Q2 2026 Applied Digital Corp Earnings Call

Speaker #1: Good afternoon, and welcome to your Applied Digital's Fiscal Second Quarter 2026 conference call. My name is Konstantin, and I will be your operator for today.

Speaker #1: Before this call, Applied Digital issued its financial results for the fiscal second quarter ended November 30, 2025. A press release, a copy of which has been furnished in a report on a Form 8-K filed with the Securities and Exchange Commission, or SEC.

Speaker #1: And will be available in the Investor Relations section of the company's website. Joining us on today's call are Applied Digital's Chairman and CEO, Wes Cummins, and CFO Sidell Mohmand. Following the remarks, we will open the call for questions.

Speaker #1: Before we begin, Matt Glover from Gateway Group will make a brief introductory statement. Mr. Glover, you...

Speaker #1: may begin. Thank you,

Matt Glover: Thank you, Operator.

Speaker #2: Operator: Hello, everyone, and welcome to Applied Digital's fiscal second quarter 2026 conference call. Before management begins formal remarks, we'd like to remind everyone that some statements we're making today may be considered forward-looking statements under securities laws and involve a number of risks and uncertainties.

Operator: Hello, everyone, and welcome to Applied Digital's Fiscal Second Quarter 2026 conference call. Before management begins formal remarks, we'd like to remind everyone that some statements we're making today may be considered forward-looking statements under securities laws and involve a number of risks and uncertainties. As a result, we caution you that there are a number of factors, many of which are beyond our control, which could cause actual results and events to differ materially from those described in the forward-looking statements. For more detailed risks, uncertainties, and assumptions relating to our forward-looking statements, please see the disclosures in our earnings release and public filings made with the SEC. We disclaim any obligation or undertaking to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made, except as required by law.

Hello, everyone, and welcome to Applied Digital's Fiscal Second Quarter 2026 conference call. Before management begins formal remarks, we'd like to remind everyone that some statements we're making today may be considered forward-looking statements under securities laws and involve a number of risks and uncertainties. As a result, we caution you that there are a number of factors, many of which are beyond our control, which could cause actual results and events to differ materially from those described in the forward-looking statements. For more detailed risks, uncertainties, and assumptions relating to our forward-looking statements, please see the disclosures in our earnings release and public filings made with the SEC. We disclaim any obligation or undertaking to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made, except as required by law.

Speaker #2: As a result, we caution you that there are a number of factors, many of which are beyond our control, that could cause actual results and events to differ materially from those described in the forward-looking statements.

Speaker #2: For more detailed risks, uncertainties, and assumptions relating to our forward-looking statements, please see the disclosures, earnings release, and public filings made with the SEC.

Speaker #2: We disclaim any obligation or undertaking to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made, except as required by law.

Speaker #2: We also discuss our disclosures in the reconciliation tables to the applicable GAAP measures and earnings release. Please consider these metrics carefully. We refer you to our filings with the SEC for detailed disclosures and descriptions of our business, as well as uncertainties and other variable circumstances, including but not limited to risks and uncertainties in our annual report on Form 10-K and our quarterly reports on Form 10-Q.

Operator: We also discuss non-GAAP financial metrics and encourage you to read our disclosures and the reconciliation tables to the applicable GAAP measures in our earnings release carefully as you consider these metrics. We refer you to our filings with the SEC for detailed disclosures and descriptions of our business, as well as uncertainties and other variable circumstances, including, but not limited to, risks and uncertainties identified under the captioned risk factors in our annual report on Form 10-K and our quarterly reports on Form 10-Q. You may access Applied Digital's SEC filing for free by visiting the SEC website at www.sec.gov. I'd like to remind everyone that this call is being recorded and will be made available for replay via a link available in the Investor Relations section of Applied Digital's website. Now I'd like to turn the call over to Applied Digital's Chairman and CEO, Wes Cummins. Wes.

We also discuss non-GAAP financial metrics and encourage you to read our disclosures and the reconciliation tables to the applicable GAAP measures in our earnings release carefully as you consider these metrics. We refer you to our filings with the SEC for detailed disclosures and descriptions of our business, as well as uncertainties and other variable circumstances, including, but not limited to, risks and uncertainties identified under the captioned risk factors in our annual report on Form 10-K and our quarterly reports on Form 10-Q. You may access Applied Digital's SEC filing for free by visiting the SEC website at www.sec.gov. I'd like to remind everyone that this call is being recorded and will be made available for replay via a link available in the Investor Relations section of Applied Digital's website. Now I'd like to turn the call over to Applied Digital's Chairman and CEO, Wes Cummins. Wes.

Speaker #2: You may access Applied Digital's SEC filings for free by visiting the SEC website at www.sec.gov. I'd like to remind everyone that this call is being recorded and will be made available for replay via a link in the Investor Relations section of Applied Digital's website.

Speaker #2: Now, I'd like to turn the call over to Applied Digital's Chairman and CEO, Wes Cummins.

Speaker #2: Wes, Thanks, Matt.

Operator: Thanks, Matt, and good afternoon, everyone. Thank you for joining our fiscal Q2 2026 conference call. I'd like to begin by thanking our employees for their dedication to delivering high-performance, sustainably engineered infrastructure for AI, cloud, and blockchain workloads. Their execution and commitment continue to be foundational to our success. This quarter marks several important milestones across our HPC data center and hosting business. Bel Air's Forge One reached ready for service, energizing 100MW on schedule and completing the first of three contracted buildings. The remainder of this AI factory campus is expected to be completed by the end of 2027 and will host 400MW for CoreWeave, representing approximately $11 billion in prospective lease revenue over approximately 15 years. We also announced a roughly $5 billion 15-year lease with a US-based investment-grade hyperscaler for 200MW at Bel Air's Forge Two.

Wes Cummins: Thanks, Matt, and good afternoon, everyone. Thank you for joining our fiscal Q2 2026 conference call. I'd like to begin by thanking our employees for their dedication to delivering high-performance, sustainably engineered infrastructure for AI, cloud, and blockchain workloads. Their execution and commitment continue to be foundational to our success. This quarter marks several important milestones across our HPC data center and hosting business. Bel Air's Forge One reached ready for service, energizing 100MW on schedule and completing the first of three contracted buildings. The remainder of this AI factory campus is expected to be completed by the end of 2027 and will host 400MW for CoreWeave, representing approximately $11 billion in prospective lease revenue over approximately 15 years. We also announced a roughly $5 billion 15-year lease with a US-based investment-grade hyperscaler for 200MW at Bel Air's Forge Two.

Speaker #3: Good afternoon, everyone. Thank you for joining our fiscal second quarter 2026 conference call. I’d like to begin by thanking our employees for their dedication to delivering high-performance, sustainably engineered infrastructure for AI, cloud, and blockchain workloads.

Speaker #3: Their execution and commitment continue to be foundational to our success. This quarter marks several important milestones across our HPC data center and hosting business.

Speaker #3: Polaris Forge One reached ready-for-service, energizing 100 megawatts on schedule and completing the first three of the first three contracted buildings. The remainder of this AI factory campus is expected to be completed by the end of 2027 and will host 400 megawatts for CoreWeave, representing approximately $11 billion in prospective lease revenue over approximately 15 years.

Speaker #3: We also announced a roughly $5 billion, 15-year lease with a US-based investment-grade hyperscaler for 200 megawatts at Polaris Forge Two. This is a $3 billion project near Harwood, North Dakota, that is advancing on schedule, with initial capacity expected in 2026 and full build-out in 2027.

Operator: This is a $3 billion project near Harwood, North Dakota, that is advancing on schedule, with initial capacity expected in 2026 and full build-out in 2027. Together, these agreements represent 600MW of lease capacity and approximately $16 billion in prospective lease revenue across our North Dakota campuses. Having secured two hyperscale leases in the region, inbound demand has increased meaningfully. As a result, we are in advanced discussions with another investment-grade hyperscaler across multiple regions, including additional locations in the Dakotas and select Southern US markets. While there can be no assurance of future contracts, we believe we are well-positioned to begin construction of additional campuses in the near term. Hyperscalers are competing aggressively to secure sites that can support massive AI demand, responding to data highlighting significant shortfalls in global power capacity.

This is a $3 billion project near Harwood, North Dakota, that is advancing on schedule, with initial capacity expected in 2026 and full build-out in 2027. Together, these agreements represent 600MW of lease capacity and approximately $16 billion in prospective lease revenue across our North Dakota campuses. Having secured two hyperscale leases in the region, inbound demand has increased meaningfully. As a result, we are in advanced discussions with another investment-grade hyperscaler across multiple regions, including additional locations in the Dakotas and select Southern US markets. While there can be no assurance of future contracts, we believe we are well-positioned to begin construction of additional campuses in the near term. Hyperscalers are competing aggressively to secure sites that can support massive AI demand, responding to data highlighting significant shortfalls in global power capacity.

Speaker #3: Together, these agreements represent 600 megawatts of lease capacity and approximately $16 billion in prospective lease revenue across our North Dakota campuses. Having secured two hyperscale leases in the region, inbound demand has increased meaningfully.

Speaker #3: As a result, we are in advanced discussions with another investment-grade hyperscaler across multiple regions, including additional locations in the Dakotas and select southern U.S. markets.

Speaker #3: While there can be no assurance of future contracts, we believe we are well-positioned to begin construction of additional campuses in the near term. Hyperscalers are competing aggressively to secure sites that can support massive AI demand.

Speaker #3: Responding to data highlighting significant shortfalls in global power capacity. Many are being asked to commit capital to 30-year power plant developments, meaning energy may take years to come online and could cost more than anticipated.

Operator: Many are being asked to commit capital to 30-year power plant developments, meaning energy may take years to come online and could cost more than anticipated. Beyond the immediate rush, AI infrastructure is ultimately a cost-of-capital business where every input matters. In this context, we chose the Dakotas because we believe they provide a durable, competitive advantage with low-cost, abundant energy, climate, ample land for expansion of existing sites, and potential for future large-scale super sites that could align with regional energy developments, making Applied Digital sites not only immediately valuable, but we believe also more efficient and cost-effective over the long term compared with other regions in the US and globally. Building on this advantage, we have significantly evolved our construction and design capabilities. Our current data center designs are modular and highly efficient, allowing us to run numerous concrete plants simultaneously and leverage prefabricated components delivered by 18-wheelers.

Many are being asked to commit capital to 30-year power plant developments, meaning energy may take years to come online and could cost more than anticipated. Beyond the immediate rush, AI infrastructure is ultimately a cost-of-capital business where every input matters. In this context, we chose the Dakotas because we believe they provide a durable, competitive advantage with low-cost, abundant energy, climate, ample land for expansion of existing sites, and potential for future large-scale super sites that could align with regional energy developments, making Applied Digital sites not only immediately valuable, but we believe also more efficient and cost-effective over the long term compared with other regions in the US and globally. Building on this advantage, we have significantly evolved our construction and design capabilities. Our current data center designs are modular and highly efficient, allowing us to run numerous concrete plants simultaneously and leverage prefabricated components delivered by 18-wheelers.

Speaker #3: Beyond the immediate rush, AI infrastructure is ultimately a cost-of-capital business where every input matters. In this context, we chose the Dakotas because we believe they provide a durable, competitive advantage with low-cost, abundant energy and climate, ample land for expansion of existing sites, and potential for future large-scale super sites that could align with regional energy developments, making Applied Digital sites not only immediately valuable, but we believe also more efficient and cost-effective over the long term compared with other regions in the US and globally.

Speaker #3: Building on this advantage, we have significantly evolved our construction and design capabilities. Our current data center designs are modular and highly efficient, allowing us to run numerous concrete plants simultaneously and leverage prefabricated components delivered by 18-wheelers.

Speaker #3: The approach reduces construction timelines and lowers overall cost. We've expanded the footprint and flexibility of our buildings' design to allow for different GPU and ASIC chip architectures, and networking infrastructure to support multi-purpose AI use cases and traditional cloud workloads.

Operator: The approach reduces construction timelines and lowers overall cost. We've expanded the footprint and flexibility of our buildings' design to allow for different GPU and ASIC chip architectures and networking infrastructure to support multi-purpose AI use cases and traditional cloud workloads. While AI is driving significant demand, cloud computing continues to grow and increasingly competes for data center capacity. Our facilities are purpose-built to support training, inference, and traditional cloud workloads intended to give hyperscalers maximum flexibility over the life of the asset. Looking ahead, we expect to maintain a meaningful competitive advantage in the Dakotas and intend to announce additional locations in other advantage regions. With that, I'll turn the call over to our CFO, Saidal Mohmand, for a detailed review of our financials. Saidal. Thanks, Wes, and good afternoon, everyone. This quarter represents a major inflection point for Applied Digital.

The approach reduces construction timelines and lowers overall cost. We've expanded the footprint and flexibility of our buildings' design to allow for different GPU and ASIC chip architectures and networking infrastructure to support multi-purpose AI use cases and traditional cloud workloads. While AI is driving significant demand, cloud computing continues to grow and increasingly competes for data center capacity. Our facilities are purpose-built to support training, inference, and traditional cloud workloads intended to give hyperscalers maximum flexibility over the life of the asset. Looking ahead, we expect to maintain a meaningful competitive advantage in the Dakotas and intend to announce additional locations in other advantage regions. With that, I'll turn the call over to our CFO, Saidal Mohmand, for a detailed review of our financials. Saidal.

Speaker #3: While AI is driving significant demand, cloud computing continues to grow and increasingly competes for data center capacity. Our facilities are purpose-built to support training, inference, and traditional cloud workloads, intended to give hyperscalers maximum flexibility over the life of the asset.

Speaker #3: Looking ahead, we expect to maintain a meaningful competitive advantage in the Dakotas and intend to announce additional locations in other event advantage regions. With that, I'll turn it over to Sadol Mohmand for a detailed review of our financials.

Speaker #3: Sadol? Thanks, Wes, and good

Saidal Mohmand: Thanks, Wes, and good afternoon, everyone. This quarter represents a major inflection point for Applied Digital.

Speaker #4: Afternoon, everyone. This quarter represents a major inflection point for Applied Digital. After two years of construction and over $1 billion invested in our first 100-megawatt data center, we have now begun to generate lease revenues.

Operator: After two years of construction and over $1 billion invested in our first 100-MW data center, we have now begun to generate lease revenues. We expect lease revenues to ramp over the next quarter, and it's important to note that we currently have two different campuses under construction simultaneously, representing 600MW. These buildings are expected to come online over the course of calendar 2026 and 2027, where we anticipate meaningful revenue growth over the coming 18 to 24 months. This does not include any additional campuses currently under advanced discussions with customers, which would be layered into these numbers according to their respective design and build timelines. From a high-level finance perspective, we have agreements in place with top-tier financial institutions that allow us to execute this repeatable and capital-efficient framework.

After two years of construction and over $1 billion invested in our first 100-MW data center, we have now begun to generate lease revenues. We expect lease revenues to ramp over the next quarter, and it's important to note that we currently have two different campuses under construction simultaneously, representing 600MW. These buildings are expected to come online over the course of calendar 2026 and 2027, where we anticipate meaningful revenue growth over the coming 18 to 24 months. This does not include any additional campuses currently under advanced discussions with customers, which would be layered into these numbers according to their respective design and build timelines. From a high-level finance perspective, we have agreements in place with top-tier financial institutions that allow us to execute this repeatable and capital-efficient framework.

Speaker #4: We expect lease revenues to ramp over the next quarter, and it's important to note that we currently have two different campuses under construction simultaneously, representing 600 expected to come online over the course of megawatts.

Speaker #4: These buildings are calendar 2026 and 2027, where we anticipate meaningful revenue growth over the coming 18 to 24 months. This does not include any additional campuses currently under advanced discussions with customers, which would be layered into these numbers according to their respective design and build timelines.

Speaker #4: From a high-level finance perspective, we have agreements in place with top-tier financial institutions that allow us to execute this repeatable and capital-efficient framework. The first step of this process is to draw on our development loan facility with Macquarie Equipment Capital, which allows us to fund pre-lease construction for new sites.

Operator: The first step of this process is to draw on our development loan facility with Macquarie Equipment Capital, which allows us to fund pre-lease construction for new sites. Subsequent to the second first quarter end, we made our first draw under this $100 million facility. The second step, following a mutually agreed-upon executed lease with an investment-grade hyperscaler, is to access the Macquarie Asset Management's $5 billion preferred equity facility. To date, we have drawn $900 million from this facility to support our Bel Air's Forge One and Two campuses. We expect a similar financial structure will be used going forward for future development projects. This multi-layered financing framework allows Applied Digital to leverage third-party capital for a majority of the upfront investment while retaining majority ownership of each site, providing financial flexibility and reducing reliance on public capital markets.

The first step of this process is to draw on our development loan facility with Macquarie Equipment Capital, which allows us to fund pre-lease construction for new sites. Subsequent to the second first quarter end, we made our first draw under this $100 million facility. The second step, following a mutually agreed-upon executed lease with an investment-grade hyperscaler, is to access the Macquarie Asset Management's $5 billion preferred equity facility. To date, we have drawn $900 million from this facility to support our Bel Air's Forge One and Two campuses. We expect a similar financial structure will be used going forward for future development projects. This multi-layered financing framework allows Applied Digital to leverage third-party capital for a majority of the upfront investment while retaining majority ownership of each site, providing financial flexibility and reducing reliance on public capital markets.

Speaker #4: Subsequent to the second first quarter end, we made our first draw under this $100 million facility. The second step, following a mutually agreed-upon executed lease with an investment-grade hyperscaler, is to access Macquarie Asset Management's $5 billion preferred equity facility.

Speaker #4: To date, we have drawn $900 million from this facility to support our Polaris Forge One and Two campuses. We expect a similar financial structure will be used going forward for future development projects.

Speaker #4: This multi-layered financing framework allows Applied Digital to leverage third-party capital for a majority of the upfront investment while retaining majority ownership of each site, providing financial flexibility and reducing reliance on public capital markets.

Speaker #4: On the debt front this quarter, we completed a $2.35 billion private offering of our nine-and-a-quarter percent senior secured notes due 2030 to finance the first two of the three buildings at our Polaris Forge One site, supporting the CoreWeave leases, allowing us to refinance existing debt.

Operator: On the debt front this quarter, we completed a $2.35 billion private offering of our nine-and-a-quarter senior secured notes due 2030 to finance the first two of the three buildings at our Polaris Forge One site, supporting the CoreWeave leases, allowing us to refinance existing debt. Note, project-level debt typically carries higher interest rates initially as it finances the riskier portion of development, but once the buildings are operational, our goal is to refinance at lower rates. Additionally, our team is actively exploring and working on options to reduce the cost of debt for the third building, ensuring we continue to optimize our capital structure. Now let's turn to the quarter. Revenues for the fiscal second quarter of fiscal 2026 were $126.6 million, up 250% from $36.2 million in the prior year.

On the debt front this quarter, we completed a $2.35 billion private offering of our nine-and-a-quarter senior secured notes due 2030 to finance the first two of the three buildings at our Polaris Forge One site, supporting the CoreWeave leases, allowing us to refinance existing debt. Note, project-level debt typically carries higher interest rates initially as it finances the riskier portion of development, but once the buildings are operational, our goal is to refinance at lower rates. Additionally, our team is actively exploring and working on options to reduce the cost of debt for the third building, ensuring we continue to optimize our capital structure. Now let's turn to the quarter. Revenues for the fiscal second quarter of fiscal 2026 were $126.6 million, up 250% from $36.2 million in the prior year.

Speaker #4: Note, project-level debt typically carries higher interest rates initially, as it finances the riskier portion of development. But once the buildings are operational, our goal is to refinance at lower rates.

Speaker #4: Additionally, our team is actively exploring and working on options to reduce the cost of debt for the third building, ensuring we continue to optimize our capital structure.

Speaker #4: Now, let's turn to the quarter. Revenues for the fiscal second quarter of fiscal '26 were $126.6 million, up 250% from $36.2 million in the prior year.

Speaker #4: The increase was primarily due to $73 million of revenue generated from the 10-out fit-out services associated with our HPC hosting business, along with $12 million of recognized revenue in connection with the commencement of the first CoreWeave lease at Polaris Forge One.

Operator: The increase was primarily due to a $73 million of revenue generated from the turnout fit-out services associated with our HPC hosting business, along with $12 million of recognized revenue in connection with the commencement of the first CoreWeave lease at Polaris Forge One, reflecting partial quarter lease revenue. On a cash basis for the leases, revenues were approximately $8 million. The difference between cash received and the revenue recognized reflects ASC 842 lease accounting, which requires lease revenue to be recognized on a straight-line basis over 15 years. We will aim to provide clarity on this difference on an annual basis going forward. Applied Digital's data center hosting segment, which operates 286MW of customer ASICs across two North Dakota facilities, had an exceptionally strong quarter, contributing $41.6 million of revenue, up 15% compared to the prior year.

The increase was primarily due to a $73 million of revenue generated from the turnout fit-out services associated with our HPC hosting business, along with $12 million of recognized revenue in connection with the commencement of the first CoreWeave lease at Polaris Forge One, reflecting partial quarter lease revenue. On a cash basis for the leases, revenues were approximately $8 million. The difference between cash received and the revenue recognized reflects ASC 842 lease accounting, which requires lease revenue to be recognized on a straight-line basis over 15 years. We will aim to provide clarity on this difference on an annual basis going forward. Applied Digital's data center hosting segment, which operates 286MW of customer ASICs across two North Dakota facilities, had an exceptionally strong quarter, contributing $41.6 million of revenue, up 15% compared to the prior year.

Speaker #4: Reflecting partial quarter lease revenue. On a cash basis for the leases, revenues were approximately $8 million. The difference between cash received and the revenue recognized reflects ASC 842 lease accounting, which requires lease revenue to be recognized on a straight-line basis over 15 years.

Speaker #4: We will aim to provide clarity on this difference on an annual basis going forward. Applied Digital's data center hosting segment, which operates 286 megawatts of customer ASICs across two North Dakota facilities, had an exceptionally strong quarter, contributing $41.6 million of revenue, up 15% compared to the prior year.

Speaker #4: This growth was primarily driven by increased capacity online across the company's hosting facilities. We are very pleased with this business, which generated roughly $16 million in segment operating profit in just one quarter on a $131 million asset base.

Operator: This growth was primarily driven by increased capacity online across the company's hosting facilities. We are very pleased with this business, which generated roughly $16 million in segment operating profit in just one quarter on a $131 million asset base. Cost of revenues in total were $100.6 million compared to $22.7 million in the prior quarter. Approximately $69.5 million of the increase in the cost of revenue was associated with the tenant fit-out services for our HPC hosting business, while the remaining increase was associated with our data center hosting business and other expenses directly attributable to generating revenue. SG&A was $57 million compared to $26 million.

This growth was primarily driven by increased capacity online across the company's hosting facilities. We are very pleased with this business, which generated roughly $16 million in segment operating profit in just one quarter on a $131 million asset base. Cost of revenues in total were $100.6 million compared to $22.7 million in the prior quarter. Approximately $69.5 million of the increase in the cost of revenue was associated with the tenant fit-out services for our HPC hosting business, while the remaining increase was associated with our data center hosting business and other expenses directly attributable to generating revenue. SG&A was $57 million compared to $26 million.

Speaker #4: Cost of revenues in total were $100.6 million, compared to $22.7 million in the prior quarter. Approximately $69.5 million of the increase in the cost of revenue was associated with the tenant fit-out services for our HPC hosting business, while the remaining increase was associated with our data center hosting business and other expenses directly attributable to generating revenue.

Speaker #4: SG&A was $57 million, compared to $26 million. This increase was due to an increase of $23.8 million in stock-based comp due to accelerated vesting of certain employee stock awards, $4.7 million in professional service expenses, primarily related to an increase in legal services, and $1.2 million in personnel expense for employee costs and other costs attributable to supporting the growth of the business.

Operator: This increase was due to an increase of $23.8 million in stock-based comp due to accelerated vesting of certain employee stock awards, $4.7 million in professional service expenses primarily related to an increase in legal services, and $1.2 million in personnel expense for employee costs and other costs attributable to supporting the growth of the business. Interest expense was $11.5 million compared to $2.9 million, while net loss was $31.2 million, or $0.11 per share. On an adjusted basis, adjusted net income was positive $100,000, or $0 per share. Adjusted EBITDA for the quarter totaled $20.2 million. From a balance sheet perspective, Applied Digital is exceptionally well-positioned. We ended the second fiscal quarter with $2.3 billion in cash, cash equivalents, and restricted cash versus $2.6 billion in debt, most of which does not mature until 2030, and approximately $2.1 billion in total equity.

This increase was due to an increase of $23.8 million in stock-based comp due to accelerated vesting of certain employee stock awards, $4.7 million in professional service expenses primarily related to an increase in legal services, and $1.2 million in personnel expense for employee costs and other costs attributable to supporting the growth of the business. Interest expense was $11.5 million compared to $2.9 million, while net loss was $31.2 million, or $0.11 per share. On an adjusted basis, adjusted net income was positive $100,000, or $0 per share. Adjusted EBITDA for the quarter totaled $20.2 million. From a balance sheet perspective, Applied Digital is exceptionally well-positioned. We ended the second fiscal quarter with $2.3 billion in cash, cash equivalents, and restricted cash versus $2.6 billion in debt, most of which does not mature until 2030, and approximately $2.1 billion in total equity.

Speaker #4: Interest expense was $11.5 million, compared to $2.9 million, while net loss was $31.2 million, or $0.11 per share. On an adjusted basis, adjusted net income was positive $100,000, or 0 cents per share.

Speaker #4: Adjusted EBITDA for the quarter totaled $20.2 million. From a balance sheet perspective, Applied Digital is exceptionally well-positioned. We ended the second fiscal quarter with $2.3 billion in cash, cash equivalents, and restricted cash versus $2.6 billion in debt, most of which does not mature until 2030, and approximately $2.1 billion in total equity.

Speaker #4: Note these figures do not include the $382.5 million in proceeds from financings completed subsequent to the quarter end. Our goal is to maintain one of the strongest balance sheets in the industry throughout the majority of the construction phases.

Operator: Note these figures do not include the $382.5 million in proceeds from financings completed subsequent to the quarter end. Our goal is to maintain one of the strongest balance sheets in the industry throughout the majority of the construction phases, intentionally holding a robust liquidity position to preserve a strong credit profile while enabling additional investments in equipment and new sites, then reassessing as buildings come online as our cash flow increases. With that, I'll turn over the call to Wes for closing remarks. Thank you. Thank you, Saidal. Applied Digital is executing in a market defined by extraordinary hyperscaler investment, now exceeding $400 billion annually. With our first two hyperscalers under contract for 600MW and additional sites and advanced discussions, we are well-positioned to scale rapidly. We now expect to surpass our long-term goal of $1 billion in NOI within five years.

Note these figures do not include the $382.5 million in proceeds from financings completed subsequent to the quarter end. Our goal is to maintain one of the strongest balance sheets in the industry throughout the majority of the construction phases, intentionally holding a robust liquidity position to preserve a strong credit profile while enabling additional investments in equipment and new sites, then reassessing as buildings come online as our cash flow increases. With that, I'll turn over the call to Wes for closing remarks. Thank you.

Speaker #4: Intentionally holding a robust liquidity position to preserve a strong credit profile, while enabling additional investments in equipment and new sites, then reassessing as buildings come online, as our cash flow increases.

Speaker #4: With that, I'll turn over the call to Wes for closing remarks. Thank you.

Speaker #4: you. Thank you,

Wes Cummins: Thank you, Saidal. Applied Digital is executing in a market defined by extraordinary hyperscaler investment, now exceeding $400 billion annually. With our first two hyperscalers under contract for 600MW and additional sites and advanced discussions, we are well-positioned to scale rapidly. We now expect to surpass our long-term goal of $1 billion in NOI within five years.

Speaker #2: Fedel. Applied Digital has been executing in a market defined by extraordinary hyperscaler investment, now exceeding $400 billion annually. With our first two hyperscalers under contract for 600 megawatts and additional sites in advanced discussions, we are well-positioned to scale rapidly.

Speaker #2: We now expect to surpass our long-term goal of $1 billion in NOI within five years. The Dakota campuses are expected to provide a durable, strategic advantage through low-cost energy and natural cooling, and a supportive regulatory environment.

Operator: The Dakota campuses are expected to provide a durable strategic advantage through low-cost energy, natural cooling, and a supportive regulatory environment. We remain committed to responsible development, strong community partnerships, and environmental stewardship. We continue to invest ahead of the curve. This quarter, we led and invested $15 million in a $25 million funding round for Correntis, supporting advanced liquid cooling solutions for high-density AI workloads. We are also working with utilities and strategic partners, including Babcock & Wilcox Enterprises, to explore ways to add power to the grid without increasing costs to our customers. These initiatives reinforce our leadership in next-generation data center design, responsible grid management, and long-term shareholder value creation. We plan to continue advancing our thought leadership at the forefront of data center technology and deepening our influence across the broader ecosystem.

The Dakota campuses are expected to provide a durable strategic advantage through low-cost energy, natural cooling, and a supportive regulatory environment. We remain committed to responsible development, strong community partnerships, and environmental stewardship. We continue to invest ahead of the curve. This quarter, we led and invested $15 million in a $25 million funding round for Correntis, supporting advanced liquid cooling solutions for high-density AI workloads. We are also working with utilities and strategic partners, including Babcock & Wilcox Enterprises, to explore ways to add power to the grid without increasing costs to our customers. These initiatives reinforce our leadership in next-generation data center design, responsible grid management, and long-term shareholder value creation. We plan to continue advancing our thought leadership at the forefront of data center technology and deepening our influence across the broader ecosystem.

Speaker #2: We remain committed to responsible development, strong community partnerships, and environmental stewardship. We continue to invest ahead of the curve. This quarter, we led and invested $15 million in a $25 million funding round for Corentis, supporting advanced liquid cooling solutions for high-density AI workloads.

Speaker #2: We are also working with utilities and strategic partners, including Babcock & Wilcox Enterprises, to explore ways to add power to the grid without increasing costs to our customers.

Speaker #2: These initiatives reinforce our leadership in next-generation data center design, responsible grid management, and long-term shareholder value creation. We plan to continue advancing our thought leadership at the forefront of data center technology and deepening our influence across the broader ecosystem.

Speaker #2: I'm also proud to announce the launch of Applied Digital Cares, a community initiative funding grants that support education, health, innovation, and local development in the regions where we operate.

Operator: I'm also proud to announce the launch of Applied Digital Cares, a community initiative funding grants that support education, health, innovation, and local development in the regions where we operate. Through this initiative, we aim to improve the standard of living in these focused communities because our success depends on theirs. Finally, as noted earlier, I want to expand on the board's decision to spin out Applied Digital Cloud. We've entered a non-binding letter of intent to combine Applied Digital Cloud with Exobionics to form Chronoscale, a dedicated GPU-accelerated compute platform for demanding AI workloads. This transition separates our cloud platform from our data center business, intended to allow each to scale independently with greater strategic and capital flexibility. Chronoscale is set up to leverage the proven Applied Digital Cloud platform among the first to deploy NVIDIA H100 GPUs at scale.

I'm also proud to announce the launch of Applied Digital Cares, a community initiative funding grants that support education, health, innovation, and local development in the regions where we operate. Through this initiative, we aim to improve the standard of living in these focused communities because our success depends on theirs. Finally, as noted earlier, I want to expand on the board's decision to spin out Applied Digital Cloud. We've entered a non-binding letter of intent to combine Applied Digital Cloud with Exobionics to form Chronoscale, a dedicated GPU-accelerated compute platform for demanding AI workloads. This transition separates our cloud platform from our data center business, intended to allow each to scale independently with greater strategic and capital flexibility. Chronoscale is set up to leverage the proven Applied Digital Cloud platform among the first to deploy NVIDIA H100 GPUs at scale.

Speaker #2: Through this initiative, we aim to improve the standard of living in these focused communities, because our success depends on theirs.

Speaker #2: Finally, as noted earlier, I want to expand on the board's decision to spin out Applied Digital Cloud. We've entered a non-binding letter of intent to combine Applied Digital Cloud with Exobionics to form ChronoScale.

Speaker #2: A dedicated GPU-accelerated compute platform for demanding AI workloads. This transition separates our cloud platform from our data center business, intended to allow each to scale independently with greater strategic and capital flexibility.

Speaker #2: ChronoScale is set up to leverage the proven Applied Digital Cloud platform, among the first to deploy NVIDIA H100 GPUs at scale. On an anticipated closing in the first half of 2026, Applied Digital is expected to own over 80% of ChronoScale.

Operator: On an anticipated closing in H1 2026, Applied Digital is expected to own over 80% of Chronoscale. Today, the cloud business generates over $60 million in trailing 12-month revenue with $313 million in assets. We believe spinning off our cloud business best positions us to serve the accelerating AI market while enhancing long-term shareholder value. With that, Operator, we'll open the call for questions. Ladies and gentlemen, we will now begin the question and answer session. If you have a question, please press star followed by the number one on your touch-tone phone. You will hear a prompt that your hand has been raised. If you would like to withdraw from the polling process, please press star then the number two. If you are using a speakerphone, please make sure to lift your handset before pressing any keys.

On an anticipated closing in H1 2026, Applied Digital is expected to own over 80% of Chronoscale. Today, the cloud business generates over $60 million in trailing 12-month revenue with $313 million in assets. We believe spinning off our cloud business best positions us to serve the accelerating AI market while enhancing long-term shareholder value. With that, Operator, we'll open the call for questions.

Speaker #2: Today, the cloud business generates roughly over $60 million in trailing 12-month revenue, with $313 million in assets. We believe spinning off our cloud business best positions us to serve the accelerated AI market while enhancing long-term shareholder value.

Speaker #2: With that, operator, we'll open the call for questions.

Speaker #2: Ladies and gentlemen, we will now begin.

Operator: Ladies and gentlemen, we will now begin the question and answer session. If you have a question, please press star followed by the number one on your touch-tone phone. You will hear a prompt that your hand has been raised. If you would like to withdraw from the polling process, please press star then the number two. If you are using a speakerphone, please make sure to lift your handset before pressing any keys.

Speaker #3: We will now begin the question and answer session. If you have a question, please press star, followed by the number one on your Touch-Tone phone. You will hear a prompt that your hand has been raised.

Speaker #3: If you would like to withdraw from the polling process, please press star, then the number two. If you are using a speakerphone, please make sure to lift your handset before pressing any keys.

Speaker #3: Your first question comes from the line of Neha Aggarwal from B. Riley Securities. Please go ahead.

Operator: Your first question comes from the line of Nick Giles from B. Riley Securities. Please go ahead. Thanks, Operator. Hey, guys, congrats on all the progress. My first question was just, you know, I was hoping to get a sense for your growth appetite in the cloud business. Good to see the announcement there for Chronoscale. Should we expect the Applied platform to be a host for any future GPU purchases, or how could Applied ultimately help attract incremental customers for Chronoscale? Thanks a lot. Thanks, Nick. We've had a lot of discussions around that. So I think one of the key advantages that Chronoscale will have is the relationship with Applied Digital and access to large-scale data center facilities.

Your first question comes from the line of Nick Giles from B. Riley Securities. Please go ahead.

Speaker #3: ahead. Thanks, operator.

Nick Giles: Thanks, Operator. Hey, guys, congrats on all the progress. My first question was just, you know, I was hoping to get a sense for your growth appetite in the cloud business. Good to see the announcement there for Chronoscale. Should we expect the Applied platform to be a host for any future GPU purchases, or how could Applied ultimately help attract incremental customers for Chronoscale? Thanks a lot.

Speaker #4: Congrats on all the 'Hey, guys,' progress. My first question was just, you know, I was hoping to get a sense for your growth appetite in the cloud business.

Speaker #4: Good to see the announcement there for ChronoScale. You know, should we expect the Applied platform to be a host for any future GPU purchases, or how could Applied ultimately help attract incremental customers in, you know, for ChronoScale?

Speaker #4: Thanks a lot.

Wes Cummins: Thanks, Nick. We've had a lot of discussions around that. So I think one of the key advantages that Chronoscale will have is the relationship with Applied Digital and access to large-scale data center facilities.

Speaker #2: Thanks, Nick. We've had a lot of discussions around that, so I think one of the key advantages that ChronoScale will have is the relationship with Applied Digital and access to large-scale data center facilities.

Speaker #2: Deploying the accelerated compute, whether it be GPUs, TPUs, or LPUs, is part of the equation, but having access to large-scale data center facilities to actually make those deployments is a bigger part of the equation.

Operator: Deploying the accelerated compute, whether it be GPUs or TPUs or LPUs, is part of the equation, but having access to large-scale data center facilities to actually make those deployments is a bigger part of the equation right now. I think that's going to give that platform an advantage having the relationship with Applied Digital. We've had some of those discussions. We don't really want to get into how that will work in the future, but I do think that's a big advantage for the cloud business as it spins out. Got it. No, I appreciate that, Wes. My second one was just, you signed an agreement for a limited notice to proceed with Babcock & Wilcox, and I was just wondering if you could touch on the opportunity there.

Deploying the accelerated compute, whether it be GPUs or TPUs or LPUs, is part of the equation, but having access to large-scale data center facilities to actually make those deployments is a bigger part of the equation right now. I think that's going to give that platform an advantage having the relationship with Applied Digital. We've had some of those discussions. We don't really want to get into how that will work in the future, but I do think that's a big advantage for the cloud business as it spins out.

Speaker #2: Right now, and I think that's going to give that platform an advantage—having the relationship with Applied Digital. We've had some of those discussions.

Speaker #2: We don't really want to get into how that will work in the future, but I do think that's a big advantage for the cloud business as it spins.

Speaker #2: out. Got it.

Nick Giles: Got it. No, I appreciate that, Wes. My second one was just, you signed an agreement for a limited notice to proceed with Babcock & Wilcox, and I was just wondering if you could touch on the opportunity there.

Speaker #4: I appreciate that, Wes. My second one was just, you know, you signed an agreement for a limited notice to proceed with Babcock & Wilcox, and I was just wondering if you could touch on the opportunity there.

Speaker #4: What kind of optionality does this really give you going forward, and what should we be looking for in the upcoming contract?

Operator: What kind of optionality does this really give you going forward, and what should we be looking for in the upcoming contract release? So for us, the Babcock & Wilcox solution is a very unique solution and an exciting solution in the market because it uses older technology or an older process, which has been proven out for 100-plus years. It's using steam turbines, think of coal plant boilers, but we're using natural gas. That company has actually made a lot of coal to natural gas conversions over the past decade plus. What it allows us to do is go to market earlier. If you get in lines for traditional natural gas turbine right now, if we put an order in today, we're probably not getting delivery until 2031, 2032 for that equipment. We need power earlier than that.

What kind of optionality does this really give you going forward, and what should we be looking for in the upcoming contract release?

Speaker #4: release? So for

Wes Cummins: So for us, the Babcock & Wilcox solution is a very unique solution and an exciting solution in the market because it uses older technology or an older process, which has been proven out for 100-plus years. It's using steam turbines, think of coal plant boilers, but we're using natural gas. That company has actually made a lot of coal to natural gas conversions over the past decade plus. What it allows us to do is go to market earlier. If you get in lines for traditional natural gas turbine right now, if we put an order in today, we're probably not getting delivery until 2031, 2032 for that equipment. We need power earlier than that.

Speaker #2: For us, with the BW solution, it is a very unique and exciting solution in the market because it uses older technology, or an older process, which has been proven out for 100-plus years.

Speaker #2: It's using steam turbines. Think of coal plant boilers, but we're using natural gas. That company has actually made a lot of coal-to-natural-gas conversions.

Speaker #2: Over the past decade-plus, what it allows us to do is go to market earlier. If you get in line for a traditional natural gas turbine right now, if we put an order in today, we're probably not getting delivery until 2031 or 2032 for that equipment.

Speaker #2: We need power earlier than that. We are working with our utility partners specifically now in the Dakotas, but expect to in other states as well.

Operator: We are working with our utility partners, specifically now in the Dakotas, but expect to in other states as well. The initial reaction from those utilities has been overwhelmingly positive, and really interested in the solution, that the utilities, any utility in the country, knows who BW is. The company's been around for a long time, very good reputation. For us to be able to bring a product forward three, four-plus years to be able to generate power in the near term is a big advantage for those utilities and for us. I think you should expect to see more information about that in Q1 as we proceed with a site and an actual schedule for build on that equipment. It provides a really good option for Applied Digital to expand its current campuses and future campuses faster than we would be able to otherwise.

We are working with our utility partners, specifically now in the Dakotas, but expect to in other states as well. The initial reaction from those utilities has been overwhelmingly positive, and really interested in the solution, that the utilities, any utility in the country, knows who BW is. The company's been around for a long time, very good reputation. For us to be able to bring a product forward three, four-plus years to be able to generate power in the near term is a big advantage for those utilities and for us. I think you should expect to see more information about that in Q1 as we proceed with a site and an actual schedule for build on that equipment. It provides a really good option for Applied Digital to expand its current campuses and future campuses faster than we would be able to otherwise.

Speaker #2: The initial reaction from those utilities has been overwhelmingly positive, and they're really interested in the solution. Any utility in the country knows who BW is.

Speaker #2: The company's been around for a long time, very good reputation. And for us to be able to bring a product forward, you know, three, four-plus years to be able to generate power in the near term, is a big advantage for those utilities and for us.

Speaker #2: And I think you should expect to see more information about that in the first quarter as we proceed with a site and an actual schedule for build on that equipment.

Speaker #2: But it provides a really good option for Applied Digital to expand its current campuses, and future campuses, faster than we would be able to.

Speaker #2: otherwise.

Speaker #4: Got it.

Operator: Got it. Hey, Wes, appreciate all the detail. Keep up the good work. Thanks, Nick. Next question comes from the line of Darren Aftahi from Roth Capital. Please go ahead. Hey, guys. Yeah, good afternoon. Thanks for taking my question and congrats on the progress. Two, if I may, Wes, can you just talk generally about the landscape for leases and how pricing may have changed over the last six months? Is it improving, staying the same, going down? And then second question, can you just talk a little bit about the pre-lease financing? I appreciate what it's actually doing, but what does that say about your confidence when you're progressing on sites where you don't have signed leases? Just any kind of commentary and context would be great. Thanks. Sure. So I'll start with pricing, and, Darren, I'll keep it specifically to us.

Nick Giles: Got it. Hey, Wes, appreciate all the detail. Keep up the good work.

Speaker #4: Hey, Wes, appreciate all the detail. Keep up the

Speaker #4: good work. Thanks,

Wes Cummins: Thanks, Nick.

Speaker #2: Nick. Next

Operator: Next question comes from the line of Darren Aftahi from Roth Capital. Please go ahead.

Speaker #3: Of Ty from Roth Capital. Please go. Question comes from the line of Darren ahead.

Darren Aftahi: Hey, guys. Yeah, good afternoon. Thanks for taking my question and congrats on the progress. Two, if I may, Wes, can you just talk generally about the landscape for leases and how pricing may have changed over the last six months? Is it improving, staying the same, going down? And then second question, can you just talk a little bit about the pre-lease financing? I appreciate what it's actually doing, but what does that say about your confidence when you're progressing on sites where you don't have signed leases? Just any kind of commentary and context would be great. Thanks.

Speaker #5: Hey, guys. Yeah, good afternoon. Thanks for taking my questions, and congrats on the progress. Two, if I may. Wes, can you just talk generally about the landscape for leases and how pricing may have changed over the improving?

Speaker #5: Last six months? Like, is it staying the same? Going down? And then, second question, can you just talk a little bit about the pre-lease financing?

Speaker #5: I appreciate what—it's your confidence when you're progressing, actually doing—but, like, what does that say about on sites where you don't have signed leases?

Speaker #5: Just any kind of commentary and context would be great. Thanks.

Wes Cummins: Sure. So I'll start with pricing, and, Darren, I'll keep it specifically to us.

Speaker #2: Sure. So I'll start with pricing, and Darren, I'll keep it specifically to Wes. I don't want to speak for the market at large, but I would say, generally, pricing has been stable to slightly better over the past six months.

Operator: I don't want to speak for the market at large. But I would say generally pricing has been stable to slightly better over the past six months. The demand profile for the past six months has been extraordinarily robust. I always want to expand a little bit on this with contracting. There's the headline price that you'll see in contracts and a calculated yield, which is using an estimated cost to build. That's one aspect of it. What I would say, though, that's as important or even more important is we're getting more favorable terms in other aspects of the contract that we focus on very acutely for things like cancellation, transferability, and a lot of the things that make these contracts for us much more rock solid over that 15-year timeframe. We're getting a lot more favorable treatment in those aspects.

I don't want to speak for the market at large. But I would say generally pricing has been stable to slightly better over the past six months. The demand profile for the past six months has been extraordinarily robust. I always want to expand a little bit on this with contracting. There's the headline price that you'll see in contracts and a calculated yield, which is using an estimated cost to build. That's one aspect of it. What I would say, though, that's as important or even more important is we're getting more favorable terms in other aspects of the contract that we focus on very acutely for things like cancellation, transferability, and a lot of the things that make these contracts for us much more rock solid over that 15-year timeframe. We're getting a lot more favorable treatment in those aspects.

Speaker #2: The demand profile for the past six months has been extraordinarily robust. I always want to expand a little bit on this with contracting. There's the headline price that you'll see in contracts, and a calculated yield, which is using an estimated cost to build.

Speaker #2: That's one aspect of it. What I would say, though, that's as important or even more important is we're getting more favorable terms in other aspects of the contract that we focus on very acutely.

Speaker #2: For things like cancellation, transferability—a lot of the things that make these contracts for us much more rock solid over that 15-year timeframe—we're getting a lot more favorable treatment in those aspects. As an example, our current contracts are really non-cancelable for 15 years.

Operator: As an example, our contracts are really non-cancelable for 15 years. The customer can cancel for convenience; however, they owe us the 15 years of payments if they do. So that's typically referred to as a make-whole or a cancellation in the contract. So we've been able to get that 100% make-whole transferability that doesn't allow them to transfer to a credit rating that's either equal or higher. There's a lot of things that go into the contracting. So I would just say in general that the contracting environment has gotten more favorable over the past six months. And then on the Macquarie equipment facility and us announcing that, I think you should think back to what we did for our facility in Harwood, North Dakota.

As an example, our contracts are really non-cancelable for 15 years. The customer can cancel for convenience; however, they owe us the 15 years of payments if they do. So that's typically referred to as a make-whole or a cancellation in the contract. So we've been able to get that 100% make-whole transferability that doesn't allow them to transfer to a credit rating that's either equal or higher. There's a lot of things that go into the contracting. So I would just say in general that the contracting environment has gotten more favorable over the past six months. And then on the Macquarie equipment facility and us announcing that, I think you should think back to what we did for our facility in Harwood, North Dakota.

Speaker #2: The customer can cancel for convenience. However, they owe us the 15 years of payments if they do. So that's typically referred to as a make-whole or a cancellation.

Speaker #2: In the contract, so we've been able to get that 100% make-whole transferability, that rating that's either equal or doesn't allow them to have to transfer to a credit higher.

Speaker #2: There’s a lot of things that go into the contracting, so I would just say, in general, that the contracting environment has gotten more favorable over the past six months.

Speaker #2: And then on the Macquarie equipment facility, and us announcing that, I think you should think back to what we did for our facility in Harwood, North Dakota.

Speaker #2: I did something very similar, and at the time I spoke, we talked about that, as well as how we will go forward with the groundwork—breaking ground, getting the project moving.

Operator: We did something very similar, and at the time I spoke about that, as well as we will go forward with groundwork, breaking ground, getting the project moving when we have a high degree of confidence that we're going to sign a lease at a new campus or new campuses. And that's that facility. We use that same style of facility. Now we've made that facility effectively an evergreen so that we can continue to draw and pay it back. But we use that in Harwood. We paid that back with the draw on Macquarie Asset Management. We've now drawn down again. We've purchased some land and some other equipment. We'll start construction on at least one new campus by the end of January. And that's because we have a high degree of confidence that we're going to sign a lease with a new customer that is different.

We did something very similar, and at the time I spoke about that, as well as we will go forward with groundwork, breaking ground, getting the project moving when we have a high degree of confidence that we're going to sign a lease at a new campus or new campuses. And that's that facility. We use that same style of facility. Now we've made that facility effectively an evergreen so that we can continue to draw and pay it back. But we use that in Harwood. We paid that back with the draw on Macquarie Asset Management. We've now drawn down again. We've purchased some land and some other equipment. We'll start construction on at least one new campus by the end of January. And that's because we have a high degree of confidence that we're going to sign a lease with a new customer that is different.

Speaker #2: When we have a high degree of confidence that we're going to sign a lease at a new campus or new campuses, and that's that facility.

Speaker #2: We use that same style of facility. Now we've made that facility effectively an evergreen, so that we can continue to draw and pay it back.

Speaker #2: But we used that in Harwood. We paid that back with the draw on Macquarie Asset Management. We've now drawn down again—we've purchased some land and some other equipment.

Speaker #2: We'll start construction on at least one new campus by the end of January, and that's because we have a high degree of confidence that we're going to sign a lease with a new customer that is different.

Speaker #2: It's been—we've set investment-grade hyperscaler. It's different than the original one we signed in Harwood. And that's the goal for us. Darren, we have a lot of momentum.

Operator: We've said investment-grade hyperscaler. It's different than the original one we signed in Harwood. And that's the goal for us. Darren, we have a lot of momentum. So we've talked a lot about this before, where we're qualified with most of the investment-grade hyperscalers, are really focused on six companies total here. And so we want to add new locations, and we want to add new customers. So we diversify both in location and by customer. And we expect to have a lot of success on that in 2026. And with what we're doing and what you're seeing, the actions are now. You should expect that we think it's going to be in very early 2026. Great. Appreciate the insight, Wes. Thanks. Absolutely. Your next question comes from the line of Rob Brown from Lake Street Capital Markets. Please go ahead. Good afternoon. Congratulations as well on all the progress.

We've said investment-grade hyperscaler. It's different than the original one we signed in Harwood. And that's the goal for us. Darren, we have a lot of momentum. So we've talked a lot about this before, where we're qualified with most of the investment-grade hyperscalers, are really focused on six companies total here. And so we want to add new locations, and we want to add new customers. So we diversify both in location and by customer. And we expect to have a lot of success on that in 2026. And with what we're doing and what you're seeing, the actions are now. You should expect that we think it's going to be in very early 2026.

Speaker #2: So we've talked a lot about this before, where we're qualified with most of the investment-grade hyperscalers. We're really focused on fixed companies total here.

Speaker #2: And so what we want to do is add new locations, and we want to add new customers. So we diversify both in location and by customer.

Speaker #2: And we expect to have a lot of success on that in 2026, and with what we're doing and what you're seeing, the actions are now.

Speaker #2: You should expect that we think it's going to be in very early '26.

Darren Aftahi: Great. Appreciate the insight, Wes. Thanks.

Speaker #5: Great. Appreciate the insight, Wes. Thanks.

Wes Cummins: Absolutely.

Wes Cummins: Your next question comes from the line of Rob Brown from Lake Street Capital Markets. Please go ahead.

Speaker #2: Absolutely. Your next question

Speaker #3: Comes from the line of Rob Brown from Lake Street Capital Markets. Please go ahead.

Speaker #3: ahead.

Rob Brown: Good afternoon. Congratulations as well on all the progress.

Speaker #6: Good afternoon. Congratulations as well on all the progress. Just back to the Cronoscale spin-out—I think you said mid-year for that. Can you give us a sense of what has to happen between now and then in terms of steps, finalizing the agreement, and the closing step?

Operator: Just back to the Chronoscale spinout. I think you said mid-year for kind of closing. Give us a sense of what steps have to happen between now and then in terms of getting finalized agreement and a closing step. What sort of has to happen here? Sure. So it technically will be a merger, Rob. And so we'll get to a definitive later this month or early in February. And then there will just be a process for a shareholder vote to complete the merger. I think in the first half of 2026 is the expectation. I think if I were handicapping it on the very, very early side in March, but I would expect kind of the April, May timeframe as we go forward with that. Okay. Great.

Operator: Just back to the Chronoscale spinout. I think you said mid-year for kind of closing. Give us a sense of what steps have to happen between now and then in terms of getting finalized agreement and a closing step. What sort of has to happen here?

Speaker #6: What sort of has to happen here?

Wes Cummins: Sure. So it technically will be a merger, Rob. And so we'll get to a definitive later this month or early in February. And then there will just be a process for a shareholder vote to complete the merger. I think in the first half of 2026 is the expectation. I think if I were handicapping it on the very, very early side in March, but I would expect kind of the April, May timeframe as we go forward with that.

Speaker #2: Sure. So it technically will be a merger, Rob. And so we'll get to a definitive later this month or early in February. And then there will just be a process for a shareholder vote to complete the merger.

Speaker #2: I think in the first half of '26 is the expectation. I think if I were handicapping it on the very, very early side, in March, but I would expect kind of the April-May timeframe as we go forward with that.

Rob Brown: Okay. Great.

Speaker #6: Okay, great. And then as you kind of think about that business and the growth possible there—I think you said a $60 million trailing or $75 million.

Operator: And then as you kind of think about that business and the growth possibility there, I think you said $60 million trailing or $75 million. I think you've also said sort of prospective. What's sort of the growth opportunity? Is there additional capacity that can get leased out as a standalone business, or do you expect? I assume you expect some growth and capacity as well, but just a sense of the growth opportunity there? Yeah. So just for context on this, Rob, when we announced back in April, we put that into discontinued ops. We were seeking strategic alternatives. We evaluated a lot of alternatives. But while we were evaluating those alternatives, I think that market changed pretty significantly. And what we're seeing is a big opportunity in the compute side of the market, obviously the data center side as well, but the compute side of the market.

And then as you kind of think about that business and the growth possibility there, I think you said $60 million trailing or $75 million. I think you've also said sort of prospective. What's sort of the growth opportunity? Is there additional capacity that can get leased out as a standalone business, or do you expect? I assume you expect some growth and capacity as well, but just a sense of the growth opportunity there?

Speaker #6: I think, prospectively, you’ve also said, sort of, what’s sort of the growth opportunity? Is there additional capacity that can get leased out as a standalone business, or do you expect—I assume you expect some growth in capacity as well, but just a sense of the growth opportunity.

Speaker #6: there? Yeah.

Wes Cummins: Yeah. So just for context on this, Rob, when we announced back in April, we put that into discontinued ops. We were seeking strategic alternatives. We evaluated a lot of alternatives. But while we were evaluating those alternatives, I think that market changed pretty significantly. And what we're seeing is a big opportunity in the compute side of the market, obviously the data center side as well, but the compute side of the market.

Speaker #2: So just for context on this, Rob, when we announced back in April, we put that into discontinued ops. We were seeking strategic alternatives.

Speaker #2: We evaluated a lot of alternatives. But while we were evaluating those alternatives, I think the market changed pretty significantly. And what we're seeing is a big opportunity on the compute side of the market.

Speaker #2: On the compute side of the market, you're seeing a lot of activity. Obviously, the data center side as well, but deals are happening. Over the past three or four months in that part of the market, we're involved with a lot of those counterparties and discussions, and have been.

Operator: You're seeing a lot of deals happen over the past three or four months in that part of the market. We're involved with a lot of those counterparties and discussions and have been. We think there's a really large opportunity for our cloud business as we spin it out into Chronoscale to get some of those types of contracts. Working with us, we think there's a really unique relationship there where we can get data center capacity to be able to deploy significant scale for those style of contracts with those customers. So we think this is the absolute best path for value creation for our shareholders to let this company spin out and capture that opportunity and raise its own capital and get on its own growth trajectory, which we just haven't focused on for the past, oh, eight months.

You're seeing a lot of deals happen over the past three or four months in that part of the market. We're involved with a lot of those counterparties and discussions and have been. We think there's a really large opportunity for our cloud business as we spin it out into Chronoscale to get some of those types of contracts. Working with us, we think there's a really unique relationship there where we can get data center capacity to be able to deploy significant scale for those style of contracts with those customers. So we think this is the absolute best path for value creation for our shareholders to let this company spin out and capture that opportunity and raise its own capital and get on its own growth trajectory, which we just haven't focused on for the past, oh, eight months.

Speaker #2: And we think there's a really large opportunity for our cloud business, as we spin it out into Cronoscale, to get some of those types of contracts and working with us.

Speaker #2: We think there's a really unique relationship there. We can get data center capacity to be able to deploy significant scale for those styles of contracts with those customers, and so we think this is the absolute best path for value creation for our shareholders.

Speaker #2: To let this company spin out and capture that opportunity, and raise its own capital and get on its own growth trajectory, which we just haven't focused on for the past, oh, eight months.

Speaker #2: So we think there's a huge opportunity there, and you can see the stuff that's going on in the market, and we're really well positioned to capture some of those.

Operator: So we think there's a huge opportunity there, and you can see the stuff that's going on in the market, and we're really well positioned to capture some of those opportunities. Okay. Great. Thank you. I'll turn it over. Thanks, Rob. Next question comes from the line of Mike Grondahl from Northland Securities. Please go ahead. Hey, guys. Thank you. You've mentioned a couple of times, advanced discussions. Can you talk a little bit about how many sites you're having advanced discussions about and how many megawatts? Just so we can get a feel, kind of a sense of the breadth that you're talking about. Sure. I think we've talked about two or three sites. So I'll tell you, we're in advanced discussion on three sites and 900MW. Great. Three sites and 900MW. And then, Wes, how are you thinking about the pipeline today?

So we think there's a huge opportunity there, and you can see the stuff that's going on in the market, and we're really well positioned to capture some of those opportunities.

Speaker #2: opportunities.

Rob Brown: Okay. Great. Thank you. I'll turn it over.

Speaker #6: Okay.

Speaker #6: Great. Thank you. I'll turn it over.

Wes Cummins: Thanks, Rob.

Speaker #2: Thanks,

Speaker #2: Rob. Next question comes from the line.

Operator: Next question comes from the line of Mike Grondahl from Northland Securities. Please go ahead.

Speaker #3: Of Mike Groundhall from Northland Securities. Please go ahead.

Speaker #3: ahead. Hey, guys.

Mike Grondahl: Hey, guys. Thank you. You've mentioned a couple of times, advanced discussions. Can you talk a little bit about how many sites you're having advanced discussions about and how many megawatts? Just so we can get a feel, kind of a sense of the breadth that you're talking about.

Speaker #7: Thank you. You've mentioned a couple of times advanced discussions. Can you talk a little bit about how many sites you're having advanced discussions about, and how many megawatts?

Speaker #7: Just so we can get a feel, kind of a sense of the breadth that you're talking about.

Wes Cummins: Sure. I think we've talked about two or three sites. So I'll tell you, we're in advanced discussion on three sites and 900MW.

Speaker #2: Sure. I think we've talked about two or three sites. So, I'll tell you, we're in advanced discussion on three sites and 900 megawatts.

Mike Grondahl: Great. Three sites and 900MW. And then, Wes, how are you thinking about the pipeline today?

Speaker #7: Three sites and 900 megawatts. And then, Wes, how are you thinking about the pipeline today? How would you characterize that?

Operator: How would you characterize that pipeline? The pipeline remains robust. I will say, Mike, when I think about the business, and it's been like this for the past few months, I'm thinking less about the demand side of the equation. I talked about this a lot on the last call, which is our ability to scale. Our ability to scale across multiple sites and do construction across multiple sites and how many sites can we do construction across. The team spent a lot of time in 2025 and will continue in 2026 working on our ability to scale and execute these projects at the size that we're doing across multiple sites. So it's less on the demand side because that's not been really the issue for us or really, I think, the issue for the industry.

How would you characterize that pipeline?

Speaker #7: pipeline?

Wes Cummins: The pipeline remains robust. I will say, Mike, when I think about the business, and it's been like this for the past few months, I'm thinking less about the demand side of the equation. I talked about this a lot on the last call, which is our ability to scale. Our ability to scale across multiple sites and do construction across multiple sites and how many sites can we do construction across. The team spent a lot of time in 2025 and will continue in 2026 working on our ability to scale and execute these projects at the size that we're doing across multiple sites. So it's less on the demand side because that's not been really the issue for us or really, I think, the issue for the industry.

Speaker #2: The pipeline remains robust. I will say, Mike, when I think about the business—and it's been like this for the past few months—I'm thinking less about the demand side of the equation. I talked about this a lot on the last call, which is our ability to scale.

Speaker #2: Our ability to scale across multiple sites and do construction across multiple sites, and how many sites can we do construction across, and the team spent a lot of time in 2025 and will continue in '26.

Speaker #2: Working on our ability to scale and execute these projects at the size that we're doing across multiple sites is less on the demand side, because that's not really been the issue for us, or really, I think, the issue for the industry.

Speaker #2: We'll focus more on how much we can do and how much we can build from a supply chain perspective, from a personnel perspective, on an annualized basis.

Operator: We'll focus more on how much can we do and how much can we build from a supply chain perspective, from a personnel perspective, on an annualized basis. And so I don't think demand is going to be the limiter for us, but I want to make sure we always want to make sure that we're delivering on time and on budget for our customers. And I don't want to go too far out. We haven't hit that limit yet. But it's the piece that I think about a lot, and we internally think about a lot, is what is the limit for us on an annual basis? It's a large number, but that's really more the limiting factor for us and not what the demand picture looks like. Great. Hey, thanks a lot. Absolutely. Thanks, Mike. Your next question comes from the line of George Sutton from Craig-Hallum.

We'll focus more on how much can we do and how much can we build from a supply chain perspective, from a personnel perspective, on an annualized basis. And so I don't think demand is going to be the limiter for us, but I want to make sure we always want to make sure that we're delivering on time and on budget for our customers. And I don't want to go too far out. We haven't hit that limit yet. But it's the piece that I think about a lot, and we internally think about a lot, is what is the limit for us on an annual basis? It's a large number, but that's really more the limiting factor for us and not what the demand picture looks like.

Speaker #2: And so I don't think demand is going to be the limiter for us, but I want to make sure—we always want to make sure—that we're delivering on time and on budget for our customers.

Speaker #2: And so I don't think demand is going to be the limiter for us, but I want to make sure—we always want to make sure—that we're delivering on time and on budget for our customers, and not to go too far out.

Speaker #2: And I don't want—we haven't hit that limit yet. But it's the piece that I think about a lot, and we internally think about a lot, is: what is the limit for us on an annual basis?

Speaker #2: It's a large number, but that's really more the limiting factor for us and not what the demand picture looks like.

Mike Grondahl: Great. Hey, thanks a lot. Absolutely.

Speaker #7: Great. Hey, thanks a lot.

Speaker #2: Absolutely. Thanks, Mike.

Wes Cummins: Thanks, Mike.

Operator: Your next question comes from the line of George Sutton from Craig-Hallum.

Speaker #3: Your next question comes from the line of George Sutton from Craig-Hallum. Please go ahead.

Operator: Please go ahead. Thank you. Wes, you mentioned having been qualified by a few of the investment-grade hyperscalers. Can you just talk about what that means when we talk about being in advanced discussions? I mean, how much more simplicity of getting something across the finish line is there once you've gone through that process versus hypothetically someone new in the market? Yeah. So what I would say generally, and I'm going to only be able to reference our experience. So getting onboarded, getting to the point where you sign a master agreement that governs typically work orders or service orders you'll sign underneath of that can be anywhere from on the low end, three months, to on the high end, nine months to a year. And so we've been through the process there for most of these hyperscalers.

Please go ahead.

Speaker #3: ahead. Thank you.

George Sutton: Thank you. Wes, you mentioned having been qualified by a few of the investment-grade hyperscalers. Can you just talk about what that means when we talk about being in advanced discussions? I mean, how much more simplicity of getting something across the finish line is there once you've gone through that process versus hypothetically someone new in the market?

Speaker #8: Wes, you mentioned having been qualified by a few of the investment-grade hyperscalers. Can you just talk about what that means when we talk about being in advanced discussions?

Speaker #8: I mean, how much more simplicity is there in getting something across the finish line once you've gone through that process, versus, hypothetically, someone new in the—

Speaker #8: market? Yeah.

Wes Cummins: Yeah. So what I would say generally, and I'm going to only be able to reference our experience. So getting onboarded, getting to the point where you sign a master agreement that governs typically work orders or service orders you'll sign underneath of that can be anywhere from on the low end, three months, to on the high end, nine months to a year. And so we've been through the process there for most of these hyperscalers.

Speaker #2: So what I would say generally, and I'm going to only be able to reference our experience. So, getting onboarded, getting to the point where you sign a master agreement that governs, typically, work orders or service orders you'll sign underneath that, can be anywhere from, on the low end, three months to, on the high end, nine months to a year.

Speaker #2: And so we've been through the process there for most of the hyperscalers. So there's the six that we target, which are the five investment-grade hyperscalers.

Operator: So there's the six that we target, which are the five investment-grade hyperscalers, and then the, and CoreWeave. So out of those six, we're through that process with five of those. And so I think we're in a really good position. And so if we've already been through that process doing a new building, even if it's a new building on the same campus, or expansion in a current building, or doing even a new campus, if you're through that with one of those hyperscalers, it's a much shortened timeframe, abbreviated timeframe to get to that actual contract versus starting from scratch. Gotcha. So I want to put a couple of things together. And if you can help me, you were on CNBC the other day, mentioned, by the way, movie star quality experience, frankly.

So there's the six that we target, which are the five investment-grade hyperscalers, and then the, and CoreWeave. So out of those six, we're through that process with five of those. And so I think we're in a really good position. And so if we've already been through that process doing a new building, even if it's a new building on the same campus, or expansion in a current building, or doing even a new campus, if you're through that with one of those hyperscalers, it's a much shortened timeframe, abbreviated timeframe to get to that actual contract versus starting from scratch.

Speaker #2: And then the CoreWeave. So, we're through—out of those six, we're through that process with five of those. And so, I think we're in a really good position.

Speaker #2: And so if we've already been through that process—doing a new building, even if it's a new building on the same campus, or an expansion in a current building, or even doing a new campus—if you're through that with one of those hyperscalers, it's a much shortened, abbreviated timeframe to get to that actual contract versus starting from scratch.

George Sutton: Gotcha. So I want to put a couple of things together. And if you can help me, you were on CNBC the other day, mentioned, by the way, movie star quality experience, frankly.

Speaker #8: Gotcha. So I want to put a couple of things together, and if you can help me. You were on CNBC the other day—mentioned, by the way, movie star quality experience, frankly.

Speaker #8: But you mentioned you had done $16 billion of deals in ’25, and that you would anticipate doing that or potentially better in ’26. And I want to dovetail that with what you just said on we're late stage with three sites and 900 megawatts.

Operator: But you mentioned you had done $16 billion of deals in 2025 and that you would anticipate doing that or potentially better in 2026. I want to dovetail that with what you just said on we're late stage with three sites and 900MW. Am I kind of putting these things all together correctly? Yeah. I think that's correct. What I would just add to that on the, George, on the 900MW, I don't want to set the expectation that all of that is done at the same time. That could be one at a time. It could be none. We've been through enough of this. George, you've been through this with us as we've gone through the last few years. Nothing is done until it's done. That's just what we're working through right now. But those two going together, I think you're reading that correctly. All right.

But you mentioned you had done $16 billion of deals in 2025 and that you would anticipate doing that or potentially better in 2026. I want to dovetail that with what you just said on we're late stage with three sites and 900MW. Am I kind of putting these things all together correctly?

Speaker #8: Am I kind of putting these things all together correctly?

Wes Cummins: Yeah. I think that's correct. What I would just add to that on the, George, on the 900MW, I don't want to set the expectation that all of that is done at the same time. That could be one at a time. It could be none. We've been through enough of this. George, you've been through this with us as we've gone through the last few years. Nothing is done until it's done. That's just what we're working through right now. But those two going together, I think you're reading that correctly.

Speaker #2: Yeah, I think that's correct. What I would just add to that on the George, on the 900 megawatts, I don't want to set the expectation that all of that is done at the same time.

Speaker #2: That could be one at a time. It could be none. We've been through enough of this. George, you've been through this with us as we've gone through the last few years.

Speaker #2: Nothing is done until it's done. That's just what we're working through right now. But that's those two going together—I think you're reading that correctly.

George Sutton: All right.

Speaker #8: All right. Perfect. Thank you.

Operator: Perfect. Thank you. Absolutely. Next question comes from the line of John Todaro from Needham & Company. Please go ahead. Hey, thanks for taking my question and congrats on the quarter. Wes, you spent a good amount of time talking about how, I guess, supply and execution is a little bit more of the difficulty part than demand. I think you ultimately ended ahead of schedule on that first build for CoreWeave. Can you just walk us through maybe what you learned from that execution and give us confidence in how you'd be able to continue to execute on those builds on the development side, and then have a follow-up? Yeah. So we learned a lot going through that process on that first building, and we've made a lot of refinements. Typically, John, I think you've probably heard me talk about this before.

Perfect. Thank you.

Wes Cummins: Absolutely.

Operator: Next question comes from the line of John Todaro from Needham & Company. Please go ahead.

Speaker #2: Absolutely. Next question comes

Speaker #3: From the line of design at Tudoro, from Edom and Company, please go.

John Todaro: Hey, thanks for taking my question and congrats on the quarter. Wes, you spent a good amount of time talking about how, I guess, supply and execution is a little bit more of the difficulty part than demand. I think you ultimately ended ahead of schedule on that first build for CoreWeave. Can you just walk us through maybe what you learned from that execution and give us confidence in how you'd be able to continue to execute on those builds on the development side, and then have a follow-up?

Speaker #9: Hey, thanks for taking my question, and congrats on the quarter. Wes, you spent a good amount of time talking about how, I guess, supply and execution is a little bit more of the difficult part than demand.

Speaker #9: I think you ultimately ended ahead of schedule in that first build for CoreWeave. Can you just walk us through maybe what you learned from that execution, and give us confidence in how you'd be able to continue to execute on those builds and the development side?

Speaker #9: And then I have

Wes Cummins: Yeah. So we learned a lot going through that process on that first building, and we've made a lot of refinements. Typically, John, I think you've probably heard me talk about this before.

Speaker #2: Yeah. So we learned

Speaker #2: A lot going through that process on that first building, and we've made a lot of follow-up refinements. Typically, John, I think you've probably heard me talk about this before.

Speaker #2: So for us, one of the things I think differentiates us in the market is we started on this path back in 2022. We've stubbed our toe in a lot of different ways.

Operator: So for us, one of the things I think differentiates us in the market is we started on this path back in 2022. We've stubbed our toe in a lot of different ways through the years. Luckily, we did most of that at a very small scale, but we had a lot of lessons on that first building. And you see that reflected in design change, and then construction change, and how we operate all the way through our supply chain, and standardizing, a lower amount of SKUs, a lower amount of suppliers, all of these things that streamline the process that we do to build these facilities. And so we feel like we have a really good handle on our construction timelines. There's always things that can cause a problem that are out of our control on construction. One of the things I always worry about is weather.

So for us, one of the things I think differentiates us in the market is we started on this path back in 2022. We've stubbed our toe in a lot of different ways through the years. Luckily, we did most of that at a very small scale, but we had a lot of lessons on that first building. And you see that reflected in design change, and then construction change, and how we operate all the way through our supply chain, and standardizing, a lower amount of SKUs, a lower amount of suppliers, all of these things that streamline the process that we do to build these facilities. And so we feel like we have a really good handle on our construction timelines. There's always things that can cause a problem that are out of our control on construction. One of the things I always worry about is weather.

Speaker #2: Through the years, luckily, we did most of that at a very small scale. But we had a lot of lessons on that first building, and you see that reflected in design change, and then construction change, and how we operate all the way through our supply chain and standardizing.

Speaker #2: Lower amount of SKUs, lower amount of suppliers— all of these things streamline the process that we use to build these facilities. And so, we feel like we have a really good handle on our construction timelines.

Speaker #2: There are always things that can cause a problem that are out of our control. On construction, one of the things I always worry about is weather.

Speaker #2: But we've built—I think this is our fourth year in a row building in North Dakota in the wintertime. So we're pretty accustomed to that as well.

Operator: But we've built, I think this is our fourth year in a row building in North Dakota in the wintertime, so we're pretty accustomed to that as well. But we went back securing supply chain well over a year ago, 18 months plus ago, and we thought we were really forward-thinking on locking in 600MW, 700MW of MEP per year that we have for us. Now we're working to expand that. That fits what we're doing right now, but I think that needs to go larger for us. But we feel good about our processes we have in place and kind of the maturation of the construction and development group versus what we did on building one. I'm proud, I'm really proud for the entire team that we delivered that on time and on budget for our customer. But we have to continue to do that.

But we've built, I think this is our fourth year in a row building in North Dakota in the wintertime, so we're pretty accustomed to that as well. But we went back securing supply chain well over a year ago, 18 months plus ago, and we thought we were really forward-thinking on locking in 600MW, 700MW of MEP per year that we have for us. Now we're working to expand that. That fits what we're doing right now, but I think that needs to go larger for us. But we feel good about our processes we have in place and kind of the maturation of the construction and development group versus what we did on building one. I'm proud, I'm really proud for the entire team that we delivered that on time and on budget for our customer. But we have to continue to do that.

Speaker #2: But we have—we went back, securing supply chain well over a year ago, 18 months plus ago. And we thought we were really forward-thinking on locking in 600, 700 megawatts of MEP per year that we have for us.

Speaker #2: Now we're working to expand that. That fits what we're doing right now, but I think that needs to go larger for us. But we feel good about our processes.

Speaker #2: We have in place, and kind of the maturation of the construction and development group versus what we did on Building One. I'm proud. I'm really proud of the entire team that we delivered that on time and on budget for our customer.

Speaker #2: But we have to continue to do that. We feel really good about where we are for the CoreWeave building that we're expecting to deliver in the middle part of this year.

Operator: We feel really good about where we are for the CoreWeave building that we're expecting to deliver in the middle part of this year and the building in Harwood we're expecting to deliver shortly after that, and then the next two buildings after that, both in Ellendale and in Harwood. So we're feeling really good about where we are on schedule, but it's about the fact that we have streamlined this and we're on what I call our fourth-generation design, has really helped us in simplifying the process and streamlining the process and being one of the companies that does deliver on time. That's great. Thanks for that. And then just a quick follow-up.

We feel really good about where we are for the CoreWeave building that we're expecting to deliver in the middle part of this year and the building in Harwood we're expecting to deliver shortly after that, and then the next two buildings after that, both in Ellendale and in Harwood. So we're feeling really good about where we are on schedule, but it's about the fact that we have streamlined this and we're on what I call our fourth-generation design, has really helped us in simplifying the process and streamlining the process and being one of the companies that does deliver on time.

Speaker #2: And the building in Harwood, we're expecting to deliver it shortly after that. And then the next two buildings after that, both in Ellendale and in Harwood.

Speaker #2: So, we're feeling really good about where we are on schedule, but it's about the fact that we have streamlined this and we're on what I call our fourth-generation design. That has really helped us in simplifying the process and streamlining the process, and being one of the companies that does deliver on.

Speaker #2: time. That's great.

John Todaro: That's great. Thanks for that. And then just a quick follow-up.

Speaker #9: Thanks for that. And then just a quick follow-up. I think you mentioned in the past getting calls from entities with, sort of, stranded power.

Operator: I think you've mentioned in the past getting calls from entities with sort of stranded power, and it sounded like there might be a little bit more pockets of available power out there than some of us in the industry had initially thought. Could you just maybe frame that up as there's still additional kind of pockets to acquire more fairly near-term power and maybe talk to your color on that? Yeah. We keep finding more opportunities, more and more opportunities. Everything we're in process with right now is organic. So we have a large amount in flight that is organic, but we continue to see opportunities, third-party opportunities. We continue to evaluate those opportunities. And some of those, really for us, it's could it be in a different geographic market for us that is a really attractive market? But we continue to look at that.

I think you've mentioned in the past getting calls from entities with sort of stranded power, and it sounded like there might be a little bit more pockets of available power out there than some of us in the industry had initially thought. Could you just maybe frame that up as there's still additional kind of pockets to acquire more fairly near-term power and maybe talk to your color on that?

Speaker #9: And it sounded like there might be a little bit more pockets of available power out there than some of us in the industry had initially thought.

Speaker #9: Could you just maybe frame that up as there's still additional, kind of, pockets to acquire more fairly near-term power, and maybe talk to color on...

Speaker #9: Could you just maybe frame that up as there are still additional kind of pockets to acquire more fairly near-term power, and maybe talk to some color on that?

Wes Cummins: Yeah. We keep finding more opportunities, more and more opportunities. Everything we're in process with right now is organic. So we have a large amount in flight that is organic, but we continue to see opportunities, third-party opportunities. We continue to evaluate those opportunities. And some of those, really for us, it's could it be in a different geographic market for us that is a really attractive market? But we continue to look at that.

Speaker #2: Yeah, we keep finding more opportunities—more and more opportunities. Everything we're in process with right now is organic, so we have a large amount in flight.

Speaker #2: That is organic. But we continue to see opportunities—third-party opportunities. We continue to evaluate those opportunities. And some of those, really for us, it's could it be in a different geographic market for us that is a really attractive market, but we continue to look at that.

Speaker #2: But everything we're doing right now is organic, but we see those, I would say, daily—weekly at least, but typically multiple times in a...

Operator: But everything we're doing right now is organic, but we see those, I would say, daily, weekly at least, but typically multiple times in a week. Great. Thanks for that, guys, and congrats again. Thanks, John. Your last question comes from the line of Michael Donovan from Compass Point. Please go ahead. Hi, Wes, Michael. Congrats on the quarter. Following up on Mike's pipeline question, can you touch upon expansion opportunities at PF1 and PF2? Do you still have confidence in those reaching 1.4GW and 1GW respectively? And I have a follow-up. Yeah. So every one of our campuses, I think this is an important point. Every one of our campuses has the potential to go to at least 1GW and some significantly beyond 1GW.

Operator: But everything we're doing right now is organic, but we see those, I would say, daily, weekly at least, but typically multiple times in a week.

Speaker #2: week. Great.

John Todaro: Great. Thanks for that, guys, and congrats again.

Speaker #9: Thanks for that, guys. And congrats.

Speaker #9: again. Thanks,

Wes Cummins: Thanks, John.

Operator: Your last question comes from the line of Michael Donovan from Compass Point. Please go ahead.

Speaker #3: Your last John question comes from the line of Michael Donovan from Compass Point. Please go ahead.

Speaker #3: ahead. Hi, Wes from Seidel.

Michael Donovan: Hi, Wes, Michael. Congrats on the quarter. Following up on Mike's pipeline question, can you touch upon expansion opportunities at PF1 and PF2? Do you still have confidence in those reaching 1.4GW and 1GW respectively? And I have a follow-up.

Speaker #10: Congrats on the quarter. Following up on Mike's pipeline question, can you touch upon expansion opportunities at PF1 and PF2? Do you still have confidence in those reaching 1.4 gigawatts and 1 gigawatt, respectively?

Speaker #10: And I have a

Speaker #10: follow-up. Yeah.

Wes Cummins: Yeah. So every one of our campuses, I think this is an important point. Every one of our campuses has the potential to go to at least 1GW and some significantly beyond 1GW.

Speaker #2: Yeah, so every one of our campuses—I think this is an important point—every one of our campuses has the potential to go to at least a gigawatt.

Speaker #2: And some significantly beyond a gigawatt. But when we think about our goals inside the company, we have two campuses now that can each go to a gigawatt or more.

Operator: But when we think about our goals inside the company, we have two campuses now that can each go to a gigawatt or more. So we have that pipeline in the future for ourselves. And then we're working on three additional campuses. We're working on a lot more than that, but think of it in the things we're in advanced stage on, three more campuses. Each one of them can scale to gigawatt capacity. So for us, if we put those in place, those contracts in place, we have different customers on those campuses. We have a view and a pretty clear path to whether it's by 2030 or 2031 or 2032 to growing our capacity to five gigawatts if we don't add another campus after that.

But when we think about our goals inside the company, we have two campuses now that can each go to a gigawatt or more. So we have that pipeline in the future for ourselves. And then we're working on three additional campuses. We're working on a lot more than that, but think of it in the things we're in advanced stage on, three more campuses. Each one of them can scale to gigawatt capacity. So for us, if we put those in place, those contracts in place, we have different customers on those campuses. We have a view and a pretty clear path to whether it's by 2030 or 2031 or 2032 to growing our capacity to five gigawatts if we don't add another campus after that.

Speaker #2: So, we have that pipeline in the future for ourselves, and then we're working on three additional campuses. We're working on a lot more than that.

Speaker #2: But think of the things we're in advanced stage on—three more campuses. Each one of them can scale to 2-gigawatt capacity. So for us, if we put those in place, those contracts in place, we have different customers on those campuses.

Speaker #2: We have a view and a pretty clear path to, whether it's by 2030 or 2031 or 2032, growing our capacity to 5 gigawatts if we don't add another campus after that.

Speaker #2: We would expect that we get good growth, we would. But it puts a really clear path out for the company, just having these campuses in place, just getting to 2 gigawatts.

Operator: We would expect that we would, but it puts a really good growth path out for the company just having these campuses in place, that just getting to 2GW, if we were talking about this a year ago, would be monumental for us. But if we can expand to five campuses and have a clear path to 5GW plus of capacity over the next five years, that's a really great position for the company. But all of those campuses have that expansion potential. Great. Appreciate that. And with the discussions around NVIDIA this week with liquid cooling for Rubin, can you discuss a bit on what makes Correntis a competitive solution? So Correntis is a really interesting, you could go and look at their technology. They had a very nice announcement with Microsoft, I think, a couple of months ago.

We would expect that we would, but it puts a really good growth path out for the company just having these campuses in place, that just getting to 2GW, if we were talking about this a year ago, would be monumental for us. But if we can expand to five campuses and have a clear path to 5GW plus of capacity over the next five years, that's a really great position for the company. But all of those campuses have that expansion potential.

Speaker #2: If we were talking about this a year ago, it would have been monumental for us. But if we can expand to five campuses and have a clear path to 5 gigawatts plus of capacity over the next five years, that's a really great position for the company.

Speaker #2: But all of those campuses have that expansion.

Speaker #2: But all of those campuses have that expansion potential. Great.

Michael Donovan: Great. Appreciate that. And with the discussions around NVIDIA this week with liquid cooling for Rubin, can you discuss a bit on what makes Correntis a competitive solution?

Speaker #9: Appreciate that. And with the discussions around the video this week with liquid cooling for VR, Rubens, can you discuss a bit on what makes Corentis a competitive solution?

Speaker #9: Appreciate that. And with the discussions around the video this week with liquid cooling for VR, Rubens, can you discuss a bit on what makes Corentis a competitive solution?

Wes Cummins: So Correntis is a really interesting, you could go and look at their technology. They had a very nice announcement with Microsoft, I think, a couple of months ago.

Speaker #2: So Corentis is really interesting—you could go and look at their technology. They had a very nice announcement with Microsoft, I think a couple of months ago.

Speaker #2: What we like about it is, Corentis has a cold plate technology that I liken to semiconductors and then modules. A lot of semiconductors are built into modules.

Operator: What we like about it is Correntis has a cold plate technology that I liken to semiconductor and then module. A lot of semiconductors are built into modules. So they have the technology that I would classify in this case like semiconductor, which is a specially designed patterned cold plate that is dependent on each chip individually. So whether it's B200, B300, Rubin, whatever it might be, they map that chip. They map the heat points of that chip. They design the cold plate with a lot of microchannels through it. And then it goes into a full cold plate, and it sits on top right now. But this technology is designed to go inside the semiconductor packaging in the future, and then actually inside the manufacturing process in the EPI for the semiconductors.

What we like about it is Correntis has a cold plate technology that I liken to semiconductor and then module. A lot of semiconductors are built into modules. So they have the technology that I would classify in this case like semiconductor, which is a specially designed patterned cold plate that is dependent on each chip individually. So whether it's B200, B300, Rubin, whatever it might be, they map that chip. They map the heat points of that chip. They design the cold plate with a lot of microchannels through it. And then it goes into a full cold plate, and it sits on top right now. But this technology is designed to go inside the semiconductor packaging in the future, and then actually inside the manufacturing process in the EPI for the semiconductors.

Speaker #2: So they have the technology that I would classify in this case like semiconductor, which is a specially designed, patterned cold plate that is dependent on each chip individually.

Speaker #2: So, whether it's B200, B300, Rubin—whatever it might be—they map that chip. They map the heat points of that chip. They design the cold plate with a lot of microchannels through it.

Speaker #2: And then it goes into a full cold plate, and it sits on top right now. But this technology is designed to go inside the semiconductor packaging in the future, and then actually inside the manufacturing process, in the epi for the semiconductors.

Speaker #2: And the goal for this technology and a lot of this is proven out for them is that you can use if a chip goes say it's using 1 kilowatt down, but the next generation chip uses 3 kilowatts or 5 kilowatts, this technology can use the same amount of liquid to chill chips as they go up.

Operator: And the goal for this technology, and a lot of this is proven out for them, is that you can use if a chip goes, say, it's using 1kW now, but the next generation chip uses 3kW or 5kW, this technology can use the same amount of liquid to chill chips as they go up. Now, there's a point where that breaks, and there's a change where we'll need more liquid. But from a data center operator perspective, having that efficiency inside is always great for our customers. But to be able to deliver the same amount of liquid on the data center side for a chip that's 3x the power density of what we're currently running really helps us future-proof our infrastructure. And so we're really excited about that technology. Thank you. There are no further questions. There are no further questions at this time.

And the goal for this technology, and a lot of this is proven out for them, is that you can use if a chip goes, say, it's using 1kW now, but the next generation chip uses 3kW or 5kW, this technology can use the same amount of liquid to chill chips as they go up. Now, there's a point where that breaks, and there's a change where we'll need more liquid. But from a data center operator perspective, having that efficiency inside is always great for our customers. But to be able to deliver the same amount of liquid on the data center side for a chip that's 3x the power density of what we're currently running really helps us future-proof our infrastructure. And so we're really excited about that technology.

Speaker #2: Now, there's a point where that breaks and there's a change where they'll need more liquid. But from a data center operator perspective, having that efficiency inside is always great for our customers.

Speaker #2: But to be able to deliver the same amount of liquid on the data center side for a chip that's 3x the power density of what we're currently running really helps us future-proof our infrastructure.

Speaker #2: And so we're really excited about that.

Speaker #2: technology. I don't know.

Operator: Thank you. There are no further questions. There are no further questions at this time.

Speaker #3: Thank

Speaker #3: You. There are no further questions. There are no further questions at this time.

Speaker #2: Sounds good.

Speaker #3: I'd like to turn the call back to Wes Cummins for closing comments. Sir, please go ahead.

Operator: I'd like to turn the call back to Wes Cummins for closing comments. Sir, please go ahead. Thanks, everyone, for joining us for our Q2 earnings call. I appreciate all of the support and look forward to speaking to you in April. Thanks. Ladies and gentlemen, this concludes today's conference call. Thank you very much for your participation. You may now disconnect.

I'd like to turn the call back to Wes Cummins for closing comments. Sir, please go ahead.

Thanks, everyone, for joining us for our Q2 earnings call. I appreciate all of the support and look forward to speaking to you in April. Thanks.

Speaker #2: Thanks, everyone, for joining us for our Q2 earnings call. I appreciate all of the support and look forward to speaking to you in April.

Speaker #2: Thank you. Ladies and gentlemen, this concludes today's call.

Ladies and gentlemen, this concludes today's conference call. Thank you very much for your participation. You may now disconnect.