Hut 8 Mining Corp Stock

Good morning, and welcome to Hut 8's Full Year 2025 Financial Results Conference Call. Joining us today are our CEO, Asher Genoot; and our CFO, Sean Glennan. Following the presentation, we will open the line for questions. This event is being recorded, and a transcript will be made available on our website.

In addition to the press release issued earlier today, our full annual report on Form 10-K is available at hut8.com, on our EDGAR profile at sec.gov, and on our SEDAR+ profile at sedarplus.ca. Unless otherwise indicated, all figures discussed today are in U.S. dollars. Certain statements made during this call may constitute forward-looking statements within the meaning of applicable securities laws. These statements reflect current expectations and are subject to risks and uncertainties that could cause actual results to differ materially. Certain key risks are detailed in our Form 10-K for the year ended December 31, 2025, and our other continuous disclosure documents.

Except as required by law, we assume no obligation to update or revise any forward-looking statements. During the call, management may reference non-GAAP measures such as adjusted EBITDA. We believe these metrics alongside GAAP results provide valuable insight into our performance.

Reconciliations of GAAP and non-GAAP results are included in the tables accompanying today's press release available on our website. We will begin with a moderated Q&A session with our CEO, Asher Genoot, followed by a detailed financial review from our CFO, Sean Glennan. Okay, everyone. So let's get started.

So to start Asher, fiscal 2025 was a big year for Hut 8. We executed on several important milestones, including the carve-out of our legacy Bitcoin mining business and the execution of our first AI data-center transaction. So what were the guiding principles that enabled us to achieve these outcomes in your mind in 2025?

2025 was about rebuilding Honey around capital efficiency and durable cash flow. So 2 years ago, we rebuilt the company from a first principles approach after our merger with Hut 8 and going public. And everything started with the electron. We chase megawatts, not chips, and we want to control the power layer first. And so we don't view electrons as a commodity, but rather strategic assets, and the ABC carve-out shifted us from cyclical CapEx exposure to contracted infrastructure like cash flow. So that was a big theme of last year.

We also reallocated capital from volatility to long-duration agreements, and with ABC being able to self-fund on itself on the mining and Hut 8 providing the infrastructure. And then River Bend validated that model. We had a true greenfield development. We didn't convert a site. We developed the site from the ground up by a power-first thinking. It was really the first domino to fall under an AI infrastructure platform. And we focus only on what compounds, power control, scalable campuses, disciplined capital structure and repeatable execution. And so 2025 was about building the right foundation, and now we compound and we scale going into 2026.

In your mind, what specific operational and strategic milestones were prerequisites before the business could meaningfully accelerate?

2024, as I shared a little earlier, was about restructuring. We started a company, we merged with Hut 8, and then I took over shortly after. And it was restructuring the business and creating the ability for us to create a foundation. 2025 was about building credibility and so credibility started with our shareholders.

In 2024, when I took over the helm, our institutional ownership was sub-10%. We're at approximately 70% today. And some of our earliest shareholders, who invested in us when we started the company 5 years ago, still hold a large percentage of the stock. There's -- we've given shareholders, disciplined capital allocation that they've seen through us in the years and with us in the public markets. And then honestly, transparent execution, we told people what we were going to do, and we focus on getting that done and delivering a fully built solution when we execute, and we intend to do the same.

We built credibility with team members. We scaled intentionally. We institutionalized processes while maintaining an entrepreneurial speed. I think that's critical. As you grow, you naturally build bureaucracy, and having the mindset to say, you know what, we will continue to operate as a lean culture, even as we build an institutionalized process. I spent a lot of my time thinking about that in terms of how do we scale at the same rate that we have historically.

Credibility with financing partners is really important for us to secure Tier 1 lenders with JPMorgan, Goldman Sachs to lock in nonrecourse project financing. It was harder, but we believe it's the better path. And we believe early investors in us like Coatue, they backed us before the theme was a consensus. And I'm glad that they're happy, right?

I meaningfully spoke on a panel the other week, and I'm glad that we're able to drive a good return on their investments. And lastly, credibility with our partners. That's local partners, for example, at River Bend with Entergy, Louisiana, West Feliciana Parish, the Governor's office and being able to deliver on them and our commitments to them when they took a bet on us. And so acceleration only happens when credibility is on, and we would like to compound on that as the years go by.

So you were under a lot of pressure last year to talk about a deal and guide the market to when it would come, what it would look like, but we kept our cards very close to our chest. So can you talk about why we were patient in what we wanted to see come together first?

So I'll separate my role in speaking to the public markets and our shareholders, and my role in running the operating business and making sure we're able to build that over the long term. In my role in the public markets, I knew what shareholders wanted. They wanted a deal. They want to know that we can build the data center infrastructure platform, and they wanted to see what that would look like and to build the first domino as a part of the platform. For the business itself, we weren't waiting to announce a deal. We were really building a fully locked and executable program.

And so for us, we didn't feel like there was a reason to add public market complexity, while negotiating a super complex structure with a lot of moving pieces. We didn't want to just announce a headline. We wanted a complete financeable program. We wanted demand secured, financing secured, execution partners aligned on construction, delivery, engineering, long lead time items. We wanted our power path defined, and we wanted risk allocated properly across counterparties.

So instead of guiding towards a deal that's coming, which everyone knew we were working hard at, we optimized for building the right structure for the company in the long term. And when everything was negotiated and aligned, we announced the full framework in one step. And I think that discipline hopefully reinforces the credibility that we're building with our shareholder base. And as we move forward, we're going to be really thoughtful about what we share with the market versus how we think about those impacts to our customers as well.

So our first AI data center transaction generated significant market attention. And how should investors think about this transaction in the context of our broader strategic evolution without over-indexing on a single data point?

I think this is a fair market deal. It was designed to compound relationships and not to maximize one transaction. And so we structured that market clearing economics. A lot of private deals are getting done, we believe, are done in a similar range. We focus on long-term creditworthy counterparties that can grow with us. And we built to scale the program beyond just the first phase across our customers and across our financing counterparties, execution partners, supply chain partners.

And so it took a very customer-centric approach on how do we de-risk execute and give them confidence, we're not optimizing for headlines. We're trying to build repeatable partnerships because that's going to be the secret sauce in our ability to grow and scale.

So let's drill down into River Bend, then. As we look at River Bend even more holistically as well, can you update us on the progress of some of those power expansion discussions with Entergy? And how is construction tracking?

Look, 2026 is 1,000% going to be about execution and delivery. That's going to be the theme of the market, in my opinion. And so we're super high for its construction right now, it's tracking according to plan. We have tight coordination with Jacobs Engineering and Vertiv. Long lead time procurement is progressing and getting manufacturing delivered. Our customer engagement is really, really high with Fluidstack and Anthropic. We have many working sessions a week, multiple standups on-site in their offices, and really strong collaboration as we move towards delivery.

The 1 gigawatt expansion plan at River Bend, the power is there. It's not about if, it's about when. And so now, we're optimizing on delivery time lines and cost scenarios in terms of collateral upfront to make sure the rate base doesn't get impacted. We're working through different structuring paths to maximize efficiency and speed, meanwhile solving for what we're looking for and also what Entergy is trying to solve for, for their constituents. And so the focus now is simple: execute, deliver and derisk.

So how should investors think about long-term expansion opportunity at some of our other sites like Corpus Christi? Obviously, we've been seeing an uptick in pushback with respect to data centers getting done. We've seen new rules proposed out of ERCOT. How should investors think about the expansion?

Something I've been saying for years is we're building an energy infrastructure platform on digital infrastructure. Our edge is power-first development. And oftentimes in markets that others overlook, and so our Corpus Christi site that we announced, we have an approved interconnect in ERCOT that's increasingly valuable. And it was put in before all of these recent changes in batch studies. It was put in 2023, in a changing regulatory environment, permitted power and transmission access matter more than ever. The interconnect and the permitting matrix at Corpus Christi, I think, gives us a structural advantage to be able to build quickly and get an access to power quickly.

So if we were using the traditional developer playbook, we wouldn't have a low redundant data center solution for Bitcoin security as our tool for our underwriting assets. And we probably would have passed on this 1 gigawatt interconnect like many others did, but we didn't because we have multiple use cases of our megawatts as we develop the platform. It's really similar to what happened about 1.5 years ago in Louisiana.

When we first talked about the site, started marketing the site, people thought we were crazy. I thought we were early, and I think, we were right. We really validated the thesis of what we believe in terms of the value and the assets in the power and how much you can get at scale in the local regulatory environments that you're building this infrastructure at. And now you see that in Louisiana, you have other hyperscalers like Meta and AWS that I have announced projects there as well.

And I don't want the market to forget that alongside our River Bend announcement, we also announced a strategic partnership with Anthropic. And so they're a partner that we continue to look at opportunities with alongside other demand signals that we've built along the last 2 years as well. And so if you look at our development pipeline, we have 8.5 gigawatts across various stages of development. We are energy developers first. We understand grid dynamics, regulatory shifts and permitting realities. And that's what gives us confidence that we can navigate the evolving environments.

It's a lot easier to go and build a large-scale data center with the dollars that we're bringing into these economies than it was developing Bitcoin mining facilities when no one wanted Bitcoin in their neighborhoods. And so we've navigated through different environments. We've gone through changing ERCOT procedures. We've done this for the last 5 years since we started the business. And this is just another hurdle that comes along the way as demand continues to increase and we need to continue to show our competitive edge in developing power assets.

So you often referenced first principles and value engineering and innovation as a core edge for Hut. Can you walk us through how Vega delivering 180 kilowatts direct liquid-to-chip at $455,000 per megawatt from scratch and our codeveloped infrastructure design with Vertiv that we're using at River Bend. How do those two things reflect that philosophy and effectively position us for the future?

We think that no one has fundamentally challenged, how data center infrastructure, I guess, now AI infrastructure is built. And that's our opportunity. We reject the status quo. In the short term, there's a huge supply and demand imbalance that allows us to get deals done from a power perspective, and that's our competitive moat. In the medium term, the differentiation will come from value engineering and the infrastructure stack innovation as supply and demand reach equilibrium.

And so Vega is a great example, too, because Vega, we developed 180 kilowatts per rack direct-to chip cooling technology earlier last year when NVIDIA was only at 120 kilowatts per rack. And the reason we did it was to show the markets we could develop that type of infrastructure as you see on the screen here, but most importantly, we were able to develop that for $455,000 per megawatt. And I'd like to tell customers when we show them the site that, that includes the office furniture, the whiteboards and everything and the fit out in the data center.

And the reason we were able to do that is because we built the site from a grass field from scratch. There were no legacy constraints. We figured out what areas of the infrastructure stack switch gears, PDUs, the rack conveying structure that we want to vertically integrate, design ourselves and contract manufacturer, what areas of the construction we want to self-perform and manage ourselves? And that's what I'm really excited for. Once we can get the next couple of deals done and we get to a large multi-gigawatt platform in terms of data center, how do we think about the next phase of our competitive moat. And that's around innovation and that's around value engineering. The Vertiv partnership is a good example of our early kind of stages into that.

We codesigned the approach, the architecture with them and with Jacobs to show not only supply chain visibility, but how do we take risk off of the site how do we speed the efficiencies of these development, these builds, so we can have them in controlled environments for a lot of the infrastructure that we're building and how do we have long lead time mitigation risk. I had the opportunity to keynote Vertiv's main event earlier in January this year, because we believe that that's where the edge will live in the second phase, as we monetize the power assets in our pipeline in this first phase. And so when demand and supply normalize, infrastructure efficiency will matter more and more, and I think, we're perfectly positioned for that, and it's a story and a theme that people haven't really even delving under the Hut today.

So we're executing on large and complex infrastructure projects that require significant capital and coordination. And obviously, with that kind of scale comes risk. How are we structurally mitigating down that exposure and protecting equity if things don't go according to plan? And how is your experience, how you got here and how you think about things like this? You talk a lot about being a credit guy. Can you elaborate on that?

So I actually don't talk a lot about being a credit guy. Sean talks a lot about me being a credit guy. He's like, for your age, you're really more of a credit guy than anything else when we talk about underwriting these sites. And I think, the stars that I've gained from living in kind of the business and building infrastructure around Bitcoin has really rooted us in how we think about underwriting opportunities, how we think about building the business long term. We lived through cycles, for example, in 2022, where Bitcoin prices crashes, our only revenue; energy prices skyrocketed, because Russia attacked Ukraine and profits were squeezed and we had fixed debt and amortization payments.

I sat as a chair at UCC committees of companies going through restructuring and bankruptcy. We were the planned sponsor of taking Celsius out of -- taking a business segment they had out of bankruptcy and turning into a company. So I learned firsthand meeting with creditors on what could go wrong when you're building in a hypergrowth environment and the music stops thing. And so that sticks with me honestly, forever. And so as we think about these projects, what I always told the team is, if we have the privilege to sign a data center deal, that contract is a liability until we deliver and start generating cash flow, and that's why we're so thoughtful in how we structured this deal.

We didn't just want to announce a deal and then figure out the rest afterwards. We want to announce a deal that was able to have financing, execution, manual labor, steel for the buildings, long lead-time items, regulatory permitting, all secured when we announced it to the market. And that was a key part of the timing and the things we want to get done.

And so as we think about debt obligations, construction risk, power risk delivery, counterparty risks, those were all the things that we've mitigated through on long lead time contracted cash flows, creditworthy counterparties, structuring nonrecourse financing and really disciplined underwriting as we look at kind of the T's and C's of how we thought about the overall risk framework between us and our counterparties and what we were committing and what we were all receiving. I think durable credit really compounds. If you want to build a business over the long term, it's about compounding value over time and about continuously doing that.

And I feel like over the last 2 years, we've done that, and we've already seen the rewards of those actions, and we're really just getting started. Another element that I'd like to note is if you look at our balance sheet, I think we have one of the cleanest balance sheets in the market today. We -- if you think about the debt structure that we have, we have three pieces of paper at the parent level. The first is our Coatue convertible note that we did almost 2 years ago. That's heavily in the money and most likely gets converted out this year. That's the only parent recourse piece of debt we have.

The other 2 pieces that we have is 1 coin base, which is recoursed against the Bitcoin only without parent resource, and the next one is the one we have with NextEra at King Mountain, which is recoursed against our equity stake in that 50% JV on the Bitcoin mining facility and does not have parent recourse. And so as we really think about it with Coatue heavily in the money, we have no recourse debt on our balance sheet. We're bringing on great financing in terms of the projects, but as we think about growth, we're thinking about growth in credit really, really well to manage through kind of these markets and hopefully be able to grow at a faster and faster rate.

So Sean is going to walk us through our results shortly. We're going to do a little Q&A with him. But let's touch on a few areas in our results. G&A, for example, what drove that this year.

Stock-based compensation aligns everyone with the long-term and long-term value creation. So at the company, every single person has equity from our site-level team members to the CEO, myself and the CFO, Sean. So real ownership culture and skin in the game is something we've optimized from day 1 and continue to do so even in the public nature that we have. And so total G&A was about $122.8 million this fiscal year compared to $72.9 million. Stock-based comp was around $57.8 million versus $20.8 million in the year prior.

And that has to do with a lot of the upscaling that we had in the investment in our engineering, development, institutional infrastructure team. The cash SG&A only rose from $52 million to about $65 million in the year, and that includes all of those transactions we did from the carve-out of American Bitcoin to the deals that we've done. And so our belief is that we're building the team and investing in the team for the future financial profile of where we're going, a lot of the dollars we're spending are on growth, not on managing the current business, not on even executing River Bend, on the growth of all of the sites that we're looking to execute and commercialize.

And we don't believe you can scale a multi-gigawatt infrastructure platform without building and training that team in advance. And so we're rightsizing for where we believe the company is going.

So before we wrap up with you and move on to Sean, is there anything we haven't covered that you want investors to keep in mind. Specifically, there's been a lot of internal discussion around moving from simply building infrastructure for AI, to actually building infrastructure with AI. How are you thinking about that evolution? And why is it strategically important for us over the long term?

Yes. We're sequencing the business pretty deliberately. And the next layer of our advantage is technological convergence. So Phase 1, which is about 1 to 2 years in my mind, is lock in the right deals, establish durable counterparties, build the right financing framework and monetize our power capabilities. Phase 2 in the 2- to 5-year range is value engineering the infrastructure stack, driving cost down per megawatt, improving speed, efficiency and repeatability.

And then Phase 3 is more in the 5- to 10-year range, which is be at the forefront of how AI and robotics reshape infrastructure development. We're not just building infrastructure for AI, we have to be building infrastructure with AI and leveraging it to change in how we think about charging our innovation cycles. So we're deeply thinking about how AI integrates into our business. From a workforce perspective, increasing productivity across the organization, and from a design and engineering perspective, I mean hundreds of thousands of engineering hours go into these builds.

AI is going to fundamentally change the way that, that work can be done. We can model, simulate and optimize every variable for capital is deployed. And in the build process, we're in the early stages of exploring robotics and automation embedded directly into construction workflows. This is not a distraction. It's an awareness of where the technology curve is heading and we intend to meet it at the moment of real inflection when it meaningfully changes how infrastructure is built at scale, and that will be the next compounding layer of advantage after the first two, I've spoken about earlier in this call.

That's super exciting. So with that foundation set, 2026 shifts us from prove to scale, right? So what should investors look to from us moving forward?

2026 is about execution and delivery, full stop. Converting the pipeline to additional contracted revenue, advancing power origination, delivering River Bend on time and on budget, maintaining capital discipline, no trend chasing. The foundation is built. Now we execute and we scale.

All right. Now let's move on to Sean. Sean. So let's walk through the results. Maybe we can start with what defined fiscal 2025 performance?

Yes. Thanks, Sue. I think there's 2 main things that really define fiscal 2025. First, I want to talk about margin expansion and operating leverage and second is bottom line results. On the first topic, revenue grew 45% to $235.1 million, driven primarily by our compute segment, while cost of revenue grew by 24% to $107.8 million. This resulted in gross margin expansion from 47% to 54%. I also want to highlight sequential Q4 2025 over Q4 2024 results where revenues grew by 179% and gross margin expanded from 36% to 60%.

I think each of these data points highlights and is indicative of enhanced operating leverage in the business. In other words, the foundation is sound and what we've set in place will compound over time.

Next, moving to bottom line results. Net loss was $248 million, and we had an adjusted EBITDA loss of $135.4 million, compared to net income of $331.4 million and adjusted EBITDA of $555.7 million in 2024. importantly, I think to note, that swing was largely due to a $220 million primarily unrealized mark-to-market loss in 2025 of our Bitcoin stack versus a $509.3 million gain in the prior year.

Now let's walk through segment by segment. Can you walk us through the power digital infrastructure and then compute segment results?

Absolutely. In our power layer, revenue was $23.2 million versus $56.6 million in 2024. Cost of revenue declined to $20.5 million from $21.5 million in the year prior. The revenue decline reflects the termination of our ionic digital agreement in managed services. This was somewhat offset by increased revenues in our Far North segment due to increasing power market tightness, which I think that power market tightness is kind of some of the fundamental underpinnings of the business. So it's showing up in other places, too.

On digital infrastructure, revenue was $9.6 million compared to $17.5 million last year. Cost of revenue declined to $8.9 million from $15.6 million last year, and margins improved sequentially as Vega entered commercialization, and we transitioned to colocation-based payments from American Bitcoin.

And finally, compute. This was the real growth engine. Revenue more than doubled to $202.3 million from $80.7 million the year prior. Cost of revenue increased to $78.4 million from $45 million in the year prior. And this was driven by infrastructure upgrades, higher deployed hash rate and a full year of steady-state operations of Highrise AI, which added $7.4 million year-over-year.

I think important to note also from -- as we talk about operating leverage, here, segment margins expanded from 44% to 61%.

Now let's get into capital structure and strategy. How are we thinking about our capital structure evolution?

Yes. I think 2025 was an incredibly important year for capital structure evolution. Spinning out our Bitcoin mining business through our American Bitcoin subsidiary, shifted us from a very high cost of capital, high CapEx cyclicality business to a much lower cost of capital business with a lot more focus on infrastructure, low cost of capital lower, risk and longer duration.

Okay. And then heading into 2026, what are some of your top financing priorities?

Yes. I think about this is what I spend most of my days thinking about. And as I think about looking into 2026, there's four main things I'm really focused on. One is protecting shareholder value through disciplined equity use. Two is minimizing enterprise risk; three, diversifying liquidity sources, including private markets; and then four, maintaining strong balance sheet that allows for strategic flexibility and a path towards an investment-grade rating.

I think one thing that's important to note is we continue to evaluate all financing options and we say no to a lot of things. We're not just trying to get capital wherever it's available. We're looking for the lowest cost of capital. And I probably got 10 things across my desk every day, most of which I say no to because we want to continue to drive that and be innovators on capital structure rather than just following the back.

So then, to wrap up, how would you, as the CFO, summarize our position heading into 2026?

Yes. So I mean, it's amazing to think relative to when I joined 1.5 years ago where we are entering 2026. We have greater scale, both from an exahash market cap and future cash flow position. We have improved margin durability, which I think the numbers speak for themselves. We're declining cost of capital. And I think the project financing we're working on with JPMorgan and Goldman Sachs is indicative of that. That's the lowest cost of capital that anyone in our sector has raised ready to support AI infrastructure growth to date.

And then I think as I kind of mentioned in your first question in the section, a capital structure that's aligned with long-term value creation. And I think those are the things that are really kind of setting us apart, and it's very exciting to be in this position, and we feel grateful to our shareholders for entrusting us with their capital as we go into 2026. So with that, I think we'll go into Q&A.

Yes. Let's go into the Q&A here.

Well, Sue, looks at some of the questions, we want to shake things up this earnings a little bit, go on a video style, so we'll get feedback from our investors if they enjoy today or not. We're also if we keep the video format, we'll -- I want to be able to hear people when they ask questions, and we talked a bit about that. And as we set-up this first structure, Sue is going to kind of read the answers that people are submitting, we weren't able to with the platform today to be able to allow for that for today. But if people like this current format, then I really want to hear them and see them if possible as well. So we'll look at that on the next earnings calls.

But hopefully, you guys enjoy the new shake up here and approaching this from first-principles as well. Our goal was to use this call to have you to really get to know us, get to know how we think about the world, how we think about problem solving. You guys can look at our financials and our business through our public filings, but the purpose of this call, when we really broke it down from first principles, was speaking to our shareholders in very direct honest, transparent way, and we hope this new format helps drive closer to that as well.

Okay. So let's get into it. So from Greg Miller at Citizens, will the company be defining what portion of its pipeline will be allocated to Bitcoin mining and what percentage will be allocated to HPC as the 2 represent very different value propositions?

That's very fair. If we look at our existing capacity under management in the gigawatt that we're managing today, we have 300 megawatts of power generation that we've told the markets that we're selling to TransAlta, and we have -- that we've closed on that transaction, and we have 700 megawatts of compute that currently support American Bitcoin.

In our capacity under construction, we have 330 megawatts of utility that's River Bend Phase 1. And then we have a multi-gigawatt pipeline as you go further and further up the development cycle. And so currently, the core focus is converting those sites for AI use cases. Having Bitcoin as an alternative use case, allows us to continue to develop confidently in building the substations on the land that we acquire in interconnections knowing that we'll have a consumer there in all scenarios rather than just have risk development capital. And I think that's a unique edge that we have.

So our key focus around our current full development pipeline is around AI utilization and development, and we're seeing more and more focus on just power at scale and location really being a lower and lower factor in that as well. And so as we talk about all of the sites that we're developing right now, the primary goal is development around traditional data centers for AI computing.

Okay. So George Sutton from Craig-Hallum, can you give any detail behind the $163 million deposit for future sites?

Yes. Sean, do you want to jump into that?

Sure. So as we look at kind of developing some of the future sites, we have lots of land options, and we're also procuring long lead time equipment at some of these sites. So I don't want to get into the detail as to how much dollars are for which sites. I think that will give away some of our secret sauce, very competitive industry, but effectively, that's kind of what the -- those dollars are allocated towards.

And one key thing to know on how we approach development, historically, and moving forward, when we think about risk dollars out there, whether it be land options or they'd be developing, we've historically been very, very low upfront until there's real feasibility, right? So a big portion of those long lead time items are malleable pieces of equipment that we can allocate specifically around high to medium voltage breakers at the substation, different transformers once we set things down to 34.5 kV. And so malleable infrastructure that we can allocate across multiple campuses.

And then the investments we do at the early stage of development are really lower in terms of development, unless it's a kayak payment or an infrastructure upgrade as we locked in the power. And as we see collateral payments kind of increasing, we're also looking at other kind of project level financing and balance sheet borrowing that we're looking at doing to drive down our cost of capital as well, but we're very, very thoughtful in what dollars we're spending, what's truly at risk and what's malleable.

All right. So from Brett at Cantor, you guys effectively set the market with your Fluidstack and Anthropic deal. Can you talk about how pricing has changed since then? Do you think the next deal will see a step-up in economics?

I don't think we set the market. I think the majority of transactions in the market happened in the private markets. Everyone is kind of focusing on the public companies, but feels like 80% plus of the transactions are happening in the private markets with kind of the private equity funded development platforms on the data center side. And so I think our deal was market. It was middle of the fairway, and it was structured appropriately. And so as we continue to talk to customers about the deal and deal economics, we think that these are kind of market terms in the private markets, and we've held ourselves to the standard of a blue-chip data center development company. I think, I've brought in the partners to validate that thought process and that approach as well.

Okay. So from Stephen Glagola at KBW, a recent job posting pointed to a potential scale up of the Highrise AI GPU platform from roughly 1,000 GPUs to 20,000 GPUs. Can you provide more detail on your growth plans for the Highrise AI cloud business? And how do you envision scaling that trajectory.

So Hut 8, the parent company builds in the power layer and build in the digital infrastructure layer, front meter, behind-the-meter interconnects, obviously, we own power generation, and we build digital infrastructure on top of that, i.e., the River Bend campus we announced. In a lot of these deals, there's an opportunity where we can fund the compute as well. The funding compute and ASICs on the American Bitcoin side GPUs on the AI side are fundamentally different cost and risk profiles, which is why those businesses are separate companies, ABTC, being a public company now on its own and then Highrise still being a private company that is growing.

And so what's really unique about Highrise, we've been pretty quiet about it because we've been building the foundation of that business. It's not just the story is and we're managing a little over 1,100 GPUs, the story is we built a cloud network. We built a software stack. We offer bare metals. We offer multi-tenant solutions. And we announced this in one of our press releases in Highrise, but the current CTO of that business ran AI in the IDF and was there for a decade and half.

And so as we look at different opportunities, there are opportunities in these data center deals where Highrise can come in and provide the financing around the GPU stack, provide the services and technologies that I can build on top of the chip stack as well. And so Highrise is our new cloud business. It's one that we haven't spoken much about because as everyone knows, we're much more about talking about things when they come into fruition rather than what's on the come.

But across the whole board, we are building the company and hiring people to the place that we're going, and that's where you see a lot of that investment in talent into the business that we're going to be building and scaling into.

Okay, so another one from George here that I really like because I don't think we talk enough about this in the market. So Anthropic is the major -- is a mega disruptor in the space. How important is our existing relationship with them as part of the Phase II and Phase III opportunities?

They're great, right? And they're very open to thinking about things from a first principles approach. It's not a company where we have to do it this way just because. It's a company where we can talk about what are we trying to solve for and what is the best way to be able to solve for that. So if you think about Phase 1, give additional capacity, get additional power converted for our customers. Phase 2 is how do we drive down costs with really thinking about value engineering.

And value engineering is 2 ways. One is, how do we engineer and more efficiently drive the cost down for our existing infrastructure stack. The second is, how do we think about the actual demands that a customer has, which is also why we have Highrise to understand the full stack from electron to compute, from megawatt to token. And so by understanding that, we can more optimize the infrastructure to support for really what's needed, and we can have open discussions and discussions with Anthropic have been great in terms of solutions and malleability over how things are built to get to the final outcome.

And the last one in terms of AI and robotics, obviously, that they're at the forefront of building the technologies that support all industries. And so we're excited to continue to build those relations and compound, but I'm really, really excited for Phase III. We have to build Phase 1 and 2 to have the privilege for me to work on Phase III, but this year will be focused on Phase I and really scaling up our data center platform.

So I've got one here from Kevin Dede at H.C. Wainwright. Trump in his State of the Union last night asked the big tech -- asked big tech to commit to building their own power. How do you think your customers, partners and Hut 8 react -- will react to that should it become law?

It's a natural progression of where things are going. If we think about the overall sentiment and what should happen right now is when a data center is built that should be net positive to the community and the environment and the actual energy grids that you're impacting, right? And so when we think about sites like River Bend or Corpus Christi, we pay for the system upgrades that pull the power to where we are. We commit to the capacity on the energy side. And so that's kind of table stakes in my mind in the world that we're developing today and smaller utilities have gotten infinitely more sophisticated on that which is or to see kind of collateral coming in. I think in some places, it's getting overindexed and will kind of come back to the mean. But in general, that's the general sentiment.

As power generation gets constrained as more and more demand comes on to the grid, I think what you'll see more often is not island generation or bridge generation, where you kind of wait for the interconnect, but when you're building a load asset, you want the redundancy from the grid. There is value in that. When building a generation asset, you want the grid and the demand that's in the grid for the power. And so I think more and more what will happen in the markets, is people will bring load and people will bring generation. And so we're trying to kind of have a net equal impact into the grid, but interconnect that all in the long term.

And so then you'll have power generation increasing in the grid, you have load increasing. A lot of that will be financed and capitalized through the demand of the end customers and users and we think that's the best way to be able to scale and compete in the AI race on the global markets.

So from John Todaro at Needham, can you walk us through where you stand on the OSA negotiations with Fluidstack and more broadly, give us an update on construction cadence. How many data falls in the initial phase? And are you seeing any supply chain or contractor bottlenecks? Maybe we can talk about where we're at as well on the procurement side at River Bend.

Sure. Happy to do so. When we announced the deal, everything we locked in from people, contractors, long lead time items, equipment. And so all of that was locked in. There was nothing open when we announced the deal at the end of last year. On the delivery and the execution itself, as we mentioned, and we guided towards. When in the beginning of Q2, we'll have the first data center coming online, and then we'll have a data center coming online every 60 days thereafter. There are 4 data centers in this data hall. And so as we think about the actual construction right now, everything is going really, really well. People are very excited.

There's a lot of local talent in Louisiana because of the heavy industry that was there before. And so that's really, really great. Jacobs has been a great partner. Vertiv is fully cranking on the long lead time items that they're bringing and procuring for this project. So overall, from a constructability and delivery perspective, feel very, very good. And we gave ourselves a healthy time line to deliver this as well. And so we're not crunching every single thing.

We put buffer in. We hope to deliver earlier if we can. And so that's how we've really developed this program. From a financing perspective, things are going very well as well. We announced that we're going to target 75% -- 85% LTC at a SOFR plus 225 rate. We've recently been able to improve that to 90% LTC at SOFR plus 240 to account for the increased loan-to-cost ratio. But we've been able to get more project financing on the projects and something that Sean and I like to talk about, even when a deal is done, we still like to further improve and figure out how to make it better. And so overall, in terms of delivery, feeling very, very good. We're currently in active negotiations on the OSA in terms of operations and delivery, but we have some time until we actually are operating in the campus so working through those kind of contracts now as well?

So maybe just to quickly piggyback on that from one of our new friends, Robert Boucai at Newbrook. In considering future deals, do you require credit enhancements as with Google on the Fluidstack deal? Or would you be willing to have one of the LLMs be a counterparty? How much of a gating issue would this be?

I think overall, it's really thinking about our overall platform that we're building and the exposure that we're taking on investment-grade counterparties on non-investment-grade counterparties and really everything kind of in between. And so as we think about developing our platform, we want to make sure that the cash flows that we have and that we're projecting to be able to fund the growth and the expansion of our business are durable and are reliable.

And obviously, that affects cost of capital and financing and LTCs as well. And so as we look at future growth opportunities, we're obviously optimizing towards investment-grade counterparties, but it's really about, like any portfolio anyone has including all the shareholders on this call, it's about risk allocation, what percentage of your platform is on high growth, high-risk companies that have kind of a ton of upside. What percentage is on stability on the platform as well.

And so I think for us, it's not binary. It has to be this or that, but it's around risk allocation. And obviously, as we've kind of told and shown in the market, we have a heavy lenience towards folks with investment-grade counterparty and as we think about financing on the debt and the equity investments as well, but there's always a place in the portfolio for high-growth companies as well, but it's all about percentage exposure that we have to them. And every time we announce a deal, we'll walk through the thought processes in those. But right now, we continue to be focused on investment-grade counterparties that we're financing towards.

Okay. So a question from Mike Grondahl at Northland. Can you describe the demand environment and how it's evolved over the last 90 days for HPC? Obviously, there's a few new dynamics that have transpired in the market. So how has that evolved in terms of your guys' customer conversations?

It's really interesting. I mean, last year on the same time, this DeepSeek news came out, right? And everyone was scared that the demand has gone and the markets were scared. The Microsoft has traded down a lot. But the reality is at that time, we were still seeing the demand and demand signals. And you saw a heavy uptake towards the end of the year. I think right now, especially with the Agentic AI and a lot of -- I mean, the Mac Minis are sold out across the U.S. If we look at Highrise, the utilization on our cloud is at record highs.

And so the actual applications and use cases are continuing to grow and increase in pickup. I think that will result in the compute that's needed. And so where we are today is also a little bit different than where we were last year. We have much deeper relationships with a variety of counterparties because of the last two years of relations that we built. We've gone through a lot of negotiations on the actual contracting multiple counterparties. We've gone through engineering design drawings for months with multiple counterparties.

River Bend wasn't one counterparty that we worked with for 1.5 years. We went through multiple iterations with multiple counterparties, and we had one that got to finish line first. And so those relationships are stronger than ever. And what's nice from where we are today and the credibility that we have as well is, we can have a lot more frank and meaningful discussions around, what is their capacity demand over the long term? How do we play into that? How do we support them?

And so for us, honestly paying less attention to the stock market these days and spending way more time on the customers, what are their demands and how do we build the competitive moats, because that is what's going to drive our business and grow and compound over time. But I think all the noise you're seeing, we're seeing really the exact opposite. The demand is still there, demand is still strong, people are still growing.

You see that with some of the announcements like yesterday with Meta and AMD in terms of additional capacity. They just announced a deal with NVIDIA for that. And so overall, I think demand is healthy. A bigger theme that we're seeing that's real is that power is becoming more constrained, right? You're seeing every utility, every transmission operator trying to go through and restudy and change the approach that they're going in terms of the study.

And I think that's healthy as well because you have so many developers that may not have the balance sheet or the capabilities to actually develop sites, and all they're trying to do is lock in an interconnect and then flip it to someone else to buy it. We get -- Sean talks about getting 10 inbounds on financings, probably get 100 inbounds on sites for us to look at from an M&A perspective. And so clearing out some of that FUD, I think we'll actually make the queues better.

And then also from a development perspective in terms of land development, you're seeing some places that don't want this in their backyards and some places that do. And so I think you're seeing consistent strong demand on the demand side, and then I think you're seeing kind of volatility on the supply side in the markets, which make us excited.

Yes. Agree, we support any sort of initiative that helps trim some of the fat in these queues, and also education is key in some of these new markets where we're seeing stakeholder pushback for data center development. Okay. So from our friend, Greg Lewis at BTIG. He wants to know what I'm sure a lot of people want to know is any update on the power that is under exclusivity and steps and processes needed to move that into development? It doesn't seem like we saw a lot of that happen in the current queue.

Yes. Currently working through it, we obviously have a pretty big amount of capacity in development right now to trying to move that into commercializing and signing those agreements and signing them, because if you think about our stages in the pipeline, we go from capacity under diligence, which is we have a large energy origination development team, and they're out there, they're hunting, they're negotiating and they're looking at opportunities that make sense for us.

Then we get into capacity under exclusivity. That's where we're investing more dollars from a team perspective and legal dollars perspective as well. In those scenarios, we have exclusivity, land options. We're investing into legal resources, preconstruction resources, high-voltage transmission engineering resources. And then when we get into capacity under development, that's when we're actually buying the land or locking in the kind of contractual agreements on the power and putting in the kayak payments or any collateral obligations.

And then from there, we go into commercialization, construction and then ultimately, management and operations. And so I think we have a strong amount of megawatts over 1 gigawatt in capacity under development right now that we're working on commercializing and the capacity exclusivity will kind of be following that as well.

And so if you think about timing, capacity and exclusivity, we have an exclusive access on that opportunity, whether it be the land, the power or both. And in that scenario, like why go and spend the money if you still have option value there and work on commercializing the things that you already spent money on. And so when you think about those and how they interplay together, that's kind of a big part of it.

And so from a timing perspective, it's really getting more sites commercialized and having that funnel continue to grow and increasing the capacity under exclusivity from the capacity under diligence. And so as we continue within this year, there will be a lot more conversations about the pipeline, how we think about conversion, more transparency into the sites that we have under capacity under development as well. And so we're excited as we mentioned, we're building a robust energy infrastructure platform in the digital infrastructure world and River Bend, again, to remind everybody, was a site that started at capacity under diligence and went -- made it all the way through to capacity under construction within the last 2 years during the theme and during the market rush of power.

This was not a site that we converted from the Bitcoin mining days when it was less competitive to get power. And so we've shown that we can do it once, and we will continue to do it.

Thank you. So from our friend, Chris Brendler at Rosenblatt Securities. On funding River Bend CapEx, any early read on the project level financing deal given the recent volatility in the market? And how do you view your Bitcoin holdings as a potential source of funding for the equity portion?

We feel very good. So the equity as of right now is already fully funded, because we've had to fund the projects, our deposits with Vertiv and so forth. So when the project financing actually completes, we're going to get a multi-hundred million dollar cash out of the transaction, then we'll fund our 10% on an ongoing basis. And so as we mentioned, we went from 85% LTC to 90% LTC on the financing. We're pushing aggressively towards closing. JPMorgan and Goldman are committed. They wouldn't have given us quotes and put us on the press release when we announced to see it was just an idea.

And so we're very excited, we're very committed. And we have connectivity at the highest levels. I've had lunches with the CEOs of the firms. And so I'm very, very excited that we have partners, not only to finance this project, but on go-forward projects to replicate this program on a go forward. From a Bitcoin perspective, our balance sheet and our Bitcoin on the balance sheet in the beginning of last year was core to us executing on throughout last year.

Being able to tell customers, don't worry about our ability to finance with this amount of Bitcoin on the balance sheet was really important. Where we are this year, Bitcoin on the balance sheet is not -- it doesn't -- it's not the focus. It doesn't matter. It's just like asset on our balance sheet. And so the reality is we're going to remove Bitcoin exposure on our balance sheet as we move forward. And how we do it is what we're focused on right now. And our exposure will be through the equity ownership that we have in American Bitcoin.

And so the Bitcoin on the Hut 8 balance sheet is not going to be a thing that we continue to hold for the long term. And the beauty is we're able to hold that exposure through the equity that we were able to create in American Bitcoin for incubating and building that business. I think we're really good at creating value and our focus is how do we drive down cost of capital and continue to create value by building businesses and what we're excited for building Hut 8, building ABC, building Highrise.

And so that's a big change in focus on kind of the importance of Bitcoin on our balance sheet and our perspective on it on a go-forward basis. But River Bend, currently, from an equity portion, we don't need any more equity funding. We've already funded the projects. We're actually getting cash back once the financing closes, and hopefully, we can talk about it in our upcoming earnings call.

Great. Okay. So let's talk about, we touched on this a little bit. But why don't we talk about, where is the -- I'm just trying to find where Brett was asking us a question. Okay. So it seems like co-locating generation on-site with data centers is going to be more prevalent. We did touch on this a little bit. What are we doing specifically to participate in this trend?

You're saying -- sorry, repeat colocation data centers, is that traditional colo you mean instead of single kind of campuses?

No single tenant campuses, yes.

Sorry, repeat the question.

It seems like co-locating generation, single-tenant campuses on site with -- yes, is going to be more from doing to participate in this trend.

So let's use River Bend, that's a perfect example. The Entergy Louisiana has given us a plan in terms of when they can deliver power, right? And we're talking about the full gigawatt and there -- they want to build generation added to their rate base, have us be able to make sure we commit to it, so they're not taking spec dollars at play here. We're having discussions around them of maybe we can bring the generation faster to the site to drive the full gigawatt at a faster time frame, right? We don't want to wait 5 years, what if we brought it in a lot earlier?

And so as you think about the sequencing, what percentage of the gigawatt can we pull from the open markets in terms of capacity, and what percentage do we have to build that new generation, right? And so that's first, not -- the 4 gigawatt is not treated as the same. And so the discussions we're having is how do we think about bringing generation to this campus. We have a lot of land. We have the ability to scale to almost 3,000 acres. We have access to pipelines and the ability to generate and to produce.

And so as I mentioned in earlier Q&A or in the actual fireside chat, bringing generation with load, we think is going to be a bigger part of the story, a bigger part of the development. And luckily, we have those capabilities in-house. We manage 4 natural gas power plants with Macquarie as a partner, and we not only manage those, that's another asset. Those were 4 assets that we bought out of bankruptcy. We turned around. We signed long-term offtake agreements with the utility in Ontario, and we sold them to TransAlta, which is a large utility in Canada.

And so we have the expertise in-house. We're continuing to build and compound on the expertise we already have, but it's going to be a bigger and bigger part of the story. I don't think it's going to be around island generation. I think it's going to be around bridging and having load and generation interconnected to the grid at your campuses.

Okay. So we are coming up on the hour here. So we're going to do one more...

We have like 31 questions in the queue. So I think we'll reduce that number when we get people to come on stage with us next time.

That's right. So we talk a lot about the importance of our energy origination team of diversifying the pipeline of not being overweighted to a single market. Can you, and maybe, Sean, talk about some of the areas where we are still finding pockets of opportunity. For example, in a previous conference, we talked about how we were interested in studying a development in Pennsylvania. Maybe just talk a little bit about sort of some of the areas that we're looking at well outside of ERCOT.

We're looking across the whole U.S. Every single area in the U.S., as we mentioned, power and land in a regulatory environment that allows for building this infrastructure at scale are the key pieces in building, right? Fiber has been less of a bottleneck. We've been able to bring fiber to a lot of the campuses that we're developing and that we're building.

And so it's following the power. It's taking a first principle approach to where is their power. Using River Bend as another example because I think it's our first fully kind of vetted case study, and we can do the same about future sites that we announced. But that project was around the transmission lines. That project was around the generation near that campus.

Then we came together and we pieced multiple pieces of land that were held for generations as kind of hunting properties by people, and we built this 3,000 acre opportunity to go build a large-scale mega campus. And so we're looking at those similar characteristics as we look across the whole United States and we look at its ability to scale power, its ability to build with a friendly regulatory environment that wants this project there and see the impact and the benefit that we can bring, a place that we can have talent to actually execute and build these projects and do so with the speeds that we're looking to build them at. And so our team -- the reason why we're scaling is we're continuing to increase the breadth and the depth across our energy origination pipeline across the full United States.

And there are some areas that are more complex than others, obviously, that aren't kind of traditional data center markets. And so we're kind of focusing on Tier 1, Tier 2 and Tier 3 markets. and there's a little bit of a different allocation of priority risk capital that we put on to each of them, based on our confidence level of commercializing them. In some sites, we know that we'll always have kind of another market through American Bitcoin has a demand of a captive consumer that we have with the power where the energy prices work. In other areas, we know that this is primarily built and there is no backup option for developing this campus.

And so overall, we're excited. I think, we're one of the first to talk about our development pipeline and our energy pipeline because that was a core focus. And now we're 2 years into that journey. We've been able to take one project fully through the getting to almost near the end of the process. Now, we got to get it to capacity under management, but we'll start having more sites kind of coming through that pipeline. And it takes time to develop these projects and you're starting to see some of those come to fruition as they move down the pipeline as we start talking about them more.

Awesome. So...

More projects -- similar, I guess, to River Bend, we've had a lot more projects get into the press than we've shared with the markets because of all the local zoning and panels that we do. So you guys will see that as well if you keep your news alerts on Hut 8.

Okay. So we've got one minute left in this call. Maybe any closing thoughts, Sean and Asher that you want to leave our audience with.

I've talked a lot, Sean, why don't you close this out?

Yes. Happy to. Thanks, Asher. Look, I think Asher said a lot of it, but this is a year about execution, this is the year about growth and scaling the company. We're excited about the foundation we've built. Like when I started, I told Asher, I felt like where we are now is inevitable. And I feel like the growth of the company is inevitable. We put it together a really good development business, a really good funding mechanism, and we're looking to continue to repeat and compound that over time. So we're excited to have you along as shareholders. We hopefully do believe we've done you well so far, and we look forward to continuing to do so in the future.

Thanks, Sean. Okay. Operator, you can close the line. Thank you, everybody.

[Audio Gap]

Asher Genoot, CEO of Hut 8.

So today, Hut 8 announced 2 major announcements. We announced an AI infrastructure partnership with Anthropic and Fluidstack, where Hut will develop at least 245 megawatts of infrastructure and up to 2.3 gigawatts of AI data center infrastructure for Anthropic, one of the leading AI labs who will be leveraging Fluidstack's clusters. We also announced the signing of a 15-year 245-megawatt AI data center lease at our River Bend campus in Louisiana with a total contract value of $7 billion over the base term and up to $17.7 billion if all renewal options are exercised. Google will be providing a financial backstop covering obligations for the 15-year base lease term, and we are really excited to get into this transaction with you guys today.

So -- but first, some quick housekeeping items. Unless otherwise indicated, all figures discussed today are in U.S. dollars. Certain statements made during this call may constitute forward-looking statements within the meaning of applicable securities laws. These statements reflect current expectations and are subject to risks and uncertainties that could cause actual results to differ materially. Certain key risks are detailed in our Form 10-K for the year ended December 31, 2024, and in our other continuous disclosure filings. Except as required by law, we assume no obligation to update or revise any forward-looking statements.

And with that, let's get into the AI infrastructure partnership that Hut 8 announced this morning.

Thanks, everybody, for coming today. This wasn't a conversion story. We had a new site that we developed, we originated and we commercialized as AI demand came to reality. And so we did not convert an existing site, but we net developed it with the development pipeline that we've been growing. I think it's also one of the most thoughtful deals that have been structured, and we're excited to go into the nuances of what that means.

We're able to retain the relationship, the upside of demand from Anthropic, Fluidstack and Google, but be able to have an investment-grade counterparty be able to provide a guarantee and financial backstop on all lease payments, which is about $7 billion for the term of the first 15 years, minimum power bills, which is about another $1 billion, property tax, insurance and other pass-through expenses as well.

And so not only is this a backstop on the debt and the financing, this backs up the full obligations of the lease payments to us and therefore, the equity investment that we're making and the return profile and the overall value of the site that we believe.

That was extremely critical to us and why we were patient in finding the right deal that was structured thoughtfully with the right economics.

We also have a holistic deal that we announced that was focused not just on the actual contract terms itself, but how do we actually execute on this project and how do we deliver it to the customer, one with partners that have scale, our industry leaders, and we believe a program that we can continue to repeat and scale as we now go into growth mode.

Awesome, Asher. I appreciate that overview, but now let's get into it. So maybe let's start off with how does this partnership -- like what does this partnership say about Hut 8's ability to support frontier model developers and effectively integrate us into the AI supply chain?

I think it validates our ability to work with high-class and high counterparty partnerships. It validates our power-first development model that we've been discussing throughout the last 1.5 years. And it shows that we have confidence from some of the leading AI companies in the world to have our power development pipeline be able to help support them and continue their runway and give them the capacity to grow and advancing frontier AI technologies.

Very cool. So -- maybe let's start with how should we think about the long-term expansion potential of this partnership? Maybe walk us through in greater detail what that looks like.

So Tranche 1 is the deal that we announced today. We have a single building that supports 245 megawatts of IT capacity. On the campus, they'll also have a ROFO to be able to expand an additional 1,000 megawatts of capacity. And then there's a third tranche, which is about 1 gigawatt of capacity as well in other sites within our development portfolio that they found interesting.

And so to support them on a holistic 2.3 gigawatts of additional expansion opportunity that we'll be able to have them diligence, review and scale into as they have their demand profiles come in. Most importantly here, it's proof of scalability and repeatability within Hut 8's platform and development pipeline.

You're on mute, Sue.

Let's get into the actual meat of the deal. Let's get into the transaction overview. So can you walk us through the economics of the deal, including how we evaluated Google's credit support and what their guarantee actually covers? And maybe can you touch on -- we've seen a few deals signed with Fluidstack in the market. What is differentiated about this deal in particular? And then finally, why didn't we take the high-yield bond route?

So I'll first start with kind of lease structure. The way that we've built our business and the way we've structured our reporting segments in the company is we have a power layer, digital infrastructure layer and a compute layer. The power layer is the actual vertical and the power layer is the horizontal investments that we make and also the managed service and operating business. The digital infrastructure there is when we go horizontal and to actually build a building.

And so if you go with a gross modified structure, that's essentially one business, right? You are building and operating a turnkey data center for a customer. And so that's where you see kind of 80%, 85% gross margins on the revenue that you receive from those inflows. But you really have 2 businesses there. You have the business of developing and delivering a data center to the customer and the business of actually operating and maintaining SLAs and service level obligations of operating that data center. For us, it was really important in how our company is structured to be able to separate those within the business units that they operate.

So we have a triple net lease here, which is a fixed rate of return on the initial CapEx that we invest into the data center. Once we deliver that data center to the customer, we will have that cash flow coming in and all costs are passed through to the customer where it's really a rate of return on that capital deployment on that execution. Then we currently have an LOI to sign a managed services OSA agreement. That will be incremental economics in a 15-year deal to operate the data center on behalf of the customer and have those relative SLAs and penalties on those obligations within that contract.

So I think structuring for us was really, really important as we thought about our business units, how we think about lowering our cost of capital and the different risk profiles that the business units has in development and construction versus operations and maintenance. So that's first in terms of triple net lease structure and why you see that NOI contribution on the 15-year average at $454 million in such a high near 100% flow-through. So that's kind of part one.

The second was it was important to us, we believe that power is scarce. We believe that near-term power is even more scarce. And so because of that conviction in the asset, we have had many conversations with different customers, and we said, we have something that we think is of value.

We want to solve for 2 things. We want a good deal that is fair for us and fair to the customer, and we want a customer that we can scale with. Here, we have 3 customers that we can scale with within Anthropic, Fluidstack and Google and those relationships that we've built with them through the process and we'll continue to build.

In terms of the actual structure, we did not want just a guarantee of the debt. That helps us finance the debt, which is great, but that doesn't help us in underwriting the project for our equity investment. These are 15-year contracts, and we have to think about the creditworthiness of those counterparties for 15 years, and how we think about that build to the foundation of the business that we're growing.

And so here, Google is providing a financial backstop to all of the lease payments in this initial term. That's about $7 billion. All of the pass-through payments, including power bills, minimum power bill is about $1 billion during the 15-year term. We have insurance. We have other costs like maintenance, operations, property tax and so forth. And so all those together take us to a minimum about a $9 billion financial backstop in this overall transaction.

And so for us, the look-through is essentially Google is our credit counterpart and the customer in this lease during this duration, right? We didn't have to give equity upfront in order to achieve that. And if they do step in, we are not diluting our equity in that scenario either. They are the customer if Fluidstack is not the customer at that point.

And so we're so excited to grow and scale with Fluidstack through this partnership with Google and Anthropic. And the overall deal here that you see, our average cost to build will be around $9 million to $10 million a megawatt. The delivery schedule was important as well. We didn't want to overpromise just to get a deal done. We want to set strong conservative expectations of delivery. And so you see early 2027 is when we'll start the first data hall delivery and deliver the full data center within 2027.

We hope to exceed those expectations for the customer, deliver early and give them their capacity. But what we did not want to do was to deliver late and lock in the contract today, but hurt the relationship to be able to scale and grow with the customer, which obviously makes the upfront negotiation a little bit harder.

The other outlet was the financing. Because of that, the structure of the look-through in terms of the IG creditworthiness of Google, we were able to get JPMorgan and Goldman Sachs to provide a financing partnership with us to finance up to 85% loan to cost of the data center, at SOFR of 225 -- target of SOFR at 225. That's some of the best financing in the market today because of the creditworthiness of these cash flows and of this agreement.

And then Asher, one -- just jumping in here quickly. It's kind of unusual to see a target delivery date on a page full of financial metrics. What's the rationale behind that?

Yes. Because for us, signing the contract is great. It's what is our potential expected returns. But here is where the real work begins. How do we execute this project and how do we deliver this infrastructure to the customer before they need it and to be able to meet the time lines that we give to them and not be delayed and out of construction risk, supply chain risk and so forth.

And so we'll talk a lot about that in this presentation, but a part of us waiting and having shareholders be patient was because we want to put a holistic delivery solution and program together to announce to the market and to sign the contract with all of that in place rather than figuring out after the fact once we've made the commitment to the customer already.

Awesome. So maybe you can walk us through a little bit on the economic durability and the revenue visibility of this deal. And I'd also love for you to touch on what is the difference? And why does it matter that this is a ROFO versus a ROFR with respect to this deal?

So the initial base term is 15 years. That's about $7 billion of NOI contribution, roughly around $454 million per year on average. If the customer extends during the duration of the additional 15 years of extension options that they have, that second 15 years is about $700 million of average NOI contribution during that period of time. So on an average, you're looking at about $580 million across 30 years on NOI contribution per year. And so overall contract value obviously increases $17.5 billion. This campus is one that we believe a ton in and its ability to expand and scale. And so the customer has a ROFO right.

And what that means is they have the ability when we have additional capacity to come online to give us a right of first offer on what they would like to propose to us. The reason why that's a little different than a ROFR, is a ROFR really hurts marketability. If we go out and spend months marketing a site to a customer and that customer knows, if I offer you and we get to a final deal, you have someone that can just jump in and get a right of first refusal and say, we're going to take this and said, it really makes the ability to scale this campus and the marketability of that much more difficult.

And so this is -- ROFO as we like because it shows our intent where we want to grow and scale with our tenants, but it also doesn't take away the marketability of future campuses in the case that the tenant just wants that optionality.

Yes, that's a super salient point. So I think we should now sort of zoom in on some of the incredibly impressive partners that we've gotten to align with us on this deal. So from across financing, power, construction and supply chain, how did these relationships come together? And given the industry's heightened focus on execution risk and recent delays, how confident are we in delivering by Q2 2027?

Very confident. A big reason that we've taken so long to announce a deal and to sign a deal was that we didn't want to just negotiate and get to the finish line on a contract with the customer and make commitments that we didn't have buttoned up on the other side.

And so we worked really hard to get this program together and get these executed agreements where on the Entergy side, we have a strong utility power partner that can scale and grow with us. They were able to increase our initial 300 megawatts of utility capacity to 330 megawatts because we need to put a little bit more IT capacity into the building.

If we can go back to the previous slide, thank you. Then when we think about the actual financing, we talked about Google and their financial backstop and covering those commitments of the lease payments of $7 billion and covering the pass-through obligations under the lease as well. That's what gave confidence to JPMorgan and Goldman Sachs to come in as partners to have our target SOFR plus 225 cost of financing up to 85% of the overall build cost of the project and for them to be willing to put balance sheet capital as well to help drive that financing.

And lastly, the ability to actually have the labor and talent, the engineers, the skilled labor in order to do so. So Jacobs is our design build partner on this project and the program that we're developing to rinse and repeat and to scale. They have over 40,000 people. They are a publicly traded EPCM company as well. And they're going to be managing our subcontractors, which we've all identified as well and already have staff committed to this project. And then Vertiv from a long lead time equipment perspective as well.

So today, when we announced this deal, we're not just announcing a customer. We're not just announcing a great credit counterparty that stabilizes the cash flows for this data center across the next 15 years. We are announcing an overall program to deliver this project on time and on budget and to be able to deliver that and repeat that program. So this was key as well.

We met with a lot of different counterparties. We wanted partners that could scale with us. We wanted partners that have the infrastructure to be able to duplicate the model that we spent so much time building and grow from project and project to us and to repeat and repeat and repeat throughout all of the sites we have within our development pipeline.

Yes.

And one other thing, I'd just jump in and add here is while JPMorgan and Goldman Sachs are providing capital, the underwriting process with banks like themselves, especially when they're doing something on their balance sheet is extremely stringent. And so as we look to develop a construction project and a supply chain to get the project off the ground, they also had to do a lot of their own diligence.

So you not only have us doing diligence, but you have JPMorgan and Goldman Sachs who have been in the market for a long time and are putting their balance sheets behind this project, effectively giving the stamp of approval that they think the program that we put together to build this is one that works.

Yes. Super, super important point there, Sean. Okay. So maybe let's pivot a little bit and talk about -- we've seen other deals signed in the market, other players that are having great success in the space. But what really differentiates Hut 8's development model from any other AI data center builders out there? Like what is it that makes us incredibly unique?

Yes, I'll jump in here. And I think it really starts with the way we develop projects. For us, everything starts with the electron. We view electrons as a product and not a commodity. And so that starts with working with a company like Entergy, who provided us with an electric supply agreement that we could then sink our teeth into and understand that there's really reliable, uninterruptible power there for the long haul.

Next, and I think people don't really understand the full gravity of this, a local ground game is incredibly important. You're starting to read articles about NIMBYism. And so we wanted to make sure that we were working with the local community to have a project that they would get behind. So the State of Louisiana, Parish of West Louisiana, both got really behind it, and we work hand in glove with them to make sure that we were delivering a project that would deliver economic value, jobs and a lot of high-tech improvement to the state.

Next, once we have those in place, then you're able to commercialize a project. I think if you go to the market with an unbaked project and you start trying to market it to Google and the other hyperscalers, you're going to lose a lot of credibility really fast. And so once we have the first 2 on the left side of this page locked in, then we say, okay, let's go market the project to people.

Once we've got a lease kind of in negotiation form, then we got to execute. And as we walked through on the prior page, getting the financing locked in, getting the supply chain locked in and getting the construction locked in really derisks the project from an execution perspective. And you know we've preached patience and we wanted to give you guys a deal that really spoke for itself. And as you put all these counterparties in this full development time line together, you can see how we do that. And this is repeatable. We're very methodical about this, and we do this at all of our sites.

So you guys might have noticed Sean, suit and tie. He is one of the former top bankers at Citi. Sean, maybe you can just talk a little bit about as a former banker who did over $80 billion of transactions in the energy space, energy and infrastructure space, like what does this deal look like from your seat?

Yes. I mean there's a bunch of boxes you got to check when you're doing a big infrastructure project. First and foremost, what's the creditworthiness of it? At the end of the day, all infrastructure projects are a look through to the counterparty. Are you investment grade or are you not? That's typically the big litmus test. So we've got that. Then it's -- you're going to dive into the economics and what does that look like?

Sean, frankly -- sorry.

Go ahead, Asher.

Sean, let's do this actually. We have a slide where we kind of go through a recap of the overall transaction. Maybe let's jump into that. We have 2 more to get through, and then let's jump into that when we get there.

Absolutely.

Okay. So yes, because we are a little bit tight for time here. So let's quickly go into River Bend, which is now, I guess, it's safe to say like our flagship greenfield project. Remember, guys, Hut 8 did not tear down sites. This is greenfield development.

Maybe you guys can walk us through really quickly what drew us to this site, Asher? And how did it evolve into today's flagship product? Because Louisiana is not a traditional data center market where you see data centers like up-scale like this, right? So what drew us there? How did that evolve?

As Sean shared in the slide previously, we follow the power. We really looked at where is a strong power story within the U.S. that was underappreciated and underlooked at. And so Louisiana is a state that actually sits right in the middle of Dallas and Atlanta, which are 2 major data center hubs. The connectivity of this campus allows us to connect fiber North, South, East and West with low latency. We've looked at having customers come to the site that offer cloud availability zone services as well, not just AI training.

And so when we look at the campus, there's about 3.7 gigawatts of generation just within a couple of miles away. Our switchyard actually connects to the River Bend nuclear substation. Then transmission, the transmission story on the site is also extremely strong. We have a couple of 230 kV lines, 69 kV lines as well. We're only connecting to one of those lines right now for this first building. And so -- because of that conviction in the overall power story and generation and transmission, the fiber story, we've actually increased our commitment to the campus size as well.

We announced that we owned 592 acres. We've incrementally increased that to 35 acres. But more importantly, we've actually optioned the 2,300 acres contingent and connected to that property as well. So we have about 3,000 acres of connected land to be able to grow and scale into this campus into this gigawatt platform. And so we're very, very excited by this and think we have all of the right ingredients to continue to build the campus. And I believe that's why we've had so much interest on this campus over the last year.

Yes. No kidding, that's insanely exciting. So maybe we can quickly talk about how are we derisking the long lead procurement items and labor for this full build, right? Because that's -- obviously, there's a lot of bottlenecks in the market right now. So maybe you can talk a little bit about some of the nuances that are unique to this site and actually Louisiana as a market in general.

So when we think about development and risk to development, we already started building the switchyard with Entergy, and we started procuring equipment for the substation as well. Some of this long lead time equipment like [ 330 ] for breakers from the substation on the low side into the actual data center building, that's valuable equipment that we would use at any data center campus we have regardless of transmission level voltage, right? And then there's some more unique products like the substation itself and if that voltage is more valuable.

And so we started running the civil work on the site and having a lot of the long lead time items for the electrical infrastructure on the high-voltage side. When we announced this deal today, we also locked in the long lead time items as well within the data center from chillers to busways to CDUs and across the whole data center infrastructure stack.

We have partners that have committed to the time lines that we have committed to as well. And that's what you see kind of on the screen today is we did initial work that we felt comfortable to from an investment perspective, but also made sure that all of the risk factors in actually deploying and executing this from a delivery perspective was already solved for before signing the contract with the customer.

Maybe you can quickly touch on the significance of our skidded design and also the pilot that we actually did at this site.

Sure. So 2 different elements. One is when we think about scaling and growing, we believe that the more you can actually take out of the data center and able to skid into a repeatable assembly line in a manufacturing facility, the faster execution you can have on site and the lower risk you have of something not being executed well.

And so when we think about the deployment of this data center, it is a traditional data center building, but the way that we have thought about our procurement of this data center, we're not just stick building the site on campus. We're actually doing a lot of that assembly where we're connecting different components together, purchasing that full skid, having it arrive on site and then you're connecting those interconnection points on that skid design, which we'll go into more detail as the campus continues to mature and construct.

And then separately, from a pilot perspective, Louisiana has been an amazing state to work into. We've been welcomed by the governor, by LED, which is the economic -- Louisiana Economic Development Board, the Parish President, Kenny, the local Parish Sheriff, the school district. I mean, we have a community locally and at a state level that have wanted us to come into the state.

They recently passed the data center sales and use tax exemption as well, and we work closely with the Parish to put together a program that allowed us to be able to grow and attract the right customers from a tax perspective to be able to generate revenue for the local community as well. And so we feel extremely grateful, and that's why we have so much conviction and continue to scale within the states.

Awesome. Okay. So we're about to wrap it up here. We only have a few more slides left. So I want to quickly talk about -- maybe let's zoom out again and talk about why is this deal so important for Hut 8's long-term financial profile and our valuation. Maybe, Sean, I'll let you kick it off there as the former banker and now CFO in the role.

Yes. So before I go there, I'll actually start with why this deal is so great. Like I spent 13 years in power and utilities, it's an infrastructure business. I'm an infrastructure geek. I love infrastructure. And when you evaluate an infrastructure project, there's kind of a checklist of things you need to go through and does project check all the boxes. The first one is always creditworthiness, as I was saying before. Is the tenant or the offtaker going to be around to pay their bills for a long time.

I think with Google's support here, that box is very clearly checked. Then you got to get into the economics. And we've already talked about the actual NOI generation, but the structure of the economics. We have an inflation sort of protection mechanism through the escalator that comes every year. That's incredibly rare and important in infrastructure contracts and the triple net structure, right, which has a pass-through of all costs.

Next, you're going to get into financing, both on the debt and the equity side. So from -- on the debt side, we've been able to secure 85% loan to cost at SOFR plus 225, which, given where SOFR is right now, is a sub-6% cost of capital on the debt. On the equity side, we also -- you have to think about dilution. We didn't give up any warrants to do this project, which I think is very differentiated from some of the other things that have been in the market, and it protects our shareholders as we think about value creation.

And then finally, having sat in a lot of credit committees in my career, there's like a kind of logo test that you do, right? And that logo test is sort of like does this pass the execution thresholds we need. And I think as you look at the logos here, we've got Jacobs, Vertiv, Google, Goldman Sachs, JPMorgan, Entergy, it's a screaming home run from that perspective, candidly, and I'm not just saying this because I work here, it's one of the best infrastructure deals I've ever seen in my career, and I'm really proud to be a part of it.

I think that dovetails nicely into the next slide where we talk about what does this mean for valuation for the company. And if we could go to the next slide. Yes. Thanks.

So we're joking around before we came here to this meeting about where we were a year ago. And I told Asher was like, look, this was inevitable. Like I saw the team here, I saw what we had in front of us. And like this wasn't and if it was and when? And now it's going to be how much and what's next, right? Because we know that's going to be your next question. And as we look at where other companies are trading in the market from a dollar per megawatt perspective, and we apply that to what we have in front of us with an over 9 gigawatt development pipeline, that is extremely attractive to me.

Moreover, if you think about the revenue generation we just created, that was about $1.85 million per megawatt. I'll let you guys do the math here, but clearly, we're just at the ground floor of something that's pretty impressive from a value creation perspective.

Moreover, we just -- and one final point on this. We just developed the site for mid-teens yield and the market trades at around mid-single digits cap rate. So that's significant equity value creation right off the bat. And the fact that we've actually shown we can do this now, I think, derisks the rest of the pipeline tremendously.

With that, Asher, I'll give it to you to kind of wrap it up with some final thoughts.

We appreciate the patience that people gave us. And we hope that what we delivered today met true to the promises that we made in terms of giving a holistic solution to the first deal that was thoughtfully structured for the long term, not just wanting to get a deal done because there are deals that we walked away from and thought it was that the wrong decision. But today, we're confident in where we are, the deal that we put together, and more importantly, the program of partners that we have to repeat and to scale this structure in this program across the sites and many other sites in our pipeline.

Awesome. Well, guys, that was great. Let's open up the floor now to a Q&A. We've got a couple of guys here in the queue. What I'm going to do is I'm going to read the question and then Sean and Asher will answer.

So the first one comes from our friend, Amit at Millennium. So when is expected power delivery? What years for the ROFO, not the ROFR, the ROFO portion of the Fluidstack transaction?

Yes. So for the additional 1,000 megawatts, the conversation we had, we submitted that request with Entergy Louisiana, and we're actually meeting -- I actually talked to Philip May, the CEO today after the announcement, and we said that we would put together a schedule and pipeline once we had our first deal that we announced for the initial capacity. And so we'll be releasing more of that information in terms of when that capacity becomes available and looking at doing similar chunks in terms of building sizes as we scale into that capacity.

Awesome. Okay. So the next question comes from anonymous. Congratulations on the deal. Could you please clarify if the $9 million to $11 million per megawatt of CapEx refers to critical IT of 245 megawatts or gross of 330 megawatts?

Easy. Critical IT. We think about costs relative to the revenues of megawatts that we're receiving.

Awesome. Another one here. So what do financial penalties look like in the event of delays? We've heard a lot about delays in the market. What does that look like for Hut if we are delayed?

The structure that we've created and the structure that we think is fair that we've had across many customer contracts that we've negotiated is that there's delayed penalties that accrue in the 6 months following a delay, right? So that escalates in month 1, 2, 3, 4, 5, 6. At 6 months, there's no termination right on a delay. However, there is a separate right where the customer come in and try to remedy and bring the site online.

Once the site is delivered to the customer, then any delayed credits that may have been accrued, those credits will be abated towards the first couple of months of rent up to 60% of the rent costs until those rent abatements are abated and then the continued lease term continues. And so we think in terms of the way that we've landed here as well, it's not overly punitive where you have a large termination right if the project is delayed. However, it's fair and equitable in regards to having the right incentives to deliver on time and also having a remedy for the customer to step in and control that destiny as well if they don't.

And I think this ties back to one of the earlier points that I made, which is giving realistic time lines to customers and then being extremely aggressive in trying to deliver them the best schedule in reality. And I think that's what we've done here today and hope to continue to build customer trust by doing so and by executing well for them.

Awesome. Okay. So the next question comes from our friend, Thiago at WHG. So congratulations team. Can you please provide additional details to tranches 2 and 3? Do we have any insight yet on expected timing, the regulatory approval process, economics? Do you have any color you can share?

So Tranche 2 was the 1,000 megawatts on the River Bend campus that I mentioned. And in terms of Tranche 3, we have sites currently in our capacity at the development stage and sites in our capacity of exclusivity. So those sites were in active discussions on and diligence and negotiations on. And so we'll share more with due time.

And for Anthropic, they have to look at their demand curves, how they want to phase into that demand and ultimately, how quickly they would like to look at the sites that we have and the attractiveness of those.

Awesome. Okay. Next question also comes from anonymous. So how confident are we in the indicative SOFR plus 220 (sic) [ 225 ] basis point financing costs? I appreciate if we can't provide much guidance on the expected margin of error here, but if you can, that would be great. I would also like to confirm that the Google financial backstop covers the entirety of the 15 years contracted lease, aka 7 billion, if we could reconfirm that.

Yes. So on the first one, it's SOFR plus 225. We have a 25 bps spread, so 225 to 250, and that's what we have with JPMorgan and Goldman and the term sheet they have. And that aligns with kind of financing around a credit counterparty like Google. And that dovetails into the second, which is the Google financial backstop. It covers the entirety of the 15 years of contracted lease payment obligations, which is around $7 billion, but also because of the triple net structure, the pass-through obligations as well of the minimum energy build or whatever energy consumption, the other pass-through things like insurance, other maintenance costs that are associated with the triple net nature. And so it covers the full cost of the lease from a tenant perspective when it comes to the lease and the pass-through obligations.

Awesome. Okay. So this is a big one. I've got quite a few people asking me this here. How are we thinking about funding the equity component of this project? So we've got the 85% LTC. What does the funding of that equity component look like?

Yes, that's a great question. And so the equity is about $300 million to $400 million. Our balance sheet today kind of far outweighs that equity that's needed for the project. And so we feel comfortable that our balance sheet today covers the equity that's needed. We obviously will continue to look at opportunistic ways to bring on capital as we look at the overall development pipeline if needed.

But today, I mean, we have 85% from bank balance sheet financing. And there's -- I actually got calls this morning on mezz financing on just the project level on the equity component as well. And so we feel today that there is no contingency or there's no need for financing in order to develop this data center. And at the same time, we're going to make sure that we continue to have a robust balance sheet as we look at our overall development pipeline and continued demand that we have across other campuses, too.

V Awesome. Okay. So from our friend, Stephen Byrd at Morgan Stanley. Stephen, is there a certain magnitude of SG&A that we should be factoring in?

So we'll share some of that in our next earnings discussion. When we think about SG&A related to actually the site construction of River Bend itself, we have the team that's on it from an energy origination, preconstruction, design engineering, supply chain engineering and construction perspective and also operations. So we already have team leads on this project running that.

The SG&A that would come is growth. We have demand for the gigawatts of capacity within our pipeline. We will grow our talent in order to support the needs of the demand signals that we're receiving from the customers. So SG&A will not be correlated to this data center and the execution of this data center. However, we look to continue to grow our teams to be able to actually execute on all the demand that we see and the growth opportunity we see ahead of us.

Awesome. Okay. Cool. And then the next one comes from George , our good friend at Craig-Hallum. So he asked, could Tranche 3 come before Tranche 2? Or could it happen simultaneously?

Yes, Tranche 3 could definitely come before Tranche 2. Tranche 3 is the existing assets that we have within our development pipeline under development, under exclusivity. And some of those, as we shared in previous earnings calls, have -- are within next year. And so those you can think of as kind of in parallel rather than one after the other.

Awesome. And then Joe, a good friend at Canaccord, Joe Vafi, does signing this deal potentially accelerate capacity under development -- from under development to under construction?

So it depends on Anthropic's demand signals, right? They don't have an obligation to step into Tranche 2 or Tranche 3. They have the option and we have kind of announced a partnership in principle to go and scale and develop for them, right? That was important to us. We had a lot of demand signals for this campus, and we wanted partners that had an intent to want to scale and grow with us.

And so here, Anthropic wanted to announce with us that they had that intent to grow and to scale in addition to just the first data center that we signed, and we're in discussions on other campuses already. And for the other customers that had demand signals at our River Bend campus, we continue to have deep relationships with them, continue to have commitment to them as well and are looking at other campuses with them as well.

Awesome. So also from John, our good friend at Needham. I appreciate the less aggressive time line than peers. This is great. We talked a little bit about penalties. Can you discuss if there are ones related specifically to delays? And can you comment on supply chain to give us a little bit more confidence on that front?

Yes. So the delayed penalty regime is you -- if we deliver on month X, if your delivery is late and you're X plus 1, 2, 3, every one of those months, you'll step up into delay penalties. You'll usually see contracts that start anywhere from 0% to 50% of the monthly rent as a delayed penalty and go up to 150%, in some extreme cases, 200%. And so we went kind of middle down the fairway and feel comfortable with where we landed there to make sure the customer had confidence that we were confident in our delivery schedules.

And so how do we make sure that we're not delayed? And that caps out at about -- that caps out at 5 months -- 6 months for us until a separate right comes in, so delayed penalties do have a cap. Why that from our perspective was how do we solve for it to make sure we're not delayed? Because if you're delayed outside of delayed penalties, you lose trust with the customer. They have billions of dollars, if not tens of billions of dollars of equipment that they've ordered based on your commitments.

And so that's why for us, having a conservative delivery schedule, but being able to accelerate that was important and also having the partners and contracts signed simultaneous with the customer obligation was important. So that's in terms of Jacobs, our design and build partner on this project. They're staffed to be able to actually support into GC this project, but also all the subcontractors that have the talent locally to be able to support the different skilled trades as well.

And with Vertiv as a supply chain partner, making sure that all long lead time items we had solved for and we had committed dates and deliveries to as well and having that unified approach where if we have delayed penalties, our partners do as well, and we work together to execute on the schedule that we've committed to together.

Awesome. Okay. Let's keep going here. So our friend, Patrick at Piper Sandler, do you think having Anthropic as a partner is going to allow you to diligence sites any faster than previous? Will it speed up the power approval process?

Most definitely. Anthropic and other customers that were very late stage with us as well on this campus, I think I'm very grateful for the relationship that we've built over the last 2 years. They've definitely compounded. We want to be good partners. We've always been transparent with them, what we believe we can do and what we can't do, why we bring in partners, what we're trying to solve for.

And today, when we have new sites come in, we're able to get really quick feedback on if fits within a customer's requirements. We save weeks, if not months compared to early last year when we were first starting to build these relationships.

Awesome. So Brian, from Clear Street, another good friend of ours, focusing on execution and replication is paramount. Were these the key gating factors in choosing your partners?

Definitely partners from a customer perspective of can we grow with them on a demand signal. We know there's demand in the market today. We know that customers need capacity. But are they customers that are willing to scale with us? Are we just giving up this campus for a onetime deal? That was important. Then who are the execution partners with us that can grow and scale?

I'll give a shout out to JPMorgan. They have been by our side through various customer conversations that have worked, that haven't worked. They've given us guidance on some deals that we walked away from because we didn't believe it was the right long-term decision for us, and they supported us. And so the partner -- and if we think about JPMorgan, Goldman Sachs, their balance sheets and their abilities to be able to scale with us in terms of our capital needs from a project financing perspective.

Then when we think about EPCM design build partners from an engineering and construction perspective, Jacobs is one of the only publicly traded companies within this space. And they have over 40,000 employees worldwide and have shown a commitment to want to grow and to scale, and you'll see that through some of the quotes in our press release with the Vice Chairman of JPMorgan, with the CEO of Jacobs.

And then lastly, Vertiv as well in terms of the solution to deliver. They're one of the most well-known data center supply chain delivery solutions that's full stack across the data center industry and their commitment to us to deliver these long lead time items in this equipment to make sure that we're able to construct and build for the customer.

Awesome. Okay. So we've got 3 more super important questions here that a few people are asking. Maybe I'll lob this one to Sean. So Sean, why didn't -- why exactly didn't we tap the high-yield market for this deal? Maybe walk us through that would be great.

Yes, absolutely. So when you think about large construction projects, large infrastructure projects, the project financing market is always going to be the most efficient. So if we break it down into its constituent pieces, from a cost perspective, if we're at SOFR plus 225. Right now, that pencils out to a little bit below where SOFR is, that pencils out to a little bit below 5.5% from a cost of debt perspective. High-yield bonds we've seen issued in the market were 7-plus percent, right? So we're more efficient there.

Second, and this is really important, there's no negative carry associated with these deals. So what does that mean? If we were to go issue $2.5 billion of high-yield bonds to finance this, and I'm just using a round number so that people can dig their teeth into it, and that was at a 7% interest rate. From day 1, we'd have to start paying $175 million in annual interest. the way our loan is structured is a delayed draw, right? So we only use the debt when we need it.

So if we have to make a big payment, we work with the bank operations folks, and we draw that capital down as and when is needed, 85% -- $0.85 of every dollar we spend is from debt. And so there's a significant cost savings to us with that reduced negative carry expense. So those are the 2 key things.

And then I think sort of more subjectively or less numerically, working with the banks, this is our first project, right? And it's important that we nail this. And so having folks like JPMorgan and Goldman Sachs alongside us working through the lease -- the engineering programs that we put together gave us a lot of confidence that they've seen a lot more of these than we have. So that was also a very validating point.

And moreover, we take market risk off the table. This is done on their balance sheet. It's committed, pending some final execution. And so that was -- that's another really important piece because market risk is something the market is very volatile right now. So that was something we really wanted to take off the table.

Awesome. Super, super interesting. So a few questions on this one as well. Can you discuss -- one from our friend, Chris Brendler at Rosenblatt. Can you discuss any concessions that may have been made in order to get the full 15 years backstopped without granting any equity or warrants? We talked about differentiators of this deal versus what's been done in the market. Can we double-click on that one?

Sure. Look, we just had open and honest conversations with customers. We said, this is what we care about. This is the value that we believe these assets should trade at. And this is why we believe in our ability to execute, and we should not get a discount for being a first-time data center developer. And we brought in obviously, partners to help build that conviction in that growth from a financing perspective, from an execution perspective.

And I think we were okay saying no to deals. We're okay saying, if this deal works for you all and it doesn't work for us, we're not going to do it. And obviously, in the short term, that hurt a lot as deals are getting announced and people are saying, Hut 8, where is your deal? But for us, I think we felt like we knew what their deals look like and what other data center platforms were getting for their sites and their campuses. And so it was very simple. It was -- what are the economic terms and structure that are equitable and fair between us and customers for the risk profiles and for the asset -- value of the assets that we have today and the time lines that we have to deliver them.

Then from a structural perspective, how does the structure of these agreements, the risk of each of those agreements, how the economics flow, how does that align with how our business is built, the responsibilities that our different business unit leaders have in managing their own P&Ls and being able to drive that and to drive -- this is the structure that we are offering, and this is the kind of terms and contract we're offering. And if this is not the right site for you and the right opportunity, that's okay. And we'd love to build a longer-term relationship together.

And I think that approach has taken more time. But as trust has been built, I think that approach has done us well, and we have very open, transparent discussions with customers. And everyone wants to come and say, can you deliver me a data center in 6 months? And you have to talk through this is what we believe we can commit to. This is the buffer we're adding for ourselves in case there's some execution or construction delays and risk, and we would love to deliver it to you early, and this is how we're approaching it.

And I think that type of radical transparency has done us well with our shareholders as we were building last year, and I think it has done us really well with our current customers and our prospective customers as well.

Okay. Super interesting. Okay. So we've got time for about 2 or 3 more questions. So this...

I have a couple as well, Sue. So we're going to let a rip a little -- since everyone has been waiting so long.

All right. For sure. So okay, next one is from Darren at ROTH. If you compare the market when you started the permitting process in Louisiana over a year ago to now, how would you characterize the overall demand environment? And are you seeing improvement in that market demand in real time? I'll log that to Sean or Asher.

Yes. We're seeing a ton of demand in the market. We approached the Louisiana campus. We actually had 2 customers at first. And one of the customers couldn't get there for regulatory reasons. This was kind of end of 2024. And then earlier this year, we worked with a hyperscaler that was looking at a cloud availability zone and then a demand signal just changed.

And so we kind of changed our approach in how to develop campuses where we have customers that we're talking to where maybe multiple campuses might meet their needs, and we're able to kind of work in parallel where we're not losing the value of those megawatts by being locked into just one conversation. There's a commitment from the customer to drive towards the finish line as well.

And so for right now, I mean, since we've started this endeavor over the last 24 months in terms of these demand signals around AI data centers, we see demand signals increasing. We see focus on execution increasing and giving confidence on the ability to deliver on schedules increasing. And I think a willingness and appetite to historically work with developers that hadn't.

And I think for us, when we were able to dive into the actual engineering discussion, the power discussions, I think the value and knowledge and depth of our team really were able to shine and come to light. And that's what's given us the ability to have, I think, a very strong and healthy agreement today that allows us to give us the customer what they need and allows us to build a great platform of digital infrastructure and power for our shareholders.

Awesome. A side note, George Sutton would like to give a shout out to Sean and say thank you for wearing the tie today because this is obviously a serious business. So you're welcome George.

Very pleased, George.

So okay, the next one is from Stephen at Jones. He asks initial data hall Q2 2027. How many gross critical IT megawatts is that? Any color on the additional data hall timing over the second half of 2027?

Four data halls. First data hall is 65 megawatts. The remaining 3 data halls are 60 megawatts, a total of 245 megawatts for the campus. The extra 5 megawatts is the network stack in the first data hall. And so you'll see kind of the cadence of data hall 1 coming online, and then you have a fast follow within 45 to 60 days for the second data hall, and you'll see that cadence of data halls coming online.

Okay. And then from Mike, and then Asher after this question, I'll let you choose a few if you'd like.

Sure.

So Mike from Northland, our good friend at Northland wants to know, would Tranche 3 use the same partners outside of Fluidstack and Google? Or would it be different?

We really like these partners. We spent time talking to a lot of different folks. The answer to that question is a bit nuanced. The first answer is we've already been working with them on other campuses. And we've asked, one, from Vertiv perspective, do you have the supply chain that can support us? From a Jacobs perspective, do you have the actual labor talent and a team to be able to support the delivery of this project? And we've had some open, real honest discussions, which make that partners even better because they'll give you the truth and we can work through that together.

The other element that I've told them is, I'm someone who likes to build deep relationships and partnerships with counterparties. And if they treat us well and we treat them well, then we scale and we grow. And so that's the expectations going into these partnerships. We structured them to build a program to scale rather than just a single opportunity. And that's kind of the approach and the expectation set.

If we don't receive that or we're not giving that, then I don't expect that to continue to grow and scale, and we'll have different folks. And to the extent that we can have the same partners that have the infrastructure to grow with us, we are looking to continue to scale. And we've chosen these counterparties because of the scale that they have today and their ability to scale with us across multiple campuses.

Very cool. Okay. Do you want to pick the next one?

Yes, happy to do so. There are some questions around how did you get the Google backstop without offering equity warrants?

This goes back to the open and honest conversations of what a deal would look like that would work for us versus that wouldn't. I think it's finding the right places where we can concede because the customers have something they need and we need to deliver for them versus what we feel like is fair market and economical and for our shareholders.

How much debt financing is needed?

I think we addressed that as well in terms of the build costs are around $9 million to $11 million a megawatt on the 245 IT, looking at 85% loan-to-cost financing with JPMorgan and Goldman Sachs.

Okay. I have one here that I think we should dig into. So from [ Alexander Whitelaw ], compared to what we've seen in the market by peers who have recently signed AI deals, this deal on a risk-adjusted and commercial basis seems significantly superior. How do you go about educating shareholders and the market on the long-term commercial attractiveness of this deal?

We were talking about this in the office today, right? Because we were saying, look, if we announced the deal a month or so ago, we probably would have had a lot more appreciation on the day of announcement than today where the markets have been a little more bearish. I think at the end of the day, what we're solving for is what does this company look like in 5 to 10 years from today. And as we sign these long-term commitments, will we be able to deliver on the promises of those commitments to our shareholders and to the business that we're trying to build.

And so I think these contracts, I mean, across all of these counterparties were thousands of pages of agreements that we went through. And the nuances are in the terms and conditions of each one of those agreements, how they're structured, how risk is fairly allocated between counterparties. And those only come out via execution.

And so I think for us, for example, when we announced Google is providing the actual financial guarantee and backstop to these obligations. We didn't put out a number of what that is, is because they're securing the whole thing, right? And so I think the market will have to ingest this.

We gave a lot of information today. We give information about a strategic partnership. But even on the data center side, we didn't just give the terms of a data center. We went much deeper into the execution of that data center and why from day 1, we're starting to deliver and to execute, and we don't need to figure anything else out at this point. We just need to execute.

And so I think for us, we understand that this was a lot of content for the market. And as they digest it, I think they'll only feel better and better about the quality of this deal and the confidence that they have in our ability to deliver for the customer, make them proud and be able to scale with them as well.

Yes. Okay. So there's been a few questions around this, and this might be one of our last questions is, will you sell Bitcoin to fund build-outs? Also, has there been any change in strategic thinking around Hut's working relationship with American Bitcoin? Do you still plan on leveraging American Bitcoin to monetize energy at future site purchases? What does that look like in a nutshell?

Yes, I'll start at the last part of that. Answer is yes. We are a power infrastructure platform. We're powering compute, compute that's supporting the Bitcoin network, compute that's supporting AI technologies. A great example of that is our Lon Hill campus in Corpus Christi, that's a gigawatt. We have never underwritten that campus for an AI data center because of where it's located. We underwrote it because we knew American Bitcoin had the demand for that project, and there were other potential use cases.

Today, there is demand for that campus from an AI data center perspective. So that shows that value and that opportunity. We actually have [ 8 ] sites on the data center side with American Bitcoin that customers are looking at and looking at potentially taking over. And so American Bitcoin continues to be an ability for us to scale and grow our development pipeline and have demand that's natural and captive within our platform.

In terms of our ownership stake, that company continues to grow. It's been growing its Bitcoin yield. We see it as a free call option for our shareholders here that is nondilutive. And it's a business that we have a lot of conviction and growth in. Because of that conviction and growth, our equity in Bitcoin optionality and upside is through our equity in American Bitcoin. That means that Bitcoin on the balance sheet is not something that we're religiously committed to holding, especially now as we've announced the first deal.

And so we will look at the best ways to maximize the value and the return on invested capital for our shareholders. And so we'll have more updates there in terms of how we think about the balance sheet and the composition of that balance sheet as we continue to grow into this development pipeline.

Awesome. So let's do one more question. How do we think about backup power supply, micro grids, turbine solutions for some of these projects? Look, how are we solving for that?

You're adding more variables and more complexity. So simple answer is if you don't need to, that's the best case scenario. The more nuanced and real answer is the grid is getting strained, transmission is getting strained, and people want sites that are larger and larger by the month. And so building on-site generation is becoming more and more of a topic and more and more of an opportunity as well, right? We have pipelines that run through our campus at River Bend. We have pipelines that run through our campus in Corpus Christi. And so those used to be a liability historically because you have to build your building far enough away where you didn't want to be close to.

Today, they're an asset because if the pipelines have excess capacity, you can tap into and build generation, you have the ability to control generation growth and you have to kind of work with the local utilities and their regulatory requirements around behind-the-meter generation and how you would actually structure those agreements. But you'll see that more and more part of campuses as the demand for larger campuses scale. But ultimately, if people can get grid-connected power, they will prefer to do so. But available grid-connected power will continue to be scarce and the speed at which it comes online will continue to take a long time.

Awesome. Okay. So Asher, should we wrap it up here? I think we've covered quite a bit, and we got to get back to work.

I think so. I really appreciate everybody for being here today. I appreciate all the partners that made this possible, all the local stakeholders within Louisiana that supported us from day 1 and our team for really busting their butts and working relentlessly to make this a possibility.

I mean the work really has just begun. Now we've got to deliver the data center to our customer. And for our shareholders, we've got to show them that this is the first of a repeatable program that we can continue to grow and scale. So I appreciate you all for coming midday and listening to us, and hope you all continue to follow our journey.

And guys, a recording of this call will be available. And if you have any more questions, [email protected], happy to chat with you any time. Talk to you soon, guys. Bye.

Thank you.

"

"

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" Piper Sandler

" Craig-Hallum

" ROTH Capital Markets

" Clear Street

" JonesTrading

" Canaccord Genuity

" Needham & Company

" Rosenblatt Securities Inc.

" Cantor Fitzgerald

" Northland Securities

" KBW

" Maxim Group LLC

" B. Riley

" BTIG

Thank you for standing by. At this time, I would like to welcome everyone to the Hut 8 Third Quarter 2025 Earnings Conference Call. [Operator Instructions].

I would now like to turn the call over to Sue Ennis, Head of Investor Relations. You may begin.

Good morning, and welcome to Hut 8's Third Quarter 2025 Financial Results Conference Call. Joining us today are our CEO, Asher Genoot; and our CFO, Sean Glennan. Following the presentation, we will open the line for questions. This event is being recorded, and a transcript will be made available on our website.

In addition to the press release issued earlier today, our full quarterly report on Form 10-Q is available at hut8.com, on our EDGAR profile at sec.gov and on our SEDAR+ profile at sedarplus.ca. Unless otherwise indicated, all figures discussed today are in U.S. dollars. Certain statements made during this call may constitute forward-looking statements within the meaning of applicable securities laws. These statements reflect current expectations and are subject to risks and uncertainties that could cause actual results to differ materially. Certain key risks are detailed in our Form 10-K for the year ended December 31, 2024, and our other continuous disclosure documents.

Except as required by law, we assume no obligation to update or revise any forward-looking statements. During the call, management may reference non-GAAP measures such as adjusted EBITDA. We believe these metrics alongside GAAP results provide valuable insight into our performance. Reconciliations of GAAP and non-GAAP results are included in the tables accompanying today's press release available on our website. With that, I'll turn the call over to our CEO, Asher Genoot.

Thank you, Sue, and good morning, everyone. Earlier this year, we introduced our 2025 strategy. At its foundation is our development flywheel, a framework designed to compound returns through 4 integrated stages of platform development, origination, investment, monetization and optimization. This model defines how we scale across our power, digital infrastructure and compute layers under a unified power-first architecture.

The third quarter marked a clear inflection point in the velocity of that flywheel. That acceleration is evident not only in our financial results, but also in the step change extension of our near-term growth runway. Together, these outcomes reflect the strength of a diversified platform operating as a single integrated engine. Let's begin with our results. I'll share the highlights now before turning it over to Sean for a detailed review later in the call.

In the third quarter of 2025, we delivered revenue of $83.5 million, up 91% year-over-year. This increase was driven primarily by the expansion of Bitcoin mining revenue through American Bitcoin, the purpose-built Bitcoin accumulation vehicle we launched earlier this year. American Bitcoin has scaled rapidly since its debut on the NASDAQ, contributing to significant top line growth in our Compute segment. Because American Bitcoin is a consolidated subsidiary, its revenue is reported entirely within our Compute segment.

Meanwhile, the infrastructure and services it consumes from Hut 8 are treated as intercompany transactions and eliminated in consolidation despite representing real and recurring economic activity. In effect, what appears in compute today reflects only the surface layer of a robust commercial engine fueled by our power and digital infrastructure businesses. Importantly, our results reflect not only top line growth, but also early evidence of commercial and financial synergies across the platform.

Net income was $50.6 million versus $0.9 million in the prior year period, and adjusted EBITDA was $109 million versus $5.6 million in the prior year period. These metrics reflect a $76.6 million gain on digital assets versus a $1.6 million loss on digital assets during the prior year period, both recorded in accordance with FASB's fair value accounting guidance.

Beyond strong headline performance, the third quarter demonstrates the structural advantage we have unlocked by carving out the majority of our legacy Bitcoin mining business into a stand-alone entity. That separation has clarified our mandate and streamlined our capital allocation framework, enabling us to focus on scaling lower cost of capital businesses such as colocation.

During the third quarter, that clarity drove tangible momentum at the foundation of our development flywheel, for power layer. From the outset, we recognize that large load technologies like Bitcoin mining and AI computing are at their core functions of how effectively energy can be harnessed, deployed and monetized. That insight shaped how we built Hut 8. We engineered the business around power expertise and designed it to transcend any single application.

Today, surging computational demand has transformed energy from a background input into a defining constraint to growth. For us, that constraint represents an advantage. Hut 8 was built from day 1 with a power first innovation-driven strategy. By integrating power, digital infrastructure and compute assets at scale, we aim to address energy demand from the world's most transformative technologies for decades to come.

Early last year, shortly after I became CEO, we began translating our Power First strategy into our external reporting. We introduced new performance metrics such as energy capacity under management and energy capacity under exclusivity, which reflected the utility-grade depth and rigor with which our power native team operated and scaled the business. At the time, our focus on energy was contrarian in a sector still oriented around [ exahash ] and other end application metrics.

Since then, the exponential rise of AI and the broad adoption of energy-based performance metrics have validated our founding conviction that energy is not merely an input, but a structural source of value creation and competitive advantage. This shift underscores a fundamental distinction in the role of power within our business. For many, power is a reporting overlay on a legacy model or a reactive pivot to capture new value. For us, it has always been the foundational driver of our growth, the lens through which we scale, deploy capital and allocate resources.

The development flywheel we introduced earlier this year codifies that foundation. It defines how we originate, invest in, monetize and optimize critical infrastructure assets across 4 interconnected stages. By aligning these stages under a single power-first framework, we can systematically convert development opportunity into tangible value with increasing speed and capital efficiency.

As the benefits of this framework have compounded across our organization, our flywheel has entered a new phase of scale and execution. In the third quarter, that momentum drove the launch of our largest expansion initiative to date. Spanning 4 U.S. locations with a combined 1,530 megawatts of utility capacity, this initiative has the potential to more than double the scale of our platform, diversify our presence across strategic energy markets and position us to meet growing demand across energy-intensive applications. It underscores both the depth of our development pipeline and the scalability of our platform.

In conjunction with the launch of this initiative and building on our early sector leadership in power-first growth and performance metrics, we refined our reporting framework to more precisely capture the maturity and velocity of our development flywheel. This refinement is formalized in a new stage of our development pipeline, energy capacity under development, which is positioned between energy capacity under exclusivity and energy capacity under management.

Capacity under development bridges origination and monetization, providing greater visibility into late-stage projects that have advanced beyond exclusivity. It applies to sites where critical development work is underway, including the execution of land and power agreements, site design and infrastructure build-out and engagement with prospective customers. Capacity advances from exclusivity to development, ultimately converting to energy capacity under management upon monetization.

In the near term, our focus is on commercializing the 4 sites in our expansion portfolio, representing 1,530 megawatts of energy capacity under development. The sites range in scale from 50 megawatts to 1 gigawatt of utility capacity, each selected for near-term power access and the potential to support commercialization across a range of advanced technologies. Guided by our first principles approach to digital infrastructure, we continue to advance design and commercialization initiatives with prospective customers. Where appropriate, we will seek to incorporate next-generation architecture that enables rapid, capital-efficient deployment and the flexibility to support a range of customer requirements.

Across our expansion portfolio and broader development pipeline, we continue to execute against a long-held ambition to build a platform that evolves alongside energy-intensive technologies for decades to come. From the world-shaping innovations of today to the nascent ideas of tomorrow and the breakthrough is yet to be achieved. Today, the conversation is rightly dominated by AI. The scale and intensity of AI compute demand is unlike anything in the power sector has seen. But we believe this is only the first chapter of a much longer story. We believe the same power infrastructure that underpins AI and high-performance computing today will, over time, form the backbone for a broader class of next-generation technologies.

While it is still early, we're beginning to see directional interest from adjacent sectors that recognize that large-scale power infrastructure will be foundational to what comes next. Our platform is designed for that future, and we are building it for now. As always, we will remain disciplined in how we structure and underwrite new opportunities, deploying capital only where we see a clear path to long-term value creation. We will not chase trends, and we'll continue to prioritize durable returns over short-term gain as we strive to build an enduring generational business at the intersection of energy and technology. With that, I'll turn it over to Sean.

Thanks, Asher. Before I review our third quarter 2025 results by segment, I want to briefly clarify our reporting structure, particularly as it relates to American Bitcoin.

Because American Bitcoin is a consolidated subsidiary, revenue from its Bitcoin mining operations is reported within our Compute segment. However, revenue earned by Hut 8 through our managed services and ASIC colocation agreements with American Bitcoin within our Power and Digital Infrastructure segments, respectively, is eliminated in consolidation as is revenue from our shared services agreement with American Bitcoin. With that context, let's turn to our results.

We begin with Power, which consists of power generation and managed services. Segment revenue declined year-over-year from $26.2 million to $8.4 million, reflecting the full impact of the wind down of our managed services agreement with Ionic Digital in late 2024. The resulting $17.8 million reduction in managed services revenue was partially offset by a $1.9 million increase in power generation revenue, driven by elevated demand across our portfolio of 4 natural gas-fired power plants in Ontario.

While these results capture the termination of our MSA with Ionic, they do not reflect the full earnings power of our Power segment. During the quarter, we expanded our managed services agreement with American Bitcoin to 325 megawatts of contracted capacity, the largest in our history. This milestone supports the broader structural shift we have executed this year from merchant exposure to long-term contracted revenue. At quarter end, more than 85% of our energy capacity under management is commercialized under executed agreement with terms of 1 year or longer, positioning our Power segment for greater earnings visibility and recurring returns.

Segment cost of revenue rose from $5 million to $6.5 million, reflecting a $3.6 million increase in power generation cost of revenue due to higher output during the period. This was partially offset by a $2.1 million decrease in managed services cost of revenue following the termination of our MSA with Ionic.

We turn next to digital infrastructure, which consists of ASIC colocation and CPU colocation. Segment revenue increased 31% year-over-year to $5.1 million, driven primarily by the ramp-up of our ASIC colocation activity at our Vegas site, which was initially energized in June 2025. Revenue generation commenced under an ASIC colocation agreement with BITMAIN, supporting nearly 15 exahash of capacity delivered by the next-generation ASIC machines we co-developed with the manufacturer.

In August and September, American Bitcoin exercised its option to purchase those machines. As a result, our colocation agreement with BITMAIN concluded in September. We subsequently transitioned to managed services and ASIC colocation agreements with American Bitcoin and continue to operate the fleet under these agreements. Because American Bitcoin is a consolidated subsidiary, revenue from these agreements is eliminated in consolidation and therefore, not reflected in reported segment results for our Power and Digital Infrastructure segments, respectively.

Operationally, Vega remains active. Financially, revenue is now recognized as intercompany rather than third party. Segment cost of revenue rose modestly year-over-year to $3.8 million. This $0.1 million increase was mainly driven by higher electricity and connectivity costs across our 5 traditional data centers in Canada.

Finally, we turn to compute, which consists of Bitcoin mining, data center cloud and GPU as a Service. Compute segment revenue increased more than fivefold year-over-year from $13.7 million to $70 million. Top line growth was driven primarily by the expansion of Bitcoin mining revenue from American Bitcoin. During the quarter, American Bitcoin deployed approximately 14.9 exahash of additional installed mining capacity at Vega, increasing Hut 8's total hash rate from approximately 12 exahash to approximately 26.8 exahash. Of that total, approximately 25 exahash was attributable to American Bitcoin at quarter end.

Supported by a higher average price of Bitcoin during the period, this expansion delivered $54.3 million in incremental Bitcoin mining revenue. Segment also benefited from a $2.6 million increase in GPU as-a-Service revenue from Highrise AI, our wholly owned subsidiary. Gains from Bitcoin mining and GP-as-a-Service operations were partially offset by a $0.5 million decline in data center cloud revenue driven by customer churn.

Segment cost of revenue increased from $8.9 million to $22 million year-over-year, consistent with the significant expansion of operations and top line growth we achieved across the segment during the quarter. Revenue growth significantly outpaced cost increases, resulting in substantial operating leverage. Segment gross profit grew tenfold from $4.8 million to $48 million year-over-year, and gross margin expanded by 33.5 percentage points to 68.6%.

Taken together, our third quarter performance reflects the strength of our integrated platform model and the accelerating momentum of our development flywheel. As we look ahead to the remainder of the year, our focus turns to execution across both our recently launched 1,530-mgawatt expansion initiative and our broader 8,650-megawatt development pipeline at quarter end.

To deliver at utility scale, we must operate from a position of both strength and flexibility and always with an eye towards the future. That has been a guiding principle of our capital strategy since I stepped into the CFO role just over a year ago. And over the past 12 months, we've executed on that strategy to build a financial foundation purpose-built for balanced risk-adjusted growth. The foundation of this strategy is our fortress balance sheet. Today, 3 key pillars support that foundation, an actively managed strategic Bitcoin reserve, disciplined access to capital markets and a focus on responsible leverage.

The first pillar is our strategic Bitcoin reserve. At quarter end, we held 13,696 Bitcoin in reserve with a market value of approximately $1.6 billion, of which 10,278 Bitcoin were held by Hut 8 and 3,418 Bitcoin were held by American Bitcoin. Since February 2024, when Ashra became CEO, we have benefited from nearly $1 billion in incremental value and liquidity from these holdings. That includes $689 million in contributions from Bitcoin price appreciation, $265 million in new Bitcoin-backed credit facilities with Coinbase and Two Prime at a blended cost of capital of 8.2% and approximately $32 million in premiums realized through covered call option strategies.

These results validate our conviction that Bitcoin when actively and responsibly managed becomes a productive reserve asset that enhances liquidity, provides optionality and reduces reliance on equity.

The second pillar is disciplined access to capital markets. During the quarter, we significantly reinforced this pillar with the addition of a $200 million revolving credit facility with Two Prime and the launch of a new $1 billion at-the-market equity program. Simultaneously with the launch of our new ATM program, we closed our previous ATM with 40% of its capacity unutilized. Shares issued under the prior program were sold on average at a 50% premium to the average trading price during the period, underscoring a disciplined approach focused on minimizing excess dilution.

The third and final pillar is responsible leverage. There's a joke among financing bankers that goes something along the lines of this. Just because I'll give you leverage doesn't mean you should take it. Leverage is often easy to add but expensive and painful to unwind. We, as a management team, understand these realities, and they inform our decision-making on a daily basis as stewards of shareholder capital. When paired with a fortress balance sheet, responsible leverage fuels operating growth and provides strategic flexibility. As we continue to execute on our business plan, we will aim to make capital decisions in a manner designed to minimize enterprise risk and support long-term growth.

In closing, the third quarter marked a clear inflection point in both our 2025 strategy and the velocity of our development flywheel. We believe this reflects a business with structural advantage, proven commercial velocity and a long runway for continued growth and value creation at the intersection of energy and technology. Backed by a fortress balance sheet, disciplined capital framework and diversified platform spanning power, digital infrastructure and compute, we are executing from a position of strength as we build what we believe will become a category-defining business for the next era of energy-intensive innovation. Operator, please open the line for Q&A.

[Operator Instructions] Your first question comes from the line of Patrick Moley with Piper Sandler.

Little bit of a two-parter for me. Would love to get an update on just how conversations have trended with potential AI -- HPC tenants since the last earnings call? And then second, there appears to be a notable difference in how the market is valuing your power pipeline relative to some of your competitors that being, there seems to be a steep discount placed on the 1.5 gigawatts that you currently have under development. So just wondering if you have any thoughts on what has led to this disconnect and whether you think it's warranted.

Great to hear from you. I'll start on the second and go into the first. I think the second one is simple. People want to see us execute and prove out the ability to convert the power pipeline, and then we'll get more value for it, which I think is fair. And so for the investors that are waiting to see execution, I think they'll see value contributed to that pipeline as that execution leads that. That's to your second question.

On to the first, it's no surprise, market is very hot over the last couple of months, a ton of demand. The conversations we're having have progressed even faster. When we think about a deal, and I know a lot of folks are on this call around this question, and so might as well go into it a little bit in detail here.

When we think about a deal, we think about it holistically. Who is the customer? What are the commitments we're making to that customer? How are we going to finance that agreement? Where is our supply chain going to come from? And how are we going to build that site? All coupled together with the local relationships that we have with the communities, the state to create a project that is set up for success and that could actually execute.

If we look at the timelines in which customers want these data center delivered, they're faster than any historical data center timelines from a greenfield build to delivery to the customer. And so it's really important in our opinion to have these specific pillars as a part of the deal concrete and solidified as you deliver and commit to these obligations on these long-term contracts that we hope to continue to grow and scale with customers as we build credibility and delivery execution with them in the overall market.

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

Ashar, you made an interesting comment that you felt AI is only the first chapter of the story. There are other chapters to come and you're positioning yourself for that. Can you be a little bit more specific about what you're referring to there?

Yes. When we started the business and when I say started the business, U.S. Bitcoin Corp., which then merged into Hut 8, the thesis was that as technologies evolve, their consumption on power will increase. And we started with Bitcoin mining because we felt like it was an under-computered sector that allowed us to arbitrage electrons and energy and capture load and help build that new generation.

The thought when we started the business was always we would be more than just a Bitcoin mining company. At the time, the foresight was not to AI and data centers, but we looked at green hydrogen, we looked at carbon capture, a lot of other technologies, industrial batteries, a lot of those, the economics did not actually pencil out as we go deeper. And obviously, AI and where it stands today, we think is an incredible opportunity due to the changing tide in the scale of these sites that allow you to be a leading platform within the world in competing today as a newcomer rather than an existing incumbent.

The technology is changing, so you can innovate right now at the forefront of the sector as well. And so what I believe we did in the Bitcoin mining sector is we're a leader in that industry today. And we did not want to pivot out of that technology and just focus on the next new shiny object. We want to layer that into our platform. And that was one critical portion of what we did this quarter with American Bitcoin. I think many thought it was not possible. And with that spin out, if you look at the financials of American Bitcoin in this first quarter, I mean American Bitcoin did $64 million in revenue at about $28 million in cost at 56% margin.

I mean that's a great first quarter in this public debut as a public company when the company was only started in Q2 of this year. And so as we think about our ability to scale and grow within that sector, which we first started, we think we're a leading provider and leading operator within that industry, and we look to do the same in the data center market. As we look forward into the future, there's additional demand that we see from a power perspective from advanced manufacturing from large-scale campuses that drive robotics, other energy-intensive use cases as well. And it's interesting because some of the sites that we have in our pipeline, folks have reached out because locally, people know that we have access to that land or that power and have had other use cases reach out as well. I think right now, we stay hyper-focused on being a leader within the data center industry platform. And once we feel like we have a very strong foothold in that market and are a leader within that market, the platform of Hut 8 will be more than just a data center platform. It is already more than just a Bitcoin mining data center platform, and that's the vision for the company. But until then, we stay relentlessly focused on developing and competing within this sector and becoming a market leader before being distracted and looking to expand anything else.

Your next question comes from the line of Darren Aftahi with ROTH Capital Markets.

This is Dylan on for Darren. I guess on the 1.5 gigawatts, where do you stand in terms of progress securing some of the longer lead time items that might help with some of the build time visibility in terms of whichever of the 4 sites you're sort of working on consistently or one or the other?

Great question. And so all 4 of these sites, we have land control and then the utility agreements as well. And so for those projects, we have in sequence right now based on customer demand. And all of these projects, power is actually available for development. And so to your point on long lead time items and also execution in terms of who's going to be our partners in delivering execution of the sites as well in terms of labor as that's another shortage in the market.

We feel comfortable in the ability to be able to deliver at a time that the market expects today. We have continued to increase our reserve of long lead time items like high to medium voltage breakers at the substation. There are a lot of our projects in which we're designing that we're actually using similar equipment across sites even if the transmission level voltage is at a certain scale, we dropped down to 34.5. And so we can create commonality across sites irregardless of where those sites are located and what the transmission level voltage is. And by doing that and adding that into our design, we're able to procure equipment that is valuable and can move around from site without having to take that risk on supply chain on a single site. And so we continue to do that and continue to scale in that reserve that we have as well.

Your next question comes from the line of Brian Dobson with Clear Street.

So the business has evolved tremendously over the past year, and we're about to enter '26. What key themes do you expect to emerge next year? And what do you believe Hut will look like when we're discussing the company at this time next year?

The market demand has only increased since we started this journey, especially as of recently. I think next year is a year of execution. Next year is a year that companies need to deliver on the promises they made to customers in the market, and that's extremely important in order to be able to maintain that credibility and build into it. Right now, there's an opportunity if you have power, if you have land, and demand is there because it's such a shortage of power that exists. But that demand will only come back to you if you execute on the promises that you make today and you deliver on those promises. So I see next year as a year of execution for data center providers, for actual AI companies that have raised the capital and need to deploy and show the growth rates of those businesses as well.

For Hut 8, we'll be along our journey of executing on those data center platforms that we announced to the market and deliver, and we need to show progress and continued updates on where we are, both on the sites that we already have announced and are developing and constructing in addition to new sites and new projects. I think for us, as we provide more transparency into our pipeline as we start segmenting our pipeline from diligence to exclusivity to development and management, we hope to have people understand where are projects within our pipeline, what is the probability of outcome that they become successful and they can provide -- put a different weighting on each megawatt within each stage of our business. And so for us, what's really important is the transparency to the market and the execution to the market when we announce deals, so they're able to much better understand our business and the evolution and growth of that business past just the initial sites or 2.

Your next question comes from the line of Stephen Glagola with Jones.

For the 300 megawatts of gross capacity at Riverbend, what is your expected ready for service date for a hypothetical [ colo ] lease there? And additionally, maybe you could share any updated milestones or timelines regarding the plans to scale the site to 1 gigawatt.

Expectation is end of 2026. The IT capacity we're looking at, at 300 megawatts utility is roughly 216 to 224 megawatts in IT capacity. And currently, we sent some photos on my X account in regards to the delivery of the Switchyard. [ Entergy ] has been doing a phenomenal job in the progress that they've made at the Switchyard. We've already started moving forward on a lot of civil work for the last few months. The substation is in process of being built right now as well, and you'll start seeing more active construction as well. But delivery is expected for end of 2026, and that's where we think there's a lot of value in that site.

As we look at the overall campus, the beauty of finding this project in this site was the high density of transmission line capacity that flows through the campus and its proximity to generation nearby as well and allowing for the physical capacity to deliver power to the system. We've been in deep discussions with [ Entergy ] on the scale of that campus. We spent a lot of work on that in Q2 as well with one of our customers that had an interest in wanting to look at that campus being larger than just 300 megawatts. We believe that the ability to do that exists, and we have had deep discussions with [ Entergy ], we'll be sharing more on those updates post announcement of the first deal.

Your next question comes from the line of Joseph Vafi with Canaccord.

Just, I thought maybe we kind of drill down a little bit on the Bitcoin holdings here a little bit. Clearly, it is a differentiator versus some of your peers. And it does feel like some of the GPU as a service demand is really rising. Just wondering how you're looking at that as you work on your power pipeline. Clearly, there's value there, but it might be a little longer term to realize the GPU as a service could be a little shorter term, leveraging power that you already have and your balance sheet. Just wondering how you're thinking about that in kind of the pecking order of efforts and developments right now.

The GPU business is actually the first business we looked at before data centers. And this was pre our merger with Hut 8. We looked at deploying our first cluster of GPUs. And at the time, the market and scale were much smaller. Unfortunately, it took about a year in 2023 to get through the merger. And so we were about a year delayed in our strategy to deploy those GPUs. But we launched Highrise during that period of time. And when we launched, it was a bit subscale with a little over 1,000 GPUs that we have in that business. But as you mentioned, the demand for compute is extremely high today and combining compute with power creates even more value. And so from a risk profile perspective, investing in GPUs and investing in ASICs, we see as a similar risk profile. If you're unhedged, you're taking compute price risk. If you're hedged, then you're taking counterparty risk on what the value of that contract is. And so with that said, that's why as a structural build, we built Hut 8 to be the energy infrastructure platform to invest into the longer depreciating assets. American Bitcoin, we spun out to continue to invest into ASICs. And then Highrise, we incubated as a separate company with a separate balance sheet to invest into the GPUs as well. And so there are definitely conversations in which Highrise is kind of on the back of Hut 8 conversations in regards to the power infrastructure we have and can it be just a colo deal or also colo compute in some regards.

Obviously, as we look at the scale of projects, we're extremely sensitive to what is Highrise's ability to bring on capital, what scale do we step into that? How do we think about dilution and equity versus debt on raising for GPUs, but definitely something that is a part of these discussions and that we look to grow if the opportunities are there, but heads down focus on having a couple of long-term lease agreements as well that anchor the cash flows of Hut 8 as a business.

Your next question comes from the line of John Todaro with Needham.

I guess on the 1.5 gigawatts, just can you frame up a little bit more what would ultimately be earmarked for HPC AI and then getting at one of the earlier questions, just a little bit more details on maybe some of those other use cases like advanced manufacturing or something else that you might look at for the other capacity.

So we'll go into kind of detail on each site in short order after we kind of share some of the more recent efforts that we have across data centers. So it's really interesting. I'll give you an example. One of the sites is a gigawatt site and on the map you see that's in Texas and it's in Corpus Christi, right? That's near the coast. We have 700 megawatts that come available in Q4 of next year and then 300 megawatts following in the 24 months after that.

That site, we had never planned for kind of AI use cases because of its proximity to the coast. We saw it as an opportunity for Bitcoin mining or advanced manufacturing. There's a lot of manufacturing that you're seeing. You see SpaceX, Tesla, so forth, building facilities in Corpus Christi. But to our surprise, we've actually had recent demand for that site, not just from kind of AI labs or Neo clouds, but from hyperscalers as well and have been exploring test fits. And so I'm not saying that customers will end up landing at some of those sites, but the amount of demand for power right now is extremely high, as everyone knows on this call. And so we're focusing right now on commercializing, executing and announcing and delivering the sites that are high on the list in data center markets, but some of these other properties where we develop the opportunity from the ground up, have a very low-cost basis because of the development work that we put in. Right now, all of our sites are being looked at across the board, even sites that historically we wouldn't have looked at it.

Another example of that is Vega. Vega is a site that we built to show the market what a low density -- low redundant high density 200 kilowatts per rack of direct liquid to chip cooling could look like. That site, we have behind the meter at a co-op territory in Vega, which is right near Amarillo, Texas. There's some curtailment obligation because you're in a small co-op that we don't want to hit the peak curve so we want to be able to curtail when this constraint needs it for the local co-op.

But, now customers are looking at that too and said, you know what, maybe we'll take that. We're okay with some of those curtailment it's a really interesting world that we're living in. A couple of campuses are kind of straight down the fairway in terms of this just works for AI. We don't see us putting Bitcoin there, and we haven't had any discussions around other advanced kind of manufacturing use cases. And then the other ones that we thought we were putting in our pipeline for some of those in the long term are now being looked at as well from a data center perspective.

And so I think you'll see more and more competition for power outside of just data centers. Everyone is focusing on data centers, manufacturing as you look at the overall kind of demand curve is a big percentage of that increase. We see that in Louisiana. You're seeing multi-hundred megawatt deals that get announced on the Hyundai plant that they're building, other LNG facilities that they're building. And so I think you'll see increased competition on that power. I mean relationships with communities will really matter. Do they want you, your business what you bring to the community there or not. And so across the board, we think this will be kind of a multifaceted growth in terms of how energy plays out within the U.S. But for us at Hut 8, again, staying very focused on the data center platforms. We had built sites for kind of this longer-term initiative. But today, we're seeing demand on those as well that we originally weren't planning for data centers.

Your next question comes from the line of Chris Brendler with Rosenblatt.

I just wanted to follow up on that last question and answer on the competitive environment for power. And I guess as I look at your 4 categories, where is the competitive pressure? Because not surprisingly, it seems like power is very popular these days. So where does that competitive pressure show up in your pipeline as it moves between diligence, exclusivity and development? And how is Hut 8 positioned to sort of win in this environment? I'd love to get like a sort of more of a high-level view of Hut 8's strengths when it comes to finding sourcing and closing on power sources, that would be great.

When we think about power development, there's 3 types of ways to consume power, front of the meter, behind the meter and then net new generation build where you actually build your own generation. front of the meter, it's about, are you finding the right place in the transmission line that other people aren't looking at. And Louisiana is a perfect example of that in that site that we found.

We looked at places that other people weren't looking. We had a perspective that we bet on, on where the markets were heading and if this would be valuable or not. That obviously is becoming more and more competitive as more entrants come in and the power and the value of power continues to be realized from the local landowner and farmer to the developer to obviously the larger platforms and hyperscalers.

Behind the meter is interesting because I think we've pioneered in the focus on our team in terms of behind-the-meter assets. We have 280 megawatts behind the meter at our King Mountain site with a joint venture with Dexterra. We have 205 megawatts at our Vegas site. And so about 0.5 gigawatt of behind-the-meter platforms in our portfolio today. I think that's really unique and interesting for a company because you don't have as many of those deals. And recently, we've had more announced within the data center space, but we've done, I think, the most within the market, especially within Texas of existing generation plants and how do we allow to be able to pull power and co-locate a data center there as well.

And lastly, it's generation. We think there will be a continued theme of bringing your own generation, whether interconnected to the grid or not and more acceptability by customers. Although we did not want to kind of continue to drive and own the power plants that we have today and we said we'd find strategic value for those in the long term, having owned those power plants over the last 1.5 years has continued to increase our learnings and understanding of how to run generation, how to run natural gas power plants. That's about 30% of our portfolio today in which we run 4 natural gas power plants in Ontario. And so I think the expertise that we have and behind the meter in generation will continue to create that moat and that value advantage because we can go to generators and say, look, we've been able to go and amend these SGIAs to be able to co-locate data centers, and we'll walk you through the process of how to do that. On the generation side, we have experience in doing so, and we can bring that to the table as well, whether we partner with folks or do it ourselves. On the front of the meter side, it's getting more competitive, but it's focusing on areas that are underappreciated, under-looked at and also developing those from the ground up as well.

The other really important thing is, look, a lot of people on this call today are here saying, Ashley, where the hell is your deal? Where is your announcement? There's been a bunch of great announcements done this week. And as we live in this era where there's so much demand and excitement over this category and over this asset class, I think it remains important to be disciplined and be focused on are we doing the right deals that drive value, not just to our share price in the short term, but also as we execute on these deals and the economics and the structure flow into the market.

There are many sites that we look at, and I believe are overpriced because people want to make generational wealth because they found a piece of land in the middle of nowhere and now want to flip it to some data center developer. And those transactions are happening. But what is the value of those transactions? Are you able to commercialize them? Are you taking a lot of development risk?

Secondly, I mean, there are deals that we have walked away from, and I could have announced those deals to the market sooner and haven't kept you guys waiting for this long. But were those the right deals to lock in for 15 years? Were we taking the right risk reward based on what we believe is in the market from a structure perspective, from a credit perspective, from a pricing perspective. And so I appreciate all the analysts and shareholders who are on the call today for being patient with us. But we've lived through markets where in moments of excitement and moments of extreme growth, people just want to see growth at all costs.

we've also been on the other side of those markets where momentum slows down for a little bit. And have you structured those deals thoughtfully, have you managed your balance sheet thoughtfully. 2022, we've learned a lot of those lessons. And so in markets that are exciting today, we will grow, but we will also grow with the mindset that we are able to manage through any volatility that the world throws at us because I promise you all, there will be volatility in the next 15 years as we sign these long-term agreements. And it's important to think about can we manage through that as a business or not. It's a little bit of a longer-winded answer to your question by seeing a lot of people on this call today were wanting to talk about exactly this and when the hell are we announcing our deal. And so I wanted to give a little bit more background to why we haven't shared something with the market yet.

That's fantastic. Great color there. My follow-up question is on American Bitcoin. I think last reported number was 64% pro forma ownership, but with their large ATM filing a couple of months ago, I imagine that's going down. Do you expect -- or can you give us an updated pro forma ownership percentage? And should we start thinking about 2026 being unconsolidated? When does that flip?

Right now, the consolidation, even if we flip under 50.1%, we have a super vote there, right? And so we continue to maintain voting control within the company until we'll consolidate for the foreseeable future. And we'll share updates in regards to the business and we -- and kind of growth there. To date, the company has roughly 4,000 Bitcoin. And so dilution has been not -- it has not been the $2.1 billion ATM that we announced as it's been minimal and thoughtful. And so our ownership percentage has remained roughly intact.

Your next question comes from the line of Brett Knoblauch with Cantor Fitzgerald.

As we look at your power pipeline, how should we decipher kind of maybe like what percentage do you think is going to be used for an AI data center in some form or fashion versus maybe Bitcoin mining as [ ADTC ] has plans to reach 100 exahash, which obviously they're going to need a lot more power capacity, which bodes well for you guys. But how should we look at your power portfolio split between what your new on the data center side and on the Bitcoin mining side?

We have sites that we've developed that we historically believed that we're not interesting for data centers. Obviously, that's changing the landscape that we're in today. We're also designing the next generation of data centers to be able to be valuable as well, where we're able to quickly transition from Bitcoin to AI, and it will be accretive for Hut 8 and American Bitcoin because if any of those transitions happen, American Bitcoin would obviously be bought out at a premium and they would be able to get their return on their investments, and we would be able to get longer-term agreements by delivering short-term power.

And so today, as we look at our overall pipeline, we have a team that can build and operate Bitcoin mining facilities on turnkey, and we have the ability and infrastructure to scale that very quickly. Obviously, we're building those muscles and continue to scale those muscles in more Tier 3 data center development, whether it be kind of Five9 core network stack and GPUs or [ 39 plus Five9 ]. But overall, as we look at our development pipeline, we think we have ample demand for both of those businesses.

At the end of the day, American Bitcoin has exahash target goals, but the most important goal that it has is increasing Bitcoin per share. And so it's not at a race to increase exahash at all costs. It's doing so thoughtfully with the right structures and ultimately increasing Bitcoin per share over the long term, and it's done a great job of doing that since we launched that company. And so as of right now, we don't see large competing interest in regards to data centers in AI, but we'll share more of that in the coming quarters if we start seeing more constraint there.

Your next question comes from the line of Mike Grondahl with Northland.

The 1.5 gigawatts under development where you're making a lot of progress, roughly how much of that do you see ready for use in '26 versus '27?

It's a matter of our ability to be able to have the supply chain and the execution of that capacity. We have a lot of that power that becomes available and it's building the substation and data center [ field masher ], which is a great problem to have. And so Riverbend is obviously a large site that everyone knows about. We talked about Corpus Christi. We have another site in West Texas. We have a site in Chicago as a part of that overall platform. We'll actually share more detail on each of those sites. So everyone on this call and the broader markets and customers can kind of all see it as well. But overall, today, it's really about executing on those sites and being able to deliver them thoughtful and on time.

I think building these data centers and these time lines is a lot to ask for our vendors and our partners in building and whether it be subcontractors, EPC. And so doing so thoughtfully and making sure we set the proper expectations with customers where we can deliver and execute for them as well.

Your next question comes from the line of Bill Papanastasiou with KBW.

As we near towards the first 3 months of ABTC trading independently, Asher would just love to hear your thoughts on the future opportunity here for Bitcoin mining and whether the strategy is changing at all given the AI HPC diversification play that's clearly accelerating across the peer group.

As we're developing our pipeline, we're looking to continue to develop and the large-scale operators and platforms for AI and data centers and a lot of the deals you'll see coming from Hut 8 announced will be on that front. We also have assets in our pipeline that we believe are great position for Bitcoin as well and has ample runway for American Bitcoin to run at scale.

Look, I think if we think about the company launching from day 1 in April 1 of this year, becoming a public company on the NASDAQ about a month or so ago. And today, having about 4,000 Bitcoin on their balance sheet by themselves, 25 exahash mining 8 Bitcoin to 10 Bitcoin a day. I mean that's really impressive for a period of time that it's built.

The business is obviously still going through price discovery in the public markets. We have early investors that are heavily in the money. There are lockups will be coming up in about a month or so. And so I think managing those nuances getting to a stabilized state at ABTC and ultimately continue to focus on building Bitcoin per share for the underlying shareholders. We can't control where the share price goes, how high it goes, how low it goes, we can control the underlying operating business. That's the same mindset I had with Hut 8 when we took over and the stock was about $6, and we just focus on the fundamentals and the rest will work itself out. And so that's our same thought process with ABTC. We think as a structural kind of initiative, a strategic initiative, we were very happy by the outcomes of it thus far. No doubt that we'll go through some volatility there as shares become released into the market. But overall, I think the structural ability for us to have ABTC for us to have high rise and then the infrastructure business of Hut 8.

I believe that the market will see that continue to play out and the value of that over time. We were able to increase our amount of exahash, the amount of Bitcoin that we mined, the margins we mine without any dilution to Hut 8 that a parent company that was value accretive for ABTC shareholders and obviously value accretive for Hut 8 shareholders in a risk-adjusted anti-dilutive way as well. And so I think structurally, how we're forming the foundation of this business will only compound. And although the numbers people care less about this quarter compared to us announcing a deal, look, we beat all expectations across kind of the categories in this quarter, and we look forward to continuing to execute and developing and scaling this platform.

Your next question comes from the line of Matthew Galinko with Maxim Group LLC.

Can you touch on the role that your Bitcoin reserve plays in accessing project financing and financing for site build?

Happy to do so. The 2 prime example is a great example of that in addition to Coinbase. So when we think about the stack that we have on the balance sheet today, and Sean, I'll have him chime in right after this as well because his perspective on this has definitely changed since he joined us day 1 and asked me, when are we selling this as this immediate versus what he's been able to do thus far with it. We've been able to, as Sean mentioned, write cover calls and drive a yield on that Bitcoin that we have, right? Because that's right way risk, we get covered at a much higher price. We're okay with that world, and we can use that money to fund the business.

Additionally, we're able to bring on really low cost of capital on Bitcoin-backed loans with revolvers that we have that we can pull, pay back. We don't have penalties in doing so. So the structure of the ability to pull on that value is really important as well. And so as we think about do we hold that Bitcoin at Hut 8, does that long term, all our Bitcoin exposure at ABTC and Hut 8 is more cash and just developing data centers, we'll have that story play out in the coming, call it, year as our data center platform continues to mature and ABTC continues to mature as well. Sean, I don't know if you have any thoughts on your perspective of kind of Bitcoin on the balance sheet and the value that it has. But I think for us, the larger strategic element of where does Bitcoin stay? Is it at Hut 8? Is it at ABTC in the long term as we think about exposure, and we'll share that with the market as the data center platform continues to mature.

Yes. Thanks, Asher. And as we went through in the prepared remarks, we talked about the $689 million in contributions from price appreciation, the $265 million in Bitcoin-backed facilities that we've raised and then approximately $32 million in covered call premiums. But it goes beyond that, right? Like that's direct access to capital. I think there's also a read-through to our balance sheet as you look at the stack. And so as we work with very large counterparties, creditworthiness is something that they're very focused on. And I think they take a look at our balance sheet, and I think it answers a lot of their questions very quickly. So it's not something we need to dwell on. It's become a check-the-box exercise, which I think has been really valuable as we've entered into the new business line of AI data centers where the numbers are much bigger than they had been in Bitcoin mining.

Your next question comes from the line of Nick Giles with B. Riley.

Maybe another question for Sean. I was wondering if you could just give us a little more color around how project financing discussions have progressed or are you seeing any changes in terms since your last update? And then given some of the other deals we've seen across the space, has your thinking around structure changed at all?

Yes. Thanks a lot, Nick. So for one, the project financing market remains extremely healthy. If you look over the past month, we've seen 2 enormous deals, one with Meta and one with Vantage with Blue Owl in the mix on the first one. And so there's a tremendous amount of capital out there to support data center growth. I think the market remains bifurcated between investment-grade and noninvestment-grade off-takers and what that looks like from a loan to capital and a credit spread perspective. That hasn't really changed. But suffice to say, the market remains extremely healthy, both from a bank and private credit perspective. There's lots of capital to support it.

As we think about some of the new structures that have emerged, I think we will look at everything out there that we think will create shareholder value, provide mitigants against enterprise risk. And I think one of the most important things that you can avail yourself of on the financing of these is nonrecourse sort of -- nonrecourse project financing. And what that does is it insulates the parent company from any debt issues at the subsidiary level. And that's something that I think is really valuable, and we'll continue to evaluate those structures. But again, long story short, the market is extremely healthy. And I think we're not really worried about the ability to finance these projects over the long term.

Your next question comes from the line of Ben Sommers with BTIG.

So I just wanted to ask about the site in Illinois. I guess kind of curious what the demand profile is for the site given it's a little smaller than some of the sites in Texas in the pipeline or Riverbend and just kind of how we think about potentially expanding in that region.

We originally developed that site because most of our sites weren't in Tier 1 markets, and we want to have a campus that was there that could be a nice tuck-in add-on. What we've seen from demand in the market is exactly that, a tuck-in site for people who have sites nearby, a burst site for some AI labs as well and enterprise as well. And so that site is -- and then also is an opportunity for Highrise and GPUs as a nice kind of step in opportunity as well for that business. And so we're exploring opportunities there.

Right now, we're prioritizing our supply chain and the focus on some of our larger campuses as the demand is there, and so we'd like to commercialize those first. But this is a site that we think is valuable even though it's a smaller site, we're focusing on it for more strategic reasons of who we place there rather than just looking at kind of the economics because relatively smaller in scale compared to other sites that we're commercializing.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.