Q1 2027 HIVE Digital Technologies Ltd Earnings Call

August 17, 2026

Speaker #2: Hello, and welcome to today's webcast covering HIVE Digital Technologies' financial results for fiscal Q1 2027. My name is Nathan Fast, Director of Marketing and Branding at HIVE, and I'll be your moderator for today's call.

Nathan Fast: Hello, and welcome to today's webcast covering HIVE Digital Technologies' financial results for fiscal Q1 2027. My name is Nathan Fast, Director of Marketing and Branding at HIVE, and I will be your moderator for today's call. Before we get started on slide 2, I would like to briefly note the disclosures for today's presentation. Except for statements of historical fact, this presentation contains forward-looking statements within the meaning of the US Private Securities Litigation Reform Act of 1995. Words such as expects, believes, and similar expressions identify these statements. Actual results could differ materially, and we disclaim any obligation to update them except as required by law. For a full discussion of risk factors, please refer to our most recent SEC filings at sec.gov.

Nathan Fast: Hello, and welcome to today's webcast covering HIVE Digital Technologies Financial results for fiscal Q1 2027. My name is Nathan Fast, Director of Marketing and Branding at HIVE, and I will be your moderator for today's call. Before we get started on slide 2, I would like to briefly note the disclosures for today's presentation. Except for statements of historical fact, this presentation contains forward-looking statements within the meaning of the US Private Securities Litigation Reform Act of 1995. Words such as expects, believes, and similar expressions identify these statements. Actual results could differ materially, and we disclaim any obligation to update them except as required by law. For a full discussion of risk factors, please refer to our most recent SEC filings at sec.gov.

Speaker #2: Before we get started on slide 2, I'd like to briefly note the disclosures for today's presentation. Except for statements of historical fact, this presentation contains forward-looking statements within the meaning of U.S. law.

Speaker #2: Private Securities Litigation Reform Act of 1995. Words such as "expects," "believes," and similar expressions identify these statements. Actual results could differ materially, and we disclaim any obligation to update them except as required by law.

Speaker #2: For a full discussion of risk factors, please refer to our most recent SEC filings at sec.gov. In addition to discussing results that are calculated in accordance with GAAP, we will also reference certain non-GAAP financial measures, including adjusted EBITDA, adjusted net income, and free cash flow.

Nathan Fast: In addition to discussing results that are calculated in accordance with GAAP, we will also refer certain non-GAAP financial measures, including adjusted EBITDA, adjusted net income, and free cash flow. Management uses these metrics to evaluate operating performance and believes they provide investors with additional insight, and they are presented for supplemental purposes only and should not be considered in isolation from GAAP results. Reconciliations to the nearest GAAP measures are included in the appendix to this presentation and in the press release in Form 8-K furnished to the SEC. On the next slide, I am pleased to introduce today's presenters, Frank Holmes, Executive Chairman, Aydin Kilic, President and CEO, and Darcy Daubaras, Chief Financial Officer. I would now like to hand the presentation over to Mr. Frank Holmes for a macro recap of the quarter. Frank?

Speaker #2: Management uses these metrics to evaluate operating performance and believes they provide investors with additional insight in their presented supplemental purposes only and should not be considered in isolation from GAAP results.

Speaker #2: Reconciliations to the nearest GAAP measures are included in the appendix to this presentation and in the press release in Form 8-K furnished to the SEC.

Speaker #2: On the next slide, I'm pleased to introduce today's presenters: Frank Holmes, Executive Chairman; Aydin Kilic, President and CEO; and Darcy Daubaras, Chief Financial Officer.

Speaker #2: I'd now like to hand the presentation over to Mr. Frank Holmes for a macro recap of the quarter. Frank?

Speaker #3: Thank you. And so, let's do a quick macro recap of what's been affecting stock markets and HIVE's stock price and valuations over this past recent quarter.

Frank Holmes: Thank you. Let us go a quick macro cap of what has been affecting stock markets and HIVE stock price and valuations over this past recent quarter. Next, please. Before we jump into those granular details, it is always important to understand the DNA of volatility, and every asset class has its own DNA of volatility. This is the highlight, for especially we find so many people like to trade HIVE. It is because of that volatility. It is a non-event over 1 day to go up or down 6%, and over 10 days, 23%. You can see that it is a little more than CoreWeave. It is substantially 3 times more than what Bitcoin is and 4 times more what NVIDIA is when we look over 6 trading days.

Frank Holmes: Thank you. Let us go a quick macro cap of what has been affecting stock markets and HIVE stock price and valuations over this past recent quarter. Next, please. Before we jump into those granular details, it is always important to understand the DNA of volatility, and every asset class has its own DNA of volatility. This is the highlight, for especially we find so many people like to trade HIVE. It is because of that volatility. It is a non-event over one day to go up or down 6%, and over 10 days, 23%. You can see that it is a little more than CoreWeave. It is substantially 3x more than what Bitcoin is and 4 times more what NVIDIA is when we look over 6 trading days.

Speaker #3: Next, please. So, before we jump into those granular details, it's always important to understand the DNA of volatility. Every asset class has its own DNA of volatility.

Speaker #3: And this is the highlight—that, especially, we find so many people like to trade HIVE. It's because of that volatility. It is a non-event over one day to go up or down 6%.

Speaker #3: And over 10 days, 23%. You can see that it's a little more than CoreWeave. It's substantially three times more than what Bitcoin is, and four times more than what Nvidia is.

Speaker #3: When we look over six trading days, it is just a factor of these macro forces pulling, from what these announcements—from what Bitcoin is doing on a daily basis—to the announcements of our AI build-out.

Frank Holmes: It is just a factor of these macro forces pulling, with these announcements from what Bitcoin is doing on a daily basis to the announcements of our AI build-out. When we have a strong Bitcoin day and good AI sentiment, the stock has these big surges. Vice versa, a negative day in the world of AI and Bitcoin down, and you get these downdrafts. These appear to be the factors driving a lot of the sentiment. The leadership team has been up here before. Aydin, CEO, the best operator in the data center business. I will walk you through why. Craig Tavares, our superstar sovereign builder, I mean, incredible builder of data centers, build out our vision, in Canada in particular, which is the fastest track that we have. The government is committed to it with having a minister for AI.

Speaker #3: So when we have a strong Bitcoin day and good AI sentiment, the stock has these big surges. Vice versa, on a negative day, with the world of AI and Bitcoin down, you get these downdrafts.

Speaker #3: These appear to be the factors driving a lot of the sentiment. The leadership team has been up here before. Aydin, CEO, the best operator in walking through why in the data center business, and Darcy Daubaras, our superstar sovereign—I mean, incredible builder of data centers—built out our vision in Canada, in particular, which is the fastest track that we have, and the government's committed to it, with having a minister for AI.

Speaker #3: Darcy Daubaras, our CFO, Gabriel, in Europe, and Gabriel Lamas, who's in Paraguay, and Johanna Thornblatt, also in Europe. HIVE operates over nine time zones in five languages, and we're able to manage that complexity and still be one of the most efficient Bitcoin miners, with our HPC AI data centers that we have functioning today in downtown Montreal, Stockholm, Manitoba, and British Columbia.

Frank Holmes: Darcy Daubaras, our CFO, Gabriel Ibghy in Europe, Gabriel Lamas, who is in Paraguay, and Johanna Thörnblad, who is also in Europe. HIVE operates over nine time zones in five languages, and we are able to manage that complexity and still be one of the most efficient Bitcoin miners in our HPC AI data centers that we have functioning today in downtown Montreal, Stockholm, in Manitoba, and British Columbia. Our efficiency is always ranked by third party as the top of the stock. HIVE has always used green energy. Canada, Sweden, Paraguay. Low electricity costs, low temperature, fast internet connection. What we have been doing to accelerate the AI build-out is to lay dark fiber. Dark fiber in New Brunswick in Canada, and dark fiber is next to be laid in Paraguay.

Speaker #3: Our efficiency is always ranked by third parties. It's the top of the stock. HIVE has always used green energy. Canada, Sweden, and Paraguay—low electricity costs, low temperature, fast internet connection. And what we've been doing to accelerate the AI build-out is largely dark fiber.

Speaker #3: Dark fiber in British Columbia—no, sorry, dark fiber in New Brunswick in Canada—and dark fiber is next to be laid in Paraguay. But we've been able to demonstrate on this: our ability to export, create, convert electrons and export what they call compute power 5,000 miles away.

Frank Holmes: We have been able to demonstrate, on this ability to export, create, convert electrons, and exports to how they call compute power 5,000 miles away. That is pretty impressive. We are pretty excited about what the opportunities down the road are from Paraguay. I want to thank all the shareholders. You can see Invesco, Citadel Advisors, Millennium Management, Two Sigma Investments, Charles Schwab. Charles Schwab is probably the biggest in the retail component, from registered investment advisors and the retail public. Thank you all for listening to the call, for being shareholders. For the quarter ended 30 June, you can see that HIVE outperformed its 50-day moving average. It had a big sell-off along with the whole industry in July. It was one of the biggest outpouring in the month of July by hedge funds.

Speaker #3: So that's pretty impressive. And so we're pretty excited about what the opportunities down the road are from Paraguay. I want to thank all the shareholders.

Speaker #3: You can see Invesco, O, Citadel Advisors, Millennium Management, Two Sigma Investments, Charles Schwab. Charles Schwab is probably the biggest and the retail component from registered investment advisors and the retail public.

Speaker #3: So, thank you all for listening to the call and for being shareholders. For the quarter ended June 30th, you can see that HIVE outperformed its 50-day moving average.

Speaker #3: It had a big sell-off along with the whole industry in July. And it was one of the biggest outpourings in the month of July by hedge funds.

Speaker #3: And a lot has to do, which I'll mention later on, about the carry trade out of Japan and the significance of this sort of domino effect—a contagion. Japan wants their money back because rates are going up.

Frank Holmes: A lot has to do, which I will mention later on, about the carry trade out of Japan and the significance of this sort of domino effect, a contagion. Japan wanted their money back because rates are going up, and it impacted first the Korean stock market, which was one of the best performers last year, up about 100%. It had a huge correction as, in particular, technology and AI-related stocks sold off out of South Korea, and we saw that domino effect impact in America, and we saw a lot of AI and anything related also being deleveraged. I think that that sort of worst is behind us. These sentiment factors, they swing back and forth.

Speaker #3: And it impacted first the South Korean stock market, which was one of the best performers last year—up about 100%. It had a huge correction, as in particular, technology and AI-related stocks sold off out of South Korea.

Speaker #3: And we saw that domino effect impact in America, and we saw a lot of AI and anything related also being deleveraged, and I think that that sort of worsening is behind us.

Speaker #3: And these sentiment factors, they swing back and forth. What investors have to realize is this carry trade in Japan is quite significant. In my years as a money manager, I've seen the swings back and forth globally and what it's done.

Frank Holmes: What investors have to realize is this carry trade Japan is quite significant in my years as a money manager of seeing the swings back and forth globally, of what it has done. It appears that the worst is behind us right now out of the Japanese economy. We are happy to see that HIVE outperformed Bitcoin at the end of June when you look over that time period this year. I think a big part is much of our AI strategy and announcing the growth in the revenue from $1 million a month to $3 million a month, now expanding that will be going to $5 to $6 to $10 million a month with these contracts that we are building.

Speaker #3: And so it appears that the worst is behind us right now in terms of the Japanese economy. We're happy to see that HIVE outperformed Bitcoin at the end of June when you look over that time period this year.

Speaker #3: And I think a big part is, much of our AI strategy and announcing the growth and the revenue from $1 million a month to $3 million a month, and now expanding that—it'll be going to $5 to $6 to $10 million a month with these contracts that we're building.

Speaker #3: And we have machines that are increasing this year to date substantially over the year, the daily cash flow coming from our GPU chips, in particular the suite of Nvidia chips we have.

Frank Holmes: We have machines that are increasing this year to date, substantially over the year, the daily cash flow coming from our GPU chips, in particular the suite of NVIDIA chips we have. I mentioned earlier that Japan carry trade unwind is a macro risk. I think the worst is behind us, but any rising rates in Japan will have a big impact. We have seen the administration come in to support Japan's currency, even though rates were rising. It appears to be sort of an aftermath of COVID, that after three decades, inflation started showing up in Japan and rates started rising. They went for three decades of basically, at majority of the time, issuing zero cost of capital or 10 basis points. Funds would borrow in Korea, in US, Canada, England, and get US rates from 4% up to dividend-paying stocks and in speculative stocks.

Speaker #3: I mentioned earlier that the Japan carry trade unwind is a macro risk. I think the worst is behind us, but any rising rates in Japan will have a big impact.

Speaker #3: We've seen the administration come in to support Japan's currency, even though rates were rising, and it appears to be sort of an aftermath of COVID that, after three decades, inflation started showing up in Japan.

Speaker #3: And rates started rising. They went for three decades of basically, the majority of the time, issuing zero cost of capital or 10 basis points.

Speaker #3: Funds would borrow in Korea, in the US, Canada, and England, and get US rates from 4% up to dividend-paying stocks and in speculative stocks. That was starting to unwind as Japan started seeing the rates rise and they wanted their money back.

Frank Holmes: That was starting to unwind as Japan started seeing their rates rise and they want their money back. This is a real important phenomena for investors just to be able to follow the Japan carry trade, because it could impact you. You do not realize why the stocks are up or down during the day. There is no news, and it could be an unwind or reloading around the world. Well, it has been exciting in respect that last year we substantially increased our hashing power in Paraguay in particular, taking an overall complex from 6 exahash to 25. That gave us economies of scale, and that gave us the ability to deal with the drop in Bitcoin pricing and the difficulty rising. Those are two real significant headwinds, especially in February of this year, we hit.

Speaker #3: This is a really important phenomenon for investors, just to be able to follow the Japan carry trade, because it can impact you. You don't realize why the stocks are off or up or down during the day.

Speaker #3: There's no news, and it could be an unwind or reloading around the world. Well, it's been exciting in the respect that, last year, we substantially increased our hashing power in Paraguay in particular, taking the overall complex from 6 exahash to 25.

Speaker #3: That gives economies of scale, and that gave us the ability to deal with the drop in Bitcoin pricing and the difficulty rising. And those are two real significant headwinds, especially in February of this year. We hit, and we've been able to make money every month, even though—and I can share with you—had we not strapped on that additional power, it would be very difficult to be operating a Bitcoin operation today.

Frank Holmes: We have been able to make money every month, even though, and I can share with you, had we not strapped on that additional power, it would be very difficult to be operating a Bitcoin operation today. We have this key scalability at 2% and been redeploying our Bitcoin into expanding our AI gigafactory vision. Aydin is going to give you and Darcy, our CFO, and Aydin Kilic, our CEO, is going to give you more granularity on these numbers. Underneath the hood, underneath all these non-cash charges such as the depreciation that we have to take for our chips and in particular the non-cash charges out of Sweden, which we will have more discussion on as we go on this ongoing battle with the Swedish Tax Agency, which changed the rules from when we initially went there. The interpretation. The laws have not changed.

Speaker #3: But we have this key scalability at 2%, and we've been redeploying our Bitcoin into expanding our AI gigafactory vision. So, Aydin's going to give you—and Darcy, our CFO—and Aydin Kilic, our CEO, is going to give you more granularity on these numbers.

Speaker #3: But underneath the hood, underneath all these non-cash charges, such as the depreciation that we have to take for our chips, and in particular, the non-cash charges out of Sweden—which we will have more discussion on as we go on—this ongoing battle with the Swedish tax agency, which changed the rules from when we initially went there.

Speaker #3: The interpretation—the laws haven't changed. It is their interpretation, because they're very anti-crypto industry. And even though we tried to explain that we're exporters of electrons: we take hydroelectricity, run it through an ASIC chip, and we export that hashing power—compute power—to Foundry, which is a pool in the US that is SOX 1 and 2 compliant, and they pay us our Bitcoin in Bermuda.

Frank Holmes: It is their interpretation because they are very anti-crypto industry. Even though we try to explain that we are exporters of electrons, we take hydroelectricity, run them through an ASIC chip, and we export that hashing power, compute power to Foundry, which is a pool in the US, which is SOC 1 and 2 compliant, and they pay us our Bitcoin in Bermuda. It is an export industry. What is really exciting is that Paraguay's central bank gets that, and it is important now for them in calculating what the GDP is and the contribution to their GDP of how we use a chip. AI business is very similar, and that is you take the electrons, you run from the hydroelectricity of hydro, they go through your GPU chips, and you can transmit that GPU power, that compute power to New York City. We have demonstrated that in a test 5,000 miles.

Speaker #3: It's an export industry, and what's really exciting is that Paraguay's central bank gets that, and it's important now for them in calculating what the GDP is and the contribution to their GDP.

Speaker #3: How we use a chip in the AI business is very similar. You take the electrons, run them from the hydroelectricity of hydro, they go through your GPU chips, and you can transmit that GPU power, that hashing compute power, to New York City.

Speaker #3: And we've demonstrated that in a test—5,000 miles. Now, you cannot send electricity on transmission lines 5,000 miles. But you can convert them into compute power and send along fiber optic cables along the bottom of the ocean 5,000 miles, and someone can create models at New York City at Columbia University, which has basically validated that exercise.

Frank Holmes: Now, you cannot send electricity on transmission lines 5,000 miles, but you can convert them into compute power and send along fiber optics cables along the bottom of the ocean 5,000 miles. Someone can create models at New York City at Columbia University, which has basically validated that exercise. So when you look at a Bitcoin mining industry or you are looking at an AI gigafactory, what investors have to realize is that you do not have an ATM, you do not have a Bitcoin machine that spits out Bitcoin. No, you really export out to a pool if it is Bitcoin mining or to an end user wants your compute power, and you can transmit that.

Speaker #3: So, when you look at the Bitcoin mining industry or you're looking at an AI gigafactory, what investors have to realize is that you don't have an ATM—you don't have a Bitcoin machine that spits out Bitcoin.

Speaker #3: No, you really export out to a pool if it's Bitcoin mining, or to an end user once you have compute power. And you can transmit that.

Speaker #3: So this is phenomenal because you can take all this abundance of electricity in Paraguay and you can turn around and export it by converting those electrons into compute power, and they can be used all over the world.

Frank Holmes: This is phenomenal because you can take all this abundance of electricity in Paraguay, and you can turn around and export by converting those electrons into compute power, and they can be used all over the world. So it is very exciting what we are doing on that, but it does not stop still this ongoing saga in battling with Sweden. We believe that based on law and our expert witnesses, we will go through this process, and we believe that justice will prevail. What is important for you is to recognize underneath the hood is that the revenue quarter grew 10%, net operating income grew by 86%, because the beginning of this year, February, was a very big challenging month. So the year-over-year, it goes to show the significance of the scaling.

Speaker #3: So it's very exciting, what we are doing on that. But it doesn't stop—there's still this ongoing saga in battling with Sweden, and we believe that, based on law and our expert witnesses, we'll go through this process, and we believe that justice will prevail.

Speaker #3: But what's important for you to recognize, underneath the hood, is that revenue for the quarter grew 10%, and net operating income grew by 86%, because at the beginning of this year, February was a very big and challenging month.

Speaker #3: So, the year-over-year numbers go to show the significance of the scaling. I mentioned at the very beginning, taking revenue on a year-over-year basis, it grew by 73%, even though Bitcoin fell by 40%, and operating net income grew by 50%.

Frank Holmes: I mentioned at the very beginning, taking revenue is year-over-year grew by 73%, even though Bitcoin fell by 40%, and operating net income grew by 50%. So we are really thrilled of our positioning of having 2% of that global network and continuing to build out that dual engine. In particular this year is our HPC, high-performance compute strategy to build AI gigafactories. Craig Tavares will give you more granularity as we go on, but who is really going to really carry that ball for you today is going to be Aydin Kilic. The team is very, very proud of closing another 130 million of exchangeable notes, zero cost of capital for interest payments. That money is not earmarked for Sweden. That money is earmarked for the fastest path to cash flow and revenue, in particular in our partnership with Bell Canada.

Speaker #3: So, we're really thrilled with our positioning, having 2% of that global network and continuing to build out that dual engine. In particular, this year is our HPC—high-performance compute—strategy to build AI gigafactories.

Speaker #3: And Darcy Daubaras will give you more granularity as we go on, but who’s really going to carry that ball for you today is going to be Aydin Kilic.

Speaker #3: The team is very, very proud of closing another $130 million of exchangeable notes, zero cost of capital, for interest payments. That money is not earmarked for Sweden.

Speaker #3: That money is earmarked for the fastest path to cash flow and revenue, in particular in our partnership with Bell Canada. The countries that win the AI race won't just produce the smartest engineers.

Frank Holmes: The countries that win the AI race won't just produce the smartest engineers, they'll build the infrastructure to support them. Data centers are becoming an essential to economic growth as railroads were a century ago. A quote I've been saying in speeches, one of the things that in our gigafactory and being the biggest in Canada, I think what's really interesting is that it's really not taught in school in Canada to the degree, but I grew up there as a child, Toronto was very proud of their medical breakthroughs and research.

Speaker #3: They'll build the infrastructure to support them. And data centers are becoming as essential to economic growth as railroads were a century ago. That's a quote I've been saying at speeches. One of the things about our gigafactory—and being the biggest in Canada—I think what's really interesting is that it's not really taught in school in Canada to the degree you would expect. I grew up there as a child, and Toronto was very proud of their medical breakthroughs and research.

Speaker #3: It inspired me too, and part of my journey of education was going into medical school before I pivoted to go into business and economics, because I was just so in love with what was taking place in Toronto and Waterloo, and then at University of Western Ontario, where the founding school is called Huron University.

Frank Holmes: It inspired me to, part of my journey of education was to going into medical school before I pivoted to go into business and economics because I was just so in love with what was taking place in Toronto, Waterloo, and then University of Western Ontario, where the founding school is called Huron University, which I sit on the board of. I was always thrilled to know in 1921, insulin was discovered in Toronto. Pablum was developed in Toronto. The pacemaker was pioneered. Polio vaccine and scaling it was in 1955 when I was born, was done in Toronto. The first successful double lung transplant, cystic fibrosis gene. I can go on, but it has rich with intellectual capital with two major schools, the University of Toronto and University of Waterloo, which is like Canada's MIT.

Speaker #3: I sit on the board of. I was always thrilled to know that in 1921, insulin was discovered in Toronto. Pablum was developed in Toronto. The pacemaker—and it was pioneered.

Speaker #3: The polio vaccine and its scaling happened in 1955, the year I was born. It was done in Toronto. The first successful double lung transplant, cystic fibrosis gene—I can go on, but it's rich with intellectual capital, with two major schools: the University of Toronto and Waterloo University, which is like Canada’s MIT.

Speaker #3: There are many other schools all around, like the Schulich School, which is famous for business in Toronto, but there are many scientific research laboratories in that area as well. Toronto is the financial capital of the country. Ottawa is like Washington, D.C.—it is the political capital, the seat of the federal government—but the universities are really in that greater Toronto area.

Frank Holmes: There are many other schools all around, like the Schulich School of Business is famous for business in Toronto, but there's many scientific research laboratories in that area. Toronto is the financial capital of the country. Ottawa is like Washington, D.C., is the political capital of the federal government, but the universities are really in that greater Toronto area. We've been on a campaign to try to educate investors in Canada as well as in the US about the University Health Network, SickKids Hospital. One of my friends is a doctor here, a pediatrician, and his internship was in Toronto at SickKids. The Princess Margaret Cancer Centre, the Vector Institute, where the Nobel Prize winner two years ago, Geoffrey Hinton, was at the University of Toronto. This use of artificial intelligence to improve cancer diagnosis, drug discovery, medical imaging, it's very, very big.

Speaker #3: So, we've been on a campaign to try to educate investors in Canada as well as in the US about the University Health Network, SickKids Hospital. One of my friends is a doctor here, a pediatrician, and his internship was in Toronto at SickKids.

Speaker #3: The Princess Margaret Cancer Center, the Vector Institute, where the Nobel Prize winner two years ago, Geoffrey Hinton, was at the University of Toronto. It's this use of artificial intelligence to improve cancer diagnosis, drug discovery, medical imaging.

Speaker #3: It's very, very big. But what they do not have are these big gigafactories—AI gigafactories—and that is where HIVE's buzz is buzzing with activity.

Frank Holmes: What they do not have are these big gigafactories, AI gigafactories, that is where HIVE's BUZZ High Performance Computing is buzzing with activity to build out. Other things just to understand and appreciate Toronto more outside of the Toronto Maple Leafs or the Toronto Raptors basketball and the Toronto Blue Jays baseball. The telephone innovation was not too far from the city of Toronto. The electron microscope in 1938. Anti-GGC 41. Deep Learning 2006. Ethereum, next please, was discovered by a student out of University of Waterloo. What's also important in this visual is to show you the triangle of concentration of internet nodes and, in particular for AI and transferring of data. The big concentration is from the Toronto region up to Boston, down to Virginia. This is a visual to show you where Lake Ontario is. Finger Lakes, as you see, is New York.

Speaker #3: To build out. So, other things just to understand and appreciate Toronto more, outside of the Maple Leafs, or the Raptors basketball, and the Blue Jays baseball.

Speaker #3: The telephone innovation was not too far from the city of Toronto. The electron microscope in 1938, anti-GGC 41, deep learning in 2006, and Ethereum—the next place—was discovered by a student out of Waterloo University.

Speaker #3: What's also important in this visual is to show you the triangle of concentration of internet nodes, and in particular for AI and transferring of data, the big concentration is from the Toronto region up to Boston and down to Virginia.

Speaker #3: This is a visual to show you where Lake Ontario is. The Finger Lakes, as you see, is New York, and the University of Toronto and the Gus gigafactory is right in between Waterloo University and University of Toronto.

Frank Holmes: The University of Toronto and the BUZZ gigafactory is right in between University of Waterloo and University of Toronto. The University of Toronto is much closer to where Toronto is than this map. It gives you an idea that this is an important intellectual capital. Just like I have mentioned before, you look at bio research, 50% of bio research is done in Boston, San Diego. If you look at other types of gaming, there are clusters of software coders that show up. When you look at cybersecurity, one of the biggest clusters is right here in San Antonio, Texas, with UTSA, which has the biggest cybersecurity school in the country with 10,000 students. Vitalik Buterin, the creator of Ethereum, went to Waterloo, AKA, as we called the MIT of Toronto because of the software number of geniuses that come out of that school.

Speaker #3: The University of Toronto is much closer to where Toronto is than this map shows, but it gives you an idea that this is an important intellectual capital.

Speaker #3: Just like I've mentioned before, if you look at bioresearch, 50% of bioresearch is done in Boston and San Diego. If you look at other types of gaming, there are clusters of software coders that show up.

Speaker #3: And when you look at cybersecurity, one of the biggest clusters is right here in San Antonio, Texas, with the UT university, which has the biggest cybersecurity school in the country, with 10,000 students.

Speaker #3: So Vitalik Buterin, the creator of Ethereum, went to Waterloo—also known as the 'MIT of Toronto' because of the number of software geniuses that come out of that school.

Speaker #3: So this is to give you an idea from a macro point of view. What has happened this year is that semiconductors have had a big run, and they started coming off with the correction, as you can see here in July. A lot of this had to do with the contagion from Japan to Korea, to North America, to Europe.

Frank Holmes: This is to give you an idea from a macro point of view, which has happened this year, is that semiconductors have had a big run, and they started coming off with the correction, as you can see here in July. A lot of this had to do with the contagion from Japan to Korea to North America to Europe. It looks like that worse is behind us now. What is important, what I look at and I hear, "Oh, it is a bubble. It is the worst ever. It is a bubble, bubble." All these people are coming up with PhDs in bubbleology. I share with you that it is far from that. The amount of these collateral minerals, you need lithium batteries, not just for cars, but you need them for all these data centers.

Speaker #3: And it looks like that worse is behind us now. What's important what I look at and I hear oh it's a bubble it's already it's a worse ever it's a bubble bubble bubble and all these people are coming up with PhDs and bubbleology I share with you that it's far from that and the amount of these collateral minerals you need lithium batteries not just for cars but you need them for all these data centers and you can see the drive for lithium and graphite and nickel and zinc and copper copper is making all-time high because a gigawatt of electricity converting that to an AI factory like the Lean Texas is going to consume 50,000 tons not copper tons of copper and most people think of pounds of copper no 50,000 tons and that's 2,000 pounds per ton that's a significant amount and when we look around the world it means that the supply is limited and it continues to have big demand globally.

Frank Holmes: You can see the drive for lithium and graphite and nickel and zinc and copper. Copper is making an all-time high because a gigawatt of electricity, converting that to an AI factory like Abilene, Texas, is going to consume 50,000 tons, not copper, tons of copper. Most people think of pounds of copper. No, 50,000 tons, and that is 2,000 pounds per ton. That is a significant amount. When we look around the world, it means that the supply is limited, and it continues to have big demand globally. That is another demand that I see that is going to continue with building out of AI centers. There are lots of political headwinds. It is election year, so it becomes on the agenda. But it is not going to stop this build-out.

Speaker #3: That's another sort of demand that I see that's going to continue with the building out of AI centers. And there's lots of political headwinds this election year, so it becomes on the agenda, but it's not going to stop this buildout.

Speaker #3: This is just looking at spending for you, and you've seen this in other visuals, but it's just important to recognize the peripheral equipment for computers. Those stocks have been on a tear, and it's not just here in America.

Frank Holmes: This is just looking at spending for you, and you have seen this in other visuals, but it is just important to recognize the peripheral equipment for computers. Those stocks have been on a tear. It is not just here in America. It is a global phenomena that anyone is involved in the building construction of these data centers. I was thrilled. I mentioned to you that Bitcoin, particularly with the Central Bank of Paraguay, recognized that Tier 1 data centers are a big contribution to the GDP because it is a way for the country to export besides food and beef. They are able to export electrons, and they export them with compute power. That is a significant contributing income to the country for its size. I am very pleased that the central bank has had this ability to really grasp the significance of this being an export industry.

Speaker #3: It's a global phenomenon. Anyone involved in the building and construction of these data centers— I was thrilled, I mentioned this earlier— Bitcoin, particularly, the central bank of Paraguay recognized that tier-one data centers are a big contribution to the GDP because it's a way for the country to export, besides food and beef. They're able to export electrons, and they export them with compute power.

Speaker #3: And it's a significant contributing income to the country for its size. So I'm very pleased that the central bank has had this ability to really grasp the significance of this being an export industry, and hopefully other countries will all of a sudden recognize, like Sweden and Canada and Norway and Iceland, that it's an important component of converting hydroelectricity or any other type of electricity with GPU chips to be able to export that compute power.

Frank Holmes: Hopefully other countries will all of a sudden recognize that, like Sweden and Canada, Norway and Iceland, it is an important component of converting hydroelectricity or any other type of electricity with GPU chips to be able to export that compute power. Just a visual for you to grasp. You cannot transmit electricity from Paraguay to New York, but you can send AI compute power. Those GPU chips is what we do, and we have shown it, we have demonstrated, and that is a big breakthrough. We think this is very significant, what we have been able to demonstrate. After we lay all the dark fiber necessary in Paraguay, like we are doing in New Brunswick on the border of Maine, I think that the ability to move those molecules, electrons into compute power will even accelerate. That is the team. 300 megawatts building out in Paraguay and expanding another 100 megawatts.

Speaker #3: Just a visual for you to grasp: you cannot transmit electricity from Paraguay to New York, but you can send AI compute power. And those GPU chips are what we do, and we've shown it.

Speaker #3: We've demonstrated it, and that is a big breakthrough. We think this is very significant, what we've been able to demonstrate, and after we lay all the dark fiber necessary in Paraguay, like we're doing in New Brunswick on the border of Maine, I think that the ability to move those molecules—electrons—into compute power will even accelerate.

Speaker #3: That's the team. Three hundred megawatts building out in Paraguay, and expanding another one hundred megawatts. So this will give you more granularity of other things we're looking at.

Frank Holmes: This will give you more granularity of other things we are looking at. We are looking in Texas, Paraguay substation being built. Boden, the land that we have ended up purchasing in a separate entity as we repurpose the land and power in Sweden, and then the gigafactory that is taking place in Canada, in particular in New Brunswick. Then this joint venture with Bell Canada rapidly expanding in British Columbia. We are coast to coast and the biggest technically hyperscaler in Canada. That is the building, a beautiful data center that we bought in northern Sweden with the land and the long-term power contracts. We have a very strong footprint in the community. There is the HIVE Hockey Arena, in which we sponsor 12 kids learning how to play hockey.

Speaker #3: We are looking in Texas. The Paraguay substation is being built. Bowdoin, the land that we've ended up purchasing, is in a separate entity as we repurpose the land and power in Sweden. And then the gigafactory that's taking place in Canada, in particular in New Brunswick, and then this joint venture with Belt Canada rapidly expanding in British Columbia. So we are coast to coast, and the biggest, technically, hyperscaler in Canada.

Speaker #3: That's the building—a beautiful data center that we bought in northern Sweden, along with the land and the long-term power contracts. We have a very strong footprint in the community.

Speaker #3: There's the Hive hockey arena, which we sponsor, with 12 kids learning how to play hockey. This is a draft visual for what we expect to see over the next couple of years in Toronto for the AI Gigafactory.

Frank Holmes: This is a draft, a visual for what we expect to see over the next couple of years in Toronto for the AI gigafactory. This is really quite phenomenal that I did not give you more granularity, but the relationships that Craig has been able to build and accelerate with other key groups and entities. I think it is really important to see that a couple of years ago, it was predominantly the relationship that we had with NVIDIA, and Aydin and myself had been and purchased a lot of NVIDIA chips. What we have seen with Craig taking that ball and running with it has really accelerated these other relationships and the thrust to be in these other countries that have sovereign data centers. This is just to give you an idea.

Speaker #3: This is really quite phenomenal, that I didn't give you more granularity, but the relationships that Craig has been able to build and accelerate with other key groups and entities.

Speaker #3: So I think it's really important to see that a couple of years ago, it was predominantly the relationship that we had with Nvidia. And Aydin and myself had been, and had purchased, a lot of Nvidia chips. But what we've seen with Craig taking that ball and running with it is really accelerating these other relationships, and the thrust to be in these other countries to have sovereign data centers.

Speaker #3: So this is just to give you an idea—we’re traveling all over the world all the time, meeting with captains of industry like Michael Dell several times, President Peña, Jensen Huang. So we are meeting with very important people that have visions, and President Peña has an incredible vision for the country. You can see Gabriel Amas was arm on his, President Peña’s shoulder. Well, the big vision is to make that the biggest AI destiny center for gigafactories in Latin America. So it’s great to be with young executives, like say, like Santiago Peña, the President of Paraguay, that has this phenomenal vision.

Frank Holmes: We are traveling all over the world all the time, meeting with captains of industries like Michael Dell several times, President Peña, Jensen Huang. We are meeting with very important people that have visions, and President Peña has an incredible vision for the country. You can see Gabriel Lamas with his arm on President Peña's shoulder. Well, the big vision is to make that the biggest AI destiny center for gigafactories in Latin America. It is great to be with young executives like Santiago Peña, the President of Paraguay, that has this phenomenal vision. We hope to be fast-tracking that process and growing with his country. Well, here as I turn it over to Aydin, and that is Aydin Kilic, a touchdown pass to Craig Tavares, which I just mentioned. Aydin Kilic is our electrical engineer.

Speaker #3: And we hope to be fast-tracking that process and growing with this country. Well, here’s where I’ll turn it over to Aydin, and that’s Aydin throwing a touchdown pass to Darcy Daubaras, which I just mentioned.

Speaker #3: Aydin Kilic is our electrical engineer. He's our CEO, was originally our President and Chief Operating Officer, and saw the building and construction of New Brunswick and helped dramatically build out the Paraguay for HIVE. And I think it's important to listen to him give you the story. He's also been very much involved in Wall Street in raising capital for this growth we have for our gigafactories.

Frank Holmes: He is our CEO, was originally our President and Chief Operating Officer and saw the building and construction of New Brunswick and helped dramatically build out Paraguay for HIVE. I think it is important that you listen to him give you the story. He has also been very much involved in Wall Street and raising capital for this growth we have for our gigafactories. There you go, Aydin.

Speaker #3: Here you go Aydin.

Speaker #2: Thank you, Frank, for the excellent strategic overview. Now, let's get into an executive summary of the quarter to date, our recent accomplishments, and some exciting things in the pipeline.

Aydin Kilic: Thank you, Frank, for the excellent strategic overview. Now let us get into an executive summary of the quarter to date, our recent accomplishments, and some exciting things in the pipeline. Starting here, financial highlights for the quarter period end 30 June. USD 79 million of revenue, USD 24 million of gross operating margin, and USD 15.2 million of earnings from operations, which is revenue less cost of goods sold, less corporate SG&A. We do have a USD 143 million net loss, which is really driven by two non-cash items. This is depreciation of about USD 54 million and this roughly USD 85 million provision for tax liability in Sweden.

Speaker #2: Starting here, financial highlights for the quarter period ended June 30th: $79 million of revenue, $24 million of gross operating margin, and $15.2 million of earnings from operations, which is revenue less the cost of goods sold and less corporate G&A.

Speaker #2: We do have a $143 million net loss, which is really driven by two non-cash items. This is depreciation of about $54 million and this roughly $85 million provision for tax liability in Sweden.

Speaker #2: This is actually a longstanding issue that we've previously disclosed over the last two years, going back as far as 2023, related to the Bitcoin mining business in Sweden and VAT tax treatments for basic imports in the Bitcoin mining business.

Aydin Kilic: This is actually a long-standing issue that we have previously disclosed over the last two years, going back as far as 2023, related to the Bitcoin mining business in Sweden and VAT tax treatments for ASIC imports in the Bitcoin mining business. We are appealing it, we are contesting it. We do not plan to pay, and that is why it is a non-cash charge on the financials. There is further disclosure in our earnings press release, but I really want to focus on the operations of the business. We did make USD 15 million this quarter on a non-cash basis, or if you interpret through adjusted EBITDA, USD 13.4 million. Well, of course, the depreciation, look, we have a very aggressive two-year depreciation cycle for those ASICs. That means over eight quarters, ASICs will get depreciated to zero. Well, guess what?

Speaker #2: So we are appealing it. We are contesting it. We do not plan to pay, and that is why it is a non-cash charge on the financials.

Speaker #2: There's further disclosure in our earnings press release, but I really want to focus on the operations of the business. We did make $15 million this quarter on a non-cash basis, or if you interpret it through adjusted EBITDA, $13.4 million.

Speaker #2: Of course, on depreciation—look, we have a very aggressive two-year depreciation cycle for those ASICs. That means over eight quarters, ASICs will get depreciated to zero.

Speaker #2: Well, guess what? We imported about a quarter billion dollars of Bitcoin mining equipment—the containers and ASICs—to Paraguay last year, so that depreciation is still hitting us quarter over quarter. We have four-year depreciation for the GPUs, and of course, we have GPUs from the past and we're bringing more online. That’s really where that non-cash number comes from.

Aydin Kilic: We imported about a quarter billion dollars of Bitcoin mining equipment, the containers and ASICs, to Paraguay last year. So that depreciation is still hitting us quarter over quarter, and we have four-year depreciation for the GPUs. Of course, as we have GPUs from the past and bring online more, that is really where that non-cash number comes from. Quarter over quarter and year over year, I am very pleased it was a strong quarter. Growth 10% in revenue quarter over quarter. 74% growth year over year, again, driven by the expansion in Paraguay. Moreover, if you look at the earnings from operations, again, that figure USD 15.2 million, that is up 86% quarter over quarter. Again, last quarter, January, February, March, we saw the downturn on February. Mining economics were the lowest they have been. We navigated that.

Speaker #2: Quarter over quarter and year over year. I'm very pleased it was a strong quarter growth 10 percent in revenue quarter over quarter 74 percent growth year over year again driven by the expansion in Paraguay and moreover if you look at the earnings from operations again that figure 15.2 million that's up 86 percent quarter over quarter again last quarter Jen Feb March we saw the downturn February mining economics were the lowest they've been we navigated that still with a business generating 8 million on a cash basis this quarter April May June that number almost doubled to 15.2 million and year over year that number is up about 50 percent.

Aydin Kilic: Still with the business generating $8 million on a cash basis this quarter, April, May, June, that number almost doubled to $15.2 million. Year over year, that number is up about 50%. Again, having a lean and mean corporate G&A, we have made a lot of strategic hires to scale the HPC business, but we really want to focus, does the business fundamentally on a cash basis make money? What is your revenue? What are your direct operating costs or your COGS? Of course, your corporate G&A. You can find this nicely summarized on page 20 of the MD&A, but here it is graphically represented. This is a breakdown of the Bitcoin mining versus HPC revenue. Currently, our HPC revenue is represented by the GPU cloud revenue.

Speaker #2: So again, having a lean and mean corporate G&A, we've made a lot of strategic hires to scale the HPC business, but we really want to focus: does the business, fundamentally, on a cash basis, make money? So, what is your revenue, what are your direct operating costs or your COGS, and of course, your corporate G&A?

Speaker #2: And you can find us nicely summarized on page 20 of the MD&A, but here it is graphically represented. This is a breakdown of the Bitcoin mining versus HPC revenue.

Speaker #2: Currently, our HPC revenues, represented by the GPU cloud revenue of $7.1 million for the quarter, represent about 10 percent of the total revenue this quarter, and $72 million is from Bitcoin mining, about 90 percent.

Aydin Kilic: $7.1 million for the quarter represents about 10% of the total revenue this quarter, and $72 million is Bitcoin mining, about 90%. I want to point a couple of things out. The last four quarters, the previous four quarters, we were doing roughly $5 million a quarter. We were at that $20 million ARR figure. In May, that B200 cluster went online in Bell Canada's Winnipeg facility, and that got us to $7 million of actual revenue for the quarter. You are seeing that growth, and that number is going to continue to grow, and we are going to explore why. Just looking at the quarterly analysis, Bitcoin mining revenue grew 7% quarter over quarter, 77% year over year, again, having Paraguay fully at scale. Of course, as I mentioned, HPC is growing.

Speaker #2: But I want to point a couple things out. So, the last four quarters—the previous four quarters—we were doing roughly $5 million a quarter. We're at that $20 million ARR figure.

Speaker #2: Well, in May, that B200 cluster went online in Bell Canada's Winnipeg facility, and that got us to $7 million of actual revenue for the quarter. So you're seeing that growth, and that number is going to continue to grow, and we're going to explore why.

Speaker #2: But just looking at the quarterly analysis, Bitcoin mining revenue grew 7 percent quarter over quarter and 77 percent year over year. Again, having Paraguay fully at scale, and of course, as I mentioned, HPC is growing.

Speaker #2: So if you look at that $7 million realized for the quarter of HPC revenue, that's about $28 million ARR if you annualize it. Let's go to the next slide.

Aydin Kilic: If you look at that $7 million realized for the quarter of HPC revenue, that is about $28 million ARR if you annualize it. Let us go to the next slide. That means by Q2, we exited the quarter at $28 million ARR. We are actually doing $35 million ARR today because we are about $97,000 daily HPC revenue. Here is the big news, everybody. We have hit a massive milestone I am so excited to share. Team has done a tremendous job, and we are at $180 million of contracted revenue because we just announced a new five-year deal which adds $70 million ARR to our HPC business unit. This is new. This is brand new. We just announced it this morning. This is in addition to the Cohere deal, which we announced a few months ago.

Speaker #2: Well, that means in Q2 we exited the quarter at $28 million ARR. We're actually doing $35 million ARR today because we're at about $97,000 daily HPC revenue.

Speaker #2: But here's the big news, everybody. We have hit a massive milestone—so excited to share! The team's done a tremendous job, and we are at $180 million of contracted revenue, because we just announced a new five-year deal which adds $70 million in ARR to our HPC business unit. And this is new news.

Speaker #2: This is brand new. We just announced it this morning. This is in addition to the Cohere deal, which we announced a few months ago.

Speaker #2: So you now have $180 million of combined active and contracted revenue. We're very excited. This is a five-year contract that we just announced. These are GB 300s—2,088 GB 300s are going to go to the Bell Merritt facility. These will be delivered and deployed in Q4.

Aydin Kilic: You now have $180 million of combined active and contracted revenue. We are very excited. This is a five-year contract that we just announced. These are GB300s, 2,088 GB300s are going to go to the Bell Merritt facility. These will be delivered in Q4. It is a five-year contract for a $350 million total contract value. Therefore, $70 million ARR. Super excited. We funded the acquisition of these GPUs using proceeds from our June convert, where we did the $130 million convert, 0% coupon. Lenovo is our partner for the OEM on these GPUs. This gets us to that sweet $180 million number. By the way, we are still targeting $200 million ARR for the GPU cloud business with Q4. We still have more GPUs to bring online in the pipeline. We are at critical mass now, ladies and gentlemen. Very exciting.

Speaker #2: It is a five-year contract for a $350 million total contract value. Therefore, $70 million ARR. Super excited. We funded the acquisition of these GPUs using proceeds from our June convert, where we did the $130 million convert—0 percent coupon. Lenovo is our partner for the OEM on these GPUs.

Speaker #2: And this gets us to that that sweet sweet 180 million dollar number. And by the way we're still targeting 200 million ARR for the GPU cloud business with before we still have more GPUs to bring online in the pipeline but we're we're at critical mass now.

Speaker #2: Lisa and gentlemen, so very exciting. And of course, this will go into the Bell Merritt facility, which will be closed-loop, liquid-cooled, ultra low PUE.

Aydin Kilic: This will go into the Bell Merritt facility, which will be closed loop, liquid cooled, ultra low PUE. I was actually just there last week on a site tour. The facility is looking phenomenal. That Merritt facility will house both the Cohere cluster of GB200s and this new GB300 cluster. This is with an investment grade global technology giant that we signed this deal with. That is fantastic. They are actually putting a 10% down deposit of total contract value, about $35 million. That is very exciting. If you zoom out and look at the total contract value now of the cluster deals we signed, we are up $600 million of GPU cloud TCV signed this year. The BUZZ team has done a tremendous job. Craig Tavares, Mark Volk, Mario Sergi, they have all been doing a phenomenal job.

Speaker #2: I was actually just there last week on a site tour. The facility is looking phenomenal. That Merritt facility will house both a Cohere cluster of GB200s and this new GB300 cluster, and this is with an investment-grade global technology giant that we signed a deal with.

Speaker #2: So that's fantastic, and they're actually putting a 10% down deposit of total contract value, about $35 million. So that's very exciting. If you zoom out and look at the total contract value now of the cluster deals we signed, we are up to $600 million of GPU cloud TCP signed this year.

Speaker #2: This year, the Buzz team has done a tremendous job—Craig Tavares, Mark Volk, Mario Sergi—they've all been doing a phenomenal job. Gabriel Igby, really the whole executive team, him, of course Darcy, everybody has been working around the clock to make this a reality.

Aydin Kilic: Gabriel Ibghy, really the whole executive team, him, of course, Darcy Daubaras, everybody has been working around the clock to make this a reality. Of course, it all really started with Frank Holmes' vision when we ordered those NVIDIA GPUs back in 2021 to pivot from Ethereum mining to HPC cloud. To see here today that we have got $600 million in total contract value signed really this year. Our market cap is about $800 million. You see how attractive we are. I think that the stock should be due to re-rate with this fantastic news. These are long-term contracts. We told the Street when we were doing our converts to fund this growth, that we were going to focus on long-term 3 to 5-year contracts, which is exactly what we have done.

Speaker #2: And of course, you know, it all really started with Frank's vision when we ordered those NVIDIA GPUs back in 2021 to pivot from Ethereum mining to HPC cloud.

Speaker #2: So, to see here today that we've got $600 million in total contract value signed, really this year, and our market cap is about $800 million.

Speaker #2: So you see how attractive we are, and so I think that the stock should be due to re-rate with this fantastic news. And these are long-term contracts.

Speaker #2: We told the Street when we were doing our converts to fund this growth that we were going to focus on long-term, three- to five-year contracts, which is exactly what we've done.

Speaker #2: The Cohere contract is a three-year, $225 million TCB, and this new GB300 contract with the global tech giant, which is investment grade, is a five-year deal. So, very exciting stuff.

Aydin Kilic: The Cohere contract, 3-year, $225 million TCV, and this new GB300 contract with the global tech giant, investment grade, is a 5-year deal. Very exciting stuff. Of course, that is a snapshot, a picture there of one of our actual clusters. This is a snapshot of the two convert deals we did this quarter in April and in June. Collectively, almost a quarter billion dollars to zero coupon debt, 5-year bonds. We did purchase a capped call for each to minimize dilution. The capped call conversion premium, $4.92 for the April bond, and then $8.53 for the June bond. Those capped calls are very attractive as you minimize dilution and of course, having that zero coupon interest. We are delivering on our promises. The proceeds from these notes were to go towards the acquisition of these GPUs.

Speaker #2: And of course, that is a snapshot—a picture there—of one of our actual clusters. So, this is a snapshot of the two convert deals we did this quarter, in April and in June.

Speaker #2: Collectively almost a quarter billion dollars zero coupon debt five-year bonds. We did purchase a capped call for each so to minimize dilution. So the capped call conversion premium four dollars and 92 cents for the April bond and then eight dollars and 53 cents for the June bond.

Speaker #2: Those capped calls are very attractive, as you minimize dilution and, of course, have that zero coupon interest. So we are delivering on our promises. The proceeds from these notes were to go towards the acquisition of these GPUs, which, by the way, we still financed. We put a healthy down payment down and tried to minimize our cost of capital all the way around, and then have financing for the rest.

Aydin Kilic: Which by the way, the GPUs we still finance. We put a healthy down payment down and try to minimize our cost of capital all the way around, and then have financing for the rest. Targeting about 20% to 30% down per GPU cluster and the balance you finance. This is just an overview for all the analysts and enthusiasts out there if you want the granular details of the three deals we have now. Three deals in Bell AI Fabric data centers in the Winnipeg facility and of course the Merritt facility. Those are going to get delivered and deployed in Q4 of this year. The GB200 cluster for Cohere and the GB300 we just announced. We talked about that landmark $180 million of contracted revenue. Here is the breakdown.

Speaker #2: I'm targeting about 20 to 30 percent down per GPU cluster, and the balance you finance. So this is just an overview for all the analysts and enthusiasts out there if you want the granular details of the three deals we have now.

Speaker #2: So, three deals in Bell AI fabric data centers: in the Winnipeg facility and, of course, the Merritt facility. Those are going to get delivered and deployed in Q4 of this year.

Speaker #2: The GB 200 cluster for Cohere and the GB 300 we just announced. So, we talked about that landmark $180 million of contracted revenue.

Speaker #2: Here's the breakdown again. This is a really handy slide if you want to pause on this slide—for all the analysts and enthusiasts out there—it shows you that we have approximately 5,500 GPUs online today doing $35 million ARR, and then the two large clusters coming online in Q4, which brings us to 9,800 GPUs contracted or active, bringing us to a $180 million ARR target.

Aydin Kilic: Again, this is a really handy slide if you want to pause on this slide for all the analysts and enthusiasts out there. It shows you that we have the approximately 5,500 GPUs online today doing $35 million ARR, and then the two large clusters coming online in Q4, which brings us to 9,800 GPUs contracted or active, bring us to that $180 million ARR target. Again, by the way, our year end, we are still targeting $200 million by Q4. We still got some more bullets in the chamber, so to speak. But for the most part, we have done a tremendous job. It is August and we are already at $180 million of that $200 million target that we had. So very proud of the team. It has been a tremendous quarter, and I think it is going to be an amazing year. Let us go to the next slide.

Speaker #2: And again, by the way, our year-end—we're still targeting $200 million by Q4. We've still got some more bullets in the chamber, so to speak, but for the most part, we've done a tremendous job.

Speaker #2: It's August, and we're already at $180 million of that $200 million target that we had. So, very proud of the team; it's been a tremendous quarter, and I think it's going to be an amazing year.

Aydin Kilic: So very proud of the team. It has been a tremendous quarter, and I think it is going to be an amazing year. Let us go to the next slide.

Speaker #2: Let's go to the next slide. We also announced an LOI for our growth initiative. This is an HPC colo lease. This is for $45 million ARR.

Aydin Kilic: We also announced an LOI for our Odin site, and this is an HPC Colo lease. This is for $45 million ARR. We announced it in June. 25 megawatts of IT load. So I want to pause here and let this sink in. We are at $180 million of active and contracted revenue today with our GPU cloud business. If you add this $45 million ARR HPC colo deal, which we will announce the total deal size, how many years, et cetera, when we announce the definitive, which we hope to announce before the end of September, then it puts us at $225 million ARR of contracted HPC revenue with cloud and colo. I think that is really exciting because our target was $200 million for the end of the year. So we are blowing past that target ahead of schedule once this deal is announced formally.

Speaker #2: We announced it in June—25 megawatts of IT load. So, I want to pause here and let this sink in: we are at $180 million of active and contracted revenue today.

Speaker #2: With our GPU cloud business, if you add this $45 million ARR HPC colo deal—which we will announce, including total deal size, how many years, etc., when we announce a definitive, which we hope to announce before the end of September—then it puts us at $225 million ARR of contracted HPC revenue with cloud and colo.

Speaker #2: And I think that's really exciting because our target was $200 million for the end of the year, so we're blowing past that target ahead of schedule.

Speaker #2: Once this deal is announced formally—but I just want to put that into context. So, really exciting stuff. Nothing's slowing down. We just announced this $350 million, five-year GPU cloud deal, the GB300s, and we've already got another bullet in the chamber.

Aydin Kilic: I just want to put that into context. So really exciting stuff. Nothing is slowing down. We just announced this $350 million five-year GPU cloud deal, the GB300s, and we have already got another bullet in the chamber. So really exciting. Let us hop to the next slide because I want to underscore the value proposition. The value proposition, if you look at having a diversified sum of the parts valuation, we have still got the Bitcoin mining doing about 750,000 a day of revenue, $275 million ARR to date. We have got the $180 million signed contracted revenue, including $35 million of active. Then, of course, once we bring online that Boden HPC colo deal, what you can look at here is if you look at the multiples that our peers are trading at.

Speaker #2: So, really exciting. Let's hop to the next slide, because I want to underscore the value proposition. The value proposition, if you look at having a diversified sum-of-the-parts valuation: we've still got the Bitcoin mining doing about $750,000 a day of revenue, $275 million ARR today.

Speaker #2: We've got the $180 million in signed contracted revenue, including $35 million of active, and then, of course, once we bring online that Bowden HPC colo deal, what you can look at here is, if you look at the multiples that our peers are trading at.

Speaker #2: So, on the cloud, looking at the CoreWeave, the Mobius Irons of the world, it's about a five and a half times based on two-year forward revenue.

Aydin Kilic: On the cloud, looking at the CoreWeave, Nebius, IRENs of the world, it is about a 5.5x based on two-year forward revenue multiple. If you look at the HPC colo, your TeraWulfs, your Ciphers, your Hut 8s, it is about almost 11x multiple. So if you apply those multiples and do a sum of the parts, then you have the nominal valuation based on where our peers are, such as Marathon Digital, CleanSpark, that still have large hash rate online, the composite sum is a $2 billion enterprise value. Again, we are hoping to announce this Boden HPC colo lease before the end of September. So I think that there is a lot of real exciting near-term value growth. In fact, I think with the announcement, again, of this GB300 deal, we are due to re-rate as we have massively grown our ARR to that $180 million contracted number.

Speaker #2: The multiple—and if you look at the HPC colo, your WOLFs, your Ciphers, your HUDs—it's about almost an 11x multiple. So if you apply those multiples to, and do, a sum of the parts, and then you sort of have the nominal valuation based on where our peers are such as Marathon, Queens Park, that still have large hash rate online, the composite sums at a $2 billion enterprise value.

Speaker #2: And again, we're hoping to announce this Bowden HPC colo lease before the end of September. So I think that there's a lot of really exciting near-term value growth.

Speaker #2: In fact, I think with the announcement again of this GB300 deal, we’re due to re-rate, as we’ve massively grown our ARR to that $180 million contracted number.

Speaker #2: But this is the case for a $2 billion enterprise value near-term based on where our peers are trading. So, to recap—I know there's a lot going on.

Aydin Kilic: This is the case for a USD 2 billion enterprise value near term based on where our peers are trading. Recap, I know it is a lot going on. We huddle every day over nine time zones. We operate in three continents, in Europe, North America, and South America. We have 35 million ARR active to date. Again, that really bold and 180 million contracted GPU cloud revenue ARR. Then that lease, which was announced in June for Boden. Again, we also announced the Gigafactory in May, so that was technically in this Q2. Just giving you a quarterly recap. It was a very dynamic quarter, so very excited. Here is a bit of a double-click on this Boden data center LOI. It is 32 megawatts of utility load, which will be 25 megawatts of IT load. We have a fit test complete.

Speaker #2: We huddle every day over nine time zones. We operate in three continents: Europe, North America, and South America. And we've got $35 million ARR active today.

Speaker #2: Again, that really golden $180 million contracted GPU cloud revenue ARR. And then that lease, which was announced in June for Bowden, and again, we also announced the Gigafactory in Mace.

Speaker #2: That was technically in this Q2, so just giving you a quarterly recap. It was a very dynamic quarter, so very exciting. Here's a bit of a double-click on this Bowden data center LOI.

Speaker #2: So it's 32 megawatts of utility load, which will be 25 megawatts of IT load. We have a fit test complete. We have a Tier III data center builder to actually do some Tier IV as well.

Aydin Kilic: We have a tier 3 data center builder. They actually do some tier 4 as well. It is very prevalent in the Swedish market. They have been at it for nine months. This is not something that we just picked up last week, guys. We just announced the LOI, so that is why it is new news. This is a legacy site. We have been operating here since 2018. This is the GPU super site where HIVE was mining with 130,000 GPUs Ethereum in the Ethereum mining heyday, almost 6% of the network at its peak. What the catalyst is, the catalyst was that we got approval from the Boden municipality to buy this building because this was a long-term lease with the municipality. They actually own the building, and we just got approval to buy it. That was the catalyst that suddenly made it an HPC co-location conversion candidate.

Speaker #2: It's very prevalent in the Swedish market. They've been at it for nine months. This isn't something that we just picked up last week, guys.

Speaker #2: So, we just announced that LOI, so that's why it's new news. But this is a legacy site—we've been operating here since 2018. This is the GPU Super Site where HIVE was mining with 130,000 GPUs, Ethereum, in the Ethereum mining heyday—almost 6 percent of the network at its peak.

Speaker #2: And what the catalyst is, the catalyst was that we got approval from the Bowden municipality to buy this building, because this was a long-term lease with the municipality.

Speaker #2: They actually owned the building, and we just got approval to buy it. That was the catalyst that suddenly made it an HPC colocation conversion candidate.

Speaker #2: And so that was the big news in June. And here it is by the numbers, what it works out to. And that colo rate, by the way, is about $150 a kilowatt a month.

Aydin Kilic: That was the big news in June. Here it is by the numbers, what it works out to. That colo rate, by the way, is about USD 150 a kilowatt a month. Very strong, very comparable to some primary US markets that we have seen our peers sign data center deals for colo throughout the US. Very exciting. Now, once we announce the definitive deal, we will have the total contract value, we will have the length of the lease. Right now, on an indicative basis, you know that it is 45 million ARR HPC colo, and it is with an investment grade Swedish offtaker as well, a telco company. We have talked about the Gigafactory, the crown jewel of our Canadian assets. We announced this in May, and of course, this slide was in our last quarterly update.

Speaker #2: So, very strong, very comparable to some primary US markets. We've seen our peers sign data center deals for colo throughout the US.

Speaker #2: So, very exciting. Once we announce the definitive deal, we'll have the total contract value. We'll have the length of the lease, but right now, on an indicative basis, you know, that's $45 million ARR HPC colo.

Speaker #2: And it's with an investment-grade Swedish off-taker, as well as a telco company. So we've talked about the Gigafactory, the crown jewel of our Canadian assets.

Speaker #2: We announced this in May, and of course, this slide was in our last quarterly update. But here it is again, just as a frame of reference.

Aydin Kilic: Here it is again, just as a frame of reference. Expect a lot of news as we advance this site. It is very exciting. We expect to energize the site end of 2027 and have compute come on early 2028. Our dual engine strategy. We are at approximately USD 850,000 to date, and that comes from USD 750,000 a day of mining Bitcoin. We have 24 exahash operational. It is actually 25.3 installed. We just optimize with firmware and downclocks the machines. Again, we are in bear market economics, so how do you maximize your profit? That is throwing off about 275 million ARR. Then on, of course, BUZZ with the HPC is about USD 97,000 a day. You add that up, it is about USD 850,000 a day of total revenue. If you look at our COGS and SG&A, so total cash costs to run the company globally.

Speaker #2: Expect a lot of news as we advance this site; it's very exciting. We expect to energize the site end of '27 and have compute come on early '28.

Speaker #2: Our dual engine strategy—we are at approximately $850,000 today, and that comes from $750,000 a day mining Bitcoin. We've got 24 exahash operational; it's actually 25.3 installed.

Speaker #2: We just optimize with firmware and downclock the machines. Again, we are in bear market economics. So, how do you maximize your profit? That's running off of about $275 million ARR.

Speaker #2: And then, of course, Buzz with the HPC is about 97,000 days. So you add that to total revenue. And if you look at our COGS and SG&A, so total cash cost to run the company globally—again, I always like to go to page 20 and 21 of the MD&A.

Aydin Kilic: Again, I always like to go to page 20 and 21 of the MD&A. It has a nice chart. It is my favorite page in the MD&A, which is a long and it is a great document for all the analysts and enthusiasts out there. If you add our total operating cost, about $63 million for the quarter, it is about $690,000 a day. As CEO, that is just a good number I like to have at the tip of my fingers because if we are doing $850,000 of daily revenue on a cash basis and our global operating cost, everything, going to conferences, paying for data centers, electricity, you name it, salaries, everything, it is about $690,000 a day. That means we are printing, we are doing about over $150,000 a day of profit. That just gives you a sense of the health of the business.

Speaker #2: Got a nice chart; it's my favorite page in the MD&A, which is long—and it's a great document for all the analysts and enthusiasts out there.

Speaker #2: If you add our total operating cost, about $63 million for the quarter, exports of about $690,000 a day. And as CEO, that's just a good number.

Speaker #2: I like to have that at the tip of my fingers because if we're doing $850,000 of daily revenue on a cash basis, and our global operating costs—everything going to conferences, paying for data centers, electricity, you name it, salaries, everything.

Speaker #2: It's about $690,000 a day. That means we're printing—we're doing about over $150,000 a day of profit. So that just gives you a sense of the health of the business.

Speaker #2: And I know, again, you have all these non-cash charges and accounting treatments, etc. I'm an engineer. I just want to know, as a businessman, fundamentally, are we making money on a cash basis?

Aydin Kilic: I know, again, you have all these non-cash charges and accounting treatments, et cetera. I am an engineer, I just want to know as a businessman, fundamentally, are we making money on a cash basis? Yes. Great. Let us look forward. Once we get to that $180 million contract and those go live in Q4, once those go live in Q4, it is really easy math. $180 million of GPU cloud business, about $500,000 a day. What does that mean? Hash rates can vary, but let us just assume mining economics are similar in the next three to four months, which is not far away. We are in August right now. That would be $750,000 a day on Bitcoin mining and $500,000 a day on HPC, which includes our GPU cloud revenue.

Speaker #2: Yes, great. Let's look forward. So once we get to that $180 million contract and those go live in Q4—once those go live in Q4, it's really easy math.

Speaker #2: $180 million of GPU cloud business is about $500,000 a day. So what does that mean? Well, I mean hash price can vary, but let's just assume mining economics are similar.

Speaker #2: In in you know the next three to four months which is not far away. We're in August right now. That would be 750 grand a day on Bitcoin mining and 500,000 a day on HPC which includes our GPU cloud revenue.

Speaker #2: So that's about 40 percent of global revenue, is what the HPC business is going to constitute, with Bitcoin being 60 percent. So again this quarter, it's 10 percent AI and 90 percent Bitcoin mining.

Aydin Kilic: That is about 40% of global revenue is what the HPC business is going to constitute with Bitcoin being 60%. Again, this quarter, it is 10% AI and 90% Bitcoin mining. Within the next few months, that is going to be 40% on the AI and 60% on Bitcoin mining. So really exciting outlook on the dual engine strategy. Zooming out global power footprint, we have 860 MW globally. That includes 440 MW active of Tier 1 sites. Of course, the additional 420 MW, which is 100 MW in Yguazú that we are building out, a substation, of course, the Gigafactory in the Greater Toronto area. What you can see on this slide to try to make it easy for the viewers is the sites that we have highlighted in green are sites that we own the land. These are sites that are candidates for conversion to Tier 3.

Speaker #2: Within the next few months, that's going to be 40% on the AI and 60% on Bitcoin mining. So, really exciting outlook on the dual engine strategy.

Speaker #2: Zooming out, our global power footprint is 860 megawatts. That includes 440 megawatts active at tier one sites, and of course, the additional 420 megawatts, which includes 100 megawatts in Iwazu that we’re building out.

Speaker #2: A substation, of course, at the Gigafactory in the Greater Toronto Area. So, what you can see on this slide, to try to make it easy for the viewers, is the sites that we've highlighted in green are sites where we own the land.

Speaker #2: These are sites that are candidates for conversion to Tier 3. And if you tally that number up, it's about a 440-megawatt pipeline between Canada and Sweden for our conversion to Tier 3, which is very exciting.

Aydin Kilic: If you tally that number up, it is about 440 MW pipeline between Canada and Sweden for our conversion to Tier 3, which is very exciting. By the way, there is on top of that, Yguazú as well. So it is very exciting. I think that if you look at the value proposition and what that looks like on a revenue basis on our two-year vision, let us go to the next slide. So on the left, GPU cloud, on the right, HPC colo. Again, we are at $180 million contracted today. We went over that earlier in the presentation. We still have some room in Quebec to put another 500 B300s in. That will add $20 million ARR. So our end of year target is actually $200 million ARR on the GPU cloud business, and we are so close to that given that we are at $180 million contracted now.

Speaker #2: And by the way, there's, on top of that, Iwazu as well. So it's very exciting. And I think that if you look at the value proposition and what that looks like on a revenue basis, on our two-year vision—let's go to the next slide.

Speaker #2: So, on the left, GPU cloud; on the right, HPC colo. So again, we are at $180 million contracted today. We went over that earlier in the presentation.

Speaker #2: We still have some room in Quebec. Let's put another 500 B300s in. That'll add $20 million ARR. So our end-of-year target is actually $200 million ARR.

Aydin Kilic: So our end of year target is actually $200 million ARR on the GPU cloud business, and we are so close to that given that we are at $180 million contracted now.

Speaker #2: On the GPU cloud business, we're so close to that, given that we're at $180 million contracted now. And then, on the right-hand side, if you look at the portfolio of sites—the Toronto site, or both of our Boding sites, of course New Brunswick, and the Gigafactory.

Aydin Kilic: On the right-hand side, if you look at the portfolio of sites, the Toronto site or both of our Boden sites, of course, New Brunswick and the Gigafactory. On an HPC colo basis, 325 MW of critical IT load would generate at prevailing lease rates, $150 a kilowatt in Boden, $130 in New Brunswick, so on and so forth. The Gigafactory I believe is about $160 a kilowatt. If you do the math, what that works out to, the common sense, $500 million of HPC colo revenue with these sites being developed over the next 2 years. On a total basis between AI cloud and HPC colo, $700 million ARR, and that is very exciting. By the way, any one of the sites on the right, HPC colo, we could stand up GPUs as well. We have that optionality.

Speaker #2: On an HPC colo basis 325 325 megawatts of critical IT load. Would generate at prevailing lease rates you know 150 megawatt 150 bucks a kilowatt in boating.

Speaker #2: 130 in New Brunswick, so on and so forth. Gigafactory leaves about $160 a kilowatt. If you do the math, what that works out to is the competent sum.

Speaker #2: $500 million of HPC colo revenue with these sites being developed over the next two years. So on a total basis, between AI cloud and HPC colo, $700 million ARR.

Speaker #2: And that's very exciting. Now, by the way, at any one of the sites on the right—HPC colo—we could stand up GPUs as well.

Speaker #2: We have that optionality. If we did that, those sites on the right would be able to accommodate over—very exciting. Of course, Big Boating has already been earmarked for HPC colo, but just to give you a flavor, the other sites—New Brunswick, GTA Gigafactory, and the Toronto Airport site—we still have the optionality if you want to send up more cloud.

Aydin Kilic: If we did that, those sites on the right would be able to accommodate over 120,000 GPUs. That is very exciting. Of course, Boden has already been earmarked for HPC colo, but just to give you a flavor. The other sites, New Brunswick, GTA Gigafactory, and the Toronto Airport site, we still have the optionality if we want to stand up more cloud. To keep it simple right now, we have done the research. We have had talks with parties that are interested in colo any of these sites. That number on prevailing market rates, $500 million target ARR, plus of course, the $200 million for GPU cloud. $700 million is the number to take away from this slide. That is the vision. Plus, of course, the Bitcoin mining revenue. Where will Bitcoin mining be over the next 2 years? Of course, it depends on hashprice.

Speaker #2: But to keep it simple, right now we've done the research. We've had talks with parties that are interested in colo at any of these sites.

Speaker #2: That number, based on prevailing market rates, is a $500 million target ARR. Plus, of course, there's $200 million for GPU cloud. $700 million is the number to take away from the slide.

Speaker #2: That's the vision. Plus, of course, the Bitcoin mining perfume. Now, where will Bitcoin mining be over the next two years? Of course, it depends on hash price, but if it's worth that today, that puts us collectively at almost $1 billion of combined revenue.

Aydin Kilic: If it is where it is at today, that puts us collectively at almost $1 billion of combined revenue. So it is very exciting. As we continue to grow, we want to see the stock re-rate, search for the lowest cost of capital. Convertible, or we have seen high yield bonds being used to finance the construction of data centers. A lot of our peers have done that. We are exploring that as well. Of course, the convertible bond market, we did two of those deals this year, has worked out very well for us. Of course, leveraging vendor finance for the GPUs as GPUs are emerging as an asset class. So we have got a very methodical and forward-looking strategic cost of capital to plan to realize this growth. Let us go to the next slide. Honest sum of the parts, $5.2 billion is the implied enterprise value.

Speaker #2: It's very exciting as we continue to grow. We want to see the stock re-rate and search for the lowest cost of capital—convertibles. We've seen high-yield bonds being used to finance the construction of data centers.

Speaker #2: A lot of our peers have done that. We are exploring that as well. Of course, the convertible bond market—if we did two of those deals this year—has worked out very well for us.

Speaker #2: And of course, leveraging vendor finance for the GPUs, as GPUs are emerging as an asset class. So, we've got a very methodical and forward-looking strategic cost of capital plan to realize this growth.

Speaker #2: Let's go to the next slide. On a sum of the parts, $5.2 billion is the implied enterprise value. If you look at having $200 million of GPU cloud revenue, $500 million of HPC colo revenue, and again you apply those industry multiples.

Aydin Kilic: If you look at having $200 million of GPU cloud revenue, $500 million of HPC colo revenue, and again, you apply those industry multiples. This is actually a base case. We are not even using our pure multiples. We are discounting a bit. We are going 3.5x on cloud and 8x on colo. Then of course, you have the Bitcoin mining business. Puts it at a $5.2 billion base case, and you can see here how you get to that number doing the sum of the parts. If you actually go to where our peers are trading and you use the same multiples, the mid-range case is actually a $7 billion market cap USD as we scale towards those revenue targets we presented. So that is very exciting. On the upside case, depending, some peers trade at higher multiples, as high as $8 billion.

Speaker #2: This is actually a base case. We're not even using our peer multiples or discounting a bit. We're going three and a half ex on cloud and eight ex on colo.

Speaker #2: And then, of course, you have the Bitcoin mining business, which puts a $5.2 billion base case, and you can see here how you get to that number during the sum of the parts.

Speaker #2: If you actually go to where our peers are trading and you use the same multiples, the mid-range case is actually $7 billion market cap USD.

Speaker #2: As we scale towards those revenue targets we presented, that's very exciting. And on the upside case, you know, some peers trade at higher multiples, as high as $8 billion.

Speaker #2: But really, to be conservative, we say the base case is $5 billion. And again, these are sites we own. This is land and power that’s secured, or sites that are operational that are conversion candidates to tier three.

Aydin Kilic: But really to be conservative, we say the base case is $5 billion. Again, these are sites we own. This is power, land and power that is secured or sites that are operational that are conversion candidates to tier 3, and of course the growth in our GPU cloud business. A summary of the land and power we are advancing on that. We have talked about everything except Paraguay. We have completed the civil work. We have talked about that all summer. We just had two 80 MVA transformers installed. By the way, in June we announced the proof of concept between New York and Asunción. That is the cherry on top, I would say. Stay tuned for updates there, but just a little bit of eye candy for everybody. Let us go to the next slide.

Speaker #2: And, of course, the growth in our GPU cloud business—a summary of the land and power we are advancing on that. We've talked about everything except Paraguay.

Speaker #2: So, we have completed the civil work. We've talked about that all summer. We just had 280 NVA transformers installed. And, by the way, in June we announced the proof of concept between New York and Husson Sion.

Speaker #2: So that is the cherry on top. I would say stay tuned for updates there, but just a little bit of eye candy for everybody.

Speaker #2: Let's go to the next slide. Here is one of those 80 NVA transformers that were just delivered and dropped on the site last week.

Aydin Kilic: Here is one of those 80 MVA transformers that were just delivered and dropped on the site last week. Again, we were doing the civil work. This is heavy civil infrastructure, guys. We are trenching. There are large concrete pads that go deep underground, et cetera. Of course, you have cables and so forth. This is a 200-megawatt substation in Yguazú that is going to have an additional 130 megawatts of utility load from these two 80 MVA substations, which will allow for 100 megawatts of IT load. This is just at Yguazú in the backyard of the Itaipu Hydro dam. It is a 1.2-gigawatt substation regionally that we feed off of, which directly feeds off the Itaipu Dam, which is a 14-gigawatt dam. Yeah, just letting you know a lot of things happening and progressing in the background.

Speaker #2: So again, we were doing the civil work. This is heavy civil infrastructure, guys. We're trenching. There are large concrete paths that go deep underground, etc.

Speaker #2: Of course, you've got cables and so forth. This is a 200-megawatt substation in Iwazu that is going to have an additional 130 megawatts of utility load.

Speaker #2: From these 280 NVA substations, which will allow for 100 megawatts of IT load—this is just at Iwazu, in the backyard at the Itaipu hydro dam.

Speaker #2: It's a 1.2-gigawatt substation regionally that we feed off of, which directly feeds off the Itaipu Dam, which is a 14-gigawatt dam. So, yeah, just letting you know a lot of things are happening.

Speaker #2: And progressing in the background. Again, we are data center builders, developers, and operators. So we do everything from substation construction, maintaining substations, of course building the data centers, and operating them.

Aydin Kilic: Again, we are data center builders and developers and operators, so we do everything from substation construction, maintaining substations, of course building the data centers and operating them. Steady progress on all fronts around the world. Just a little bit of context. Yguazú is very close to São Paulo. Why São Paulo? São Paulo is where the hyperscalers in Latin America are mostly serviced out of. There is a data center park in São Paulo. NVIDIA's Latin American headquarters are in São Paulo. São Paulo is kind of the hub for Latin America, but most of the data centers there are 1, 5, or 10 megawatts. This will be, we believe, based on our market research, the largest AI factory in Yguazú with 100 megawatts of critical IT load. Design development is underway as well.

Speaker #2: So, steady progress on all fronts around the world. Just a little bit of context: So, Iwazu is very close to São Paulo.

Speaker #2: And why São Paulo? Well, São Paulo is where the hyperscalers in Latin America are mostly serviced. There's a data center park in São Paulo.

Speaker #2: Nvidia's Latin American headquarters is in São Paulo, so São Paulo is kind of the hub for Latin America. But most of the data centers there are 1, 5, or 10 megawatts.

Speaker #2: So this will be, we believe based on our market research, the largest AI factory in Iwazu, with 100 megawatts of critical IT load. We're completing a basis of design.

Aydin Kilic: We are completing a basis of design, so stay tuned for updates there. This is a little bit of a geographic snapshot of how close we are to the region that is currently serving all of Latin America. Again, with that proof of concept we did earlier this year, we are in talks with different groups there. There is a lot of international interest in Latin America as the market emerges. Let us go to the next slide. Looking at the last 12 months. Here you have the revenue, and here you have earnings from operations. $330 million of revenue in the last 12 months. I would say that is very impressive. Almost $1 million a day we have done. Again, that is navigating the downturn. In calendar Q1 of this year, for the entire market, it was tough.

Speaker #2: So stay tuned for updates there. That's a little bit of a geographic snapshot of how far we are, how close we are to the region that is currently serving all of Latin America.

Speaker #2: And again, with that proof of concept we did earlier this year, we're in talks with different groups. There is a lot of international interest.

Speaker #2: In Latin America, as you know, the market emerges. Let's go to the next slide. Looking at the last 12 months, here you've got the revenue.

Speaker #2: And here you have earnings from operations. So, $330 million of revenue in the last 12 months—I would say that is very impressive. Almost a million dollars a day we've done.

Speaker #2: And again that's navigating the downturn. You know in Q calendar Q1 of this year it was it for for the entire market it was tough.

Aydin Kilic: But we persevere, we optimize, and on a cash basis, we still made money every quarter. So again, that earnings from operations is revenue minus cost of goods sold, minus corporate SG&A. We have done USD 80 million of earnings from operations in the last 12 months, which I think is very impressive. Again, we have seen bull markets and bear markets in the last 12 months. By the way, we are showing five quarters here. I realize that. It is just since you can do the year-over-year comp as well. If you look at the last 12 months, that is what those sums are. Let us actually zoom out and look at how the industry has done. I think what is overlooked, everyone is so hyper-focused on the next year or 2. That is great. We have got a 2-year target of USD 700 million ARR.

Speaker #2: But, you know, we persevere. We optimize. And, on a cash basis, we still made money every quarter. So, again, that earnings from operations is revenue.

Speaker #2: Minus cost of goods sold. Minus corporate SG&A. So we have done $80 million of earnings from operations in the last 12 months, which I think is very impressive.

Speaker #2: And again, we've seen bull markets and bear markets in the last 12 months. And, by the way, we're showing five quarters here. I realize that's just so you can do the year-over-year comp as well.

Speaker #2: But if you look at the last 12 months, that's what those sums are. But let's actually zoom out and look at how the industry has done.

Speaker #2: So, I think what's overlooked is that everyone is so hyper-focused on the next year or two. That's great; we've got a two-year target of $700 million ARR. We're at $180 million contracted revenue now in GPU Cloud.

Aydin Kilic: We are at USD 180 million contracted revenue now in GPU cloud. That is great. That is great. I think it is about getting the story in front of peers. By the way, we should be Russell 2000 qualified by end of this year. We are, of course, filing U.S. GAAP now. Principal executive office is in San Antonio. We are very much aware of the. It is important to have a strong presence in the US capital markets. Let us look at the actual revenue. We have done, amongst this peer group here, and you have got USD 2 billion and USD 10 billion companies represented here. We have done more revenue than all of our peer groups, USD 331 million in the last 12 months. Some of our peers have done half of that, which is interesting. In some cases, Bitfarms' revenue is actually trending down. We get it.

Speaker #2: So, that's great. That is great. And I think it's about getting the story in front of peers. By the way, we should be Russell 2000.

Speaker #2: Qualified by end of this year. We, of course, filed in US GAAP. Now, principal executive office is in San Antonio. We're very much aware.

Speaker #2: It's important to have a strong presence in the US capital markets. Let's look at the actual revenue we've done amongst this peer group. Here, in these, you've got $2 billion and $10 billion companies represented here.

Speaker #2: We've generated more revenue than all of our peer groups—$331 million in the last 12 months. Some of our peers have done half of that.

Aydin Kilic: Some of our peers have done half of that, which is interesting. In some cases, Bitfarms' revenue is actually trending down. We get it.

Speaker #2: Which is interesting. In some cases, that farm’s revenue is actually trending down. We get it. People are focusing on HPC conversion and colo. And we are too.

Aydin Kilic: People are focusing on HPC conversion and co-lo, and we are too. I think it is important to point to a track record. We stood up 300 megawatts in 6 months in Paraguay. We have got 9,800 GPUs now contracted, 5,500 active. We are not only pointing to the growth, but we are actually doing it today. I think it is very noteworthy to point out a strong track record of accomplishment is a good indicator of future success, at least in our opinion at HIVE. We get it. It is all about megawatts, powered labs. If you look at what we have got secured in our pipeline, when you compare that to our peers, we have a very healthy 860 megawatts. Of course, you have got the Hut 8s of the world with 2 gigawatts. But outside of them, our pipeline is in line.

Speaker #2: But I think it's important to point to a track record. We stood up 300 megawatts in six months in Paraguay. We've got 90,100 GPUs now contracted.

Speaker #2: 5,500 active. So we are not only pointing to the growth, but we are actually doing it today. And so I think it's very noteworthy to point out a strong track record of accomplishment is a good indicator of future success.

Speaker #2: At least in our opinion, a high. We get it. It's all about megawatts powered land. So if you look at what we've got secured in our pipeline, and you compare that to our peers, we're at a very healthy 860 megawatts.

Speaker #2: And so, of course, you know, you've got the HUTs of the world with 2 gigawatts. But, you know, outside of them, our pipeline is in line.

Aydin Kilic: I think it is really just framing this in context for the Street. I think HIVE is an incredibly attractive value proposition now. We have got some really smart money in our cap table, and we look forward to growth, and our team is working hard around the clock to build value for our shareholders. This is just a quick crib sheet for you as Bitcoin price fluctuates, that USD 60,000, USD 70,000, USD 80,000. This is just what the mining margin is after electrical costs using an indicative 5 cent OPEX. You could see how hashprice varies versus Bitcoin price, et cetera. Right now we are sort of in the 36% range, given where Bitcoin is, 36% to 40% margin on that 750 grand daily revenue that we are at right now. Just a handy reference slide.

Speaker #2: So I think it's really just framing this in context for the Street. I think it has an incredibly attractive value proposition now. You know, we've got some really smart money in our cap table.

Speaker #2: And we look forward to growth, and our team is working hard around the clock to build value for our shareholders. This is just a quick crib sheet for you.

Speaker #2: As Bitcoin price fluctuates—$67,000, $60,000, $70,000, $80,000—this is just what the mining margin is after electrical costs, using an indicative 5-cent opex.

Speaker #2: You could see how hash price varies versus Bitcoin price, etc. So right now, we're sort of in the, you know, 36% range given where Bitcoin is.

Speaker #2: We have a 36 to 40% margin on that $750,000 daily revenue that we're at right now. So just a handy reference slide. And I'm going to turn it over to Mr. Darcy Daubaras, the longest-standing CFO in the industry.

Aydin Kilic: I am going to turn it over to Mr. Darcy Daubaras, the longest standing CFO in the industry since 2018. Darcy, thank you so much, and the team working tirelessly. It was a super solid quarter. Over to you.

Speaker #2: Since 2018. Darcy, thank you so much. And the team working tirelessly—it was a super solid quarter. Over to you. Thank you, Aydin. I’ll take the next few minutes to walk through Hive's financial results for the first quarter of fiscal 2027.

Darcy Daubaras: Thank you, Aydin. I will take the next few minutes to walk through HIVE's financial results for the Q1 of fiscal 2027. This was a strong quarter from an operating perspective. We delivered significant year-over-year revenue growth, improved our gross operating margin in dollar terms, returned to positive adjusted EBITDA, and substantially strengthened our liquidity position. At the same time, our reported GAAP net loss was significantly impacted by several non-cash items, most notably a provision associated with the ongoing Swedish tax matter, which I will discuss in more detail. Before getting into the financial results, I will briefly highlight our capital structure. At 30 June 2026, HIVE had approximately 271 million common shares outstanding, together with approximately 3 million warrants, 2.6 million options, and 16.7 million restricted share units.

Speaker #2: This was a strong quarter from an operating perspective. We delivered significant year-over-year revenue growth and improved our gross operating margin in dollar terms.

Speaker #2: We returned to positive adjusted EBITDA and substantially strengthened our liquidity position. At the same time, our reported GAAP net loss was significantly impacted by several non-cash items.

Speaker #2: Most notably, a provision associated with the ongoing Swedish tax matter, which I'll discuss in more detail. Before getting into the financial results, I'll briefly highlight our capital structure.

Speaker #2: As of June 30, 2026, HIVE had approximately 271 million common shares outstanding, together with approximately 3 million warrants, 2.6 million options, and 16.7 million restricted share units.

Darcy Daubaras: Our shares continue to trade on the Toronto Stock Exchange and Nasdaq under the simple HIVE, as well as on the Colombia Stock Exchange under HIVECO. Turning to our Q1 financial highlights, there are several numbers I want to emphasize. HIVE generated $79.1 million of revenue, compared with $45.6 million in the same quarter last year. Bitcoin mining remained our largest contributor, generating $72.1 million of revenue, while our HPC and AI business contributed approximately $7 million. Importantly, our gross operating margin increased to $24.2 million, compared with $15.8 million in the prior year quarter. We also generated positive adjusted EBITDA of $13.4 million. Our reported EBITDA was -$86.3 million, and our GAAP net loss was -$142.9 million. However, there is an important distinction between the operating performance of the business and the reported GAAP loss this quarter.

Speaker #2: Our shares continued to trade on the Toronto Stock Exchange and NASDAQ under the symbol HIVE, as well as on the Colombian Stock Exchange under HiveCo.

Speaker #2: Turning to our first quarter financial highlights, there are several numbers I want to emphasize. HIVE generated $79.1 million of revenue, compared with $45.6 million in the same quarter last year.

Speaker #2: Bitcoin mining remained our largest contributor, generating $72.1 million of revenue, while our HPC and AI business contributed approximately $7 million. Importantly, our gross operating margin increased to $24.2 million compared with $15.8 million in the prior year quarter.

Speaker #2: We also generated positive adjusted EBITDA of $13.4 million. Our reported EBITDA was negative $86.3 million, and our GAAP net loss was $142.9 million. However, there is an important distinction between the operating performance of the business and the reported GAAP loss this quarter.

Darcy Daubaras: The net loss included an $84.7 million non-cash provision related to regulatory liabilities associated with our ongoing Swedish VAT dispute. It also included $53.7 million of depreciation, $7.1 million of share-based compensation, and the impact of fair value adjustments. While those items are appropriately reflected in our U.S. GAAP financial statements, they are important to consider when evaluating the underlying performance operationally of the business. We ended the quarter holding 190 Bitcoin in treasury. Stepping back from the individual line items, three numbers really summarize the quarter for me. First, revenue of $79.1 million demonstrates the increased scale of HIVE's operations. Second, adjusted EBITDA of $13.4 million returned to positive territory after negative adjusted EBITDA in the Q4. Third, we produced approximately 1,004 Bitcoin equivalent during the quarter.

Speaker #2: The net loss included an $84.7 million non-cash provision related to regulatory liabilities associated with our ongoing Swedish VAT dispute. It also included $53.7 million of depreciation, $7.1 million of share-based compensation, and the impact of fair value adjustments.

Speaker #2: So while those items are appropriately reflected in our US GAAP financial statements, they are important to consider when evaluating the underlying operational performance of the business.

Speaker #2: We ended the quarter holding 190 Bitcoin in treasury. Stepping back from the individual line items, three numbers really summarize the quarter for me. First, revenue of $79.1 million demonstrates the increased scale of HIVE's operations.

Speaker #2: Second, adjusted EBITDA of $13.4 million returned to positive territory after negative adjusted EBITDA in the fourth quarter. And third, we produced approximately 1,004 Bitcoin equivalent during the quarter.

Darcy Daubaras: Taken together, these metrics demonstrate the operating leverage we are beginning to see from the investments we have made in our global infrastructure. We continue to balance growth in our core Bitcoin mining operations with the development of our higher value HPC and AI infrastructure business. That operating performance is supported by a substantially stronger liquidity position. We finished June with $208 million of cash, compared with approximately $23 million at 31 March. In addition, we held approximately $11.2 million of digital currencies, $10.9 million of investments, and $18.9 million of receivables and prepaids. Total current assets were approximately $280 million, compared with current liabilities of approximately $143 million. The increase in cash primarily reflects the financing activity completed during the quarter, including our exchangeable senior note offerings and proceeds from our ATM program.

Speaker #2: Taken together, these metrics demonstrate the operating leverage we're beginning to see from the investments we've made in our global infrastructure. We continue to balance growth in our core Bitcoin mining operations with the development of our higher value HPC and AI infrastructure business.

Speaker #2: That operating performance is supported by a substantially stronger liquidity position. We finished June with $208 million of cash, compared with approximately $23 million at March 31st.

Speaker #2: In addition, we held approximately $11.2 million of digital currencies, $10.9 million of investments, and $18.9 million of receivables and prepaids. Total current assets were approximately $280 million, compared with current liabilities of approximately $143 million.

Speaker #2: The increase in cash primarily reflects the financing activity completed during the quarter, including our exchangeable senior note offerings and proceeds from our ATM program.

Darcy Daubaras: These financings have provided HIVE with significant liquidity as we continue investing in our Bitcoin mining infrastructure and increasingly focusing on our HPC and AI growth initiatives. Our objective remains to maintain financial flexibility while deploying capital into opportunities that we believe can generate attractive long-term returns for shareholders. Turning from the balance sheet back to operations, gross operating margin showed meaningful year-over-year improvement. We generated $24.2 million during the quarter, compared with $15.8 million in Q1 of last year. That is an increase of approximately 53% year-over-year. This is particularly noteworthy given the substantial increase in the scale of our operations during the past year. Our basic loss per share was $0.54, compared with earnings per share of $0.19 in the comparable quarter.

Speaker #2: These financings have provided HIVE with significant liquidity as we continue investing in our Bitcoin mining infrastructure and increasingly focusing on our HPC and AI growth initiatives.

Speaker #2: Our objective remains to maintain financial flexibility while deploying capital into opportunities that we believe can generate attractive long-term returns for shareholders. Turning from the balance sheet back to operations, gross operating margin showed meaningful year-over-year improvement.

Speaker #2: We generated $24.2 million during the quarter, compared with $15.8 million in Q1 of last year. That's an increase of approximately 53% year over year.

Speaker #2: This is particularly noteworthy given the substantial increase in the scale of our operations during the past year. Our basic loss per share was $0.54 compared with earnings per share of $0.19 in the comparable quarter.

Darcy Daubaras: Again, the current quarter loss per share reflects the significant non-cash charges recorded during the quarter, particularly the Swedish regulatory provision and depreciation associated with our expanded infrastructure base. The year-over-year comparison really demonstrates the increased scale of the business. Revenue increased from $45.6 million to $79.1 million, representing growth of approximately 73%. At the same time, gross operating margin increased from $15.8 million to $24.2 million, an increase of approximately 53%. As a percentage of revenue, gross operating margin was 31% compared with 35% in the prior year period. While the percentage margin moderately somewhat, the absolute dollars of gross operating margin increased significantly as we expanded the scale of the business. This is an important measure for us because it demonstrates our ability to generate positive operating contribution with a substantially larger revenue base. Sequentially, the trend is also encouraging.

Speaker #2: Again, the current quarter loss per share reflects the significant non-cash charges recorded during the quarter, particularly the Swedish regulatory provision and depreciation associated with our expanded infrastructure base.

Speaker #2: The year-over-year comparison really demonstrates the increased scale of the business. Revenue increased from $45.6 million to $79.1 million, representing growth of approximately 73%.

Speaker #2: At the same time, gross operating margin increased from $15.8 million to $24.2 million, an increase of approximately 53%. As a percentage of revenue, gross operating margin was 31%, compared with 35% in the prior year period.

Speaker #2: So, while the percentage margin moderated, or at least somewhat, the absolute dollars of gross operating margin increased significantly as we expanded the scale of the business.

Speaker #2: This is an important measure for us because it demonstrates our ability to generate positive operating contribution on a substantially larger revenue base. Sequentially, the trend is also encouraging.

Darcy Daubaras: Revenue increased from $71.8 million in the fourth quarter to $79.1 million in Q1, an increase of approximately 10%. More importantly, gross operating margin increased from $17.5 million to $24.2 million, or approximately 38% quarter-over-quarter. Gross operating margin as a percentage of revenue improved from 24% to 31%. Sequentially, we saw improvement in revenue, operating margin dollars, and the margin percentage. That combination is a positive indicator of the underlying operating performance of the business as we entered fiscal 2027. From an earnings perspective, it is important to distinguish between our underlying operating results and the impact of several significant non-cash items. Adjusted EBITDA was $13.4 million, compared with $44.6 million in the same quarter last year. The year-over-year decline reflects a number of factors, including the changing economics of Bitcoin mining and the increased operating cost base associated with our expanded global infrastructure.

Speaker #2: Revenue increased from $71.8 million in the fourth quarter to $79.1 million in Q1, an increase of approximately 10%. More importantly, gross operating margin increased from $17.5 million to $24.2 million, or approximately 38% quarter over quarter.

Speaker #2: Gross operating margin as a percentage of revenue improved from 24% to 31%. So, sequentially, we saw improvement in revenue, operating margin dollars, and the margin percentage.

Speaker #2: That combination is a positive indicator of the underlying operating performance of the business as we entered fiscal 2027. From an earnings perspective, it's important to distinguish between our underlying operating results and the impact of several significant non-cash items.

Speaker #2: Adjusted EBITDA was $13.4 million, compared with $44.6 million in the same quarter last year. The year-over-year decline reflects a number of factors, including the changing economics of Bitcoin mining and the increased operating cost base associated with our expanded global infrastructure.

Darcy Daubaras: Our reported U.S. GAAP results moved from net income of $35 million in the prior year quarter to a net loss of $142.9 million this quarter. The most important point when interpreting that result is the magnitude of the non-cash items. The quarter included the $84.7 million regulatory provision associated with the Swedish VAT matter, together with $53.7 million of depreciation, as well as share-based compensation and fair value adjustments. The Swedish provision reflects our accounting assessment following the adverse court of appeal adjustments. We continue to pursue the available legal avenues in Sweden. Accordingly, we believe adjusted EBITDA provides investors with an additional perspective on the underlying operating performance of the business alongside our U.S. GAAP results. Finally, looking at earnings sequentially provides another useful perspective on the quarter. Adjusted EBITDA improved significantly.

Speaker #2: Our reported US GAAP result moved from net income of $35 million in the prior year quarter to a net loss of $142.9 million this quarter.

Speaker #2: Again, the most important point when interpreting that result is the magnitude of the non-cash items. The quarter included the $84.7 million regulatory provision associated with the Swedish VAT matter, together with $53.7 million of depreciation, as well as share-based compensation and fair value adjustments.

Speaker #2: The Swedish provision reflects our accounting assessment following the adverse Court of Appeal adjustments. We continue to pursue the available legal avenues in Sweden. Accordingly, we believe adjusted EBITDA provides investors with an additional perspective on the underlying operating performance of the business alongside our US GAAP results.

Speaker #2: And finally, looking at earnings sequentially provides another useful perspective on the quarter. Adjusted EBITDA improved significantly. We moved from negative $9 million of adjusted EBITDA in Q4 to positive $13.4 million in Q1.

Darcy Daubaras: We moved from -9 million of adjusted EBITDA in Q4 to +13.4 million in Q1, an improvement of more than $22 million. That improvement is consistent with the stronger revenue and gross operating margin performance we discussed on the previous slides. Our U.S. GAAP net loss increased from $76.3 million in Q4 to $142.9 million this quarter. Again, the comparison is heavily affected by the $84.6 million non-cash Swedish regulatory provision recorded in Q1. For that reason, we believe it is important to look at both the U.S. GAAP results and the operating metrics when assessing the quarter. Overall, we entered fiscal 2027 with a larger revenue base, improving sequential operating margins, positive adjusted EBITDA, and a substantially strengthened liquidity position.

Speaker #2: An improvement of more than $22 million. That improvement is consistent with the stronger revenue and gross operating margin performance we discussed on the previous slides.

Speaker #2: Our US GAAP net loss increased from $76.3 million in Q4 to $142.9 million this quarter, but again, the comparison is heavily affected by the $84.6 million non-cash Swedish regulatory provision recorded in Q1.

Speaker #2: For that reason, we believe it's important to look at both the US GAAP results and the operating metrics when assessing the quarter. Overall, we entered fiscal 2027 with a larger revenue base, improving sequential operating margins, positive adjusted EBITDA, and a substantially strengthened liquidity position.

Darcy Daubaras: That financial position provides us with flexibility as we continue executing on both sides of HIVE's strategy, operating our existing Bitcoin mining business efficiently while investing in the growth of our HPC and AI infrastructure platform. With that, I will turn the presentation back over to Nathan.

Speaker #2: That financial position provides us with flexibility as we continue executing on both sides of the HIVE strategy—operating our existing Bitcoin mining business efficiently while investing in the growth of our HPC and AI infrastructure platform.

Speaker #2: With that, I'll turn the presentation back over to Nathan.

Nathan Fast: Thank you, Darcy. That concludes the presentation portion of today's call. We will now begin the question and answer portion of our call. Analysts on the line, if you could please click raise hand when you are ready with your questions, we will begin to choose and ask you to unmute. Our first question comes from the line of Joe Vafi from Canaccord. Joe, feel free to unmute. Proceed with your question.

Speaker #1: Thank you, Darcy. That concludes the presentation portion of today's call. We will now begin the question and answer portion of our call. Analysts on the line, if you could please click 'Raise Hand' when you're ready with your questions.

Speaker #1: We will begin the Q&A. Please unmute yourself. Our first question comes from the line of Joe Vafi from Canaccord. Joe, feel free to unmute and proceed with your question.

Joseph Vafi: Hey, guys. Good morning. Great progress in the business, especially this new cloud deal with the investment-grade tenant. Maybe we could double-click on that. I know it's a 5-year deal. Could we get some, perhaps, initial thoughts on if you've run some IRRs on the GPU investment? What kind of returns, potentially, you're getting there, and maybe some additional thoughts on CapEx here to fund the build-out. I know you've got a deposit. I know you've done some of your convert deals. Just kind of what the rest of the financing stack might look like here. I have a quick follow-up. Thanks.

Speaker #3: Hey guys, good morning. Great progress in the business, especially this new cloud deal with the investment-grade tenant. Maybe we could double-click on that.

Speaker #3: I know it's a five-year deal. Could we get some, perhaps, initial thoughts on if you've run some IRRs on the GPU investment? What kind of returns, potentially, are you getting there? And maybe some additional thoughts on capex here to fund the build-out.

Speaker #3: I know you've got a deposit. I know you've done, you know, some of your convert deals. Just kind of what the rest of the financing stack might look like here, and I have a quick follow-up.

Speaker #3: Thanks.

Aydin Kilic: Hey, Joe. This is Aydin. Great question. Thanks for tuning in. It was good to see you last week at the conference in Boston. Having that 5-year term locked in, we put in the press release, CapEx is about $185 million for the GPU cluster, of course, with the InfiniBand and so forth, really just to have an NVIDIA reference architecture design for the 2016 GPUs. If you kind of do the math indicatively model, of course, it'll be delivered and deployed in Q4. We're expecting EBITDA to land in the 75% to 80% range. If you do the math, you're paying off the GPUs completely in about 3 years, and the balance of that 2-year term is free cash flow. You effectively bake in a 1.6x return, roughly speaking, on the GPUs, and then you own them outright after the term.

Speaker #4: Thank you, Joe. This is Aydin. Great question. Thanks for tuning in. It was good to see you last week at the conference in Boston. So, you know, having that five-year term locked in—we put in the press release CapEx is about $185 million for the GPU cluster.

Speaker #4: Of course with the InfiniBand and and and so forth. I'm really just to have Nvidia reference architecture design for the 2016 GPUs. And so if if you kind of do the math indicatively model of course the it'll be delivered and deployed in in Q4.

Speaker #4: So we're expecting EBITDA to land in the 75% to 80% range. And so, if you do the math, you're paying off the GPUs completely in about three years.

Speaker #4: And the balance of that two-year term is free cash flow. So you effectively bake in, you know, a 1.6x return, roughly speaking.

Speaker #4: On the GPUs, and then you load them out right after the term. Now we've also financed the GPUs, so we're putting a portion down.

Aydin Kilic: Now we've also financed the GPU, so we're putting a portion down, about 20% down of the cost of the GPUs. We can provide subsequent market updates with the financing terms. Really, the inaugural release was to let The Street know that we've now hit that $180 million ARR target, well on our way to the $200 million target end of year, and to show The Street that we were delivering and deploying the promises from our converts in April and June to use that capital as down payments to lock in these GPUs. The financing actually doesn't kick in towards when the GPUs ship, and so as we get closer to the deployment dates, et cetera. POs are secured for the GPUs, and that means they go into production, which is so critical, and that's really what locks in.

Speaker #4: About 20 percent down of the cost of the GPUs. And so we can provide subsequent market updates with the financing terms, but really the inaugural release was to let the street know that we've now hit that $180 million ARR target, while on our way to the $200 million target by end of year.

Speaker #4: And to show the street that we were delivering and deploying the promises from our converts in April and June. To use that capital as down payments to lock in these GPUs. The financing actually doesn't kick in until the GPUs ship.

Speaker #4: And so, as we get closer to the deployment dates, etc., the POs are secured for the GPUs, and that means they go into production, which is so critical.

Speaker #4: And that's really what locks in. So us having the capital from our converts, the $245 million collectively that we raised, allows us to have those GPU POs accepted, hardware going into production, and then of course you've got a shipping date, which is important and critical for the off-taker, for the client.

Aydin Kilic: It's having the capital from our converts, the $245 million collectively that we raised allows us to have those GPUs, POs accepted, hardware going into production, and then, of course, you've got a shipping date, which is important and critical for the off-taker, for the client, so they have assurance that the infrastructure and by the way, the data center's ready. I was actually just at the Bell Merritt facility 2 weeks ago doing a diligence visit with one of the lenders, and I'm going again tomorrow for another trip. Things are really moving forward. I hope that covers your questions.

Speaker #4: So, they have assurance that the infrastructure—and, by the way, the data center—is ready. I was actually just at the Bell Merritt facility two weeks ago doing a diligence visit with one of the lenders, and I'm going again tomorrow for another trip.

Speaker #4: So, things are really moving forward, and yeah, I hope that covers your questions.

Joseph Vafi: The deal sounds like it is well on its way. Down in Paraguay, I know there is a lot of things going on. The substations are going in for that additional build. The benchmark testing has been done. What should we be looking for down there as kind of a next step in the evolution of that power portfolio? Thanks a lot.

Speaker #3: Thank you Joe. Sounds like you know it's well under well on its way. And then down in Paraguay I know there's a lot of things going on the substations are going in for that additional build.

Speaker #3: You know, the benchmark testing's been done. What should we be looking for down there as kind of a next step, you know, in the evolution of that power portfolio?

Speaker #3: Thanks a lot.

Aydin Kilic: Mm-hmm. I would say the next thing to look forward to, it is just updates as we work through the basis of design. I am actually planning to go to Paraguay at the end of September. I have got a trip to New York planned the third week of September, then I will actually stop in São Paulo. I plan to visit NVIDIA down there, then go straight to Asunción, do a site tour. So we are engaged with a design build firm that has built a lot of data centers in the region. We are working through a basis of design. So I think as we work through that process, we will be providing updates just the same way that we put a photo of the substation being deployed last week. So we will keep The Street updated with progress as we work towards that.

Speaker #4: I would say the next thing to look forward to is just updates as we work through the basis of design. I'm actually planning to go to Paraguay at the end of September.

Speaker #4: I've got a trip to New York planned, a third week of September. And then I'll actually stop in Sao Paulo, plan to visit Nvidia down there, and then go straight to Asunción to do a site tour. So we're engaged with a design-build firm that's built a lot of data centers in the region. We're working through a basis of design.

Speaker #4: So I think as we work through that process, we'll be providing updates just the same way that we put a photo of the substation being deployed last week.

Speaker #4: So we'll keep the Street updated with progress as we work towards that substation. We expect to be energized towards the end of this calendar year, and in parallel, of course, working through that basis of design.

Aydin Kilic: That substation we expect to be energized towards the end of this calendar year. In parallel, of course, working through that base of design. That is all I am going to say for now. I think we like to let people know as a multinational company, we have progress in different jurisdictions and a lot of the growth, like the revenue growth, is happening in Canada this year with the deployment of these GPU clusters. Of course, we will work on the conversion of the Toronto airport site, the New Brunswick site as well. I was actually just in New Brunswick last week after Boston.

Speaker #4: And that's all I'm going to say for now. I think, really, we'd like to let people know that as a multinational company, we are making progress in different jurisdictions. A lot of the growth, like the revenue growth, is happening in Canada this year.

Speaker #4: With the deployment of these GPU clusters, and of course, we'll work on the conversion of the Toronto Airport site and the New Brunswick site as well.

Speaker #4: I was actually just in New Brunswick last week after Boston. I flew to New Brunswick, to Fredericton, to meet with the provincial government, NB Power, as well, to talk about our vision there.

Aydin Kilic: I flew to New Brunswick to Fredericton, to meet provincial government, NB Power as well, to talk about our vision there to make the New Brunswick site in Grand Falls the largest AI token factory in the Maritimes, which I think will be of national significance. Of course, that complements the gigafactory in Ontario and the Greater Toronto area. So, I would say stay tuned for updates coming out of Canada as we advance the conversion of those data centers. Of course, the Big Boden site. I would say that is actually furthest along because we had that LOI signed with an offtaker as well. The next step there is really to watch out for the definitive agreement to be announced, then that plays into the growth of our ARR targets as well, which was highlighted in my section.

Speaker #4: To make NB the New Brunswick state and Grand Falls the largest AI token factory in the Maritimes, which I think will be of national significance.

Speaker #4: So, and of course, that complements the Gigafactory in Ontario and in the Greater Toronto Area. So I would say stay tuned for updates coming out of Canada as we advance the conversion of those data centers.

Speaker #4: And then, of course, the big Bowden site—I would say that's actually furthest along because we had that LOI signed with an off-taker as well.

Speaker #4: And so the next step there is really to watch out for the definitive agreement to be announced, and then that plays into the growth of our ARR targets as well, which was highlighted in my section.

Aydin Kilic: I would say keep your eyes peeled for updates on Big Boden, Canada, and Paraguay is just the icing on top. We will update the market, but focus on Sweden and Canada for now.

Speaker #4: So I would say keep your eyes peeled for updates on Big Bowden Canada, and then Paraguay is just, you know, the icing on top, and we'll update the market. But focus on Sweden and Canada for now.

Joseph Vafi: Thanks, Aydin. Great work.

Speaker #3: Thanks Aydin. Great work.

Nathan Fast: Thank you, Joe. We will keep the Q&A moving next to Chris Brendler from Rosenblatt.

Aydin Kilic: Thank you, Joe.

Speaker #1: Thanks Joe.

Speaker #4: Thank you Joe.

Nathan Fast: Thank you, Joe. We will keep the Q&A moving next to Chris Brendler from Rosenblatt.

Speaker #1: We'll keep the Q&A moving. Next is Chris Brendler from Rosenblatt.

Chris Brendler: Hey, thanks, Nathan. Good morning, folks. Congrats on the results here. Nice to see the progress in a tough market for Bitcoin, but you guys are executing pretty well. My first question is on the high-performance compute business, given all the progress there, I was hoping you could give us a little color on what you are targeting for a gross margin. In the queue, it looked like it was 44% this past quarter. I know as these contracts ramp up, I think you will become less impacted by the service fees and potentially go a lot higher than 44%. Any thoughts on the target gross margin for the HPC business after signing these contracts? Thanks.

Speaker #5: Hey, thanks, Nathan. Good morning, folks. Congrats on the results here. Nice to see the progress, and you know, tough market for Bitcoin, but you guys are executing pretty well.

Speaker #5: My first question is on the high-performance compute business, given all the progress there. I was hoping you could give us a little color on what you are targeting for a gross margin in the quarter.

Speaker #5: It looks like it was about 44 percent this past quarter. I know as these contracts ramp up, I think it will become less impacted by the service fees, and potentially go a lot higher than 44 percent.

Speaker #5: Any thoughts on the target gross margin for the HPC business after signing these contracts? Thanks.

Aydin Kilic: Yeah, that is an insightful question, Chris. Our fleet right now is comprised still of, we have about $20 million of our $35 million active revenue coming from Hopper series GPUs, a combined total of 844 H200s and H100s. The balance is about 4,200 A series cards. The A series cards are legacy. They have been running on cloud since 2023, which is a testament to their fortitude. As older generation cards, those rent out for $0.40 a GPU hour. Keep in mind, an A40 only uses 400 watts. It is still doing almost a dollar a kilowatt hour. Still, of course, as we bring on GB200, GB300s, these are more profit dense per watt. Also, of course, with scale, you get economies of scale.

Speaker #4: Yeah, that's an insightful question, Chris. So, our fleet right now is comprised still of—we've got about $20 million of our $35 million active revenue coming from Hopper Series GPUs, a combined total of 844 H200s and H100s, and then the balance is about 4,200 A Series cards.

Speaker #4: So the A Series cards are legacy. They've been running on cloud since 2023, which is, you know, a testament to their fortitude. But as older generation cards, those rent out for 40 cents a GPU hour.

Speaker #4: Now, keep in mind an A40 only uses 400 watts, so it's still doing almost a dollar per kilowatt hour. But still, of course, as we bring on GB200s, GB300s, these are more profit-dense per watt, and also, of course, with scale, you get economies of scale.

Aydin Kilic: Those two factors, newer generation GPUs coming online at scale, both are indicative drivers for that margin to go up. As we have built the business, of course, you need to have the foundation in place to scale. Some of that cost basis is somewhat fixed. Of course, as the scale grows on a relative basis, that fixed cost diminishes. Hence, you can expect margins to improve substantially.

Speaker #4: So, those two factors—newer generation GPUs coming online at scale—both are indicative drivers for that margin to go up. And again, as we've built the business, of course you need to have the foundation in place to scale.

Speaker #4: So some of that cost basis is somewhat fixed and and of course as as the scale grows you know on a relative basis that that fixed costs you know diminishes.

Speaker #4: So, hence, you know you can expect margins to improve substantially.

Chris Brendler: Okay, great. Thanks, Aydin. That is good color. My second follow-up question is for open jump ball for Frank or Aydin, is the Bitcoin mining business actually doing pretty well? You have gained hash rate share, the gross margins there also improved sequentially, despite pretty tough environment for Bitcoin. We have seen hash price stabilize. Network hash rate has also come down from the peaks. Just wondering how you feel about the Bitcoin mining business at this point and any updated sort of big picture thoughts on Bitcoin. I have been a long-term believer myself and just sort of waiting for the next cycle. Is that kind of what you guys are thinking about it as well, or are we in a new paradigm for Bitcoin? I would love to hear your thoughts. Thanks.

Speaker #5: Okay, great. Thanks, Aydin. That's great color. My second follow-up question is an open jump ball for either Frank or Aydin. You know, the Bitcoin mining business is actually doing pretty well—you've gained hash rate share and the gross margins are there.

Speaker #5: Also improved sequentially despite, you know, a pretty tough environment for Bitcoin. We've seen hash price stabilize; network hash rate has also come down from the peaks. Just wondering how you feel about the Bitcoin mining business at this point, and any updated, sort of, big picture thoughts on Bitcoin.

Speaker #5: I've been a long-term believer myself and just, you know, sort of waiting for the next cycle. Is that kind of what your thoughts are—thinking about it as well, or are we in a new paradigm for Bitcoin?

Speaker #5: I'd love to hear your thoughts. Thanks.

Aydin Kilic: Well, we see hash price sort of stabilize around the $31 per pet hash per day level. We saw lows as low as $28, $27, which was not long-lived, but they for a week or two, and we would see difficulty adjust. It seems that the prevailing floor of this bear market is just above $30 hash price. What does that mean? In our case in Paraguay, we have, I think last time I checked, about 19.5 exahash because we have optimized with firmware and we had earlier in this year, we had some S21 XP orders go down and replace some of the BUZZ Miners. We are actually at 19.5 exahash in Paraguay. That is new generation gear that on a blended average is below 15 joules a terahash. We have a large amount of new generation hash rate.

Speaker #4: Yeah, so we see hash price sort of stabilize around the $31 per petahash per day level. We saw lows as low as $28, $27, which was not long-lived, but they were there for a week or two, and we'd see difficulty adjust.

Speaker #4: So it seems that the prevailing floor of this bear market is just above $30 hash price. So, you know, what does that mean?

Speaker #4: Well you know in our case in got I think last time I checked about 19.5x a hash because we've we've optimized with firmware and we've had earlier in this year we had some S21XP orders go down and replace some of the buzz miners.

Speaker #4: So we're actually at 19.5x a hash in Paraguay. That's new generation gear that, on a blended average, is below 15 joules a terahash. So we've got a large amount of new generation hash rate. Of course, Paraguay's got very attractive power costs too.

Aydin Kilic: Paraguay's got very attractive power costs too. That just forms part of that hash flow engine and a dual engine strategy. I think that it's anyone's guess, of course, with Clarity Act. If that gets pushed through in September, that could be a catalyst. I think the street's really looking for a catalyst for what's going to be the next breakout for Bitcoin price. 100% of our growth is in HPC and AI. Again, we have new generation gear in Paraguay that's performing phenomenally well, very close to 100% uptime. The hydro infrastructure we deployed has worked very well for the climate there. We've made some modifications to it. It's there, it's performing exactly what we expected, and it's throwing off cash flow as we focus on growing the rest of the business. I think that we'll see.

Speaker #4: So that just forms part of that cash flow engine in a dual engine strategy. So I think that it's anyone's guess, of course, with the Clarity Act—if that gets pushed through in September, that could be a catalyst.

Speaker #4: But I think the Street's really looking for a catalyst for what's going to be the next breakout for Bitcoin price. But 100% of our growth is in HPC and AI.

Speaker #4: So again, we have new generation gear in Paraguay that's performing phenomenally well—very, very close to 100 percent uptime. The hydro infrastructure we deployed has worked very well for the climate there.

Speaker #4: We've made some modifications to it, so yeah, it's there. It's performing. It's doing exactly what we expected, and it's throwing off cash flow.

Speaker #4: As we focus on growing the rest of the business. So I think that we'll see. You know Bitcoin always tends to come around. Is it going to is it going to stick with a cyclical four year cycle?

Aydin Kilic: Bitcoin always tends to come around. Is it going to stick with a cyclical four-year cycle? Will the Clarity Act cause a big breakout? We'll see.

Speaker #4: Will the Clarity Act cause a big breakout? We'll see. We'll see.

Chris Brendler: Great. Thanks again, and congrats again on the results.

Speaker #5: All right. Thanks again, and congrats again on the results.

Aydin Kilic: Thank you.

Speaker #4: Thank you.

Nathan Fast: Thank you, Chris. For our next analyst question, we will pass the mic to Mike Grondahl from Northland. Mike, the floor is yours.

Speaker #1: Thank you, Chris. For our next analyst question, we'll pass the mic to Mike Grondle from Northland. Mike, the floor is yours.

Mike Grondahl: Hey, guys. Thank you. Two questions. One, Aydin, is there anything significant left to get the definitive agreement with Boden, or do you just need a little bit of time there? Secondly, could you just talk a little bit about demand trends and pricing trends on both the GPU and the co-location side? Thank you.

Speaker #6: Hey guys, thank you. Two questions. One: Aydin, is there anything significant left to get the definitive agreement with Bowden, or do you just need a little bit of time there?

Speaker #6: And then, secondly, could you just talk a little bit about demand trends and pricing trends on both the GPU and the co-location side?

Speaker #6: Thank you.

Aydin Kilic: The sublease for Big Boden, or sorry, the lease for Big Boden, that process has been advancing. What I can say is that I alluded to in my presentation was a lot of our peers are using corporate bonds, either investment grade or high yield bonds, to finance the construction of these data centers. We see that as an attractive path to raise capital. Moreover, when you, and we are in talks with two lenders on that accord, you want to carefully structure that lease so that the terms are favorable, and you could at least strive towards an IG grade bond instead of a high yield bond. So, it is really just to lower your cost of capital. So, it is an active process whereby we are, I would say, refining. I do not want to give the street obviously an exact date, but we are well on our way.

Speaker #4: So the sublease for big Bowden or sorry the lease for big Bowden that process has been advancing. What I can say is that I I alluded to in my presentation was a lot of our peers are using corporate bonds either investment grade or high yield bonds to finance a construction of these data centers.

Speaker #4: And so we see that as an attractive path to raise capital, and moreover, when you—and we're in talks with two lenders on that accord—you want to carefully, carefully make sure the terms are favorable and you could at least strive towards an IG grade bond instead of a high yield bond.

Speaker #4: And and so really just to lower your cost of capital. So it's an active process whereby you we are I would say refining the I don't I don't want to give the street obviously an exact date but we're we're well on our way.

Aydin Kilic: I do not want to give the street obviously an exact date, but we are well on our way.

Aydin Kilic: The process has been well underway, and it is really just fine-tuning those nuances in the agreement. But yes, we do have a draft that has gone back and forth. So, just stay tuned. I would love to give the street an update sometime in September on that definitive agreement. In terms of demand, I alluded to in previous presentations, we had a B200 cluster on a two-year contract, the first one we deployed in Canada in Winnipeg, 504 GPUs. We rented those at $2.90 an hour. I think six to nine months before, I rented a big deployment of B200s at $2.20 an hour. So what that tells you is that there is increasing demand in the market, and that tells you that you have got continued, I think, CoreWeave came out last week and said that they had GPUs from 2020 that they booked out to 2029.

Speaker #4: The process has been well underway, and it's really just fine-tuning those nuances in the agreement. But yes, we do have a draft that's gone back and forth, and so just stay tuned.

Speaker #4: I'd love to September on that definitive agreement. And in terms of demand, I mean, I alluded to it in previous presentations — we had a B200 cluster on a two-year contract. The first one we deployed in Canada, in Winnipeg: 504 GPUs, and we rented those at $2.90 an hour. And, you know, I think six to nine months before, I rented a big deployment of B200s at $2.20 an hour.

Speaker #4: So what that tells you is that there's increasing demand in the market, and that tells you that you've got continued—I think CoreWeave came out last week and said that they had 20 GPUs from 2020 that they booked out to 2029.

Aydin Kilic: And by the way, if no one was really doing GPU cloud in 2020, they would have been mining Ethereum. We know the CoreWeave guys well, and they used to be Ethereum miners. And so our A40s, we ordered those in 2021. And the margins may not be as fat, but they are still cash flowing those things. So, I think the demand is great. I think that you have frontier labs that are always going to want the latest and greatest hardware from NVIDIA. And then you are going to have other labs, other AI natives that are more than happy with second generation gear. And then people that are just using it for inference that just want the lowest cost per token, they are happy to use GPUs from early Hopper even Ampere generation. So we have seen demand very strong.

Speaker #4: So, those—and by the way, you know, no one was really doing GPU cloud in 2020. They would have been mining Ethereum.

Speaker #4: We we know that core weave guys well and they used to be Ethereum miners and and so our A40s we ordered those in 2021 and the margins are may may not be as as fat but they're still cash flowing those things.

Speaker #4: So I think the demand is great. I think that you've got frontier labs that are always going to want the latest and greatest hardware from Nvidia, and then you're going to have other labs, other AI natives, that are more than happy with second-generation gear.

Speaker #4: And then people that are just using it for inference, that just want the lowest cost per token, they're happy to use GPUs from early Hopper, even Ampere generation.

Speaker #4: So we've seen demand be very strong, and even in our current deployments, we have a lot of stuff we're working at. I'm trying to be mindful with my words here, but we're seeing tremendous demand for new potential deployments of GPUs beyond what we forecast in the earnings presentation today.

Aydin Kilic: And even in our current deployments, we have a lot of stuff we are working at. And I am trying to be mindful of my words here, but we are seeing tremendous demand for new potential deployments of GPUs beyond what we forecasted in the earnings presentation today. We are not stopping at 200 million ARR when we hit that number for GPU cloud. We see the demand taking us well past that number, very far past that number. We just wanted to give the street some very realistic targets that we were going to hit and blow past. So yeah, we are seeing tremendous demand. I would say that if we were to bring online another cluster of 2,000 GPUs, we have numerous parties, some that we have existing agency with, that would happily rent that out on a three-year or longer contract.

Speaker #4: We're not stopping at $200 million ARR when we hit that number for GPU cloud. We see the demand taking us well past that number, very far past that number.

Speaker #4: We just wanted to give the street some very realistic targets that we were going to hit and blow past. So yeah, we're seeing tremendous demand. I would say that if we were to bring online another cluster of 2,000 VPUs, we have numerous parties, some that we have existing agency with, that would happily rent that out on a three-year or longer contract.

Aydin Kilic: So tremendous demand, and so we are very bullish right now, just based on the quality of the off-takers, the economic terms. In some cases, we are seeing dollar per GPU price even higher than what we have seen previously. So it is definitely rising tides environment, which is great for us and our peers in the sector.

Speaker #4: So, tremendous demand, and so we're very bullish right now just based on the quality of the off-takers, the economic terms. In some cases, we're seeing dollar-per-GPU prices even higher than what we've seen previously.

Speaker #4: So, it's definitely a rising-tide environment, which is great for us and our peers in the sector.

Mike Grondahl: Yeah. Hey, thank you guys.

Speaker #6: Yeah. Hey thank you guys.

Nathan Fast: Thank you, Mike. Time for a few final questions here. Next, we will go to the line of Bill Papanastasiou from Chardan. Bill, floor is yours.

Speaker #1: Thank you, Mike. Mike, time for a few final questions here. Next, we'll go to the line of Bill Papa Nastasio from Chardon. Bill, the floor is yours.

Bill Papanastasiou: Yeah. Good morning. Thanks for taking my questions, and congrats on the deal announced this morning. Aydin, the team has landed a number of attractive deals standing up GPU clusters. Maybe you can walk us through how management is thinking about weighing co-location opportunities compared to these GPU clusters, given the power portfolio. Thank you.

Speaker #7: Yeah, good morning. Thanks for taking my questions, and congrats on the deal announced this morning. Aydin, the team has landed a number of attractive deals standing up GPU clusters.

Speaker #7: Maybe you can walk us through how management is thinking about weighing co-location opportunities compared to these GPU clusters, given the power portfolio. Thank you.

Aydin Kilic: Yeah, that is a great question, Bill. What we forecast is we have got a target of 10,500 GPUs that we plan to stand up, and that is with our partnership with Bell Canada AI Fabric, and of course, we have got the Merritt British Columbia facility and then the Winnipeg facility, and then our existing sites in Quebec and Sweden. After that, we still have a pipeline of about 400 megawatts in Canada between New Brunswick, the Toronto airport site, and the Gigafactory site. That is about 400 megawatts of utility load. If you look at that, I could tell you right now that the Gigafactory can do 100,000 GPUs, liquid cooled, GB300 spec type of GPUs. New Brunswick would be able to do 20,000. It is 50 megawatts of IT load.

Speaker #4: Yeah, that's a great question, Bill. So, what we forecast is we've got a target of 10,500 GPUs that we plan to stand up, and that is with our partnership with Bell Canada AI Fabric. Of course, we've got the Mirror Bridge Columbia facility, the Winnipeg facility, and then our existing sites in Quebec and Sweden.

Speaker #4: And so after that, we still have a pipeline of about 400 megawatts in Canada, between New Brunswick, the Toronto airport site, and the Gigafactory site.

Speaker #4: So that's about 400 megawatts of utility load. So if you look at that, I could tell you right now that the Gigafactory can do 100,000 GPUs, liquid-cooled, GP300-spec type of GPUs.

Speaker #4: And New Brunswick would be able to do 20,000. It's 50 megawatts of IT load. One of those clusters, roughly one of those clusters of 2,000 GPUs, is roughly 5 megawatts, just for all the analysts—just helpful taking notes, etc.

Aydin Kilic: One of those clusters of 2,000 GPUs is roughly 5 megawatts, just for all the analysts, it is helpful taking notes, et cetera. You could do the math and you could say, "Okay, so that is 120,000 GPUs." We could phase New Brunswick, and we have a two-phase design for New Brunswick now. So we have a very long stretch, a very long pipeline, and we did cite that in our press release that we have a runway for over 120,000 GPUs for the sites that we own. I think that it is looking at what is the value proposition. If you do the math on a dollar per megawatt basis, pick an indicative number, say $150 a kilowatt a month for HPC colo. What that works out to, if you do the math, 1,000 kilowatts, 12 months, is $1.8 million a year of recurring revenue for HPC colo.

Speaker #4: So you could do the math and you could say, okay, so that's 120,000 GPUs. Now, we could phase New Brunswick, and we have a two-phase design for New Brunswick now.

Speaker #4: So we have a very long stretch, a very long pipeline, and we did cite that in our press release—that we have runway for over 120,000 GPUs for the sites that we own.

Speaker #4: So I think that it's looking at what is the value proposition. So if you do the math on a dollar-per-megawatt basis, pick an indicative number—say, $150 per kilowatt a month for HPC colo—what that works out to, if you do the math, is 1,000 kilowatts, 12 months, is $1.8 million a year of recurring revenue.

Speaker #4: For HPC colo, you see our peers are trading at roughly 10x that multiple. So if you looked at it on an enterprise value basis, it's $18 million per megawatt of enterprise value.

Aydin Kilic: And you see our peers are trading at roughly 10x that multiple. If you looked at it on an enterprise value basis, it is $18 million per megawatt of enterprise value cloud. On the other hand, you do 14 million per megawatt per month. So cluster here, we just announced 70 million ARR, 5 megawatts, 14 million ARR. Depending on the multiples right now, it used to be 5x. I think it is trending closer to about 3.5x. So 3.5 times 14, you are well upwards of 50 million enterprise or about 50 million enterprise value per megawatt. If you are in a megawatt-constrained environment, you can get maximum profit density and based on multiples enterprise value by going GPU cloud.

Speaker #4: Cloud on the other hand you do 14 million per megawatt per month. So cluster here we just announced 70 million ARR 5 megawatts 14 million ARR and depending on the multiples right now we used to be 5x I think it's trending closer to about 3 and a half x.

Speaker #4: So you know, 3 and a half times 14, you're well upwards of $50 million ARR enterprise or about $50 million enterprise value per megawatt.

Speaker #4: So if—if you're in a megawatt-constrained environment, you can get maximum profit density, and based on multiples, enterprise value, by going GPU cloud.

Aydin Kilic: That being said, the Street is also clearly rewarding people that are signing long-term fixed agreements because they are looking at the total contract value. If you sign a 15-year offtake agreement, the TCV on that, we have seen some of our peers sign deals as big as almost $9 million for 300 megawatts. So we could take a similar approach for the Gigafactory, and that is why we sort of represented it as such. We give a base case, hey, 360 million ARR if Gigafactory was HPC colo. If you did a 15-year on that, it is a $5 billion contract. We will evaluate what we think is the best opportunity, and bring those to life. But we are very much aware of the economics. It is not like we are done looking for land and power as well. We are constantly on the hunt.

Speaker #4: That being said the street is also clearly rewarding people that are signing long term fixed agreements because they're looking at the total contract value if you sign a 15 year off take agreement the TCV on that you know we've seen some of our peers sign deals the biggest almost 9 million dollars for 300 megawatts.

Speaker #4: So we could take a similar approach for the Gigafactory, and that's why we sort of represented it as such. We give a base case—hey, $360 million ARR if Gigafactory was HPC colo. If you did a 15-year on that, you know, it's a $5 billion contract.

Speaker #4: So it's it's we will we will evaluate what we think is the best opportunity and and bring those to light. But we're very much aware of the economics and it's not like we're we're done looking for land and power as well.

Speaker #4: I mean we're we're constantly on the hunt so I think that it's going to be a really exciting year but I think that it's it's a lot more challenging and it's it requires more capex but we've got the the pedigree to do the GPU cloud business and the you know when you like I was at the EMD keynote that Lisa Sue gave but Craig and I flew down to San Francisco a few weeks ago and when you're actually there in the ecosystem at the industry conferences and you're seeing you know the amount of demand the big players that are coming online that are lining up for the next generation of GPUs it is it is very remarkable.

Aydin Kilic: I think that it is going to be a really exciting year, but I think that it is a lot more challenging and it requires more CapEx, but we have got the pedigree to do the GPU cloud business. I was at the AMD keynote that Lisa Su gave, where Craig and I flew down to San Francisco a few weeks ago. When you are actually there in the ecosystem at the industry conferences and you are seeing the amount of demand, the big players that are coming online, that are lining up for the next generation of GPUs, it is very remarkable. So I think that the GPU cloud business remains very interesting. I think the capabilities it will unlock in the industry will continue to drive demand.

Speaker #4: So I think that the GPU cloud business remains very, very, very interesting. And I think the capabilities that it'll unlock in the industry will continue to drive demand.

Bill Papanastasiou: Appreciate the color. Thanks for answering the question.

Speaker #7: Appreciate the color. Thanks for answering the question.

Nathan Fast: Thank you, Bill. Next question from the line of Brett Knoblauch from Canaccord. Brett, the floor is yours.

Speaker #1: Thank you, Bill. Next question from the line of Brett Nobloch from Cancer. Brett, the floor is yours.

Brett Knoblauch: Hi, guys. Thank you for taking my question. On the GTA site, at what point do you guys have to make a decision to start to break ground and build the data center for that to be ready for service in 2028? Do you need to decide whether that is going to go cloud or colo when you break ground? Or how you would fund the build-out of that, maybe pre-signing a tenant? Just any thoughts on GTA and timing. Thank you.

Speaker #8: Hi guys. Thank you for taking my question. On the GTA site, at what point do you guys have to make a decision to, you know, start to break ground and build the data center for that to be kind of ready for service in 2028?

Speaker #8: And then, do you need to kind of decide whether that's going to go cloud or colo when you break ground, or, you know, how you would fund the build-out of that, and maybe pre-signing a tenant? Yeah, any thoughts on, you know, GTA and timing?

Speaker #8: Thank you.

Aydin Kilic: Yeah. We will provide the Street updates on that project. We have got our basis of design, so I think as you work through the process, we will have more, I think, collateral. Again, there was so much excitement when we announced it in May. It was just to really announce that we secured the land power, and we have got the process well underway from design and permitting. So really just stay tuned, Brett, for more updates on that. In terms of cloud versus colo, it kind of goes back to the last question I answered, where if you just use a nominal prevailing market rate for HPC colo, that site would be over USD 360 million ARR. That site, our design right now is three phases of 80 megawatts of critical IT load in our basis of design.

Speaker #4: Yeah, so we will provide the Street updates on that project. We've got our basis of design, and so I think as you work through the process, we'll have more, I think, collateral. Again, there was so much excitement when we announced it in May.

Speaker #4: I was just really announcing that we secured the land and power, and we've got the process well underway from design and permitting. So really, just stay tuned, Brett, for more updates on that.

Speaker #4: And then in terms of cloud versus colo, it kind of goes back to the last question I answered, where if you just use a nominal prevailing market rate for HPC colo, that site would be over $360 million ARR. But that site, our design right now is three phases of 80 megawatts of critical IT load, and our basis of design.

Aydin Kilic: When you phase that, we could have a government tenant in there doing colo. We can have a hyperscaler. We could maybe have three or four different clients. That is not to say we can have a section of it as GPU cloud. I think that as we advance along that project, there might be a component of it that we have funded purchase of some long lead items, perhaps we did another financing down the road. But right now, we have got the other more near-term projects that we are going to be bringing to market. I think I do not want to prematurely speak on what financing strategy we will take. Obviously, corporate bonds are very attractive. Typically, you are going to want to have a signed offtake agreement for that before you go to market to get a corporate bond.

Speaker #4: And so when you when you phase that we could have a government tenant in there doing colo. We can have a hyperscaler we we you maybe have three or four different clients and that's not to say you know we can have a section of it as as GPU cloud but I think that as as we advance along that project you know there might be a component of it that we we've fund the purchase of some long lead items using perhaps perhaps we did a another financing down the road but right now it's we've got the other more near term projects that we're going to be bringing to market and I think I don't want to prematurely speak on what financing strategy we'll take.

Speaker #4: Obviously, corporate bonds are very attractive. Typically, you're going to want to have a signed offtake agreement for that before you go to market to get a corporate bond.

Aydin Kilic: Just the jurisdiction of that site, the amount of reverse inquiry and demand that we have seen, even in our partnership with Bell Canada, a lot of their enterprise clients, et cetera, Fed gov, there is a lot of demand. We see really just finding the right mix of offtakers, be it HPC or cloud. When you are raising capital, you get that lead order, then it all kind of follows from there. We would undertake. It is a three-phase design, if that helps. We expect the site to be energized end of 2027, with Compute live in early 2028.

Speaker #4: And so again, just the jurisdiction of that site, the amount of reversing career and demand that we've seen, and even in our partnership with Bell Canada—a lot of their enterprise clients, et cetera, FedGov—there's a lot of demand.

Speaker #4: So we see really just finding the right mix of off takers be it HPC or cloud and you know when you kind of when you're raising capital you get that lead order and then it all kind of follows from there.

Speaker #4: And so we would you know undertake but it but it's a three phase design if that helps and you know we expect the site to be energized end of 27 with compute live in early 28.

Brett Knoblauch: Awesome. Thank you, Aydin. Really appreciate it. Congrats on the results.

Speaker #1: Awesome. Thank you, Adam, really appreciate it. Congrats on the results.

Aydin Kilic: Yeah. Thank you.

Speaker #4: Thank you.

Nathan Fast: Excellent. Thank you, Brett. I have time for two more total questions. Let us hear one from Mike Colonnese from H.C. Wainwright. Mike, the floor is yours.

Speaker #1: Excellent. Thank you, Brett. I have time for two more questions. Let's hear one from Mike Colonise from HC Wainwright. Mike, the floor is yours.

Mike Colonnese: Hi. Good morning, guys. Thanks for taking my question and congrats on all the progress on the HPC AI deployments. Great to see. My question is really on CapEx in the H2 of the year and timing to funding. Obviously, you guys have two large GPU clusters that are set to come online over the next couple of quarters. You are doing some design work at a few of your owned and operated data center facilities. So, what are you guys estimating for the total CapEx lift through the H2 here, and then expected timing to secure the funding required to pay down some of these chips? Aydin, I think you mentioned the goal is to pay 20% to 30% of the purchase price and then look for funding for the rest, if I heard that correctly. Any additional color on CapEx would be helpful.

Speaker #5: Hi, good morning, guys. Thanks for taking my question, and congrats on all the progress on the HPC AI deployments—great to see. So, you know, my question is really on capex in the second half of the year and timing to funding. Obviously, you guys have two large GPU clusters that are set to come online.

Speaker #5: Over the next couple of quarters, you're doing some, you know, design work at a few of your owned and operated data center facilities. So, you know, what are you guys estimating for the total CapEx split through the second half here, and then expected timing to secure the funding required to pay down some of these chips? And I think you mentioned the goal is to pay 20 or 30 percent of the purchase price, and then look for funding for the rest, if I heard that correctly.

Speaker #5: So, any additional color on capex would be helpful.

Aydin Kilic: Yeah. The scale in the near term. So getting to our end-of-year target to 200 million ARR on the GPU cloud is through our partnership with Bell Canada, and the AI Fabric facilities are colo. The virtue of that partnership, just to recap for everybody, we are collocating as a tenant in the Bell AI Fabric data centers. There is one in Merritt, BC, and one in Winnipeg. So they have given us a very attractive colo rate below market, and the other virtue of that partnership is that their enterprise customers who are looking for sovereign AI compute, well, BUZZ is the exclusive partner on that accord, so we are building and deploying the GPU clusters in their facilities. So we have seen, for example, Cohere come in as a client and tenant through that partnership. So that was tremendous. Now, what are the other benefits is it is CapEx light.

Speaker #4: Yeah so the the scale of the the scale in the near term so getting to our end of year target to 200 million ARR on the GPU cloud is through our partnership with Bell Canada and the AI fabric facilities are colo.

Speaker #4: So, the virtue of that partnership—just to recap for everybody—we are colocating as a tenant in the Bell AI Fabric data centers.

Speaker #4: There's one in Merritt, BC, and one in Winnipeg. So they've given us a very attractive colo rate below market, and the other virtue of that partnership is that their enterprise customers who are looking for sovereign AI compute, Well Buzz is the exclusive partner on that accord.

Speaker #4: So we're building and deploying the GPU clusters in their facilities. So we've seen, for example, Cohere come in as a client and tenant through that partnership.

Speaker #4: So so that was tremendous now what what are the other benefits it's it's capex light. So being that it's colo we we didn't have to shoulder the capex to bring this compute online.

Aydin Kilic: Now, what are the other benefits is it is CapEx light.

Aydin Kilic: Being that it is colo, we did not have to shoulder the CapEx to bring this compute online. So we think, and as evidenced by the relative valuation slide, there is still a lot of upside very near term when you look at where we would be with a Big Boden lease signed and now that we have got our two big GPU contracts announced as we promised the Street. That was our mandate in April and June. So what I am getting at is, I think there is room for the stock to re-rate, and as the stock re-rates, then you can kind of look at whether we use equity for financing some long lead items for some of these data centers.

Speaker #4: So we think and and you know it's evidenced by the relative valuation slide there's there's still a lot of upside very near term when you look at where we would be with a big bone lease signed and now that we've got our our two big GPU contracts announced as as we promised the street that was our mandate in April and June.

Speaker #4: So we what I'm getting at is I think there's room for the stock to re rate and as the stock re rates then you can kind of look at whether we use equity for financing some long lead items for some of these data centers but again we've seen the the corporate bond strategy investment grade bonds of course being the method of choice to finance a construction of the data center conversions that we have in the pipeline.

Aydin Kilic: But again, we have seen the corporate bond strategy, investment grade bonds, of course, being the method of choice to finance the construction of the data center conversions that we have in the pipeline. So really when you say, "Well, how much CapEx do you need to get through to your end-of-year target of 200 million ARR?" As we put in this press release, a cluster NVIDIA reference architecture worked out to about $185 million. So if you are putting, say, 20% down on that, it is just under $40 million. And then the rest you get GPU vendor financing with a blue-chip lender. And so you are targeting single digit lease to own. What I could say is Directionally, usually the terms of these GPU finance is less than the term of the contract.

Speaker #4: So really when you when you say well how much capex do you need to get through to your end of year target of 200 million ARR as we put in this press release a cluster and video reference architecture worked out to about 185 million so if you're putting say 20 percent down on that it's just under 40 million bucks and then the rest you get GPU vendor financing with with a blue chip lender.

Speaker #4: And so you're targeting single digit least own what I could say is directionally usually these the terms of these GPU finance is is less than the term of the contract and so but again the actual GPU finance kicks in before the GPU is delivered because typically there's a big payment associated with that.

Aydin Kilic: But again, the actual GPU finance kicks in before the GPU is delivered, because typically there is a big payment associated with that. We will provide The Street more updates on IRR, et cetera, the closer we get to the deployment date. But really, the CapEx is just what I described. It is the down payment requirement. Roughly, I am giving you indicative figures here, it is the down payment requirement on the GPU cluster. There are nominal deposits related to the Bell AI Fabric colo, single digit millions, which were paid up a long time ago. That is what is really exciting. I think that the CapEx to convert the small Toronto site is about USD 40 million to bring that to HPC tier 3 liquid cooled, and that would be able to stand up another 2,000 GPUs or do colo.

Speaker #4: And so we'll, we'll kind of provide the street more updates on IRR, etc., the closer we get to the deployment date. But really, yeah, the capex is just what I described.

Speaker #4: It's it's the down payment requirement roughly like I'm giving you an indicative figures here it's the down payment requirement on the GPU cluster and you know there's nominal deposits with related to the Bell AI fabric colo single digit millions which we're we're paid up a long time ago.

Speaker #4: So that's that's what's really exciting I think that the the capex to convert the small Toronto site is is about 40 million to bring that to HPC tier three liquid cooled and that would be able to stand up another 2000 GPUs or do or do colo.

Aydin Kilic: We have had reverse inquiries on that site, just based on where its jurisdiction is. That one is only a 7 MW utility load, 5 MW of IT load. Again, just based on its location, it is very attractive. That is the near term stuff, and I think we put in the deck that it is a USD 200 million CapEx for the Big Boden conversion to get to 25 MW of critical IT load. Again, we have got that LOI signed, definitive in the wings. Those are sort of, I would say, the most near term CapEx figures for you, if that is helpful, Mike. Did I answer the questions?

Speaker #4: We've had reverse increase on that site just based on where its jurisdiction is. That was only a 7-megawatt utility load, 5 megawatts of IT load, but again, just based on its location, it's very attractive.

Speaker #4: So that's kind of the near-term stuff, and I think we put in the deck that it's a $200 million capex for the Big Bone conversion to get to 25 megawatts of critical IT load.

Speaker #4: Again, we've got that LOI signed, definitive in the wings, and those are sort of, I would say, the most near-term capex figures for you, if that's helpful, Mike.

Speaker #4: Did I answer the questions?

Mike Colonnese: Yes, Aydin, great color. Appreciate that.

Speaker #5: Yes, I have a great color. I appreciate that.

Aydin Kilic: You bet.

Speaker #4: You bet.

Nathan Fast: It's Mike. Final question this morning comes from the line of Stephen Glagola from KBW. Steven.

Speaker #1: Thanks, Mike. Final question this morning comes from the line of Stephen Glagola from KBW. Stephen.

Stephen Glagola: Hey, thank you for the question, and congrats on all the cloud progress. For the 84.7 million Swedish tax liability, can you help us understand the likely timing of any cash payment there, and what avenues remain available to mitigate or defer that obligation, and how management intends to fund that liability if it becomes due? Thank you.

Speaker #6: Hey, thank you for the question, and congrats on all the cloud progress. For the 84.7 million Swedish tax liability, can you help us understand the likely timing of any cash payment there, what avenues remain available to mitigate or defer that obligation, and how management intends to fund that liability if it becomes due?

Speaker #6: Thank you.

Aydin Kilic: Yeah. Hi, Steven. We don't plan on funding that liability, is the takeaway. We addressed it in the press release. I would refer you to that as well as Darcy's section. In our opinion, the treatment of taxes is uneven. They gave Northern Data a hard time, too. This is not exclusive to us. It's just how the STA was such a huge fan of Bitcoin mining. We've paid 50 million of tax already from our normal course of operations, and we have advisors in the country, and we've looked at other remedies in terms of appealing and contesting and even going a step above to the European Union. Again, that commentary is detailed in the press release. I would refer you to that.

Speaker #4: Yeah hi Stephen. We don't plan on funding that liability is is the the takeaway we we addressed it in the press release I would refer you to that as well as Darcy section and you know in our opinion the treatment of tax is is uneven it's you know they they gave Northern data a hard time to so this is not exclusive to us it's just how the STA was such a huge fan of Bitcoin mining.

Speaker #4: And and so you know we've paid 50 million of tax already from our normal course of operations and we have advisors in the country and we've looked at other remedies in terms of appealing and contesting and even going a step above to the European Union and and again that that commentary is detailed in the press release I would refer you to that but really we we do not think that that's a good use of shareholder capital to pay down this in my my opinion egregious tax claim and we've paid all the tax that in the normal course of business and again this is related to VAT on A6 so so sort of a fossil a relic from the past if you will that had long been contended for you know really it goes back to 2023 and it's always been there's been our disclosures for the last couple years we haven't paid it we don't plan to pay it and it's just something that we're going to continue to to appeal.

Aydin Kilic: But really, we do not think that that's a good use of shareholder capital to pay down this, in my opinion, egregious tax claim, and we've paid all the tax in the normal course of business. Again, this is related to VAT on ASICs. Sort of a fossil, a relic from the past, if you will, that had long been contended for. Really, this goes back to 2023. It's always been there. It's been in our disclosures for the last couple of years. We haven't paid it, we don't plan to pay it, and it's just something that we're going to continue to appeal. That's really it.

Speaker #4: So that's really it.

Stephen Glagola: Okay. Thank you.

Speaker #5: Okay. Thank you.

Aydin Kilic: You bet.

Speaker #4: You bet.

Nathan Fast: Thank you, Steven. Thank you to all of our analysts. That concludes our Q&A session and our Q1 fiscal 2027 earnings call. Thank you to all of our shareholders and the investment community for joining. We look forward to speaking to you again soon.

Speaker #1: Thank you Stephen. Thank you to all of our analysts. That concludes our Q&A session and our Q1 fiscal 2027 earnings call. Thank you to all of our shareholders and the investment community for joining.

Speaker #1: We look forward to speaking to you again soon.

Operator: Goodbye.