Q4 2025 Applied Digital Corp Earnings Call
John: Good afternoon and welcome to the Applied Digital's fiscal fourth quarter 2025 conference call. My name is John and I will be your operator today. Before this call, Applied Digital issued its financial results for the fiscal fourth quarter ended May 31st, 2025. In a press release, a copy of which has been furnished in a report on a form 8K filed with the SEC and will be available in the Investor Relations section of the company's website. Joining us on today's call are Applied Digital's Chairman and CEO, Wes Cummins, and CFO, Sidal Mohmand. Following the remarks, we'll open the call for questions. Before we begin, Matt Glover from Gateway Group will make a brief introductory statement. Mr. Glover, you may begin.
Good afternoon and welcome to the applied. Digital's fiscal, fourth quarter 2025 conference call. My name is John and I will be your operator today.
Before this call apply digital issued its Financial results for the fiscal fourth quarter. Ended, May 31st 2025
In a press release, a copy of which has been furnished in a report on a Form 8-K filed with the SEC.
And will be available in the investor relations section of the company's website.
Joining us on today's call are Applied Digital's Chairman and CEO Wesley Cummins and CFO Cidal Moment.
Following the remarks, we will open the call for questions.
Before we begin, Matt blubber from Gateway group will make a brief introductory statement.
Matt Glover: Thank you, Operator. Hello everyone and welcome to Applied Digital's fiscal fourth quarter 2025 conference call. Before Manager begins formal remarks, we'd like to remind everyone that some statements we're making today may be considered forward-looking statements under securities laws and involve a number of risks and uncertainties. As a result, we caution you that there are a number of factors, many of which are beyond our control, that could cause actual results and events to differ materially from those described in the forward-looking statements. For more detailed risks, uncertainties, and assumptions related to our forward-looking statements, please see the disclosures and earnings release and public filings made with the Securities and Exchange Commission, or SCC. We disclaim any obligation or undertaking to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made, except as required by law.
Mr. Glover, you may begin.
Thank you, operator. Hello everyone. And welcome to apply. Digital's fiscal, fourth quarter 2025 conference call.
Before manager Begins for more remarks, we'd like to remind everyone that some statements were making. Today may be considered for leaking statements under security laws and involve a number of risks and uncertainties.
As a result, we caution you that there are a number of factors, many of which are beyond our control, that could cause actual results and events to differ materially from those described in the forward-looking statements.
For more detailed risks, uncertainties, and assumptions related to our forward-looking statements, please see the disclosures and earnings release.
To public filings made with the Securities and Exchange Commission or sec.
Matt Glover: We also discuss non-GAAP financial measures and encourage you to read our disclosures and the reconciliation tables to the applicable GAAP measures and earnings release carefully as you consider these metrics. We refer you to our filings with the SEC for detailed disclosures and descriptions of our business, as well as uncertainties and other variable circumstances, including but not limited to risks and uncertainties identified in the risk factors section of our annual report on Form 10-K and our quarterly reports on Form 10-Q. You may access Applied Digital's SEC filings for free by visiting the SEC website at www.sec.gov. I would like to remind everyone that this call is being recorded and will be available for replay via link available in the Investor Relations section of Applied Digital's website. Now I'd like to turn the call over to Applied Digital's Chairman and CEO, Wes Cummins. Wes.
We disclaim any obligation or undertaking to update for looking statements to reflect circumstances or events that occur. After the date, before looking statements are made except as required by law.
We also discussed non-gaap Financial measures and encourage you to read our disclosures and the reconciliation tables to the applicable Gap measures and earnings release carefully as you consider these metrics.
We refer you to our filings with the SEC for detailed disclosures and descriptions of our business, as well as uncertainties and other variable circumstances.
Including but not limited to risks and uncertainties identified in the risk factors section of our end to report on form 10K and our quarterly reports on form 10q.
you may access applied, digital's SEC, filings for free by visiting the SEC website, at www.sec.gov
I would like to remind everyone that this call is being recorded and will be available for replay via a link in the Investor Relations section of Applied Digital's website.
Now, I would like to turn the call over to apply digital chairman and CEO West Cummins West.
Wes Cummins: Thanks, Matt. And good afternoon, everyone. Thank you for joining our fourth quarter 2025 conference call. I want to start by expressing gratitude to our employees for their continued hard work and service in supporting our mission of providing purpose-built infrastructure to the rapidly growing high-performance compute industry. Before turning the call over to our CFO, Sidal Mohmand, for a detailed review of our financial results, I'd like to share some recent developments across our business. Let me start with an update on our HPC data center hosting segment. During the quarter, we signed a transformative 15-year lease agreement with CoreWeave, the AI hyperscaler, to deliver 250 megawatts of critical IT load at our Ellendale, North Dakota campus, now named Tellaris Forge 1.
Thanks, Matt and good afternoon everyone. Thank you for joining our fourth quarter 2025 conference call.
I want to start by expressing gratitude to our employees for their continued hard work and service in supporting our mission of providing purpose-built infrastructure to the rapidly growing high-performance compute industry. Before turning the call over to our CFO, Mohammad Mohmand, for a detailed review of our financial results, I'd like to share some recent developments across our business.
Let me start with an update on our HPC data center hosting segments.
Wes Cummins: These agreements are expected to generate approximately 7 billion in contracted revenue over the lease terms and to position Applied Digital as a leader in AI and HPC infrastructure. Last week, CoreWeave exercised their option for an additional 150 megawatts in a third building at Tellaris Forge 1, underscoring the campus's potential as a scalable hub for next-generation AI workloads. These long-term leases mark a defining moment for Tellaris Forge 1, one of North America's most ambitious data center projects. Purpose-built for artificial intelligence and high-performance computing, the campus combines massive power capacity with rapid deployment and is designed to scale up to 1 gigawatt. With the first 100 megawatt facility scheduled to be operational in Q4 of 2025, the second 150 megawatt facility coming online in mid-2026, and the third 150 megawatt facility planned for 2027.
During the quarter, we signed a transformative 15-year lease agreement with CoreWeave, the AI hyperscaler, to deliver 250 megawatts of critical IT load at our Ellendale, North Dakota campus, now named Polaris Forge 1.
These agreements are expected to generate approximately $7 billion in contracted revenue over the lease terms.
And to position apply digital as a leader in Ai and HPC infrastructure.
Scoring the campus's potential as a scalable hub for Next Generation AI workloads.
these long-term leases Market defining moment for Polaris Forge, 1 1 of North America's most ambitious data center projects
Purpose-built for artificial intelligence and high-performance computing, the campus combines massive power capacity with rapid deployment and is designed to scale up to 1 gigawatt.
Wes Cummins: Tellaris Forge 1 serves as a launchpad for the future of AI infrastructure, and we believe it validates our vision to deliver reliable, power-dense solutions and become a category leader in designing and building AI factories. Building on the momentum from these leases and the surging demand for AI infrastructure, we're actively marketing our multi-gigawatt pipeline to a diverse group of customers. We believe one of our key strengths over the past two years has been refining our process by reducing the number of SKUs by approximately 50% and consolidating our suppliers. We believe our proprietary building design offers greater flexibility, and we've developed a repeatable process with minimal customization supported by a strong supply chain. As a result, we believe we've reduced our projected build times from 24 months to 12 to 14 months, allowing us to deliver on large-scale commitments faster and more efficiently than before.
With the first 100 megawatt facility scheduled to be operational in Q4 of 2025. The second and 150 megawatt facility coming online in mid 2026 and the third 150 megawatt facility planned for 2027 Polaris Forge, 1 serves as a launch pad for the future of AI infrastructure and we believe validates our vision to deliver, reliable power, dense, Solutions, and become a category leader in designing and building AI factories.
Building on the momentum from these leases and the surging demand for AI infrastructure. We're actively marketing, our multi gigawatt pipeline, to a diverse group of customers.
We Believe 1 of our key strengths over the past 2 years, has been refining our process by reducing the number of skus by approximately 50% and consolidating our suppliers.
We believe our proprietary building design offers greater flexibility and we've developed a repeatable process with minimal customization supported by a strong supply chain.
Wes Cummins: At the same time, we're highlighting the many advantages of building in the Dakotas, along with our unique design that features an innovative closed-loop, direct-to-chip liquid cooling system. This design seeks to achieve a projected PUE of 1.18 and near zero water consumption, intended to ensure exceptional efficiency and sustainability. We like this location for its abundant, low-cost energy, some of which is generated from stranded power, with over 200 days of free natural cooling. We have calculated that a 100-megawatt data center customer could save up to 2.7 billion over a 30-year period as compared to the current industry data centers in other regions. Our strategic decisions in location and design are intended to position us to grow dramatically within the Dakotas and across other regions within our pipeline. Besides CoreWeave, we have completed the diligence and onboarding process with two other investment-grade North American hyperscalers.
As a result, we believe we've reduced our projected build times from 24 months to 12 to 14 months, allowing us to deliver on large scale, commitments faster and more efficiently than before.
at the same time, we're highlighting the many advantages of building in The Dakotas along, with our unique design that features an Innovative closed loop, direct the chip liquid cooling system,
This design seeks to achieve a projected PE of 1.18 and near zero, water consumption, intended to ensure, exceptional, efficiency and sustainability.
We like this location for its abundant low-cost energy, some of which is generated from stranded power, with over 200 days of free, natural cooling.
We have calculated that 100 megawatt data. Center customer could save up to 2.7 billion over a 30-year period. As compared to the current industry data centers and other regions.
Our strategic decisions in location and design are intended to position us to grow dramatically within the Dakotas and across other regions within our pipeline.
Wes Cummins: This is an accomplishment that cannot be overstated. We have learned over the past two years that the onboarding, internal approval, and contracting process with hyperscalers is longer and more complex than originally anticipated. We believe that the market-leading experience gained from this process in signing our first leases will benefit us as we continue to engage potential tenants and execute on our pipeline. We also expect to benefit from this competitive advantage as new entrants to the market confront the time, money, and effort it takes to overcome these industry-syncratic barriers to entry for other players. We also, for us, we feel we are now in a position to do business with these companies in the future with a much shorter negotiating and contracting completion process.
Besides core. We've we have completed the diligence and onboarding process with 2. Other investment grade in North American hyperscalers.
This is an accomplishment that cannot be overstated. We have learned over the past 2 years that the onboarding internal approval and Contracting process with hyperscalers is longer and more complex than originally anticipated.
We believe that the market leading experience gained from this process and signing. Our first leases will benefit us as we continue to engage potential tenants and execute on our pipeline.
We also expect the benefit from this competitive, Advantage is new entrance to the market. Confront the time money and effort. It takes to overcome these industries syncrasy to entry for other players.
Wes Cummins: In fact, we are currently in various stages of negotiation with several investment-grade hyperscalers for large-capacity campuses other than our Tellaris Forge 1 campus, with one of those negotiations being in an advanced stage. Given our past experience, we know these large and complex lease agreements require multiple levels of approval, making it difficult to determine when and if any of them will be finalized. Now turning to our data center hosting business, we currently operate 286 megawatts of fully contracted data center hosting capacity for our cryptocurrency customers across two locations in North Dakota. Bitcoin prices remain strong, which is positive for our customers, and we remain optimistic about the business and its future prospects. Next, let's discuss our cloud services business, which provides high-performance computing infrastructure for AI applications.
We also, for us, we feel we are now in a position to do business with these companies in the future with a much shorter negotiating and Contracting completion process. In fact, we are currently in various stages of negotiation with several investment grade hyperscalers for large capacity campuses other than our Polaris Forge. 1 Campus with 1 of those negotiations being in an advanced stage.
Given our past experience. We know these large and complex, lease agreements, require multiple levels of of approval, making it difficult to determine when. And if any of them will be finalized,
Now turning to our data center hosting business. We currently operate 286 megawatts of fully contracted data center hosting capacity for our cryptocurrency customers across 2 locations in North Dakota.
Bitcoin prices, remain strong, which is positive for our customers. And we we remain optimistic about the business and its future prospects.
Wes Cummins: As announced on our prior quarterly call, our board of directors determined that we would be reviewing strategic alternatives for this business. This process is ongoing, and we will provide an update as soon as we have more details to share with shareholders. With that, I will now turn the call over to our CFO, Sidal Mohmand, to walk through our financials. Sidal.
Next. Let's discuss our cloud services business which provides high performance Computing infrastructure for AI applications.
As announced on our prior quarterly, call our board of directors determined that we would be reviewing strategic alternatives for this business. This process is ongoing and we will provide an update as soon as we have more details to share with shareholders.
With that, I will now turn the call over to our CFO set, all Moman to walk through our financials. Is that all
Sidal Mohmand: Thanks, Wes, and good afternoon, everyone. Now that we've signed the leases for Tellaris Forge 1, we're actively working with our financing partners to finalize the project financing for these data centers, which we expect to occur over the next 4 to 10 weeks. Since the end of the quarter, we've raised approximately $270 million between our ATM and Series G preferred stock. Combined with the significant equity we already have in the campus, we believe this puts us in a very strong position as we seek to wrap up the new financing package. Now let's turn to the quarter. Please note that unless otherwise specified, the figures we are about to discuss reflect continuing operations only and exclude the cloud services business. Revenues for the fiscal fourth quarter of 2025 were $38 million, up 41% year-over-year over the prior comparable period.
Thanks, Wes, and good afternoon, everyone. Now that we've signed the leases for Polaris Forge 1, we're actively working with our financing partners to finalize the project financing for these data centers, which we expect to occur over the next 4 to 10 weeks.
Since the end of the quarter, we've raised approximately $270 million between our ATM and Series G preferred stock combined, with the significant equity we already have in the campus. We believe this puts us in a very strong position as we seek to wrap up the new financing package.
Return to the quarter. Please note that unless otherwise specified, the figures we are about to discuss reflect continuing operations only and exclude the cloud services business.
Sidal Mohmand: This increase was driven predominantly by an increase of capacity online in our data center hosting business. Cost of revenues increased $7.5 million to $30.2 million from the prior comparable period. This increase was also driven by an increase of capacity online in our data center hosting businesses. SG&A expense increased $15 million to $28.1 million. The increase was driven by the company's overall business growth, which included an increase of $9.4 million in stock-based compensation due to accelerated vesting of certain employee stock awards and expenses related to the PSUs. $3.4 million of personnel expense also increased, largely driven by increases in headcount to support the business, and $2.3 million of other expenses, mainly software expenses and insurance premiums. This quarter, our depreciation amortization expense increased to $4.1 million compared to $3.6 million in the same period in 2024. Interest expense decreased $9.3 million to $4.5 million.
Revenues for the fiscal fourth quarter of 2025 or 38 million up, 41% year-over-year over the prior comparable period. This increase was driven predominantly by an increase of capacity online and our data center hosting business.
Costs and revenues increase 7.5 million to 30.2 million from the prior comparable period. This increased was also driven by an increase of capacity on line and our data center hosting businesses.
Sg&a expense increased, 50 million 15 million to 28.1 million. The increase was driven by the company's overall business growth, which included an increase of 9.4 million. In stock-based compensation due to an accelerated vesting of certain Employee Stock Awards and expenses related to the psus
3.4 million of personal expense. Also increase largely driven by increases in headcount to support the business and 2.3 million of other expenses mainly uh, software expenses and insurance premiums.
This quarter, our depreciation amortization expense increased to 4.1 million compared to 3.6 million in the same period in 2024.
Sidal Mohmand: Net loss attributable to common stockholders was $26.6 million, or $0.12 per basic and diluted share. The adjusted net loss attributable to common stockholders was $7.6 million, or $0.03 per diluted share. Our adjusted EBITDA was $1 million for the quarter, and we provided a reconciliation for these metrics in the press release released earlier today. Moving to our balance sheet, we ended the fiscal fourth quarter with $120.9 million of cash, cash equivalents, and restricted cash, along with $688.2 million in debt. As noted earlier, this does not include the additional $268.9 million in proceeds from our ATM and Series G preferred stock offering that occurred post-quarter. Turning to guidance, we historically have not provided specific forward-looking guidance. However, given some of the near-term dynamics related to the CoreWeave leases, we will provide some directional guidance for the next quarter.
Interest expense decreased 9.3 million to 4.5 million.
Net loss attributable.
Holders was 26.6 million or 12 cents per basic and diluted share.
The adjusted net loss attributable to Common stockholders was 7.6 million or 3 cents per diluted share.
Our adjusted ibido was 1 million for the quarter for, for the quarter and for the for the quarter and we provided a Reconciliation for these metrics in the press release. Uh uh released earlier today.
moving to our balance sheet, we ended the fiscal Force quarter with 120.9 million of cash, cash equivalents and restricted cash along with 688.2 million in debt
As noted earlier, this does not include the additional $268.9 million and proceeds from our ATM and Series G preferred stock offering that occurred post-quarter.
Sidal Mohmand: We expect revenue to increase significantly sequentially, beginning the quarter ending for August 2025, due to the technical fit-out of our first Tellaris Forge 1 building. Note, our customer pays the cost of this fit-out with a small margin to the company. This fit-out revenue will largely be recognized in both the current fiscal quarter and as well as the quarter ending November 30th, 2025. Now, this is before the actual lease revenue for the facility begins to be recognized. With that, I'll turn over the call to Wes for closing remarks.
Returning to guidance. We historically have not provided specific forward-looking guidance however, given some of the near-term Dynamics related to the core we releases, we will provide some directional guidance for the next uh, for the next quarter.
We expect Revenue to increase significantly sequentially beginning in the quarter, ending up for August 2025 due to the technical fit out of our first Polaris Forge 1 building.
Note, our customer pays the cost of this fit out with a small margin to the company.
this fit out Revenue, will largely be recognized in in both the current fiscal quarter and as well as the quarter ending, November 30th 2025
Now, this is before the actual lease revenue for the facility begins to be recognized.
With that, I'll turn over the call to West for closing remarks.
Wes Cummins: Over the past two years, we've sought to build strong relationships with nearly all major hyperscalers and demonstrated our advanced building capabilities by passing what we believe is some of the most rigorous technical due diligence and processes imposed by them in the industry. As a result, we've established relationships with several hyperscalers, which should position us for future projects. With the CoreWeave lease, we believe we're now roughly halfway toward our internal goal of generating $1 billion in annual net operating income over the next three to five years. We feel confident this is achievable thanks to what we believe to be our competitive advantages for our multi-gigawatt pipeline, proven design and construction expertise, and strong relationships with hyperscalers who appear to be more active than ever in pursuing land, power, and data center capacity.
Over the past 2 years. We've sought to build strong relationships with nearly all major hyperscalers and demonstrated our Advanced building capabilities by passing. What we believe is some of the most rigorous technical due diligence and processes imposed by them in the industry. As a result. We've established relationships with several hyperscalers which should position us for future projects with the core weave lease. We believe we're now roughly halfway toward our internal goal of generating 1 billion in annual net, operating income over the next 5 years, over the next 3 to 5 years,
Wes Cummins: Overall, we see this as just the beginning for Applied Digital as we help drive the future of AI and high-performance computing infrastructure, and we remain very optimistic about the road ahead. We welcome your questions at this time. Operator?
We feel confident, this is achievable, thanks to what we believe to be our competitive advantages for our multi gigawatt pipeline, proven design and construction, expertise and strong relationships with hyperscalers, who appear to be more active than ever, in pursuing, land, power and Data Center capacity.
Overall, we see this as just the beginning for Applied Digital, as we help drive the future of AI and high-performance computing infrastructure. We remain very optimistic about the road ahead.
Operator: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by the number one on your touchstone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by the number two. If you're using a speakerphone, please lift the handset before pressing any keys. Your first question comes from the line of Nick Giles from B Reilly Securities. Your line is now open.
We welcome your questions at this time, operator.
Thank you, ladies and gentlemen, we will now begin the question and answer session. Should you have a question please? Press star. Followed by the number 1 on your touchtone phone.
You will hear a prompt that your hand has been raised.
Should you wish to the client from the polling process? Please press star followed by the number to
If you're using a speaker-phone, please lift the handset, before pressing any keys?
Nick Giles: Thanks, Operator. Good afternoon, everyone. My first question was just how we should think about development cadence over the course of 2026, and just wondering if there's a window where you could be breaking ground on a second campus, or would this be more of a 2027 groundbreaking on a site other than Pigeon Porch?
Your first question comes from the line of Nick guides from B Riley Securities. Your line is now open.
Thanks operator. Uh, good afternoon everyone. Uh my my first question was just how we should think about development Cadence over the course of 2026 and just wondering if there's a window where you could be breaking ground on a SE second campus, or would this be more of a 2027 groundbreaking um on a site other than pitching porch?
Wes Cummins: Hey, thanks, Nick. We do expect to break ground on work that's already started for that on one additional campus and potentially two before the end of this year.
This year.
Nick Giles: Got it. Okay, thanks, Wes. Maybe just my second question would be, you know, I think you provided a range on the financing for four to ten weeks, so I was just curious if you could add any additional color. What would be the largest gating items at this point, or you know, what could ultimately take you to either end of that range?
Got it. Okay. Thanks Wes. Um maybe just my second question would be you know I think you provided a range on the financing for 4 to 10 weeks. So it was just curious. If you could add any additional color, what would be the largest skating items at this point or, you know, what could ultimately take you to uh, either end of that range?
Wes Cummins: I'll say something first, Nick, and then turn it to Sidal. But I think the biggest gating item in my mind right now in the process is just how things generally slow down in the last part of August before they turn back on in September in the industry in general. And then I'll turn it over to Sidal for any comments he would like to make.
Nick Giles: I think that's fair, Wes. I would also add, you know, you're also relying on professional service providers. Think about consultants who will provide construction reports as well as, you know, just lawyers giving through documents and turning documents. So that can always add some lag, but we have a good team as well as a great identified lead banking partner who's both incentivized to get this done on an expedited timeframe, given there's a lot to do. People are excited in the space in general. Great. Well, guys, thanks for the update and continue best of luck.
I'll I'll I'll say something first, Nick, and then turn it to set all, but the I think the the biggest gating item in my mind right now in the process is just um how things generally slow down in the, you know, the last part of August before they turn back on in September, in the industry in general. Um and then I'll turn it over to cite all for any comments. He would like to make
I I think that's fair was I would also add, you know, you also rely on professional service providers to think about um Consultants who will provide construction reports as well as you know, there's lawyers getting through documents and turning documents so that can always add some lag. But uh, we have a good team as well as um a great uh, identified lead banking partner. Um, who's both incentivized to uh get this done on a expedited time frame given um there's a there's a lot to do. People are excited in the space in general.
Great. Well uh guys, thanks for the update and uh continue best of luck.
Wes Cummins: Thanks, Nick.
Operator: Your next question comes from the line of Rob Brown from Lake Street Capital Market. Your line is now open.
Thanks. Thanks.
Rob Brown: Good afternoon. Congratulations on all the progress.
Your next question comes from the line of Rob Brown from Lake Street Capital Market. Your line is now open.
Good afternoon. Congratulations to all the progress.
Wes Cummins: Thanks, Rob.
Rob Brown: You talked about one customer being in advanced negotiations and part of your large pipeline, but could you give us a sense of, is this the customer that you've gotten through a lot of the onboarding work and it's really down to the contract negotiation at this point, or just give us a sense of where that's at?
Wes Cummins: Yeah, so there's, we don't want to give a lot of detail on it, Rob, to identify the customer, but it is an investment-grade North American hyperscaler that we're in advanced negotiations with. So that's a pretty small group. And, but we're having ongoing discussions with, you know, four, five, six of the hyperscalers for the campuses that we're working on, both in the Dakotas and outside of the Dakotas. But I would say that things have accelerated from that perspective, just in the market in general, in the past month.
You talked about a, uh, 1 customer being Advanced negotiations and and, you know, part of your large pipeline. But, but could you give us a sense of, uh, is this the customer that you've gotten through through a lot of the onboarding work and, and it's really down to the the contract, uh, negotiation at this point. It just gives a sense of where that's at
Yes, so there's I we don't want to give a lot of detail on it, uh, Rob from to identify the customer. But it is an investment grade in North American hyperscaler that we're, we're, we're in advanced negotiations with. Um, so that's a pretty small group and, uh, but but we're having ongoing discussions with, uh, you know, 4 5, 6 of the hyperscalers for the campuses that we're working on, um, both in in the dotas and outside of the dotas. But I would say that things have accelerated from that perspective, just in the market, in general, uh, in in the past month.
Rob Brown: Yep. Okay, great. And then on the Ellendale facility, I think you're doing fit-out sort of starting this coming quarter. Just what's left to complete on that building, or is it really just getting the fit-out and the customer started to load into the facility?
Wes Cummins: Yeah, it's mostly fit-out, which is underway, and then, you know, the customer will bring gear on site and cabling and, you know, racking and cabling, and that's really what's left. And the expectation is, you know, in calendar Q4 of this year that that'll start to ramp up in kind of October through November.
Yep. Okay, great. And then, and then, on the on the facility, I think, um, you're doing fit out sort of starting, uh, this this coming quarter, uh, just just what, what's left to complete on that building or is it really just getting the fit out in the customer started to to load in the facility?
Yeah, it's mostly fit out uh, which is is is underway. And then, you know that the customer will bring gear on site and cabling and, uh, you know, racking and cabling and that's really what's left. And, and the expectation is, you know, in calendar Q4 of this year that that that'll start to ramp up and and kind of October through November.
Rob Brown: Okay, great. Thank you, Open.
Wes Cummins: Thanks, Rob.
Okay, great. Thank you.
Thanks Rob.
Operator: Your next question comes from the line of Mike Grundl from Northland Securities. Your line is now open.
Mike Grondahl: Hey, Wes and Sidal. Hey, first, congratulations on the 150 megawatt option signed by CoreWeave. And related to the first 250 from CoreWeave, the 100 megawatt building and the 150 megawatt building, how are terms looking on that project financing? Are those kind of coming in with how you expected? Any color you could give us there?
Your next question comes from the line of Mike. Randall from Northland Securities. Your line is now open.
Uh a west side El. Hey first, congratulations on the uh 150 megawatt option signed by core weave.
And, um, related to the first 250 from CoreWeave, um, the 100 megawatt building and the 150 megawatt building.
our terms looking on that project financing are, are those kind of coming in with, with how you expected any color you could give us their
Wes Cummins: Yeah, they're largely coming in as expected. I'll let Sidal give any details that he wants to give on that, but it's largely for me as expected.
Yeah, the largely coming in as expected. Um, a website I'll give
Nick Giles: Yeah, correct. And I think this is, you know, call it known from the industry for similar financings for this type of tenant. You know, think about it if you're investment grade, you know, you're somewhere in the high 2s. You know, think about it low silver plus low 4s is generally where the cost is coming for this type of tenant, as well as loan-to-cost or LTCs in the 70% range. That is what we're seeing in the market, and it's becoming somewhat universal.
Um any any details that he wants to give on that but it's largely for me as expected.
Mike Grondahl: Got it. And then, you know, thinking of the 100 megawatts, then the 150, and then the second 150, do you have rough go-live dates for each of those buildings?
Yeah, correct. And I think this is, this is, you know, call it known within the industry for uh, some of our financing for for this type of uh, tenant. You know, think about it. If, if you're Investment Group, you know, you're somewhere in the high high twos, you know, think about it. Low silver plus Low 4, is, is generally where, uh, the cost is coming for for this type of a tenant, as well as a loan to cost or ltc's, uh, in the 70% range. That that is what we're seeing in the market, uh, and it's it's becoming, uh, somewhat Universal.
Got it.
Uh, the 100 megawatts. Then the 150. And then the second 150. Do you have rough? Go live dates for each of those buildings?
Wes Cummins: Yeah, so the first 100, as we mentioned, is Q4 of this year, and then mid-26 for the second building, the 150, and then first half of 27 for the following 150.
Mike Grondahl: Got it.
Wes Cummins: And Rob, or sorry, Mike, these are in calendar quarters.
Yeah. The uh so the the first 100 as we mentioned is Q4 of this year and then mid 26 for the the second building the 150 and then first, half of 27 for the following 150.
Mike Grondahl: Got it. So that continues to progress well. Okay. Hey, thanks, guys, and congratulations.
And Robert, sorry. My these are in calendar quarters.
Wes Cummins: Thanks, Mike.
Got it so that but that continues to progress. Well. Okay. Hey, thanks guys and congratulations.
Thanks Mike.
Operator: Your next question comes from the line of Darren Aftahi from Roth. Your line is now open.
Darren Aftahi: Hey, guys, thanks for taking my questions and congrats as well. A question on building two. I know you said you guys have already broken ground, and I know you've invested a lot of money for the campus in general. The timeframe looks like it's 12 months from now, plus or minus. I guess, is that an aggressive timeframe? And if there's any slippage, are you penalized in terms of a credit against the lease, or just kind of help me if you're a month or two late on that with CoreWeave, how that kind of works out? And then my second question, there's a lot of commentary in the release and your white paper that you wrote about the Dakotas.
Your next question comes from the line of Darren Aftahi from D.A. Davidson. Your line is now open.
Hey guys, thanks for taking my questions and congrats as well. Um,
A question on Building 2. I know you said you have already broken ground, and I know you've invested a lot of money in the campus. In general, the time frame looks like it's 12 months from now, plus or minus, I guess.
Is that an aggressive time frame? And if there's any slippage.
Darren Aftahi: I'm just kind of curious, beyond South Dakota, are you more partial to looking at places where PUEs are super attractive, maybe then, like, southern part of the United States? Any color on that would be helpful. Thanks.
Are you penalized in terms of a credit against the lease or just kind of help me if you're a month or 2 late on that with core weave? How that kind of works out? And then my second question, there's a lot of commentary in the release and your white paper that you wrote about um, The Dakotas. I'm just kind of curious Beyond South Dakota. Um are you more partial to looking at places where peas are super attractive, maybe then like
Wes Cummins: Sure, Darren. So on building two, we got the most recent pictures from the campus today that the building's actually being erected now. So there's been a significant amount of work done already from the foundation and dirt work. So the building's actually going up, and it's going up quickly. And we feel great about that timeline, as I mentioned in the script. You know, we've worked really hard, and the teams worked really hard over the past year streamlining what we do. And so we significantly reduced the number of components, the different suppliers, so that we have a very repeatable streamlined process that's designed to be deployed in about half of the time that we did building one. It was a lot of learning for us in building one and a design that's much more flexible as well.
Southern part of the United States. Any color on that would be helpful. Thanks.
Sure Darren. So on on building 2 uh but we got the most recent pictures uh from the campus today. The the buildings actually being erected now. So there's been a, a significant amount of work done already from foundation and and dirt work. So the building is actually going up and it's going up uh quickly and feel, you know, great about that timeline. As I mentioned in the script, you know we we've worked really hard and the teams worked really hard over the the past year.
Wes Cummins: So a higher liquid air mix so that different tenants require different liquid air mixes. And then also designed to lower costs as well. So feel good about where that is, especially we're in the middle of the summer there, and the building's already going up. So we'll be enclosed for construction and fit-out in the winter. But there are just standard lease, there are late delivery penalties for us. And then to your point on other campuses, it's not exclusively the Dakotas. We feel really good in North Dakota. You know, we have the site in South Dakota we've been working on, but we have multiple campuses, large campuses in North Dakota. We have workforce there. We have a GC there that we have worked really well with. And so we're really comfortable with all of the pieces of the puzzle of North Dakota.
Streamlining, what we do. And so we significantly reduce the, the number of, you know, components the different suppliers. Uh, so that we have a very repeatable streamlined process. That's designed to do to, to be deployed in about half of the time that we did building 1. There's a lot of learning, uh, for us in building 1 and some in a, in a design that's much more flexible as well. So, a higher liquid air mix, um, so that, you know, it's different tenants, require different liquid air mixes, uh, but and then and then also designed to lower costs as well. So, feel good about where that is, especially, you know, we're in the middle of the summer there and the buildings are already going up. So, we'll be enclosed for, um, for construction and fit out in the winter and there, but there are just standard lease there are late delivery penalties, uh, for us. And then to the, the, your point on other campuses, it's not exclusively the Dakota's. We we feel really good in
Wes Cummins: And then obviously the fiber with the new line coming through as well, really enhancing the fiber connectivity in the state. But we have other sites, mostly in Myso, but that go really all the way to the southern part of the country as well. But we're primarily focused in North Dakota right now.
Nick Giles: Got it. Thank you.
In North Dakota. Um, you know we have the site in South Dakota we've been working on, but we have multiple campuses um large campuses in North Dakota, we have Workforce there, we have GC there. That we have worked really well with and so we're really comfortable with all all of the pieces of the puzzle of North Dakota. And then obviously the the fiber um, with the new line coming through as well. Really enhancing the fiber connectivity in the state, but we have other sites uh mostly in MSO but the the the go, you know, really all the way to the southern part of of the country as well. Um, but we're, we're primarily focused in in North Dakota right now.
Got it. Thank you.
Operator: As a reminder, if you have a question, please press star one. Your next question comes from the line of George Sutton from Craighallam. Your line is now open.
I had a reminder, if you have a question, please press star 1. Your next question comes from the line of George Sutton from Craig Hallam. Your line is not open.
George Sutton: Thank you. My congrats as well. So Wes, you mentioned that the hyperscalers are more active than ever. And I'm curious because some of them are seeming to want to own their own infrastructure. Are we talking about scenarios where you would own the campus like Ellendale, or are we talking in some cases about powered shelves?
Wes Cummins: No, and thanks for the congrats. But right now, we're very focused on full stack. So we want to own the full building. We want to do operations, and that's really all of the negotiations and the interest that we're fielding. There is a preference, and there always has been with hyperscalers to do self-builds or powered shell. And then when conditions are tight, they'll typically do colo agreements like the ones that we have and the ones that we're seeking to have in the future. But right now, George, we're really sticking with the full stack colo versus powered shell. I don't, you know, it might be interesting for us if we blended a campus with some full stack and some powered shell, but right now, I don't have a lot of interest in just a powered shell.
Thank you, Mike congrats as well. Um, so Wes you mentioned that the hyperscalers are more active than ever. And I'm curious because some of them are seeming to want to own their own infrastructure. Are we talking about scenarios where you would own the campus, uh, like Ellendale or are we talking in some cases about powered shells.
Wes Cummins: I don't think it's necessarily a great business model as a public company, maybe more so as a private company on the powered shell side.
Solo, uh, versus powered shell. I don't, I, you know, it it might be interesting for us if we Blended a campus, uh, with some full stack and some powered shell. But right now, I don't have a lot of interest in just a powered shell. I, I don't think, um, it's necessarily a great business model as as a, as a public company, maybe more. So as a private company on the, on the powered shell side,
George Sutton: Great. And then relative to what you're defining as the Dakota advantage, I'm just curious, have you made any progress in South Dakota relative to the sales tax? I've sensed that's a very key gating item to deals.
Wes Cummins: Yeah, we have not, and that's likely something in the next legislative session next year. So right now, we're focused on another large campus in North Dakota. That's where we're in the advanced negotiations, and then a campus in the southern part of the US in Myso as well.
Great and and then relative to uh what you're defining is the decoded Advantage. I'm just curious. Have you made any progress in South Dakota relative to the sales tax? I've since that's a, a very key gating item to deals.
Yeah, we have not, and that's likely something in any next legislative session next year. So right now, we're focused on.
Um, uh, another large campus in North Dakota. Uh, that's where we're in advanced negotiations. And then, uh, a campus in the southern part of the U.S. and MSO as well.
George Sutton: Perfect. Thank you very much.
Wes Cummins: Thanks, George.
Perfect, thank you very much.
Thanks George.
Operator: There are no further questions at this time. I will now turn the call over to Wes Cummins. Please continue.
There are no further questions at this time. I will now turn the call over to West comments. Please continue.
Wes Cummins: Great. Thanks, everyone, for joining, and I look forward to speaking to you in October.
Great. Thanks everyone for joining and I look forward to speaking to you, in October.
Operator: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.
Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.