so it's a bit of a combination. So at the Childress site Dan had the rendering up earlier as to what a potential full site build out for liquid cooled capacity could look like and there is ample space at that site to be able to build additional phases of horizon on areas that currently haven't been built out as well as in the future then retrofitting the existing buildings for further development.

Speaker Change: Yes.

Speaker Change: It's a bit of a combination sorry at the children side, Dan had the rendering up earlier as to what a potential full site buildout for liquid cold capacity could look like and there is ample space at that site to be able to build.

Speaker Change: Additional phases of horizon.

Speaker Change: On areas that currently havent been built out as well as in the future than retrofitting existing buildings for further development.

Kent Draper: So obviously the approach that you're taking there if it is new build phases from the ground up obviously there's no interruption to your Bitcoin mining activities until you know right near the end when you switch the power across and power up new liquid cooled data centres where you are undertaking retrofits of existing capacity then yes you do need to take that capacity offline at some point prior to the new liquid cooled capacity coming online. I understood.

Speaker Change: So obviously the approach that you're taking there if it is new build sizes from the ground up obviously theres no interruption.

Speaker Change: To your bitcoin mining activities until right near the end.

Speaker Change: When you switch the power across and power up and you'd likely cold data centers, where you are undertaking retrofits of existing capacity.

Then, yes, you do need to take that capacity offline at some point prior to the new liquid cooled capacity coming online.

Reggie Smith: Thank you so much.

Got it understood. Thank you so much.

Darren Aftahi: Thank you. and Darren Aftahi. With Roth, you may proceed.

Speaker Change: Thank you.

Speaker Change: They are an Italian with Roth you May proceed.

Kent Draper: Hi, guys. Thanks for your questions and congrats on the progress. Just kind of a clarification on the CapEx spend per megawatt. You mentioned it includes UPS and diesel gen. I guess, how are you able to kind of reach that CapEx spend when it seems like it's kind of below market? And then I guess, in the conversations you're having with potential parties at Horizon One, and maybe beyond, can you characterize kind of maybe what those clients might look like? Is it hyperscalers, neoclouds, large enterprise, all of the above? Any color would be great. Thanks. Yeah, happy to touch on the cost element there.

Speaker Change: Hi, guys. Thanks for taking my questions and congrats on the progress just kind of a clarification on the Capex spend per megawatt you mentioned that includes <unk> and diesel Gen. I guess, how are you able to kind of reach that capex span when it seems like it's kind of below market and then I guess.

Speaker Change: And the conversations Youre, having with.

Speaker Change: Potential parties at Horizon, one and maybe beyond.

Speaker Change: Can you characterize kind of maybe what those clients might look like as a hyper scaler clouds large enterprise all of the above any color would be great. Thanks.

Speaker Change: Yes happy to touch on.

Speaker Change: On the cost element there.

Kent Draper: So in terms of the build-out, as Dan mentioned, we've been doing power-dense data centres for over seven years now. So we are extremely experienced in building out these facilities. We've spent a lot of time optimising our data centre design. And importantly, in the build-out for Horizon One, we're doing it in a way that utilises a lot of the existing data centre design. So the same building shells, a lot of the electrical infrastructure is very similar. And then we're just layering in the redundancies that these AI customers ultimately are looking for in terms of what you mentioned around gensets, UPS, etc.

Speaker Change: In terms of the build out as Dan mentioned, we've been doing.

Speaker Change: Power dense data centers for over seven years now.

Speaker Change: We are extremely experienced in building out our base facilities. We've spent a lot of time optimizing our data center design.

Speaker Change: And importantly in the in the build out for Horizon. One we're doing in on why that utilizes a lot of.

Speaker Change: The existing data center design side, the same building shells a lot of the electrical infrastructure.

It's very similar and then we're just layering in the redundancies.

Speaker Change: That these II customers ultimately are looking for in terms of what you mentioned around Gen sets UBS etcetera.

Dan Roberts: So what that enables is that we're able to do it in an extremely cost-efficient manner versus a traditional new AI data centre build-out where people may be using, for example, concrete building shells, which require a significant amount of additional capex versus our design. So everything that we're delivering is consistent with what customers expect. And we know that because we've been going through these detailed technical due diligence. conversations with Irmo over the past number of months. So that's really, you know, the key elements as to how we're able to achieve better costs.

Speaker Change: So what that enables is that we're able to do it in an extremely cost efficient manner versus traditional.

Speaker Change: Got you.

Speaker Change: Data center build out where people might be using for example concrete building shells.

Speaker Change: Which require a significant amount of additional capex versus our design.

Speaker Change: So everything that we're delivering is consistent with what customers expect and we know that because we've been going through these data out.

Speaker Change: Technical due diligence.

Speaker Change: Conversations with him onto the past number of months.

Speaker Change: That's really the key elements as to as to how we're able to achieve better cost.

Dan Roberts: I think just to add to that, like this isn't a small team of finance guys just trying to sign a contract and then outsource everything on the technical side. Like as Kent said, we've been doing this for seven years. It's a founder-led business where every single element of every data center and everything we do goes back to first principles. Whether people want to acknowledge it or not, this is an entirely new asset class, power-dense computing. Legacy data centers are fundamentally different in terms of how they've developed, how they've been engineered, how they've been operated and we've had the benefit of seven years from the ground up optimising everything.

Speaker Change: I think just to add to that likely seasons, a small team of finance guys. Just trying to sign a contract and then outsource everything on the technical side like I said, we've been doing this for seven years. It's a founder led based business with every single element of every data center of everything we do goes back to first principles, but where the people want to acknowledge it or not.

Speaker Change: This is an entirely new asset class pad as computing legacy data centers are fundamentally different in terms of how they have developed how they've been engineered how they've been operated and we've had the benefit of seven years from the ground up optimizing everything no. One believed that we could build air cooled data centers the $650000.

Dan Roberts: Like no one believed that we could build air-cooled data centers for $650,000 a megawatt that run next generation AI workloads, H100s, H200s. We've been doing it for 15 months and it's the same thing with all this. It's just a bottom-up analysis. How much does the raw materials cost? What's the most efficient way to assemble everything? Not signing layers upon layers of contractors, designers, builders, etc. It's all controlled in-house and I think you're right. It's going to be a competitive advantage, the ability to deliver costs at this level. Thank you.

Speaker Change: The megawatt that run next generation AI workloads <unk> hundred <unk> two hundreds we've been doing it for few months and it's the same thing with all this it's just a bottom up analysis, how much does the raw materials cost, what's the most efficient way to assemble everything not signing layers upon layers of contract as designers.

Speaker Change: Builders et cetera, it's all controlled in house, and I think youre right like it's going to be a competitive advantage the ability to deliver cost at this level.

Speaker Change: Thank you.

Dan Roberts: I would now like to turn the call back over to Dan Roberts for any closing remarks. Thank you. Thanks again to everyone for the questions and also for joining us today. As you've heard throughout this call, IRON continues to deliver consecutive quarters of profitability, substantial free cash flow and really strong execution across both Bitcoin and AI. So we've built a business that performs through the cycle. You can see those scenarios all the way down to a $33,000 Bitcoin price, all the way up to wherever your minds would like to imagine. So not just when Bitcoin is running, but through disciplined operations, efficient infrastructure and capital allocation that stacks up in any market.

Speaker Change: Thank you I would now like to turn the call back over to Dan Roberts for any closing remarks.

Speaker Change: Thank you thanks.

Speaker Change: Thanks, again to everyone for the questions and also for joining us today as you've heard throughout this call.

Speaker Change: And he continues to deliver.

Speaker Change: <unk> quarters of profitability.

Speaker Change: Substantial free cash flow and really strong execution across both be coined and I are so we've built a business that performs through the cycle you can see those scenarios all the way out way down to a $33000 bitcoin price all the way up to wherever your months wed like to imagine so not just <unk>.

Speaker Change: When <unk> is running.

Speaker Change: Through disciplined operations efficient infrastructure and capital allocation that stacks up in any market. So we lead on fundamentals and that's what sets us.

Dan Roberts: So we lead on fundamentals and that's what sets us apart. It's what allows us to fund growth from cash flows that we're generating, while still scaling into one of simply the most exciting infrastructure opportunities of our time. So we're incredibly excited about what lies ahead in AI and really confident in our ability to capture that upside, but capture it in the right way. So thanks again. We look forward to updating you all next quarter. Thank you.

Speaker Change: Pass it to what allows us to fund growth.

Speaker Change: From cash flows that we're generating while still scaling into one is simply the most exciting infrastructure opportunities of our time. So we are incredibly excited about what lies ahead in IR.

Speaker Change: And really confident in our ability to capture that upside thoughts capture it in the right way. So thanks again.

Speaker Change: We look forward to updating you all next quarter. Thank you.

Operator: This concludes the conference. Thank you for your participation. You may now disconnect.

Speaker Change: Thank you. This concludes the conference. Thank you for your participation you may now disconnect.

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