Q3 2025 Bit Digital Inc Earnings Call

Speaker #2: Hello , and welcome to the Bit . Third quarter 2020 Earnings Conference Call . Good afternoon and good evening . Depending on where you are joining us will begin shortly .

Speaker #2: During the participants line will be open and from , listen only mode Following the . remarks , we'll open the line for questions .

Speaker #2: like to ask a question at that time , please press star One on your telephone keypad . call , all As a reminder , today's call is Good morning . being I'll recorded .

Speaker #2: like to ask a question at that time , please press star One on your telephone keypad . call , all As a reminder , today's call is Good morning .

Speaker #3: . And welcome to the Bit Digital, Inc Third Quarter Call 2020 Earnings . Joining me on the call today are Sam Tabar , our Chief executive officer , and Eric chief Wong , our officer .

Speaker #3: remarks include may also non-GAAP financial measures , reconciliations of those measures to the most directly comparable GAAP figures can be found in our form 10-q , which is available on our website .

Speaker #3: After our prepared remarks , we'll open the call for Q&A . With that , I'll hand the today to Sam to discuss our performance .

Speaker #3: Sam .

Speaker #4: Kim Thank you . thank you to everyone for joining us today . The third quarter was our , and first full period as a focused Treasury and staking company .

Speaker #4: Our execution has been consistent with the plan we laid out last year . completing the white IPO in August , the Since become a more streamlined business .

Speaker #4: strategy is simple our Ethereum holdings and grow activity in staking a digital had prudent , responsible way that creates long for term value .

Speaker #4: not chasing We're shareholders sake size for . We're not trying to accumulate as much as possible in the shortest time . Our goal is to compound value per share through disciplined capital allocation , careful risk management and consistent yield generation .

Speaker #4: During the quarter, we continued to expand our ETH position. At quarter end, we held about 122,000 ETH. By the end of October.

Speaker #4: That risen to had more 153,000 ETH , than with roughly 132,000 actively staked . That is a five fold increase since . It shows that our June transition to an platform is , eccentric well underway .

Speaker #4: After quarter we completed end , a $150 million convertible notes offering . We used the proceeds to purchase about 31,000 ETH . The structure of the offering was designed to be accretive to net asset share .

Speaker #4: The initial conversion price was set at a premium to our estimated Nav at the time per . The transaction attracted from participation leading asset digital investors and institutional .

Speaker #4: This financing reflects our disciplined approach to growth . We are not pursuing rapid expansion own for its sake . Instead , we raised long term , low cost funds capital on attractive terms .

Speaker #4: Then we deployed it Ethereum we at what is a compelling long entry term believe point . Our staking operations are now beginning to contribute meaningfully to revenue .

Speaker #4: Staking revenue about $2.9 million third quarter , up from 400,000 in the prior quarter . This was driven by a large directly into balance stake and a realized yield price grew to higher .

Speaker #4: ETH As our position grows , staking , income staking will become the main engine of our results . We see . We see it developing into a strong that cash flow .

Speaker #4: And of course , the real power of source of this model itself when ETH moves meaningfully higher . Something we believe is of a matter when , not if shows .

Speaker #4: Turning briefly to mining, we produced 65 in the third quarter, from the previous quarter. As we continue to wind down the business in a measured way.

Speaker #4: Mining 83 in the prior gross margin was about 32% . Our highest since the recent . down Halving . This reflects improved fleet efficiency as we phased out older hardware and optimized hosting assets .

Speaker #4: As of the end of September . Our active hash rate about one point nine x hash , with an average efficiency of roughly 22 joules per terahash was .

Speaker #4: We expect fleet efficiency to improve to around 19 joules per terahash over the next few quarters, as less efficient units are retired.

Speaker #4: We anticipate active hash rate trending towards 1.1.2 extra hash by mid 2026 . Mining remains a small non-core contributor , but it continues to help offset corporate overhead while we complete the transition to a fully based model .

Speaker #4: As I like to say , mining can be a pretty good business if you never have to Ethereum spend money on replacing Asics .

Speaker #4: If games solid . remain Institutional participation participation is rising . Validator counts . continue to grow on Institutional chain activity is strong . We believe its role as the foundation digital assets for , decentralized finance and tokenized real world assets becomes clearer with time .

Speaker #4: For investors . Bid digital offers an actively managed , yield generating way to gain Ethereum exposure . We combine the characteristics of a treasury vehicle with the active benefits of capital allocation and staking income .

Speaker #4: Our experience and scale allow us to manage risk and capture opportunities that passive ether holders cannot . Finally , discipline is more than a strategy .

Speaker #4: is It who we are . This quarter reaffirmed that discipline in our in our competitive edge . We have operated and evolved through multiple crypto cycles as a public company , drawdowns are new to nothing us .

Speaker #4: That experience helps us stay on focused durability , not momentum . The third quarter was about execution . We streamlined the business . We strengthened our capital base , and we delivered strong results while positioning digital for the next phase of growth .

Speaker #4: With that, I will hand it over to Eric to walk through the financials.

Speaker #5: you Sam . As a reminder , our financial results continue to consolidate . With fiber . Under Thank US GAAP , due to our majority ownership segment , breakouts are available in our form 10-q .

Speaker #5: Also that a portion of our consolidated cash is held at a fiber We level . Total revenue for the third quarter was $30.5 million , compared to $25.7 million in the prior quarter .

Speaker #5: And a 22.8 million in the same period last year . If you're revenue mistaken , totaled $2.9 million , up over 542% from last year .

Speaker #5: We earned 644 ETH from staking native and 53 ether from liquid staking during the quarter . The year over year in staking revenue increase both higher Ethereum earned and a higher average .

Speaker #5: Ethereum price . As of September 30th , we held approximately 122,000 ETH , of which about 100,000 ETH were staked , representing roughly 82% of total holdings .

Speaker #5: That balance has continued to grow meaningfully since quarter end , with 153,500 S held and 132,000 ETH as staked . As of October 31st .

Speaker #5: While new validators take time to enter the activation queue before yield , generating expect the full effect of this increase be reflected in to fourth quarter results .

Speaker #5: Digital asset mining revenue was $7.4 million , compared to 6.6 million in the prior quarter and 10,000,000.1 10.1 million in the same period last year .

Speaker #5: We produced 65 bitcoin during the quarter . Mining margins remained positive despite higher network difficulty and ongoing wind down of the fleet . Cost of revenue , excluding depreciation , was $2.1 million compared to 13.8 million in the prior quarter , and 15.5 million a year ago .

Speaker #5: Gross profit $18.3 million , was representing a 60% gross margin compared to a 32% . In three Q 2020 . For general and expenses administrative were $33.1 million , compared to a 19.7 million in the second quarter and 13.7 million a year earlier .

Speaker #5: The increase primary reflects higher share based compensation and consulting related to costs the We Fiber IPO and transition standalone digital , expected to be normalized as long , non-recurring fall costs off and once we fiber related costs are fully separated , the standalone cost structure for has digital a flexibility to become very lean .

Speaker #5: Net income for the third quarter was $146.7 million , or $0.47 per diluted share , compared to a net loss of $38.8 million in the year ago period .

Speaker #5: Results were driven by higher revenue, improved margins, and a $168 million gain on digital assets, reflecting appreciation in our Ethereum holdings.

Speaker #5: Adjusted EBITDA was $166.8 million compared to 27.8 million in Q2 and negative 19.7 million a year ago . On the balance sheet , we quarter ended the with approximately $179 million in cash and cash equivalents , and approximately 424 million in digital assets consisting almost of entirely Ethereum , including Usdc .

Speaker #5: Total liquidity was approximately $620 million , of which roughly 166 million was held . And we fiber level . We had no debt outstanding as of September 30th after quarter end , we closed $850 million , offering a 4% convertible notes due 2030 , providing long term , low cost capital to support continued ETH accumulation .

Speaker #5: Our plan is to keep total leverage below 20% of ETH holdings . Right now , the figure is above the threshold , meaning we would not increase leverage until the ETH price rises to a comfortable levels relative to our notes .

Speaker #5: That concludes my financial review . I'll now hand the line back to Sam .

Speaker #4: Thank you . The third quarter was an important step in Digital's evolution . We completed our transformation into an Ethereum focused company at the same time , we continue to deliver strong financial performance .

Speaker #4: balance Our sheet is solid . Our capital base has expanded , and our east position continues to grow . Looking ahead , our priorities remain the same .

Speaker #4: We will allocate capital responsibly . We . Will continue scaling our staking operations , and we will maintain a strong financial position . We believe that discipline , patience and thoughtful execution will create the most long term value for our shareholders .

Speaker #4: We are also in a unique position amongst digital asset companies . Bit gives investors exposures to two powerful secular trends . First , the growth of Ethereum as the backdrop of finance decentralized and second , the rise of AI infrastructure through our ownership of white fiber , our competitive edge is clear .

Speaker #4: We built infrastructure that earns in all conditions, anchored by the two most powerful story arcs of our time: Ether and AI. White Fiber is establishing itself as a credible operator in the high performance computing market.

Speaker #4: We continue to see substantial value in that business . Our retained stake represents a meaningful asset for digital shareholders view our . We ownership as both strategic and long term .

Speaker #4: The lock-up on those shares expires in February 2026. But let me state firmly: we will not sell any of our Wi-Fi shares during 2026.

Speaker #4: We are confident that the value of this asset will materially appreciate over time . The recent sector wide drawdown does not affect our conviction .

Speaker #4: Clarity accelerates adoption for the first time. We're seeing regulation begin to finally catch up with technology, and Ethereum is winning where it matters most.

Speaker #4: Every part of modern financial infrastructure now touches ETH in some way . It has become the foundation for stablecoins , decentralized finance and the next wave of on chain financial innovation .

Speaker #4: We believe Ethereum and AI will define the future of digital infrastructure . This is where credibility and capital meet . But digital positions itself early for where the puck is going , not where it has been .

Speaker #4: We are building for participation , not extraction . We own the compute , the capital and the credibility to help secure the next generation of networks .

Speaker #4: As we move forward , we will stay focused on what we can control disciplined capital deployment , prudent risk management , prudent risk management and steady growth in our staking operations .

Speaker #4: We believe this approach will allow us to compound value per share over time and remain one of the most durable platforms in the digital asset space.

Speaker #4: Thank you for joining us today . And thank you for your continued support . Operator , please open the line for questions .

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Speaker #2: We'll take our first question . We'll go to George Sutton with Greg Hallam . Please go ahead .

Speaker #6: Thanks . Hey , Sam . So one thing I think would be helpful , the market has gotten a little late confused of with a number of different blockchain alternatives .

Speaker #6: Call, I would them Solana Suite, Canton, etc. Can you just talk about your ultimate belief in Ethereum relative to the rest of the blockchain options?

Speaker #4: Sure . mean , to begin with , Ethereum has no downtime and Wall Street is going to back a blockchain that has zero downtime .

Speaker #4: So, when it comes to security and downtime, there is no second best. If there is, certainly, the very best blockchain for that use case.

Speaker #4: Of course , Bitcoin is not possible because it doesn't have smart contracts . And of course there is smart contract technology with Solana and the others .

Speaker #4: But they have downtime. There are also centralization issues. It's pretty clear that Wall Street has already made its decision about which blockchain it's going to back, and given the reasons that I mentioned.

Speaker #4: It also helps that, from a regulatory perspective, there's been some clarity and there's emerging clarity about stablecoins. You're seeing regulatory acts like the Clarity Act and the Genius Act making their way up.

Speaker #4: lot of And a these regulations provide a lot of clarity about the rules on stablecoins . And last I looked , I think a little bit more than half of stablecoins are built on Ethereum , and stablecoins are certainly where the pocket will be going .

Speaker #4: And that is built on Ethereum. So for all those reasons and much more, not to mention there are tens of thousands of developers that are on Ethereum.

Speaker #4: That is way more than any other blockchain . By bye , by orders of magnitude . So I mean , I can go on , but those are a few reasons why we believe Ethereum is going to winner .

Speaker #4: That is way more than any other blockchain . By bye , by orders of magnitude . So I mean , I can go on , but those are a few reasons why we believe Ethereum is going to be the And frankly , we think that race has already been largely determined .

Speaker #4: But perhaps I'm biased .

Speaker #6: So, I appreciate the increase in the staking revenue. Do you have a limit on the percentage that you will ultimately stake?

Speaker #4: I mean, for us, the more, the merrier. I'll let Eric talk about that a little bit.

Speaker #5: In terms of the balance sheet , we can stick them 100% . And right now , the reason we're about like , you know , 85% just below 90% is because a portion of that we're working with external managers also being staked .

Speaker #5: you know , And , via different like staking strategies that would generate for the company alpha as well . So that's our target to generate additional yield .

Speaker #5: Just , you know , not just native staking , but beyond native staking , you know , above 3% of the yield . But to answer your question , we .

Speaker #6: Can .

Speaker #5: Last question .

Speaker #6: You multiple custodians .

Speaker #5: I'm sorry ,

Speaker #4: Didn’t catch that. Can you repeat that question, please?

Speaker #6: Are you multiple custodians ?

Speaker #5: Yes . We primarily are using two custodians . One is Fireblocks and another one is cactus custodian by measures board . And we have been using them for the past like you 4 or 5 years .

Speaker #5: And it's been working. It's been working great.

Speaker #6: Perfect . Thanks .

Speaker #2: We'll go to our next question . Our next question comes from Brian Dobson with Clear Street . Please go ahead .

Speaker #7: thanks very Hey , As much . you look out into the broader market , thinking about your competition , what do you think sets the digital part over the next two years ?

Speaker #4: I mean , we have just taking a step back . There's there's s bet and there's Bremner . These two companies , I have a lot of respect for , for Joe and for Tom .

Speaker #4: I was just on a panel with them in Singapore at token 2049 . We had a very healthy debate with each other . I highly recommend checking out that debate because that question came up and the short version of my answer was that , first of all , you know , we the digital was a is has a successful business .

Speaker #4: had you know , we had bitcoin We mining , which was profitable . We sold all our bitcoin . We bought into we bought Ethereum .

Speaker #4: With that, we also had a very successful HPC business. So successful that we IPO'd that business, and we now own 71.5% of a real business.

Speaker #4: So this was before digital was not Beatty . Beatty was not some sort of failed business . That was a shell that was just picked up .

Speaker #4: And then, you know, I did a pipe and shoved a bunch of Ethereum on it. That's not what happened. This was a real company.

Speaker #4: And company this currently still has a very profitable business , very profitable business , including staking Ethereum on the balance sheet . Also , I mean for Joe Lubin , who's the , except co-founder of Ethereum , I've been involved with Ethereum since 2017 .

Speaker #4: I remember asking people me if I thought Ethereum was was basically topping at $300 . I kept telling people no , I don't think it's topped if you ask me .

Speaker #4: still continue to with the same answer . It has not topped even at 3000 . So I've been involved in the space . I also built technology on as a And co-founder to We fluidity .

Speaker #4: built , the team called Airswap , was a something decentralized . We exchange sold that company to actually Joe Lubin , who's the of Ethereum , who co-founder is involved with with Spit .

Speaker #4: So , you know , we intimately involved we're Ethereum , from a price action not just perspective , but also from a technological perspective , which is why reinforces belief our and our why this conviction technology over other technologies and lastly , I mean , there are many reasons .

Speaker #4: lastly , But able to we're do things like unsecured converts . We've been able to financially engineer the purchases of Ethereum . Unlike any other , that there isn't any doubt out there that's done an unsecured convert .

Speaker #4: We are the only ones and we just have that ability and talent and we're structured in a way where we could do that .

Speaker #4: And that's really important because if it's a secured convert , well , when Ethereum goes down , creditors can grab your Ethereum and that's going to end well not for you .

Speaker #4: In our case, that can't happen because it's an unsecured debt. It's not secured by the underlying assets that we have on our balance sheet.

Speaker #4: So, because of our creative financial ability with engineering, which we were inspired by, Michael Saylor's playbook, and this was a successful company, it continues to be a successful company.

Speaker #4: It owns a controlling ownership stake in White Fiber , which is an AI infrastructure company . And because we understand the underlying technology very , very well , and the only person who knows that better than me is Joe Lubin , we think that we're very differentiated in many different ways .

Speaker #4: So, we don't think, frankly, that being the largest is the marker of success. It's how you do it. And we've done it with unsecured we converts.

Speaker #4: are structured in a way positions us to have exposure to digital assets and artificial intelligence in a successful company . And so those for those reasons and more , that's how we're differentiated versus and BMR .

Speaker #7: Thanks . And then Great . just as a just as a quick follow up , the converts and Preferred's market are rather demand for converts .

Speaker #7: And preferred's has been has been pretty robust over the past few months . As you're looking forward , do you have a preferred way of of raising capital ?

Speaker #4: I mean , we love these and secured converts , but I'll let let I'll Eric , our CFO , talk more about that .

Speaker #5: Yeah , I mean , convertible is always on the table , but we do , you know , monitor our leverage very closely .

Speaker #5: we don't want to , you know And , overleverage the company . And we had just set up a ATM program for $2.5 billion , but we only use it when we see in the market .

Speaker #5: Makes sense. Or the nav makes sense. We're very conservative and combined. I think that's our way of adding additional Ethereum to our accumulation.

Speaker #5: Treasury .

Speaker #7: Excellent. Thank you very much.

Speaker #2: Well , next go to Kevin Deedy with H.C. Wainwright . Please go ahead .

Speaker #3: Hi , Sam .

Speaker #8: Hi , Eric . Hi . I first question is I know guess you mentioned 1.2 x to hash mid year . Next year .

Speaker #8: Sam , but I'm looking at the hash price at $0.04 now . And I'm wondering if that may have reset your calculus a little bit .

Speaker #8: And maybe you could give us an idea where you think you'd be at the end of the year next year .

Speaker #4: I'll give that to you , cam and Eric .

Speaker #3: I mean , likely in that range . I think it's just a function of sort of the hosting portfolio pruning over time as contracts roll off and then optimizing the newer machines .

Speaker #3: I mean , there might be space to increase it marginally , just based on what's available . Maybe on shorter term , you know , one month extensions here or there , if those machines make sense .

Speaker #3: But I mean, it is a business generally that is sunsetting, and like we've never had a lot of conviction historically in being able to model mining economics a year out.

Speaker #3: So I think we'll just evaluate that as it comes. But as it stands, it's going to be a business that methodically winds down.

Speaker #3: And as older are machines retired , efficiency should improve and should enhance the overall margin profile of that business . All else equal with the hash price .

Speaker #8: I know that you're working with Fireblocks . Obviously another custodian , but I was wondering if you might offer your thinking on running your own validator nodes , and I guess more broadly , broadly , how you expect to more squeeze yield out of the Ethereum network .

Speaker #5: We work with figment for our native staking have been , and we very happy with their service . You know , and security as well .

Speaker #5: And we take this very seriously as as we grow our digital asset space , it's , you know , in the hundreds of million dollars range and , you know , not too far from dollars of billion digital assets under management and strategy , we have is we're be engaging with external , you know , fund managers for strategies that would generate additional yield beyond native staking .

Speaker #5: But again , we're very cautious about the risks associated with external partners as well . So we take a very measured way . But yeah we're trying to generate additional yield the market as well .

Speaker #5: alpha from On top of the 3% native staking . That's bringing us .

Speaker #8: Yeah . Eric , is there I mean , is there any thinking on , you know , internally about perhaps running your own validator nodes and , you know , taking figment out of the equation ?

Speaker #5: I think as of now , we're pretty happy with with working Figma . But I say when the operation becomes , meaningful enough , consider .

Speaker #5: We might, at this point, say we're happy with working with an external service provider.

Speaker #8: Could you just sort of walk me through your 2.9 million staking revenue number ? How do you how do you get that ? I mean , I saw how much Ethereum you generated .

Speaker #8: Is that just sort of the end of the quarter number multiplied by the Ethereum price , or is it done on some sort of average basis ?

Speaker #5: It's it's based on , I think , daily basis for revenue .

Speaker #8: Okay . Sort of a higher level question given on the Ethereum network because , you know , I'm still trying to get used to it .

Speaker #8: The , you know , the complexion of the business is changed . The network has changed a lot . Right , with very large some companies acquiring large amounts of Ethereum .

Speaker #8: And you a bit named mine and Sharp Link and ETH . The ether machine . And I'm wondering , you know , how you might think about what happens to inflation .

Speaker #8: Ethereum tokens itself ? I mean , I know after the merge it was sort of the network was deflationary and I think inflation is pretty slight , less than 1% at most recently .

Speaker #8: But I'm wondering if you think these Treasury companies changed that inflation pattern.

Speaker #5: I'm not sure if the Treasury companies would , you know , change the inflation because the inflation is more driven by , you know , the issuance of Ethereum from the blockchain itself .

Speaker #5: And , you know , the activities unchanged . So the Treasury companies would , you know , help , you know , held , accumulate and stake the eath .

Speaker #5: That would I think that would average a lower staking yield . But at this point , you know the staking yield is pretty stable .

Speaker #5: So it's not it's not , you know , making a very material impact for the overall inflation . Discussion of Ethereum .

Speaker #8: Okay . Thanks , Eric . I appreciate your color on that . I guess I was sort of thinking that , you know , huge amounts of Ethereum are coming out of the network and there isn't more available to handle .

Speaker #8: You know , the daily transaction volume . .

Speaker #5: Now , they're all being staked . And , you know , all the , you know , that were like , you know , running the validators .

Speaker #5: So they're still in the ecosystem , not being taken out in that regard .

Speaker #8: Okay . Thank you , gentlemen . Thanks for having me on the call . Appreciate it .

Speaker #5: Thank you Kevin .

Speaker #2: Well , next go to Nick Giles with B Securities . Please go Riley ahead .

Speaker #9: Thank you . Operator . And good morning , everyone . This is Henry Hurle on for Nick Giles for my first question . What are your guys's expectations for consolidation in the digital Asset treasury space ?

Speaker #9: And how do you guys think about opportunistic M&A? Thanks.

Speaker #4: It's a good . We've come across some opportunities ourselves . But we're currently focused on on on our unique position . And we are very uniquely positioned .

Speaker #4: not just some We're ordinary , you know , plain vanilla dat we are , you we know , have Ethereum on our balance sheet , which we stake the vast majority of .

Speaker #4: And we own 71.5% of white fiber , which is in the hottest sector . And that will continue . We see absolutely no drop in demand for the building of the data centers , regardless of the drawdown in the sector today , regardless of what Jim has to Cramer say , we actually know that there incredible demand and we own 71.5% of that company .

Speaker #4: That's exposed to that particular demand . So we're uniquely positioned and and there's just no space . I'd rather be in than digital assets .

Speaker #4: And artificial intelligence . And I don't know of any other publicly company that has direct listed that . So exposure to very uniquely positioned , if buy we're to another that I'm unsure they'd add value really .

Speaker #4: I think we'll just continue to stay the course and and by and by cerium . And just as I mentioned today and it's very important for everybody to note , we will even though our even though our lockup ends in about three months , for white fiber , we are announcing today that we will not sell that stake throughout next year because our conviction in that company is extremely rock solid , high .

Speaker #9: Great . Thank you . That's well noted . And then as a follow up to a previous question , could you guys provide any more guidance on staking yields going forward ?

Speaker #9: Like how should we think about opportunities beyond the 3% annually that we're seeing today ? Thanks .

Speaker #3: I'll let .

Speaker #4: will answer Eric that question , but I hope that one day people will dig a little deeper on how people are doing their staking amongst the that's , you know , it would be interesting to see if fees , fees that , you know , shouldn't be , you know , you guys should look at the fees that are being charged and the various service providers that other debts are using just to make sure that , you know , it's in line with , with the interest of shareholders .

Speaker #4: could I certainly say that with respect to ours , very much aligned with the interest of shareholders . on , From there I'll just leave it to Eric to to answer your question more directly .

Speaker #5: Yeah , happy to . Yeah . The native staking right now provides about 3% . think it I will continue to provide 3% for , you know , medium term period of time .

Speaker #5: And the , you know , managers were working with we like to see at least , you know , 4% of the yield .

Speaker #5: You know , that's a goal . But we're , you know , evaluating those strategies . You know , and adjusted for the risk return .

Speaker #5: And but combined you know , we'd like to at least boost 10% to 20% of of the compared to the benchmark of native staking .

Speaker #9: Great. Thanks for the time, guys.

Speaker #5: Thank you .

Speaker #10: Mike Grondahl, Northland Securities: Hey, Sam.

Speaker #11: Hey , Mike . You .

Speaker #10: white About fiber and what would you say have been the two biggest challenges in ramping revenue ? There ?

Speaker #6: Well , look .

Speaker #4: You know , we're trying to close this deal . This , this , this , this lease . And I wish it was as easy as signing a lease for an apartment it's not .

Speaker #4: . There are a lot But of moving parts when it comes to a contract . That is generationally long and that has this kind of quantum amount to it .

Speaker #4: So things little take a longer than than anticipated . But time is our friend because as time went on , we were able to upgrade the deal on the white fiber side .

Speaker #4: So we look very much forward to to announcing that deal when it's finally signed . I will not give . I will not discuss like a timeline , except to say it's soon , very but I cannot .

Speaker #4: I don't want to quantify it because I don't want to be crucified afterwards . If I get it wrong . So let's let's .

Speaker #4: I'm glad that everybody's patient . But to answer your question , the challenge with respect to white fiber is basically how long it takes and how complicated things are and negotiating deals of a certain size .

Speaker #4: It's it's it's it takes a while , but , you know , for those who are patient , people would be , you know , likely rewarded .

Speaker #10: Got it. And no operational challenges or anything of that nature. Just basically lease complications and signing, sounds like.

Speaker #4: That's right . That's right . And , you know , have we we are so blessed that at the end of acquisition on them fiber the we did a what I think was a , you know , gem of an a acquisition of a team called Novum last year .

Speaker #4: One of their strengths is that they have a retrofit approach to data centers. Their entire careers have been focused on this for hyperscalers before it was for us.

Speaker #4: they they did They they would identify facilities and turn them into 2 or 3 data centers . In fact , the latest one they did for fiber was they identified what was a mattress factory last February that took control of it .

Speaker #4: I think early April or late March . And now they turned it into a tier three data center . And it's it's going to start generating revenue now very well for a known counterparty called Cerebrus .

Speaker #4: And they did that on time within budget , within six months . And they they use a retrofit model approach to that . You cannot do that with a greenfield build .

Speaker #4: Greenfield builds take about 18 months , sometimes two years . And a lot of variables that that you don't control . And building a greenfield .

Speaker #4: But because this team that we acquired has this ability to to retrofit existing facilities and turn them into 2 or 3 data centers , that's a very special ability that not many people have .

Speaker #4: And we have that team . And so know , because , you now we're looking at North Carolina , which is our flagship facility , that used to be one of the largest manufacturing facilities on the eastern seaboard .

Speaker #4: And we're turning that into a tier three data center . The construction has already begun . And and now we're we're just just working on on the , on finalizing the business development aspect of it .

Speaker #4: But operationally , we are extremely well seasoned thanks to the talent , the very deep talent and the seasoned experience of of our team that that we were able to acquire and hire across the past year and a half .

Speaker #4: .

Speaker #10: Hey, got it. Thanks for that color.

Speaker #4: Thanks for that question .

Speaker #2: Thank you . And next we'll go to Pat McCann with Noble Capital Markets . Please go ahead .

Speaker #7: Hey , thanks for taking my questions on for Joe Gomez today . First question is with with the goal of becoming the largest public treasury .

Speaker #7: Where do you you rank today ?

Speaker #3: And .

Speaker #4: The goal .

Speaker #3: The goal .

Speaker #4: The is . goal Yeah . The goal is to be the . best The goal is . Size is not really the metric .

Speaker #4: The goal is how you do it . So we were able to financially engineer the purchase of Ethereum in ways that others have not .

Speaker #4: That's extremely important . Imagine you become the best or the biggest through , say a secured convert . I'd much rather be number two purchasing Ethereum with an unsecured convert than being number one with , you know , and doing that through a secured convert .

Speaker #4: I'm not saying that's what the number one guy did , but there are sloppy ways to buy Ethereum and to be number one through a sloppy way is not the way to go .

Speaker #4: And so we've been very , very careful not to do it that way . And and I think that to us is really our North Star .

Speaker #4: How you do it , how you're purchasing Ethereum , how are you positioned being positioned with owning a successful company like White Fiber , being positioned by buying Ethereum through unsecured converts , being positioned that way to do it responsibly , to us is our goal and not to just buy serum , hell or high .

Speaker #4: And you water know , and be number one . And then , you know , you can get in trouble after a while so that that is not something that is our goal necessarily .

Speaker #4: Having said that , we do intend to buy material amounts of Ethereum . We'll do it in a responsible way . We have levers that others do not have , and we look forward to reporting in the term medium future about these .

Speaker #4: Ethereum purchases that we'll be doing . And , you know , it's glad it's you know , it's nice to see that Ethereum is down today .

Speaker #4: You know , people may be selling Ethereum today . But you know it's it's those who have diamond hands who rich . And we have a very long term vision of what Ethereum was .

Speaker #4: I've been saying the same thing since 2017 . The same thing in 20 1820 , same thing in 2019 . And I'm saying the same thing in 2025 .

Speaker #4: I'll be saying the same thing next year . In 2026 . Ethereum will continue to structurally go up . There will be a lot of cyclical gyrations .

Speaker #4: And but the way that the digital is going to purchase Ethereum will be responsibly and prudently because we don't want to blow up .

Speaker #7: Got it? I appreciate that. And then the other question, if you could comment on the G&A expenses for the quarter, what went into that and where do you see that going moving forward?

Speaker #4: Yeah , there's a lot of one off and expenses because of a maybe I should leave that to Cam and Eric . Go ahead guys .

Speaker #3: I mean does consolidate white and I mean like from the perspective of consolidation , that would generally refer to comments made on the Wightfibre earnings call , which would provide a lot of on that nuance side of the business for digital .

Speaker #3: There was similarly some non-recurring items , some elevated marketing spends , some that we would view as discretionary that we could pull back , like generally , digital is pretty flexible from a structure cost perspective , and it can be very lean and it will become significantly leaner .

Speaker #3: So on a forward basis , G&A should be materially lower .

Speaker #4: Yeah, basically just a lot of one-offs that happened at the DNA level on a normalized basis. You'll see how digital the cost structure is; actually, it’s very light and flexible.

Speaker #7: Appreciate it, great guys.

Speaker #2: And we have no questions over the phone.

Speaker #4: No more questions okay . Well thank you for joining us today . We appreciate your continued interest and support . We look forward to speaking with you again next quarter .

Speaker #4: And remember about my comments on Diamond Hands. Thank you, everybody.