IREN Q2 2026 IREN Ltd Earnings Call | AllMind AI Earnings | AllMind AI
Q2 2026 IREN Ltd Earnings Call
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I will now like to hand the conference over to your first Speaker today. My power vice president and best of relations. Please go ahead.
Thank you operator. Good afternoon and welcome to iron's Q2 FY 2026 results presentation. I'm Mike power, VP of investor relations. And with me on the call today are Daniel Roberts. Co-founder and Co CEO Anthony Lewis CFO and Kent Draper. Chief commercial officer
Before we begin, please note this call is being webcast live with the presentation for those that have dialed in via phone. You can elect to ask a question via the moderator after our presentation.
I'd like to remind you that certain statements that we make. During the conference call May constitute forward-looking statements and iron cautions listeners that forward looking information. And statements are based on certain assumptions and risks factors that could cause actual results to differ materially from the expectations of the company.
Listeners shouldn't Place, uh, under your Reliance on, forward-looking information, or statements. And I encourage you to refer to the uh, disclaimer and slide 2 of the accompanying presentation for more information. And and finally, during the course of today's call, we will refer to certain non-gaap Financial measures. There's a Reconciliation schedule showing the gaap versus non-gaap results in the presentation.
With that. I'll now turn over the call to Dan Roberts.
Thanks, Mike. And thank you everyone for joining us today. Uh, fiscal.
Quarter 2 was an important quarter for iron. As we made meaningful progress as a vertically, integrated AI Cloud platform. Let me start with the highlights.
Firstly, we secured underwriting in commitments for 3.6 billion dollars of GPU financing at an interest rate of less than 6%.
Together with customer prepayments. This provides funding coverage for approximately 95% of the GPU related capex supporting our 9.7 billion dollar AI contract with Microsoft.
Importantly, this financing package provides greater clarity.
To also Advance a broader set of customer discussions in that regard, customer demand remains very strong and we are continuing to sign and negotiate contract for both new and prior generation gpus.
We have multiple Advanced negotiations underway for larger scale. Deployments and are also seen hyperscalers and AI Enterprises, increasingly focus on are cooled gpus given the faster deployment timelines.
Operationally execution is tracking, well, across the portfolio and we expect to deliver 140,000 gpus. By the end of 2026 positioning us to deliver 3.4 billion dollars in annualized, run rate Revenue.
Construction across Horizon, 1 through to 4 is progressing to schedule.
And in British Columbia, we continue to expand our AI Cloud footprint. With just under half a billion dollars of ARR. Now, under contract for Prince, George
Finally, we extended our growth Runway Again by securing a new 1.6, gigawatt site in Oklahoma.
Taking our total secured power to over 4 and a half gigawatts.
This reflects the strength of our internal development team.
In securing gigawatt, scale sites in a power constrained market and supports continued conversion of capacity into customer contracts over time.
So that's the quarter in summary.
Those outcomes, reflect the assets capability and execution discipline. We've built over time which I'll cover next.
Over the past 7 years, we've built a strong platform grounded in real assets.
power land data centers and just as importantly, human capital
That Foundation is what gives our in a durable competitive mode.
We have secured more than 4.5, gigawatts of power, stood up 810 megawatts of operating data centers signed billions of dollars of AI customer contracts and is assembled a team of over 2,000 people to execute on them.
These assets and capabilities are not easy replicable.
They are the results of years of hard work.
Handle a business. We have been fully committed to building a platform.
With lasting value.
and will, and I are deeply invested in this platform, along with the rest of the management team that mindset matters, as it shapes, how we allocate Capital, how we partner with customers, and how we think about long-term value creation,
In an industry. Moving in an extraordinary speed this combination of real assets. Operational capability and founder lead commitment is what sets iron apart and positions us for AI Cloud leadership?
Through what we call the 3 C's.
Capacity.
Customers.
And Capitol.
The reason we focus on these 3 is simple, they reinforce each other.
Capacity, creates opportunity.
Customer commitments, shape, the pace and scale of our investment.
And capital gives us the ability to execute.
What's encouraging today is that we have all 3 working in parallel. First on capacity, we have 810 megawatts of existing data centers that can be immediately leveraged for AI cloud deployments. In addition to the 3.6 gigawatt of Greenfield data center sites, and a 2,000 plus team to design build, and operate them end to end.
Second on customers. As I mentioned, we are in multiple Advanced negotiations. And at this point demand is not the constraint for us.
The focus is on choosing the right long-term Partnerships that support durable platform level growth.
And thirdly on Capital. We continue to diversify our sources of capital to support capacity growth and customer deployment.
We have multiple financing Pathways underway and allow us to scale. Our data center in GPU footprint in a disciplined manner.
maintaining balance sheet strength.
this includes additional GPU financing data center financing and selective corporate initiatives which Anthony will delve into
So when you step back the picture, if for us is pretty clear, we have delivered.
Capacity. We have strong customer demand and we have expanding Capital options all moving together which puts us in a position to continue scaling iron into 1 of the world's largest AI Cloud platforms.
With that. I'll now hand over to Kent, to walk through, updates to our capacity, and our customer work streams in a bit more detail.
Thanks Dan vertical. Integration is 1 of Iran's most important competitive advantages. We design build and operate. Our own data centers supported by in-house engineering, procurement construction, technology and operations teams
this structure gives us Direct end-to-end Control of our
Many of the constraints that we see across the industry today, whether it's long, lead time procurement or skilled labor are areas that we've addressed in the past. So they're manageable for us and not disrupting our execution.
That's why we remain on track against our plans today.
And on that note, we continue to see strong.
Steady process progress across our site portfolio, with construction, Milestones being delivered on schedule.
At Prince Georges, the data center fit out for air, cooled, Nvidia, b200 and B300 gpus. And now complete and awaiting the delivery of the remaining gpus on order.
At McKenzie and Canal, Flats. Our teams are actively preparing the sides for AI Cloud expansion.
There we're leveraging the exact same Playbook. We successfully executed at Prince Georges,
A6 are coming out of those data centers and gpus are going in.
At Children's construction across Horizon's 1 to 4 is also progressing to schedule to meet, Microsoft's GPU, deployment timelines, and at Sweetwater, procurement activities. And Civil Works are now underway for the first phase of data centers to be constructed.
Overall what this demonstrates is an ability to consistently take large complex projects from planning, through to execution.
That delivery capability, underpins everything we do and is 1 of the key reasons. We have a license to engage with the largest technology companies in the world.
As Dan mentioned, we have secured a new 1.6 gigawatt data center campus in Oklahoma.
Further strengthening what is already 1 of the most differentiated power portfolios in the sector. The 2000 acre. Oklahoma site is a strong addition with low latency connectivity to Major Network exchanges and ramp schedule commencing in 2028.
As with Sweetwater, the megawatts for this new site in Oklahoma, have been secured which enables commercial discussions to progress, meaningfully anchored on firm deliverable capacity.
It's also worth noting that this site is a result of work that has been underway for years.
It reflects a depth of our internal development capability and our team's ability to consistently source and secure gigawatt scale Greek Connections in a power, constrained Market.
Importantly, this new site does more than just add capacity, it broadens, our us data center pipeline Beyond kott into a market, that's attractive to hyperscalers at a time when AI, demand continues to outpace supply.
As Dan mentioned, we're advancing multiple active negotiations with a range of hyperscale and non-, hyperscale counterparties. And what we consistently see is that customers are focused on Partners who have secured power can deliver full data center infrastructure on a defined timeline and who can grow with them and scale over the long term.
In other words, time to Data Center has become the key decision point. In many of these commercial discussions
That Dynamic plays directly to our strengths, our vertically integrated model, combining in-house. Delivery capability with secured, power gives customers, a high degree of certainty on execution.
We're also seeing hyperscalers and leading Enterprises actively pursue both liquid and air, cooled, GPU deployments. As they work to accelerate rollouts.
The increased focus on are cool. Deployments allow aligned extremely well with our existing footprint of 810 megawatts of already operational. Air cooled, data centers,
Importantly, all the demand and engagement that we're seeing is translating directly into contracted Revenue.
Today, we have approximately 2.3 billion of annualized Revenue, run rate under contract, including around 0.4 billion, at Prince Georges, which we expect to increase over the coming weeks as we finalize negotiations for the remaining capacity there.
Based on capacity already contracted and the strong customer engagement for new deployments in McKenzie and Canal Flats.
We're on track to reach out targeted 3.4 billion ARR by the end of 2026.
What's worth emphasizing is a demand is not the limiting factor for reaching this milestone.
The market is extremely deep and engagement remains strong across hyperscalers. And Enterprises our focus is on selecting the right partners and structuring long-term relationships to create lasting value for iron.
And as I alluded to earlier, we have the track record and capacity to drive customer acquisition.
The takeaway from this next slide is the amount of Runway that we have ahead of us.
3.4 billion ARR. Target for the end of calendar 2026, reflects utilization of only around 10% of our 4.5, gigawatts of secured grid, connected power capacity.
that means the vast majority of our portfolio remains available to support additional deployments
Kent Draper: to run rate under contract, including around $9.4 billion at Prince George, which we expect to increase over the coming weeks as we finalize negotiations for the remaining capacity there. Based on capacity already contracted and the strong customer engagement for new deployments in Mackenzie and Canal Flats, we're on track to reach our targeted $3.4 billion ARR by the end of 2026. What's worth emphasizing is that demand is not the limiting factor for reaching this milestone. The market is extremely deep, and engagement remains strong across hyperscalers and enterprises. Our focus is on selecting the right partners and structuring long-term relationships that create lasting value for IREN. And as I alluded to earlier, we have the track record and capacity to drive customer acquisition. The takeaway from this next slide is the amount of runway that we have ahead of us.
Kent Draper: to run rate under contract, including around $9.4 billion at Prince George, which we expect to increase over the coming weeks as we finalize negotiations for the remaining capacity there. Based on capacity already contracted and the strong customer engagement for new deployments in Mackenzie and Canal Flats, we're on track to reach our targeted $3.4 billion ARR by the end of 2026. What's worth emphasizing is that demand is not the limiting factor for reaching this milestone. The market is extremely deep, and engagement remains strong across hyperscalers and enterprises. Our focus is on selecting the right partners and structuring long-term relationships that create lasting value for IREN. And as I alluded to earlier, we have the track record and capacity to drive customer acquisition. The takeaway from this next slide is the amount of runway that we have ahead of us.
And Prince George which we expect to increase over the coming weeks as we finalize negotiations for the remaining capacity there.
with the demand, continuing to build that secured capacity, gives us the ability to keep engaging customers on New large-scale Opportunities and to extend growth, well beyond the 2026 Target.
Based on capacity already contracted and the strong customer engagement for new deployments in Mckenzie and Canal Flash we're on track to reach our targeted $3 4 billion IRR by the end of 2026.
Thanks again.
222 financials reflected continued progress in the transition from Bitcoin mining to AI cloud.
Well, it's worth emphasizing is that demand is not the limiting factor for reaching this milestone.
With capacity increasingly allocated to higher value Ai workloads and AI Cloud revenues accelerating as deployments, right?
The market is extremely date and engagement remained strong across hyperscale is and enterprises.
Our focus is on selecting the right partners and structuring long term relationship to create lasting value for all our iron.
33% on the prior quarter primarily on account of lower Bitcoin, mining Revenue driven by a reduction in Bitcoin mined.
And as I alluded to earlier, we have the track record and capacity to drive customer acquisition.
This was as a result of the AI transition which lowered operating hash rate against the backdrop of an increasing Global hash rate,
The takeaway from this next slide is the amount of runway we have ahead of us.
Together with lower average Bitcoin prices over the period.
Kent Draper: Our $3.4 billion ARR target for the end of calendar 2026 reflects utilization of only around 10% of our 4.5GW of secured, grid-connected power capacity. That means the vast majority of our portfolio remains available to support additional deployments. With demand continuing to build, that secured capacity gives us the ability to keep engaging customers on new large-scale opportunities and to extend growth well beyond the 2026 target. I'll now hand over to Anthony to give an overview of our Q2 results and discuss our strategy for financing our continued growth.
Kent Draper: Our $3.4 billion ARR target for the end of calendar 2026 reflects utilization of only around 10% of our 4.5GW of secured, grid-connected power capacity. That means the vast majority of our portfolio remains available to support additional deployments. With demand continuing to build, that secured capacity gives us the ability to keep engaging customers on new large-scale opportunities and to extend growth well beyond the 2026 target. I'll now hand over to Anthony to give an overview of our Q2 results and discuss our strategy for financing our continued growth.
$3 4 billion in the IRR target for the end of calendar 2026 reflects utilization of only around 10% of our four five gigawatts of secured grid connected power capacity.
This was partially offset by growth in AI Cloud Revenue, in line with commissioning of new gpus at our Prince, George site.
That means the vast majority of our portfolio remains available to support additional deployments.
on sgna that decreased 37.6 million primarily resulting from higher accelerated stock based he recognized in the prior period and Associated payroll tax across
With demand continuing to build that secured capacity gives us the ability to keep engaging customers on new large scale opportunities and to extend growth well beyond the 2026 target.
As expected adjusted ebit da declined primarily on account of the lower Bitcoin. Mining Revenue mentioned just now partially offset by the lower payroll tax ACS and lower power costs.
I'll now hand over to Anthony to give an overview of our Q2 results and discuss our strategy for financing our continued growth.
Even Dar and net income were also impacted by several significant non-cash and non-recurring items this quarter.
Anthony Lewis: Thanks, Kent. Q2 financials reflected continued progress in the transition from Bitcoin mining to AI cloud, with capacity increasingly allocated to higher-value AI workloads and AI cloud revenues accelerating as deployments ramp. Total revenue was $184.7 million, down 23% on the prior quarter, primarily on account of lower Bitcoin mining revenue, driven by a reduction in Bitcoin mined. This was as a result of the AI transition, which lowered operating hash rate against the backdrop of an increasing global hash rate, together with lower average Bitcoin prices over the period. This was partially offset by growth in AI cloud revenue, in line with commissioning of new GPUs at our Prince George site. On SG&A, that decreased $37.6 million, primarily resulting from higher accelerated stock-based amortization recognized in the prior period, and associated payroll tax accruals.
Anthony Lewis: Thanks, Kent. Q2 financials reflected continued progress in the transition from Bitcoin mining to AI cloud, with capacity increasingly allocated to higher-value AI workloads and AI cloud revenues accelerating as deployments ramp. Total revenue was $184.7 million, down 23% on the prior quarter, primarily on account of lower Bitcoin mining revenue, driven by a reduction in Bitcoin mined. This was as a result of the AI transition, which lowered operating hash rate against the backdrop of an increasing global hash rate, together with lower average Bitcoin prices over the period. This was partially offset by growth in AI cloud revenue, in line with commissioning of new GPUs at our Prince George site. On SG&A, that decreased $37.6 million, primarily resulting from higher accelerated stock-based amortization recognized in the prior period, and associated payroll tax accruals.
These included unrealized unrealized losses on prepaid forwards and cap calls associated with our convertible notes.
Thanks, Ken.
Q2 financials reflected continued progress in the transition from bitcoin mining to AI cloud.
With capacity increasingly allocated to higher value workloads and cloud revenues accelerating as deployments ramp.
Following significant gains in the prior period as well as a 1-time debt conversion inducement expense in connection with the equitation of a portion of our 2029 and 2030 convertible notes.
Together these amounts totaling 219.4 million.
Total revenue was $194 7 million down 23% on the prior quarter, primarily on account of lower bitcoin mining revenue driven by a reduction in bitcoin font.
This was as a result of the IR transition, which lowered operating asteroid against the back drop of an increasing global house right.
Together with lower average <unk> prices over the period.
In addition, we recorded 31.8 million of mining Hardware impairment associated with the transition to AI Cloud versus 16 million in the prior period. These impacts were partially offset by an income tax benefit of 182.5, million primarily reflecting the release of previously, recognized deferred tax, liabilities relating to the unrealized gains on financial instruments.
This was partially offset by growth in Iowa cloud revenue in line with commissioning of new Gpus.
Prince George side.
Honest Eni debt decreased $37 6 million, primarily resulting from higher accelerated stock based amortization recognized in the prior period.
Overall, these results, reflect the ongoing transition of the business to AI cloud. And we expect subsequent quarters to reflect a growing AI Cloud contribution, consistent with our aarrr targets.
Now turning to Capital and funding.
At our last update.
And associated payroll tax accruals.
Anthony Lewis: As expected, adjusted EBITDA declined primarily on account of the lower Bitcoin mining revenue mentioned just now, partially offset by the lower payroll tax accruals and lower power costs. EBITDA and net income were also impacted by several significant non-cash and non-recurring items this quarter. These included unrealized, unrealized losses on prepaid forwards and capped calls associated with our convertible notes, following significant gains in the prior period, as well as a one-time debt conversion inducement expense in connection with the extinguishment of a portion of our 2029 and 2030 convertible notes. Together, these amounts totaling $219.4 million. In addition, we recorded $31.8 million of mining hardware impairment associated with the transition to AI cloud, versus $16 million in the prior period.
Anthony Lewis: As expected, adjusted EBITDA declined primarily on account of the lower Bitcoin mining revenue mentioned just now, partially offset by the lower payroll tax accruals and lower power costs. EBITDA and net income were also impacted by several significant non-cash and non-recurring items this quarter. These included unrealized, unrealized losses on prepaid forwards and capped calls associated with our convertible notes, following significant gains in the prior period, as well as a one-time debt conversion inducement expense in connection with the extinguishment of a portion of our 2029 and 2030 convertible notes. Together, these amounts totaling $219.4 million. In addition, we recorded $31.8 million of mining hardware impairment associated with the transition to AI cloud, versus $16 million in the prior period.
As expected adjusted EBITDA declined primarily on account of the lower began mining revenue mentioned, just now partially offset by lower payroll tax accruals and lower power costs.
EBITDA and net income were also impacted by several significant noncash and nonrecurring items this quarter.
As Dave has highlighted earlier, we have now secured a 3.6 billion, delayed draw term loan, financing package, from Goldman Sachs and JP Morgan.
The financing has a number of attractive features.
It is delayed draw to align with our capex profile.
These included unrealized unrealized losses on prepaid forwards and capped calls associated with our convertible notes.
It matches the profile of the underlying contract advertising in full over the 5-year term.
Following significant gains in the prior period as well as a one time <expletive> conversion inducement expense in connection with the equity transaction of a portion of about 22009 and 2030 convertible notes.
And it will be secured against the underlying gpus and the contracted cash flows from Microsoft, which supports a strong credit profile and an attractive. Interest rate expected to be less than 6%.
Together these amounts totaling $219 4 million.
In addition, we recorded $31.8 million of mining hardware impairment associated with the transition to AI cloud versus $6 million to $8 million in the prior period.
When combined with Microsoft 1.9 billion in prepayments, this package covers 95% of the GPU related capex for Horizon's 1 134 allowing us to now focus our efforts on funding further growth across the platform.
Now.
Anthony Lewis: These impacts were partially offset by an income tax benefit of $182.5 million, primarily reflecting the release of previously recognized deferred tax liabilities relating to the unrealized gains on financial instruments. Overall, these results reflect the ongoing transition of the business to AI cloud, and we expect subsequent quarters to reflect a growing AI cloud contribution consistent with our ARR targets. Now, turning to capital and funding. At our last update, we indicated an intention to raise secured finance of at least $2.5 billion to fund the GPU-related CapEx for the Microsoft contract. As Dan has highlighted earlier, we have now secured a $3.6 billion delayed draw term loan financing package from Goldman Sachs and J.P. Morgan. The financing has a number of attractive features. It is delayed draw to align with our CapEx profile.
Anthony Lewis: These impacts were partially offset by an income tax benefit of $182.5 million, primarily reflecting the release of previously recognized deferred tax liabilities relating to the unrealized gains on financial instruments. Overall, these results reflect the ongoing transition of the business to AI cloud, and we expect subsequent quarters to reflect a growing AI cloud contribution consistent with our ARR targets. Now, turning to capital and funding. At our last update, we indicated an intention to raise secured finance of at least $2.5 billion to fund the GPU-related CapEx for the Microsoft contract. As Dan has highlighted earlier, we have now secured a $3.6 billion delayed draw term loan financing package from Goldman Sachs and J.P. Morgan. The financing has a number of attractive features. It is delayed draw to align with our CapEx profile.
These impacts were partially offset by an income tax benefit of $192 5 million, primarily reflecting the release of previously recognized deferred tax liabilities relating to the unrealized gains on financial instruments.
Turning to our Capital strategy. More broadly,
Our Capital strategy is designed to support continued rapid growth, while maintaining a resilient balance sheet.
Overall these results reflect the ongoing transition of the business to AI cloud and we expect subsequent quarters to reflect the growing cloud contribution consistent with.
We end it generally with a strong cash position at 2.8 billion and we continue to deepen our access to the diverse sources of funding.
<unk> targets.
Now turning to capital and funding.
At our last update.
Financial year to date. We have now secured 9.2 billion from customary. Customer prepayments. Convertible notes, including the 2.3 billion issued in December,
We indicated an intention to raise secured finance of at least $2 5 billion to fund the GPU related capex for the Microsoft contract.
GPU leasing arrangements and the dedicated GPU financing for the Microsoft contract.
This diversity of capital sources allows us to scale with confidence.
As Dave has highlighted earlier, we have now secured $3 6 billion delayed draw term loan financing package from Goldman Sachs and J P. Morgan.
Looking ahead, a key priority will be to continue that work and expand our access further.
The financing has a number of attractive features.
It is delayed draw to align with our Capex profile.
Such as Horizons 1 through 4, when they come online.
Anthony Lewis: It matches the profile of the underlying contract, amortizing in full over the 5-year term, and will be secured against the underlying GPUs and the contracted cash flows from Microsoft, which supports a strong credit profile and an attractive interest rate, expected to be less than 6%. When combined with Microsoft's $1.9 billion in prepayments, this package covers 95% of the GPU-related CapEx for Horizons 1 through 4, allowing us to now focus our efforts on funding further growth across the platform. Now, turning to our capital strategy more broadly. Our capital strategy is designed to support continued rapid growth while maintaining a resilient balance sheet. We ended January with a strong cash position of $2.8 billion, and we continue to deepen our access to diverse sources of funding.
Anthony Lewis: It matches the profile of the underlying contract, amortizing in full over the 5-year term, and will be secured against the underlying GPUs and the contracted cash flows from Microsoft, which supports a strong credit profile and an attractive interest rate, expected to be less than 6%. When combined with Microsoft's $1.9 billion in prepayments, this package covers 95% of the GPU-related CapEx for Horizons 1 through 4, allowing us to now focus our efforts on funding further growth across the platform. Now, turning to our capital strategy more broadly. Our capital strategy is designed to support continued rapid growth while maintaining a resilient balance sheet. We ended January with a strong cash position of $2.8 billion, and we continue to deepen our access to diverse sources of funding.
It matches the profile of the underlying contract amortizing in full over the five year term.
These will be extremely valuable long-term assets which are currently being funded by the balance sheet.
And it will be secured against the underlying Gpus and the contracted cash flows from Microsoft which supports a strong credit profile and at attractive interest rate expected to be less than 6%.
And construction financing to support a broader development pipeline.
As well. We'll also look at select corporate level facilities when aligned with our cost of capital and balance sheet management priorities.
When combined with Microsoft $1 9 billion in prepayments. This package covers 95% of the GPU related Capex for horizons, one through four allowing us to now focus our efforts on funding further growth across the platform.
of course, as we scale, financing activities will remain focused on an appropriate balance between debt and Equity to ensure we maintain that balance sheet resilience
With that, I'll turn it back to Dan for concluding remarks.
Now turning to our capital strategy more broadly.
Our capital strategy is designed to support continued rapid growth, while maintaining a resilient balance sheet.
Our strategy straight forward and it comes back to the 3 CS capacity.
We ended January with a strong cash position of $2 8 billion and we continue to deepen our access to the vote diverse sources of funding.
Anthony Lewis: Financial year to date, we have now secured $9.2 billion from customer prepayments, convertible notes, including the $2.3 billion issued in December.
Anthony Lewis: Financial year to date, we have now secured $9.2 billion from customer prepayments, convertible notes, including the $2.3 billion issued in December.
Financial year to date, we have now secured.
$9 2 billion from custom customer prepayments convertible notes, including the $2 3 billion issued in December J.
Customers and capital, we secure large scale low-cost power and build quality data centers to create capacity. We pair that with long-term customer demand and we support it all with disciplined. Well structured Capital Arrangements.
Kent Draper: ... GPU leasing arrangements and the dedicated GPU financing for the Microsoft contract. This diversity of capital sources allows us to scale with confidence. Looking ahead, a key priority will be to continue that work and expand our access further. This will include looking at efficient financing for our data centers, such as Horizons 1 through 4, when they come online. These will be extremely valuable long-term assets, which are currently being funded by the balance sheet, and construction financing to support our broader development pipeline. As well, we'll also look at select corporate-level facilities when aligned with our cost of capital and balance sheet management priorities. Of course, as we scale financing activities, we'll remain focused on an appropriate balance between debt and equity to ensure we maintain that balance sheet resilience. With that, I'll turn it back to Dan for concluding remarks.
Anthony Lewis: ... GPU leasing arrangements and the dedicated GPU financing for the Microsoft contract. This diversity of capital sources allows us to scale with confidence. Looking ahead, a key priority will be to continue that work and expand our access further. This will include looking at efficient financing for our data centers, such as Horizons 1 through 4, when they come online. These will be extremely valuable long-term assets, which are currently being funded by the balance sheet, and construction financing to support our broader development pipeline. As well, we'll also look at select corporate-level facilities when aligned with our cost of capital and balance sheet management priorities. Of course, as we scale financing activities, we'll remain focused on an appropriate balance between debt and equity to ensure we maintain that balance sheet resilience. With that, I'll turn it back to Dan for concluding remarks.
That framework has guided our decisions for years and it continues to shape how we scale today.
<unk> leasing arrangements and the dedicated GPU financing for the Microsoft contract.
This diversity of capital sources allows us to scale with confidence.
Looking ahead, our key priority will be to continue that work and expand access further.
Over the past, several quarters, we've made meaningful progress, across all 3 of those Dimensions. We've removed a significant amount of execution Risk by locking in capital for our largest deployment to date. We've expanded our power footprint,
This will include looking at efficient financing for our data centers, such as horizons, one through four when they come online.
And we've continued to deepen relationships, with some of the largest technology companies in the world.
These will be extremely valuable long term assets, which are currently being funded by the balance sheet.
What's important to emphasize is that we're still at an early stage of monetization relative, to the size of our platform,
And construction financing to support a broader development pipeline.
As well we will also look at select corporate level facilities weren't aligned with our cost of capital and balance sheet management priorities.
with more than 4.5, gigawatts of power, and only 10% required to support the 3.4 billion in ARR. We have a clear pathway for continued growth
Of course, as we scale financing activities will remain focused on an appropriate balance between debt and equity to ensure we maintain that balance sheet resilience.
With Capital Access. Now, demonstrated at scale. We're able to engage customers with greater flexibility.
With that I'll turn it back to Dan.
On how. And when we bring new capacity to Market, while maintaining discipline around pricing and partner selection,
Including remarks.
Daniel Roberts: Thanks, Anthony. So to recap, our strategy is straightforward, and it comes back to the three Cs: capacity, customers, and capital. We secure large-scale, low-cost power and build quality data centers to create capacity. We pair that with long-term customer demand, and we support it all with disciplined, well-structured capital arrangements. That framework has guided our decisions for years, and it continues to shape how we scale today. Over the past several quarters, we've made meaningful progress across all three of those dimensions. We've removed a significant amount of execution risk by locking in capital for our largest deployment to date. We've expanded our power footprint. Sorry, technical issues. My screens just cut out. I can't see anyone. There we are. And we've continued to deepen relationships with some of the largest technology companies in the world.
Daniel Roberts: Thanks, Anthony. So to recap, our strategy is straightforward, and it comes back to the three Cs: capacity, customers, and capital. We secure large-scale, low-cost power and build quality data centers to create capacity. We pair that with long-term customer demand, and we support it all with disciplined, well-structured capital arrangements. That framework has guided our decisions for years, and it continues to shape how we scale today. Over the past several quarters, we've made meaningful progress across all three of those dimensions. We've removed a significant amount of execution risk by locking in capital for our largest deployment to date. We've expanded our power footprint. Sorry, technical issues. My screens just cut out. I can't see anyone. There we are. And we've continued to deepen relationships with some of the largest technology companies in the world.
Thanks, Anthony so to recap our strategy is straightforward and it comes back to the three CS capacity.
That scale allows us to Pace growth responsibly be selective in the customers we partner with and structure contracts and Finance in ways that support durable, long-term value creation.
Customers and capital, we secure large scale low cost power and build quality data centers to create capacity, we pair that with long term customer demand and we still support it all with disciplined well structured capital arrangements.
In summary. After all the 7 years I've found to let execution, iron is now scaled AI Cloud platform with significant opportunity ahead.
With that, we'll open the call for Q&A.
That framework has gone to their decisions for years and it continues to shape, how we scale today.
As a reminder to ask a question. Please press star, 1 1 1 on your telephone, and wait, for your name to be announced.
Over the past several quarters, we've made meaningful progress across all three of those dimensions, we've removed a significant amount of execution risk by locking in capital for our largest deployment to date, we've expanded out powerful bridge.
To withdraw your question, please press star 1 again.
Please stand by. If you compile the Q&A roster.
First question comes from, Darren Atassi from Roth. Please go ahead.
Sorry technical issues on our screens.
Cut out I can't see anyone.
Yeah.
And we've continued to deepen relationships with some of the largest technology companies in the world.
Daniel Roberts: What's important to emphasize is that we're still at an early stage of monetization relative to the size of our platform. With more than 4.5GW of power and only 10% required to support the $3.4 billion in ARR, we have a clear pathway for continued growth. With capital access now demonstrated at scale, we're able to engage customers with greater flexibility on how and when we bring new capacity to market, while maintaining discipline around pricing and partner selection. That scale allows us to pace growth responsibly, be selective in the customers we partner with, and structure contracts and financing in ways that support durable, long-term value creation. In summary, after more than 7 years of bound to lead execution, IREN is now a scaled AI cloud platform with significant opportunity ahead. With that, we'll open the call for Q&A.
Daniel Roberts: What's important to emphasize is that we're still at an early stage of monetization relative to the size of our platform. With more than 4.5GW of power and only 10% required to support the $3.4 billion in ARR, we have a clear pathway for continued growth. With capital access now demonstrated at scale, we're able to engage customers with greater flexibility on how and when we bring new capacity to market, while maintaining discipline around pricing and partner selection. That scale allows us to pace growth responsibly, be selective in the customers we partner with, and structure contracts and financing in ways that support durable, long-term value creation. In summary, after more than 7 years of bound to lead execution, IREN is now a scaled AI cloud platform with significant opportunity ahead. With that, we'll open the call for Q&A.
What's important to emphasize is that we're still at an early stage of monetization relative to the size of our platform.
Hi guys. Good afternoon. Thanks for taking my questions and congrats on the continued progress with Oklahoma. Um 2. If I met there's a lot of noise around Urgot and I'm sure people on the phone cuz I don't want to know but um any change in those kind of amended rules with batch processing in terms of how that would potentially impact um Sweet Water for you guys.
And then I'm going to follow up.
With more than 4.5, gigawatts of power and only 10% required to support the $3 4 billion in IRR, we have a clear pathway for continued growth.
With capital that is now demonstrated at scale, we're able to engage customers with greater flexibility on how and when we bring new capacity the market, while maintaining discipline around pricing and partner selection.
That scale allows us to price growth responsibly be selective in the customers, we partner with and structured contracts and financing in ways that support durable long term value creation.
In summary, after more than seven years of Bandlet execution are and he is now a scaled.
<unk> cloud platform with significant opportunity ahead.
Yeah, happy to jump in there. Uh, Darren. Um, so short answer is with respect to Sweetwater. Uh, it is likely to be included in the batching process and we believe that both Sweetwater 1 and 2 would be included in batch zero, which would mean that the full 2 gigawatts of power is secured. Um, so that's obviously a key important point there is that security of power. Um, in addition to that there are other projects in our portfolio that uh are potentially also included in batch zero. Uh, so it's 1, 1 of the advantages of obviously having a large internally developed uh portfolio um, is is is that we do have a number of projects uh that that are going through this process.
With that we'll open the call for Q&A.
Yeah.
Operator: As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by as we compile the Q&A roster. First question comes from Darren Aftahi from Roth MKM. Please go ahead.
Operator: As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by as we compile the Q&A roster. First question comes from Darren Aftahi from Roth MKM. Please go ahead.
As a reminder to ask a question. Please press star one line all your telephone.
Excellent, appreciate that. Uh, and then secondarily, um,
For your name to be announced killer.
He left Julie a question. Please press star one again.
Please standby ethical pile the Q&A roster.
So economics on Colo have continued to creep up. I, I know you guys initially signed this Cloud deal with Microsoft, um, any kind of real time thoughts on, you know, as you move forward, uh, with
First question comes from Darren <unk> from Roth. Please go ahead.
Plans for children, Sweetwater. Any other sites? Your views on verticalized? Uh, AI Cloud versus collocation. Thanks.
[Analyst] (Roth MKM): Hi, guys. Good afternoon. Thanks for taking my questions and congrats on the continued progress with Oklahoma. Too, if I may. There's a lot of noise around ERCOT. I'm sure people on the phone kind of want to know, but any change in those kind of amended rules with batch processing in terms of how that would potentially impact Sweetwater for you guys? And then I've got a follow-up.
Darren Aftahi: Hi, guys. Good afternoon. Thanks for taking my questions and congrats on the continued progress with Oklahoma. Too, if I may. There's a lot of noise around ERCOT. I'm sure people on the phone kind of want to know, but any change in those kind of amended rules with batch processing in terms of how that would potentially impact Sweetwater for you guys? And then I've got a follow-up.
Hi, guys. Good afternoon, Thanks for taking my questions and congrats on the continued progress with Oklahoma.
yeah, I mean as as as
Two if I may is a lot of noise around ERCOT I'm sure people on the phone kind of want to know but.
Any change in those kind of amended rules with batch processing in terms of how that would potentially impact Sweetwater for you guys and then I've got a follow up.
Kent Draper: Yeah, happy to jump in there, Darren. So short answer is, with respect to Sweetwater, it is likely to be included in the batching process, and we believe that both Sweetwater 1 and 2 would be included in Batch Zero, which would mean that the full 2GW of power is secured. So that's obviously a key important point there, is that security of power. In addition to that, yeah, there are other projects in our portfolio that are potentially also included in Batch Zero. So one of the advantages of obviously having a large internally developed portfolio is that we do have a number of projects that are going through this process.
Kent Draper: Yeah, happy to jump in there, Darren. So short answer is, with respect to Sweetwater, it is likely to be included in the batching process, and we believe that both Sweetwater 1 and 2 would be included in Batch Zero, which would mean that the full 2GW of power is secured. So that's obviously a key important point there, is that security of power. In addition to that, yeah, there are other projects in our portfolio that are potentially also included in Batch Zero. So one of the advantages of obviously having a large internally developed portfolio is that we do have a number of projects that are going through this process.
Yeah happy to jump in there.
Karen So the short answer is with respect to sweet water.
It is likely to be included in the batching process and we believe that bulge Sweetwater, one and two would be included in batch the euro which remained at four two gigawatts of power is secured.
So that's obviously a key important point there is that security of power in.
In addition to that there are other projects in our portfolio that are.
Potentially also included in batch Cri.
So one of the advantages of obviously, having a large internally developed portfolio.
Is that we do have a number of projects.
That are going through this process.
[Analyst] (Roth MKM): Excellent. Appreciate that. And then secondarily, so economics on colo have continued to creep up. I know you guys initially signed this cloud deal with Microsoft. Any kind of real-time thoughts on, you know, as you move forward with plans for Childress, Sweetwater, any other sites, your views on verticalized AI cloud versus colocation? Thanks.
Darren Aftahi: Excellent. Appreciate that. And then secondarily, so economics on colo have continued to creep up. I know you guys initially signed this cloud deal with Microsoft. Any kind of real-time thoughts on, you know, as you move forward with plans for Childress, Sweetwater, any other sites, your views on verticalized AI cloud versus colocation? Thanks.
Excellent I appreciate that and then secondarily.
So economics on Colo.
Continue to creep up I know you guys. Initially signed this cloud deal with Microsoft.
Uh, it's it's higher up, obviously in the value chain than collocation and you can capture materially better dollars per megawatt through Cloud versus pure co-location. Uh, and obviously at this point, you know, we demonstrated the the capability, um, and execution, to be able to stand up these large Cloud customers. Uh, and, you know, as as we spoke about at length during the call, also seeing the capital side come together. So all the elements are there within the portfolio. To allow us to continue to take advantage of of what we have on a on a cloud services basis.
Any kind of real time thoughts on.
As you move forward with.
Plans for children is sweetwater any other sites your views on vertical wise.
AI cloud versus co location.
Kent Draper: Yeah, I mean, as we've said before, we continue to be open-minded about how we allocate our megawatts and continue to observe what's happening in the market. You know, we are observing, as you mentioned, what's happening in the colocation market, but also seeing continued strength in demand on the cloud side as well. And I think when we look at the overall portfolio, you know, power is the scarce resource today. And so, you know, it's absolutely vital that you are maximizing the value of each of the megawatts within the portfolio. And today, we still see AI cloud as doing that in a more meaningful way than colocation. It's higher up, obviously, in the value chain than colocation, and you can capture materially better dollars per megawatt through cloud versus pure colocation.
Kent Draper: Yeah, I mean, as we've said before, we continue to be open-minded about how we allocate our megawatts and continue to observe what's happening in the market. You know, we are observing, as you mentioned, what's happening in the colocation market, but also seeing continued strength in demand on the cloud side as well. And I think when we look at the overall portfolio, you know, power is the scarce resource today. And so, you know, it's absolutely vital that you are maximizing the value of each of the megawatts within the portfolio. And today, we still see AI cloud as doing that in a more meaningful way than colocation. It's higher up, obviously, in the value chain than colocation, and you can capture materially better dollars per megawatt through cloud versus pure colocation.
Yes.
As we've said before we continue to be open minded about how we allocate out of our megawatts and continue to observe what's happening in the market.
And maybe just to add to what Kent said. It is something we can continue to evaluate. But, you know, 1 of the knocks on GPU Cloud, was the capital intensity of gpus. So with the announcement today of the GPU financing, we've now secured 95% of the cost of the gpus.
As an average interest rate of around 3%.
Yeah. We are observing is you mentioned what's happening in the Colocation market at all so I think continued strength in demand.
When you factor into the prepayments, so we essentially got the gpus, uh, for next to nothing. Um, so I think in terms of capital, intensity it, ticks that box.
On the cloud side as well and I think when we look at the overall pulp portfolio yeah.
Power is the scarce resource today and so it's absolutely vital that you are maximizing the value of each of the megawatts within within the portfolio.
To further to Kent's, Point time to power is critical, but time to Data Centers is actually, the more limiting factor and when you've got scarcity around, how many data centers you can physically bring online.
And today, we still see Ili cloud is doing that in a more meaningful way than car location.
It's higher up obviously in the value chain and Colocation and you can capture materially better dollars per megawatts through cloud versus pure kind of bifurcation and obviously at this point, yeah, we demonstrated the capability and execution.
Every incremental 200 megawatts can deliver either. 300 million dollars is through a collocation or multiples of that in the billions under a cloud contract. So, when we look at the monetization opportunity for our platform and growth for shareholders and creating value, the cloud opportunity, creates a lot more upside, um, as we see it, and
In terms of collocation versus cloud.
Kent Draper: And obviously, at this point, you know, we've demonstrated the capability and execution to be able to stand up these large cloud customers. And, you know, as we spoke about at length during the call, also seeing the capital side come together. So all the elements are there within the portfolio to allow us to continue to take advantage of what we have on a cloud services basis.
Kent Draper: And obviously, at this point, you know, we've demonstrated the capability and execution to be able to stand up these large cloud customers. And, you know, as we spoke about at length during the call, also seeing the capital side come together. So all the elements are there within the portfolio to allow us to continue to take advantage of what we have on a cloud services basis.
We're able to stand up these large cloud customers.
And as we spoke about it at length during the call all size, saying the capital. So I'd come together. So all the elements are there within the portfolio to allow us to continue to take advantage of what we have on our on our cloud services basis.
We believe that AI is going to continue. We believe that data center demand is going to continue to compound. So recovering Capital back in short order and being able to compound those returns as distinct from holding effectively a bond exposure, against a hyperscaler.
Daniel Roberts: And maybe just to add to what Kent said, it is something we continue to evaluate, but, you know, one of the knocks on GPU cloud was the capital intensity of GPUs. So with the announcement today of the GPU financing, we've now secured 95% of the cost of the GPUs at an average interest rate of around 3% when you factor into the prepayment. So we essentially got the GPUs for next to nothing. So I think in terms of capital intensity, it ticks that box. To further to Kent's point, time to power is critical, but time to data centers is actually the more limiting factor.
Daniel Roberts: And maybe just to add to what Kent said, it is something we continue to evaluate, but, you know, one of the knocks on GPU cloud was the capital intensity of GPUs. So with the announcement today of the GPU financing, we've now secured 95% of the cost of the GPUs at an average interest rate of around 3% when you factor into the prepayment. So we essentially got the GPUs for next to nothing. So I think in terms of capital intensity, it ticks that box. To further to Kent's point, time to power is critical, but time to data centers is actually the more limiting factor.
And maybe just to add to what Ken said he recently, we continue to evaluate but.
One of the knocks on GPU cloud was the capital intensity of Gpus, So with the announcement today of the GPU financing we've now secured.
Is the area we want to play. And if investors want bonds like exposures, they can buy collocation companies. They can buy Bonds in the hyperscalers, but we believe we're offering a high conviction. But very, well-managed risk, exposure to the sector through this, our Cloud business. Now again, we're not dogmatic. Things can change quickly, we get a compelling, collocation deal. We will absolutely pursue it. But right now, ai Cloud. It's a very compelling for all those reasons.
Appreciate it guys, best of luck.
Acuity, 95% of the cost of the Gpus at an average interest rate of around 3%.
Thank you.
When you factor into the prepayments so we essentially got the Gpus.
Next question comes from. Paul Golling from McCrory. Please go ahead.
For next to nothing.
So I think in terms of capital intensity it ticks that box.
To further to Ken's point, Tom to power is critical baton to data centers is actually the more limiting factor and when you've got scarcity around how many data centers you can basically bring online.
Daniel Roberts: When you've got scarcity around how many data centers you can physically bring online, every incremental 200MW can deliver either $300 million-ish through a colocation or multiples of that in the billions under a cloud contract. So when we look at the monetization opportunity for our platform and growth for shareholders in creating value, the cloud opportunity creates a lot more upside, as we see it. In terms of colocation versus cloud, we believe that AI is going to continue. We believe that data center demand is going to continue to compound, so recovering capital back in short order and being able to compound those returns, as distinct from holding respectively a bond exposure against the hyperscaler, is the area we want to play. If investors want bond-like exposures, they can buy colocation companies; they can buy bonds in the hyperscalers.
Daniel Roberts: When you've got scarcity around how many data centers you can physically bring online, every incremental 200MW can deliver either $300 million-ish through a colocation or multiples of that in the billions under a cloud contract. So when we look at the monetization opportunity for our platform and growth for shareholders in creating value, the cloud opportunity creates a lot more upside, as we see it. In terms of colocation versus cloud, we believe that AI is going to continue. We believe that data center demand is going to continue to compound, so recovering capital back in short order and being able to compound those returns, as distinct from holding respectively a bond exposure against the hyperscaler, is the area we want to play. If investors want bond-like exposures, they can buy colocation companies; they can buy bonds in the hyperscalers.
Every incremental 200 megawatts can deliver or the $300 million ish through a co location.
Or multiples of that in the billions under a cloud contract. So when we look at the monetization opportunity for our platform.
And growth for shareholders and creating value the cloud opportunity creates a lot more upside as we see it and.
Thanks so much. And, uh, congrats on, uh, the, the additional site and all the progress. I just wanted to ask as we think about the uh, uh Oklahoma, uh, site and power Market, I guess anything specific to call out about how that, uh, factors into the demand picture for HPC compute. Uh, from a location perspective, aside from, uh, I know the, the low latency already mentioned or their, uh, you know, favorable, uh, Power reliability, Dynamics or power pricing Dynamics or uh, just geographically relative to, uh, you know, Tier 1 availability zones and then I have a follow-up. Thank you so much.
In terms of co location versus cloud.
We believe that I always going to continue we believe that data center demand is going to continue to compound. So recovering capital back in short order. It may not to compound those returns as distinct from holding respectively, a bond exposure against the harvest Skyla <unk>.
He is the area, we want to play and if investors want bond block exposures. They can buy colocation companies. They can buy bonds in the harvest skyler, but we believe we are offering a high conviction the very well managed risk exposure to the sector really say our cloud business now again, we're not diabetic things can change quickly we get there.
Daniel Roberts: But we believe we're offering a high conviction, but very well-managed risk exposure to the sector through this AI cloud business. Now, again, we're not dogmatic. Things can change quickly. We get a compelling colocation deal, we will absolutely pursue it, but right now, AI cloud is very compelling for all those reasons.
Daniel Roberts: But we believe we're offering a high conviction, but very well-managed risk exposure to the sector through this AI cloud business. Now, again, we're not dogmatic. Things can change quickly. We get a compelling colocation deal, we will absolutely pursue it, but right now, AI cloud is very compelling for all those reasons.
Yeah, so we we think that site there has um, favorable characteristics on a, on a number of levels. Uh, I did mention that like, latency is you refer to earlier? Uh, it's a very large site, which, which gives us flexibility as we build out the capacity. It's located in Southwest power pool, which is a different, uh, Market to URL. So it provides us with some jurisdictional diversity. Um, we think Southwest power pool is a, is a very attractive Market on the power side. Uh,
Compelling colocation deal, we will absolutely pursue it but right now it's.
Very compelling for all those reasons.
[Analyst] (Roth MKM): Appreciate it, guys. Continue. Best of luck.
Darren Aftahi: Appreciate it, guys. Continue. Best of luck.
I appreciate it guys, Dave best of luck.
Operator: Thank you. Next question comes from Paul Golding from Macquarie. Please go ahead.
Operator: Thank you. Next question comes from Paul Golding from Macquarie. Please go ahead.
Thank you.
Our next question comes from Paul calling from Macquarie. Please go ahead.
A large penetration of Renewables, um, low cost of power. Um, we know that it's an area that is attractive to hyperscalers, because there have been a number of, uh, hyperscalers that have been active, um, in Southwest power pool, more broadly, but also, uh, Oklahoma specifically. Um, so overall, it exhibits all the characteristics that, you know, we would look for, uh, in terms of an attractive data center campus.
[Analyst] (Macquarie): Thanks so much, and congrats on the additional site and all the progress. I just wanted to ask, as we think about the Oklahoma site and power market, I guess anything specific to call out about how that factors into the demand picture for HPC compute from a location perspective, aside from I know the low latency already mentioned or there you know favorable power reliability dynamics or power pricing dynamics or just geographically relative to you know tier one availability zones? And then I have a follow-up. Thank you so much.
Paul Golding: Thanks so much, and congrats on the additional site and all the progress. I just wanted to ask, as we think about the Oklahoma site and power market, I guess anything specific to call out about how that factors into the demand picture for HPC compute from a location perspective, aside from I know the low latency already mentioned or there you know favorable power reliability dynamics or power pricing dynamics or just geographically relative to you know tier one availability zones? And then I have a follow-up. Thank you so much.
Thanks, so much and congrats on the additional site and all the progress I just wanted to ask as we think about the.
Oklahoma.
Site and power market, I guess anything specific to call out about how that.
Factors into the demand picture for HPE compute from a location perspective aside from I know the low latency already mentioned are there.
Sure one availability zones, and then I have a follow up thank you so much.
Kent Draper: Yeah, so we think the site there has favorable characteristics on a number of levels. I did mention that low latency, as you referred to earlier. It's a very large site, which gives us flexibility as we build out the capacity. It's located in Southwest Power Pool, which is a different market to ERCOT, so it provides us with some jurisdictional diversity. We think Southwest Power Pool is a very attractive market on the power side, a large penetration of renewables, low cost of power. We know that it's an area that is attractive to hyperscalers because there have been a number of hyperscalers that have been active in Southwest Power Pool more broadly, but also Oklahoma specifically.
Kent Draper: Yeah, so we think the site there has favorable characteristics on a number of levels. I did mention that low latency, as you referred to earlier. It's a very large site, which gives us flexibility as we build out the capacity. It's located in Southwest Power Pool, which is a different market to ERCOT, so it provides us with some jurisdictional diversity. We think Southwest Power Pool is a very attractive market on the power side, a large penetration of renewables, low cost of power. We know that it's an area that is attractive to hyperscalers because there have been a number of hyperscalers that have been active in Southwest Power Pool more broadly, but also Oklahoma specifically.
Yes, so we think that site that has.
Favorable characteristics on a on a number of levels I did mention that line license as you referred to earlier.
Um, as you roll out, these these 2 different approaches to Cloud, even write with your, your, uh, British Columbia, uh, clusters versus the Microsoft clusters. How should we think about your software approach? We, you know, looking at the, uh, nio Cloud space software as a topic that comes up quite a bit. I guess, how should we think about? Uh your software offering for uh for certain clusters where there's there's on demand or smaller contracted uh deals. Um versus of course bare metal deals. Uh and how that uh development and and the uptake from customers has progressed. Thank you so much.
It's a very large site, which gives us flexibility as we build out the capacity, it's like I did in southwest power pool, which is a different.
Market caught so it provides us with some jurisdictional diversity, we think southwest power pool has a very attractive market on the power side, a large penetration of renewables.
<unk> cost of power.
We know that it's an area that is attractive to hyper scale is because there have been a number of hyper scale is that have been active.
In southwest power pool, more broadly, but all signs are calling a specific clay.
Kent Draper: So, overall, it exhibits all the characteristics that, you know, we would look for in terms of an attractive data center campus.
Kent Draper: So, overall, it exhibits all the characteristics that, you know, we would look for in terms of an attractive data center campus.
So overall it exhibits all the characteristics that we would look for.
In terms of then attractive data center campus.
[Analyst] (Macquarie): Thanks, Kent. And then, maybe a follow-up on the questions that have been asked around, cloud versus colo, or maybe more specifically about cloud. As you roll out these, these two different approaches to cloud even, right, with your, your, British Columbia, clusters versus the, Microsoft clusters, how should we think about your software approach? We-- you know, looking at the, neocloud space, software is a topic that comes up quite a bit. I guess, how should we think about, your software offering for, for certain clusters where there's, there's on-demand or smaller contracted, deals, versus, of course, the bare metal deals, and how that, development and, the uptake from customers has progressed? Thank you so much.
Paul Golding: Thanks, Kent. And then, maybe a follow-up on the questions that have been asked around, cloud versus colo, or maybe more specifically about cloud. As you roll out these, these two different approaches to cloud even, right, with your, your, British Columbia, clusters versus the, Microsoft clusters, how should we think about your software approach? We-- you know, looking at the, neocloud space, software is a topic that comes up quite a bit. I guess, how should we think about, your software offering for, for certain clusters where there's, there's on-demand or smaller contracted, deals, versus, of course, the bare metal deals, and how that, development and, the uptake from customers has progressed? Thank you so much.
Thanks, Ken and then maybe a follow up on the questions that have been asked around.
Cloud versus Colo or maybe more specifically about cloud.
As you rollout. These these two different approaches to cloud even ride with your your British Columbia.
Clusters versus the Microsoft clusters, how should we think about your software approach.
Looking at the Neo cloud space software is a topic that comes up quite a bit is how should we think about.
Your software offering for.
For certain clusters, where there's there's on demand or smaller contracted deals versus of course, the bare metal deals and how that development and the uptake from customers has progressed. Thank you so much.
Kent Draper: Yeah, so today, we're still seeing the bulk of our demand coming from hyperscalers, the largest enterprises, extremely advanced technology firms within the AI space, all of which are still looking for bare metal access. They want full ability to be able to take control of the GPUs, layer on their own software stack, set up the compute in exactly the way that they want to operate it, and that is where the vast majority of our demand is coming. And as we referred to in the call, our ability to scale with them over time is one of the key elements. And I think the largest customers are those bare metal customers.
Kent Draper: Yeah, so today, we're still seeing the bulk of our demand coming from hyperscalers, the largest enterprises, extremely advanced technology firms within the AI space, all of which are still looking for bare metal access. They want full ability to be able to take control of the GPUs, layer on their own software stack, set up the compute in exactly the way that they want to operate it, and that is where the vast majority of our demand is coming. And as we referred to in the call, our ability to scale with them over time is one of the key elements. And I think the largest customers are those bare metal customers.
Yes today, we are still saying the bulk of our demand coming from hyper scale as the largest enterprise is extremely.
Customers are those bare metal customers. Um, whereas the the software really is typically more useful for smaller, Enterprise customers. Um, that are looking for an easy, you know, user interface and easy single spin up spin down service. Um, but that is a, you know, small proportion of the overall, uh, compute demand that we're seeing out there today. Um, it may well grow over time and that's something that we continue to monitor as as as we look to our software strategy. Um, but we continue to think that it is likely to be 1 of the areas in this space, that gets commoditized to the fastest, um, you know, it is relatively simple in comparison to finding power building data centers, setting up, GPU clusters at scale, uh, and and likely to be an area where you're going to see. Third-party offerings.
Advanced technology firms within the II space, all of which are still looking for bare metal access.
They want the full ability to be able to tight control of the J P. Us layer on their own software stack setup their compute and exactly the way that they want to operate at.
And commoditization uh, that you know, we may well be able to take advantage of. So you know, in short, continue to monitor that part of the market and what makes sense for us. But today it is not a major driver for us because our demand is coming from bare metal, customers.
And that is where the vast majority of our demand is coming and as we referred to in the call our ability to scale.
With them all the time is one of the key elements.
And I think the largest customers are those bare metal customers.
Kent Draper: Whereas the software really is typically more useful for smaller enterprise customers that are looking for an easy, you know, user interface and easy single spin-up, spin-down service. But that is a, you know, small proportion of the overall compute demand that we're seeing out there today. It may well grow over time, and that's something that we continue to monitor as we look to our software strategy. But we continue to think that it is likely to be one of the areas in this space that gets commoditized the fastest.
Kent Draper: Whereas the software really is typically more useful for smaller enterprise customers that are looking for an easy, you know, user interface and easy single spin-up, spin-down service. But that is a, you know, small proportion of the overall compute demand that we're seeing out there today. It may well grow over time, and that's something that we continue to monitor as we look to our software strategy. But we continue to think that it is likely to be one of the areas in this space that gets commoditized the fastest.
Whereas the software really is typically more useful for smaller enterprise customers.
That are looking for an easy user interface and AZ single spin up spin down service.
And maybe just to give you some additional Comfort around the way, the world might go here. Paul is we do have an internal software capability. I think we probably downplay it a bit. Um, partly in response to the market seeming to overplay it, but we've got that capability and to give you additional Comfort 1 of the contracts. We are negotiating at the moment is a multi-billion dollar contract where we need to bring a software solution so it is not holding us back, it will not hold us back but the reality is exactly is what Kent said, you are dealing with the largest technology companies in the world to protect that. You can be better at software and jam something down their throat when that is their competitive mode and that is their expertise, it's just not congruent with reality.
But that is a small proportion of the overall compute demand that we're seeing out there today.
Craig caller. Thank you both so much.
Thank you. Just a moment for our next question, please.
It may well grow over time, and that's something that we continue to monitor as we look to our software strategy.
Next, we have Michael nin, from Goldman Sachs, please go ahead.
But we continue to think that it is likely to be one of the areas in this space that gets commoditize the process.
Kent Draper: You know, it is relatively simple in comparison to finding power, building data centers, setting up GPU clusters at scale, and likely to be an area where you're gonna see third-party offerings and commoditization, that, you know, we may well be able to take advantage of. So, you know, in short, continue to monitor that part of the market and what makes sense for us, but today, it is not a major driver for us because our demand is coming from bare metal customers.
Kent Draper: You know, it is relatively simple in comparison to finding power, building data centers, setting up GPU clusters at scale, and likely to be an area where you're gonna see third-party offerings and commoditization, that, you know, we may well be able to take advantage of. So, you know, in short, continue to monitor that part of the market and what makes sense for us, but today, it is not a major driver for us because our demand is coming from bare metal customers.
It is relatively simple and comparison to finding power building datacenters setting up J P. You clusters at scale.
And likely to be an area, where you're going to see third party offerings and commoditize Asian.
Hi, good afternoon, thank you so much for the question. Um, I just have 2 a first, as a follow-up to the question earlier around. Um, the aircot batch study processing. Um, it was encouraging to hear that, um, the, the iron sights lightly will be in batch zero. I was just wondering if you could, um, provide an update around the, the Sweetwater 1 and Sweetwater 2, um, energization dates and, um, whether uh, the batch
That yes, we might well be able to take advantage of so <unk>.
Sure continue to monitor that part of the market and what makes sense for us but today. It is not a major driver for us because our demand is coming from bare metal customers.
Has affected your ability to, um, uh, you know, negotiate and, and sign contracts with customers for those sites. And, um, you know what? That progress looks like. And then I have a quick follow-up. Thank you.
Daniel Roberts: Maybe just to give you some additional comfort around with the way the world might go here, Paul, is we do have an internal software capability. I think we probably downplay it a bit, partly in response to the market seeming to overplay it, but we've got that capability. And to give you additional comfort, one of the contracts we are negotiating at the moment is a multi-billion dollar contract where we need to bring a software solution. So it is not holding us back. It will not hold us back. But the reality is exactly as what Kent said, you are dealing with the largest technology companies in the world. To pretend that you can be better at software and jam something down their throat when that is their competitive moat and that is their expertise, it's just not congruent with reality.
Daniel Roberts: Maybe just to give you some additional comfort around with the way the world might go here, Paul, is we do have an internal software capability. I think we probably downplay it a bit, partly in response to the market seeming to overplay it, but we've got that capability. And to give you additional comfort, one of the contracts we are negotiating at the moment is a multi-billion dollar contract where we need to bring a software solution. So it is not holding us back. It will not hold us back. But the reality is exactly as what Kent said, you are dealing with the largest technology companies in the world. To pretend that you can be better at software and jam something down their throat when that is their competitive moat and that is their expertise, it's just not congruent with reality.
And maybe just to give you some additional comfort around with the way the world might go. He Paul is we do have an internal software capability I think we probably downplay the beach, partly in response to the market seeming to overplay, it, but we've got that capability and to give you additional comfort one all of the contracts we have negotiated with them I imagine.
Is a multibillion dollar contract, where we need to bring a software solution.
It is not holding us back and we will not hold us back but the reality is exactly is what Kim said you are dealing with the largest technology companies in the world to pretend that it can be better at software and Jim suddenly down their throat when that is the competitive moat that is their expertise.
Um, so energization very much on track. Um, construction is well Advanced both with the on-site substation, as well as the the utility substation there.
Just not can grow with reality.
[Analyst] (Cantor Fitzgerald): Great color. Thank you both so much.
Paul Golding: Great color. Thank you both so much.
Great color. Thank you both so much.
Operator: Thank you. Just a moment for our next question, please. Next, we have Michael Ng from Goldman Sachs. Please go ahead.
Operator: Thank you. Just a moment for our next question, please. Next, we have Michael Ng from Goldman Sachs. Please go ahead.
Thank you Amanda next question please.
Next we have Michael <unk> from Goldman Sachs. Please go ahead.
Um as it relates to to customer engagement, moving forward on those sites. Um obviously very early uh since this batching process has been announced but if anything we would actually expect it to to be helpful to us. Um, you know, we we've said uh, numerous times in the past, there are a lot of megawatts that are put out there into this Market that are that are you know, made up
[Analyst] (Goldman Sachs): Hi, good afternoon. Thank you so much for the question. I just have two. First, as a follow-up to the question earlier around the ERCOT batch study processing, it was encouraging to hear that the Childress sites likely will be in Batch Zero. I was just wondering if you could provide an update around the Sweetwater One and Sweetwater Two energization dates and whether the batch process has affected your ability to, you know, negotiate and sign contracts with customers for those sites, and you know, what that progress looks like. And then I have a quick follow-up. Thank you.
Michael Ng: Hi, good afternoon. Thank you so much for the question. I just have two. First, as a follow-up to the question earlier around the ERCOT batch study processing, it was encouraging to hear that the Childress sites likely will be in Batch Zero. I was just wondering if you could provide an update around the Sweetwater One and Sweetwater Two energization dates and whether the batch process has affected your ability to, you know, negotiate and sign contracts with customers for those sites, and you know, what that progress looks like. And then I have a quick follow-up. Thank you.
Hi, good afternoon, and thank you so much for the question I just have two.
First as a follow up to the question earlier around the Aircard that study processing.
It was encouraging to hear that.
Um, and I think what this process is going to do is is really uncover which megawatts are real. Um, and we which are not real and for us, you know, we expect that to actually lead to to better discussions with our customers uh over time.
The direct sites like <unk> will be in batch zero I was just wondering if you could provide an update around the sweetwater one in three order too.
And organisation dates and.
Whether the batch process has.
Fact that your ability to.
Negotiate and sign contracts with customers for those sites and you know what that progress looks like and I have a quick follow up thank you.
Kent Draper: Yeah, thanks. Thanks for the question. In terms of the energization date for Sweetwater One, we're still on track to energize in Q2, and that's a full bulk substation, so that's capable of the full 1.4GW of power capacity at that site. So energization, very much on track. Construction is well advanced, both with the on-site substation as well as the utility substation there. As it relates to customer engagement moving forward on those sites, obviously, very early since this batching process has been announced, but if anything, we would actually expect it to be helpful to us. You know, we've said numerous times in the past, there are a lot of megawatts that are put out there into this market that are, you know, made up.
Kent Draper: Yeah, thanks. Thanks for the question. In terms of the energization date for Sweetwater One, we're still on track to energize in Q2, and that's a full bulk substation, so that's capable of the full 1.4GW of power capacity at that site. So energization, very much on track. Construction is well advanced, both with the on-site substation as well as the utility substation there. As it relates to customer engagement moving forward on those sites, obviously, very early since this batching process has been announced, but if anything, we would actually expect it to be helpful to us. You know, we've said numerous times in the past, there are a lot of megawatts that are put out there into this market that are, you know, made up.
Yeah. Thanks, Thanks for the question.
In terms of the energized I shouldn't dive for Sweetwater want and we're still on track to energize in Q2, and that's a full bulk substation. So that's capable of the the full one four gigawatts.
Great, wonderful. Thank you. Um, and I I wanted to ask about the, um, the 2.3 billion dollars of ARR, um, which, um, I guess is the, the Microsoft contract plus the 400 million at, um, British Columbia. Um, we when should we ask expect those, uh, revenues to, to start, um, being recognized and, and commencing in the p&l? Um, you know, is it is it kind of more incredibly through the year? Um, is it more in 27 just would love to get any thoughts about that?
Uh, thank you very much.
Of power capacity at that site.
Yeah, so Prince George. We've obviously had capacity operating there for a while and continue to install new capacity and and we'll do over the upcoming weeks.
<unk> very much on track.
Instruction is well advanced with the onsite substation as well as the utility substation there.
Um so yeah, a decent proportion of the 0.4 billion of contracted um Revenue that we talked about is already operational there.
As it relates to customer engagement moving forward on those sites, obviously very early.
Since this patching process has been announced but if anything we would actually expect it to be helpful to us.
how's it relates to the Microsoft contract um that will come online progressively over the course of the year uh commencing you know we expect Q2 in terms of initial revenues flowing through
Thank you so much for the thoughts. Really appreciate it.
Yes.
<unk> said numerous times in the past there are a lot of megawatts that are put out there in todays market.
Thank you, remember for next question, please.
I've made off.
Kent Draper: I think what this process is gonna do is really uncover which megawatts are real, and which are not real. For us, you know, we expect that to actually lead to better discussions with our customers over time.
Kent Draper: I think what this process is gonna do is really uncover which megawatts are real, and which are not real. For us, you know, we expect that to actually lead to better discussions with our customers over time.
And I think what this process is going to do is is really uncover which megawatts of rail.
Next, we have Brett combines lunch from cancer for geralt, please. Go ahead.
Guys, this is on.
Order.
We cannot rail and for US, we expect that to actually lead to better the sessions with our customers.
Over time.
[Analyst] (Goldman Sachs): Great. Wonderful. Thank you. And I wanted to ask about the $2.3 billion of ARR, which I guess is the Microsoft contract, plus the $400 million at British Columbia. When should we expect those revenues to start being recognized and commencing in the P&L? You know, is it kind of more ratably through the year? Is it more in 2027? Just would love to get any thoughts about that. Thank you very much.
Michael Ng: Great. Wonderful. Thank you. And I wanted to ask about the $2.3 billion of ARR, which I guess is the Microsoft contract, plus the $400 million at British Columbia. When should we expect those revenues to start being recognized and commencing in the P&L? You know, is it kind of more ratably through the year? Is it more in 2027? Just would love to get any thoughts about that. Thank you very much.
Great wonderful thank you.
And I wanted to ask about the $2 3 billion of.
I'm curious in your conversations with customers, um, relative to maybe the the first big deal that you guys signed with Microsoft. What you are seeing from a pricing environment. I think we have a lot of data points on the pillow and pricing, maybe improving out there, but I'm curious, if you guys are seeing something similar when it comes to the cloud cloud deals.
Which I.
I guess is the Microsoft contract plus the 400 million at.
British Columbia.
When should we expect those revenues to start.
Being recognized and commencing in the P&L.
Is it kind of more ratably through the year is it more in 2007, just would love to get any thoughts about that thank you very much.
Kent Draper: Yeah. So at Prince George, we've obviously had capacity operating there for a while and continue to install new capacity and will do over the upcoming weeks. So, you know, a decent proportion of the $0.4 billion of contracted revenue that we talked about is already operational there. As it relates to the Microsoft contract, that will come online progressively over the course of the year, commencing, you know, we expect Q2 in terms of initial revenues flowing through.
Kent Draper: Yeah. So at Prince George, we've obviously had capacity operating there for a while and continue to install new capacity and will do over the upcoming weeks. So, you know, a decent proportion of the $0.4 billion of contracted revenue that we talked about is already operational there. As it relates to the Microsoft contract, that will come online progressively over the course of the year, commencing, you know, we expect Q2 in terms of initial revenues flowing through.
Yes, so bad at Prince George We've obviously had capacity operating there for a while and continue to install new capacity and will do over the upcoming weeks.
So yeah.
Data and proportion of the <unk> 4 billion of contracted.
Yeah, we're seeing very strong ongoing demand as as we refer to earlier and I think that is flowing through in a number of potential areas. You know, we're we're seeing demand for long bed teners. I think the customers that are out there in the market realize that this may be a long-dated, um, Supply demand imbalance moving forward. And there's certainly an openness that we're that we're seeing to longer teners, um, than we have in the past, um, and another factor that, um, we mentioned earlier, we are seeing an increase interest in air cooled capacity, um, and that is primarily, because that can feel immediate needs especially within our portfolio because we have
Revenue that we talked about is already operational there.
As it relates to the Microsoft contract that will come online progressively over the course of the year.
Commencing we expect Q2 in terms of initial revenues flowing through.
[Analyst] (Goldman Sachs): Thank you so much for the thoughts. Really appreciate it.
Michael Ng: Thank you so much for the thoughts. Really appreciate it.
Thank you so much for the thoughts really appreciate it.
Operator: Thank you. Just a moment for our next question, please. Next, we have Brett Knoblauch from Cantor Fitzgerald. Please go.
Operator: Thank you. Just a moment for our next question, please. Next, we have Brett Knoblauch from Cantor Fitzgerald. Please go.
Thank you Thomas our next question please.
Next we have Brett conduct lunch from Cantor Fitzgerald. Please go ahead.
[Analyst] (Cantor Fitzgerald): Thanks, guys. Congrats on all the progress made throughout the quarter. I'm curious in your conversations with customers, relative to maybe the first big deal that you guys signed with Microsoft, what you are seeing from a pricing environment. I think we have a lot of data points on the colo pricing maybe improving out there, but I'm curious if you guys are seeing something similar when it comes to cloud, cloud deals.
Brett Knoblauch: Thanks, guys. Congrats on all the progress made throughout the quarter. I'm curious in your conversations with customers, relative to maybe the first big deal that you guys signed with Microsoft, what you are seeing from a pricing environment. I think we have a lot of data points on the colo pricing maybe improving out there, but I'm curious if you guys are seeing something similar when it comes to cloud, cloud deals.
Hey, guys congrats on all the projects.
For the quarter.
I'm curious in your conversations with customers.
Existing operational data centers, uh, on an air cool basis that are capable of of hosting gpus in relatively short order with relatively minimal, uh, Capital upgrades, um, we continue to see, uh, you know, the ability to, to get prepayments from customers over time. Um, so I think all all of that leads us, um, as we said to to see a very strong demand picture and it is, you know, flowing through in some elements of of the terms that we're getting under these cloud services contracts. And I think also to add to that, um, price is 1
<unk> to maybe the first big deal that you guys signed with Microsoft What you were seeing from a pricing environment. I think we have a lot of data points on a pillow pricing, maybe improving out there, but I'm curious if you guys are seeing something similar when it comes to the cloud the cloud deals.
Kent Draper: Yeah, we're seeing very strong ongoing demand, as we referred to earlier, and I think that is flowing through in a number of potential areas. You know, we're seeing demand for longer tenors. I think the customers that are out there in the market realize that this may be a long-dated supply-demand imbalance moving forward, and there's certainly an openness that we're seeing to longer tenors than we have in the past. Another factor that we mentioned earlier, we are seeing an increased interest in air-cooled capacity, and that is primarily because that can fill immediate needs, especially within our portfolio, because we have existing operational data centers on an air-cooled basis that are capable of hosting GPUs in relatively short order with relatively minimal capital upgrades.
Kent Draper: Yeah, we're seeing very strong ongoing demand, as we referred to earlier, and I think that is flowing through in a number of potential areas. You know, we're seeing demand for longer tenors. I think the customers that are out there in the market realize that this may be a long-dated supply-demand imbalance moving forward, and there's certainly an openness that we're seeing to longer tenors than we have in the past. Another factor that we mentioned earlier, we are seeing an increased interest in air-cooled capacity, and that is primarily because that can fill immediate needs, especially within our portfolio, because we have existing operational data centers on an air-cooled basis that are capable of hosting GPUs in relatively short order with relatively minimal capital upgrades.
Yeah, we're seeing very strong ongoing demand as we referred to earlier and I think that is flowing through in a number of potential areas, where we're seeing demand for longer tenors.
1 dimension of a commercial negotiation. Um, there are other factors as Ken alluded to whether it's tener and prepayments, but also the quality of the underlying contracts. Um, we do manage risks very carefully. It's a founder-led business. This is our money. This is our platform. Um, and we're not here to optimize Revenue in the next 4 weeks, compared to building something that's durable, and long-term value. And to highlight what that means in tangible terms, look at the GPU,
I think the customers that are out there in the market realize that this might be.
Our long dated supply demand imbalanced moving forward and there's certainly an openness away the way, saying to longer tenors than we.
5.8 billion of GPU costs to deliver 9.7 billion in Revenue over 5 years.
In the past.
Other factors that.
As we mentioned earlier, we are seeing an increased interest in air cooled capacity.
And that is primarily because that can fail immediate needs, especially within our portfolio because we have existing operational data centers.
Of the 5.8 billion, the nature of the contract, as in the quality of the underlying contract, the quality of the credit, the tenor and the prepayments allowed us to get 5.5 out of the 5.8 financed as an average cost of 3%. Like that is not specifically Linked In A GPU our price but that is specifically tied to Value creation on the platform.
On an air cooled bases that are capable of hosting gpus in relatively short order.
Relatively minimal capital upgrades, we continue to say.
Awesome. Now very helpful and and then maybe just 1 more error card related question.
Kent Draper: We continue to see, you know, the ability to get prepayments from customers over time. So I think all of that leads us, as we said, to see a very strong demand picture, and it is, you know, flowing through in some elements of the terms that we're getting under these cloud services contracts.
Kent Draper: We continue to see, you know, the ability to get prepayments from customers over time. So I think all of that leads us, as we said, to see a very strong demand picture, and it is, you know, flowing through in some elements of the terms that we're getting under these cloud services contracts.
The ability to get prepayments from customers over time.
So I think all of that leads us as we said to to say a very strong demand picture and it is.
Um, I think you guys said using your words here that it's likely included in batch zero whether that's zero or zero, B, I guess. Is there a time of when we would expect to know if it's included in batch zero? I know there's a meeting on the 12th and maybe it'll go on the 20th, but it is at the Timeline that you guys are looking forward as well.
Flowing through in some elements of the terms that we're getting them, but these cloud services contracts.
yeah, I think I think, uh,
Daniel Roberts: I think also to add to that, price is one dimension of a commercial negotiation. There are other factors, as Kent alluded to, whether it's tenor and prepayments, but also the quality of the underlying contracts. We do manage risks very carefully. It's a founder-led business. This is our money, this is our platform, and we're not here to optimize revenue in the next four weeks compared to building something that's durable and long-term value. To highlight what that means in tangible terms, look at the GPU financing that we did on the Microsoft contract. To step back, $5.8 billion of GPU costs to deliver $9.7 billion in revenue over five years.
Daniel Roberts: I think also to add to that, price is one dimension of a commercial negotiation. There are other factors, as Kent alluded to, whether it's tenor and prepayments, but also the quality of the underlying contracts. We do manage risks very carefully. It's a founder-led business. This is our money, this is our platform, and we're not here to optimize revenue in the next four weeks compared to building something that's durable and long-term value. To highlight what that means in tangible terms, look at the GPU financing that we did on the Microsoft contract. To step back, $5.8 billion of GPU costs to deliver $9.7 billion in revenue over five years.
And I think also to add to that price is one dimension of the commercial negotiation. There are other factors as Ken alluded to whether its tenor and prepayments, but also the quality of the underlying contracts.
okay, will make announcements over time, you know, exact timing may change, and whenever I call it makes uh, you know, announcements with respect to this, they do acknowledge it is
We do manage risks very carefully it's a handle it business. This is al money. This is our platform.
And we're not here to optimize revenue in the next four weeks compared to building something that's durable and long term value and to highlight what that means intangible terms look at the GPU.
Um, you know, in the works are there at their end and they're actively working through it so hard for us to put an exact date on it. But, you know, we do expect a call to to make public disclosures at some point in the, in the relatively near future.
But to be clear on this guy, like crystal clear.
Financing that we did on the Microsoft contract to sit back $5 8 billion of GPU costs to deliver $9 7 billion in revenue over five years.
Daniel Roberts: Of the $5.8 billion, the nature of the contract, as in the quality of the underlying contract, the quality of the credit, the tenor, and the prepayments, allowed us to get 5.5 out of the 5.8 financed at an average cost of 3%. Like, that is not specifically linked in a GPU hour price, but that is specifically tied to value creation on the platform.
Daniel Roberts: Of the $5.8 billion, the nature of the contract, as in the quality of the underlying contract, the quality of the credit, the tenor, and the prepayments, allowed us to get 5.5 out of the 5.8 financed at an average cost of 3%. Like, that is not specifically linked in a GPU hour price, but that is specifically tied to value creation on the platform.
All of the $5 8 billion.
Nitro of the contract is in the quality of the underlying contract the quality of the credit the tenor and the prepayments allowed us to get five five out of the 5.8 financed at an average cost of 3%.
That is not specifically linked in the GPU out price, but that is specifically tied to value creation on the platform.
The 2000 megawatt is secure, like none of this batch stuff. None of the market chatter is influencing whether or not this 200 megawatts is available. We've got the signed interconnection agreement. It was signed in 2023. It's been there for years, it's been built and commissioned in Q2 this year. There is no indication the 2,000 megawatts is absolutely secure. The only thing that this is likely to amount to is maybe working with utilities around load ramp, but the reality is we don't have 1400 megawatts of Sweet Water, 1 of data centers in April, this year to energize. So, in Practical terms, it has very little, if no effect on our business, the 2,000 megawatts is the QR. We cannot reiterate that enough.
[Analyst] (Cantor Fitzgerald): Awesome. No, very helpful. And then, and then maybe just one more ERCOT-related question. I think you guys said, using your words here, that it's likely included in batch zero, whether that's zero A or zero B. I guess, is there a time of when we would expect to know if it's included in batch zero? I know there's a meeting on the 12th and maybe also on the 20th, but is that the timeline that you guys are looking towards as well?
Brett Knoblauch: Awesome. No, very helpful. And then, and then maybe just one more ERCOT-related question. I think you guys said, using your words here, that it's likely included in batch zero, whether that's zero A or zero B. I guess, is there a time of when we would expect to know if it's included in batch zero? I know there's a meeting on the 12th and maybe also on the 20th, but is that the timeline that you guys are looking towards as well?
Awesome, that's very helpful. And then maybe just one more ERCOT related question.
Perfect. That's what I was getting at. Thank you guys.
I think you guys had.
Using your words here that it's likely included in <unk> zero, whether that's right or is there a b I guess is there a time of when we would expect to know if it's included in that scenario I know Theres a meeting on the 12th and maybe also on the 20th but is that the timeline that you guys are looking towards as well.
Thank you. Next. We have Nick go, B Riley Securities. Please go ahead.
Kent Draper: Yeah, I think, I think, ERCOT will make announcements over time. You know, exact timing may change, and whenever ERCOT makes, you know, announcements with respect to this, they do acknowledge it is, you know, in the works at their, at their end, and they're actively working through it. So hard for us to put an exact date on it, but, you know, we do expect ERCOT to make public disclosures at some point in the, in the relatively near future.
Kent Draper: Yeah, I think, I think, ERCOT will make announcements over time. You know, exact timing may change, and whenever ERCOT makes, you know, announcements with respect to this, they do acknowledge it is, you know, in the works at their, at their end, and they're actively working through it. So hard for us to put an exact date on it, but, you know, we do expect ERCOT to make public disclosures at some point in the, in the relatively near future.
Yes, I think.
Our call, we will make announcements over time exact timing may change and whenever radical at mikes announcements with respect to the east I do acknowledge it is.
Yeah in the works at their at their end and they are actively working through it so hard for us to put an exact date on it but yeah. We do expect a call to to make public disclosures at some point in the relatively near future.
Yeah, thanks operator. Um yeah it's good to see all the progress here. I I like the concept of the 3 C's and capital is 1. I think this is mainly around Financial Capital but there's a growing narrative around the human capital requirements to ultimately bring Data Center capacity online. So are you seeing any constraints in terms of skilled workers or can you just speak to any advantages? You may have from, you know, having EPC Partners in place. Um, thanks a lot.
Daniel Roberts: But to, to be clear on this, guy, like, crystal clear, the 2000MW is secure. Like, none of this batch stuff, none of the market chatter is influencing whether or not this 2000MW is available. We've got the signed interconnection agreement. It was signed in 2023. It's been there for years. It's been built and commissioned in Q2 this year. There is no indication the 2000MW is absolutely secure. The only thing that this is likely to amount to is maybe working with utilities around load ramp. But the reality is we don't have 1400MW of Sweetwater, one of data centers in April this year to energize. So in practical terms, it has very little, if no effect on our business. The 2000MW is secure. We cannot reiterate that enough.
Daniel Roberts: But to, to be clear on this, guy, like, crystal clear, the 2000MW is secure. Like, none of this batch stuff, none of the market chatter is influencing whether or not this 2000MW is available. We've got the signed interconnection agreement. It was signed in 2023. It's been there for years. It's been built and commissioned in Q2 this year. There is no indication the 2000MW is absolutely secure. The only thing that this is likely to amount to is maybe working with utilities around load ramp. But the reality is we don't have 1400MW of Sweetwater, one of data centers in April this year to energize. So in practical terms, it has very little, if no effect on our business. The 2000MW is secure. We cannot reiterate that enough.
To be clear on this guy like Crystal clear.
The 2000 megawatts secured like none of this batch, though none of the market chatter is influencing whether or not these 2000 megawatts is available we've got the Sarnia to connection agreement. It was done in 2023, it's been there for years, it's been built and commissioned in Q2. This year there is no.
Yeah. I mean the the fact that we've been building continuously for the last 3 years means that we built up, not only a large existing labor pool at Children's. Um, but also those, those relationships and the relationships extend not just across, um, construction, contractors and labor but also across equipment, uh, procurement and and Supply chains.
No indication the 2000 megawatts each absolutely secure the only thing that this is likely to amount to is maybe working with utilities around low drag.
Reality is we don't have 4800 megawatts at Sweetwater one of data centers in April this year when the Josh So in practical terms. It has very little if no effect on our business. The 2000 megawatts insecure, we cannot radius right that enough.
So that is 1 of the, the major advantages uh, that that we have of having done this for for so long. Um, and having been continuously constructing is that, you know, we are in a position where we're able to call on those relationships. We're we're well positioned with those Partners in the sense that, you know, they are looking for continued.
Brett Knoblauch: Perfect. That's all again, Matt. Thank you, guys.
Perfect. That's what I was getting at thank you guys.
Yeah.
Operator: Thank you. Next, we have Nick Yako, B. Riley Securities. Please go ahead.
Operator: Thank you. Next, we have Nick Yako, B. Riley Securities. Please go ahead.
Thank you next we have Nick <unk> B Riley Securities. Please go ahead.
[Analyst] (B. Riley Securities): Yeah, thanks, operator. Guys, good to see all the progress here. I like the concept of the three Cs, and capital is one. I think this is mainly around financial capital, but there's a growing narrative around the human capital requirements to ultimately bring data center capacity online. So are you seeing any constraints in terms of skilled workers, or can you just speak to any advantages you may have from, you know, having EPC partners in place? Thanks a lot.
Nick Yako: Yeah, thanks, operator. Guys, good to see all the progress here. I like the concept of the three Cs, and capital is one. I think this is mainly around financial capital, but there's a growing narrative around the human capital requirements to ultimately bring data center capacity online. So are you seeing any constraints in terms of skilled workers, or can you just speak to any advantages you may have from, you know, having EPC partners in place? Thanks a lot.
Yes, thanks operator.
That's good to see all the progress here I like the concept of the three CS and capital is one I think this is mainly around financial capital, but there is a growing narrative around the human capital requirements to ultimately bring data center capacity online. So are you seeing any constraints in terms of skilled workers or can you just speak to.
Any advantages you may have from having EPC partners in place. Thanks.
Thanks, a lot.
Kent Draper: Yeah, I mean, the fact that we've been building continuously for the last three years means that we've built up not only a large existing labor pool at Childress, but also those relationships. And the relationships extend not just across construction, contractors, and labor, but also across equipment, procurement and supply chains. So that is one of the major advantages that we have of having done this for so long and having been continuously constructing, is that, yeah, we are in a position where we're able to call on those relationships, where we're well positioned with those partners in the sense that, you know, they are looking for continued steady work.
Kent Draper: Yeah, I mean, the fact that we've been building continuously for the last three years means that we've built up not only a large existing labor pool at Childress, but also those relationships. And the relationships extend not just across construction, contractors, and labor, but also across equipment, procurement and supply chains. So that is one of the major advantages that we have of having done this for so long and having been continuously constructing, is that, yeah, we are in a position where we're able to call on those relationships, where we're well positioned with those partners in the sense that, you know, they are looking for continued steady work.
Yeah, I mean, the fact that we've been building continuously for the last three years means that we built up not only a large existing labor pool at Childress.
Capacity against the target to waive announced historically.
Yeah. And again just to add to the exactly what Ken's saying like this has been 7 years.
But all sides is those relationships and the relationships extend not just across construction.
Construction contractors in labor, but also across equipment procurement and supply chains.
That is one of the major advantages that we have of having done this for so long.
And having been continuously constructing is that yeah. We are in a position where we're able to call on those rollout I shouldn't chips, we are well positioned with those partners in the sense that dire are looking for continued steady work and when they look at us and say a secure power portfolio with <unk>.
In the making of building a Data Center and Technology platforms, the very first data centers. We built are now being used for NVIDIA gpus for an AI Cloud. We signed an mou with Dell we wasn't 5 almost 6 years ago to bring out, diverse workloads to our British Columbia facilities in these data centers. So we've had a very long runway in terms of accumulating that human capital. And yes, there is more scarcity, and more demand for human capital today. But we've been able to build that platform over a very long period of time and get the right people in the right roles.
Kent Draper: When they look at us and see a secured power portfolio with construction that is gonna extend over a multi-year period, you know, they, they're extremely willing and active in terms of, you know, helping us and making sure that they're serving our needs. And similarly, on the supply side, because we're continuously in the market and continuously procuring long lead equipment, we, we get a very good read on where the constraints are in supply chains, where the areas are that are tight, and that enables us to, to respond to those and be able to act well in advance so that long lead items don't become a, a constraint for us in terms of our data center build out. So I think all of that history, the internal expertise we have, is, is extremely important, and it's, it's not just talk.
Kent Draper: When they look at us and see a secured power portfolio with construction that is gonna extend over a multi-year period, you know, they, they're extremely willing and active in terms of, you know, helping us and making sure that they're serving our needs. And similarly, on the supply side, because we're continuously in the market and continuously procuring long lead equipment, we, we get a very good read on where the constraints are in supply chains, where the areas are that are tight, and that enables us to, to respond to those and be able to act well in advance so that long lead items don't become a, a constraint for us in terms of our data center build out. So I think all of that history, the internal expertise we have, is, is extremely important, and it's, it's not just talk.
Because that's good to hear. Um, alternative, but keep up the good work.
Structure and that is going to extend over a multi year period, yes, they're extremely willing and active in terms of helping us and making sure that they're serving and age and similarly on the supply side, because we are continuously in the market and continuously procuring long lead equipment.
Thank you. Next. We have Joseph by from Kenna court jennetty. Please go ahead.
Yeah, good afternoon. Good morning. Um, terrific progress once again. Um, awesome to see it. Uh
When we get a very good read on where the constraints in supply chains, where the areas are that are tight and that enables us to respond to those and be able to act when it bombed Si that long lead items don't become constrained process in terms of our data center build out so I think all of that history.
Just um, revisiting the ARR number for the year. Um, you know, you clearly, you know, Ireland's always wants to overpromise and under deliver and throwing that number out. You know, on top of uh, revenues, that would be coming from Microsoft kind of
The internal expertise we have is.
Is extremely important and it's it's not just talk I mean, this is consistent and we delivered capacity against the targets that we've announced historically.
Kent Draper: I mean, this is consistently delivered capacity against the targets that we've announced historically.
Kent Draper: I mean, this is consistently delivered capacity against the targets that we've announced historically.
Daniel Roberts: Yeah, and again, just to add to the, exactly what Kent's saying, like, this has been 7 years in the making of building a data center and technology platform. The very first data centers we built are now being used for NVIDIA GPUs for an AI cloud. We signed an MOU with Dell, when was it? 5, almost 6 years ago, to bring out diverse workloads to our British Columbia facilities in these data centers. So we've had a very long runway in terms of accumulating that human capital. And yes, there is more scarcity and more demand for human capital today, but we've been able to build that platform over a very long period of time and get the right people in the right roles.
Daniel Roberts: Yeah, and again, just to add to the, exactly what Kent's saying, like, this has been 7 years in the making of building a data center and technology platform. The very first data centers we built are now being used for NVIDIA GPUs for an AI cloud. We signed an MOU with Dell, when was it? 5, almost 6 years ago, to bring out diverse workloads to our British Columbia facilities in these data centers. So we've had a very long runway in terms of accumulating that human capital. And yes, there is more scarcity and more demand for human capital today, but we've been able to build that platform over a very long period of time and get the right people in the right roles.
And again just to add to that exactly what can sign long pieces being seven years in the making or building a data center and technology platform. The very first data centers. We built are now being used for Nvidia Gpus for an IR cloud, we signed an Mou with Dale was up five.
Feels like you've got a pretty good line of sight on things. I just wanted to drill down on that a little bit on those, you know, those customer ramps and, um, maybe is there a potential on on some of these other customer ramps, also, see, maybe some prepayments, uh, to help fund their own, um, GPU buys. And now I have a quick follow-up. Thanks.
Yeah. Thanks Joe. I I hope you were referring to under promising and over delivering rather than the other way around. Yeah, sorry if I said yeah. Sorry I can't. Yeah.
Almost six years ago to bring out diverse workloads to a British Columbia facilities. In these data centers. So we've had a very long runway in terms of accumulating that human capital and yes, there is more scarcity and more demand for human capital to diet, but we've been able to build that platform over a very long period of time.
All of them and get the right people in the right roles.
[Analyst] (Cantor Fitzgerald): That's good to hear. I'll turn it over, but keep up the good work.
Nick Yako: That's good to hear. I'll turn it over, but keep up the good work.
That's good to hear I'll turn it over but keep up the good work.
Yeah. Yeah. Um, so as I mentioned uh, earlier, Prince George, um we we already have a lot of operating capacity there and expect uh over the upcoming weeks to continue uh to install equipment, allowing us to get to the point 5 um billion annualized Revenue, run rate at that site. Um McKenzie and Canal Flats the um the works in our end in order to be able to accommodate gpus very well Advanced. Um we would expect uh you know capacity to to ramp progressively over the year there in terms of the additional 40,000 gpus which
Operator: Thank you. Next, we have Joseph Vafi from Canaccord Genuity. Please go ahead.
Operator: Thank you. Next, we have Joseph Vafi from Canaccord Genuity. Please go ahead.
Thank you next behalf Joseph Bobby from Canaccord Genuity. Please go ahead.
Which equates to around a billion dollars of annualized Revenue, run rate.
[Analyst] (Canaccord Genuity): Hey, guys. Good afternoon, good morning. Perfect progress once again. Awesome to see it. Just revisiting the ARR number for the year, you know, you clearly, you know, IREN always wants to overpromise and underdeliver, and throwing that number out, you know, on top of revenues that would be coming from Microsoft, kind of feels like you've got a pretty good line of sight on things. I just wanted to drill down on that a little bit on those, you know, those customer ramps and, maybe, is there a potential on, on some of these other customer ramps to also see maybe some prepayments, to help fund their own GPU buys? And then I'll have a quick follow-up. Thanks.
Joseph Vafi: Hey, guys. Good afternoon, good morning. Perfect progress once again. Awesome to see it. Just revisiting the ARR number for the year, you know, you clearly, you know, IREN always wants to overpromise and underdeliver, and throwing that number out, you know, on top of revenues that would be coming from Microsoft, kind of feels like you've got a pretty good line of sight on things. I just wanted to drill down on that a little bit on those, you know, those customer ramps and, maybe, is there a potential on, on some of these other customer ramps to also see maybe some prepayments, to help fund their own GPU buys? And then I'll have a quick follow-up. Thanks.
Yes, good afternoon good morning.
Progress on for Dan.
Awesome.
Just revisiting the our number for the year you clearly you know islands always worth over promise and under deliver and throwing that number out you know on top of a rep.
Revenues that would be coming from Microsoft.
It feels like you've got pretty good line of sight on thing.
Just wanted to drill down on that a little bit on those you know those costs the morale and.
Is there a preclinical along on some of these other customer ramp.
Um, and then the Microsoft contractors are I referred to earlier? We expect to ramp progressively over the year, um, in terms of the 40,000 additional gpus that we're expecting at at McKenzie, um, that, uh, as I referred to the customer conversations before we are still seeing, um, customers very willing to to make significant prepayments with respect to that. Um, and there are a number of other areas of financing uh that we're looking at with relation to that. Um, which Anthony you may well want to touch on some of the options there as to how we can finance that?
I see.
Maybe some prepayments to help fund their own GPU buys and then I'll have a quick follow up thanks.
Kent Draper: Yeah. Thanks, Joe. I hope you were referring to underpromising and overdelivering rather than the other way around.
Kent Draper: Yeah. Thanks, Joe. I hope you were referring to underpromising and overdelivering rather than the other way around.
Yeah. Thanks, Joe I Hope you were referring to under promising and over delivering rather than the other way around yes, sorry, if I said, yes.
Kent Draper: Yeah. So as I mentioned earlier, Prince George, we already have a lot of operating capacity there and expect to continue to install equipment, allowing us to get to the $0.5 billion annualized revenue run rate at that site. Mackenzie and Canal Flats, the works at our end in order to be able to accommodate GPUs, very well advanced. We would expect, you know, capacity to ramp progressively over the year there in terms of the additional 40,000 GPUs, which equates to around $1 billion of annualized revenue run rate. And then the Microsoft contractors are... I referred to earlier, we expect to ramp progressively over the year.
Kent Draper: Yeah. So as I mentioned earlier, Prince George, we already have a lot of operating capacity there and expect to continue to install equipment, allowing us to get to the $0.5 billion annualized revenue run rate at that site. Mackenzie and Canal Flats, the works at our end in order to be able to accommodate GPUs, very well advanced. We would expect, you know, capacity to ramp progressively over the year there in terms of the additional 40,000 GPUs, which equates to around $1 billion of annualized revenue run rate. And then the Microsoft contractors are... I referred to earlier, we expect to ramp progressively over the year.
Yeah Yeah.
So as I mentioned earlier, Prince George where you where you already have a lot of operating capacity, there and expect over the upcoming weeks to continue.
Sure, thanks. Yeah, I, I, we've obviously, um, I guess over the financial year today, proven access to both leasing based sources of of capitals for GPU financing and obviously the, um, the dedicated GPU financing that we recently procured for Microsoft. Um, so there's, uh, there's there's, uh, a number of different pools of capital which will obviously depend on the nature of the, uh, the customer and the opportunity. But uh, will you feel well placed to, uh, to continue to fund that growth efficiently?
To install equipment, allowing us to get to the 0.5.
The annualized revenue run rate at that site Mckenna.
Mackenzie and canal flaps they.
Works, an hour and in order to be able to accommodate J P use very well advanced.
Uh very good. Thanks for that caller. And then, you know, just uh, circling back on Sweetwater. Obviously energization coming up here very quickly and you know, a lot of your peer companies
We would expect our yard capacity to to ramp progressively over the year. There in terms of the additional 40000, Gpus, which which equates to around $1 billion of annualized revenue run rate.
And then the Microsoft contractors are I referred to earlier, we expect to ramp progressively over the year.
Would have likely announced um, you know, at least a if there was Colo a tenant uh, at that site by now. Um, you know, obviously it's really big, there's a lot going on and, you know, not, you know, asking for a date on anything, but just getting in your mind, maybe a little bit Daniel, uh, you know, is it?
Kent Draper: In terms of the 40,000 additional GPUs that we're expecting at Mackenzie, as I referred to the customer conversations before, we are still seeing customers very willing to make significant prepayments with respect to that. And there are a number of other areas of financing that we're looking at with relation to that, which, Anthony, you may well want to touch on some of the options there as to how we can finance that.
Kent Draper: In terms of the 40,000 additional GPUs that we're expecting at Mackenzie, as I referred to the customer conversations before, we are still seeing customers very willing to make significant prepayments with respect to that. And there are a number of other areas of financing that we're looking at with relation to that, which, Anthony, you may well want to touch on some of the options there as to how we can finance that.
In terms of the 40000 additional Gpus and we're expecting it at Mackenzie.
That's as I referred to the customer conversations before we are still saying.
Customers very willing to make significant prepayments with respect to that.
Um, on, um, some of the Sweetwater capacity. Thanks.
And there are a number of other areas of financing that we're looking at with relation to that which Anthony you might want to touch on some of the options are as to how we can finance app.
Anthony Lewis: Sure. Thanks, Kent. Yeah, I we've obviously, I guess over the financial year today, proven access to both leasing-based sources of capitals for GPU financing and obviously the dedicated GPU financing that we recently procured from Microsoft. So there's a number of different pools of capital, which will obviously depend on the nature of the customer and the opportunity. But we feel well placed to continue to fund that growth efficiently.
Anthony Lewis: Sure. Thanks, Kent. Yeah, I we've obviously, I guess over the financial year today, proven access to both leasing-based sources of capitals for GPU financing and obviously the dedicated GPU financing that we recently procured from Microsoft. So there's a number of different pools of capital, which will obviously depend on the nature of the customer and the opportunity. But we feel well placed to continue to fund that growth efficiently.
Sure. Thanks.
Yeah, we've obviously.
Sure. So I mean we've had an ongoing Dialogue on that site for 1218, 24 months um with various parties and as we've tried to reiterate it, it needs to be the right deal. And I think to date um our patients and conviction has been rewarded with the deals that we have been.
I guess over the financial year to date proven access to both leasing by sources of capital for J P financing and obviously the data kind of GPU financing that we recently procured from Microsoft.
So there is.
There's a number of different pools of capital, which will obviously depend on the nature of the customer and the opportunity, but we feel will place to to continue to fund that growth efficiently.
Yeah.
[Analyst] (Canaccord Genuity): Very good. Thanks for that color. And then, you know, just circling back on Sweetwater, obviously, energization coming up here very quickly, and, you know, a lot of your peer companies would have likely announced, you know, at least a -- there was colo, a tenant, at that site by now. You know, obviously, it's really big. There's a lot going on, and, you know, not, you know, asking for a date on anything, but just getting in your mind maybe a little bit, Daniel, you know, is it, is it just getting your feet more wet in the DPU business and holding back there, waiting for better terms on colo? Maybe a multitude of things, just, you know, your thought process there on pulling a trigger on some of the Sweetwater capacity. Thanks.
Joseph Vafi: Very good. Thanks for that color. And then, you know, just circling back on Sweetwater, obviously, energization coming up here very quickly, and, you know, a lot of your peer companies would have likely announced, you know, at least a -- there was colo, a tenant, at that site by now. You know, obviously, it's really big. There's a lot going on, and, you know, not, you know, asking for a date on anything, but just getting in your mind maybe a little bit, Daniel, you know, is it, is it just getting your feet more wet in the DPU business and holding back there, waiting for better terms on colo? Maybe a multitude of things, just, you know, your thought process there on pulling a trigger on some of the Sweetwater capacity. Thanks.
Very good thanks for that color and then you know FERC.
Circling back on Sweetwater, obviously entered basically coming up here very quickly and you know a lot of your peer companies.
Would have likely announce them.
So at least there with Colo a tenant.
At that site by now obviously, a really big there's a lot going on.
I'll now ask for a date on anything but.
Signing. Um, you know, if we, if we look back to some of the structures being floated, uh, early in this kind of AI Market narrative, um, you know, where we are today is seems to be pretty objectively, a better position. Um, you know, it is all about the 3 C's and bringing those together, um, and doing it in a way where you are maximizing the opportunity for for shareholders. And, you know, there's only so much capacity that you can bring online that time to Data Center narrative. So there's a real opportunity cost of signing a bad deal and that is relative right bad's relative to good. It's still probably a good deal collocation. But can you get better given that your constrained by how quickly you can build out data centers and that's why those 3 C's are a really good framework. Because for any business trying to operate in this space, you have to bring those 3 C's together to sell reinforce each other. If you haven't got the power and the capacity,
Putting in your mind, maybe a little bit Daniel.
And the ability to execute.
Is it.
Is it.
Getting your feet more wet in the GPU business holding back there.
Waiting for better terms on Colo.
Maybe a multitude of things.
Your thought process there on pulling the trigger.
On some other sweet watercraft.
Daniel Roberts: Sure. So, I mean, we've had an ongoing dialogue on that site for 12, 18, 24 months with various parties, and as we've tried to reiterate, it needs to be the right deal. I think to date, our patience and conviction has been rewarded with the deals that we have been signing. You know, if we look back to some of the structures being floated early in this kind of AI market narrative, you know, where we are today seems to be pretty objectively a better position. You know, it is all about the three Cs and bringing those together, and doing it in a way where you are maximizing the opportunity for shareholders. You know, there's only so much capacity that you can bring online, that time to data center narrative.
Daniel Roberts: Sure. So, I mean, we've had an ongoing dialogue on that site for 12, 18, 24 months with various parties, and as we've tried to reiterate, it needs to be the right deal. I think to date, our patience and conviction has been rewarded with the deals that we have been signing. You know, if we look back to some of the structures being floated early in this kind of AI market narrative, you know, where we are today seems to be pretty objectively a better position. You know, it is all about the three Cs and bringing those together, and doing it in a way where you are maximizing the opportunity for shareholders. You know, there's only so much capacity that you can bring online, that time to data center narrative.
Sure.
We've had an ongoing dialogue on that thought.
When 12, 18 24 months with.
With various parties and.
As we've tried to read her eyes eat it needs to be the right deal and I think to dice.
Our patience and conviction is being rewarded with the deals that we have been.
Yeah, if we if we look back to some of the structures being floated early in this kind of I O market narrative.
You're going to struggle to be a player. If you haven't got the access to customers and their faith and belief, in you as an execution machine, it's going to be tough and if you haven't got the capital, then you're kind of going to continue to to be on on zero. Um, so sequencing all that. Having it reinforced. Each other is really important and I think that's why we're really pleased around the GPU financing result, um, because it's kind of ticked that box. We're now on to the next 1. And it also helps catalyze a lot of these other customer negotiations with having an advanced into the next phase because we need capital and you can't build without Capital. So the GPU financing is now done onto the next 1. We've got the capacity, we've got the customers uh, and the demand of the negotiations underway. And as Anthony said, we've got what we see is really good access to Capital at the moment.
Where we are today is seems to be pretty objectively are better positioned.
Great. Thanks down.
It is all about the three CS and bringing those together.
Thank you. Just a moment of our next question, please.
And doing it in a way where you are maximizing the opportunity for shareholders.
Next, we have Michael Donovan from compass point. Please go ahead.
There's only so much capacity that you can bring online that time to data center narratives. So there's a real opportunity cost of signing a bad deal.
Daniel Roberts: So there's a real opportunity cost of signing a bad deal. And bad is relative, right? Bad's relative to good. It's still probably a good deal, colocation, but can you get better given that you're constrained by how quickly you can build out data centers? And that's why those three Cs are a really good framework, because for any business trying to operate in this space, you have to bring those three Cs together to self-reinforce each other. If you haven't got the power, the capacity, and the ability to execute, you're going to struggle to be a player. If you haven't got the access to customers and their faith and belief in you as an execution machine, it's going to be tough. And if you haven't got the capital, then you're kind of just gonna continue to, to be on, on zero.
Daniel Roberts: So there's a real opportunity cost of signing a bad deal. And bad is relative, right? Bad's relative to good. It's still probably a good deal, colocation, but can you get better given that you're constrained by how quickly you can build out data centers? And that's why those three Cs are a really good framework, because for any business trying to operate in this space, you have to bring those three Cs together to self-reinforce each other. If you haven't got the power, the capacity, and the ability to execute, you're going to struggle to be a player. If you haven't got the access to customers and their faith and belief in you as an execution machine, it's going to be tough. And if you haven't got the capital, then you're kind of just gonna continue to, to be on, on zero.
Hi guys, thanks for taking my question and congrats on progress.
That is real it's each rot beds relative to good it's still probably a good deal colocation, but can you get better given the youll constrained by how quickly you can build data centers and that's why those three CS are really good framework because to any business trying to operate in this space you have to bring those three CS together to sell free.
So following up on questions around Sweetwater, assuming the, the batch process goes smoothly and, and getting the 3 C's together, how should we think about ramping up?
A phases for construction would just follow chess's. 50 megawatt tranches or do you have different plans? Thanks.
Enforce each other if you haven't got the power and the capacity and the ability to execute.
Youre going to struggle to be applied if you haven't got the access to customers and they have faith and belief in you as an execution machine and it's going to be tough and if you haven't got the capital.
Then you kind of continue to be on on zero.
Daniel Roberts: So sequencing all that, having it reinforce each other is really important. And I think that's why we're really pleased around the GPU financing result, because it's kind of ticked that box. We're now onto the next one, and it also helps catalyze a lot of these other customer negotiations we're having and advance into the next phase, because we need capital, and you can't build without capital. So the GPU financing is now done. Onto the next one. We've got the capacity, we've got the customers, and the demand and the negotiations underway. And as Anthony said, we've got what we see as really good access to capital at the moment.
Daniel Roberts: So sequencing all that, having it reinforce each other is really important. And I think that's why we're really pleased around the GPU financing result, because it's kind of ticked that box. We're now onto the next one, and it also helps catalyze a lot of these other customer negotiations we're having and advance into the next phase, because we need capital, and you can't build without capital. So the GPU financing is now done. Onto the next one. We've got the capacity, we've got the customers, and the demand and the negotiations underway. And as Anthony said, we've got what we see as really good access to capital at the moment.
So sequencing all that having it reinforce each other is really important and I think that's why we're really pleased around the GPU financing result.
Yes. In relation to that. Um, yes, it's look, it's going to be a phased build out. Um, it's a it's a very large site that is a large amount of power. Um and what what we're continuously doing across all of our 4.5, gigawatts of of secure portfolio is aligning, um, customer discussions, availability of capital and our ability to build out data centers and and that will influence
Because it's kind of tick that box went out onto the next one and it also helps catalyze a lot of these other customer negotiations with having an advance into the next phase because we need capital and you cant build without capital. So the G. P financings near them onto the next one we've got the capacity, we've got the customers and the <unk>.
Man to the negotiations underway.
As Anthony said, we've got what we see as really good access to capital at the moment.
Uh, how how we actually build out. But, as Dan, referred to earlier, you know, likely at the moment, the constraint is, is the the actual pace of construction and ability to construct, rather than power availability, or Capital availability at our end. Um, so, we'll, we'll be a phased approach, and we will continue to, to triangulate with the levels of customer demand, that that we continue to see.
Operator: Thank you. Just a moment for our next question, please. Next, we have Martin Yang from Compass Point. Please go ahead.
Operator: Thank you. Just a moment for our next question, please. Next, we have Martin Yang from Compass Point. Please go ahead.
Thank you Amanda next question please.
Next we have Michael Donovan from Compass point. Please go ahead.
Can you provide some more color on what assets or currently there? And then what long lead, long-term lead assets are needed for the sites site build out, and
[Analyst] (Compass Point): Hi, guys. Thanks for taking my question, and congrats on progress. So following up on questions around Sweetwater, assuming the batch process goes smoothly and getting the three Cs together, how should we think about ramping up of phases for construction? Would this follow Childress' 50MW tranches, or do you have different plans? Thanks.
Martin Donovan: Hi, guys. Thanks for taking my question, and congrats on progress. So following up on questions around Sweetwater, assuming the batch process goes smoothly and getting the three Cs together, how should we think about ramping up of phases for construction? Would this follow Childress' 50MW tranches, or do you have different plans? Thanks.
Hey, guys. Thanks for taking my question and congrats on progress.
What additional permitting or studies are are needed at the Oklahoma site? Appreciate it.
Following up on questions around Sweetwater, assuming the batch process goes smoothly and and getting the three CS together, how should we think about ramping up.
Ah phases for construction would follow children says 50 megawatt tranches or do you have different plans.
Kent Draper: Yeah, so in relation to that, yes, it, look, it's gonna be a phased build-out. It's a very large site. That is a large amount of power. And what we're continuously doing across all of our 4.5GW of secure portfolio is aligning customer discussions, availability of capital, and our ability to build out data centers, and that'll influence how we actually build out. But as Dan referred to earlier, you know, likely at the moment, the constraint is the actual pace of construction and ability to construct, rather than power availability or capital availability at our end. So we'll be a phased approach, and we'll continue to triangulate with the levels of customer demand that we continue to see.
Kent Draper: Yeah, so in relation to that, yes, it, look, it's gonna be a phased build-out. It's a very large site. That is a large amount of power. And what we're continuously doing across all of our 4.5GW of secure portfolio is aligning customer discussions, availability of capital, and our ability to build out data centers, and that'll influence how we actually build out. But as Dan referred to earlier, you know, likely at the moment, the constraint is the actual pace of construction and ability to construct, rather than power availability or capital availability at our end. So we'll be a phased approach, and we'll continue to triangulate with the levels of customer demand that we continue to see.
Yes in relation to that yes, it's look it's going to be a phased build out.
It's a very large site that is a large amount of power.
And what we are continuously doing across all of our four five gigawatts of secured portfolio is aligning customer discussions availability of capital and our ability to build out datacenters and that'll influence.
How how we actually build out but as Dan referred to earlier.
6 gigawatts, there is secured. Uh, so all of the, the key elements, as it relates to a data center campus are are there, um, over the upcoming months. You know, we'll continue to work on the various development items which include Master planning more more detailed, local permitting. Uh, Etc. Um, but with power availability, uh, there from 2028, we we feel extremely well, placed with where we're at today.
Likely at the moment the constraint is just the dead.
The actual pace of construction and ability to construct rather than power availability or capital availability at our end.
Great, thank you for that Clarity and keep up the good work.
So it will be a phased approach and we'll continue to try to triangulate with the levels of customer demand that we continue to say.
Thank you next. We have John torado from Needham. Please. Go ahead.
[Analyst] (Compass Point): Appreciate that. And then on Oklahoma, can you provide some more color on what assets are currently there? And then what long-term lead assets are needed for the site build, site build-out, and what additional permitting or studies are needed at the Oklahoma site? Appreciate it.
Martin Donovan: Appreciate that. And then on Oklahoma, can you provide some more color on what assets are currently there? And then what long-term lead assets are needed for the site build, site build-out, and what additional permitting or studies are needed at the Oklahoma site? Appreciate it.
I appreciate that and then on Oklahoma.
Can you provide some more color on what assets are currently there and then what long lead long term lead assets are needed for the sites built site build out and.
What additional permitting or studies or are needed at the Oklahoma site I appreciate it.
Hey, thanks for taking my question and uh, congrats on the progress. I just have 1. Um, it relates to kind of these credit back stopping that you might see from Nvidia. Um, does how do you think the competitive Dynamic changes on the cloud side? You guys obviously have a ton of power um but if some of these Neo calls are able to get more of kind of an Nvidia back stop, um they could get more contracted power as well. Just I I guess how you're thinking about that.
Kent Draper: Yeah. So we mentioned the 2,000 acres of land earlier. So all of that land is secured. The land is immediately adjacent to a major utility substation, which is where we will be connecting to the transmission grid. On the power side, the full 1.6GW there is secured. So all of the key elements as it relates to a data center campus are there. Over the upcoming months, you know, we'll continue to work on the various development items, which include master planning, more detailed local permitting, et cetera. But with power availability there from 2028, we feel extremely well placed with where we're at today.
Kent Draper: Yeah. So we mentioned the 2,000 acres of land earlier. So all of that land is secured. The land is immediately adjacent to a major utility substation, which is where we will be connecting to the transmission grid. On the power side, the full 1.6GW there is secured. So all of the key elements as it relates to a data center campus are there. Over the upcoming months, you know, we'll continue to work on the various development items, which include master planning, more detailed local permitting, et cetera. But with power availability there from 2028, we feel extremely well placed with where we're at today.
Yeah. So we mentioned the two thousands of acres of land earlier. So all of that land is secured the land is immediately adjacent to a major utility substation.
Which is where we will be connecting to the transmission grid.
On the power side the full one six gigawatts there is secured.
So all of the key elements as it relates to a data center campus.
There.
Over the upcoming months I will continue to work on the various development items, which include master planning more detailed local permitting.
Etc.
But with power availability there from 2028.
We feel extremely well placed with wherever app today.
Well, I'm, I'm not necessarily sure an Nvidia back. Stop helps them secure more power. I mean, power and more pointedly to Dan's Point earlier Data Center capacity is, is the constraint. Now, having a having a back stop, can allow you to finance the build out of a project, but you still need that access to to power. And I don't think necessarily the back stop sort of help with that. Um you know that that is a an entirely separate process related more to to development and as we've spoken about before you know that is becoming increasingly challenging as you move forward. Now, for new projects. Um, so 1 of the, the advantages that we have of having been doing this internal uh development of projects for many many years is that, you know, we got in early and we have secured. Uh, what we think is an extremely differentiated, uh, portfolio on the
[Analyst] (Compass Point): Great. Thank you for the added color, clarity, and keep up the good work.
Martin Donovan: Great. Thank you for the added color, clarity, and keep up the good work.
Great. Thank you for the added color clarity and keep up the good work.
Operator: Thank you. Next, we have John Todaro from Needham. Please go ahead.
Operator: Thank you. Next, we have John Todaro from Needham. Please go ahead.
Thank you next we have John Tarata from <unk>. Please go ahead.
[Analyst] (Needham): Hey, thanks for taking my question, and congrats on the progress. I just have one. It relates to kind of these credit backstopping that you might see from NVIDIA. Just how do you think the competitive dynamic changes on the cloud side? You guys obviously have a ton of power. But if some of these neo clouds are able to get more of kind of an NVIDIA backstop, they could get more contracted power as well. Just, I guess, how are you thinking about that?
John Todaro: Hey, thanks for taking my question, and congrats on the progress. I just have one. It relates to kind of these credit backstopping that you might see from NVIDIA. Just how do you think the competitive dynamic changes on the cloud side? You guys obviously have a ton of power. But if some of these neo clouds are able to get more of kind of an NVIDIA backstop, they could get more contracted power as well. Just, I guess, how are you thinking about that?
Hey, Thanks for taking my question and congrats on the progress I just have one it relates to kind of be credit backstopping that you might see from Nvidia.
Our side and and that's something that can't be easily replicated a and certainly not something that can just be, you know, bought if you somehow get access to to a credit back stop. Um, so yeah, I I think credit back stops can be helpful in other contexts but I, I don't think it's going to give people necessarily faster access to to power or Data Center capacity.
Just how do you think the competitive dynamic changes on the cloud side you guys, obviously have a ton of power.
and just to add to that, I think if you would be very dangerous to assume that we haven't got
But it is some of these neocon, they're able to get more of kind of an nvidia backstop, they could get more contracted power as well.
the same access and conversations around all these different structures in the market, whether its Equity Investments, whether it's credit back stops, whether it's offtake agreements,
How are you thinking about that.
Kent Draper: Well, I'm not necessarily sure an NVIDIA backstop helps them secure more power. I mean, power, and more pointedly, to Dan's point earlier, data center capacity is the constraint. Now, having a backstop can allow you to finance the build-out of a project, but you still need that access to power, and I don't think necessarily the backstop sort of help with that. Yeah, that is an entirely separate process relating more to development. As we've spoken about before, you know, that is becoming increasingly challenging as you move forward now for new projects.
Kent Draper: Well, I'm not necessarily sure an NVIDIA backstop helps them secure more power. I mean, power, and more pointedly, to Dan's point earlier, data center capacity is the constraint. Now, having a backstop can allow you to finance the build-out of a project, but you still need that access to power, and I don't think necessarily the backstop sort of help with that. Yeah, that is an entirely separate process relating more to development. As we've spoken about before, you know, that is becoming increasingly challenging as you move forward now for new projects.
Okay.
Well I'm I'm I'm, not necessarily sure and Nvidia backstop helps them secure more power I mean power and more pointedly to Dan's point earlier datacenter capacities is the constrained now having a having a backstop can allow you to finance the build out of a project.
To assume that we're not having those conversations and haven't been having those conversations. Yeah, I'd be bit careful about that.
But you still need that access to power and Atlantic necessarily the backstop sort of help with that.
Yeah that that is a an entirely separate process relating more to development and as we've spoken about before that is becoming increasingly challenging as you move forward now for new projects.
That's, that's exactly what I was getting at there and that, that's how far. So, um, I guess the takeaway from us is what would Corey, even some of these others are having with Nvidia. We should think you guys are right there in the same boat, right? You're right there with them. Yeah, I I can't obviously comment specifically on counterparties, but generally the sector is a very small sector. We are a player. We've got a 10 billion dollar contract with Microsoft. I would encourage it to be a safe assumption that we are having
The very similar, it's not exact same dialogue with all these different counterparties about different structures.
Perfect. That's that's great. Thank you, guys, appreciate it.
Kent Draper: So one of the advantages that we have of having been doing this internal development of projects for many years is that, you know, we got in early, and we have secured what we think is an extremely differentiated portfolio on the power side, and that's something that can't be easily replicated and certainly not something that can just be, you know, bought if you somehow get access to a credit backstop. So yeah, I think credit backstops can be helpful in other contexts, but I don't think it's gonna give people necessarily faster access to power or data center capacity.
Kent Draper: So one of the advantages that we have of having been doing this internal development of projects for many years is that, you know, we got in early, and we have secured what we think is an extremely differentiated portfolio on the power side, and that's something that can't be easily replicated and certainly not something that can just be, you know, bought if you somehow get access to a credit backstop. So yeah, I think credit backstops can be helpful in other contexts, but I don't think it's gonna give people necessarily faster access to power or data center capacity.
So one of the advantages that we have of having been doing this internal <unk>.
Development of projects for many many years is that we got in early and we have secured a what we think is an extremely differentiated portfolio on the power side and and that's something that can't be easily replicated and certainly not something that can just be bought if you somehow get access to it.
Credit Backstop Si.
I think credit Backstops can be helpful. In other context, but I don't think its going to give people necessarily false or access to power or data center capacity.
Daniel Roberts: And just to add to that, I think it'd be very dangerous to assume that we haven't got the same access and conversations around all these different structures in the market, whether it's equity investments, whether it's credit backstops, whether it's offtake agreements. To assume that we're not having those conversations and haven't been having those conversations, yeah, I'd be careful about that.
Daniel Roberts: And just to add to that, I think it'd be very dangerous to assume that we haven't got the same access and conversations around all these different structures in the market, whether it's equity investments, whether it's credit backstops, whether it's offtake agreements. To assume that we're not having those conversations and haven't been having those conversations, yeah, I'd be careful about that.
Just to add to that.
Hi. Dennis team, congratulations. Uh, and all the great progress you guys have made on the past couple of quarters and thank you for taking my question. Uh, first 1 for me and I'm sorry if I missed a juggling, a few calls here, um, you know, looking at the capex, projections for the year versus the total amount of additional financing needed to complete the full 140,000 GPU deployment. Can you just give us an update on that? I know you secured the 3.6 billion GPU financing with covers, you know, which covers most of it. But how should we think about the progression of capex expenditure and the remaining amount of financing uh needed to get to your target?
It would be would be very dangerous to assume that we haven't got.
The same axis and conversations around all these different structures in the market, whether it's equity investments, whether it's credit backstops, whether it's offtake agreements to assume that we're not having those conversations that haven't been having those conversations yeah I'd be careful about that.
[Analyst] (Needham): That's exactly what I was getting at, Dan. That's helpful. So, I guess the takeaway from us is what CoreWeave and some of these others are having with NVIDIA, we should think you guys are right there in the same boat, right? You're right there with them.
John Todaro: That's exactly what I was getting at, Dan. That's helpful. So, I guess the takeaway from us is what CoreWeave and some of these others are having with NVIDIA, we should think you guys are right there in the same boat, right? You're right there with them.
That that's exactly what I was getting at there that that's helpful. So yeah.
I could take away from us.
With core or even some of these others are having with Nvidia. We should think of you guys are right. There in the same boat right Youre right there with them.
Daniel Roberts: Yeah, I can't obviously comment specifically on counterparties, but generally, the sector is a very small sector. We are a player. We've got a $10 billion contract with Microsoft. I would encourage it to be a safe assumption that we are having a very similar, if not exact same dialogue with all these different counterparties about different structures.
Daniel Roberts: Yeah, I can't obviously comment specifically on counterparties, but generally, the sector is a very small sector. We are a player. We've got a $10 billion contract with Microsoft. I would encourage it to be a safe assumption that we are having a very similar, if not exact same dialogue with all these different counterparties about different structures.
I can't obviously comment specifically on Counterparties, but generally the sector is a very small sector. We are a player. We've got a 10 billion dollar contract with Microsoft I would encourage it to be a safe assumption that we are having.
Very similar not exact same dialog with all these different counterparties about different structures.
John Todaro: Perfect. That's, that's great. Thank you, guys. Appreciate it.
Perfect. That's great. Thank you guys appreciate it.
Operator: Thank you. Next, we have Mike Colonnese from H.C. Wainwright & Co. Please go ahead.
Operator: Thank you. Next, we have Mike Colonnese from H.C. Wainwright & Co. Please go ahead.
Thank you next we have Mike colonies from H C. Wainwright <unk>. Please go ahead.
[Analyst] (H.C. Wainwright & Co.): Hi, Dan and team. Congratulations on all the great progress you guys have made in the past couple of quarters, and thank you for taking my question. First one for me, and I'm sorry if I missed it, juggling a few calls here. You know, looking at the CapEx projections for the year versus the total amount of additional financing needed to complete the full 140,000 GPU deployment, can you just give us an update on that? I know you secured the $3.6 billion in GPU financing, which covers, you know, which covers most of it. But how should we think about the progression of CapEx spend this year and the remaining amount of financing needed to get to your target?
Mike Colonnese: Hi, Dan and team. Congratulations on all the great progress you guys have made in the past couple of quarters, and thank you for taking my question. First one for me, and I'm sorry if I missed it, juggling a few calls here. You know, looking at the CapEx projections for the year versus the total amount of additional financing needed to complete the full 140,000 GPU deployment, can you just give us an update on that? I know you secured the $3.6 billion in GPU financing, which covers, you know, which covers most of it. But how should we think about the progression of CapEx spend this year and the remaining amount of financing needed to get to your target?
Hi, Dan and team congratulations on all the great progress you guys have made or in the past couple of quarters and thank you for taking my question first one for me and I'm, sorry, if I missed it as everyone of a few calls here.
Um, and we've obviously raised, uh, the the recent GPU financing package in addition, to, uh, sources of of, of cash on balance sheet. So I think we can, uh, we, you know, effectively. That's, uh, all of the Microsoft related capex for the compute and DC spoken for, uh, when we think about the capex required for the rest of the ARR, growth Target to the 3.4. Uh, we've previously talked about the capex required for that expansion at PG and McKenzie, so taken together that's about, you know, Circa using round numbers, Circuit 3 billion of capex. Um, uh, a material amount of that which has been incurred to date and uh, and financed through uh, the lease based financing that we've announced today. Uh, but the uh, the focus for financing activities going forward will be that residual amount for the expansion across BC, uh and opportunistically. As we look at uh further growth the platform.
Very helpful. Thank you for the call.
Looking at the Capex projections for the year versus the total amount of additional financing needed to complete the full 140000 GPU deployment can you just give us an update on that I know you secure the $3 6 billion in GPU financing recovers, which covers most of it but how should we think about the progression of the capex spend this year and the remaining amount of fine.
Thank you.
Our last question comes from Ben, Somers from btig, please call. I need
Dancing needed to get to your target.
Anthony Lewis: Sure. Thanks for the question. I'll take that one. So I guess we've got, as you know, we've got the $5.8 billion CapEx on the compute for Microsoft. We've got the approximately $3 billion of CapEx for the Horizon data centers. You know, a material amount of which has been incurred or committed to date. And we've obviously raised the recent GPU financing package in addition to sources of cash on balance sheet. So I think we can. You know, effectively, that's all of the Microsoft-related CapEx for the compute and DC spoken for.
Anthony Lewis: Sure. Thanks for the question. I'll take that one. So I guess we've got, as you know, we've got the $5.8 billion CapEx on the compute for Microsoft. We've got the approximately $3 billion of CapEx for the Horizon data centers. You know, a material amount of which has been incurred or committed to date. And we've obviously raised the recent GPU financing package in addition to sources of cash on balance sheet. So I think we can. You know, effectively, that's all of the Microsoft-related CapEx for the compute and DC spoken for.
Sure. Thanks for the question I'll take that one.
So I guess, we've got as you know we've got the.
The five 1 billion capex on the on the compute for Microsoft We've got to be approximately 3 million of Capex for the horizon data centers.
How's it going? And thank you for taking my question. So you made a comment earlier about you know strong demand for older generation. Uh chips I was just I was just kind of curious, you know, maybe a is there a different kind of customer mix for older generation gpus versus newer generation gpus and I guess kind of like, how long do you see the tail going on to continue generating Revenue off kind of older generation ships?
A material amount of which is which has been which has been incurred or committed to today.
And we've obviously raised the recent GPU financing package. In addition to our sources of cash on balance sheet. So I think we can.
That's all of the Microsoft related Capex for the compute and D. C is spoken for when we think about the capex required for the rest of the IRR growth target to the $3 four.
Anthony Lewis: When we think about the CapEx required for the rest of the ARR growth target to the $3.4, we've previously talked about the CapEx required for that expansion at PG and Mackenzie. So taken together, that's about, you know, circa, using round numbers, circa $3 billion of CapEx. A material amount of that, which has been incurred to date and financed through asset-based financing that we've announced to date. But the focus for financing activities going forward will be obviously that residual amount for the expansion across BC, and opportunistically, as we look at further growth across the platform.
Anthony Lewis: When we think about the CapEx required for the rest of the ARR growth target to the $3.4, we've previously talked about the CapEx required for that expansion at PG and Mackenzie. So taken together, that's about, you know, circa, using round numbers, circa $3 billion of CapEx. A material amount of that, which has been incurred to date and financed through asset-based financing that we've announced to date. But the focus for financing activities going forward will be obviously that residual amount for the expansion across BC, and opportunistically, as we look at further growth across the platform.
<unk> talked about the capex required for that expansion of <unk> pay.
G and Mackenzie so taken together that's about circa using round numbers circa 3 billion of Capex.
<unk>.
The amount of that which has been incurred to date and financed through.
Elisa.
So as financing that we've announced today.
Yeah, I think in general, um, you tend to see newer generation chips being used more for training. Um, typically in, in training scenarios, somebody is is training a model to actually get a product out to Market. Um, and speed to Market is is important. So generally speaking, they want the highest, uh, you know, power chips in order to speed up their production times. Um, what we see, as the, uh, chips get older, is that the use case can shift more to the imprint side. Um, now that's not to say they're not useful for training, you can absolutely still do training on older Generations. Um, but often, um, they are used more and more for for imprints over time, um, and inference continues to to become a larger and larger portion of the overpine I think, will continue to do so,
The focus for financing activities going forward will be obviously that residual amount for the experienced across species and opportunistically as we look at further growth across the platform.
[Analyst] (H.C. Wainwright & Co.): Very helpful. Thank you for the color.
Mike Colonnese: Very helpful. Thank you for the color.
Very helpful. Thank you for the color.
Operator: Thank you. Our last question comes from Ben Thomas from BTIG. Please go ahead.
Operator: Thank you. Our last question comes from Ben Thomas from BTIG. Please go ahead.
Thank you.
Our last question comes from Ben Thomas from <unk>.
Please go ahead.
[Analyst] (BTIG): How's it going? And thank you for taking my question. So you made a comment earlier about, you know, strong demand for older generation chips. I was just kind of curious, you know, maybe a different kind of customer mix for older generation GPUs versus newer generation GPUs? And I guess kind of like, how long do you see the tail going on to continue generating revenue off kind of older generation chips?
[Analyst] (BTIG): How's it going? And thank you for taking my question. So you made a comment earlier about, you know, strong demand for older generation chips. I was just kind of curious, you know, maybe a different kind of customer mix for older generation GPUs versus newer generation GPUs? And I guess kind of like, how long do you see the tail going on to continue generating revenue off kind of older generation chips?
Has it gone and thank you for taking my question. So you made a comment earlier about strong demand for older generation chips. I was just I was just kind of curious you know maybe is there a different kind of customer mix for older generation Gpus versus newer generation Gpus, and I guess kind of like how long do you see the tale going on to continue generating revenue off kind of older generation.
Chips.
Kent Draper: Yeah, I think in general, you tend to see newer generation chips being used more for training. Typically in training scenarios, somebody is training a model to actually get a product out to market, and speed to market is important. So generally speaking, they want the highest powered chips in order to speed up their production times. What we see as the chips get older is that the use case can shift more to the inference side. Now, that's not to say they're not useful for training. You can absolutely still do training on older generations, but often they are used more and more for inference over time. And inference continues to become a larger and larger portion of the overall pie, and I think will continue to do so over time.
Kent Draper: Yeah, I think in general, you tend to see newer generation chips being used more for training. Typically in training scenarios, somebody is training a model to actually get a product out to market, and speed to market is important. So generally speaking, they want the highest powered chips in order to speed up their production times. What we see as the chips get older is that the use case can shift more to the inference side. Now, that's not to say they're not useful for training. You can absolutely still do training on older generations, but often they are used more and more for inference over time. And inference continues to become a larger and larger portion of the overall pie, and I think will continue to do so over time.
Yes, I think in general.
You tend to say newer generation chips being used more for training.
Typically and in training scenario somebody is training a model to actually get a product out to market.
Over time. Um, in terms of the, the second part of your question around, you know, economics and longevity of these chips. And then we still see, uh, very strong demand for older generations of chips. I think you've got to think about the demand picture in Aggregate and overall. It's still very clear that there is an undersupply relative to demand. Um, and so, what that means is, people will take, uh, you know, compute as it is available. Um, and if that happens to be older generations of chips that they can get their hands on then they're absolutely, you know, willing and not only willing but requiring, uh, that that capacity. Uh and if if you look more broadly across the industry, if you think of a100s h100s you know those are more than 5 years old and More Than 3 years old respectively. Now now those those chips
And speed to market is important so generally speaking I want the highest.
Power chips.
In order to speed up their production times.
What we see as the chips get older as that they use case can shift more to the imprint side now.
Are still effectively 100% utilized across the industry. Uh, and still earning very good rates of return against, um, their original capital costs. So we can continue to believe that that these chips will have a long economically useful lifetime, uh, you know, in in excess of uh, the, the contract lens that we're signing, um, even the Microsoft 1 at 5 years,
That's not the side, they're not useful for training you can absolutely they still do training on older generations.
Awesome. Thank you for the help with caller.
But often die.
I I used more and more for inference or over time.
Thank you. I see no further questions at this time. I will now turn the conference back to Dan for closing remarks.
And in France continues to become a larger and larger portion of the over par and I think we'll continue to do decide over time.
Uh, thanks everyone for joining. Um,
Kent Draper: In terms of the second part of your question around economics and longevity of these chips, I mean, we still see very strong demand for older generations of chips. I think you've got to think about the demand picture in aggregate, and overall, it's still very clear that there is an undersupply relative to demand. And so what that means is people will take, you know, compute as it is available. And if that happens to be older generations of chips that they can get their hands on, then they're absolutely, you know, willing, and not only willing, but requiring that capacity. And if you look more broadly across the industry, if you think of A100, H100, you know, those are more than five years old and more than three years old, respectively now.
Kent Draper: In terms of the second part of your question around economics and longevity of these chips, I mean, we still see very strong demand for older generations of chips. I think you've got to think about the demand picture in aggregate, and overall, it's still very clear that there is an undersupply relative to demand. And so what that means is people will take, you know, compute as it is available. And if that happens to be older generations of chips that they can get their hands on, then they're absolutely, you know, willing, and not only willing, but requiring that capacity. And if you look more broadly across the industry, if you think of A100, H100, you know, those are more than five years old and more than three years old, respectively now.
In terms of the second part of your question around the economics and longevity of these chips I mean, we still see very strong demand for older generations of chair. So I think you've got to think about the demand picture in aggregate.
more than 7 years of execution is built on into a scaled AI platform grounded in real assets.
Delivery capability and discipline, Capital structures.
With Capital Access now available at scale and strong customer demand, we're well positioned to bring on new capacity on terms that make sense. Economically over time.
And overall it is still very clearly that there is an under supply relative to demand.
And so what that means is people will take a compute as it is available.
Importantly, having now absorbed the capital requirements associated with our Microsoft deployment. We're able to focus on converting a broader set of advanced customer negotiations into contracted Revenue.
And if that happens to be older generations of chips that I can get their hands on them and they're absolutely willing and not only willing but requiring that that capacity.
And if you look more broadly across the industry. If you think of I, one hundred's H one hundreds.
We discuss secured power. We mean fully secured power is not a constraint for us and the Urgot process is providing greater transparency around, which projects are genuinely deliverable that Clarity reinforces the scarcity of firm megawatts and helps customers focus on capacity that can be brought to Market with certainty.
More than five years old or more than three years old respectively. Now now those chips is still effectively 100% utilized across the industry and still earning very good rates of return against their original capital cost side. We continue to believe that these chips will have a long economically use.
Kent Draper: Now, those chips are still effectively 100% utilized across the industry, and still earning very good rates of return against their original capital costs. So we continue to believe that these chips will have a long, economically useful lifetime, you know, in excess of the contract lengths that we're signing, even the Microsoft one at 5 years.
Kent Draper: Now, those chips are still effectively 100% utilized across the industry, and still earning very good rates of return against their original capital costs. So we continue to believe that these chips will have a long, economically useful lifetime, you know, in excess of the contract lengths that we're signing, even the Microsoft one at 5 years.
At iron we remain focused on execution and on converting our capacity into high-quality customer contracts. We look forward to updating you as we continue to deliver.
Thanks again for your time and continued support. Have a good day.
The lifetime.
In excess of.
Thank you for joining us today. This concludes, today's conference call, thank you for participating. You may now disconnect
The contract lanes that we are signing even the Microsoft one at five years.
[Analyst] (Canaccord Genuity): Awesome. Thank you for the help, caller.
[Analyst] (BTIG): Awesome. Thank you for the help, caller.
Awesome. Thank you for the helpful color.
Operator: Thank you. I see no further questions at this time. I will now turn the conference back to Dan for closing remarks.
Operator: Thank you. I see no further questions at this time. I will now turn the conference back to Dan for closing remarks.
Thank you I see no further questions at this time I will now turn the conference back to Dan for closing remarks.
Kent Draper: Thanks, everyone, for joining. More than seven years of execution has built IREN into a scaled AI platform, grounded in real assets, delivery capability, and disciplined capital structures. With capital access now available at scale and strong customer demand, we're well positioned to bring on new capacity on terms that make sense economically over time. Importantly, having now absorbed the capital requirements associated with our Microsoft deployment, we're able to focus on converting a broader set of advanced customer negotiations into contracted revenue. When we discuss secured power, we mean fully secured. Power is not a constraint for us, and the ERCOT process is providing greater transparency around which projects are genuinely deliverable. That clarity reinforces the scarcity of firm megawatts and helps customers focus on capacity that can be brought to market with certainty.
Daniel Roberts: Thanks, everyone, for joining. More than seven years of execution has built IREN into a scaled AI platform, grounded in real assets, delivery capability, and disciplined capital structures. With capital access now available at scale and strong customer demand, we're well positioned to bring on new capacity on terms that make sense economically over time. Importantly, having now absorbed the capital requirements associated with our Microsoft deployment, we're able to focus on converting a broader set of advanced customer negotiations into contracted revenue. When we discuss secured power, we mean fully secured. Power is not a constraint for us, and the ERCOT process is providing greater transparency around which projects are genuinely deliverable. That clarity reinforces the scarcity of firm megawatts and helps customers focus on capacity that can be brought to market with certainty.
Thanks, everyone for joining.
More than seven years of execution is build our and into a scaled.
Our platform granted in real assets deliver.
Delivery capability and disciplined capital structures.
With capital access now available at scale and strong customer demand, we are well positioned to bring on new capacity on terms that make sense economically over time.
Importantly, having now absorbed the capital requirements associated with their Microsoft deployment, we're able to focus on converting a broader base of advanced customer negotiations into contracted revenue.
When we discuss secured power, we mean fully secured power is nautical stripe for us in the ERCOT process is providing greater transparency around which projects are genuinely deliverable that clarity reinforces the scarcity of food megawatts and helps customers focus on capacity.
<unk> that can be brought to market with certainty.
Kent Draper: At IREN, we remain focused on execution and on converting our capacity into high-quality customer contracts. We look forward to updating you as we continue to deliver. Thanks again for your time and continued support. Have a good day.
Daniel Roberts: At IREN, we remain focused on execution and on converting our capacity into high-quality customer contracts. We look forward to updating you as we continue to deliver. Thanks again for your time and continued support. Have a good day.
And our and we remain focused on execution and on converting our capacity into high quality customer contracts. We look forward to updating you as we continue to deliver thanks.
Thanks again for your time and continued support and have a good day.
Operator: Thank you for joining us today. This concludes today's conference call. Thank you for participating. You may now disconnect.
Operator: Thank you for joining us today. This concludes today's conference call. Thank you for participating. You may now disconnect.
Thank you for joining US today. This concludes today's conference call. Thank you for participating you may now disconnect.
