Bitdeer Technologies Aktie

Hello, and welcome to Bitdeer Technologies First Quarter 2026 Earnings Conference Call. [Operator Instructions] I would now like to hand the conference over to Tesh Dahya. You may begin.

Thank you, operator, and good morning, everyone. Welcome to Bitdeer Technology Group's First Quarter 2026 Earnings Conference Call. Joining me today are Jihan Wu, Founder, Chairman and Chief Executive Officer; Matt Kong, Chief Business Officer; and Haris Basit, Chief Strategy Officer. Today's call will begin with Haris providing a review of the company's first quarter results, operational progress and strategic direction, and I will close with an update on our financial performance.

To accompany today's call, we have provided a supplemental investor presentation available on Bitdeer's Investor Relations website under Webcasts and Presentations. Before management begins their formal remarks, I would like to remind everyone that during today's call, we may make certain forward-looking statements. These statements are based on management's current expectations and are subject to risks and uncertainties, which may cause actual results to differ materially. For a more complete discussion of forward-looking statements and the risks and uncertainties related to Bitdeer's business, please refer to the company's filings with the U.S. Securities and Exchange Commission.

I also want to note that beginning with the first quarter of 2026, Bitdeer has transitioned from International Financial Reporting Standards to U.S. Generally Accepted Accounting Principles. As part of this transition, Bitdeer has adopted FASB ASU 2023-08, which requires digital assets held to be measured at fair value each reporting period. Changes in the fair value of our digital assets will flow through GAAP net income and may introduce noncash volatility into reported earnings. We will discuss this further during the financial review.

With that, I will now turn the call over to Haris.

Thank you, Tesh, and good day, everyone. The first quarter of 2026 demonstrated Bitdeer's fundamental strength and resilience. In a challenging environment for the broader mining industry, our vertically integrated platform advanced across our 4 strategic businesses: Bitcoin mining, ASIC development, AI cloud and colocation data center infrastructure. We are making significant progress in each area.

First, our Bitcoin mining production has grown almost 500% year-on-year. Second, we launched the industry-leading SEALMINER A4 series. Third, we are rapidly growing our AI cloud revenue. And fourth, we are well on our way towards converting our Tydal Norway facility into what is expected to be Norway's largest AI data center with a lease tenant in advanced stages of negotiation. The combined strengths we see across our portfolio create optionality that is genuinely differentiated within our industry.

We remain committed to Bitcoin mining and see significant opportunity ahead. At the same time, our 3 gigawatt global power capacity is a strategic asset that is increasingly relevant to AI and colocation customers. In Q1, we delivered total revenue of $188.9 million, an increase of approximately 170% year-over-year, with an adjusted EBITDA of $14.4 million, an approximate $60 million increase year-on-year. Tesh will cover additional details of the financials here shortly.

But first, let's turn to a review of our power and infrastructure portfolio, which remains the foundational asset underlying everything we are building. We continue to make meaningful progress across our global infrastructure footprint during the quarter. As of the end of March, we had approximately 1.7 gigawatts of electrical capacity online and a total global power pipeline of approximately 3 gigawatts. We believe this represents one of the largest and most AI suitable power portfolios among publicly listed companies in our sector, and it continues to provide us with strategic optionality as demand for large-scale compute infrastructure intensifies.

Our core sites are sizable, dispersed across multiple continents and regulatory jurisdictions. They include access to renewable energy with attractive economics, featuring infrastructure designed to support intensive continuous operations. These are characteristics that are difficult and time consuming to replicate, and they are increasingly what large-scale AI customers are looking for as they pursue power-constrained deployments.

Over the past several months, we have seen the demand dynamics for AI data center capacity continue to sharpen. The supply and demand imbalance for AI compute has widened, and we expect this shortage to persist well into 2027 and beyond. Time to power remains a critical variable, and we are positioned to serve customers seeking both near-term and midterm capacity in a way that very few operators can match. Against this backdrop, we are prioritizing colocation arrangements for our larger sites, which are best suited to serve hyperscale, Neo cloud and enterprise tenants seeking substantial committed capacity.

For our smaller facilities, we continue to pursue AI cloud opportunities, deploying capacity on a contract-backed basis. This tiered approach reflects a disciplined allocation of capital across our portfolio, matching the appropriate commercial model to the scale and characteristics of each site.

Let me walk through where we stand on key development sites. Tydal Norway remains our highest priority colocation opportunity. On March 30, 2026, our subsidiary, Tydal Data Center AS, entered into a formal agreement with Data Center Installation AS, a specialized Norwegian contractor, to develop and convert the Tydal facility into an AI data center.

The project will deliver 180 megawatts of gross installed capacity and the first phase is expected to be completed as early as December 2026. Upon completion, the Tydal facility is expected to be Norway's largest operational AI data center and one of the largest in Europe by installed capacity. This facility is being built primarily for colocation usage. Designed in accordance with NVIDIA guidelines and closely following NVIDIA reference designs, it is intended to support deployment of both GB300s and NVIDIA's latest Vera Rubin AI technology.

What makes Tydal particularly compelling to prospective tenants is a combination of attributes that are genuinely rare, stable baseload power enabled by 100% renewable sources and an excellent power usage effectiveness, or PUE, of approximately 1.1 enabled by the cold climate and chilled water available from a nearby lake. Furthermore, the site was built such that it substantially reduces retrofit capital requirements relative to a greenfield build. We expect our remaining CapEx costs to complete the Tydal site to be significantly lower than typical greenfield data center development costs.

Orders for most long lead equipment have been placed and decommissioning of Bitcoin mining rigs at the site is already underway. Upcoming near-term milestones include finalization of key equipment installation contracts and technical installation work in several of our data halls. Lastly, we have also begun technical due diligence work on behalf of our future tenant. We are in advanced stages of negotiations with a potential colocation tenant for Tydal. These discussions, when completed, would result in highly regarded and well-recognized end users.

Morgan Stanley has been retained as our financial adviser for this project. Signing the Tydal lease agreement is management's highest priority. At Clarington, Ohio, we have 570 megawatts of power under contract with AEP. This is one of the largest AI data center development opportunities in the United States among publicly listed companies in our sector. Design and preparation work is continuing for the site. As we have disclosed, litigation filed by a neighboring company could affect the timing of construction.

Our attorneys feel strongly that we have a well-founded case and that the litigation has limited merit. On the business side, we are evaluating plans that can mitigate the impact on our overall development time line. We remain optimistic about the potential for the site, and we continue to build strong relationships with the local community and government officials at all our Ohio sites.

At Rockdale, Texas, we are pursuing a dual-track strategy that maintains our existing Bitcoin mining operation while developing new AI infrastructure on adjacent land. In addition, we are working with ERCOT on incremental power capacity of 179 megawatts targeted for energization by year-end. This will bring our total power capacity at Rockdale to over 740 megawatts. We are actively engaged in discussions with several prospective colocation tenants for this site.

The Rockdale site benefits from its location in the ERCOT market and will be designed from the ground up to support AI workloads. This approach allows us to maintain revenue-generating mining operations throughout the development period rather than interrupting them. Beyond these 3 primary sites, conversion projects are advancing at Wenatchee, Washington, and at Knoxville, Tennessee. Both sites are undergoing design and permitting work for AI data center conversion with the Wenatchee site and first phase of our Knoxville site targeted for completion in the fourth quarter.

At Niles, Ohio, we are actively working towards the development of our 300-megawatt grid interconnected site with a target energization time line of the fourth quarter of 2028. We also plan to break ground on our 101-megawatt Fox Creek, Alberta, Canada site in June of this year. Furthermore, we continue to aggressively look for additional opportunities to invest in land and power capacity, and we will share these updates as appropriate.

The U.S. continues to be the primary hub for Bitdeer's global operations, bolstered by our confidence in pro-business, pro-innovation policies that support the growth of AI and digital assets. We remain firmly committed to scaling our presence in the U.S.

On the Bitcoin mining side, the expansion of our self-mining platform continued throughout the quarter. Self-mining hash rate grew from 55.2 exahash per second at the end of December 2025 to approximately 65 exahash per second exiting March. 65 exahash per second represents a year-over-year increase of more than 400%. We mined 668 Bitcoin in January, 705 Bitcoin in February and 661 Bitcoin in March. The modest decline in March relative to February reflects seasonal factors at our Norway and Bhutan facilities rather than any underlying deterioration in fleet performance as witnessed by our April production of 783 Bitcoin. We expect to see continued momentum in the months ahead.

Our mining operations are not plateauing. The SEALMINER A4 series officially launched on April 7, 2026, represents the most efficient mining rigs anyone has delivered. The flagship A4 Ultrahydro model operates at 9.45 joules per terahash. The A4 series also includes the A4 Pro Hydro and the A4 Pro Air at 10.9 joules per terahash. These machines provide deployment flexibility across different site configurations and cooling environments. The A4 Pro Air is one of the most efficient air-cooled mining rigs in the world.

SEAL04-2 chip development continues at our U.S.-based design center. Importantly, our internal manufacturing capability means we are not subject to third-party hardware markups on these rigs when deploying them into our own fleet. This is a structural cost advantage over other mining operations. The inclusion of these new machines will continue to improve our fleet efficiency of approximately 16.4 joules per terahash as of March 31, 2026. That efficiency improvement, combined with our advanced chip design and supply chain resources, translates directly into lower cost per unit of hash rate produced, which means better mining margins at any given hash price level.

Over the next several quarters, we plan to leverage our growing fleet of SEALMINERS beyond our existing mining data center capacity and work with third parties to deploy incremental co-mining capacity at their facilities. This will allow us to maximize mining economics in the near term while maintaining flexibility to opportunistically drive SEALMINER sales into the second half of the year, depending on market conditions. On the SEALMINER manufacturing front, preparations for our Reno, Nevada factory are progressing. The facility lease has been signed and construction permit applications have been submitted to local municipal authorities, and we anticipate starting construction by Q3.

U.S.-based manufacturing is a core component of our vertically integrated strategy and aligns with both our operational resilience objective and the evolving trade and supply chain environment. Our AI cloud business has matured from a pilot service into a commercially distinct, structurally attractive business segment with rapidly growing revenue and a deepening enterprise customer base. For the AI cloud business, annual recurring revenue, which was approximately $10 million at the end of January, grew to approximately $21 million by the end of February and reached approximately $43 million at the end of March.

GPU utilization climbed from 41% in January to 94% in March. At quarter end, we had 2,128 GPUs deployed, including H100s, H200s, B200s and GB200s with 1,948 under active external subscription. More recently, in our April production update, we announced annual recurring revenue has now reached approximately $69 million with over 4,000 GPUs deployed.

Customers are committing to longer durations, which improves revenue visibility and cash flow stability. Since late 2025, we have seen hourly pricing of H100s increase by approximately 40%. This is in direct response to demand levels, and the market is absorbing this increase without meaningful friction. This pricing power reflects the strong fundamentals of our AI cloud business. In January, we deployed our initial NVIDIA GB200 NVL72 infrastructure at our Cyberjaya, Malaysia facility. This marks the first phase of an accelerated expansion designed to support enterprise-grade training workloads on the Grace Blackwell architecture.

In February, we launched a managed Kubernetes service with GPU-native orchestration, providing enterprise customers with scalable infrastructure for AI training and inference. Our model studio platform now supports more than 50 leading open source models, enabling clients to deploy everything from basic inference to advanced multimodal applications through a single managed environment. In March, we showcased our integrated AI solutions at the NVIDIA GTC Conference, generating incremental business opportunities and strengthening our brand presence within the AI infrastructure ecosystem.

We are actively evaluating U.S. data center leasing opportunities and expect to bring GPU capacity and AI cloud services online for U.S. customers in 2026. Consistent with our stated approach, any large-scale U.S. GPU expansion will be backed by committed customer contracts.

Turning to our balance sheet. In February, Bitdeer successfully priced an upsized offering of $375 million in 5% convertible senior notes due in 2032. We ended Q1 with cash, cash equivalents and restricted cash of $298 million. We expect that the bulk of our fiscal year '26 total financing needs will be addressed through project-level debt financing following a signed lease agreement for our Tydal, Norway site.

Now I will hand it back to Tesh to go over the detailed financials.

Thanks, Haris, and good day, everyone. It's great to be here, and I look forward to meeting many more of our shareholders in the coming months. Let me walk through our detailed financial results for the first quarter. Before I begin, I would like to remind everyone that all figures are in U.S. dollars. And as noted earlier, this is our first quarter reporting under U.S. GAAP.

In addition to discussing results calculated in accordance with U.S. GAAP, we will also reference certain non-GAAP financial measures, including adjusted EBITDA. Adjusted EBITDA excludes noncash fair value changes on our digital assets and convertible note derivative liabilities, along with certain other items, and we believe it provides the most consistent basis for assessing core operational performance. For a full reconciliation of non-GAAP measures, please refer to our earnings release published earlier today on Bitdeer's Investor Relations website.

First quarter consolidated revenue was $188.9 million, an increase of approximately $119 million year-over-year. The year-over-year growth was driven primarily by the significant expansion of our mining hash rate and associated Bitcoin production, reflecting the continued SEALMINER deployment throughout 2025 and into 2026. Sequentially, revenue declined from $224.8 million in the fourth quarter of 2025, reflecting lower average Bitcoin prices during the first quarter relative to the fourth quarter as well as a larger portion of our manufacturing output going towards self-mining deployment rather than external SEALMINER sales.

Total gross profit was negative $39 million, reflecting a gross margin of negative 20.7%. Three converging factors drove the outcome. First, Bitcoin prices remained under pressure throughout the quarter. Second, our mining fleet carries substantial noncash depreciation expense amounting to $70 million, given our rapid expansion. As a reminder, we now depreciate mining rigs on a 3-year straight-line basis, and the pace of SEALMINER deployment throughout 2025 and into 2026 generates a significant concurrent charge. Third, a seasonal power cost dynamics at our Norway and Bhutan facilities weighed on energy costs in the first quarter.

Looking ahead, the path to gross margin recovery is straightforward. A4 Series deployment lowers our cost per Bitcoin mined, spring and summer rate normalization reduces electricity costs and the scaling of AI cloud revenue improves margin composition as that segment grows.

Adjusted EBITDA was $14.4 million for the quarter, an increase of approximately $60 million year-on-year. The sequential decline from $24.3 million in the fourth quarter of 2025 reflects the gross margin dynamics described earlier. Operating loss in the quarter was negative $159.5 million and earnings per share was negative $0.68. Net cash used in operating activities was $346.9 million, a 42% reduction versus the Q4 net cash used in operations of $594.7 million. The primary drivers of the sequential reduction were lower SEALMINER supply chain and manufacturing costs, partially offset by higher electricity costs.

Turning to the balance sheet. We exited the first quarter with $297.7 million in cash, cash equivalents and restricted cash compared to $177.9 million at year-end 2025. Total borrowings at the end of Q1 were approximately $1.92 billion. For the full year 2026, we reiterate our guidance for total infrastructure capital expenditures in the range of $180 million to $200 million for crypto mining data center construction. This guidance covers crypto mining infrastructure only and does not include CapEx for SEALMINER hardware, GPUs, AI cloud or colocation development. Additionally, we anticipate a continuation of growth in our mining hash rate, albeit at a more moderate pace than we have seen throughout the prior 2 quarters.

In summary, the first quarter of 2026 was a quarter of execution and strategic advancement. Gross margins were under pressure from a combination of low Bitcoin price, the depreciation accounting impact of our fleet expansion and seasonal power costs. These factors are transitory and the forward catalysts for margin recovery are tangible and progressing, A4 deployment, power cost normalization, colocation and scaling our AI cloud. Against that backdrop, we delivered on the key elements that will define the value creation we expect to deliver over the coming quarters.

We launched the SEALMINER A4. We grew AI cloud ARR by 105% in a single month. We engaged a construction partner for Norway's largest AI data center, and we strengthened our balance sheet with $375 million in new capital. The colocation pipeline ahead of us is substantial, and we are pursuing it with full organizational focus. We entered the second quarter with strong operational momentum, a differentiated asset base and a team that has demonstrated its ability to execute at scale. We are energized about what lies ahead and remain committed to delivering long-term value for our shareholders.

Thank you. Operator, please open the call for questions.

[Operator Instructions] Our first question comes from the line of Greg Lewis with BTIG.

Haris, I appreciate we're in advanced discussions on Tydal in Norway. That being said, kind of curious how you're thinking about that. I noticed in the comments, we talk about the design and planning. Like how much design knowing that there is some similarities between certain customers and what they expect from a data center, but there are some differences. How far in the process of the final design can we get? Is that something that we then need to wait for the customer to kind of move forward?

And just as we think about the opportunity in Norway, like I know we're talking about hyperscalers. But like -- how important is that? I know there's some big tech scandy companies maybe that we wouldn't think are traditional hyperscale -- that some people might not think are traditional hyperscalers, but are kind of big tech companies in Northern Europe. Just kind of curious if you could provide any color around some of those questions on that opportunity.

Okay. Sure. Thank you, Greg. So with regards to the exact technical specifications, and there are differences between customers because different customers want to put in different machines versus GB300s versus Vera Rubin and the mix of those machines. And so -- but we have, I would say, the vast majority, almost entirely of the design in hand. We're still communicating with the most likely tenant here, the one that we're very close to signing, to make sure that all the design elements meet what their requirements are, which turn out to be very close to what the NVIDIA reference designs are.

So we think we have that well in hand. There's ongoing discussions, but just over very detailed type of stuff at present. And then with regard to the type of tenant, the 2 most important things here are that there would be a very sound credit, an investment-grade client or a very good credit wrapper. And so that's important. And then, of course, the economics of it are important. And we're focusing on those 2 things. We think we've -- if it goes through the way we expect -- in the time frame we expect, I think investors should be relatively pleased with both of those issues. And I can't say too much more about the tenant, but it won't be too long before I think we can announce that deal.

Understood. And then I did want to touch on the Clarington. In the press release, you mentioned -- and then actually in the prepared remarks, we mentioned the -- maybe some of the delays that are going on, realizing that, that is active. Could you kind of at least provide like some broad strokes around what is actually happening? I mean, yes, just kind of like that was news to us. So I just want to understand...

I'm sorry, which...

Some of those headwinds are that you're going to have to deal with?

Which location are you referring to?

I'm sorry, Clarington.

Clarington. Well, we announced earlier about the litigation at that site. And we're still working through that, and we expect that, that will have an impact on the construction schedule. There's not really a lot more I can say about that. We are looking at ways of mitigating those impacts, but...

I mean I guess what I would ask is the power is approved, so it would have to be something more around like the land user. Is that how -- is that kind of...

Yes, it's not really a question of the power...

Our next question comes from the line of Mike Colonnese with H.C. Wainwright.

Nice to see all the progress across your business lines here. So it sounds like SEAL is progressing nicely. I was wondering if you could provide a little bit more color around Rockdale. It sounds like you're going to simultaneously construct a new AI data center alongside your Bitcoin mining operations there. Can you talk about the level of client demand for that specific asset? It sounds like a really unique opportunity given the power capacity and really what the development time lines could ultimately be for that part of the portfolio for an AI colocation opportunity?

Yes. I think it's a little early to predict the exact development time line for that. It's a very attractive site for AI. And one of the things to make it even more attractive would be to have more land, which is what we're working on at that site. But the power is there, and it's going to be expanded to even a larger envelope of power over 700 megawatts. So it's a good location for AI. We're speaking with several potential tenants there. They span from hyperscalers to Neo clouds and even some others. But the level of demand, I think, is very high. I think the -- I can't really put a good time frame on the execution of that site yet. But we're moving forward on at least making sure that we have an appropriate land space where we can develop the AI data center while the Bitcoin mines are still operating.

Got it. Very helpful color, Haris. Appreciate that. And then just sticking on the AI side, but more on the cloud business, that is seeing really strong growth here between GPU deployments, utilization rates. Just curious to get a sense as to how durable that revenue stream is here. Obviously, the utilization rates are helping, but to the extent you could share more information around the contracted element to it? And then also, if there are any sort of internal benchmarks you guys are looking to grow that business this year? Obviously, you have multiple business lines you're working through, but thinking about GPU expansion from the around 4,000 that you guys have today, the best way for investors to think about that?

Yes. I think there's tremendous demand for GPUs. And it's really on our part, limited by how quickly we can bring up these GPUs and AI cloud sites. But the demand is there. It's across the board. It's -- we mentioned we were able to raise the rates on our H100s by 40% and have no problem booking those. So we're also starting to get longer-term contracts. I don't know, Jihan, did you want to add anything to that? Maybe...

Okay. I muted myself. Okay. Right now, most of our contract is a long-term contract right now. It takes majority of our machines in long-term contract. And right now, customers will need to agree with us on such terms in 3 to 5 years.

Our next question comes from the line of Mike Grondahl with Northland Capital Markets.

This is Logan on for Mike. First, can you just provide some insight into the conversations around pricing and terms at Norway and also some color on just what the remaining hurdles are to getting a lease signed at the site?

Yes. I don't think we're going to give you satisfaction on the pricing other than we think it's at the -- near the top of the market of what we've seen announced. So it's -- we think it's going to be quite good. Let's see. For what's left, there's just a lot of detailed work. We are in the late stages or advanced stages of negotiating the lease, and there's just a lot of small details. There's no one big thing that stands in the way. But -- all these small things do have to get handled before we can have a finished signed lease. So there's no one thing that's standing in the way here. We're trying to move as fast as we can. It's our highest priority within the management chain here. And we're applying a tremendous amount of resources to it. There's just a lot of detail that needs to get covered here.

Got it. And that's great to hear on the favorable pricing. And then one more. In your April update, you mentioned that various other sites outside of Norway, Clarington and Rockdale are in advanced stage negotiations. Are you guys at a point to be able to formally call out those sites by name? And if not, can you just provide some color around how demand for your sites has changed over the last 90 days?

Yes. I mean I think the last 90 days has stayed. It's pretty much -- it stayed very strong. I don't know how to quantify whether it's gotten a little stronger or not, but we haven't seen any diminishment, that's for sure. And yes, we are not in a position to announce the schedule for any of the other sites in terms of the colocation. The AI cloud sites, we have announced Q4 of this year for Wenatchee and the first phase of the Knoxville, Tennessee site. So is there something different than that you were looking for?

No, that's all good. Got it. Congrats on an impressive start to 2026.

Our next question comes from the line of Kevin Cassidy with Rosenblatt.

Yes. Congratulations also on all the progress you have. Just going back to the AI cloud, very impressive that you're able to raise hourly rates by 40% on the H100. What's the trend as you go to the higher performance GPUs? What kind of rate increase should we expect on the hourly rate?

Maybe I'll ask Jihan to answer that question since I don't have a good feel for that.

Well, because previously, we have mostly signed with a short-term contract. So after those contract ends, we have -- we had an opportunity to raise the rates. But right now, most of our GPU cost is in kind of a long-term contract. So the rate will be relatively stable from now.

I guess your [Technical Difficulty] how the rate differs from the high-end machines to the 1,800, right, is something like that or...

Yes. And as we...

Yes. If we go into higher-end GPU, that means we are deploying new GPU. And right now, all those contracts are in negotiation where we are preparing the data centers and the installation work. Generally, we can feel that the customers are quite competitive on the demand side, and we needed to carefully choose our clients that can be stable and also profitable. That's what where we need to wait. So I think generally, I'm quite optimistic about the profitability of the GPU renting AI cloud business because the customers are quite willing to pay good price to get the GPU.

Okay. And just maybe it wouldn't be [indiscernible] your conference call if I didn't ask about the SEAL04 second version. You mentioned you're still working on it, but do you have any timing? And are we -- what the targeted joules per terahash is?

No, we haven't changed the target, but -- and we're not ready to announce new timing on that yet. So I sorry about that.

Okay. Just obliged to ask that question every...

[Technical Difficulty]

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

Maybe just a follow-up from an earlier question around to what stage across some of these other sites would you be willing to kind of build for colocation purposes? And what level of CapEx would be associated with that? And then do you have a rough estimate of how much CapEx you've deployed to date towards colocation conversions across the platform?

We haven't announced or revealed our CapEx for colocation conversion other than to say that the amount of capital required in Norway is remarkably less than the normal amount of CapEx required. We expect that the CapEx requirements at other sites, the U.S. sites will be closer to the typical amount needed to build an AI data center that we will be able to get some of the savings that we had in Norway at other sites, but not to the same extent.

Understood. I appreciate that, Haris. Maybe switching gears, just on the Reno Nevada site, the facility, the ASIC facility, any kind of preliminary estimates on what CapEx could be there? And then how would this change your margin profile in that business, if at all?

Yes. I think just to remind everyone, that's the site where we're assembling ASIC mining rigs. Jihan, do you have an answer for that question?

[ Probably, no. ]

Yes. So I don't think -- we haven't reported the amount of capital required for that site. It's significantly smaller than the amount of capital required for like a data center or even a Bitcoin mining site. What was the other part of that question?

Really, I was just curious...

The margin.

The margin profile of that business, yes.

Well, it will be a little bit more expensive to build in Reno than it will be in Asia or to assemble there. But most of the cost of our mining rigs is really embedded in the silicon itself, which is still made by TSMC in the same location. So we think that the incremental cost of assembling in the U.S. will be covered by, for example, tariffs and things like that. So we think it will be a very good location for us and within a reasonable price increment of building in Asia, especially if you account for tariffs.

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

Congrats on the progress so far. I guess just going back to Rockdale and Clarington, obviously, some pieces need to still be completed there to get development moving along. I think my understanding is it's mostly acreage. I guess just what are some of the limiting factors there? Are we just kind of in negotiation processes for that? Do you need some additional cash to get those items done? I guess just trying to understand that a little bit better to see how far along we can be.

Well, I think one way to think about it is that the amount of power, say, in Rockdale is much larger than the amount of land, right? So that's something that we want to rectify. And it's really around those kinds of issues that we want to make sure we're able to fully utilize all of the power that we have at those locations. And of course, in Clarington, there's the additional complication of the litigation.

Okay. Understood. And then shifting to Bitcoin mining machine sales. So obviously, a lot of the U.S. public miners are pulling back as they shift towards AI HPC. You guys have had a little bit more external sales in international markets. So wondering how does that change the sales strategy? Is it actually a benefit versus a negative that there's more public U.S.-focused miners pulling back and maybe that shifts more opportunity to do sales internationally? I guess just trying to frame up how that shifts for external sales a bit longer term here.

So one thing I just want to remind you is that we're not really pushing that hard for external sales at this point. We -- almost all of the output is being used internally by our own data centers. We do, as you mentioned, sell internationally. So the fact that a lot of the U.S. mining companies are pulling back is not -- has a little mitigated impact based on that. Then -- I don't know, Jihan, do you want to make any additional comments on Bitcoin mining ASIC sales or demand?

Right now, because of the constrained supply of the semiconductor fabrication service, we intend to do more self-mining. And self-mining is also -- I believe it's a profitable business. So we still have some Bitcoin mining sites. We haven't filled it. And we also have a lot of partners that want to do co-mining partnership with us, which means that we provide the Bitcoin mining rigs and they provide the Bitcoin mining farm, so we can share the Bitcoin mining hash rate, and we will get the majority out of it.

And the electricity bill is to be transparent and no markup from the mining partnership side. It's quite scalable. So we are not very aggressive on selling the mining rig right now. Right now, the Bitcoin price is still in its bearish situation. And if we sell the mining rigs, we will have to do it at a very bad price, I think. So I think to expand our self-mining is the best economical decision for our company.

Understood. So the focus is, yes, almost primarily on internal.

[Operator Instructions] Our next question comes from the line of Brian Kinstlinger with Alliance Global Partners. All right. I don't have a response from Brian.

All right. Ladies and gentlemen, I'm showing no further questions in the queue. I would now like to turn the call back over to Haris for closing remarks.

Well, I think actually, it's Tesh, do you have some closing remarks, Tesh?

Yes. I think we just want to thank everyone for joining the call. We're exiting the first quarter with clear operational momentum here, a focused strategy, and we're really executing decisively on our AI infrastructure pipeline. Thank you for joining us today, and we look forward to driving sustainable long-term value creation.

Thank you, everyone.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.

Thank you for standing by, and welcome to Bitdeer's Third Quarter 2025 Earnings Conference Call. [Operator Instructions] I would now like to hand the call over to Yujia Zhai, Investor Relations. Please go ahead.

Thank you operator, and good morning, everyone. Welcome to Bitdeer's Third Quarter 2025 Earnings Conference Call. Joining me today are Matt Kong, Chief Business Officer; Haris Basit, Chief Strategy Officer; and Jeff LaBerge, VP of Capital Markets and Strategy. Haris will be in today by providing a high-level overview of Bitdeer's third quarter 2025 results and then cover the company's strategy and a detailed business update. After that, Jeff will cover Bitdeer's third quarter financial results in more detail, and then we will open the call for questions.

To accompany today's earnings call, we have provided a supplemental investor presentation. This presentation can be found on Bitdeer's Investor Relations website under Webcasts and Presentations. Before management begins their formal remarks, we would like to remind everyone that during today's call, we may make certain forward-looking statements. These statements are based on management's current expectations and are subject to risks and uncertainties, which may cause actual results to differ materially. For a more complete discussion on forward-looking statements, and the risks and uncertainties related to Bitdeer's business, please refer to its filings with the SEC.

Further, in addition to discussing results that are calculated in accordance with International Financial Reporting Standards, or IFRS, we will also make references to certain non-IFRS financial measures, such as adjusted EBITDA and adjusted profit and loss. For more detailed information on our non-IFRS financial measures, please refer to our earnings release that was published earlier today, which can be found on Bitdeer's IR website. Thank you.

I will now turn the call over to Haris. Haris?

Thank you, Yujia, and good day, everyone. It's great to be with you today. Since our last call, we've made significant progress across all of our strategic priorities, and I'm excited to share how Bitdeer is growing from a global leader in bitcoin mining, into a vertically integrated bitcoin infrastructure and AI platform.

Let's start with the numbers on Slide 3. Q3 marked a period of rapid growth and strong execution. In the third quarter, total revenue reached $169.7 million, up 173.6% year-over-year and up 9.1% sequentially. Gross profit came in at $40.8 million, and adjusted EBITDA increased to $43 million, both substantially improved from Q2. This performance reflects continued execution in our self mining business. Mass production of our SEALMINER ASICs drove 273.1% year-over-year and 105.4% sequential increase in our average operating self-mining cash rate to 29.1 exahash per second. As of the end of October, we achieved 41.2 exahash per second, surpassing our 40 exahash per second target that we set out at the beginning of the year. Looking forward, we plan to continue deploying our SEALMINER ASICs to fill our substantial global power pipeline. Through a combination of decommissioning both degeneration rigs and adding new SEALMINER ASICs, we expect meaningful growth throughout 2026, which will ensure we remain one of the world's largest bitcoin miners. In addition to hash rate growth, we expect continual improvement in our fleet-wide energy efficiency to drive increased margins and profitability in the quarters ahead.

Our investments in chip design, data center infrastructure and global power portfolio are paying off, not only in strong financial performance, but also positioning us for the next major wave of demand for compute. Our bitdeer.ai computing business continues to scale, reaching at an annualized revenue run rate of $8 million at the end of October. As of October 31, we operate 584 GPUs with an 87% utilization rate. Our newest B200 systems installed late in Q3 are being tested by customers and will drive additional revenue. We are finalizing deployment for NVIDIA's GB200 systems and expect to reach 1,160 GPUs operated by end of the year. We are also in the process of procuring NVIDIA's next generation GB300 and B300 systems. And as we look ahead, Bitdeer's growth will be anchored by 3 strategic pillars Bitcoin mining, ASIC development and HPC/AI. Together, these represent a vertically integrated highly dependable platform that leverages our technology expertise and extensive power portfolio.

To accelerate our AI footprint, we are taking bold deliberate steps to simultaneously pursue both colocation and cloud services. With respect to co-location on our last earnings call, we guided the market that we intended to pursue a joint venture model with a development partner. In September, due to a significant increase in market demand, we let the exclusivity period under our LOI with this development partner expire. This was a strategic decision that gives us greater flexibility and allows us to take a more direct role in the HPC/AI data center market and retain more of the economics. We intend to develop data centers using our own internal development team, which will be significantly augmented through strategic hiring alongside highly experienced [ DBC ] and general contractors on a fee basis. Regarding our cloud services business. Over the past 18 months, we have developed a vertically integrated AI infrastructure platform in Singapore. That includes bare metal GPUs as well as orchestration, networking and managing services. These additional services are highly sought after by small and midsized enterprise customers who require more than just bare metal offering and are being underserved in today's market. Now that we have a proven concept in Singapore, we are ready to expand this business line into Malaysia, the U.S. and Europe. Our current customer discussions range from early to mid-stage start-ups in the biomedical, robotics and gaming industries to more traditional U.S. enterprise customers seeking to expand their footprint. We will provide additional details as this business model develops over the coming months.

Moving now to our HPC/AI infrastructure plans. For our 570-megawatt Clarington, Ohio site, we have already begun the design and procurement process for an HPC/AI's suitable substation, which is expected to be energized in the first half of 2027. The local utility at Clarington has confirmed the full 570 megawatts will be available by the end of Q3 2026, nearly a year earlier than expected. Given its size, the Clarington site could be utilized for our cloud services business or colocation. At the same time, we have made the decision to convert our 175-megawatt Tydal site in Norway into an AI data center by Q4 2026. Given the announcement of Stargate in Norway in July, we have seen a significant increase in inbound interest from potential tenants. So we believe this site could be used for either our cloud services business or colocation. The site was designed by our local Norway team with HPC/AI in mind as the end use. So it already includes liquid cooling capabilities and a more robust electrical infrastructure.

Furthermore, it utilizes a substation that is powered by 18 hydro power generators and 1 wind farm giving it a high degree of reliability. Our current analysis indicates that the site could be ready to accept GPUs by the second half of 2026 with conversion costs well below U.S. and European AI data center benchmarks. Additionally, we plan to expand our Singapore cloud services business into Malaysia. Through a combination of loan and lease opportunities, we anticipate activating up to 15 megawatts of cloud services capacity in Malaysia during 2026, with the ability to expand significantly beyond that if demand persists. We are also upgrading our 13-megawatt Wenatchee, Washington site using a proprietary modular data center technology. This conversion is expected to be completed by Q4 2026. Further, we have initiated the conversion of 10 megawatts of power capacity at our Knoxville, Tennessee side into an AI data center with targeted completion in Q4 2026. We are evaluating potential U.S. data center rental opportunities to bring our AI cloud services online domestically as early as Q1 2026. In summary, the supply and demand imbalance for AI compute continues to widen, and we impact this shortage to persist well into 2027. Based on our estimates under the most optimistic scenario, converting 200 megawatts of our power capacity fully towards AI cloud services could generate an annualized revenue run rate exceeding $2 billion by the end of 2021.

Turning to our ASIC business. When we launch our aggressive ASIC road map last year, our goal was clear. Industry leadership in performance and energy efficiency. Our R&D team has delivered on that promise. In September, we launched the Wenatchee SEALMINER A3 series, now among the most energy-efficient products in the market. Mass production has started and initial shipments are expected this month. We anticipate the series will generate meaningful revenue in 2026. Looking ahead, our focus shifts to our SEAL04 chip. To derisk the development and ensure success, we are pursuing 2 distinct design approaches. The tape-out for the first SEAL04 design was completed in September, and latest sample verification demonstrated approximately 6 to 7 joules per terahash power efficiency at the chip level under local ultra power-saving mode. We are targeting mass production to begin in Q1 2026. In the meanwhile, development of the next-generation SEAL04 is significantly delayed.

Next, let's turn to our energy infrastructure shown on Slides 7 through 11 in the supplemental investor presentation. In Q3, we continued our rapid build-out of our global power and data center portfolio. As of October 2025, we fully energized the Tydal, Norway site and the full 500 megawatts in Jigmeling, Bhutan. This brings our total available electrical capacity to approximately 1.6 gigawatts and our total global power pipeline to approximately 3 gigawatts. For our AI cloud services and colocation strategy, we believe we have one of the most attractive power portfolio in the industry. Across our sites in Clarington, Ohio, in Norway and Renato, Washington, we will have over 1.3 gigawatts of HPC suitable power by Q3 2027. This gives us a significant advantage in time to power and the ability to deploy massive GPU capacity rapidly. In September, we announced a new 300-megawatt site in Niles, Ohio. The project remains on track for energization in Q1 2029. The site spans 41.8 acres and includes an interconnection agreement with First Energy. It is located about 75 miles from our Massillon, Ohio site and 125 miles from our Clarington, Ohio site. We continue to secure low-cost power sites globally, reinforcing our competitive advantage in both mining and AI infrastructure. In summary, we are proud of our team's execution this quarter. These efforts are already reflected in our financial results and have established a scalable foundation for long-term growth.

I'll now turn it over to Jeff LaBerge, our VP of Capital Markets and Strategy to go over our detailed financial results for the quarter.

Thank you, Haris. [indiscernible] over to Bitdeer's third quarter financial results I'd like to remind everyone that all figures I refer to today are in U.S. dollars. Q3 consolidated revenue was $169.7 million, up from $62 million in Q3 2024 and $155.6 million in Q2 2025, or up 173.6% year-over-year and 9.1% sequentially. Self mining revenue was $130.9 million versus $31.5 million in Q3 2024 and $59.3 million in Q2 2025, or up 315.6% year-over-year and up 120.7% sequentially. These results were primarily due to a 273.1% year-over-year and 105.4% sequential increase in self-mining hash rate as well as higher bitcoin prices. These increases were partially offset by higher mining difficulty. SEALMINERs sales revenue was $11.4 million compared to $0 in Q3 2024 and [ $69.5 million ] in Q2 2025. Total gross profit for the quarter was $40.8 million versus $2.8 million in Q3 2024 and $12.8 million in Q2 2025. Gross margin was 24.1% versus 4.5% in Q3 2024 and 8.2% in Q2 2025.

The year-over-year and sequential increase in our gross margin was primarily driven by higher self-mining revenue and improved fleet efficiency. We expect to continue gross margin improvements over the coming quarters as our hash rate ramps up and overall fleet efficiency improves. Total operating expenses for the quarter were $60.5 million versus $42.9 million in Q3 2024 and $42.3 million in Q2 2025. The year-over-year and sequential increase was primarily driven by the one-off R&D costs for the SEAL04 chip development and tape-out and noncash amortization expenses of intangible assets related to the acquisition of free chain. Other operating income was $26.5 million, primarily due to a $22.2 million mark-to-market adjustment to our cryptocurrency receivables. As a reminder, under IFRS, Bitcoin and other cryptocurrencies are classified as intangible assets and are measured at cost less any accumulated impairment losses with no subsequent upward revaluation permitted.

However, during the quarter, we entered into a $100 million Bitcoin-backed loan facility, pledging approximately 1,400 bitcoin as collateral. As a result, these bitcoin were reclassified as cryptocurrency receivables. IFRS requires that any cryptocurrency known as a receivable or payable to market, which led to this adjustment. Other net loss for the quarter was $238.5 million versus $14.7 million in Q3 2024 and $108.5 million in Q2 2025. The net loss was due to the noncash derivative losses on the convertible senior notes issued in August 2024, November 2024 and June 2025, which I will discuss in more detail in the liability section. IFRS net loss was $266.7 million versus $50.1 million in Q3 2024 and $147.7 million in Q2 2025. Adjusted loss was $32.8 million versus $25.6 million in Q3 2024 versus $24.4 million in Q2 2025. The increase in loss was primarily due to higher operating expenses and interest expense related to the increased borrowings, partially offset by the year-over-year higher revenue and gross profit margins.

Adjusted EBITDA was positive $43 million versus negative $7.9 million in Q3 2024 and positive $17.3 million in Q2 2025. The year-over-year growth was primarily driven by significantly higher self-mining cash rate as a result of the company's mass production and deployment of SEALMINERs A1 and A2 during 2025. Note that both the adjusted loss and adjusted EBITDA figures for the quarter do not include the $22.2 million favorable mark-to-market gain from Bitcoin pledged as collateral. This quarter's higher year-over-year and sequential top line and non-GAAP bottom line performance was mainly driven by higher self-mining cash rate, SEALMINER sales and higher Bitcoin pirces. these were partially offset by higher global network cash rate and higher R&D costs as previously described. Net cash used for operating activities was negative $520 million, primarily driven by SEALMINERs supply chain and manufacturing costs, electricity costs from the mining business, general corporate overhead and interest expense. Net cash generated from investing activities was $27 million, which was driven by $60 million of capital expenditure, of which $32 million was related to data center infrastructure and related construction. Proceeds from disposal of cryptocurrencies from our primary business was $89 million. Net cash generated from financing activities for the quarter was $388 million, which resulted primarily from approximately $320 million of borrowing from a related party and $91 million of proceeds from shares sold under our ATM program, partially offset by $48 million of repayments of borrowings.

Moving to our 2025 infrastructure spend. We expect CapEx for the continued buildout of our global power and data center infrastructure to be in the range of $210 million to $240 million for calendar year 2025. This range includes reported infrastructure CapEx from the previous 9 months of approximately $168 million. The remaining projected CapEx is extended on the completion or near completion of our data centers in Tydal, Norway, Jigmeling, Bhutan, Massillon, Ohio and Ethiopia as well as the partial completion of the 101-megawatt gas-fired power plant in Alberta, Canada. Please note that this guidance only factors in power and data center and does not include CapEx for SEALMINERs and GPUs.

In terms of our balance sheet, we ended the quarter in a strong financial position with $196.3 million in cash and cash equivalents, $82.2 million in cryptocurrencies held at cost less impairment $163.9 million in cryptocurrency receivable held at fair market value and $824.3 million in borrowings, excluding derivative liabilities. Please note the $82.2 million in cryptocurrencies is accounted for according to IFRS rules and is currently below its market value. Derivative liabilities were $672.5 million which related to the November 2024 and June 2025 convertible senior notes, representing a $234.6 million increase compared to the last quarter. This is a noncash fair value adjustment driven by the increase in our stock price and does not impact our liquidity or operations. Under IFRS, certain derivative instruments such as warrants and convertible debt are required to be revalued at fair market value in the reporting period.

As our stock price increases, the fair value of these instruments rises, resulting in a higher reported liability and vice versa. The reported liability will ultimately be netted at settlement either upon conversion to equity or expiration and does not represent an actual cash outflow. Finally, regarding our outstanding ATM facility, we've sold 6.2 million additional shares during the quarter. Thank you, everyone. That concludes the prepared remarks section of the our earnings call.

Operator, please open the call for questions.

[Operator Instructions] Our first question comes from the line of Greg Lewis of BTIG.

Haris, thanks for the update on kind of the progression of the HPC opportunity as you guys think about it. I wanted to talk a little bit about that. You called out a few of the sites. I mean it sounds like that Washington and maybe Tennessee could be maybe move up in the queue just given their size. So I guess, one, as we think about beyond -- I guess, first, if you could talk a little bit more on how you see the opportunity in Asia progressing. And then as we kind of continue to gain momentum in Asia, how we're able to kind of expand that into the U.S. Jeff, if you're on the line, I guess, I'd be curious to know about -- it looked like we added a site in Ohio, Niles, Ohio. Are you there?

Okay. Can you hear me okay?

Yes, sir, please to proceed.

Yes. Okay. So sorry about that. I'm not sure what was going on. So Greg, let me answer your question, I answered it once, I think nobody heard me. So it's not that we're going to do Malaysia first and then go to the U.S. We're doing both simultaneously. We're definitely moving forward in Malaga and also in a number of locations outside of the U.S. So that I think I answered your first question. Do you have a second question? I can't remember what it was.

Yes. I mean -- and I guess I was curious, like are these -- are all these sites going to be NVIDIA, are you only looking at it sounds like we're focused on the is that kind of kind of -- or could we say it seems like some of these other data center [indiscernible] are looking beyond NVIDIA. I know at 1 point, you were also looking to develop something beyond just an ASIC chip as well.

So right now, everything that we're doing in AI is largely NVIDIA-based. So the -- we're not looking at developing our own AI at the moment, if that's what your question was.

Okay. And then my other question was around the I guess we acquired a new site Niles, Ohio. I'd be curious what was kind of the process in that? Was that a site that would have been looking at? I'm trying to understand, I guess, a couple of things. One is realizing every site is different. How should we think about the timing of incremental site allocations? And I'd be curious about that.

Yes. Great. This is Jeff. So the Niles, Ohio site was actually acquired in a few months ago. We just finalized it and made the announcement last month. So strategic acquisition, 100 miles from both of our sites -- other sites in Ohio. Energization does not come until Q1 of 2029. So it's a [indiscernible]. So we think it's like us additional optionality depending on how we -- what direction we go with the Clarington and the Massillon site long term. So just long-term optionality. That's how we're thinking about that. And in general, we are in a mode of actively looking for sites that might be useful. So we are -- we have a group that's actively doing that.

Our next question comes from the line of Kevin Cassidy of Rosenblatt Securities.

This is Chris Meyers on for Kevin Cassidy. And I'm just looking if you guys could provide some additional specifics on the reason for the delay in the more 04 SEALMINERs shift?

Yes. So just to be clear, it's the new generation of architecture Well, we're very comment in the technology still. It's really just that the implementation of it is quite a bit more difficult than we originally anticipated and does involve significant changes to the design flow of EDA tools. And so we're just working through those things to do that. And really the first of the delay.

Okay. And if I could ask a follow-up, are there any additional R&D amendment that those come to market as the SEALMINER 04 comes to market?

I mean I don't think there's going to be any especially unusual R&D expenses. Of course, our R&D expenses associated with any chip.

Right. And then, I guess, if I could ask one last follow-up, and you could describe the cost difference between assembling these SEALMINERs in the U.S. versus outside of the U.S. provide a little detail on that would be great.

So there'll be -- obviously be a slight increase in the production costs for [ $0.01 ] in the U.S. So if you think about 3 months in the seal minor, about 70% to 75% of the cost is the chip. So the remaining 25% to 30% is the balance of the manufacturing is really where the delta will be on. So yes, we would expect the debt to be higher in most cases. But again, depending on what the tariff is more exporting countries, we don't have an exact number for you at this time.

Our next question comes from the line of Mike Grondahl of Northland.

Two questions. One, how will you decide whether you'll go to cloud service provider route versus the colocation route? Any insight there would be helpful. And then two, could you talk a little bit about the demand you're seeing in Norway and how that compares to the demand for some of your U.S. sites?

Yes. So with respect to versus co-location, we are definitely putting our emphasis on the AI cloud space. we will opportunistically use colocation where didn't mind makes sense, but our primary focus is on AI cloud. With regards to Norway, yes, I mean, the site the demand is largely driven by that site being one of the few places in Europe where you can get a large site with low power. And in very specific case of our side, it's very much developed towards already being a Tier 3 type of data center. So it doesn't take much effort to -- or much resources to change it, is it would a normal Bitcoin mining side. So there was a lot of interest. There is a lot of interest in for those reasons.

Is the demand greater for that site as compared to maybe a U.S. site?

I don't know -- I mean perhaps because it's so close to being a fully developed Tier 3 site, the answer is probably yes. It just takes less effort to turn it into an AI data center than our U.S. sites.

Yes. I think time to power has really been what's been driving the demand for it.

Obviously, the site, as Haris said, has a lot of attractive attributes that make [indiscernible] power much shorter. We think we could have this up and running sometime in the second half of next year possibly. So I think that's driving a lot of it.

Our next question comes from the line of Nick Giles of B. Riley Securities.

I wanted to ask a question regarding your financial options for development of the HPC/AI capacity. So kind of to what extent do you expect that CapEx to be funded by your GMV partner and additionally, is there any impact on your part of capital from your PTC holdings given that it could potentially have collateral rates?

So you've got a lot of background noise there. I'm not sure we asked that. Were you asking about a development partner?

Yes, Jeff, apologies [indiscernible]. So the question is basically -- on the financial motion of the development of HPC/AI. So I would wonder to what extent do you expect total CapEx to be funded by your JV partner? And is there any impact on your [indiscernible] capital from this point holding because I would assume they could potentially be you as collateral and help bring the rate down?

So at the present time, we don't have a JV partner in this development of HPC/AI, so we had initially guided that we were going to approach using a joint venture partner, development partner. We did have an LOI with a group previously this year. We looked at LOI expire in favor of basically pursuing the opportunity more on our own using HPC contractors and augmenting our own internal development team. So we are -- not to say we may not pursue it in the future, but at the present time, our strategy is to pursue it more on our own.

And my follow-up is about regarding the most optimistic scenario way of 100 megawatts of AI cloud capacity. -- could you provide more detail on how this capacity will be allocated across the site as possible.

I'm having trouble understanding the question. Sorry about that.

No. Can you hear me? I mean, this is about 200 megawatts of 12 capacity, but if you offline as -- so yes, you can provide the fleet in a side would be helpful.

Of the 200 megawatts, right, that includes in Singapore includes Wenatchee, includes Tyal in Norway. And we expect the vast majority of that to be an AI cloud as opposed to colocation. Is that question -- did I answer your question?

Our next question comes from the line of Mike Colonnese of H.C. Wainwright & Company.

I appreciate all the updates today. Just a couple for me. First one, as an ASIC manufacturer with better visibility into chip availability, do you foresee any procurement risks with regards to carrying some of the latest gen GPUs from NVIDIA for the broader infrastructure industry?

We haven't seen anything so far. I mean, it's I'm not sure that Jeff and I are well positioned to answer that question right now because we're not directing in the procurement. We're getting what we require for mid-year, but our initial quarters are relatively small. So I'm not sure if they're indicative of the industry as a whole.

Got it. Got it. And Haris, you mentioned in your prepared remarks that you intend to continue to deploy your still minor ASICs across your sites. Can contain build out the decline in mining business in 2026? I guess how should we think about growth coming out of this year and looking into next year for Bitcoin Mine?

We haven't released any estimates on that yet, but it will be significant. We're not plateauing at the level that we're at now. We're still on a very steep upward trajectory.

Yes, Mike, I would say, I think we've got a lot of levers to pull there. We've got new capacity coming online in Massillon, Ohio, 221 megawatts in [indiscernible], 50 megawatts. We have some unused capacity in some of our current sites right now. And we have -- also have a couple of 100 megawatts that is dedicated to or generation miners that we'll be looking to replace in the coming months. So it really needs a capacity and ASIC manufacturing will be sort of the bottleneck not power.

Our next question comes from the line of Dylan Hessman of ROTH Capital Partners.

To follow up on some of the cloud things about the $2 billion ARR. How do you sort of expect your customer base to be across that $2 billion? I know you mentioned some of the industries you're working in, but do you expect it to be multiple customer -- like multiple big customers? Or are we talking 10, 20, 30 or 30-plus small contracts?

So I think it will be a combination of both. So in places like Asia, we are seeing a lot of demand from that, I would say, small and middle market companies that are looking to stand up some AI models in some of those industries that we mentioned. We're also seeing demand from larger, call it, and large-sized enterprise customers that are looking to deploy high double, low triple digit megawatts in GPUs. So I think to get to that number, as we kind of laid out as our most optimistic scenario would likely involve a combination of both solid middle market and maybe 1 or 2 larger enterprise customers.

Got it. And as a follow-up, on the DAS and build side of things, how are you guys seeing build cost and supply chain trending as you sort of get closer to the finishing, I guess, a lot of sites that are in the pipeline?

Yes. Look, I think the long lead time items are still the same ones as we know from before, it's a lot of the electrical equipment, transformers, switchgears, breakers, things like that. Look, I think they're out there to be found. We've got a very experienced procurement team. This is not the first time where this type of equipment has been in high demand and shortages and we've had success sourcing in the past. I think some of the potential tenants and other EPCs that we may be working with, there's a possibility that they have some of that stuff kind of queued up as well. So the avenues to get it. But I think the supply chain still remains stressed to some extent.

Our next question comes from the line of John Todaro of Needham & Company.

I just wanted to confirm stuff from earlier. So one, it does seem like the focus is more on AI cloud, so GPU as a service versus HPC colo. Are you seeing a lot more demand in that area? And should we also expect the Ohio sites would be more geared for AI cloud versus a colo lead? And then I have a follow-up.

The Ohio side, yes, I think the answer is yes, it could be more and more AI cloud, but it's a large enough site where it could be divided as well. So final determination of that site is not clear at the moment. You do have a follow-up question you said.

Yes. But also just within that, I guess, is there -- are you seeing more customer demand for AI cloud versus colo. And then I guess my follow-up would be just you think about returning more megawatts out there. We have heard from some peers that there is kind of a stranded power available. Is there kind of a guardrail of how much a capacity maybe annually you guys think you could procure?

We're seeing a lot of demand for both colo and AI cloud. So I start to quantify which one is more or less, but we're seeing a lot for both.

Yes. And then yes, I agree with that. I mean I don't -- I think it's just different demand. I mean, obviously, different core customers are looking for some same customers are. But I think the demand right now is robust. Time to power. I think is the most critical, it was recurring thing we're hearing. So 2026, early '27 power is desirable right now. So I think for both business models. On the power procurement side, yes, I mean, look, I think we're seeing that, too. I mean there is some stranded power. I think we're seeing also more of a willingness to -- for tenants and end users to be more accepting of that type of power behind the meter power potentially. And so we're seeing that, and we're -- like I said, we've got a great procurement team that's been able to acquire low-cost power sites in the past, and we're confident in their ability to continue to do so.

[Operator Instructions] Our next question comes from the line of Bill Papanastasiou of KBW.

With respect to the delayed development of the SEAL04 miner, where would you say the confidence level sits today with respect to this ASIC having industry-leading specs when it gets released? Just trying to understand the extent of the delay.

The confidence is high that the architecture is the right one to go core in future design. So I don't think there's any bill lack of confidence in that. And that for subsequent designs, we would be using it in where the confidence is low, it is the exact timing of the release.

Bill, did you have a follow-up question?

No, just that question.

I think we have one more...

Our next question comes from the line of Brian Kinslinger of Alliance Global Partners.

I'm just wondering if you can help provide some sort of estimates or how you see return on invested capital for cloud service provider versus colocation services?

Yes. I think there -- it's a different return profile. So obviously, we've seen some of our peers out there putting numbers out. And I think those numbers are largely depending on how you're looking at it with I would say both the -- if you're looking at both the GPUs and the data center cost in there and ARR pacific load, I think they can be obviously different. We're seeing co-location. Obviously, the rates very similar to what others have reported recently. So that's typically a yield on cost. So I think it's just going to depend on your construction costs. we're constructing. And I think the end user. I think we're seeing a lot of variance in end user requirements as far as infrastructure needs, where the backup power is required, where they'll be providing some of kind of key infrastructure there. So that on the colocation side, especially, I think it's going to really affect our return on invested capital or any other return metrics.

Ladies and gentlemen, that does conclude the Q&A portion of our call and Bitdeer's conference for today. Thank you for participating. You may now disconnect.