Core Scientific Stock

Greetings, and welcome to the Core Scientific Fiscal Second Quarter 2026 Earnings Conference Call. [Operator Instructions] Please note, this conference is being recorded. I would now like to turn the conference over to your host, Jon Charboneau, SVP of Investor Relations. Please go ahead.

Good morning, and welcome to Core Scientific's Second Quarter 2026 Earnings Call. Before we begin, I need to remind you that statements made on this call other than historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are based on our current expectations. Words such as anticipates, expects, intends, believes and similar words and expressions are intended to identify forward-looking statements. These statements are subject to risks and uncertainties that could cause actual results to differ substantially. For further information on these risks and uncertainties, we encourage you to review the risk factors discussed in the company's reports on Form 10-Q and 8-K filed today with the Securities and Exchange Commission and the press release and slide presentation contained therein. The forward-looking statements we make today speak as of today, and we do not undertake any obligation to update any such statement to reflect events or circumstances occurring after today. Today's presentation is available on our website at investors.corescientific.com. The content of this conference call contains information that is accurate only as of today, July 28, 2026. Joining me today from Core Scientific are our CEO, Adam Sullivan; our Chief Financial Officer, Jim Nygaard; and our Chief Operating Officer, Matt Brown. We will conduct a question-and-answer session after management's remarks. We will now begin with remarks from Adam.

Good morning, everyone, and thank you for joining us. This morning, we announced a commercial partnership with AMD for up to 2.5 gigawatts of data center capacity, a clear validation of our deliberate strategy to begin development and construction across multiple locations before customer contracts were in place. Beyond their scale, contracted value and long-term growth potential, the agreements underlying this relationship reflect the strength of the company we've built, the discipline and conviction behind our approach and the significant opportunity still ahead of us. Throughout this process, our priority has been to form the right relationships that recognize the value of our portfolio. The most valuable arrangements in this market are not one-off transactions. They are the ones with the potential for significant expansion over time. In our agreement with CoreWeave began as a 16-megawatt lease at our Austin campus in 2024 and has since expanded to 590 megawatts of total contracted capacity. That progression is important, and our partnership announcement today with AMD reflects this potential. The initial agreement represents more than $14 billion of base contracted revenue across the 15-year agreements with 2.5% annual escalators. Core Scientific will deliver 530 megawatts across 5 sites, which is one of the largest single deals announced among our peers. With this announcement, we will have 2 customers that have each committed to over 500 megawatts each across 5 campuses. Approximately 380 megawatts will be delivered directly to AMD under a triple net lease across Pecos, Hunt and Muskogee. The remaining approximately 150 megawatts across Auburn and Dalton will support a Neocloud through a modified gross lease for which AMD will provide full credit support throughout the full 15-year lease term. Through this initial agreement, Dalton and Auburn will be fully leased. Importantly, the long-term opportunity at the remaining campuses extend well beyond the capacity included in these agreements. As we previously disclosed, both Pecos and Muskogee have the potential to support up to 1 gigawatt of leasable capacity through a combination of additional grid-connected power and behind-the-meter solutions. Notably, the credit support agreements do not include any equity step-in rights like those included in certain other transactions announced in the market, protecting our equity investment in these projects. As a sign of this partnership, we have issued a warrant to AMD with a strike price reflecting current market levels, vesting subject to certain commercial conditions. The structure with AMD provides meaningful potential long-term revenue, durable contracted cash flows, greater customer diversification and substantial utilization of our leasable campus portfolio. The initial 530 megawatts of contracted capacity represents only the first phase of what we believe can become a much larger strategic relationship. AMD at specific times and under specific conditions has the exclusive reservation right to lease as much as 2 additional gigawatts. We believe we can make this power available to AMD through a combination of incremental grid-connected power, capacity progressing through load studies and behind-the-meter solutions across Pecos, Hunt and Muskogee. This structure positions us to grow alongside AMD as its infrastructure requirements continue to expand over time. Our decision to provide AMD with expansion options across our portfolio reflects both our confidence in its position within the AI ecosystem and our belief in the long-term growth potential of the relationship. AMD is building significant momentum in a rapidly expanding market as hyperscalers, AI labs, cloud providers and enterprise customers increasingly adopt its advanced computing platforms, making it a highly attractive and strategic counterparty for Core Scientific. The scale and structure of the relationship are important, but AMD's decision to work with Core Scientific also reflects confidence in our ability to deliver. Discipline explains why we continue to seek only the right commercial agreement. Execution explains why we won it. AMD had the opportunity to evaluate not only the quality of our power and real estate portfolio, but also our demonstrated ability to develop and operate highly complex AI infrastructure across multiple campuses. Over the last year, we have shown that we can move from contract execution to construction, energization and revenue generation at significant scale. That experience is also enabling us to collaborate closely with AMD on codesign initiatives, shaping the future of our campuses to drive greater efficiency and speed across their GPU and CPU products. Our execution capability is not theoretical. Today, we are pleased to announce we are ahead of schedule and currently billing for 437 megawatts of capacity, tangible evidence of our ability to move from signed agreements to delivered operational infrastructure. We believe this distinction will become increasingly important as the market shifts from evaluating companies primarily on the deals they announced to also assessing their ability to execute. Value is not announced. It is delivered. Delivering hundreds of megawatts of high-density infrastructure requires far more than access to power. It requires an integrated development and operating platform capable of designing, building and operating complex infrastructure reliably and consistently at scale. We have built those capabilities, and they position us to deliver against our existing commitments while continuing to establish and expand our capacity agreements with leading companies across the AI ecosystem. The agreements announced today materially increased the scale and diversification of our contracted portfolio. Core Scientific now has approximately 1.1 gigawatts of total contracted billable capacity, representing more than $24 billion of base contracted revenue. Just as important, we achieved this growth without compromising the principles that have guided our strategy. We have remained disciplined in how we value our power, allocate our campuses, assess customer credit and evaluate the risk-adjusted returns of each opportunity. The result is a stronger, more diversified platform with greater revenue visibility, substantial embedded growth opportunities and contracts with some of the most important companies in the AI ecosystem. Our focus now is clear: finish the 150 megawatts remaining in the CoreWeave build out, successfully build and deliver the capacity lease today, position ourselves to expand our existing customers over time and continue growing our site portfolio for additional new customers. Over the past year, our priority has been converting existing power capacity from Bitcoin mining to high-density colocation. As we enter the next phase of our growth, we will complement that strategy by expanding our power portfolio through the selective acquisition of powered land and the development of new sites. Our acquisition in Hunt County, Texas earlier this year is an example of how we are beginning to build this next generation of capacity. We have now identified a new site pipeline of more than 2 gigawatts of potential incremental power with initial capacity potentially available from late 2028 through 2030. This pipeline meaningfully expands our opportunity set, and we will apply the same disciplined approach to advancing these projects that has guided the development of our existing platform. We believe the late 2028 to 2030 time lines are well aligned with our construction schedules. Over the next several years, our primary focus will remain on executing against our contracted commitments and advancing the broader pathway towards 2.5 gigawatts with AMD. This longer-dated pipeline provides additional runway for growth beyond that opportunity. Our position is unique, and we continue to have the balance sheet and operating experience to invest ahead of customer demand when the economics are compelling. The strategy we have outlined is a repeatable model that will guide our growth, secure power early, invest with discipline, deliver capacity at scale and expand successful customer relationships. Today's AMD announcement is an important validation of the strategy we have pursued, but it is also a foundation for what comes next. We remain confident in the opportunity ahead and in our ability to continue building one of the most valuable infrastructure platforms serving the growth of AI. Before turning the call over to Matt, I would like to thank the entire Core Scientific team. Their expertise, commitment and collective effort have brought us to this important inflection point and positioned us to continue delivering for our customers and shareholders. I cannot be more excited about the next phase of Core Scientific and the opportunity that is ahead of us. With that, I will turn the call over to our Chief Operating Officer, Matt Brown, to discuss operations. Matt?

Thank you, Adam. Today's announcement marks an exciting next phase of growth for Core Scientific and reflects the strong execution of our team. I'll begin with a major milestone achieved during the second quarter, then provide an overview of the AMD build-out and delivery plan. As we stated in our last earnings call, we expected to substantially complete 4 of the 5, CoreWeave campuses before the end of the summer. We achieved that milestone ahead of schedule, reaching 437 billable megawatts and demonstrating our ability to deliver complex infrastructure safely, efficiently and at scale. Dalton Phase 2, the fifth and final campus remains on track for full completion in early 2027. With the majority of the CoreWeave program now delivered, our focus is shifting to the next phase of development, led by our approximately 530-megawatt AMD commitment across 5 campuses. Importantly, this program represents more than a collection of individual data center projects. It is an integrated colocation platform engineered to support AMD Helios rack-scale systems optimized for the most demanding AI workloads. Our close coupled AMD design framework aligns Core Scientific's infrastructure with AMD's technology road map through a repeatable, scalable design that accelerates speed to compute, optimizes capital deployment and reduces execution risk as contracted capacity scales. Pecos remains our lead AMD site and is on track for initial megawatt delivery in the first half of 2027. Vertical construction is underway, major infrastructure equipment is beginning to arrive on site, and the project continues to advance in line with delivery schedule. The remaining AMD campuses, Hunt, Auburn, Muskogee and Dalton Phase 3 are also progressing through design, procurement, site preparation and construction with deliveries beginning in 2027 and ramping through the end of 2028. As we move from one major customer program to the next, our operating priorities remain clear: deliver capacity efficiently, maintain schedule discipline and deploy capital responsibly. We also want to give investors clear visibility in the true all-in cost of delivering high-density AI infrastructure. The cost per megawatt goes well beyond acquiring land and putting up the building. It reflects the total capital required to take a site from development planning through construction, utility energization, integrated systems testing, commissioning, customer acceptance and ultimately rent commencement. We organize that investment into 3 categories. The first is construction labor and on-site execution, skilled electrical and mechanical technicians, pipe fitters, equipment operators, project supervisors and safety personnel required to assemble, integrate and commission the facility. Second is the critical infrastructure equipment commonly referred to as OFE, Owner-Furnished Equipment, including transformers, switchgears, generators, chillers, pumps, liquid cooling systems, power distribution systems, control systems and the other major components that high-density computing requires. The third is soft cost and general conditions, design engineering, permitting, utility interconnect, insurance, on-site construction offices, warehouses, temporary power, fuel, lighting, program management, testing and contingency. Together, these categories capture the full cost of delivering a commissioned customer-ready billable megawatt. Based on current market conditions and site-specific factors, we expect build costs to range from approximately $11 million to $12 million per megawatt. The key takeaway is simple. We have demonstrated that we can deliver AI infrastructure at scale and are now applying that experience to a standardized multisite deployment platform for AMD with determined focus on schedule, capital deployment and repeatable execution. With that, I'll turn the call over to Chief Financial Officer, Jim Nygaard, to discuss Q2 financials.

Thanks, Matt. I'll begin with our second quarter results, which reflect continued momentum in scaling our high-density colocation business. We began billing for 437 megawatts in mid-July, nearly 200 megawatts more than at the end of the first quarter and ahead of expectations. This drove a significant sequential increase in GAAP colocation revenue to $137 million, and we expect another meaningful step-up in the third quarter. For context, under GAAP, revenue from the CoreWeave contracts is recognized on a straight-line basis over the 12-year lease terms, effectively pulling future contractual escalators forward. Within Bitcoin mining, our strategy remains unchanged. We continue to optimize the business and operate primarily to offset contractual power costs during the wind down. We ended June with nearly 30% fewer miners online than at the end of the first quarter and are now self-mining at only 2 sites. We expect Bitcoin mining activity to continue winding down over the remainder of the year. On the expense side, second quarter cash SG&A was approximately $36 million. The $4 million sequential increase was primarily driven by onetime professional fees associated with our recent debt financing. While we are not providing explicit SG&A guidance, we continue to view the low $30 million range as a reasonable quarterly baseline with the potential for some variability as we make targeted investments to support growth. With that overview of the quarter, let me turn to capital formation and our plans to fund the next phase of growth. The AMD announcement is a significant commercial achievement and an important validation of the investment and financing strategy we have pursued. We ended the second quarter with approximately $1.8 billion of liquidity, giving us a strong foundation as we prepare to fund the AMD build-out. At our current cost estimate of $11 million to $12 million per megawatt in CapEx, the initial 530 megawatts will require approximately $6 billion of capital, which we expect to finance through project-level bonds. Beyond our contracted commitments, we intend to continue to selectively advance capacity ahead of customer contracts, following the same playbook that helped us position for the AMD opportunity. At a high level, we are prepared to invest up to approximately $1 billion to advance roughly 500 megawatts of initial build-outs for future capacity. This capital would be deployed to advance development, secure long lead equipment and provide greater certainty around ready for service dates. The AMD announcement demonstrates the value of this approach and reinforces our ability to convert customer demand into additional contracted capacity. We believe our balance sheet and financing strategy give us the flexibility to execute our contracted commitments while continuing to invest in the next phase of Core Scientific's growth. With that, I'll hand the call back to the operator for Q&A.

[Operator Instructions] And our first question will come from John Todaro with Needham & Company.

Congrats on all the progress and the lease here. Two, if I may. First one, just on the potential expansion with AMD, it looks like 1.5 gigawatts of that is as stated behind the meter in the load study. I guess just wondering if we can get a little bit more color on kind of time line there. And if it is a little bit more lengthy, does AMD then have an exclusivity period for a significant chunk of time? Or just maybe frame that up a little bit more for us?

Yes, happy to, John, and thanks for the question. I think to start off, I mean, this is obviously a transformational deal for Core Scientific, and we could not be more excited about our partnership with AMD on this. I think it's not appropriate for us to speculate necessarily on what AMD will do as it relates to the additional megawatts. And as you mentioned, it is up to nearly 2 gigawatts of additional capacity under the agreement. And that is an exclusive reservation agreement that we have with AMD. I think the important part here is, as you look at and as you mentioned, behind the meter, behind the meter is becoming much more common in the marketplace amongst hyperscalers and labs, that's continued to be a growing segment of this market. And I believe the comfort level amongst all of the peers are continuing to increase as it relates to behind-the-meter deployments. We have great solutions as it relates to our Pecos and Muskogee campuses. We're looking forward to growing those campuses alongside AMD. And I think the important part here is the market demand for GPUs only continues to expand, obviously, highlighted by the most recent AMD announcements. but data center capacity is still in very short supply. So we feel like we're very well positioned for the continued growth here, and we're going to be able to deliver a significant amount of capacity for AMD.

Great. That's very helpful. And then just a quick one on the Neocloud lease as well, is there going to be a backstop or guarantee for them? Is AMD associated with that one as well or completely separate?

Yes. That's correct. They are providing a full credit support for the full 15-year lease term. And as we noted in prepared remarks, that full credit support does not include any equity step-in rights, as you've seen included in some other deals, which just protects our equity investments in these projects.

And our next question will come from Brett Knoblauch with Cantor Fitzgerald.

Congrats on the deal. Curious about the economics between maybe like the 2 deals within the larger deal. Should we view that maybe the Neocloud plus backstop economics similar as maybe the straight AMD economics?

Yes. I mean I think that's right. I think what you could assume given the modified lease -- modified gross structure with the Neocloud that those economics are in line with market. And I would say similar for the direct leases with AMD, those are also in line with market.

Awesome. And then maybe just on the CapEx front. I know you guys have kind of been pre-spending already across multiple sites. Could you maybe ballpark maybe how much of the $11 million to $12 million you guys have already spent preparing some of these sites?

Yes. Yes. I mean, similar to what we had mentioned in previous earnings call, we were looking at deploying about $2 million per megawatt across the portfolio. And so we had a bit just about $1 billion in commitments across these projects. So we're very far into our capital commitment as it relates to what the equity investment will be required for these projects.

And moving next to Darren Aftahi with Lucid Capital.

Congrats, guys. Two, if I may. Can you just talk to the thought process of if the deal is exclusive with AMD, just committing sort of one customer, that amount of capacity, just kind of the thought process that went through that. And then the time frame you laid out in the presentation, just your level of confidence in delivering that capacity on time.

Yes. Thanks, Darren. I appreciate it. I think as we look at the commitment that we made with AMD today, this is truly a one-of-one type partnership in this market. We feel very strongly that our execution capabilities over the course of the CoreWeave contracts is one of the main reasons why we are able to get such a unique partnership agreement with AMD. As we look at the product road map and the growth, the reservation rights that AMD has on additional capacity at sites where they have direct leases, that's Pecos, Muskogee and Hunt, in terms of the delivery time lines and their reservation rights time lines, they pair up very well. And so we feel very strongly that we're going to be able to continue to grow alongside of AMD at those 3 sites in particular, just given the fact that there's significant demand in the market. As I mentioned earlier, market drivers are all in our favor as it relates to both supply and demand here in this industry. And we believe AMD is going to continue to expand into the future. And Darren, to your other question, talking about our confidence in our ability to deliver, we have the equipment secured. We have contractors on site across these 5 campuses. This is a unique situation compared to others who are announcing deals with greenfield. We have bodies moving on site, walls going up at [indiscernible], as we mentioned, we have the building fully complete at this point. And so we feel like we're in a very strong position and that confidence in our ability to deliver and the progress that we've made, we believe, is really why AMD chose Core Scientific to partner with.

And we'll go next to John Peterson with Jefferies.

Congratulations on the AMD deal. That's really exciting. On the -- looking at your slide on load study additional power, Pecos, Texas. So I think on August 7, we're going to get an update from ERCOT. I guess it's 815 megawatts, is there a potential that that's unlocked for you guys or at least you have a time line on it within the next few weeks?

It's really hard for us to judge. Part of that is the -- or sorry, about 300 megawatts of that is the load study for Pecos. The rest is behind the meter. I think in terms of our execution on the next megawatts at Pecos in particular, is going to be driven by the behind-the-meter strategy, just given the uncertainty related to timing of that next 300 megawatts from on grid power.

Okay. All right. That's helpful. And then on the developments, maybe can you talk about the buildup to the lease, like the different pieces that you've already put in place, like deposits down on the various supply chain stuff that you need for the development, lining up general contractors and subcontractors. I'd just be curious to hear just a little more about what you guys have been up to the past few months and just the pieces that you had to put together to get to the point of lease signing this morning.

Yes. I can answer -- I can take that question.

I think as we stated in our previous earnings, we outlined a strategy of sort of leaning into development ahead of demand. So over the past year, we had been -- we started developing Pecos. We started [ Precon ] in Hunt and the second building in Muskogee. So we were already getting through [ Precon ] through engineering. We had secured -- actually placed orders for equipment for the initial delivery phases of each of those projects. So what does that mean? Does that mean that we had already secured long lead equipment for a large quantum of those megawatts. And then we had already secured the labor and the GCs on site and sort of progressing through GMPs. And now we're at a stage where we've already completed, like in Pecos, like the [ precast ] in the building is almost complete here in a number of weeks. The full shell for the first 185 megawatts will be done. And we're at pad-ready utility energization across the other sites. We released capital for substation construction earlier this year across multiple sites. And so all of that work that we've been going through over the course of 2026 has put us in a position to really land a monumental deal with AMD, and we're really excited about our ability to execute through 2028.

Moving on to Nick Giles with B. Riley Securities.

You mentioned, I think, 2 gigawatts of new sites. Can you just break that down across how many sites, how advanced is due diligence? And then would you expect to spend capital at those sites ahead of any lease similar to your current footprint?

Yes. I appreciate the question, Nick. Yes, across the 2 gigawatts, we're not giving a site breakdown number of sites. But I would say the Hunt acquisition that we made earlier this year is extraordinarily representative of the opportunities that we're pursuing today. I would say that's a great strike zone in terms of total amount of power that's available at the site. And to your last part of your question, absolutely, as we look at new sites and we look at acquisition costs, what we include in those calculations is being able to bring that site to really a pad-ready status at the very least. That includes putting the substation in place and releasing that capital. And so as we evaluate these sites, we think about what -- how does this fit in terms of when the power is available versus our construction schedules. And so there are a number of sites in that pipeline at varying stages of due diligence that we have confidence that we'll be able to bring a new site to market hopefully by year-end here.

And maybe a question for Jim. Should we expect to see you raise project debt at the site level? Or how do these AMD direct sites versus the Neoclouds with a wrapper influence the overall financing strategy?

Our primary financing strategy is going to be utilizing the project bond structure that is, I would say, fairly consistent in the market today, very similar to what we did with CoreWeave. Functionally speaking, the SPVs are very similar. In the direct case, the tenant has direct responsibility for fulfilling the lease payment. So that's what effectively fuels that vehicle. On the credit support dynamic, the debt is fully supported. That dynamic still exists in a similar structure. So they function and operate very -- in a very similar fashion, but they do have distinctions of having the direct relationship in one and having a credit support feature in the other. But they are project bond structures in the SPVs that we've now used in the CoreWeave example.

Our next question comes from Ben Summers with BTIG.

So as we think about the behind-the-meter opportunities, just kind of curious, what is the current kind of status of securing potentially long lead time items for this? And I guess just -- I know you can't give a direct time line estimate, but just kind of curious how that development is progressing as we think about expanding with AMD or beyond.

Yes. Thanks for the question. What I can say our visibility into the behind-the-meter development across Pecos and Muskogee, we've already been in conversations -- advanced conversations with natural gas suppliers. We've done preliminary planning around lateral development to those sites. And we have some really integrated conversations with equipment providers that would provide the generation on site for that. So I would say where we stand today is that we have really clear visibility into the execution time lines, cost and all the delivery partners required to pull that together.

Awesome. And then just one more quick one for me. So for the expansion capacity, does AMD have the ability to potentially grant that to, let's say, like another Neocloud similar to how we're doing here and then backstop that contract? Or does this all have to be direct with AMD?

On the direct leases, it has to be direct with AMD.

Our next question comes from Joseph Vafi with Canaccord.

Adding my congratulations here as well. Great to see the AMD news. Just if we rewind about a quarter, I know you were winding down some exclusive negotiations for, I believe, some of these sites with an investment-grade tenant. And now we have the AMD announcement. Just be interesting if you could provide any color on if AMD was the exclusive negotiating partner there or if they arose after those exclusives ended. Just would be -- I think it would be valuable and insightful relative to the cadence of negotiations out there broadly in the marketplace.

Yes, I appreciate the question, Joe. I'm not going to comment on who the customer was in previous discussions. I think the key here is this is a long-term relationship that was formed over a long period of time with AMD. They were evaluating our execution capabilities across the existing contracts that we have in place today. They were evaluating what we had on order in terms of long lead equipment, and we're evaluating the sites over a period of time as construction continued across the 5 campuses that they've signed up for today. So these conversations are long, and I think that's expected across the market. But what we signed today is truly unique, and we couldn't be more excited about partnering with AMD on a project of this scale.

Sure. Great. That's helpful, Adam. And then, Jim, you're kind of ahead of the pack here on generating revenue and operating cash flow, I think, at this point. How does the revenue and more of a maturing P&L kind of shape strategy here versus where you were maybe 6 or 9 months ago?

Yes. I appreciate the question. It is quite a transformation from our history of Bitcoin mining, which is certainly characteristic of a lot of volatility and lack of transparency to essentially a financial profile that is essentially opposite of that. That's what makes this business in terms of its financing capability, its visibility and its ultimately stability allows us to really make investments with a lot of confidence. So we're excited about that transformation. We've had a lot of noise in our historical financials. And what's exciting about next year is we're going to be starting with a clean sheet of paper, and you're going to start to see a much more mature financial profile emerge that is much more consistent with the new business model. So that's an exciting transformation for us and one that we think is going to serve us well, and I appreciate your comments about us being ahead of the pack. That's an important observation for our differentiation in the market that often I don't think we get a lot of credit for. So thank you for calling that out.

We'll hear next from Stephen Glagola with KBW.

On the deal. Adam, I'm curious to get your broader thoughts on what you're seeing in the funding markets today on the debt side? And has anything changed in terms of project financing availability over the last few months?

Yes. Thanks, Stephen. Obviously, we're excited about our announcement this morning. It came at a very apropos time in terms of just the broader market and recent reports that have been released. So I think as it relates to the funding market, as you mentioned, what we're seeing in the market today is definitely a backup in rates. I think that's a broad digestion period as it relates to AI. What we've seen across all of the bonds that are in the market today are just a significant amount of digestion by investors that are speaking with their trades and where the market has been going to in terms of rates. So it doesn't concern us with such a strong investment-grade counterparty here. Those -- there will still and continue to be appetite for those types of bonds in the market. And that's really what gave us confidence here in executing this contract. I think if you were signing a contract with anyone outside of kind of this tier of credit, there's question marks about capital raising. But given where we sit today with our partnership with AMD, there's incredibly high confidence as it relates to financing this deal.

Our next question comes from Jon Hickman with Ladenburg.

Could you just reiterate your time line for this -- for the first delivery of power to -- for the AMD deal? Is it early 2028?

The initial AMD deal, the first megawatts to come online will be at our Pecos location. We have said that, that will come online in the first half of 2027. And broadly speaking, we've said about half the contract will be delivered in 2027 and the other half will be delivered in 2028.

Moving next to Tim Horan with Oppenheimer.

Is there an optimal amount of megawatts you'd like to build per year? And is there kind of an upper limit on that? And just on the behind the grid power, what's really on the critical path there? Is it the pipelines? Is it the turbines? Anything else?

Yes, absolutely. I'll take the first part of the question, and I'll let Matt Brown take the second part. In terms of optimal megawatts per year, in terms of what we're looking at in 2028, we believe we could have a target of about 600 megawatts in 2028 based on current labor constraints and long lead equipment constraints in the market. Obviously, that is dependent on time lines of signing additional capacity under the AMB agreement. But I think that's a great target for us, plus or minus 600 megawatts per year. It's a great cadence for the business. That's not to say, though, if the opportunity arises to deliver more than that in a single year, it doesn't mean we're going to continue to scale up our capabilities and team internally to really meet that requirement. But from where we sit today, 2028, we have a target of about 600 megawatts of delivery. Matt, would you like to take the question on the meter?

Yes. So the constraints vary by site. But I would say largely delivery time lines, the constraints are either going to be the time to build the lateral pipeline and/or the equipment delivery, and it just depends on the various sites. Some of our sites -- it will be -- the delivery time lines will be more tied light to equipment manufacturing and production capacity. In other locations, it's going to be more tied to pipeline development and delivery. So it just -- but those are the 2 main things that sort of drive schedules with that.

We'll go next to Paul Golding with Macquarie Capital.

On the deal. I wanted to ask on the CapEx. As noted in the slide, estimating $11 million to $12 million per megawatt and also as implied by the $6 billion across the 530 megawatts. I was wondering what's driving the higher CapEx versus the CoreWeave deal at the outset? Is that the greenfield versus brownfield? Is there a difference in basis of design? And what we should expect going forward around cost per megawatt if you do incremental deals with other counterparties? And then secondly, I just wanted to ask around the acceleration of the 437 megawatts delivered for CoreWeave. What unlocked that acceleration? Is that a lever that you can pull additionally with the AMD engagements? Is there breathing room there?

Yes. I'll take the first part of this question sort of relating to cost and as it relates to where we're at today with the current $11 million to $12 million estimates on a portfolio basis. When we think about the Core sites, we started that engagement in early '24. So we started securing labor and equipment in '24. And what we've seen pretty much year-over-year just -- is pretty much increases across the board, both increases in equipment cost, some of that driven by tariffs over the past year, some of it just driven by supply chain constraints and availability. And then -- but the thing that's primarily driving, I would say, cost of construction today is labor. Labor is very scarce in a number of markets across the U.S. lot of the GC -- a lot of the electrical subcontractors, the large ones and a lot of the mechanical trades are just pretty saturated with work right now. So what you're seeing is just that labor constraint is naturally sort of driving up the cost of that labor in some of the very, very competitive geographies across the U.S. So I think that's one of the biggest differences just the increase of cost over time. And then as it relates to some of the CoreWeave sites, there are just like some fundamental design differences across a number of those sites that are just different to what we're doing today. And not to sort of drive into all the details, but there are some fundamental differences between what we've done with CoreWeave and the current product set.

Our next question will come from Brian Dodso with Clear Street.

Congratulations on the deal. So now that you have that signed and announced, do you think you could give us a little bit of additional color on what the demand environment looks like? I'm sure you were speaking to a lot of interested parties and maybe what we could come to expect from, call it, sector deal signings over the next 6 months? Like what's your viewpoint here? And how is demand evolving?

Yes, Brian, I appreciate the question. I think as we look at the demand picture really for developers that are having direct conversations with the counterparties that can sign contracts right now, it's really starkly contrasted against what you're seeing in the media headlines. What we're seeing on the ground is still a significant amount of demand coming out of the hyperscale channel and the AI labs. I think in terms of what we're going to see over the coming months and through the remainder of this year are continued new deal announcements as it relates to large-scale infrastructure commitments. And I think the big part here is a lot of these large-scale GPU contracts are just getting signed today, and those GPUs do not have a home yet. I think in terms of what we've seen over the course of the past 12 months and late deliveries across this industry, there's a lot of GPUs sitting on the ground, and those GPUs still need to be plugged in. And as that backup continues to build, I think what we're going to end up seeing is more constraints across data center supply. And obviously, given I would say, some of the headwinds as it relates to new developments of data center capacity across this industry, having available rack space within the next few years is going to be in high demand for all data center developers. And this is a great tailwind for the DCs. And I feel very strongly that we're going to continue to see new contracts being signed over the remainder of this year just because this demand picture and supply are shaping up for continued new leases to be signed.

We'll go next to George Sutton with Craig-Hallum.

Congratulations. So I'm curious when we're looking at the reservation opportunity with AMD, how are we continuing to have discussions with additional parties? How do you keep that mix live?

Yes. I appreciate the question, George. Under the agreement that we have with AMD, this is a partnership. And so we won't be speaking to customers while the additional capacity is under the reservation agreement. And so we're going to work very closely with AMD on their future demand needs, and we're going to look to continue to grow alongside of them. This is a true and unique partnership in this industry. And I think it's going to take time for people to understand truly how transformational this is and the unique position that Core Scientific sits in within the broader landscape. And so for us, we just look forward to continuing to grow alongside of AMD and look forward to developments across Pecos, Muskogee and Hunt.

And just real quickly on the Neocloud customer, obviously, Neoclouds very greatly. Can you give us any sense on the size and scope of this NeoCloud? And I assume the contracts that support this are already in place.

George, it's unfortunately something that we can't comment on at this time. I think the key here to the contract that we signed with the NeoCloud is that we do have a full 15-year credit support agreement with AMD with them standing behind the credit here. So we feel very good about that transaction and those 2 leases that were signed across Dalton and Auburn.

Moving next to Michael Donovan with Compass Point.

On the progress. Following up on behind-the-meter questions, are you solely looking at turbines or also evaluating fuel cells?

Yes. We're keeping our options open and the selection of what we -- what technology might go with will likely vary from one location to the next. Everything from recips to linear generators and fuel cells, like we're considering all of those. Partially, what will drive that decision will be kind of the local geography itself and the environmental conditions at a site that may drive that. And then the second piece will just be just supply chain availability and that. So I mean -- but we're -- we certainly have talked to a number of vendors across each of those equipment types.

Understood. And on the gross modified lease associated with the Neocloud, how should we think about NOI margins?

You should think about those NOI margins as being relatively consistent with the market standards that have been disclosed across other deals that have been announced. So we think we are right in line with that.

Moving on to Andrew Beal with Arete Research.

Could you just talk about the reservation right for incremental capacity? I mean, does AMD have the right to sign at the Phase 1 prices plus the 2.5% escalator for whenever that right happens? Or is there another mechanism to get to a market price for the next signings?

The one thing we can't comment on as it relates to the reservation capacity is these would be direct leases with AMD as it relates to any future capacity that's signed under that agreement.

Right. But are they negotiated at the time? Or are they preset in terms of price?

They would be under substantially similar terms as the existing leases that are signed today.

Moving next to Paul Meeks with Freedom Capital.

A lot of good news here today. Just so I'm crystal clear, when will you deliver and build that last 150 megawatts for CW?

Thanks for the question. Yes, the last 150 megawatts is our Dalton Phase 2 campus that will begin delivering at the end of this year and be completed in early 2027.

Okay. My follow-on is you talked about the maturity of your model. Now you have a contract visibility, more diverse customer base, Neocloud. If I take a look at your adjusted EBITDA margins because on your P&L, you do show that metric. What will it look like with your business mix and how it develops at the end of 2028?

Yes. Thank you for the question. We have not provided specific EBITDA targets for the business at this point. We will certainly evolve that thinking as we get closer to a cleaner set of financial statements. We have been working our way through the mining dynamics of our business, and we expect that to be an even smaller portion as we approach year-end to start 2027 with a clean year. We have not provided specific SG&A guidance, although in my commentary today, we talked about that quarterly baseline of about $30 million a year. And we have, of course, disclosed the revenue numbers behind the CoreWeave contract. So EBITDA margins in this business, we track very closely a cash perspective. There's a GAAP dynamic in lease accounting that has escalators in the top line a bit early that inflate the GAAP margins. on that metric, but we track it on a cash basis. And we feel very confident that this is a much higher EBITDA margin that's quite attractive and candidly has quite a bit of leverage on the operating expense line. So the business that we've announced here today will only add to that financial profile, and there's only upside to that margin profile going forward.

And that's all the time we have for questions today. Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. You may disconnect your lines, and have a wonderful day.

Greetings. Welcome to the Core Scientific Fiscal First Quarter 2026 Earnings Conference Call. [Operator Instructions]. Please note, this conference is being recorded. I will now turn the conference over to your host, Jonathan Charbonneau SVP, Investor Relations. Please go ahead, sir.

Great. Thank you. Good afternoon, and welcome to Core Scientific's First Quarter 2026 Earnings Call. Before we begin, I need to remind you that statements made on this call other than historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are based on our current expectations. Words such as anticipates, estimates, expects, intends and believes and similar words and expressions are intended to identify forward-looking statements. These statements are subject to risks and uncertainties that could cause actual results to differ substantially. For further information on these risks and uncertainties, we encourage you to review the risk factors discussed in the company's reports on Form 10-Q and 8-K filed today with the SEC and the press release and slide presentation contained therein.

The forward-looking statements we make today speak as of today, and we do not undertake any obligation to update any such statement to reflect events or circumstances occurring after today. Today's presentation is available on our website, investors.corescientific.com. The content of this conference call contains information that is accurate as of today, May 6, 2026.

Joining me today from Core Scientific are our CEO, Adam Sullivan; Chief Operating Officer, Matt Brown; and Chief Financial Officer, James Nygaard. We will conduct a question-and-answer session after management's remarks. We will now begin with remarks from Adam.

Good afternoon, everyone, and thank you for joining us. [Audio Gap] for platform designed to support the most demanding compute workloads in the market. Over the past year, we've translated that strategy into execution, delivering high-density capacity at scale across multiple states. Those sites were an important starting point, but our first customer was never Core Scientific's full story. Delivering these initial sites enhances our operating credibility and provides a significant capital foundation we need to scale meaningfully from here.

We have shown clearly our ability to deliver at scale. Across five sites, we are now developing one of the largest multisite AI infrastructure build-outs in the market. We are now earning revenue on approximately 245 megawatts with another 200 megawatts expected to be earning revenue in the coming months. Our execution, combined with the favorable structure of our CoreWeave contracts has enabled our next phase of growth.

Today, we closed on a $3.3 billion capital raise supported by that contract with the proceeds to be used for future growth and the development of projects for other customers. The fact that we have five facilities fully leased and financed by our tenant is a meaningful differentiator. We have the ability to push the next phase of development in a disciplined way by securing the land, labor and equipment to protect timelines and accelerate delivery. As these new projects are leased, we expect opportunities for further financing to continue the cycle of our forward development go-to-market strategy.

Our next phase of development has already begun. And late last year, we committed existing cash on hand to purchase equipment for our other existing sites. With the new secured financing, we are now accelerating development activity across multiple sites, including Pecos, Muskogee, Hunt, Dalton Phase III and Auburn. This positions us differently in the market. We are not waiting for deal negotiations to conclude before advancing sites. With capital in place, we can move early, bringing RFS timelines within the 12- to 14-month time frame that customers are actively trying to solve for.

We are also scaling our campuses in a repeatable way. Today, we announced a path to approximately 1.5 gigawatts at Muskogee, closely following a similar plan at Pecos. A key enabler of that scale is power strategy. Customers are increasingly focused on solutions beyond existing grid capacity, including behind-the-meter options. We are proactively positioning our sites to support those needs, including efforts to secure natural gas infrastructure where appropriate to enable future expansion. Pecos is a clear example.

We are actively converting the site from Bitcoin mining to high-density colocation with construction already underway and a pathway to RFS within 12 months. Muskogee is another. We see a path to 1.5 gigawatts of gross power supported by grid expansion, the Polaris acquisition and behind-the-meter solutions, and we expect to deliver additional data center capacity outside of our current contract in late 2027.

Stepping back, we are executing a repeatable model, secure strategic sites, invest ahead of contracts where appropriate and, create assets that are increasingly compelling as they approach readiness. That brings me to our commercial progress. We are engaging customers from a position of strength because development is already underway, our timelines are not dependent on contract timing, an important distinction in this market.

As we previously discussed, we are engaged in an exclusivity process with a hyperscaler across Pecos and Muskogee. That exclusivity has now expired. However, three hyperscalers immediately engaged on those same sites, and we are now in active discussions. This reinforced both the strategic value of these assets and the depth of demand for large-scale high-density capacity. It also informed how we approach exclusivity going forward. While it likely remains a necessary part of some deal negotiations, it must also include clear milestones.

In a market like this, we will not keep high-value assets off the market longer than necessary. More broadly, our conversations with potential customers have increased significantly since the beginning of the year. Hyperscalers remain our primary focus, and we are also seeing growing engagement from chip makers, AI labs and Neo-cloud providers.

These emerging customer segments represent meaningful opportunity, though they often require additional credit support. We are actively working with customers and financing partners on structures that can support long-term financeable commitments. Stepping back, our position is clear. We are building a scaled, high-density digital infrastructure platform with a diversified site portfolio. We are deploying capital to secure timelines and accelerate delivery. We are also seeing strong customer demand.

Based on our execution, capital position and commercial momentum, we are confident in our ability to continue expanding and creating long-term value for our customers and our shareholders.

With that, I'll turn the call over to Matt Brown to provide more details on our operations and development progress. Matt?

Thanks, Adam. As we reflect on the first quarter, our operational priorities remain clear: execute on our existing build pipeline, bring capacity online efficiently and position the business for the next phase of large-scale expansion. Demand for high-performance compute infrastructure remains strong, and we have focused on aligning our delivery timelines, supply chain readiness and power strategies to meet that demand. I'll begin with an update on our CoreWeave dedicated facilities, where we continue to execute at pace and at scale.

Today, I am pleased to announce that we have delivered 243 megawatts of billable capacity to CoreWeave. This includes a milestone with the full turnover of both our Marble, North Carolina and Dalton, Georgia Phase I data centers. At Marble, we completed construction and successfully transitioned the entire facility into operations, bringing 65 megawatts of billable capacity online. At Dalton Phase 1, we likewise achieved full site handover and delivery 30 megawatts into service. These milestones reflect the team's ability to execute efficiently at scale, transition assets seamlessly from construction to revenue generation and consistently aligned to customer timelines, all of which remain critical as we continue to move forward.

Across our remaining contracted sites, we will continue delivering billable megawatts over the coming months while scaling execution on the CoreWeave contract, positioning us to deliver more than 450 billable by the end of the summer, while remaining on track to deliver the full 590 megawatts by the early 2027. Now turning to our non-CoreWeave developments, where we are advancing our development strategy.

Our Pecos, Texas campus is one of our most significant development opportunities with a plan to scale from 300 megawatts to 1.5 gigawatts through a multipronged expansion strategy. At the core is our power road map. We've secured an additional 300 megawatts and are advancing a mix of grid-connected and behind-the-meter solutions to support long-term growth. The behind-the-meter strategy leverages low emission generation and concludes the construction of a linear gas pipeline to the campus. Together, these efforts are designed to accelerate time to power, enhance resilience and reduce supply chain risk while enable us to meet hyperscale demand.

In parallel, construction of our initial 431,000 square foot 185-megawatt facility is progressing from civil work into foundation phases with precast walls arriving for vertical construction. All long lead items equipment has been secured, helping reduce execution risk and support timelines. We are also advancing infrastructure for high-density colocation, including redundant fiber capacity and a new regional interconnect point in Midland, Texas, linking back to the Pecos campus.

At our Muskogee, Oklahoma campus, today, we announced plans for the expansion of the site to 1.5 megawatts of gross power or approximately 1 gigawatt of leasable capacity. Similar to Pecos, this expansion will leverage a combination of behind-the-meter infrastructure and utility supply power, including the roughly 440 megawatts acquired through the Polaris transaction with our general contractor already secured on site, and we have begun development of the first 82.5megawatt building with initial delivery expected in the second half of 2027.

And finally, turning to other development sites, Hunt County, Texas, Dalton, Georgia Phase III and Auburn, Alabama, each continue to advance through preconstruction milestones and remains on track to meet their initial delivery timelines. In closing, as we look ahead, we remain confident in our ability to execute against our commitments and capture opportunities in front of us. The combination of strong demand, a growing portfolio of scale developments and continued progress on our power infrastructure strategy position us well for the quarters ahead.

With that, I'll turn it over to Jim.

Thanks, Matt. During the first quarter, we reached an important inflection point as our colocation revenue scaled to a level sufficient to cover operating costs and begin expanding margins. This marks a meaningful milestone in our transition with colocation now becoming an important driver of our overall financial profile. Today, we are billing for 243 megawatts, which equates to more than $350 million of annualized colocation GAAP revenue with significant additional capacity expected to begin billing over the next several months. As a reminder, under GAAP, revenue from the Core lease contract is recognized on a straight-line basis over the 12-year lease term, effectively pulling escalators forward.

From a Bitcoin mining perspective, we remain focused on optimization and are running that business to help offset contractual power costs as we continue the transition toward high-density colocation. Going forward, we expect mining activity to continue winding down over the course of the year with a meaningful step down in miners online in the second half. Earlier this year, we monetized a significant portion of our Bitcoin holdings and currently retain only a modest amount of Bitcoin on the balance sheet. Moving on to costs.

First quarter SG&A on a cash basis was just over $30 million. While we are not providing explicit SG&A guidance, we believe this level represents a reasonable baseline for corporate expenses going forward with the potential for opportunistic investments to support growth over the next few years. Separately, you may have noticed that we increased our target cash gross profit range for the CoreWeave contract to 80% to 85%, up from our original target of 75% to 80%. We first introduced that target roughly two years ago. And today, we have much greater visibility into the associated cost structure given we are now billing for a meaningful portion of the contracted megawatts. With that operating backdrop, let me turn to capital formation, where today marked another major milestone for Core Scientific.

We closed our previously announced $3.3 billion CoreWeave project bond financing at a 7.75% interest rate, which we view as highly attractive cost of capital for a financing of this scale. After closing costs and funding the required debt service reserve account, net proceeds were approximately $2.9 billion. For additional context, the bonds include a lockbox structure, which is a cash control mechanism where project revenues are paid directly into a designated account and then applied through the indenture-defined cash waterfall, first to operating expenses, then the debt service and finally, to other uses permitted by the indenture. Unlike a traditional project finance structure, where a lockbox is created to fund a specific project under development. Our structure enables the distribution of the vast majority of offering proceeds up to the corporate level to facilitate investments in a variety of new projects outside the box.

Going forward, the lockbox will service the debt secured by Coreweave's contracted site assets and cash flows. From this perspective, the transaction significantly strengthens our consolidated capital position, validates the quality and predictability of our contracted cash flows and gives us the ability to execute the next phase of our growth plan with greater flexibility, speed and certainty.

We expect to deploy roughly $2 billion of total capital expenditures in 2026. This includes approximately $700 million for both the Hunt County, Texas site acquisition, which closed yesterday, and the Polaris acquisition at our Muskogee, Oklahoma site announced earlier today as well as expenditures to begin preceding approximately 1 gigawatt of new billable capacity. This includes long lead time equipment procurement and various site development and utility support activities across multiple project locations.

We are strategically positioning the business to sign attractive new customer contracts with capacity outside of CoreWeave available for delivery starting in early 2027. The platform we are building together with cost-effective capital we have secured for new project equity investments is differentiated in the market, and we believe it positions Core Scientific to create meaningful long-term shareholder value. Lastly, we recently welcomed Jorge Ray as our Chief Accounting Officer, further strengthening our finance and accounting team. Jorge brings valuable accounting and public company reporting experience and his leadership will be important as we continue to scale the business and support our next phase of growth. I'll now turn the call over to the operator for questions.

[Operator Instructions] And our first question will come from Brett Knoblauch with Cantor Fitzgerald.

Congrats on the site expansion at Pecos and Muskogee. I guess maybe just on the hyperscaler exclusivity expired. Clearly, there's demand with additional tenants kind of backfilling that. But can you maybe shed light on why it expired, why it didn't progress? Is there anything that maybe those sites were not of interest or they weren't interested in? Or just some more color around that dynamic?

Yes, absolutely. And thank you, Brett. Yes, I mean, those sites, as you mentioned, are incredibly attractive, both Pecos and Muskogee, given their ability to scale, represent tremendous opportunity for hyperscaler. As we noted in the prepared remarks, three hyperscalers immediately engaged. They're incredibly attractive sites. And really, with the one that we are under exclusivity with, it's hard to determine the exact reasons why. But for us, I mean, we got to the end of -- got to the end of the exclusivity. And we thought this is the best time for us to bring these back to market because hyperscalers were knocking at the door and asking questions about the sites. And we knew we could have an opportunity to bring another hyperscaler into the fray. So we feel great about our position today given the competitive dynamic.

Perfect. And maybe just one follow-up. It seems like kind of the AI pendulum swinging into full mode here, and you guys do have, I believe, a lot of capacity available to be kind of RFS by early '27. Do we think we're closer to maybe a second tenant today than we were when you guys reported 4Q in early March?

Yes. I mean when you look across our site portfolio, we have five sites with first data halls RFS in 2027. It's an incredibly unique position given the different size and scale and geography spread that we have inside our portfolio. We're in conversations with all of the hyperscalers, chip makers, AI labs, Neo-clouds. Really, we're in a unique position here just given the asset spread that we have. And so I would say, definitely across the entire site portfolio, we are closer than we were before.

Our next question will come from John Todaro with Needham & Company.

Congrats on the expansion of Power. Two for me. I guess just one, going back to the other three hyperscalers you're now in conversation with. I guess just if we frame it up, was there already some dialogue at some point? I mean, obviously, it's a little bit of a limited universe. But should we be thinking of kind of starting the process anew with them? Or there's already been at some point along the way, pretty far along where just we could get something maybe a bit sooner than necessarily restarting the process?

Yes. Thanks, John. Yes, I mean our relationship with these groups is not new. We are engaged with them on other sites. So this was just really bringing back both Pecos and Muskogee back to the table. And that's really why we are able to immediately reengage with those customers.

Got it. Understood. That's very helpful. And then just you mentioned starting some of the process on building out some of these assets. It sounds like before lease gets done at some of them. Is there any guardrail on how much CapEx you would start putting forward before getting a lease?

Yes. I mean the way we're thinking about it right now is we want to take the first data hall to full RFS. And as part of that, that means we're securing the labor, securing the trades, we're securing long lead equipment. And we're putting ourselves in a position where if a customer signs really within any time period leading up to the RFS, the first data hall, we can just continue to extend all of that labor that we have secured on site. So that's kind of our guardrail right now in terms of where we sit. But we feel very confident in the strategy and the ability to show the progress that we're making across each of these sites to customers is really what's forcing the engagement here because everyone is incredibly interested in capacity that's getting delivered in '27 right now.

And we'll go next to Tim Horan with Oppenheimer.

So do you have a rough idea when you might sign a contract? And can you maybe just talk about the pricing trends at a high level?

Yes. I mean I'll just say we're actively engaged right now across every major group, and we feel very confident based on where we sit today versus where we sat three months ago. The only thing that's changed is our assets have continued to build more value. We've continued to deploy more capital, and we've continued to get closer to the RFS state. So we have high confidence in the customer conversations that we're having today. And if you could just remind me, Tim, what was your second question?

Yes. So what are you seeing in the pricing trends? So with the pricing of the new contracts do you expect?

Yes. I mean I think you could expect to see pricing continue to firm up. Really, that's the result of both labor and equipment continuing to inflate. And so what you're just seeing is a similar move in pricing.

And then just lastly, behind-the-meter power, can you give us just a sense of what's the lead time on that? And ultimately, how will your cost per build your own versus the grid compare?

I mean, right now, what we're looking at really is to deploy behind-the-meter solutions anywhere from about 12 to 14 months. But the great part is for us is that these are opportunities given the locations that we have available to us is really going to represent a great opportunity for continuing to expand at those sites. The other site that we haven't talked about, Hunt, has the opportunity to potentially bring behind-the-meter, but that's something that we're still in the evaluation phase today, haven't necessarily done as much of the due diligence that we've done across Pecos and Muskogee, and the work that is currently being performed there.

And is the ultimate cost of the customer about the same as the grid or a little bit more?

It's about the same. I mean, the economics for us as developer look very similar. So the cost to the end tenant on a blended basis per power rate is not materially different.

And Michael Donovan with Compass Point has our next question.

So another question behind-the-meter. The Muskogee announcement this morning referenced Oklahoma's behind-the-meter legislation. Can you explain what that legislation changes for Core Scientific's ability to develop and whether it gives Muskogee a timing or cost advantage versus opportunities in Texas?

Yes. Governor Stitt has been a big advocate of bringing behind-the-meter opportunities to the state of Oklahoma. Obviously, you saw Governor Stitt's quote in the press release today. Oklahoma is focused on figuring out how to bring more generation to the state. And so our ability to execute in Oklahoma, I wouldn't say it's necessarily any easier or any more difficult than our site in Pecos, but we definitely have the support of the government there to continue to bring more generation to the state.

And one follow-up, if I may. Have you contemplated owning the generation assets? Or would you be solely partnering with a power developer? And then how are you thinking about redundancy?

Yes, I'll take the first part of that question, and then I'll hand it over to Matt to take the question about redundancy. As we evaluate the behind-the-meter solutions, there are potentially some solutions that we would own ourselves, and there are others that we would work through a third party that would provide us a PPA, and we would be paying for those over a course of time, which would be included in the power price. So there are a few different methods that we could go down. It really just comes down to the economics question, as well as who the behind-the-meter solution is from. But Matt, do you want to talk about redundancy?

Yes. To include in that is the maintenance and operation of the behind-the-meter generation, sort of come along -- comes with that PPA agreement as well. And from a redundancy standpoint, obviously, when we're building behind-the-meter, redundancy becomes much more critical in terms of when you're building high-availability services.

So we'll think about redundancy in terms of we need to be able to support the full load -- of the portion of the campus that we're powering from behind-the-meter under maintenance conditions, meaning that we need to be able to take some of that equipment offline for maintenance, maintain full load, and have redundant capacity still online and available in the event of a failure. So you can almost think about that as a minimum N plus 1 configuration, maybe an N plus 2 or an N plus 20% or N plus 30% type of redundancy scheme.

And moving on to Joseph Vafi with Canaccord. Congrats on the progress.

Just wondering how you're managing, perhaps the labor side of the builds here. I'm not quite sure if you're employing a few large GCs on the build? Or are you looking at construction labor as any constraint in the market right now?

Great question. Labor is one of the primary constraints in the market, if not depending on which market we're talking about. But when we look nationally, labor is a big issue. It's one of the reasons why we think we have an advantage by being able to proactively invest in the development of these sites, being able to secure and tie up the labor through our projected RFS, and scaling beyond that.

In terms of how we're doing that, we have a couple of large GCs executing the sites in development today. And those GCs have a lot of leverage in the marketplace. being able to secure electrical contractors, mechanical contractors, civil, et cetera. And all of those, all except for probably one site, are already fully mobilized and executing our development as we speak.

We'll go next to Paul Golding with Macquarie Capital.

Congrats on the progress. Just wanted to ask about these behind-the-meter opportunities that you've been discussing. I know you just mentioned in response to another question that you might partner with someone who would give you a PPA, or you might look at an opportunity to do it yourself behind-the-meter in terms of generation. How is the air quality component of that structured? Or how do you see that potentially being structured? Do you still have to go to the market and apply for those emissions permits? Or would a partner that you're speaking with already have that in hand? And then I have a follow-up.

Great question. As we -- I mentioned in our prepared remarks, the technologies that we're going to get behind and support for all of our behind-the-meter sites are going to be technologies that are low emissions generally. So that will give you a little bit of insight as to what we're not thinking about from that standpoint. And to go and to talk about the permitting standpoint, yes, we will have to certainly go and apply for air quality permits for many of these deployments. In some cases, that will be in participation with the behind-the-meter operator or supplier.

And in other cases, we'll be doing that on our own. And I will say that in both Pecos and Muskogee, we're already down -- kind of far down the path of sort of our air quality studies for the implementation of those solutions.

And I was just hoping you could also give a little more detail around some of the puts and takes that enabled you to raise the run rate margin profile on the existing energized and billable capacity from that 75 to 80 to 80% to 85%.

Yes. So two years ago, when we signed the CoreWeave -- original CoreWeave contract, we had a scope of service contemplated in that deal.

And I think we had an element of conservatism knowing that we hadn't broken ground on the project at that point, knowing that we were going to be deploying over a fairly lengthy period to have what I would call a very solid perspective on what we think we could have delivered.

And once you're two years after the fact, you're into it and we've got more experience under our belt on the specificity of actual heads that are going to be devoted to the activities and the contractors that we're using and actually have deployed on site. It's really just a true-up of that experience. So, we feel good that we're at a margin level that we can deliver today, and we felt more confident that we could be a bit more prescriptive of where we think we're going to end up.

And our next question comes from George Sutton with Craig-Hallum.

As you begin to market to the chip makers and the Neo-clouds, I'm just curious, do you have a bifurcated sales portfolio where some of the sites and some of the maybe even parts of locations are being marketed to those folks versus the hyperscalers? How is that working through the system?

Yes. I mean, really, we're showing both chip makers, Neo-clouds, labs. We're showing them the same sites that we are also showing to hyperscalers. I mean as we work through these processes, oftentimes, they're migrating to one or another site. But in reality, we're showing our entire portfolios to each of the customers that come through our door.

And one other question relative to the decision to execute ahead of the contracts. How does the negotiation get altered with some of these potential customers when you've secured the supply chain and you're kind of moving forward? Are they -- does that accelerate discussions? Does that keep them more engaged? Can you just walk through that thought process?

Yes. I mean it definitely keeps them more engaged. I mean they rarely see sites that come across their desk where there's an RFS timeline really within 18 months, but even more so less than that. And so for us, being able to show photos and videos of sites with active construction going on and the list of equipment that are on order that dramatically changes the dynamic of the discussions because this isn't just a photo of a piece of land. This is an active construction site actively progressing towards building a data center.

We'll go next to John Hickman with Ladenburg Thalmann.

And this is a little bit esoteric. But now that you're well into your build-out for CoreWeave, could you comment on the experience? Like what was harder than you thought? What was easier? Where do you think you have a competitive advantage now that you've put that many megawatts into production?

It's actually a great question. The kind of reflecting on that, I think the thing that was much more difficult than we certainly gave a credit for was the -- was actually executing on brownfield conversions, which is why everything you see that we're doing forward is actually a greenfield site with a very highly standard basis design that allows us to get kind of leverage over our supply chain and be super predictable in terms of our delivery dates.

Brownfield sites are highly unpredictable. They require a lot of customization. It's a lot of effort to try to retrofit an existing building. While sometimes that could be faster, it also has -- it comes with a lot more complexity. So that's what I would say is probably our biggest lessons learned out of this.

Okay. And so competitively, now that you've learned that, so where do you think you are with other people that are trying to, I mean, there's many other competitors that are trying to build data centers…

Yes. I think the great part of this is that we've had five sites to practice on, but we have been executing these high-density builds across all the CoreWeave locations. We have been able to iterate on those designs. I mean we've executed more than 150 design changes along the way across the portfolio.

And that gives us a little bit of ahead of the game in terms of what doesn't work and what works well. And all of those learnings have been sort of culminated and formulated into go-forward build strategy. And so, I think we have just the advantage of learning all those lessons firsthand in real time. And so, we won't make those mistakes going forward.

Congratulations on the new deals.

And our next question comes from Nick Giles with B. Riley Securities.

This is [Henry Hearle] on for Nick Giles. I wanted to ask about the change in your approach to exclusivity. So in what scenarios would you go into it? And then you also mentioned being in contact with several counterparties. So would you expect to announce exclusivity if you were to enter into one?

Yes. Thanks, Henry. I wouldn't say that we would expect to announce in the interim between quarters. But really, what we've migrated to here is moving to a milestone arrangement method, which allows us to ensure that the cadence is moving at the pace that we would expect it to in a deal that would move towards closing.

So that allows us to bring a site back on market if we don't feel like the pace and cadence is necessarily where we would like it to be. So we've migrated to this strategy. We're executing on it now, and we feel like it gives us the best shot on goal given the demand that we're seeing in the market today.

And then on winding down your Bitcoin mining operations in the coming quarters, do you guys have a definitive target date to be fully out of that business? Or will it kind of act as a small hedge going forward?

I would say over the course of the remainder of this year, the Bitcoin mining business is going to continue to migrate lower. And by the end of this year, we will only have one or potentially two sites operating Bitcoin mining.

Moving on to Stephen Glagola with KBW.

Adam, I just wanted to touch base again on the challenges on securing the leasing commitments at Pecos and Muskogee. From my standpoint, it would seem like you have strong leverage there. The sites have near-term power. You can point to your execution in the CoreWeave buildout to date. So I guess like maybe my question is, are you seeing the hyperscalers become more selective in their choice of development partners? And if so, how is that influencing demand or deal timing?

Yes. I mean I think the interesting part about this is the exclusivity that expired, that customer is still at the table and still interested in those sites. So, I think you are seeing that broadly across the market. You're seeing repeat deals across some of the developers, especially on the private side.

So, I would agree with that. But also, they're also looking for experience in the development of this type of infrastructure. This is different than the traditional data center infrastructure. And given the experience that we have and our ability to show them five sites that we built, 590 megawatts in progress of critical IT load, that's a differentiator. And that really puts us in a different bucket here. So as you mentioned, we have great experience building. We have sites under construction, and it really puts us into a pretty unique category in this industry.

And this now concludes our question-and-answer session. Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. You may disconnect your lines, and have a wonderful day.

Greetings, welcome to Core Scientific Fourth Quarter Fiscal Year 2025 Earnings Conference Call. [Operator Instructions]. Please note, this conference is being recorded. I will now turn the conference over to Jon Charbonneau, Vice President of Investor Relations. Thank you. You may begin.

Great. Good afternoon, and welcome to Core Scientific's Fourth Quarter and Full Year 2025 Earnings Call.

Before we begin, I need to remind you that statements made on this call, other than historical facts, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are based on our current expectations. Words such as anticipates, estimates, expects, intends and believes and similar words and expressions are intended to identify forward-looking statements. These statements are subject to risks and uncertainties that could cause actual results to differ substantially. For further information on these risks and uncertainties, we encourage you to review the risk factors discussed in the company's reports on Form 10-K, 10-Q and 8-K filed today with the Securities and Exchange Commission and the press release and slide presentation contained therein. The forward-looking statements we make today, speak as of today only, and we do not undertake any obligation to update any such statement to reflect events or circumstances occurring after today. Today's presentation is available on our website investors.corescientific.com. The content of this conference call contains information that is accurate as of today, March 2, 2026.

Joining me today from Core Scientific are our CEO, Adam Sullivan, our Chief Operating Officer, Matt Brown, and our Chief Financial Officer, Jim Nygaard. We will conduct a question-and-answer session after management's remarks. We will now begin with remarks from Adam.

Good afternoon, everyone, and thank you for joining us. On our October 30 update call, we laid out four specific deliverables for this earnings call. First, we expected to sign at least one new customer, an important step towards diversifying our customer base. Second, we planned to sign one new power expansion contract in an existing site. Third, we expected to sign a new large land and power agreement. And fourth, we plan on making a financing announcement. These are the building blocks for our future growth, expanding contracted revenue, increasing our power optionality, widening our footprint and funding growth in a way that is responsible and repeatable.

Before we talk about those four priorities, let's talk about execution. The complexity of these build-outs is enormous, and we've made incredible progress on our CoreWeave build-out. Despite challenges in the market and the evolving criteria for operating the newest generation of GPUs. This requires the deep bench that Core Scientific has to adapt to changes in real time. Matt, will cover the details, but here are the facts.

As of this week, we'll have energized approximately 350 megawatts of capacity, of which close to 200 megawatts are currently billing. This puts us well halfway -- the halfway mark of the CoreWeave contract. When we say energized, we mean power has been delivered and is generally within 90 days of billing. The natural lag between energization and billing commencement varies by site and customer requirements. Now let's put that in perspective. Last year, we energized as many megawatts as our closest publicly traded peers combined. We were building and delivering while they were still signing their first AI contracts. And going forward, to keep this simple and consistent we'll report megawatts when they start billing.

In this business, the market will always talk about demand. Investors should stay focused on what actually matters here, execution. Schedules will always move. It's easy at mile 2 of a marathon to say that you're on pace, but these are large and complex projects that expose who can actually execute. We've shown we can build, turn on capacity at scale and deliver for our customers. This leads directly into our pipeline. As this industry matures and evaluates opportunities against a more stringent criteria we're confident we check those boxes through proven execution and true site readiness. And we're disciplined. We only signed contracts we know we can deliver on time and done right. That discipline is how we're building a durable, long-standing company, one defined by execution and known for being a great partner to our customers. That's what we set out to do, and it's exactly what we're doing today. And over time, that's what will separate us from the rest of the industry and position us to be a market leader for years to come.

Now let me start by providing an update on the most visible item on our priority list. A new customer contract. We did not signed one by this call, and we are not satisfied with that. But the demand is there, and we have 2 sites under short exclusivity arrangements. We expect that this exercise will result in colocation leasing agreements in the near future. Our funnel is larger and broader than it was a few months ago, and we are in active discussions with hyperscalers, neo clouds and large enterprises. This is a timing issue, not a demand issue. While we are operating under the merger agreement, hyperscalers simply would not engage with us. Those conversations restarted following termination, and we have made significant headway. Deals at this level are not a one meeting exercise. It's a rigorous multistep process. While hyperscalers have a longer contracting process, the path to project financing and delivery can oftentimes be more straightforward. The bottom line is we are engaged, moving through the process and competing for the right long-term opportunities.

Now on Neo clouds, there is meaningful demand across the industry. However, for those deals to work for us, there needs to be a strong balance sheet standing behind the contract. In most cases, that means a hyperscaler, chip manufacturer or another investment-grade guarantee. Putting that structure in place requires the due diligence of both the Neo Cloud and investment-grade guarantee, which adds more coordination and steps and because these guarantees are new for many parties, they take time to negotiate and finalize. This is one reason we believe you've seen fewer Neo Cloud deals announced across the industry recently. We are not going to compromise on counterparty strength because that protection matters over the life of the contract.

Second, we said we plan to add new power at an existing site, and we delivered in Dalton, Georgia. Dalton will expand to 450 megawatts of total gross power capacity, including 120 megawatts of uncommitted leasable customer capacity. Our Dalton site is strategically located about 90 miles from Atlanta, sitting in the middle of an incredibly attractive demand corridor. We've been working towards this expansion with local stakeholders for over a year. And to support it, we've secured an additional 175 acres of land. This is what execution looks like, long-term planning, deep coordination and strong partnerships with the utilities and the local community.

Late last year, we also increased leasable customer capacity in [indiscernible], Texas to 200 megawatts, an area that has seen significant traction for high-density compute. Given that demand, we're moving forward with the conversion of Pecos from Bitcoin mining to colocation. Pecos is in the goldilocks zone for customer signing, meaning we've secured a general contractor, locked-in long lead equipment and conversion work is underway with the timeline to RFS within 12 months. This means Pecos is within a time frame that customers are actively trying to solve for right now. Stepping back, our strategy remains the same. We expect every megawatt in our portfolio to be dedicated to colocation within the next 3 years.

Third, we delivered on signing a new large land and power agreement through our contract to acquire a major new site in Hunt County, Texas. This site represents approximately 265 acres that we expect can support roughly 430 megawatts of gross power capacity or 285 megawatts of customer leasable capacity. This location is about 45 miles outside of Dallas in one of the fastest growing colocation markets. We expect this to close by the end of Q1. And importantly, this site has a clear interconnection path. The ERCOT energization schedule was approved in 2024 and with power expected to begin coming online in 2027 and ramp through 2029. You've also seen the headlines around ERCOT. In our view, more discipline and transparency in that process is constructive. It helps reduce speculation and rewards companies with real sites, real plans and the ability to execute. We believe this makes our two leasable sites in Texas, both Hunt and Pecos even more attractive in the market given the clarity around their ability to deliver.

As we sit here today, our pipeline is approximately 1.5 gigawatts of customer leasable capacity. This number is not a speculative position. It is not inflated with load studies. It only includes real opportunities with a clear line of sight to development, existing power under contract, new sites like Hunt, and available incremental power at both new and existing sites. Power matters, and we stay disciplined on it. But in the broader market, powers often treats as the bottleneck and we think that can be overstated. In practice, the bigger constraints are often securing long-lead equipment and lining up experienced general contractors and subcontractors. The reality is simple. We already have more power in our pipeline than we can build over the next several years.

And fourth, on financing, our balance sheet remains strong, and we have a variety of financing options that Jim will cover here shortly. Looking at 2026, our priorities are straightforward: diversify our customer base and execute on the CoreWeave contract. We are focused on delivery, disciplined growth and doing what we said we would do. I'll now turn it over to Matt to give an updated construction overview.

Thanks, Adam. Through 2025, our teams executed with intensity and precision. We stay focused on what matters our customers and building the infrastructure powering the fourth industrial revolution. Our mission is simple. Designed to deliver AI factories at scale, purpose-built for accelerated computing. Every quarter felt like new architecture cycles, new GPUs, higher power densities and new cooling paradigms that created extraordinary opportunity and real complexity. We maintained operations through unprecedented [indiscernible] across multiple regions, integrated designs in real time to support the newest GPU platforms, applied lessons from prior deployments to better align infrastructure delivery with evolving customer needs. Each challenge refine the system, each build made the thinking machine better.

Now let me take a step back and frame the magnitude of what the team accomplished over the last 14 months. Alongside our design build partners, we broke ground on 5 AI factories supporting our 590-megawatt commitment to CoreWeave. Two brownfield expansions, Denton, Texas and Marble, North Carolina; 3 greenfield campuses, Muskogee, Oklahoma; Dalton Phase 1 and Phase 2 in Georgia. In 2025, these 5 sites represented 1 million square feet of data center shell, nearly $2 billion of installed infrastructure assets, more than 5 million labor hours supported by an average of 3,300 workers on site, and over $5 billion in total project investment. This is one of the most significant AI expansions underway anywhere in the world.

Let's start with Texas. Our 262-megawatt, 400,000 square foot Denton campus made remarkable progress. By the end of Q4, Denton delivered 67 billable megawatts across 3 buildings with roughly half the campus energized. Today, Denton North is fully operational, running production GPU workloads and represents 90 billable megawatts. At Denton South, the first 41-megawatt data hall has commenced building -- has commenced building and as of today, our next 41-megawatt -- 41-megawatt data hall will begin the energization process. The remaining buildings on the South Campus remain on track for Q2 energization with full campus completion by midyear. Denton alone currently represents approximately 130 billable megawatts, actively supporting more than 50,000 Grace Blackwell GPUs.

In North Carolina, our 65-megawatt 250,000 square foot Marble data center achieved full site energization in 2025. 2 of the 3 data halls were delivered by the end of the fourth quarter, representing 36 billable megawatts, supporting approximately 15,000 Grace Blackwell GPUs. The third and final data hall is currently in commissioning and is expected to be delivered in the second quarter. Our customers are actively accelerating GPU deployments at the site this week.

Next, at our Muskogee, Oklahoma Campus Phase 1. A 70-megawatt, 138,000 square foot data center has completed vertical construction and is now fully energized and has advanced in the commissioning, remaining on track for full delivery in the second quarter. Finally, our Dalton, Georgia campus Phase 1. A 30-megawatt 52,000 square foot data center has also completed vertical construction and is now fully energized. Commissioning is progressing and preparing the facility for high-density liquid cooled AI systems with full delivery expected in the second quarter. Then at Dalton Phase 2, a 145-megawatt 250,000 square foot data center, vertical construction is currently underway with full delivery targeted for early 2027. This facility will serve as the final AI factory supporting CoreWeave's 590-megawatt commitment.

Looking ahead, I want to outline our development and go-to-market strategy, Operation Forward Observer. This strategy is straightforward, advanced development across multiple sites through the first commission data hall while simultaneously securing long lead equipment to enable rapid expansion by progressing sites to this advanced stage before contract signing, we position ourselves ahead of our peers and winning colocation agreements. This approach provides customers with a high degree of certainty around RFS time lines, not only for the initial delivery but also for seamless expansion into subsequent data halls. Executing this strategy strengthens our competitive positioning, enhances our leverage in negotiating favorable terms with a broad base of creditworthy customers.

Let me walk through our initial Forward Observer Sites. First is the hunt campus, a planned 285 leasable megawatt AI campus strategically located near the Dallas-Fort Worth market. Our development teams are actively engaged in predevelopment work to deliver the full 285 megawatts across multiple buildings with initial delivery currently planned in the second half of 2027. Next, our Pecos campus, our planned 200 leasable megawatt campus in West Texas. Our development teams are mobilized and advancing early civil work and engineering on Phase I which is designed to deliver 185 megawatts of leasable capacity across multiple data halls with initial delivery expected to begin in early 2027.

At Dalton, Phase 3 will consist of approximately 250,000 square foot greenfield data center planned to deliver 120 megawatts of leasable capacity across multiple data halls with initial delivery target for the second half of 2027. The development teams are mobilized and progressing through early civil work engineering. Finally, construction is underway on the first phase of our 30-megawatt leasable data center in Albern, Alabama. The site remains on track for its first 10 megawatts in the second half of 2026, Albern is designed with a Tier 3 facility with dense connectivity, positioned to serve multi-tenant enterprise AI customers. Engineering, preconstruction and permitting are complete and all our lead equipment is on site.

As we close, the takeaway is simple. We've built a repeatable execution engine for AI infrastructure at scale. We delivered more than 185 meaningful billable capacity, progressed multiple campuses through energization and commissioning, reached 350 megawatts energized and expanded our development pipeline by 600 leasable megawatts to support the next wave of accelerated computing, all while continuing to enhance how we design, build and onboard customers. Entering 2026, our priorities are clear. maintain alignment with customer GPU deliveries, stay ahead of the technology curve and keep transforming megawatts in production-ready AI factors. We're proud of what the team accomplished in 2025 and even more focused on the path ahead in 2026. With that, I'll turn it over to Jim.

Thanks, Matt. 2025 was a transitional year for the company. While the vast majority of our revenue continued to come from our Bitcoin mining operations, our primary focus was on scaling the Colocation business, including the ongoing build-out of capacity for CoreWeave. At the same time, mining activities continued to support the funding of the company as we progress through the transition. Although colocation revenue in 2025 was limited, we expect to reach an important inflection point in the coming months as we begin billing for additional megawatts, bringing colocation revenue to a level that will not only cover our operating costs but also drive significant margin expansion going forward.

In terms of Bitcoin mining, we remain focused on operational optimization, and we'll continue to mine to cover contractual power costs. We finished the year with a very strong balance sheet with total liquidity of approximately $530 million. We also opportunistically sold just over 1,900 Bitcoin for approximately $175 million in January and materially higher prices above current market levels. At this time, we hold under 1,000 bitcoin and expect to remain opportunistic going forward. In terms of a broader capital formation strategy, we have a full range of financing options available that we will continue to evaluate in the coming months and quarters as our needs evolve, including both sizable alternatives at the corporate level, and the up to $4 billion that we can raise against our contracted capacity with CoreWeave at stabilization. These capital sources will fund investments in our pipeline sites going forward. At these sites, we will also utilize project-based financing structures with 60% to 85% advance rate of build costs depending on customer credit quality and site characteristics.

Finally, I want to address the historical restatement outlined in our 10-K filing today. In early 2025, we changed auditors to KPMG from Markham. As part of KPMG's normal audit procedures, and our ongoing review of the conversion of legacy mining sites to colocation, we identified an error in our historical accounting going back to 2024 for certain property, plant and equipment, that was demolished as part of those conversions. Under the historical accounting treatment, demolition costs were capitalized and existing carrying values were maintained. It was determined that these values and expenses should have been written off in certain historical periods. We have filed amended statements to correct the error. Please refer to the SEC or the Core Scientific Investor Relations website for today's filings.

To clarify, there was no impact to revenue, adjusted EBITDA or on the cash flow. And while you will see a material weakness noted in our filings for the next 4 quarters, rest assured we have taken the appropriate steps to strengthen our controls over nonroutine accounting items going forward.

As we look ahead, we are incredibly excited about the trajectory of our business. The demand backdrop for high-performance infrastructure remains strong. and we've positioned Core Scientific to capitalize on that opportunity with scale, operational discipline and a clear strategic vision. We are building a differentiated data center platform with the capabilities and balance sheet strength to compete at the highest level. With an experienced and focused team, a growing pipeline and a commitment to disciplined capital allocation, we believe we are not only well positioned for the coming year, but structurally set up to create meaningful long-term value for our shareholders. With that, I'll turn the call over to the operator for questions.

[Operator Instructions] Our first question is from Jon Petersen with Jefferies.

Great. Thank you. Adam, you talked about two deals that are, I guess, in discussion right now. Can you give us some more details on the potential sizes of those deals, maybe what locations those might be in? And then also just kind of curious your selectivity around the type of tenants that you -- potential tenants that you're willing to talk with right now, how important credit quality is?

Yes, happy to. And thanks for the question, Jon. it's helpful to look back at October 30 when we first emerged from the termination of the merger agreement. One of the things that we talked about is that we were engaged with a number of different counterparties, including Neo Clouds. But at the time, hyperscaler customers and certain large investment-grade counterparties, were not willing to speak with us during that time, which was understandable. Where we have migrated our sales pipeline over the course the past 4 months as we've continued -- or we've engaged with those large counterparties once again, which has been great to see. We're in discussions across a number of them with a number of our sites. And one thing I'll say is we -- today, we sit with 500 megawatts under exclusivity arrangements with a large investment-grade counterparty, that we're excited to continue to advance forward, and we're really looking forward to hopefully signing one of those over the near future.

Okay. All right. And as a follow-up, in your presentation, you list 700 megawatts of unannounced leasable customer power opportunities. Is that additional power you might get at existing land sites? Is that new land sites? How do we think about what that bucket is exactly?

Yes. That's really just a combination of both of those items. There are places where we might be waiting to sign certain extensions on power an existing site due to certain collateral requirements until we're closer on customer signing or it might be sites that we have under exclusivity are completing due diligence but have the confidence to be able to bring those to customer conversations as opportunities that we can present to them.

Our next question is from Brett Knoblauch with Cantor Fitzgerald.

Adam, on the new site in Hunt County, I think for the most part, the deals we've seen get signed kind of are on maybe sites with energized power today, obviously, this isn't going to be energized until next year. Can you talk about maybe the level of confidence you have in being able to get a lease signed for that site even though powers going to be delivered at a later date?

Yes. I mean, for us, really, it doesn't matter if the power is available today, because it's going to take time for us to construct and build that site. So as long as the power and the ramp schedule that we've been provided, by the utility matches with our construction schedule, that is acceptable to potential customers. So we feel great about the hunt site. As we see it today, that the site is not impacted by Senate Bill 6 or maybe the recent ERCOT changes. And we've also been told that this project will not be restudied by ERCOT. So it gives us a lot of confidence in that site and that project, and we're excited about building out another large-scale campus just outside of Dallas.

And maybe as one follow-up from a demand perspective and maybe a pricing perspective, it feels like the deals have gotten better month after month, quarter after quarter. Are you guys seeing that on your end? And when you guys are having conversations with prospective tenants, just curious kind of [indiscernible] overall pricing environment, where we're heading?

Yes. We've definitely seen pricing continue to shift. Part of that is driven by equipment prices and labor prices continuing to rise in the market. And so you're seeing a similar move in terms of leasing economics. That's one of the reasons why we launched our project with -- going forward with securing long-lead equipment, securing trades at sites and beginning civil work across a number of different locations, so that we could lock in economics at those sites, essentially locking in what our costs are going to look like. while we're still in an environment where we're seeing lease rates continue to move higher. So that's something that's more protected from our business, but it's also an offensive approach for us to continue to attack the market and put ourselves, in a position to really compete on deals with hyperscalers because they're expecting capacity delivered sub 18 months and in some cases, sub 12 months. So for us to be able to put ourselves in those positions, we have to be making the moves that we're making today related to really securing site readiness around these new locations.

Our next question is from Darren Aftahi, and he is from ROTH Capital Partners.

Two, if I may. Just on the Hunt County site. Could you talk about what the rough payment was? And then I know you said the energized 2027, how does that kind of energization scale up? And then a follow-up. Jim, you've made a comment about financing as the CoreWeave deal when there's "stabilization"? Can you just kind of enlighten us what that actually means and perhaps that 6 months after all the campus they're built out?

Yes. Thanks, Darren. So we'll be announcing further details related to the Hunt County site, as that site gets to close later in this quarter. As it relates to energization, as we look at the megawatts, there are tail megawatts here, but really the energization schedule ramps alongside of what our construction schedule looks like. So we feel how that site looks today in terms of our site readiness and our ability to deliver against the ramp schedule provided by the utility. We think that puts that site in a very strong box in terms of checking a number of different criteria that both hyperscalers as well as other large offtake companies may have. So we're excited about that site and how that continues to move forward. I'll let Jim take the last question you had.

Thanks, Adam. When you look at the size of our contract with Core weave at 590 megawatts, it represents somewhere between $5 billion and $5.5 billion of total infrastructure. So when I say stabilization, and I indicate the availability of capital up to $4 billion, I'm referencing the full stabilization of the contract relative to the asset base that we're constructing. The reality is that this is different than what is more commonly structured in project finance terms where you're borrowing the money upfront and building later.

We have substantial availability under that asset as to borrow a good portion of that $4 billion today. But the scaling is quite fast because we are already at such a significant progress on the billing we will get through the vast majority of that before the end of this year.

Our next question is from Nick Giles with B. Riley Securities.

This is Henry Hurl on for Nick Giles. I wanted to follow up the new Hunt County site. Specifically, what does the site kind of look like today? And are there any preliminary permits that are needed before construction can begin?

Yes. I appreciate the question. So today, the site is essentially what we have to do to kind of energize that site is there's still a substation that needs to be built. So when we look at the kind of the utility energization schedule and the construction schedule, we feel like we can start energizing that site in late '27, but that's going to require us kind of start to get the process rolling both in terms of our preconstruction activities and getting this substation going here in pretty short order.

And then just on preliminary permits for construction. Any color on that?

So we've gone through pretty much all of the ESA sort of Phase 1, Phase 1 studies and geotechnical for the site. We have schematic designs in place. And so we have a pretty good idea on the development strategy for that site. And it's really just a matter of finalizing design docs, getting to IFPs and then releasing those for permitting.

Our next question is from George Sutton with Craig-Hallum Capital Group.

Matt, you referenced new architectures in cooling and also new GPUs, and that sounds like a bit of a frustration. I'm just curious how as you're developing new sites, how much change you're seeing relative to the prior sites?

Yes. So the evolution, I think, on the technology stack, obviously, when you're building projects that are taking 12, 18 months to sort of get out of the ground and you're going through sort of multiple sort of technology changes and trying to adapt to those in real time. In our case, we went -- we started our very first data center with CoreWeave started with H100, then we quickly evolved into NVIDIA's first iteration of Grace Blackwells, NVL 36 then NVL 72 and then to -- from the GB 200 platforms into the GB 300 platforms and sort of having to adopt sort of the data halls kind of in-flight to those technology iterations, and then recently, NVIDIA released its reference architecture for Rubin Vera and so we have a pretty good idea kind of what that sort of paradigm shift is going to start to look like, both from a cooling and power distribution standpoint. And so I would say our teams are starting to factor those changes into our new projects. And so that we're both -- we're pretty future-proofed in terms of what we're expecting next to happen.

And then in addition, the last thing I'll say, obviously, the Google and the GPUs and the GPU is becoming more prevalent into the market. And so we're also evaluating sort of how do we take our standardized base of design so that we have a more predictable, repeatable approach to putting product into market that is both adaptable to what we're doing today and what we're expecting from NVIDIA tomorrow and these new chipsets come in the market like GPUs as those become more prevalent even outside the Google ecosystem that we're able to adapt our data halls to those shifts as well. So a lot of moving parts, a lot of things happening kind of in the technology ecosystem, but our engineering team and our development teams are -- I think, are well ahead of the curve and thinking about how do we adapt to those.

Very helpful. And then just a follow-up for Adam. You mentioned the broader and larger funnel of groups that you're talking to, but you also have suggested that we need investment grade guarantees at some point. How broad can that funnel really be relative to those guarantees? Are you seeing that availability?

Yes. I would say we're seeing a pretty wide range, and that range has continued to expand. It's helpful to think back on 2025, think back of the demand from both Neo clouds and from AI labs in the first half of 2025, you actually do not really see many new deals being announced. That changed dramatically, obviously, in Q3 as guarantees were introduced into the market. We saw some deals backed by Google. And I believe over time, we're going to continue to see the evolution of these guarantees. And the ones we've seen so far come from widened varying sources. We listed hyperscalers, chip manufacturers and other large investment-grade guarantors. And that's really what we're seeing in the market. It's a wide range.

They look different, all the way from debt guarantees to full lease guarantees, so they cover the full spectrum. And I think what we're going to see over 2026 is really centralization on terms related to those guarantees and wrappers, that exists in the market. So I think some of the delay and pause that you've seen in some of the neo cloud and lab signing over the course of the past 3 months has more been related to what are those guarantees going to look like? Because I don't think they're going to look like they have in the past. So we're in the process of negotiating certain -- with certain guaranteed counterparties here. And we're hopeful that these counterparties begin to centralize on the right guarantee in order for data center developers to go out and fund these developments.

Our next question is from Mike Donovan with Compass Point.

In prepared remarks, you stated you have more power in your pipeline than you can build over the next few years. Can you share a range of megawatts you are confident you can bring online per year? And are there any areas of concern today around supply chain or labor availability?

Yes. No, I appreciate the question. So in terms of what we think is kind of an order of magnitude of what we think we can develop, a lot of that is going to be really customer-driven. We announced in our strategy that we're progressing multiple sites through the design-build process into 2027, but as customers step into those, that's really going to drive what the scalability and the pace of acceleration in terms of how many megawatts we built out.

In previous quarters, I think we've guided around the idea that we could, in theory, build out as much as 500 megawatts in a single calendar year. I think that's certainly possible. But that's going to require a customer stepping into these projects pretty early so that we can line up the financing and line up the supply chain in order to scale those out to that sort of order of magnitude of development. So another way of saying that is our internal capacity to take on 0.5 gigawatt in a year and 18-month time horizon is we feel really comfortable with it's really a matter of sort of lining up economics and financing to support that strategy. Hopefully, that answers your question.

Our next question is from John Hickman with Ladenburg Thalmann.

Could you elaborate on your comments like right up front, you talked about the billing. There's a 90-day delay in when you energize them and when you get to bill? Is that what you were telling us?

I can handle this the first part of that. This is Matt. So kind of what we're referring to as we turn on power to a building, so we achieve basically our energization milestone of basically hydrating all the equipment with electrons. From that point, each data hall within the building have to go through its subsequent commissioning phases, the fully commissioned, test commission and go through all the integrated testing to operationalize each of those data halls within that structure. And so from the time we start energization to the time that we fully commission those data halls, could roughly range into the 90-day time horizon for which we would expect to turn on revenue.

Okay. And then I think I missed this number, but as of the end of the year, how many megawatts had you delivered to CoreWeave?

The end of calendar year '25?

Yes, end of the quarter.

Yes. So we had energized 213 megawatts by the end of the calendar year. And so we had fallen just slightly short of our -- one data hall short of our goal. But as we said in this earnings call, we have more than made our way back ahead of schedule with 350 megawatts energized and nearly 200 megawatts billing. So that I think step functional progress over the last couple of months has been pretty remarkable.

And you said that kind of by midyear, you'd have it all energized?

By the end of basically going into 2027 or the early part of '27, the full contract should be fulfilled and fully delivered to CoreWeave.

Our next question is from Kevin Dede with H.C. Wainright.

Adam, Matt. Thanks for having me on. Adam, can you drill in a little bit about on Alabama, just seems to be a little bit of an outlier at 30 megawatts. I'm just wondering how you sort of process that in this grand scheme of landing hyperscalers?

Absolutely, Kevin. And thanks for the question. The 30 megawatts site in Alabama is a site that we saw early on as location that could move quickly. We also recognize the power constraints in Georgia and recognize the low latency that Auburn had available to it. That's a site that we believe sitting here today, based on our customer conversations is a site that has interest across a number of different potential counterparties. And it's something that we're using to entice customers on larger contracts.

I think one thing important to note is that hyperscalers are not only focused on the larger sites and larger campuses. They're also looking for backfill across certain locations to serve certain markets we think Alabama and Auburn specifically serves that very well. So we're excited about that project, and we're looking forward to landing a customer there as well.

Do you think it's sort of flexible for an inference-type solution? And if that's the case Matt, sort of reorganizing the way sites are constructed and fitting potential use case changes?

Yes. It's definitely a site that's going to be utilized for inference use cases. But Matt, I'll let you take it related to infrastructure design.

Yes. Auburn is unique from a couple of different standpoints. One, it sort of has the makings of a much more traditional multi-tenant data center, Tier 3 type facility, multiple 10,000 square foot data halls, high degrees of security and a mass amount of connectivity. So more can than what you might find in Digital Realty or Equinix or a modern Equinix-type facility. And so from that standpoint, we think we look at Auburn really an entry point, both in terms of inferencing AI lows, but also in terms of the enterprise segment as well. Since the enterprise segment tends to be on a smaller deal size and its smaller deal constructs with that and the needs for dense connectivity -- carrier-neutral type environments with the type of infrastructure that's laid out there sort of makes it ideal for a number of different customer segments, both on AI and on some of the non-AI segments as well. So Auburn sort of a little unique from that standpoint.

In terms of like adjusting to inferencing versus versus large language model sites as an example. From a technology standpoint, we don't see a ton of difference from what the density -- the power density needs are between those. What we might see happening is, I think, the the cluster sizing might be slightly different between an inference cluster and a large language model cluster sort of driving a little bit more segmentation potentially within the campus at some point. So that's generally how -- what we think is happening today.

And before I get the hook and nobody's really asked about Bitcoin mining, and I know it's not a priority, but it's still the lion's share of revenues for a little while anyway. Can you give us some insight how you expect this year to fall out from a hash rate perspective and whether or not you're chasing down those block miners that you thought you might look at at the end of last year?

Yes, absolutely. It's been interesting to watch what's happening in the mining environment, right? We're seeing hash price go to levels that have never been seen before, dipping below $0.03 was definitely something that, I think folks thought might happen probably in 2027 or 2028, just given where machine efficiency is today.

For us, that business is still essentially in runoff today, right? We're trying to manage our machine fleet based on what our minimum power draw requirements are across a number of different sites, and that's something that we're going to continue to operate in that mode over the course of this year. We're really just optimizing right now to ensure that we do -- that we are hitting our minimum power draw requirements across our portfolio.

In terms of the block units, those units are getting installed today, and so that's something that's going to help us maintain productivity across our mining portfolio and really help us hit given that a majority of our machine fleet is anywhere from 4 to 5 years old today, really allow us to continue to hit those minimum power draw requirements profitably.

So where does Bitcoin mining stand at the end of this year as you look at how your sites are converted?

It's something that's continuing to evolve, Kevin. We're building next door at many of these locations, which is why we've been acquiring additional land across our portfolio. So it really will come off-line as we're transferring that power over to a data center.

Our next question is from John Todaro with Needham & Company.

The progress so far. There's been some conversations of NVIDIA backstopping a number of kind of neo clouds. It would just potentially open up the type of customers you guys could sign with by quite a bit. Just wondering if there's -- if that's starting to happen in some lease discussions? Any commentary there?

Yes. I think we're going to see all chip manufacturers start to begin to play the game of guarantees to help them secure their customers moving forward and really locking architecture in the data center around their GPU chipset. It's definitely something we've seen. I think it's something that's going to continue to evolve, as I noted earlier. But I would expect both hyperscalers and chip manufacturers continue to march down the path of looking to provide guarantees for both Neo cloud as well as labs.

Okay. Understood. And then beyond just kind of maybe some of the terms, but on lease rates, as we think about some of the latest gen architecture and maybe a little bit higher CapEx spend from the data center operator side, and also maybe use case changes that we heard in your responses to Kevin. Are leasing rates going to start moving quite a bit higher from historically what we've seen signed here, ranging from you guys having one of the first leases to the more recent run with Hunt, should we expect that to start materially moving higher?

I wouldn't not necessarily say materially moving higher. I think in the market, what we've seen our lease rates move generally a bit higher in relation to what the CapEx is on those builds. So I wouldn't say that we're sitting here today, we're going to see something material outside of the bounds of what has been signed historically. But I do believe that over the course of 2026, we may see a little bit more normalization in touch movement higher in terms of lease rates, but that's really just driven by the fact that many of the hyperscalers price their data centers based on a yield and they know how much their basis of design costs.

Our next question is from Ben Summers from BTIG.

Kind of building off that last question, kind of curious if you're seeing any sort of bifurcation of kind of more urban located sites and the potential pricing there, and I guess, demand profile for those sites and kind of how that could potentially lead -- maybe improve pricing on a site like Hunt County, that's right near one of the largest data center hubs in the U.S.?

Yes. I mean as we look at Hunt, there's definitely better pricing capacity for and for data center developers more broadly when you're within a certain latency band back to a major metropolitan market. In relation to, I would say, more urban environments, that's not necessarily a game that we play in. That is more of the Equinix Digital Realty type model. But I would expect to see our pricing for sites that are closer to major metropolitan areas, be stronger than sites that might be further away from major metro areas. So -- there is that pricing bifurcation and some of that is related to dual use case when you're closer to the major metropolitan area. It can be used for both LOMs as well as inference. But the other part here is also time to RFS. It's something that we talked about in our prepared remarks. Time to RFS is really the trump card for data center developers, the closer you are to RFS, the better pricing power that you have.

Just one more if I may. Sorry if I missed this earlier. Just kind of curious on any time line around Kentucky and North Dakota on those sites? And just kind of any comments on the demand for those sites for potential HPC contracts?

They are under discussions with a number of different counterparties. There -- they're in our priority list, albeit though the projects that Matt Brown walked through earlier are focus points today.

There are no further questions at this time. That will conclude today's conference. You may disconnect your lines at this time, and have a wonderful day.

Greetings, and welcome to the Core Scientific Investor Update Call. [Operator Instructions]. As a reminder, this conference is being recorded.

It is now my pleasure to introduce Jon Charbonneau, Vice President of Investor Relations. Please go ahead.

Great. Good morning, ladies and gentlemen, and welcome to Core Scientific Investor Update Call. At this time, all participants are in a listen-only mode. We open up a question-and-answer session after management's remarks.

Please note on this call, certain information presented contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, any statements other than historical or current facts that predict or indicate future events or trends forecast, performance or achievements and many or may contain words such as believe, anticipate, expect, estimate, intend, project, plan or words or phrases with similar meaning. Forward-looking statements are based on current expectations, forecasts and assumptions that involve risks and uncertainties and that may cause actual results to differ significantly.

For further information on these risks and uncertainties, we encourage you to review the risk factors discussed in the company's annual report on 10-K, the company's quarterly report on Form 10-Q filed with the Securities and Exchange Commission and the company's current reports on Form 8-K filed today and slide presentation posted there.

We also have posted an investor presentation to our website at corescientific.com in the Presentations section. The content of this call contains information that is accurate only as of today, October 30, 2025. The company undertakes no obligation to update statements made today to reflect events or circumstances occurring after today.

Joining me from Core Scientific are our CEO, Adam Sullivan, our Chief Operating Officer, Matt Brown; and our CFO, Jim Nygaard. We will now begin with remarks from Adam.

Thanks, John. Earlier today, we held the shareholder vote on our proposed merger with Core, our shareholders voted decisively not to move forward with the transaction. In line with the procedures set out in merger agreement, we've delivered formal notes -- Core we do terminate the deal. Since announcing the transaction, we haven't had the opportunity to engage with investors in a public setting, given the clear terms written in the merger agreement, and I'm excited to have the opportunity to do so today.

Leading Core Scientific is a privilege. And I'm thankful for the opportunity every day. I love being the CEO of this company, and I'm continually inspired by the talent, the drive and resilience of this team. This team is exceptional, and the opportunity ahead of us is the strongest it has ever been in our history. We are the foundation of the AI revolution, building the critical infrastructure that powers the technologies of tomorrow.

I want to thank our shareholders for their engagement and candid feedback throughout this process. The questions and dialogue have been extremely valuable. We appreciate everyone's thoughtful input. Importantly, it was clear from our discussions throughout this process. The shareholders overwhelmingly understood the industrial logic behind a combination with Core, including how it created a stronger combined company with significant financial synergies. That rationale is always the foundation of our discussions and the reason we pursued the transaction.

And while there is criticism around how the deal is structured, it was designed specifically to preserve upside value potential for our shareholders and Core restock while ensuring the ultimate decision rests squarely in the hands of our shareholders. Board's decision not to raise their offer confirms that our Board negotiate the best deal possible for our shareholders. That said, the outcome of the ultimately reflects broader market dynamics, given demand and valuation changes over the past 4 months as well as the recent performance of Core Stock.

Now that we can speak freely, I want to take this opportunity to clear the air on some of the rumors and speculation that have been circulating in the market.

First, let's be very clear. We are executing on our objectives. We have one of the strongest development teams in the industry and a portfolio of strategically located sites that position us exceptionally well for the next generation of high-density a workloads. We are delivering significant build-outs across several locations including the anticipated 2025 build-outs we've previously spoken about for Core and have been making consistent progress under our existing agreements. I'll let Matt share some of those details.

But let's not forget, we are the first company to sign a large-scale AI location agreement last year. Since then, we've been executing at a speed and a scale that no one else in the industry is matching, including delivering more with Core megawatts this year than any other publicly traded company, and we're on track to do it again in 2026. These are extremely complex high-density build-outs. And the reality is -- very few companies have experience, the people or even the committed power to deliver them. We do.

We are the first in building an all-star operations team with the technical expertise and discipline to execute, and you're seeing those investments pay off today. Others trying to replicate this model will likely face real challenges and that's no surprise. This is hard work, and it takes time. coordination mid level of operational maturity that does not happen overnight.

And with that said, we've been upfront with our shareholders about some of the short-term challenges we face, including permitting delays, weather impacts and design modifications along the way. That is to be expected, though, of a program of this size and complexity but the reality is that we're still going to deliver more high-density data center capacity in a single year and some operators have built in a decade. The fact are simple, we're delivering, and we continue to execute against our commitments and remain on track to over 250 billable megawatts by year-end and the full 590 megawatts to quarterly by early 2027.

Second is our power pipeline. Some are quoting total or gross nights, while others, including us, focused on billable or revenue-generating megawatts, the measure we've consistently used in discussing our pipeline in the past. We've also taken what appears to be a much more conservative approach and how we present our pipeline compared to what you might be hearing from others in the industry. So let me walk you through the numbers and how to think about them.

To start, we have a total organic pipeline today of roughly 2.3 gigawatts of gross capacity or 1.5 gigawatts on a billable capacity basis. Separately, we've also paid for targeted load studies based on thoughtful capacity feedback from our utilities totaling an additional 1 gigawatt of gross power capacity. In total, this would imply we have a power pipeline of roughly 3.3 gigawatts of gross capacity.

Note, historically, we've applied probability waiting to our publicly disclosed pipeline metrics. We are taking this approach because we want to give you a realistic execution based view of what we can deliver, not inflated one.

To that point, on our first quarter earnings call in May, we spoke about roughly 700 megawatts of incremental billable capacity at existing and new locations. This only represented a subset of our actual pipeline at the time specifically the portion we had a high degree of confidence we could secure by the end of 2027, which is consistent with the projections we showed in the proxy statement.

The reality is we now have more power opportunities in front of us that we can likely build over the next several years. To put a plan line, our challenge is not in the size of the pipeline. It's about prioritization and disciplined execution.

Finally, I want to discuss -- our partnership with CoreWeave remains exceptionally strong. As you know, they are currently our only customer and will continue to be a very important partner. Together, we're executing under a take-or-pay joint execution risk contract, a structure that is very strong for us, and we believe, among the best in the industry. It ensures both companies are fully aligned on meeting key milestones and delivery commitments.

But let me be clear, going forward, our relationship with CoreWeave is purely a commercial one. Our contracts with CoreWeave is straightforward. These contracts represent more than $10 billion in total revenue potential to us over 12 years. Supported by strong markets. And unlike other got industry announced this year, CoreWeave's funding the overwhelming majority of the capital expenditures tied to these buildouts. At the same time, the contracts do not bind us to additional business with Fore do not contain change in control provisions that limit our flexibility, and we will do business with other players in the industry.

Continuing to execute on our contracts for the CoreWeave remains a major focus for our business, and our teams work very closely together every day to deliver on multiple large-scale build-outs that are actively underway across several sites.

Next, I will turn the call over to our Chief Operating Officer, Matt Brown, who will provide a detailed construction update. He will be followed by our CFO, Jim Nygaard, who will provide his views on financing projects going forward. I will then return to this call with our go-forward plan and what you can expect to hear from us in the coming months. Matt?

Thanks, Adam. And just to clarify, all references to megawatts are for billable capacity unless otherwise it. Through 2025, our teams have remained focused on disciplined execution of a clear mission, build and deliver the infrastructure that powers large-scale AI and high point security.

In Texas, our 250-megawatt a campus continues to advance. On the -- North Campus, we have completed energization across 3 buildings totaling 90 megawatts and 132,000 square feet of a 460,000 square foot campus, a key motor. As business out, construction momentum remained strong, with the next building phase rapidly progressing towards energization in the coming months. At our 65-megawatt marble -- facility -- 2 of data polar energized with the third moving through filing -- materialization later this quarter. In total, we have energized more than 120 megawatts per day of the total 590 megawatts for the core contract.

In the fourth quarter, we advanced 2 major builds from structural to interior basis. Dalton Phase 130 megawatts and -- 70 megawatts have both completed work construction with new pre-gas buildings in place, trade partners on our one side studying critical equipment and progressing interior electrical and mechanical system work that will continue over the coming months, bringing both pipes closer energization as we enter into the -- as we enter into 2026.

During the fourth quarter, we broke ground on the first 145-megawatt building at Dalton Phase 2, launching another AI factor for with initial delivery anticipated in the second half of 2026. Alongside several projects, we introduced our first Generation 2 AI factory design, which they view that -- this next-generation design is optimized for engine VDF GB 200 and 300, supporting of the 200 kilowatt per cabinet via direct the chip that we're quoting and is engineered for greater flexibility and resiliency. Enabling efficient education between current and future GPU architectures.

Our progress this year reflects a repeatable delivery playbook and a design philosophy that stays ahead of what AI customers need. With our Finn and Marble sites beginning energization as well as our -- sites moving through a material gout, we're executing the plan while bringing on our Gen 2 architectural market. We reaffirm our 2025 energization target of 250 megawatts, underpinned by recent progress at Dalton and continued energization activity at market. Looking ahead, we're executing toward a goal of delivering an additional 350 megawatts by year-end '26, of which 280 megawatts are dedicated towards the current contract and the remainder for new customer contracts.

Outside of the quarterly contracts, we have begun redevelopment on approximately 500 megawatts of billable capacity slated for 2027 -- or practically in future builds by securing longly equipment strategically acquiring additional land and positioning the company for sustainable long-term growth. Our development plan is nature by 3 buildings, scale repeatable delivery, next generation into the inefficiency and customer-aligned capacity.

Taken together, these initiatives position us to expand high -- structure while maintaining discipline around schedule, cost and technical performance. Our outlook reflects current assumptions and is subject to risks and entities, including supply chain timing, permitting and utility and interconnects.

With that, I will now turn it over to our CFO, Jim Nygaard.

Thanks, Matt. I want to take a moment to address another misconception that we were not able to raise capital for build-outs beyond core if we remain an independent company. Simply put, that is not the case. We believe we're in a unique moment in the market, one where customers, investors and capital providers recognize the strength of our position, a position that includes a strategically located and highly sought after data center footprint a very strong 12-year foundational contract with CoreWeave, a deep pipeline of power assets, as Adam outlined earlier, and an operations team that I believe is the best in the industry.

More broadly, demand remains exceptionally strong with multiple gigawatts of data center capacity already leased by hyperscalers this year, either directly or through Neo cloud providers. Leasing momentum in the market is expected to continue as AI infrastructure build-outs accelerate.

To help fund these buildouts, we've seen more than $10 billion and debt and equity-linked capital raised across the industry in just the past few months. Many of those deals have included Bitcoin miners who have secured financing through a wide range of creative structures and new strategic partnerships as they transition from mining to high-performance compute infrastructure.

More specifically, capital providers have already approached us looking to put money to work. Now with the merger behind us, we believe we're in an excellent position to raise financing with attractive terms to fund a significant amount of growth opportunities beyond the existing CoreWeave contract. We don't believe this is a question of whether we can obtain financing. It's a question of how we do it most efficiently, balancing the overall long-term cost of capital with structures that provide flexibility and how and where we deploy it, which hasn't necessarily been the case in some of the deals announced more recently. Our goal is to build scale over time, creating a virtuous cycle that ultimately drives down our cost of capital and strengthens our competitive position in the market.

To that end, we plan to be opportunistic, including pursuing a mix of corporate level financing solutions combined with more targeted project level debt for individual sites or even multiple sites, which share common financing attributes. Importantly, our core lease contract where CoreWeave is funding the overwhelming majority of the more than $5 billion of infrastructure build-out also represents a significant financing opportunity and, quite frankly, a tremendous competitive advantage for us. As we've shared publicly, we believe we can raise up to $4 billion of capital against that contract.

This structure would be highly flexible enabling us to fund multiple nondilutive equity investments at the project level. These projects generally support 60% to 80% advance rates on build costs, depending on the customer credit and site characteristics. As you know, we laid out a 5-year plan in the merger proxy, which projected that we would double our billable megawatt portfolio with an estimated build cost of more than $7 billion.

However, today, given the opportunities we're seeing, we believe that number could be significantly higher. Finally, from a balance sheet perspective, we're targeting a long-term leverage ratio of roughly 5x stabilize adjusted EBITDA. A which we believe provides the right mix of growth capacity, capital discipline and flexibility to capture the opportunities in front of us.

Now back to Adam for commentary on our forward plan.

Thank you, Jim. This management team and Board is extremely excited about the road ahead and the opportunity to create significant long-term value for our shareholders. With that in mind, we expect to make some key announcements before our next earnings call.

First, we anticipate signing at least 1 new customer, an important step towards diversifying our customer base beyond our existing ore contracts.

Second, we plan to sign at least 1 new power contract in an existing site that we could not sign while operating under the operating restrictions of the merger agreement with CoreWeave.

Third, we also expect to sign a new major power contract in an entirely new colocation.

Fourth, we anticipate making a financing announcement that will help bring more clarity on how we intend to fund future build-outs.

And finally, I want to make it clear that we plan to convert every megawatt in our portfolio into high-density colocation sites over the next 3 years as we continue to wind down our mining portfolio.

Before opening the call for questions, I want to take a moment to thank all of our employees for their hard work and dedication through what has undoubtedly been in uncertain few months. Our team's focus, professionalism and commitment has been extraordinary, and we wouldn't be in this position with a stronger business and significant opportunities ahead without them.

With that, operator, we can open the call up for questions.

[Operator Instructions]. Our first question is from Darren Aftahi with ROTH.

Good to talk to you again. Just 2, if I may. I guess on that 1 gig of incremental capacity, like what's the realism in terms of time frame, with feasibility studies that could kind of come in house? And then I guess in light of maybe some of the restrictions you had during the M&A process. I guess, how much sort of engagement could you have with any prospective customers that you kind of have spoken about in terms of objectives in the next couple of months. I guess, said another way, like were you able to engage with any perspectives while the M&A process is going on? Or are we kind of clean slate as of today?

Thanks, Darren. On the first point related to power availability, the power pipeline we outlined is specifically power that would be available and it's available either now or we have a line of sites being available over the course of the next 2 front years. So it's an important position, that's not how they have to go through load studies. It did not have to have a feasibility study. That's power that either exist in and excite today. Orders power that is currently under negotiation with utilities. So it does not have to go through that entire process related to the items that you outlined.

Related to the customers, as permitted under the merger agreement, to continue to operate business as usual. We are able to have conversations with customers during that time period. I think the 1 important thing to note is there were some customers that did not want to speak to us while we were under the merger agreement.

However, later in the process as things are to trend publicly towards looking like for the shareholders, we're going to go against the deal that could begin to open up some doors. So we've been able to work through with a number of different clients through their engineering process, and we are currently working through terms with a number of clients today.

Our next question is from Jon Petersen with Jefferies.

Great Thanks. Adam Jim, Matt. Welcome back. Good to hear your voices again. Curious if you could maybe pull the curtain back a little bit for us on your discussions with Core weave in recent weeks. Adam, it kind of seems like the door is maybe closed at this point on potentially them coming back with a higher offer, I mean, I just want to make sure that I heard that correctly, that you feel like that was the best and final offer. And at this point, we're just moving forward as a stand-alone company.

Yes, John, I would just reference the merger between our company and Core has been terminated. And I believe based on a number of public disclosures made by Cole and like that was their best and final offer.

Okay. And the financial impact, I believe, a payment needs to be made to CoreWeave now. Can you remind us on what that is and the timing on when that payment happens?

Yes, Jon, there's no payment due to the fact that our shareholders voted on the deal. So there is no termination payment related to this transaction given that our shareholders worded against the deal.

Okay. Okay. That's good to know. Maybe then just on your business, moving forward. Just curious on the power pipeline, are you able to break down for us how much of that -- the numbers you talked about, the gigawatts, the 3.3 gigawatts, like how much of that is getting additional power to existing sites -- and how much of that requires you to go out and get new sites?

So right now, a significant amount of that power is at existing size. And so that's really where our bookings is today. We've spent a significant amount of time acquiring land nearby our existing sites to give us the opportunity to continue to build out once that additional power is acquired.

And I noted earlier in the 5 items that were discussed at the end of this call, that we will be -- we are expecting to sign additional power and at least 1 existing site before our next earnings call. So that's a process that we're working through today. And we believe that is our fastest pathway forward given we have contractors either on the site or going to the sites and will provide an opportunity for more straightforward growth plan going forward.

Our next question is from Brett Knoblauch with Cantor Fitzgerald.

Adam, on the -- maybe the CoreWeave contract, I feel like there's been some speculation about interstation delays. I just want to make sure I kind of heard your prepared remarks correctly in that before you guys are expecting the [ 590 ] kind of be up and running I believe, by the first quarter of '27, it seems like everything is still on track. Is that right?

That's correct. Everything is still on track from our last update to the market.

Awesome. And then I would say a number of peers have maybe started to sign deals with a non NVIDIA GPU compute sources going into the data centers. Is that something that your data center team has looked into or can also go down that route as well.

Yes. The short answer is absolutely like while we're -- we certainly optimized our NVIDIA-based designs, we're not vendor agnostic. I mean we are ideal. So we'll be able to have designs that are adaptable for a number of different Core stacks -- architectures, both NVIDIA and nonsystems.

Awesome. And then maybe just 1 last question on -- maybe just like the speed at which you can build. What is a real -- I think you guys said that you have more power than you could easily build out over the medium term. What is like you get all these deals that you want? Like how much can you actually build in 1 year? Is it 30 megawatts the upper limit? Can you push that further? Like assuming demand is as insatiable as we think it is. Like what is the next you guys think your team to go out and build.

Yes. I think as we sort of indicated in the prepared remarks, that we're certainly planning on the ability to deliver 500 megawatts to market in '27. But right now, that's kind of the new benchmark we're setting for ourselves.

Our next question is from Joe Flynn with Compass Point.

Thanks for the question. related to the existing CoreWeave partnership as it relates to the kind of -- as you guys are building out the sites and get increased power allocations, would you ultimately expect like to see opportunities to quarterly expand other agreements? Or like have you been able to talk to customers, maybe expand that like go multi-tenant at certain sites like given that a lot of core and customers are now buying GPUs that late?

Yes. Thanks, Joe. I mean, from our perspective right now, it comes out of economics, and that's how we're evaluating each new deal that comes across our desk. There are a number of different players in the market today, and we're going to continue to evaluate each available megawatt that we have on a megawatt by megawatt basis. And so that's our plan is import. And we will continue to make decisions and continue to announce to the market as we make those decisions inside of contracts.

All right. And from the financing side, I know you guys are reiterated of $4 billion you could take out of the existing contracts. But ultimately, what is the goal like time frame for that? Do you have to like ultimately maybe closer to stabilized NOI? Or does this have to be like done in conjunction with core leave? Like any information there would be helpful.

Joe, thanks for the question. The availability will scale as we continue to build out, we think we're going to have a lot of upfront capacity in that type of lending arrangement on the core we've contract directly. We also have existing liquidity on our balance sheet today. We finished the quarter very strong in that regard. And we also have very deep options at the corporate level to facilitate and expedited build-out. So all of the options are on the table, and we'll continue to optimize that question.

Our next question is from Joseph Vafi with Canaccord Genuity.

Guys. Good morning, and welcome back from me as well here. Just wondering given where things are and a lot has actually happened in the market since the deal with core weave was announced if maybe you contemplate some GPU purchases of your own at scale and thinking about GPU Cloud. I think with a power pipeline that is emerging, maybe it could be a good use of some smaller uses of power, how you think about the GP Neo Cloud opportunity directly?

Yes. Thank you I mean -- what we're really seeing in the market today with a number of these players are really a data center value-add product. They're offering GPUs oftentimes even being won by the end clients and their client cloud business. I'd say there's a differential there. And that's something that we've had discussions with a number of different customers about. It really comes down to their want or desire to transfer CapEx to OpEx. And there's definitely optionality in that route. I would say one of the things, though, that we've been evaluating more recently are there are a number of new players coming to market with extremely low cost of capital compared to existing providers of some of these new cloud platforms.

And we think there's going to be a dramatic shift in who are the winners amongst that market. And there are going to be a lot of users in that market. And so the cost of capital is the name of the game. We're looking at long-term structures with a number of different counterparties that we believe will be extraordinarily competitive in that industry. And we're still leaving the door open on the other side, where potentially some smaller customers may look to do some GPU-based deal with us as well.

Our next question is from Kevin Dede with H.C. Wainwright.

Adam, thanks for hosting this call, and thanks for having me on it. Congrats on teeing up a potential second customer. Can you give us any color on that? I mean it's hard to imagine that contract would be anywhere as lucrative as the core Weave deal. And I'm wondering if there are any parameters that you might offer to help us sort of think it through.

Yes. Thanks, Kevin. I completely agree with you. Looking back at the quarterly contract that we signed, it is the best deal in data center history and has not been replicated or has anyone ever come close designed a deal of that magnitude and that level of profitability. So completely understand your point.

And one of the things that we've been evaluating with new customers is the fact that we do have front year capacity available and utilizing that as a tool to work towards finding longer-term commitment on power, potentially anchor tenants to some of our new facilities that will help us on the financing for those build-outs. And so we've considered a number of different factors here. But I'm going to hand it over to Jim to talk a little bit about how we're thinking about the new contracts that we're evaluating today. and hopefully provide a little bit of color on how we're thinking about this long term.

Yes. And Kevin, we're in a pretty unique position in the market and that because or we've been funding the overwhelming majority of the capital expenditures on the build-out. We can leverage that contract and essentially use that money for the equity that is required at new greenfield projects. So when we look at our cost of capital and we look at our return targets, essentially, we're able to borrow much lower cost equity dollars than other companies that are required to come up with other cases of equity that would be far more expensive.

So we do not have hard and fast rules on target returns on any one site. We certainly analyze that, as you can appreciate, in great detail, but we think about it on a portfolio context. So for the right customer and the right geography under the right circumstances, we may accept a lower return to anchor a site and be able to build upon that in the future in a synergistic fashion with higher return contracts to complement this. But overall, you're maximizing the return of the portfolio. We're going to continue to take that approach. So we're excited about the opportunities that are ahead of us. and we candidly have a lot of with shop.

Yes. I'll echo the sentiment. It's Jim. A lot of wood to chop. That sort of leads me to my next question. Congratulations on navigating all the things that you have. I think one of the biggest surprises for me is the fact that you had all these things running in the background with the core Weave deal on the precipice. And I guess what I'm wondering is how were you able to do that, number one? And number two, what your new priorities become because Adam laid out a bunch of things, including 2 new power contracts, new financing, and this ability to deliver high-density compute.

Yes. Thanks, Kevin. We are permitted to continue to operate under the merger agreement as business as usual, which allowed us to have conversations with clients. We continue to have conversations with our utility partners and the reason is, is because it was advantageous also for CoreWeave for us to continue those conversations. We were looking at acquiring well in excess of gigawatt of power and we continue those negotiations, continue those discussions related to new PPAs for those utilities. And this was advantageous to both parks, whether we remain a standalone or we ended up working with or we put ourselves in a position today where we are looking to attain a number of the things that we set up during the past few months. And that's really the most important aspect here we're starting day 1 as a stand-alone company, not under the merger agreement ready to begin executing contracts. And that's the most important thing here. And so we're working towards a number of -- things on the power side that we believe will be extraordinarily advantageous to this company, continuing to work towards finalized terms with a number of different clients across our entire site portfolio. Almost every megawatt in our portfolio is under discussion right now.

And so that puts us in a position today where we feel very strongly about our stand-alone projects moving forward, and we only would have been able to do that if we continue to work hard for the past 4 months. And so that's really how we're thinking about that. We're in a great position, Kevin. Okay.

One last one, if I may, Adam, please. I understand that you invested pretty heavily in helping CoreWeave design the technology that they needed to support the stack on top of the GB2 and 300s that they're rolling out at your facilities. I'm wondering how that intellectual property that's inherent now to Core Scientific can translate to the development that other customers might want to use.

Yes. No, that's a great question. I think the advantage here is we're certainly able to take only buttons learned, both from in terms of the process of constructing that scale, the ordination with supply chain and what that's involved at large-scale projects. And what designs and what we should be optimizing for from a design standpoint. So we're able to sort of culminate all those lessons learned, all the best practices, all the design iterations and we'll be taking that up into the future design improvement for future customers going forward.

Our next question is from Brian Dodson with Clearstream.

I suppose that you've been on the receiving end of many interested, I guess, interested calls regarding demand for HPC utility, right? So as you're looking at potential clients, hyperscalers, what are they telling you about their demand needs over the next few years? And how do you feel about the broader market as you look forward?

And thanks, Brian. The broader market right now is robust. We're seeing today oftentimes many of the hyperscalers migrating their capacity needs through other providers. But then we're also seeing look-throughs up to the credit of those maps allowing those new providers to come to market, sign larger contracts at better rates and also allow for the financing markets to open up. That's why we're seeing so many new providers coming to the market today. It's because the financing market has come around to looking through to the up all the way through to the hyperscaler credit.

And I think that's what we're going to see for some amount of time there. The market from what we're seeing, there's a number of hyperscalers that are looking for gigawatts of capacity. And really, what we're seeing is the demand is almost insatiable. And so the market has definitely changed dramatically since the beginning of this year, where we are seeing much fewer large-scale bill-out demands today, that looks much different. We're seeing demands for anywhere from 100 to 500 megawatts with options to scale up to a gig at a single site. I think those opportunities are fewer -- between I think, both from a demand perspective as well as an actual site availability perspective. But I think there are going to be more of a reckoning here in terms of who these folks sign contracts with as you start to see more slippage from newer entrants to the market we were looking to develop data centers.

I think right now, it's too early to see those crafts that are in the market. But you're going to start to see cracks among some of these other developers that's going to be through extended delays, the choice of the wrong general contractors or there's a number of other issues that could present themselves as these companies start to work through that. And I think that's really going to force a pretty thick funnel here down to a very few day center developers that are going to end up being the winners in this industry.

So that's how we're thinking about it today. We have a great opportunity ahead of us. We think we're in a position on. We have a potential client, large-scale clients mentioned to us that -- and after speaking with our design engineering team, they can see why we are one of the leaders in AI data centers globally. And so that's really something that we've taken a hard year and it's really kudos to our entire construction and operations team that's really best-in-class and putting us in a position to win new contracts today.

Our next question is from Paul Golding with Macquarie Capital.

Adam, you mentioned that every megawatt in your portfolio is going to be used for colocation or HPC. I wanted to ask, when it comes to PCOS, what's changed there in terms of the original plan to consolidate the Bitcoin mining into that facility is latency less of an issue now for prospective customers. Are you just seeing the pricing equation look more favorable for that type of site relative to latency and other resources. And then as a follow-up to that, where does that leave you with disposal of those ASICs, proto and block? How should we think about that whole ecosystem?

Yes. I'll take the first part of the question here around site suitability for base on conversion. I think it's going to be true of really all of our legacy DTC facilities. So apply to make us including makes. I think what we've seen happen here in the market is a number of things.

First off, we took a really -- really a fresh look at the infrastructure that I think we had some doubts. I think we had some reservations about how convertible and how adaptable those facilities would be. For PCOS, for instance, it was how do we solve the agency and network connectivity issue in -- Texas, which is to be noted is while we think power is a constraint in the marketplace, when you go to a region like West Texas, like connectivity is actually a much larger constrained power in many locations. And so what our team did is go back and go solve the connectivity in the debacle, which we have. And so we have a good sign of attack for how we're going to build -- activity to take the site that will improve the outlook and performance for that location, making it a rating value asset for us for future conversion.

The next thing is more sort of market-driven. And so as we continue to see like the large -- request come to market, what's naturally happening is this demand is pushing out not only just from the Tier 1 market, but pushing and pushed out to the Tier 2 market in the more jewelry areas where the power is available. So as long as we're solving for the connectivity equation, we have the power secured we're finding that more suitable use cases and workloads to be able to target those facilities for.

And the second part of the question, Adam, do you want to take that one?

Yes. So we're really thinking about the wine becoming mining business in either 2 ways. So the first is we continue to take the new units that we're receiving today. We start to sell off some of the units that we do not space for that method will provide us the greatest flexibility for being able to maintain our existing power contracts, continuing to draw power at those sites while we are shifting that infrastructure to high-performance computing. The important note on that strategy is that we've been acquiring land next to each of our sites to be able to run parallel paths to build out our data center capacity while still operating the Bitcoin mining business.

The second path would be looking at potential to exit those rigs and turn into hosting contracts with a potential counterparty for the remaining time available at those sites. It's yet to be determined which path we're going to go down. But what we know right now is that we are going to continue to mine at those sites and continue to meet our utility obligations.

Our next question is from Greg Lewis with BTIG.

I guess I had 1 question just following up on Paul. I think you were alluding to it, Matt, as kind of maybe those call them, Tier 2 data center locations have become more interesting. I guess what I'm wondering is, and realizing you've been quiet for the last few quarters, have you started to notice any bifurcation between what pricing might look like for locations maybe that are more urban versus more rural? Or is there anything that's driving any kind of differentiation between pricing of locations that's kind of developed over the last couple of quarters?

Yes. The way that I would think about that is across a couple of different vectors here. One of which is just short-term capacity. You have near-term capacity, you can certainly have a little bit of pricing and leverage there from a pricing standpoint, right?

If the power is sort of longer term out, you certainly don't have that they sort of price power in the market that you would otherwise expect. So it really kind of depends on whether the capacity and needs to share reasons are either short term or long term.

And then just from just a general market standpoint, the cost of construction, the cost of development in the market is just really happy, right? And so that's certainly going to drive the economics of what sort of price points you're going to be able to come out into the market and sort of and still maintain a return profile that's attractive for making that investment or for signing that contract. And so I would say is like multiple different vectors there. We have to sort of triangulate to determine what the -- what we think the optimal pricing is. And so there is some of that upside, yes, there are changes from market, but also changes not just in -- not just by market but also by timing of availability of power.

Our next question is from Michael Donovan with Compass Point.

Just a follow-up on IP questioning. You've historically been able to push rack densities. With future build-outs, how are you thinking about builds to possibly handle Blackwell Ultra or Rubin?

Right. So as we said in our prepared remarks, we've brought our into architectural market, which is really sort of tailored around both the current and next-generation GP architectures. The team is already working on our Gen 3 architecture which is sort of solving for higher CE as well as potential changes in delivery voltage as we've seen more pocketises through the open compute project and NVIDIA are pushing the 100-volt DC. So we're actually sort of preparing for that visionality for to be able to adapt to its future architectures. We're thinking about it, the teams already have been working on it for a number of points.

Appreciate that, Adam. And then just to follow up on a pipeline question. So you mentioned demand in the range of 100, 500-megawatt sites. Is there a size that you're seeing favors for Polo modular builds? And then with inference starting to pick up, should we expect smaller sites to come online?

I'll try to take this one. The -- I think the way we think about it is not so much the size of the flight itself necessarily is really like portability launch. And so as we sort of optimize the incremental building block for the site, that sort of allows us to do a couple of different things is, one, we can sort of take a bigger campus but we could build it in 20, 30-megawatt chunks. And then we could productize and build different server products for different types of end users and workloads as we go along. So that could be a lot of smaller customers in a shared building each with their own data hall as an example. So more like a more large-scale wholesale type configuration, which might be suitable for inference given the geography of where that -- that product might locate. But it also sort of sets us up for more multi-tent configurations and being able to set ourselves up for more enterprise and type workloads.

In addition, while we're combining that with our large-scale attendant -- seaside. So I think we look at that as 100-megawatt site or 500-megawatt size kind of matters less than the building block on belt.

Our next question is from Tim Horan with Oppenheimer & Company.

Obviously, you have world-class engineers, both on the design and on the construction side. And I would assume that they're an incredible demand at the moment. Have you lost any of them through this process? And how are you retaining these engineers?

Yes. So we haven't sold any engineers in the process. In fact, we've actually been growing that team throughout this entire process. So I think the question is like how do we retain them. And there's one thing that's true about all engineers and about all high-performance teams. They all -- everyone wants for a month are working and engineers like working for other bauxite engineers. So we've built a team of rock stars. And so that's 1 reason. And the second reason is like these guys want to challenge, right?

We're doing something that's pretty impressed is in this space, right, building AI factory at scale all. The projects are incredibly challenging. They are engineering masterpieces of themselves. And I think that -- they want to be challenged. And they want to going to be challenged, but they want to get a team on a team of other later engineers. So that's what keeps the talent in place. We keep them challenged. We continue to build resources around them, give them the support they need, so they can do what they do best. And that's all our retention level.

And can you talk about from a critical path scheduling of these projects? What's the longest lead time for equipment? Or is there -- are the bottlenecks improving there? Or are they getting worse? Just any color around the whole construction process would be helpful.

Yes. So there are kind of a multitude of bottlenecks that one has to reverse. Particularly in the current state of the market. Certainly, only equipment is an issue. The supply chain is still entrained. And pit constraints are largely sort of target around leading voltage in standby generation predominantly depending on based on design and configuration that sort of covers the availability and how long that equipment may be out.

And the second piece of the question, the other constraints that we're kind of running in the marketplace is just the labor there's only some electrician. There's only some that you see that have availability. And so the ability -- our ability to sort of stay ahead of the curve, have a line sight to subcontractors, electrician, mechanical contractors that can do the work that fill our pipeline is just as much of an importance as sitting ahead of the supply chain further than making sure we have orders, continuous deliveries of old equipment. But those would be our framework at strength as those 2 things.

And lastly, if you don't mind. A lot of utilities are running out of capacity and some are requiring customers -- large customers like yourself to put up upfront capital to help them build out and ensure that you'll be around. How confident are you that you can get the capacity that the utilities are promising you? And are you now required to put up some capital yourselves before hand?

We are seeing increased demands on utility partners for capital to secure the future power. That trend will likely continue. And we do expect to follow suit on that. Look, at the end of the day, we have long-standing relationships with our utility partners that really affords us a number of benefits in terms of giving them transparency on what our objectives are and the fact that they've had experience working with us, I think, puts us in the best competitive position possible. So again, I put that into the category of optimization as we think about our build-out costs collectively. But even with those increased requirements from a capital perspective, we still are looking at projects at attractive returns.

Our next question is from Stephen Glagola with Jones.

Thanks for the question. Welcome back. Adam, in your prepared remarks and some verbiage in the Q&A, you mentioned that the opportunity set for new power build-outs is robust and that the main challenge is execution rather than access to power pipelines. I was just hoping maybe you can elaborate on that sort of given that the prevailing market view is that quality power pipelines are scarce. And then I have a quick follow-up.

Yes, I think is going back to the roots of this business. As you look at our history, our company has the strongest history in the industry of sourcing and locating developing large-scale megawatt sites that's in our DNA. And given our nimbleness with our team to be able to execute on sites that become available are -- to due diligence them quickly, our ability to work through negotiations and discussions with utilities provides us an advantage in the market that we are capitalizing on and will be capitalizing on here very shortly as we continue to expand our portfolio.

And so that's really the advantage we have right now, and it really comes down to a disciplined approach to how many megawatts will be taken on each year to ensure that we continue to meet our customer expectations for delivery because the more slippers you have in your schedules, the faster you're going to lose credibility with these large corporations who are timing up to get delivery on a time line that they have their own plans for whether it be moving in, selling capacity, whether they sold that capacity potentially onward as well.

But these are the customers that you're going to be working alongside for 10 years, 15 years, 20 years. And starting up a relationship by being laid on execution. It's not a great for to start up. And so we want to ensure that we continue to meet all the expectations we set forth in our discussions with these counterparties, and we believe that's going to help us continue to lead this industry moving forward.

Appreciate that. And then last one for me. Are you considering the convertible market as part of the potential financing mix?

All options are on the table as it relates to our financing alternatives, and we will continue to optimize that equation.

Thank you. There are no further questions at this time. This does conclude today's conference. You may disconnect your lines. We thank you again for your participation.