Q1 2026 Soluna Holdings Inc Earnings Call
Speaker #1: Hello and welcome to Soluna's review of Q1 2026 highlights and business update. We look forward to talking through a two-part presentation today. I am John Belisaire, CEO of Soluna Holdings, and I'll cover the business highlights.
Speaker #1: And I'm joined today by our new CFO, Mike Peachie, who will be covering the financial highlights. Pausing for those legal disclosures and disclaimers. First, as always, let's begin with a short company overview.
Speaker #1: Soluna is in the business of building data centers; we live in the confluence between two big major technical and technotic waves taking place in the space.
Speaker #1: On the left side, AI is driving exponential growth and demand for compute. The Bitcoin mining space, miners prefer scalable, well-managed, and cost-advantaged hosting partners.
Speaker #1: On the right side, you have clean energy. Clean energy goes to waste due to curtailment in a number of big, power markets like ERCOT and Texas.
Speaker #1: We bridge the gap between these two worlds by co-locating our data centers behind the meter at renewable power generation. Facilities which enables us to bypass long interconnection queues and improve the power economics and accelerate time to market.
Speaker #1: In essence, we're delivering speed to market to these big markets and, at the same time, addressing a major challenge for the renewable energy space, and that's wasted energy.
Speaker #1: Wasted energy becomes a power to drive the future of computing. So let's look at some of the corporate highlights and metrics we are now have exceeded over 7x a hash, a record for the company as of Q1.
Speaker #1: We have over 147 megawatts managed by the company. That's up from 123 at the end of 2020. 5. And exit the quarter with 9.4 million dollars in revenue.
Speaker #1: Our average power costs is staying within our range of $30 per megawatt hour. We continue to drive curtailed energy monetization. Approaching 49,000 or more than 49,000 megawatt hours consumed.
Speaker #1: And project equity contributed in Q1 exceeded 10.9 million dollars. We now have 58 employees. And our pipeline continues to sit at a handsome level of 4.3 gigawatts.
Speaker #1: And our average terahash rate or efficiency on the equipment that's in our Bitcoin mining facilities is 23 joules per terahash, or under. I want to remind you about our strategy as a company that drives all of our implementation.
Speaker #1: Our strategy is to transform stranded clean energy as I refer to earlier into high-performance computing infrastructure. We are doing that in two important ways.
Speaker #1: We're taking that 4.3 gigawatt pipeline I refer to, where we sign PPAs, acquire land, co-located with those renewable energy projects. In fact, we also acquire renewable energy projects now with the acquisition of Briscoe Wind.
Speaker #1: And we monetize that pipeline by turning those power assets into vertical data center infrastructure projects on the Bitcoin side. We develop, own, and operate Bitcoin hosting data centers that we then host to very large hyperscale mining companies in creditworthy counterparties.
Speaker #1: On the AI side, we're now developing AI data centers and projects around JVs with data center operators. That will allow us to go vertical as well and build data center operations that will be leased by hyperscale or neocloud customers.
Speaker #1: We call this strategy renewable computing. And it helps to position us around our mission to make renewable energy a global superpower using computing as a catalyst.
Speaker #1: Now let's take a look at the business highlights for Q1 2026. Our focus this year is around four major areas. The first, of course, is developing AI.
Speaker #1: By advancing project CADI 2, our data center project in Southeast Texas, we aim to get that project to shove a readiness and tenant readiness and build a pipeline of AI-ready campuses designed for rapid deployment out of that 4.3 gigawatt pipeline through a series of joint ventures.
Speaker #1: To date, we have two that we've announced, CADI 2 and Dorothy 3, that took place as a subsequent event after the acquisition of Briscoe.
Speaker #1: So we have over 600 megawatts of potential projects for the AI side. So we're making good progress there. Optimizing our current projects as we energize and ramp up CADI 1, our largest Bitcoin facility to date, that will help to enhance our profitability across our operating data centers through higher uptime, operational efficiency, and also discipline cost management around these facilities.
Speaker #1: And thereby strengthening the long-term asset value and improving the overall customer satisfaction. We continue to be sought after by leading players in the space.
Speaker #1: We have a number of customers that continue to expand their footprint with us, as you'll see. And that gives us confidence that our execution in this area is progressing well.
Speaker #1: Capital formation. We have been focused on a disciplined capital strategy to fund pipeline growth, AI data center development, and construction. And we're leveraging a combination of project-level financing and strategic capital partnerships to scale the data center development status and opportunities that we have, while maintaining balance sheet flexibility.
Speaker #1: And of course, our pipeline. We continue to focus on the growth of this core asset. We like to say power is the asset and compute follows.
Speaker #1: Our strategy in a similar way is to seek out opportunities where we can help power plant owners convert their stranded energy into revenue and we have amassed over 4.3 gigawatts in the pipeline to date.
Speaker #1: Our goal, of course, is to convert a healthy portion. We have over 1.5 gigawatts of projects under development into shovel-ready status and securing behind-the-meter access to that energy through the various processes that we're involved in.
Speaker #1: And then use that essentially to scale our capacity and accelerate speed to power. We've accomplished a lot in the first three months of this year.
Speaker #1: We reported record 2025 growth, pipeline reached 4.3 gigawatts, raised 142 million dollars, and we also launched our AI infrastructure plans. Of course, the development pipelines surpassed 4.3 gigawatts through new and existing IPP partnerships.
Speaker #1: We'll leave that's over 20-plus projects we've partnered with Metroblocks to unlock 300 megawatt plus of AI and HPC capacity at project CADI 2. We've partnered with Siemens to address GPU power volatility in the behind-the-meter AI deployments.
Speaker #1: We've expanded our partnership with Blockware. They added six megawatts at project Dorothy 1. We also appointed our new CFO, who is joining me on the call, effective April 1st, and we named a new auditor, KPMG is now our new independent registered public accounting firm.
Speaker #1: On the project side, CADI 1A at the Galaxy portion of the project CADI 1 data center all three phases 48 megawatts in total reached completion ahead of schedule.
Speaker #1: Project CADI 1B, the Coromant partnership that we have those containers were received on site with the first 12 megawatts passed installation underway. And CADI 2, that referenced a few times, secured another 500 acres of additional land and that's allowing us to advance into phase one and begin the design process, which will take us to 30% schematic design and begin the procurement of long lead equipment and likely begin partnerships with general contractors for the eventual construction of that site.
Speaker #1: Project Dorothy 1A also completed a 20 megawatt fleet upgrade returning the site to full capacity. As I made reference to earlier, there are a couple of other key milestones just after the end of the quarter that should be noted here.
Speaker #1: The first is we acquired the 150 megawatt Briscoe wind farm. Achieving full vertical integration at project Dorothy and securing the energy foundation for project Dorothy 3, an AI expansion or conversion of that project.
Speaker #1: The Briscoe wind farm is powered by GE Vernova turbines we're now in the process of upgrading those. The purchase price was about 53 million dollars, which acquired all the shares of the wind farm company.
Speaker #1: And as I mentioned, that allows us to expand into a 300 megawatt potential development for Dorothy 3. It will be on a campus not too far from the wind farm on a new 300-acre land site close to Dorothy 1 and 2.
Speaker #1: We did use some capital from our debt partner, Generate Capital, and cash from our balance sheet to finance the transaction. And we expect this acquisition to be accretive.
Speaker #1: We project somewhere around 6 to 11 million dollars in adjusted EBITDA from this asset. And 20 to 24 million in revenue on an annualized basis.
Speaker #1: Another big update that took place right after the close of Q1 was the acquisition of Dorothy 1A. It travels a series of deliberate steps, including that vertical integration I referred to at this campus.
Speaker #1: The acquisition brings us to 100% ownership of D1A, eliminating shared equity and giving the company unilateral authority over the site decisions. And the ownership of D1A strengthens our ability to advance the deployment and development of project Dorothy 3, essentially optimizing the existing site for AI applications.
Speaker #1: Dorothy is already powered in an interconnected via the Briscoe wind farm, which Seluna now owns outright. So that allows us to own all of the key elements to accelerate the conversion into this AI opportunity.
Speaker #1: The transaction provides liquidity to Springline Capital's Fund 1 and opens the door to new equity partners aligned with the AI infrastructure build-out. Okay, before I turn it over to Mike Peachy, I'd like to take you through some project highlights in Q1 as well.
Speaker #1: Starting with Dorothy 1A, we completed a 6 megawatt deployment for Blockware and a 14 megawatt deployment for Canan with new generation equipment. We worked through a transformer equipment failure, which impacted two MDCs for a period of about 45 days.
Speaker #1: We successfully completed the ERCOT ERS period. So participating in the demand response programs in the ERCOT market. And we continue to maintain an LCOE or cost of power at about 28 dollars per megawatt hour for the quarter.
Speaker #1: Now, at Dorothy 1B, we executed a 3.3 megawatt expansion with Blockware there, and a 3 megawatt deployment with SAS mining, a new customer that's been added to our network of partners.
Speaker #1: We consolidated and optimized proprietary mining fleets in order to create capacity for these new hosting developments at Dorothy 1B. As a reminder, Dorothy 1B was primarily proprietary mining, and we've been slowly shifting that to hosting.
Speaker #1: We also of course successfully completed the ERS program there, and maintained that power cost of 28 dollars per megawatt hour for the quarter as well.
Speaker #1: Dorothy 2, that's the expansion of Dorothy that we completed last year. It maintained strong steady operations throughout Q1 with the existing customers there. All customers are at full capacity at Dorothy 2.
Speaker #1: We completed the ERS program there, and of course our LCOE held steady at Dorothy 2 as well. I mentioned Dorothy 3 earlier. That's scheduled to be somewhere about 150 to 300 megawatt gross power envelope for this site.
Speaker #1: It's going to be powered by the wind farm, sitting on 300 acres and focused on AI. With the full ownership of the wind farm and the Dorothy 1A footprint that allow us to do that conversion fairly quickly.
Speaker #1: Stay tuned for more updates on this. We'll be keeping you posted every quarter on the progress for Dorothy 3, along with CADI 2, as we develop those projects into AI development and data center opportunities.
Speaker #1: Project Grace, our technology partnership with Siemens, is advancing as well. We advanced design optimization for microgrid electric architecture which supports AI load integration. This architecture and some of this work we're doing will certainly benefit Dorothy 3.
Speaker #1: We partnered with Siemens to evaluate high-fidelity technical solutions for AI load integration really with a focus on voltage ride-through performance. So shielding the grid from some of this fluctuation in power.
Speaker #1: And SSO mitigation sub-synchronous oscillation mitigation. This is where frequencies can be affected by the drop in load variables in the site. We are using AI, believe it or not, to do this to model this and essentially create a digital twin of a potential data center to analyze the benefits of these specific designs.
Speaker #1: Project CADI is one of our largest deployments to date. CADI 1, as you may recall, is an 83 megawatt Bitcoin hosting facility. Galaxy 1A, Galaxy's CADI 1A which is the Galaxy portion, is a 48 megawatt footprint.
Speaker #1: We achieved completion and transition to steady state operations. CORMIT containers landed. They look fantastic. Seluna branded on phase one and installation has made lots of progress there.
Speaker #1: We've installed and done power commissioning on those containers. MDCs 23 of those, 23 megawatts of those, and Seluna designed MDCs, the air-cooled solutions that you can see in the picture there, we are working on phase two and three of K1B and that continues to progress ahead of schedule.
Speaker #1: And the site operations teams have been hired locally and fully trained. So we already have people on the ground starting to ramp up that site and manage it.
Speaker #1: Now let's talk about project CADI 2. This is our AI site that's being built. Just across the street from CADI 1. This is now a very large campus that's being contemplated that would exceed 350 megawatts critical IT, tier three AI campus.
Speaker #1: We announced a joint venture with Metroblocks a group of very high highly capable people from hyperscalers who are helping us to develop the site.
Speaker #1: We secured 500 acres of additional land to support expansion of the campus. And we advanced phase one to phase one of CADI 1, which is the first 100 megawatt CIT or so to 30% schematic design.
Speaker #1: And selected architecture and engineering firms to support that process. We also signed an LOI for long lead gas generation equipment, procurement of data center equipment is underway as well.
Speaker #1: And we're also looking at some of the inside the building equipment to help accelerate this project. So those were our Texas sites. Now let's talk about project SOFI.
Speaker #1: This is our site in Kentucky, one of our first greenfield sites in the corporate portfolio. We maintain strong steady operations there in Q1 with existing customers.
Speaker #1: And all customers remained at full capacity at the site. We completed a network upgrade there to enhance the security and increase the reliability of the site.
Speaker #1: And we also completed a host of preventative maintenance on critical electrical infrastructure at these sites. Now of the 4.3 gigawatt pipeline, we have a number of projects that are either operating under construction or under development.
Speaker #1: I touched on all of the operating sites and one of the projects that are under construction. That takes us all the way to CADI 1 on this list.
Speaker #1: And if you add up the numbers here, we're well on our path to exceed 200 megawatts of assets under management. We're now at 143.
Speaker #1: We expect to exceed 200 by the middle of this year. The gray areas is the are the projects that are in development. So CADI 2, 300 plus, Dorothy 3, potentially 300.
Speaker #1: Grace, Hetty, Ellen, Rosa, Annie, Faye, and Gladys, all continue to make good progress in their progression through the development process. Stay tuned for more updates on those projects.
Speaker #1: Some of them are getting closer to being determined whether they'll be Bitcoin hosting or AI projects. But a rule of thumb is that the larger projects will most likely be AI.
Speaker #1: The smaller projects will most likely be Bitcoin. Smaller is less than 100 megawatts. Larger is more than 100 to 150 megawatts. This is a map of our projects from that table you just saw.
Speaker #1: Laid out across the great state of Texas. We have over 1.5 gigawatts now of projects in the state. The proximity of those projects and if you were to map the entire 4.3, you'd see a lot more dots in here.
Speaker #1: And what that means is that the proximity of those projects gives us a special strategic capability that allows us to advance and grow those projects as they mature in the process.
Speaker #1: And that combination of combining those projects into a single large AI data center campus is a approach we call clustering. And this creates opportunities for much larger campuses at our sites.
Speaker #1: And we're starting to use that approach for the CADI 2 project. And we'll likely use that for other projects as well. Okay. Let's take a look at some key metrics across all of our operating sites as of the end of Q1.
Speaker #1: So as I mentioned, when you look at projects energized, that's 147 megawatts up from 123 at the close of 2025. And from a business perspective, you look at 145 for Bitcoin, 2 megawatt AI technology development at Grace.
Speaker #1: 122 of the 147 is hosting, 25 proprietary, but that's shrinking here. Seven leading industry partners have partnered with us on the projects. Almost 50,000 mining rigs are deployed throughout our facilities.
Speaker #1: We have an operating hash rate of over 7 exahash. Fleet efficiency is 23 joules per terahash. Uptime is north of 91%. Industry leading in the operational hour section.
Speaker #1: And we've added about 11 new staff. We have the Briscoe wind farm now. So we now have an energy profile in our metrics of a power capacity in our asset base.
Speaker #1: We continue to consume power through the wasted energy category. As of Q1, 49,000 megawatt hours consumed. And of course, our power price is industry leading in the $30 per megawatt hour on average.
Speaker #1: Okay. Let's take a look at some upcoming catalysts for the remainder of this year. So you should expect more of CADI 2 to be energized.
Speaker #1: We'll have some new energy partnership announcements that will be coming up here in the next quarter or so. We are we have kicked off design of CADI 2A, as I mentioned earlier.
Speaker #1: And that will advance and continue to progress into activities related to construction. PAs on projects Rosa, Hetty, Ellen, Annie, and new projects are certainly underway as well.
Speaker #1: And my earlier comment about the new energy announcements was really about project Briscoe which was in our original catalyst plan. So that one certainly hit.
Speaker #1: New Bitcoin hosting announcements will be coming up as well. Stay tuned for those. CADI 2 AI announcements we've been in discussions with potential lease firms at CADI 2.
Speaker #1: And as that progresses, later this year, you'll see that as well. Dorothy 3 AI announcements as we progress those. We'll be important and potentially new AI announcements or this year as well.
Speaker #1: We have a lot cooking, a lot going on. This is probably one of the most exciting periods for the company in a long time.
Speaker #1: And so we encourage you to stay tuned as we publish these important developments. Okay. Let's talk about how we finance our projects. I've been getting a lot of questions, especially on the AI side, how we're going to finance these billion dollar projects.
Speaker #1: Just as a reminder, we've developed a capital formation structure that allows us to take investment both equity and debt at both the project level and the parent level.
Speaker #1: And Bitcoin stays separate from AI, each project is a project company which allows us to then take in capital equity and debt from those partners.
Speaker #1: So if you look at the Bitcoin hosting side, we've done that over the last few years. We've got some great partners there. Galaxy, Generate, Spring Lane, and Navitas as well.
Speaker #1: And on the right, the goal is to use project level joint ventures and partners to give us the expertise and the capital to power these projects.
Speaker #1: So as we develop CADI 2, Dorothy 3, and some of these other projects, and they become shovel ready and we start capital formation, you can expect us to raise capital debt and equity at those projects and also raise equity at the parent company to inject in those projects.
Speaker #1: So by way of example, let's say we've got an AI project. It's a billion dollar build. And we're somewhere in the 70 to 80 percent debt ratio, for example.
Speaker #1: Then 700 million dollars to 800 million dollars would be raised at project level debt backed and collateralized by the data center itself. And then we would have a 3 to 400 million dollar equity check sorry, 2 to 300 million dollar equity check to raise and that would come from a combination of project and Soluna Holdings level equity raises.
Speaker #1: All right. That's the business updates. Now I'd like to turn it to our new CFO, Mike Peachy, to take you through the financial highlights for the quarter.
Speaker #2: Thanks, John. Soluna does have diverse revenue streams. Our Bitcoin mining operation had 2.2 million dollars of revenue in the first quarter of 2026. That was down 28% compared to the first quarter of 2025, reflecting hash price compression in the industry.
Speaker #2: However, our Bitcoin hosting operation had 6.7 million dollars of revenue in Q1 of 2026. That was up a whopping 178% compared to Q1 of 2025.
Speaker #2: Our grid ancillary services business was flat year over year at roughly 500,000 dollars in revenue. And our high performance computing business had no revenues in the first quarter of 2026, but we remain in development on the 350 megawatt CADI 2 site and the new 300 megawatt Dorothy 3 site.
Speaker #2: Turning to the balance sheet, Soluna continues to show a strong cash position of 68.6 million dollars, reflecting all the capital raising efforts of fiscal year 2025.
Speaker #2: Net property plant and equipment increased 4.7 million dollars, reflecting additional build out of CADI 1. On the liability side, long term debt decreased from scheduled principal repayments.
Speaker #2: And in the equity section, non-controlling interest increased 8.4 million dollars, primarily from our partner Spring Lane Capital's funding of the CADI 1 build out cost.
Speaker #2: Looking at the revenue trend over the last four quarters, you can see that Soluna has increased revenues for four consecutive quarters notwithstanding hash price headwinds.
Speaker #2: CADI 1 will continue to ramp up as we look forward to Q2 2026. The year over year revenue increase of 58% for Q1 of 2026 compared to Q1 of 2025 was driven in large part by having Dorothy 2 energized in 2026.
Speaker #2: Dorothy 2 wasn't yet active in Q1 of 2025. Gross profit dollars have also grown for four consecutive quarters. We have shifted our Bitcoin model towards more hosting rather than Bitcoin mining.
Speaker #2: Bitcoin hosting is more profitable and less volatile than Bitcoin mining. In Q1 2026, Bitcoin hosting was 71% of our total revenues, compared to 40% of total revenues in Q1 of 2025.
Speaker #2: This change in revenue mix benefited gross profit. Adjusted EBITDA removes the impact of other non-cash charges. Such as non-cash stock compensation expense. While adjusted EBITDA improved in Q1 2026 compared to the most recent quarter, Q4 of 2025, the comparison to a year earlier period, the Q1 2025 period, was a decrease of 444,000 dollars.
Speaker #2: As we were working in Q1 of 2026 to complete the Briscoe wind farm acquisition and were incurring professional fees to get that done. Which we did on April 1st.
Speaker #2: Looking at revenue and gross profit by site, really illustrates the impact of bringing our Bitcoin hosting site Dorothy 2 online in the second half of 2025.
Speaker #2: Dorothy 2 was 37% of total revenue and 73% of total gross profit. As the CADI 1 Bitcoin hosting site ramps up in Q2 of 2026, revenues and gross profit will increase at that location.
Speaker #2: And finally, looking back at last year, the Dorothy 1A Bitcoin hosting site was up nicely in 2026 compared to this level of 2025. And you'll notice there's no revenues in the prior year for Dorothy 2.
Speaker #2: In summary, this Soluna management team is working to improve forward visibility and reduce earnings volatility from exposure to Bitcoin, while also simplifying the capital structure and improving returns.
Speaker #2: We look forward to updating you on a momentous Q2 2026. Back to you, John.
Speaker #1: Thanks, Mike. Okay. That's it for Q1. We look forward to telling you about the upcoming quarters. If you want to learn more or download some of this information, you can go to solunacomputing.com and go to the investor center.
Speaker #1: You'll find the presentation, and a host of other materials are filings etc. to support your continued learning on Soluna. Again, thanks for connecting with us.
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