Q3 2025 TeraWulf Inc Earnings Call

Formal presentation. Please note that this conference is being recorded I will now turn the conference over to John Larkin Senior Vice President Director of Investor Relations. Thank you. Mr. Lurking you may begin good afternoon, and welcome to Terra Wolf 2025 third quarter earnings call. Joining me today are chairman and CEO, Paul Prager and CFO Patrick <unk>.

Laurie.

Before we get started please note that our remarks today may include forward looking statements. These statements are subject to risks and uncertainties and actual results may differ materially.

During this call we may use words like anticipate could enable estimate intend expect believe potential will should project in.

And similar expressions, which indicate forward looking statements for a more comprehensive discussion of these and other risks please refer to our filings with the SEC available at SEC Gov.

In the investors section of our website at <unk> Dot com.

We'll also reference certain non-GAAP financial measures today, please refer to our 10-K and 10-Q filings on our website for a full reconciliation of these non-GAAP measures to the most comparable GAAP measures.

We will start today's call with prepared remarks from Paul and Patrick followed by a Q&A session now.

Now I'd like to turn the call over to our CEO Paul Prager.

Good afternoon, and thank you for joining us today.

The third quarter was truly transformational for Terribles, both operationally and financially.

During the quarter, we executed one of the most significant steps in our company's evolution.

Signing approximately 360 megawatts of critical load with fluid stack backstopped by Google at our Lake Mariner campus in Upstate New York.

This 10 year agreement, representing average annual revenue of approximately $670 million in average annual net operating income of more than $565 million before extensions.

Firmly validates our high performance computing hosting strategy and establishes terrible as a leader in designing building and operating low carbon enterprise scale compute infrastructure.

In October we reinforced that leadership by closing $3 $2 billion in senior secured financing backed by the Google credit enhancement to fully fund the late Mariner high power compute buildout.

This transaction is a milestone for the broader industry demonstrating a repeatable end to end development model that begins with design and site control.

<unk> through customer contracting and construction and culminates in long term credit enhanced lease revenue.

The third quarter also marked an operational inflection point for terrible as we recorded our first HTC revenues with lease commencement at Wolf den and CB one.

We remain on track to deliver CB two near year end.

Subject of course to tenant fit out requests, which will complete our delivery of 60 megawatts of critical it.

Record <unk> 42.

Across our platform. These early deployments are proof points that our strategy is working and our execution is disciplined.

Speaker #1: Greetings and welcome to the TERAWULF 2025 third quarter earnings conference call. Currently, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation.

At Lake Mariner, our team continues to perform exceptionally well in.

In terms of executing for fluid stacking Google.

Majority of long lead items have been contracted through CV, five and construction progress is both visible and measurable.

Speaker #1: Please note that this conference is being recorded. I will now turn the conference over to John Larkin, Senior Vice President, Director of Investor Relations.

<unk> is more than 50% directed the final concrete pours scheduled within two weeks and the structure will be fully enclosed before year end.

Speaker #1: Thank you, Mr. Larkin. You may begin.

Speaker #2: Good afternoon, and welcome to TeraWulf's 2025 third quarter earnings call. Joining me today are Chairman and CEO Paul Prager and CFO Patrick Fleury.

<unk> four and <unk> five are already well underway with underground work beginning next week deal deliveries, arriving in early December and building erection expected to begin before Christmas.

Speaker #2: Before we get started, please note that our remarks today may include forward-looking statements. These statements are subject to risks and uncertainties, and actual results may differ materially.

Speaker #2: During this call, we may use words like "anticipate," "could," "enable," "estimate," "intend," "expect," "believe," "potential," "will," "should," "project," and similar expressions which indicate forward-looking statements.

The progress our construction and operations teams have achieved and with rigorous quality standards reflects terrible deep experience in developing and delivering large scale energy and data infrastructure.

Speaker #2: For a more comprehensive We will also reference certain non-GAAP financial measures today. Please refer to our 10-K and 10-Q filings on our website for a full reconciliation of these non-GAAP measures to the most comparable GAAP measures.

Speaker #2: discussion of these and other risks, please refer to our filings with the SEC available at sec.gov and the investor section of our website at terawulf.com.

We also continued to expand our geographic footprint and customer base.

Just two weeks ago, we expanded our partnership with fluid stacking Google.

Announcing our joint venture to develop and operate the Abernathy HBC campus in Texas within the southwest power pool market.

This project adds 168 megawatts of new HCC capacity with expansion potential up to 600 megawatts and replicates the same credit enhanced structure proven at Lake Mariner.

Speaker #2: We will start today's call with prepared remarks from Paul and Patrick, followed by a Q&A session. Now, I'd like to turn the call over to our CEO, Paul Prager.

Speaker #3: Good afternoon, and thank you for joining us today. The third quarter was truly transformational for TeraWulf, both operationally and financially. During the quarter, we executed one of the most significant steps in our company's evolution.

This joint venture with fluid stacking GUL leverages, our collective expertise incorporates hyper tech as EPC partner and includes two additional options to expand the joint venture.

One for future phases at Abernathy and another for a separate site elsewhere in the United States.

Speaker #3: Signing approximately 360 megawatts of critical IT load with fluid stack, backstop by Google, at our Lake Marina campus in upstate New York. This 10-year agreement representing average annual revenue of approximately $670 million and average annual net operating income of more than $565 million, before extensions, firmly validates our high-performance computing hosting strategy and establishes TERAWULF as a leader in designing, building, and operating low-carbon enterprise-scale compute infrastructure.

This partnership represents the next evolution of our growth model.

<unk> capital efficient and backed by World Class partners.

And while we've made tremendous progress executing the business. We have what's equally important is how we are positioning terrible for the next wave of growth.

Our approach remains disciplined expanding only where we have clear structural advantages in power.

Permitting and partnership and our opportunity set continues to broaden.

In August we signed an eight year lease at the Cayuga site in New York laying the groundwork for large scale high power compute deployment beginning in 2027.

Speaker #3: In October, we reinforced that leadership by closing $3.2 billion in senior-secured financing backed by the Google Credit Enhancement to fully fund the Lake Marina high-power compute buildout.

As just mentioned the abernathy joint venture offers meaningful embedded expansion potential both on campus and across future projects with fluid Sac and Google.

Speaker #3: This transaction is a milestone for the broader industry, demonstrating a repeatable end-to-end development model that begins with design and site control and extends through customer contracting and construction, and culminates in long-term credit-enhanced lease revenue.

Meanwhile, our in House development pipeline continues to mature with several high quality opportunities now approaching realization.

Together these initiatives form the very foundation for <unk> next phase of growth executing today, while methodically building the platform for tomorrow.

Speaker #3: The third quarter also marked an operational inflection point for TERAWULF as we recorded our first HPC revenues with lease commencement at WULF Den and CV1.

Scalable low carbon and designed to meet the accelerating demand for high performance compute.

Speaker #3: We remain on track to deliver CV2 near year-end, subject, of course, to tenant fit-out requests, which will complete our delivery of 60 megawatts of critical IT for Core 42.

Reflecting that confidence we recently increased our annual target for new HCC signings from 100 to 150 megawatts per year.

The $250 to 500 megawatts per year.

Speaker #3: Across our platform, these early deployments are proof points that our strategy is working and our execution is disciplined. At Lake Marina, our team continues to perform exceptionally well.

We did not make this decision lightly.

It reflects the tangible progress we've made in advancing our development pipeline and the strength of customer demand.

Over the past year, we've evaluated over 150 potential sites narrowing that list to a select group that meets our strict criteria grid.

Speaker #3: In terms of executing for fluid stack and Google, the majority of long lead items have been contracted through CV5 and construction progress is both visible and measurable.

Grid redundancies minimum power thresholds attractive geographies for end customers and time to power.

Speaker #3: CV3 is more than 50% directed, the final concrete pour is scheduled within two weeks, and the structure will be fully enclosed before year-end. CV4 and CV5 are already well underway with underground work beginning next week, field deliveries arriving in early December, and building erection expected to begin before Christmas.

To support this next phase we've expanded our site acquisition and development teams strengthening what is already the most capable organization in the sector.

Our deep understanding of what Hyperscale and AI customers need.

Combined with our access to scalable low cost power physicians terrible at the forefront of the infrastructure transformation now underway.

Speaker #3: The progress our construction and operations teams have achieved, and with rigorous quality standards, reflects TERAWULF's deep experience in developing and delivering large-scale energy and data infrastructure.

We are proud of what our team accomplished this quarter, but we are even more excited about what lies ahead with that I'll turn the call over to our CFO, Patrick flurry to discuss our financial results in more detail.

Speaker #3: We also continue to expand our geographic footprint and customer base. Just two weeks ago, we expanded our partnership with fluid stack and Google announcing our joint venture to develop and operate the Abernathy HPC campus in Texas, within the southwest power pool market.

Thank you Paul for <unk>.

<unk> 2025 results reflect a strong contribution from our legacy Bitcoin mining operations and more importantly, the start of HPE leasing segment revenues.

Speaker #3: This project adds 168 megawatts of new HPC capacity, with expansion potential up to 600 megawatts and replicates the same credit-enhanced structure proven at Lake Marina.

On our <unk> 2025 earnings call, we discussed a series of capital markets initiatives in the second half of 2025.

I'm proud to report that with the benefit of our new financial support from Google and help of our partners, including Morgan Stanley and Paul Weiss.

Speaker #3: This joint venture with fluid stack and Google leverages our collective expertise incorporates hypertech as EPC partner and includes two additional options to expand the joint venture.

The <unk> beyond our expectations raising over $5 $2 billion at incredibly attractive rates, creating durable equity value for our shareholders.

Now, let me turn to the results.

Speaker #3: One for future phases at Abernathy and another for a separate site elsewhere in the United States. This partnership represents the next evolution of our growth model.

In the third quarter of 2025, GAAP revenues increased 6% quarter over quarter to $50 6 million from $47 6 million and <unk> 25.

Speaker #3: Scalable, capital-efficient, and backed by world-class partners. And while we've made tremendous progress executing the business we have, what's equally important is how we're positioning TERAWULF for the next wave of growth.

We recognized $7 2 million of HCC lease revenue at Wilton, and CB, one with intra quarter lease commencement, resulting in $22 five megawatts of energized hosting capacity.

Continuing with our long term commitment to financial transparency, we've added a page in our investor presentation detailing lease accounting nuances, which we hope you find helpful.

Speaker #3: Our approach remains disciplined, expanding only where we have clear structural advantages in power, permitting, and partnership, and our opportunity set continues to broaden. In August, we signed an 80-year lease with the Cayuga site in New York, laying the groundwork for large-scale high-power compute deployment beginning in 2027.

We self mined 377, bitcoin like Mariner or approximately four bitcoin per day, a 22% decrease compared to the 485 bitcoin mined in <unk> 25.

Our GAAP cost of revenue exclusive of depreciation decreased by 22% $22 1 million and <unk> 25 to $17 1 million and <unk> 25.

Speaker #3: As just mentioned, the Abernathy joint venture offers meaningful, embedded expansion potential both on campus and across future projects with fluid stack and Google. Meanwhile, our in-house development pipeline continues to mature.

Power prices in upstate New York normalized in Q, <unk> 25, and continued to decline and <unk> 25 to $4 seven per kilowatt hour in line with historical levels and our previous guidance of <unk> <unk>.

Speaker #3: With several high-quality opportunities now approaching realization. Together, these initiatives form the very foundation for TERAWULF's next phase of growth, executing today while methodically building the platform for tomorrow.

For kilowatt hour for the second half of 2025.

Proceeds from participation in demand response programs, which are recorded as a reduction in cost of revenue during the period in which the underlying program occurs.

Speaker #3: Scalable, low-carbon, and designed to meet the accelerating demand for high-performance compute. Reflecting that confidence, we recently increased our annual target for new HPC signings from 100 to 150 megawatts per year, to 250 to 500 megawatts per year.

<unk> to $7 4 million and <unk> 25 from $3 1 million and <unk> 25.

Operating expenses increased 28% quarter over quarter to $4 5 million and <unk> 25 from $3 5 million and <unk> 25.

Speaker #3: We did not make this decision lightly. It reflects the tangible progress we've made in advancing our development pipeline and the strength of customer demand.

This trend higher throughout 2025 is primarily the result of increased staffing levels at lake Mariner necessary to support our entry into HPT leasing.

Speaker #3: Over the past year, we've evaluated over 150 potential sites, narrowing that list to a select group that meets our strict criteria. Grid redundancy, minimum power thresholds, attractive geographies for end customers, and time to power.

SG&A expense for <unk> 25 was $16 7, million% to 17% increase from $14 3 million and <unk> 25.

After adjusting for stock based compensation SG&A increased quarter over quarter from $10 6 million and <unk> 25 to $12 3 million and <unk> 25.

Depreciation increased quarter over quarter from $18 8 million and <unk> 25 to $26 5 million and <unk> 25.

The company recorded accelerated depreciation expense of $7 8 million related to a certain minor building and related miners of what's the company's shortened its useful life based on unexpected shutdown of operations for purposes of supporting the HPE operations.

Change in fair value of contingent consideration was $8 8 million and <unk> 25 related to fair value remeasurement of contingent consideration liabilities.

On milestones achieved during the quarter related to the acquisition of <unk>.

Loss on disposal of property plant and equipment net was $2 million and <unk> 25 down from $3 8 million and <unk> 25.

These losses related to the sale of 8000, 902900 miners, which were sold or otherwise disposed of for proceeds of $6 9 million and $1 9 million and <unk> 25, and <unk> 25, respectively.

GAAP interest expense and <unk> 25, with $9 8 million compared to 4.0 million and <unk> 25, and we recognized interest income of $4 1 million and <unk> 25, compared to $1 2 million and <unk> 25.

Cash interest paid during <unk> 25 was negligible compared to $7 1 million and <unk> 25 to.

275% interest on our 500 million convertible notes is accrued and payable in <unk> and <unk> of each year.

Change in fair value of warrant and derivative liabilities and <unk> 25 was a loss of $424 6 million related to the Google warrants and the conversion feature of the 2031 convertible notes, which was originally accounted for separately as a <unk>.

<unk> liability.

Our GAAP net loss of <unk> 25, with $455 million compared to a net loss of $18 4 million and <unk> 25.

Our non-GAAP adjusted EBITDA improved 25% quarter over quarter totaling $18 1 million from $14 5 million in <unk>.

As a reminder, these results are inclusive of significant increases in operating expenses and SG&A over the past 12 months, because we invested heavily in our <unk> business.

Incremental costs have been entirely borne by our legacy mining business until now.

Turning our attention to the balance sheet as of September 30, we held $712 8 million in cash and restricted cash with total assets amounting to $2 5 billion and total liabilities of $2 2 billion.

In October we closed over $4 $2 billion in capital markets transactions, including $3 2 billion of seven and three quarters double B rated senior secured notes due 2030.

And $1.0 billion to $5 billion of zero percent convertible notes due 2032.

As seen on page 14 of our <unk> 25, Investor presentation with these financings complete and the law LUPA and Akela datacenter construction projects at Lake Mariner fully funded our pro forma liquidity totaled over $1 billion.

CNA expense for 3Q, 25 with 16.7 million, a 17% increase from 14.3, million in 2q, 25,

With provide cash for three important initiatives.

One zero.

<unk> cash equity contribution to the abernathy JV with fluid stack.

After adjusting, for stock based compensation sgna, increased quarter over quarter from 10.2 q25 to 12.3 million in 3Q 25.

Two.

The acquisition of key sites in our pipeline that have advanced to the final stages of diligence and negotiation.

Increased quarter over quarter from 18.8 million, and 2225 to 26.5 million in 3225.

And three excess cash to create a fortress balance sheet to weather any storm.

With regard to the Abernathy JV, we anticipate coming to market before year end with a senior secured notes financing similar in all respects to the offering we recently completed at Wolf compute.

The company recorded an accelerated depreciation expense of $7.8 million related to a certain minor building and related minors of the company. It shortened its useful life based on the expected shutdown of operations for purposes of supporting the HPC operations.

As a reminder, the abernathy JV benefits from $1 3 billion of Google credit support over a 10 year period.

The second half of 2025 has been nothing less than extraordinary for Terra Wolf and its stakeholders.

We have secured over $16 billion of HBC lease agreements and executed over $5 2 billion of financings at incredibly attractive rates.

Change in fair value of contingent consideration was 8.8 million and 3225 related to fair value, remeasurement of contingent consideration, liabilities based on Milestones achieved during the quarter related to the acquisition of baywolf and D.

Added significant liquidity to the balance sheet.

lost on disposals of property, plant, and equipment, net, with $2 million in Q3 2025, down from $3.8 million in Q2 2025.

And shown we have a deep multifaceted pipeline to grow the business at 250 to 500 megawatts annually in the future.

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

These losses related to the sale of 8,900 and 2,900 miners, which were sold or otherwise disposed of for proceeds of $6.9 million and $1.9 million in Q3 2025 and 2022 respectively.

Thank you we will now be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May Press Star two if you would like to remove your question from the queue for participants using speaker equipment it may be neck.

Gap, interest expense in 3225 was 9.8 million compared to 4.0 million in 2q 255 and we recognized interest income of 4.1 million and 3225 compared to 1.2 million in 2q 255.

Sorry to pick up your handset before pressing the star keys, one moment, please while we poll for questions.

Our first question comes from Mike Grondahl with Northland Securities.

Please proceed with your question.

Cash interest paid during 3225, was negligible compared to 7.1 million in 2225 as the 2.75% interest on our 500 million, convertible notes is approved and payable in 2q and 4 q of each year.

Hey, Thank you guys first question for Paul.

Paul It was noted that there are some key sites that you are close to closing on.

Can you talk a little bit about those sites.

No.

Good question Mike.

Change in fair value of warranty and derivative liabilities in 3Q. 255 was a loss of 424.6 million related to the Google warrants and the conversion feature of the 2031 convertible notes, which was originally accounted for separately as a derivative liability,

There are at least two sites that were very very close to two sorting out.

We're going for some.

Regional diversity.

We think our customers are inclined.

To enter into long term agreements.

<unk>.

We've we've.

Our non-gaap adjusted IBA. Improved 25% quarter over quarter totaling. 18.1 million from 14.5 million in 2q.

Built out our team on the front end here too to focus we've looked at over 150 opportunities.

Would not be surprised if by year end, we announced at least one possibly two additional sites.

As a reminder, these results are inclusive of significant increases in operating expenses and SG&A over the past 12 months as we invested heavily in our HPC business.

That's great.

These incremental costs have been entirely born by our Legacy mining business. Until now,

And then a question for Patrick.

Patrick.

Noticed in the slides you're breaking out segments.

Segments, now with with BTC and H P C.

And I also noticed on the H P. C side, the margins looked like they were about 72%.

Turning our attention to the balance sheet, as of September 30th, we held 712.8 million in cash and restricted, cash with total assets amounting to 2.5 billion in total liabilities of 2.2 billion.

And I think in the past you've talked about roughly 85% margins can can you kind of reconcile that.

Yes, yes sure. Thanks, Mike Yeah, I think youll see when we file the Q full detail on the segments.

In October, we closed over 4.2 billion dollars in capital markets transactions, including 3.2 billion of 7 and 3/4 double b-rated senior secured notes due to 2030.

And 1.025 billion of 0% convertible notes to 2032.

Obviously, which we're really proud of given the start of HBC leasing revenue, but yes. If you the actual margin was about 72% there in the operating expenses there is about.

700000 of expense development expense at Cayuga. So if you back that out you'll see that get to you.

As seen on page 14 of our 3Q, 25 investor presentation with these financing complete, and the Lupa and Aquila data center construction. Projects at Lake Mariner fully funded. Our pro-forma liquidity totals over 1 billion dollars

which provides cash for three important initiatives.

1.

To about an 82% margin for the quarter. So obviously much closer to that 85% and then the quarter.

Per Wolf, cash equity contribution to the Abernathy JV, with Fluid Stack.

A little off just because we didn't have full revenue. It was a stub period for CB. One in particular, so I think you'll see that normalize here very quickly in the fourth quarter to right around that 85% that we've guided to.

2, the acquisition of kites in our pipeline that have advanced to the final stages of diligence and negotiation,

And 3.

Excess cash to create a fortress balance sheet to weather any storm.

Great and congrats guys on all you've accomplished the last 90 days or so.

Thank you Mike.

Our next question comes from Nick aisles with B Riley Securities. Please proceed with your question.

Yes, guys. Congrats on all the progress thanks for taking my questions, obviously youre agreements to date.

As a reminder, the Abernathy JV benefits from 1.3 billion of Google credit Support over a 10-year period.

Involve top tier credits just was curious to hear how you're thinking about customer diversity from here is there a desire to expand the customer base.

The second half of 2025 has been nothing less than extraordinary for TeraWulf and its stakeholders.

I appreciate any comments.

Sure.

We have secured over 16 billion dollars of HPC. Lease agreements and executed over 5.2 billion dollars of financing at incredibly attractive rates.

You know we have two.

To slash.

Added significant liquidity to the balance sheet.

Other.

World Class credits as our customers' core 42 back by <unk> 42 in the fluids that Google deal and and those that may be associated in that deal. If you've taken a look at the recognition agreements youre aware of that.

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

Thank you.

So I could not be.

Happier with the credit quality of our customers, which is the critical element here.

And something Patrick pound the table on because obviously.

Please press star 1 on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star 2. If you would like to remove your question from the queue,

We want to be able to get ideal credit terms for our transactions.

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

The resulting financing so yeah.

1 moment, please while we pull for questions.

The answer is I would expect we will continue to grow with the customers that we have and certainly we're continuing to have dialog with a couple of others, but again the key for us is credit quality.

Our first question comes from Mike, gundal with Northland securities.

Please proceed with your question.

Hey, thank you guys. Um, first question for Paul

And so it's a little bit of a smaller universe.

As we move forward, but but yes. The sites that we have in the sites that we are anticipating bringing home.

Um, can you talk a little bit about those sites?

<unk>.

Would be very compelling to two a great quality credit. In addition to of course the ones that we already currently have on the books.

Thanks, Paul that's helpful. My next question was just on the JV can you just talk about how that opportunity came about and then just to clarify should we consider these type of deals as part of your new updated.

No, uh, good question, Mike. Um, there are at least two sites that were very, very close to sorting out. Um, we're going for some regional diversity, um, where we think our customers are inclined to enter into long-term agreements, um,

You know kind of megawatt per annum guidance and should we think about that on an attributable basis. Just appreciate any clarity there.

I'll start maybe <unk> or.

You know, we've built out our team on the front end here to focus. We've looked at over 150 opportunities. I would not be surprised if by year end, we announce at least 1, possibly 2 additional sites.

Patrick I'll take it from there we have built a great working relationship.

With fluids that Google team and if you think about it.

Theres no sort of referenced models for what were building user.

User design build opportunities so the teams.

Listen you're right.

Succeed because you work together.

You're breaking out, um, segments now with BTC and HPC. And I also noticed on the HPC side, the margins look like they were about 72%.

To be a disaster. So we like succeeding so we work hard with the fluids that Google teams.

and I think in the past, you've talked about roughly 85% margins, can can you kind of reconcile that

They're on site.

We meet constantly.

Tell you that part of our team now is.

As we look to how we want to consider financing abernathy.

So it is in the course of that dialogue.

That.

They indicated that.

They had the site.

Yep. Yeah, sure. Thanks, Mike. Yeah, I think you'll see when we file the queue, you know, full detail on the segments. Um, obviously, which we're really proud of giving the start of HPC, leasing Revenue. But yeah, if you the, the actual margin was about, 72% there in the operating expenses, there's about um,

They had the credit quality.

And that they were thinking about using an EPC, but they recognized.

Given our experience in energy infrastructure and financing energy infrastructure that.

It would be additive to the endeavor.

And so everybody everybody decided to spend a lot of sense.

Our primary strategy as we move ahead.

Is to continue to do what we've done which is great.

700,000 of expense development expense that kyoga. So, if you back that out, uh, you'll see that gets you um, to about an 82% margin for the quarter. So obviously much closer to that 85% and then the quarter is a little off just because we don't didn't have full Revenue. It was a stub period for CB1 in particular. So I think you'll see that um normalize here very quickly in the fourth quarter to to right around that 85% that we've got it to

Great sites and look for the right customer.

Great. And congrats, guys. On all you've accomplished.

But certainly.

Accomplished the last 90 days or so.

We're delighted to partner again with fluids that Google and I like.

Thanks Mike.

I can tell everybody when Google says hey, we'd like you to come into this project with US you say, yes, you find a way to say, yes. So then it makes sense to them and that is a rewarding experience as well for your shareholders. That's what we did here in abernathy.

Our next question comes from Nick Isles with B. Riley Securities. Please proceed with your question.

<unk>.

In the Abernathy deal, even though theres room to grow at abernathy itself, but separately.

As you are aware we have a.

But going forward relationship on the next.

Yeah, guys. Uh, congrats on all the progress, thanks for taking my questions. Um, obviously your agreements today are involved top tier credits, just was curious to hear how you're thinking about, uh, customer diversity from here. Is their desire to expand the customer base. Um, appreciate any comments. Thanks.

Project of similar credit quality, so, yes that will be a project that we continue to to.

Sure. As you know, we have 2 um, 2 slash

Evolve into but our primary focus is additional sites in additional high quality credit customers for those sites.

I think NASS or Patrick you may want to respond to how do we think about it from a financial perspective.

Other uh, world class credits. Uh, as our customers core 42, backed by g42 and then the fluids that Google deal and and and those that may be Associated, uh, in that deal. If if you've taken a look at the recognition agreements, you're aware of that and so I I I could not be um,

Yeah, Hey, Nick it's Patrick I don't really have much to add I think as I said in my prepared remarks, we intend to finance this to be in the market financing it before year end and it is.

Substantially similar to the deal that we just printed at Wolf compute.

Got it thanks, and just to clarify we should think about this on an attributable basis. If we see another one of these announced and we're trying to.

Pair that against your $2 50 to 500, it would make sense to look at it that way.

Yes, we owned 51% of the JV.

So yes.

Got it guys. Thanks again, congrats on a transformational quarter keep it up.

To, to get ideal credit terms for our transactions and, and if an resultant financing. So, the answer is, I would expect we'll continue to grow, uh, with the customers that we have. And, and certainly, uh, we're continuing to have dialogue with a couple of others. But again, the key for us is credit quality. Um, and so it's it's a little bit of a smaller Universe. Um,

Okay.

Our next question comes from John <unk> with Roth Capital Partners. Please proceed with your question.

Uh, as we move forward. But but yeah, this the sites that we have and the sites that we are anticipating bringing home, uh, all um,

Hey, everyone. Thanks.

Just a follow up on sort of how you are talking about your power strategy.

would be very compelling to to a great quality Credit in addition uh, to of course the ones that we already currently have on the books

The non JV side Youre looking at are you procuring those sort of an absolute for marketing or do you already have customers in mind that you could basically go to right away.

So we have an active dialogue with our customer base.

And.

Thanks Paul, that's helpful. Um, my next question was just on the JV. Can you just talk about how that opportunity came about and then just to clarify, should we consider these type of deals as part of your new updated? Uh, you know, kind of megawatt Premium guidance and should we think about that on an attributable basis. Just appreciate, uh, any Clarity there.

This is a very competitive market. So we sort of were.

We're constantly discussing with them what their needs are what it is they're seeking at the same time that we're trying to complete our diligence and negotiation over some additional sites. If you remember, we've just got quarter with century and energy infrastructure development and operation.

um, I'll start maybe Nas, um, or Patrick could take it from there, you know, we, we have built a, a great working relationship, uh, with fluids at Google team and, and if you think about it, you know, there's no sort of reference models for what we're building, these are these are design build, uh, up

opportunities, so that the team,

It's been very helpful in identifying sites that we think.

We'll we will we'll be in the next wave of data Center development.

These hyper scaler and high quality credits.

<unk>.

I think.

In the case of Abernathy.

In the fluids that Google relationship I think as we look at sites with them we will.

Uh, listen, you're either going to succeed because you work together or, you know, it's going to be a disaster. So we like succeeding. So we work hard with the fluid set, Google teams. Um, they're on site. Um, we meet constantly, uh, I would tell you that, the, the part of our team now is is, you know, as we look, uh, to how we want to consider financing Abernathy. So it is in the course of that dialogue. Um, that

Obligated, obviously to work with their customer.

In the case of <unk>.

Of taro walls, identifying and determining that another site makes a lot of sense for us.

they indicated that, you know, they had the site, um, they had the credit quality, um, they and that they were thinking about using an EPC but that they recognized

We're going to want to make sure that it's a competitive process that we end up with a great quality credit, but we also get rewarded.

For the unique and wonderful qualities of that site and then we get the most return we can for the shareholders. So it's a little bit of both.

Great. Thank you.

A follow up.

How are you guys seeing.

The market in terms of build cost.

Like the sites you've been building so far I've been at existing sites, where you've had redundant power and then the food stack Abernathy, you say, you're not building a substation. So the Capex for me go up a little bit cheaper and then youre talking about you've got long lead items procured for through <unk>, but how do you see sort of the market in general maybe.

Uh, given our experience in energy infrastructure and financing energy infrastructure that you know, would be additive to to the Endeavor. Um, and so, you know, everybody, everybody decided to spend a lot of sense. Um, our primary strategy is we move ahead, um, is to continue to do what we've done, which is, you know, have great sites and look for the right customer. Um, but certainly, uh, we're delighted to partner again with fluids at Google and I, you know, like I tell everybody when Google says, Hey, we'd like you to come into this project with us. You say, yes, you find a way to say yes, so that it makes sense to them and that it is a rewarding experience as well for your shareholders that

Beyond.

Blake Mariner.

What we did here in Abernathy, and I, uh, in the Abernathy deal. You know, there's room to grow at Abernathy itself but separately. Uh, as you are where we have a

Hey, Don this is another.

Yes.

Uh, a going forward relationship on the next.

And those are the.

Generally what we tried to do is be able to deliver capacity.

The bulk of the capacity within 12 months of signing the customer until that often requires engaging with folks kind of on the electrical gear and the coolers and chillers in advance of that and we've developed relationships with a number of different vendors, where we have a rolling 12 month.

Uh, project of similar credit quality. So, yeah, that will be a project that we continue to, you know, evolve into. But our primary focus is additional sites and additional high-quality credit customers for those sites.

I think Nas or Patrick you may want to respond to the how do how do we think about it from a financial perspective?

Projected schedule with them, which gives us positions in Qs and then we can depending upon which how many megawatts of capacity. We sign up then we take those down. So we've tried to be ahead in the being able to procure the equipment, which allows certainty to our customer when we engage with them on on discussion so that's been going well.

Yeah, hey Nick, it's Patrick. I I don't really have much to add I think as I said in my prepared remarks, we intend to finance this be in the market, financing it before your end, uh and it's substantially similar to uh, the deal that we just printed at Wolf compute.

And given the capacity that we've signed up and procured we've been good good partners for the vendors and vendors have been good partners for us as well on that equipment procurement side. So that's generally how we're approaching things and and as we look forward I think the forecast and guidance, we provided for that $2 50 to 500.

Yeah, we own 51% of the JV.

So yes.

Got it. Well, guys. Thanks again. Congrats on a transformational quarter. Keep it up.

General procurement strategy, you know covers that capacity as well.

I appreciate the color. Thanks.

Our next question comes from Dillon Hustling, with Roth Capital Partners. Please proceed with your question.

Our next question comes from Chris Friendlier with Rosenblatt. Please proceed with your question.

Hi, Thanks also congratulations raising them on our progress and looking forward to more.

I wanted to ask on the.

Actually I have a quick question.

I noticed the operating cash rate was.

Hey, everyone. Thanks. Just a follow-up on sort of how you're talking about your power strategy. Um, the non-JV side, are you looking at procuring those sort of an absolute for marketing, or do you already have customers in mind that you could basically go to right away?

We're 70% I guess of the.

Nameplate hatch rate this quarter and it's worth it to go down even further next quarter can you just give us a little color on what's going on there. Thanks.

So, we have an active dialogue with our customer base.

Yeah, Hey, Chris It's Patrick So we're running our site for our HBC clients now and as we get closer to bringing all of core 40 twos capacity online. There are some things electrically that we have to do at the site. So you noticed in my remarks I.

This is a very competitive market, so we sort of um, we're.

I talked about.

Accelerated depreciation on one of our minor buildings of $7 8 million this quarter and sales of miners. So.

As we sort of reposition the site, particularly for.

Two lines of power.

And redundancy for the HBC building, we're making some changes on the bitcoin mining side and that's that.

We're constantly discussing with them. What their needs are, what it is. They're seeking at the same time that we're trying to complete our diligence and negotiation over some additional sites. If you remember, you know, we've just got, you know, a quarter of a century and energy infrastructure development and operation. Uh it's been very helpful in identifying sites that we think uh will will will be in the next wave of data center development uh for these hyperscalers and high quality credits. Um

As reflected in those numbers, it's a combination of kind of calling our fleet to be more efficient and then again just operating the site really for H P. C.

I I I think, um, in the case of Abernathy, you know, in the fluids that Google relationship I think is we look at sites with them. We we will. We're obligated obviously to work with their customer in the case of uh,

So you'll see I mean, obviously sites still very profitable, we had a great quarter from a bitcoin mining perspective.

But I think going forward that that's our approach hence the sales are minor.

The fleet and then the accelerated depreciation on the minor building.

It makes sense and then I guess, it's not come and it's something that that continues in 2026.

Yes, I think so I think like you said, we kind of gave you some guidance in the deck for what we thought we would have here in the fourth quarter and then look I think beyond that depends on market conditions, but yeah. I think our intent is to keep mining bitcoin.

Of Terror wolf identifying and, uh, determining that another site, uh, makes a lot of sense for us. Um, we're going to want to make sure that it's a competitive process that we end up with the great quality credit, but that we also get rewarded, uh, for the unique wonderful qualities of that site. And and then we get the most return we can for the shareholders. So it's it's a little bit of both.

Great. Thank you. And as a follow-up

Through certainly the end of 2026, and then dependent upon when the next 250 megawatts that we've requested from the New York ISO comes I think we could you.

You could see us operate beyond there till the next having but again I think that will be a function of.

Got it.

How are you guys seeing the market in terms of build costs of like, the, the sites you've been building so far have been at existing sites where you've had redundant power and then the food stack Abernathy site, you're not building a substation. So the capex for mango that's a little bit cheaper and then you're talking about you've got long lead items procured for through cb5, but how do you see sort of the market in general? Maybe Beyond, um, like Mariner?

Additional megawatts at the site as well as just bitcoin profitability itself.

That sounds great. Thanks, sticking with additional megawatts.

hey Dylan, this is another

I like the slide that broke out you know how you think about the pipeline on power side on slide eight and.

Some great details, there and think about where that comes together.

The gigawatt plus of development pipeline does that in the phase four of the phase III I wasn't quite clear where that comment on the on the following page fits relative to slide eight on the phases.

I think that's really just going to Paul's comments, which again when you think about our funnel, which is really what page eight isn't that the kind of show you just the amount of time and effort that goes in to cultivating the pipeline.

I think.

Unlike some of our peers.

We're not telling you a fictitious pipeline of thousands of megawatts all in the same region. We're telling you about stuff when it's literally eminent and ready to go so I think as Paul mentioned.

Yep, Adele this is nazer. The, you know, generally what we try to do is be able to deliver capacity, uh, you know, or the bulk of the capacity within 12 months of assigning the customer and so that often requires engaging with folks kind of on the electrical gear and the coolers and chillers in advance of that. And we've developed relationships with a number of different vendors where we have a rolling 12-month projected schedule with them, which gives us positions and q's and then, you know, we can depending upon which, uh, how many megawatts of capacity we sign up, then we we take those down. So, so we've tried to be ahead in being able to procure the equipment, which allows certainty to our customer, when we engage with them on on disc.

Getting very close on a handful of sites that you know hit on page nine the development pipeline of a gigawatt.

Awesome great. Thanks, so much Patrick appreciate it.

Our next question comes from Steven Black Ala with Jones. Please proceed with your question.

So that's been been going well and given the capacity that we've signed up and procured we've been, you know, good good partners with for the vendors and vendors, have been good partners for us as well on that equipment, procurement side. So that's generally how how we're approaching things. And and as we look forward, I think the forecast and guidance we provided for that 250 to 500 that General procurement strategy, you know, covers that capacity as well.

Hey, thanks for the questions.

Appreciate the go. Thanks moner.

Raised AI.

<unk> growth targets to $2 50 to 500 megawatts annually are there any structural or operational constraints like weather.

Our next question comes from Chris brendler with rosenblat, please proceed with your question.

EPC capacity financing availability or.

Internal bandwidth that could just limit the number of projects that you can execute simultaneously.

This is Paul I'll start.

The answer is yes, I mean.

Hi, thanks and also congratulations. Uh amazing amount of progress and looking forward to more. Um just wanted to ask on the actually a Bitcoin question. Um I noticed the operating hash rate was you know sort of 70% I guess of the name plate hash rate this quote or an expected to go down, even further next cooler. Can you just give us a little caller and what's going on there? Thanks.

I think.

We've always tried to emphasize your focus on our ability to execute and.

I think that we're more than capable of meeting that goal of 250 to 500.

But.

It takes a lot of time to to really get to the bottom of these sites. It's a very competitive market you need.

You need to sort of.

Look near and far field.

Yeah, hey Chris, it's Patrick. So you know we're running our site for our HPC clients now and you know, as we get closer to bringing all of core 42's capacity online, you know, there's some things that electrically that we have to do at the site. So you notice in my remarks. Um, I talked about, uh, accelerated depreciation on 1 of our minor buildings of 7.8 million, this quarter, and sales of minors. So, um, as we sort of

You have to make determinations on site suitability for the customer but also.

reposition the site, particularly for, um,

Whats power like at the node, where does the environmental and regulatory considerations. It's just a lot. So.

We're very confident we can do what we what we now say.

Which has increased from where we're at.

I am not terribly worried about the EPC side.

<unk>.

I feel pretty good about that and procurement capability and you know.

Hi lines arent, what they were I feel very good about that I think that.

<unk>.

But the key is going to be our ability to meet.

<unk> schedule and price that's what the streets looking for that's what our customer wants and that's what we promised to our shareholders. So I'm very comfortable at $2 50 to 500.

makes sense and that I guess it, it's not coming in, simply that continues in 2026,

As we grow.

Listen.

We're building it is Patrick used to say serial model number six as we get down to 10 or 11.

And we find more efficacious ways to do this in and neither ways to scale. Then we could we could grow from there, but I think $2 50 to 500 is the right way to think about us for the coming year.

Thanks, Thanks, Paul and things to ask one more are you seeing any meaning.

Meaningful demand from tenants for the AI.

Yeah, I think so. I think like we said, we kind of gave you some guidance in the deck for what we thought, um, we'd have here in the fourth quarter and then look, I think beyond that, uh, depends on market conditions, but, yeah, I think our intent is to keep mining Bitcoin. Um, through certainly, the end of 2026 and then dependent upon when the next 250 megawatts that we've requested from, the New York ISO comes, you know, I think we could, uh, you could see us operate Beyond there till the next halving. But again, I think that will be a function of, uh, you know, say additional megawatts at the site as well as just Bitcoin and profitability itself.

Capacity with ready for service dates beyond 12 months and how has that.

Shaping in your pipeline site acquisition priorities. Thank you yeah, Yeah demand is real and it's.

It's a constant.

And I think that.

<unk>.

This is <unk>.

I think there was a side out in Ohio. The other day, they've got a letter from a piece in.

Excellent, great. Thanks. Uh, speaking of additional megawatts. Um, I like the, uh, the slide that broke out, you know, how you think about the pipeline, on the power side on slide 8 and, um, you know, some great details there and helpful to think about where that comes together. Um, the gigawatt plus of development pipeline is that in the in the phase 4 or the phase 3, I wasn't quite clear where that comment on the on the following page, fits relative to slide

On the stages.

They were in the queue and and they were in the queue for 26 now you should probably not think about that power in 'twenty six but you should think about it for like 29 and 30.

And that is a way of saying that you've got to pick your sites really carefully you have to understand.

What the grids capable of.

Are you in an area, where the whole grid is only.

And the and the demand is three times that so it's it goes it goes to the notion that.

You you've got to have a very good handle where you cite these things, but that then when you go back to the customer and you say Hey, how do you want to think about it if you want to be in this region you. Okay. Moving from 26 to 27. The answer has been yes universally the answer from 2000.

I see I I think Chris that's really just going to Paul's comments which again when you think about our funnel, which is really what page, 8 is meant to kind of show, you just the amount of time and effort that goes in to cultivating that pipeline, you know. And again, I think unlike some of our peers, you know, we're not telling you a fictitious pipeline of thousands of megawatts all in the same region. We're telling you, you know about stuff when it's literally imminent and ready to go. So, I think, as Paul mentioned, we're getting very close on a handful of sites that, you know, hit on page 9, the development pipeline of a gigawatt.

Awesome. Great. Thanks so much, Patrick. I appreciate it.

Our next question comes from Stephen. Glad go with Jones. Please proceed with your question.

7% to 28 is yes, I don't think <unk> got the power problem solved by then you've got hyper scalar is now looking at island generation, which means theyre going to bring their own power to the table and that's at least four to five years away.

If you look at the deal that was signed with Nextera for bringing back the nuke. They looked at the 30 year transaction, which doesn't come online until 'twenty nine and I don't think there's any way that nuc is back online in 2009, so the demand.

Hey, thanks for the questions. Um, on the, uh, raised AI, uh, capacity growth targets to 250 to 500. Uh, my watch, net annually. Are there any, uh, structural or operational constraints like whether I guess like EPC capacity financing availability? Or uh, you know, like internal bandwidth. Uh, that could just limit the number of projects you can execute simultaneously.

I think it is just increasing.

Um this is Paul. I'll start the answer is yes. I mean I think

And.

It took a little while to get here I think everyone was waiting to see who is going to make that first move but now that we hear.

we've always tried to emphasize here a focus on our ability to execute and

The demand from the Hyperscale or in the cloud companies is very very significant.

You know, I I think that we're more than capable of meeting that goal of 250 to 500.

Thanks, Paul.

Megs but um it takes a lot of time to to really get to the bottom of these sites.

Our next question comes from Justin Pan with Clear Street. Please proceed with your question.

Hey, guys. This is Justin on for Brian.

Obviously, the increase in incremental HBC guidance underscores a lot of optimism demand over the next two to three years.

You guys have had a great couple of months some of your peers have had a great couple of months, but could you dig in a little bit deeper into what gives you the confidence.

The heightened demand outlook over the medium term.

It seems like a pretty interesting dichotomy in the market at the moment, we're seeing some talk over AI valuation frothiness, but at the same time, there is going to cut them and Im curios success momentum in your space.

It's very competitive market. You need you need to sort of look near and far field. Uh you have to make determinations on site suitability for the customer but also, you know what's power like at the node. What are the environmental? And Regulatory considerations is, it's just a lot. So, um, we're very confident, we could do what we what we now say. Um which is increase from where we're at. Um, I'm not terribly worried about the EPC side. Um, I feel pretty good about that and procurement capability and you know the supply lines aren't what they were. I I feel very good about that. I think that um

Yeah.

I mean.

Yes.

I'm happy to start maybe you can follow up but as I just said.

We're looking.

<unk> been asked by customers to look at opportunities, where we have to bring our own generation to the table.

And you have to assume that if you're bringing your own generation to the table you are at least four years out.

And so when you have those kinds of.

Questions coming in from World class credits and that just speaks to just massive amounts of demand.

I think the shortfall in energy is real.

<unk> it.

The the key is going to be our ability to, um, meet schedule and price. That's what the Street's looking for. That's what our customer wants. That's what we promised our shareholders. So I'm very comfortable uh, at 250 to 500 and as we grow, uh, listen. You know, we're we're building as Patrick used to say serial model number 6, you know, as we get down to caner and 11, um, and we find more efficacious ways to do this and and and neater ways to scale than, you know, we could, we could grow from there. But I think 250 to 500 is the right way to think about us for the coming year.

It's greater than I think originally forecast.

And the demand for energy by users like these high load data centers is more significant than was originally forecast so.

We've been getting calls since certainly since may and they haven't abated.

Every time, we come up with the site.

We have at least five phone calls that we could go to to ask with this kind of be something that is of interest to you.

Uh, for the AI capacity with ready for service dates Beyond 12 months and and how is that, um, you know, shaping your pipeline site acquisition priorities. Thank you. Yeah. Yeah. Demand is real and it's, um, it's a constant, um, and I think that, you know,

So.

And I think.

If you just look at hyper scaler.

Two or three of the big leading cloud.

Players they are being very very aggressive in how they're looking at.

It further.

Locations and sites and.

And again a lot of these sites wouldn't have any availability.

For electrification for two three years out so I yeah I.

Listen, there was, I, I think there was, there was a site out in Ohio, the other day, they got a letter from a piece and, you know, they were in the queue and, um, and they were in the queue for 26. So now, you know, you should probably not think about that power in 26, but you should think about it for, like, 29 and 30. And, and that is a way of saying that you've got to pick your sites, really carefully. You have to understand, you know, what, the Grid's capable of, you know, are, are you in an area where, you know, the the whole grid is only, you know, X and the. Um and the demand is 3 times that. So

I don't know what to say other than to tell you the phones ringing they show massive demand and.

At.

Yeah.

We don't see that abating anytime in the near future.

Got it that's super helpful. Thanks for the commentary congrats on the quarter.

Yeah.

Our next question comes from John <unk> with Needham <unk> Co. Please proceed with your question.

Hey, guys. Thanks for taking my question first one here as we kind of moved from a phase of signing some of these leases.

Gonna have a very good handle where you cite these things but that then you know, when you go back to the customer and you say, Hey how do you want to think about it? If you want to be in this region, are you okay moving from 26, to 27? The answer has been. Yes. Universally the answer from 27 to 28 is. Yes, I don't think you get the power problem solved by then you

To executing on them can you just give us kind of any color as it relates to the penalties. If you Miss timeline to delivery and then just kind of frame up your comfort confidence in hitting delivery date, and then I have a follow up question.

You've got hyperscalers now looking at Island generation which means they're going to bring their own power to the table, and that's at least 4 to 5 years away. If you look at the deal that was signed with dextera for bringing back the nuke, they looked at a 30-year transaction, which doesn't come online till 29 and I don't think there's any way that nuke is back online in 29.

Yeah, Hey, Shneur I understand correct.

so, the demand, um,

I'm sorry go ahead.

No go ahead Patrick.

Yes, so John just with regard to penalties and I'm not going to tell you the specific ones because that's confidential to the leaf, but I would tell you.

I think is is just increasing and, um, you know, it took a little while to get here. I think everyone was waiting to see who was going to make that first move, but now that we hear,

Given the accelerated build timelines and all the work we've done with our customers here.

Uh, the demand from the hyperscalers and the cloud companies is very, very significant.

Thanks Paul.

There are pretty significant grace periods. So the leases cannot be terminated until we're over 180 days late obviously as Paul said, we are meeting weekly daily monthly like both in person and via teleconference with our customers. So there's no surprises of folks.

Our next question comes from Justin.

With your question.

Hey guys, this is Justin off for Brian. Um, you know, obviously the increase in incremental HPC, I didn't underscore, is a lot of optimism that's been made.

We are well aware of.

Budgets timelines et cetera, the in general we have very minimal penalties for.

For the first.

30 to 90 days.

Generally there's a penalty for the 30 days then theres another one for <unk> and another one for 90 and then the penalty start to accelerate from day 90 to 180.

3 years. Um, you know, you guys have had a great couple of months. Uh, some of your gears have had a great couple of months, but could you dig in a little bit deeper into what gives you the confidence in the heightened demand, and how it looks over the medium term? Uh, you know, it seems like a pretty interesting dichotomy in the market at the moment, right? We're seeing some talk over AI valuation fraudulence, but at the same time, there's been a kind of, you know, carrier of success and momentum.

Space.

But those are relatively de minimis for us through 90 days and then scale from 90 to 180.

Great.

Super helpful.

And then second question, if we do just take a step back.

I guess, how are you guys able to to add more of the power pipeline like some of the stuff was procured pretty quickly like Abernathy I would just have to think major hyperscale or cloud to be private equity everyone's competing now I'm, just I guess give a frame it up a little bit more for how you guys are able to win that.

Yes, hi.

I'm not sure I understand the question I mean, I'm going to ask you didn't.

I wouldn't look at that as came on real quickly I would've.

I mean, as I'm happy to start, maybe you can follow up. But as I just said, we're looking, uh, we've been asked by customers to look at opportunities where we have to bring our own generation to the table. Um, and you have to assume that if you're bringing your own generation to the table, you're at least 4 years out. Um, and so when you have those kinds of, you know, questions coming in from World Class credits, then that that just speaks to just massive amounts of demand. Um, I think the shortfall in energy is real. Um, it's it. It's greater than I think originally forecast. Uh, and the demand for energy by users, like these high low data centers uh is more significant than was originally forecast.

Again, we've had a long term relationship now with Google in fluids.

Stack and so.

We were aware of the strategy here and they've decided that.

So you know, we've been getting calls since, you know, certainly since May, and they haven't abated. Um,

Bringing us alongside would be additive to the overall effort, but I'm not sure I understand the balance of your question.

You know, every time we come up with a site, um, we have at least 5 phone calls that we, we could go to, to ask, you know, would this kind of be something that is of interest to you. So,

I guess the main crux of it is if we take a step back and there is such a power constrained environment. One of the biggest questions. We get from investors is just how these guys are able to continue to procure capacity like that $2 50 to 500 megawatts you talked about when we are in still a constrained environment and theres just likely so many bidders for these assets.

you know, I I think,

You know, if you just looked hyperscalers and 2 or 3 of the big, you know, leading Cloud players, they're being very, very aggressive in how they're, uh, looking at, um, at further.

Yeah.

locations and sites and

I think the answer is so some of them are looking at island generation, where they bring their own power.

Some of them are looking at it.

And again, a lot of these sites wouldn't have any availability, uh, for electrification, for 2 3 years out. So, I

Ed Hi, electrification sites that former industrial uses and they're looking at repositioning them into data centers.

and and, um,

You know.

And some of them or talking to utilities about figuring out if there's a way that they could.

Uh, we don't see that abandoning any time in the near future.

Good work out a deal like the Nextera transaction.

Got it. That's super helpful. Thank. Thanks for the the commenter. Congrats on the query.

They are following.

The following multiple strategies to get to the answer of long term demand and its near term in terms of its immediate immediate urgency, but theyre looking at.

Our next question comes from John Tarro with Neco. Please proceed with your question.

The 25 and 30 year deals if you take a look at the Abernathy guilds.

25 years so.

I'm.

You know.

Hey guys, thanks for taking my question. Um, first 1 here as we kind of move from a phase of signing, some of these leases um to executing on them, can you just give us kind of any color as it relates to, to penalties? Um, if you missed timeline of delivery and then just uh kind of frame up your conf confidence and hitting delivery dates, uh and then have a follow-up question.

I can tell you we're applying to with the long term answer is other than United States needs to build more generation, but I think everyones figure that one out. The question is are there sites.

Yeah. Hey I sorry, nazer. You want to go ahead? No, go ahead. Patrick.

That one can discover.

In the right regulatory framework sat and from.

From an environmental perspective.

Not too injurious to a customer that can enable a.

A high quality credit to come along and be a customer and I think the answer is yes, but you got to know where to look.

Got it.

Yeah, so John, just with regard to penalties and, you know, I'm not going to tell you the specific ones because that's confidential to the lease. But I would tell you, uh, you know, given the accelerated build timelines and all the work we've done with our our customers here. Um, there are pretty significant Grace periods. So the leases cannot be terminated until we're over 180 days late.

Besides I guess I should emphasize Darryl if those were to luck, so which is why I think prior to year end, we will be bringing on at least one maybe two other sites.

Yeah understood. Thank you congrats.

Our next question comes from Tim Horan with Oppenheimer. Please proceed with your question.

Obviously, as Paul said, you know, we're meeting weekly daily monthly, like both in person and um, via teleconference with our customers. So there's no surprises. So folks, you know, are are well aware of

Thanks, guys.

Was there a specific trigger that caused you to someone else.

You know, budgets, timelines, Etc. The in general we have very minimal penalties uh, for the first.

Basically lots of more than doubling your incremental capacity per year.

Or your customers I mean, it seems like demand is much stronger than maybe you were thinking about we were six nine months ago, yes, anything that really drove that.

Uh, 30 to 90 days, you know, generally there's a penalty for the 30 days. Then there's another 1 for 60, another 1 for 90 and then the penalty start to accelerate from day 90 to to to 180. Um but those are relatively dim Minimus for us.

Yes.

through 90 days and then scaled from 90 to 180

Is that in the U S.

And then maybe I guess I probably can jump in.

A few things right. One is if you go back a year ago, we hadn't gone through the full cycle as we have laid out in the deck. There's not just a site theres not the design. The engineering there was a financing and then there's the construction. So we've been through that full cycle now and so sitting 18 months ago looking forward there is pieces of.

Great. That's uh, that's super helpful. Um, and then second question if we do just take a step back. Um, you know, I, I guess, you know, how are you guys able to, to add more of the power pipeline? Like, some of the stuff was procured pretty quickly like Abernathy. Um, I would just have to think, you know, major hyperscalers, Neo clouds, maybe private Equity, everyone's competing now, um, just I guess give us, you know, frame it up a little bit more for, for how you guys are able to win that.

That process that we had not completed.

Pending this quarter go through this quarter, we've completed all of those cycles and so now we have a much better nuanced understanding of what's required for each one of those phases. What we can get done you know there was a question earlier on capacity. So all of that is factored into that 250 to 500 megawatt forecast, which again a year and a half ago, we didnt have that visibility.

Yeah. Hi. I I'm not sure I understand the question. I mean, I'm going to ask you didn't, I wouldn't look at that as came on real quickly. I would have, you know, again we've had a long-term relationship now with Google and fluid.

Stack. And, and so,

So I think that that is a reflection both of our capacity capability to each of those phases done as well as the size of the demand that's coming from the customers.

Yeah.

You know, we were aware of the strategy here and they decided that, um, bringing us alongside would be additive to the overall effort, but I'm not sure. I understand the balance of your question.

One to two more things one is obviously after we had you know.

442 online.

That enabled us to sort of do show Intel to other customers. So I think.

The level of credible incoming to us just.

It was.

Multiples of what it was prior to that secondly, Patrick who was the architect of our financing strategy from.

It's just the main crux of it is, if we take a step back and, um, there's such a power constraint environment. One of the biggest questions we get from investors is just how these guys are able to continue to procure capacity, like that 250 to 500 megawatts you talked about, when we are in a silicon-constrained environment and there's just likely so many bidders for these assets.

From day one.

Yeah, I I think the answer is so that some of them are looking at Island generation where they bring their own power.

We didn't want to sort of have an arrangement, where our customer was also financing our capex.

Wanted to go about it in a way, which we have which was to say we would do it.

And we would require credit support to enable.

Good financing.

Hum.

In our case Patrick's been able to get absolutely great financing. So once we went through that.

Some of them are looking at at at at at high electrification sites that at former industrial uses and they're looking at repositioning them and to Data Centers um and some of them or or talking to utilities about figuring out if there's a way that they could, um,

That also opened up the doors to our ability to sort of.

The capital we needed to build these things out.

And also showed customers Hey. This is this is how we do this and Patrick led the way I mean everyone's followed suit.

Could work out a deal like the next year or transaction. I I think they're following um, the following multiple strategies to get to the answer of they have long-term demand and its near-term, in terms of its uh, immediate, you know, immediate urgency. But you know, they're looking at

Since then but we were the first through the door.

And it was on the back of Patrick.

Patrick's original vision for that so I think.

The 25 and 30-year deals, you know, if you take a look at the Abernathy deals, it's 25 years. So I'm

You know.

Both wasn't azure and Patrick sort of.

Were prescient in and thinking about once we were able to execute on both of those visions and I think that just led to increased demand that you are correct, we hadn't quite anticipated.

And just two quick questions, our abernathy Diablo size, how much equity you're going to have to put up too.

It is a project that we're talking about eight four megawatts of a build out and then.

Listen I Wonder can you just talk about what items or items on the critical path on the construction schedule. Please.

And uh, from an environmental perspective, uh, not too injurious to a customer that can enable, you know, a high quality credit to come along and be a customer. And I think the answer is yes, but you got to know where to look?

Yeah I'll answer the first question. So on Abernathy, we've given you guidance of $8 million to $10 million for critical megawatt do that quick math.

Got it, thank you for that. I guess I should emphasize Terrell wolf knows where to look. So which is why I think, you know, prior to your end will be bringing on at least 1, maybe 2 other sites.

And again take the wide end of the range, that's roughly a $1 billion seven and there was a $1 3 billion. Google Backstop. So again, you can kind of do that quick math and I would again, just say stay tuned we're kind of sorting out the details with Morgan Stanley and our partners right now and will be in the market.

Yep, understood. Thank you. Congrats

Our next question comes from Tim Han with optimer please, proceed with your question.

As soon as we can be.

And then all the construction item critical path.

Thanks, guys. Um, was there a specific trigger that caused you, um, you know, to kind of basically drive to more than doubling your income level capacity per year, um, or your customers? I mean, it seems like the demand is much stronger than maybe you were thinking about six months ago. Yeah, anything that really drove that?

Neither do you want to take that.

Sure.

On the second.

You know.

Question on critical path.

There are from an equivalent perspective, we are on schedule or ahead of schedule for all of the long lead time pieces. So those.

Is that unes?

Yeah, yeah, yeah. Maybe I guess our policy can jump in. Yeah I think there's a few things, right? So 1 is

Mostly on on site C. Before and 65 are on schedule for construction. We are currently ramping up labor at the site are we're gonna peak, probably sometime in the month of March and so.

Ramping that labor up is probably you know the near term the biggest item that we're focused on it. So that's again we've got a.

A number of different things ongoing to accomplish that but that's the big driver I think here in the next couple of months is getting that ramp up as see before and CB five get through civil and get into kind of full swing on mechanical and electrical.

We have reached the end of our question and answer session.

I would now like to turn the floor back over to Paul Brager for closing comments.

Listen everybody I really appreciate you joining us today.

See if you go back a year ago, we hadn't gone through the full cycle, right? As we've have laid out in the deck, there's not just the site, there's not the design, there's the engineering, there's a financing, and then there's a construction. So, we've been through that full cycle now. And so sitting 18 months ago, looking forward there was pieces of that process that we had not completed. Uh, you know, pending this quarter, you know, through this quarter, we've completed, you know, all of those cycles. And so now we have a much better nuanced understanding of what's required for each 1 of those phases. What we can get done, you know, there's a question earlier on capacity, so all of that is factored into that 250 to 500 megawatt forecast, which again, but a year and a half ago, we didn't have that visibility. So I think that that is a, a reflection both of our capacity capability to get each of those phases done as well as the size of the demand. That's coming from the customers.

If there's one takeaway from the quarter is that <unk> is executing.

We're methodical were consistent and were doing this at scale.

We are building a differentiated platform at the very intersection of AI power and infrastructure.

Supported by long term contracts strong partners and a proven ability to deliver.

Yeah, I would just want to add 2 2 more things 1 is obviously after we we had, you know, or 42 online. Uh that enabled us to sort of do Show and Tell to other customers. So I think um the level of credible incomings to us just you know, it it it was a, you know, multiples of what it was prior to that.

I'm convinced we have the right strategy the right team and the right assets to continue this momentum well into 26 and beyond.

My focus and our focus remains disciplined execution thoughtful expansion and creating sustainable long term value for both our shareholders and partners.

I want to thank you for your continued support and confidence intervals.

Thank you again.

This concludes today's call you may now disconnect your lines.

Secondly, Patrick who was, you know, the architect of a financing strategy uh, from day 1. Um, we didn't want to sort of have an arrangement where our customer was also financing our capex. Uh, he wanted to go about it in the way which we have, which was to say we would do it, um, and we would require credit support to enable, you know, good financing, um, in our case, you know, Patrick's been able to get absolutely great financing. So once we went through that, um, that also opened up the doors to our ability to sort of get the capital we needed, uh, to build these things out. Um, and also showed customers, hey, this is, this is how we do this. And, you know, Patrick led the way, I mean, everyone's followed suit, um, since then. But we were the first through that door, um, and it was on the back of, you know, Patrick's original vision for that. So, I think,

Both what Nazer and Patrick sort of.

You know, we were prescient in thinking about once we were able to execute on both those visions. I think that just led to increased demand that we, you're correct, we hadn't quite anticipated.

I just 2 quick questions. Uh, Abercrombie, do you have a sense? How much Equity you're going to have to put up to, to finish that project? And and are we talking like 8 million per megawatt for the build out? And then

Like an hour. Can you talk about what items or item is on the critical path? Um, on the construction schedule please. Thanks.

Yeah, I'll answer the first question so on Abernathy. Uh we've given you guidance of 8 to 10 million for critical megawatt. If you do that quick math just and again take the wide end of the range. It's roughly a billion 7 and there's a 1.3 billion Google backed up. So again, you can kind of do that quick math, um, and I said, would again just say stay tuned. We're kind of sorting out the details, uh, with Morgan Stanley and our partners right now. And we'll be in the market as soon as we can be.

And then they'll do the construction item critical path.

Now sir, do you want to take that?

Critical path. There are from an equipment perspective, we are on schedule or ahead of schedule for all of the long lead time pieces. So those

You know, mostly on on site CB4 and cb5 are on schedule for construction. We are currently ramping up labor at at the site. Uh we're going to Peak probably sometime in the month of March and so uh ramping that labor up is probably, you know, the near-term, the the biggest item that we're we're focused on. So that's again, we've got uh, a number of different things ongoing to to accomplish that. But that's the the Big Driver. I think here, over the next couple of months is getting that ramp up as CB4 and cb5 get through civil and get into kind of full swing on the mechanical and electrical.

we have reached the end of

I would now like to turn the floor. Back over to Paul Prager for closing comments.

Listen, everybody. I really appreciate you joining us today. I think if there's one takeaway from the quarter, it's that TeraWulf is executing.

We're methodical, we're consistent and we're doing this at scale.

Supported by long-term contracts.

Strong partners and a proven ability to deliver.

I'm convinced we have the right strategy, the right team and the right assets to continue this momentum well into 26 and Beyond.

My focus and our Focus remains disciplined execution, thoughtful expansion, and creating sustainable long-term value.

For both our shareholders and partners.

I want to thank you for your continued support and confidence and Care wolf.

Thank you again.

This concludes today's call you.

now, disconnect