Marathon Patent Group, Inc. Aktie

Greetings, and welcome to the MARA First Quarter 2026 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce Robert Samuels, Vice President of Investor Relations. Thank you. You may begin.

Thank you, operator. Good afternoon, everyone, and welcome to MARA's First Quarter Fiscal Year 2026 Earnings Call. Thanks for joining us today. With me on today's call are our Chairman and Chief Executive Officer, Fred Thiel; and our Chief Financial Officer, Salman Khan.

Today's call includes forward-looking statements, including those about growth plans, liquidity and financial performance. These involve risks and uncertainties, and actual results may differ materially. We disclaim any obligation to update these statements, except as required by law. For more details, see the Risk Factors section of our latest 10-K and other filings.

We'll also reference non-GAAP financial measures like adjusted EBITDA, which we believe are important indicators MARA's operating performance because they exclude certain items that we do not believe directly reflect our core operations. Please see our earnings release for reconciliations to the most comparable GAAP measures. We hope you've had the chance to read our shareholder letter and look forward to your feedback. We'll begin with some prepared remarks from Fred and Salman. After their comments, we will open the call to Q&A.

I'm going to turn the call over to Fred to kick things off. Fred?

Good afternoon, everyone, and thank you for joining us. Q1 2026 was a redefining quarter for MARA, not an incremental one. This was a quarter where we executed deliberately across multiple fronts at once and move the company decisively forward.

During the quarter, we moved the Starwood joint venture from announcement to execution, closed our acquisition of a majority interest in Exaion and retired about 30% of our outstanding convertible debt, all while realigning the organization to fit the business strategy. Shortly after quarter end, we announced a definitive agreement to acquire Long Ridge Energy & Power from FTAI Infrastructure. These were not isolated events. They are connected pieces of a strategy that is now fully in motion. That strategy starts with a single conviction, the next phase of digital infrastructure value creation will be shaped by the control of power where it is located, when it's available and how it can best be monetized.

AI adoption is accelerating faster than power can be brought online to meet demand. That is not an opinion. It's the defining constraint of this market. Available connected energy is debottleneck on AI compute growth. The ability to source control and dynamically allocate that power is a structural advantage. And the lack of available power will negatively impact semiconductors related to AI, if there's not sufficient capacity to absorb ship supply, some semiconductor vendors are investing directly and locking up demand as evidenced by NVIDIA's recent investments.

MARA has positioned itself squarely in the bull's eye, with already energized power to enable hyperscalers to in the near term energize compute with our previously 1.9 gigawatts of power capacity. And now with the addition of Long Ridge, we're having advanced conversations with multiple prospective tenants across multiple sites.

Let me start with Long Ridge. We view Long Ridge as a land and power acquisition to develop our premier compute campus. It is a strategic enabler for our [indiscernible] operations, adding to the site 1,600 acres with the path to grow the existing 200 megawatts of power to over 1 gigawatt. It will establish a leading AI HPC data center campus in the PJM Interconnection, one of the most active data center and power markets in North America.

In a market where power and infrastructure constraints take years to solve, Long Ridge gives us exactly what is needed to build our value to shareholders upon closing. This is not a greenfield site. It is a site that is already operational, already generating cash, and that gives us immediate access to the infrastructure, interconnection and physical footprint required to scale to over 1 gigawatt. The power is there. The land is there. The water is there. The fuel supply is there, and the interconnection is there.

The centerpiece of the campus is an approximately 505-megawatt nameplate combined cycle gas turbine, one of the most efficient in the entire PJM Interconnection. It generated $144 million of annualized adjusted EBITDA in the second half of 2025 with 76% contracted capacity. This is stable visible cash flow from the moment we closed the transaction.

Beyond the power plant, the campus consists of over 1,600 in U.S. acres and includes the 200 megawatts that mark existing capacity at Hannibal. As a signing, we have already submitted plans to augment the Hannibal Interconnect and we will move quickly post close to further expand power capacity at the power plant.

At close, we plan to retain Long Ridge's skilled team, consisting of about 25 full-time employees that have deep operational knowledge of the facility. They will supplement our existing energy asset operating expertise.

Here's what matters most about the scarcity of this asset. If you try to build this from scratch today, the land, the power, the permitting, the water, the interconnection, you're looking at $2 billion to $3 billion of capital and 7 to 10 more years of development time. We're stepping into a platform that is already built, already operational and already generating cash flow. Assets like this are very hard to come by. Some might even call it a unicorn. So when they do, you move.

In total, Long Ridge gives us over 1 gigawatt of total potential capacity and a path to scale to 600 gross megawatts of [indiscernible] in critical IT load over time. This transaction increases our owned and operated capacity by approximately 65%, taking us from about 1.3 gigawatts of energized capacity today to roughly 2.2 gigawatts by closing and including expansion capacity to 2.4 gigawatts.

We've been actively engaged with multiple top-tier potential tenants around this asset. These conversations are now accelerated since announcing this transaction, and the current plan calls for an initial 200 megawatts of AI build-out with construction beginning around the first half of 2027, initial capacity coming online in mid-2028.

The power plant is not the [indiscernible], it's the enabler. It provides reliable control over an increasingly scarce input at a cost of approximately $15 per megawatt hour. This is a cost position that very few can match as well as a positive cash flow tomorrow. And to be clear, our existing bitcoin mining operations at Hannibal will continue without interruption until such time as the data center campus needs the power. MARA does not expect to reduce Long Ridge's current supply of power into the PJM grid. As we develop compute capacity behind the meter, we will pair that demand incremental generation over time.

Our goal is to continue to operate Long Ridge Energy and ensure that consumers continue to benefit from the reliable power they have been accustomed to. Taken together, Long Ridge gives MARA a scaled power advantage platform, immediate and durable cash flow and a clear path to build one of the leading digital infrastructure campuses in this market.

Next, I'd like to talk about our strategic partnership with Starwood, which has made meaningful progress during the quarter. We moved from announcement to execution, advancing permitting and site preparations across our portfolio and entering active tenant discussions with multiple counterparties, including hyperscalers and across 90% of our existing owned and operated sites, including the Long Ridge campus. I want to take a moment to explain why the structure of this partnership matters because it's fundamentally different from a traditional lease and that distinction has real economic benefits from our and its shareholders.

First, Starwood is a trusted institutional counterparty with global investment expertise and a dedicated data center development platform. Their team has developed, built and put into operations more than 7 gigawatts of definer capacity worldwide for premier tenants. This means Starwood is a trusted counterparty, having negotiated multiple leases with premier tenants, which we believe accelerates the time line for site evaluation and lease signing, something we have already seen.

Second, Starwood brings captive development and EPC capabilities. They lead design, development, construction and facility operations, giving MARA an experienced execution partner without having to source and manage third-party contractors.

Additionally, their prior experience for constructing sites for premier tenants provides an enhanced certainty regarding their ability to develop on tenant time lines and technical requirements. This trust factor provides prospective tenants more confidence that their time lines and specifications will be met. Our peers who have never done this before still need to build trust with prospective tenants because they lack a proven track record.

Third, the structure is capital efficient. When MARA contributes to sites, its value is determined using pre-agreed site-specific economics tied to power, land, interconnection and development attributes. That value gives more equity credit in the project before joint venture cash contributions are required. To put this in context, on an illustrative 200-megawatt project, MARA could generate approximately $50 million to $100 million of net annualized stabilized cash flow based on a 9% to 15% yield on cost range with little to no incremental equity required beyond the value of the site we contribute.

As projects scale the structure naturally evolves, MARA set contribution is fixed. So for larger developments, the incremental gross capital becomes more proportionate between the partners. At that point, the funding model starts to look more like a traditional data center development structure, including the use of construction financing that can support roughly 80% loan to value. The key point is that this model allows MARA to monetize the value of its powered land portfolio, preserve significant upside in long-term cash flows and manage capital exposure in a disciplined way. Most critically, this is not designed to be a onetime transaction. As we continue to aggregate land and power assets, our goal is to contribute sites into the structure repeatedly. Starwood is a capital-efficient engine for turning MARA's powered land portfolio into contracted institutional-grade digital infrastructure at scale. We expect to sign multiple tenant leases by year-end, as the pipeline converts, we'll disclose contracted megawatts.

While the Starwood joint venture addresses the large-scale hyperscale end of the AI infrastructure market, Exaion addresses a different but equally important segment. sovereign, enterprise and private cloud AI compute. Together, they give MARA 2 distinct pathways into AI, both grounded in the same foundation of energy-backed infrastructure, both serving real and growing demand.

Governments and enterprises, particularly across Europe and Canada are increasingly unwilling to rely solely on hyperscale platforms for their AI infrastructure due to data sovereignty cost. They want control over compute, data autonomy, jurisdictional compliance, security and independence. This is not a niche requirement. Its AI policy evolves and data sovereignty standards tightening, a meaningful share of AI workloads will require infrastructure that is compliance-ready jurisdictionally controlled and trusted. Exaion is built to serve exactly that demand.

We continue to build on our proven success in UAE, Finland and our recent launch in Oman. We are in active discussions with major energy companies in France, Brazil and Saudi Arabia across energy-rich regions, where reliable, scalable power supports long-term digital infrastructure development. We are still early, and we will share a more detailed road map as this effort develops.

The simplest way I think about it is a Starwood and Exaion are different expressions of the same thesis. The JV pursues large-scale colocation for hyperscalers. Exaion pursues private cloud, sovereign AI and enterprise deployments in regulated markets where these are critical criteria. Both depend on MARA's core capability of controlling the monetizing energy-backed infrastructure. Together, they expand our addressable market across 2 large and growing segments of the AI infrastructure opportunity.

Finally, bitcoin mining is the operational foundation we're building from. Our strategy is to co-locate new infrastructure with our existing mining operations. This allows us to monetize power assets immediately while building on the operational discipline and infrastructure expertise at mining demand. Mining generates revenue to date. It preserves the option to redirect capacity toward AI and critical IT loads as those opportunities mature on the same sites. That flexibility is deliberate. It's not incidental to our strategy. It is essential to it and that it allows us to best monetize our power and compute.

We continue to believe bitcoin is supported by institutional demand. In our view, that creates a constructive setup over time with a bias to the upside of institutional buying continues and retail demand returns. We continue to believe bitcoin will appreciate beyond its current levels.

We also took deliberate steps to strengthen the balance sheet during the quarter. We retired about 30% of our outstanding convertible debt at a discount, reducing potential dilution and increasing our financial flexibility. This was a decision to reduce the capital structure's drag on equity value and give us greater capacity to pursue the highest return opportunities across the business with discipline and without being forced to dilute shareholders.

With that, I will turn the call over to Salman to walk through the financial results.

Thank you, Fred. Good afternoon, everyone. Before I walk through the quarterly results, I want to briefly frame the first quarter of 2026 from a strategic and financial perspective. This was a quarter in which we strengthened the balance sheet, reduced potential dilution from convertible notes by as much as approximately 46 million shares or 9% on a fully diluted basis and continue to align our capital allocation with the strategy. As Fred outlined, we are converting MARA's digital infrastructure with lower cost, large-scale energy capacity into AI and critical IT. Two initiatives are central to that strategy.

First, our recent announcement to acquire Long Ridge adds one of the most efficient energy-backed compute campuses with existing cash flows, own generation, existing interconnection, low-cost vertically integrated power generation complex and a significant development opportunity over time. This acquisition is next to our existing bitcoin mining site and is expected to expand our AI expansion in an AI-rich corridor. As we pursue the regulatory approvals and seek consent from Long Ridge debt holders, we believe Long Ridge will provide near-term diversified financial performance while unlocking significant long-term contracted digital infrastructure revenue.

Second, the Starwood joint venture gives us a capital-efficient path to monetize the value of our sites by converting them to AI, HPC and critical IT workloads. It is important to note that in our JV structure and Starwood -- our joint venture structure with Starwood, MARA contributes a site into the joint venture once the tenant is signed for which we receive credit based on the site's power, land, interconnection and development attributes at predetermined value, as Fred mentioned earlier. That is the power of the joint venture model. It allows us to convert the embedded value of our existing infrastructure into meaningful ownership in large-scale digital infrastructure opportunities while significantly limiting the incremental capital required from our balance sheet, giving us a higher return on capital than our peers.

Now let me turn to bitcoin price in Q1. This was a challenging quarter for the bitcoin price and reflected broader pressure across risk assets. The decline was driven by a combination of macro uncertainty, tighter risk appetite and continued pressure on mining economics. For MARA, that backdrop reinforces the importance of operating discipline. We remain focused on fleet efficiency, cost control and capital allocation rather than pursuing growth for growth's sake. Since quarter end, bitcoin has rebounded meaningfully, increasing approximately 20% from its March 31 closing price. While volatility remains inherent to this asset class, the recovery reinforces the value of maintaining bitcoin as both a reserve asset and a source of strategic financial flexibility.

With that context, I'll turn to our Q1 financial performance, capital allocation and balance sheet activity. Revenues in Q1 of 2026 were $174.6 million compared to $213.9 million in the prior year period. The decline was primarily driven by an 18% decrease in bitcoin's average price, which reduced revenue by $33.1 million and to a lower extent, impacted lower production, which accounted for approximately $2.5 million. In addition, other revenues declined approximately $3.7 million, primarily reflecting lower revenue from other digital asset hosting services compared to the prior year period.

During the quarter, we delivered record energized hash rate of 72.2 exahash per second, increasing 33% from 54.3 exahash per second in Q1 of 2025. This growth reflects continued fleet optimization and the deployment of approximately 2.4 exahash of new generation ASIC miners at favorable pricing during the quarter. Our share of available mining rewards reached 5.5%, up from 4.8% in Q4 of 2025.

We mined 2,247 bitcoin or 25 bitcoin per day in the first quarter of 2026. That is approximately 39 fewer BTC than prior year period, reflecting a higher network difficulty level, partially offset by our higher hash rate.

We reported a net loss of $1.3 billion or $3.31 loss per diluted share this quarter compared to net loss of $533.4 million or $1.55 loss per diluted share in the first quarter of 2025. Approximately $1 billion of this net loss for the first quarter of 2026 was driven by unrealized mark-to-market fair value adjustment for digital assets, a direct reflection of the drop in bitcoin price during the quarter. A reminder that based on our current bitcoin holdings, every $10,000 change in bitcoin price results in an approximate $350 million impact on fair value of digital assets, which is an unrealized mark-to-market adjustment to our income statement.

Adjusted EBITDA for the quarter was negative $1 billion compared to negative $483.6 million in the prior year period. Similar to net loss, this figure is denominated by -- or dominated by the bitcoin mark-to-market change. We use adjusted EBITDA as a supplemental measure of operational performance. A full reconciliation to net loss is included in our shareholder letter and earnings deck.

On the cost side, our cost per kilowatt hour was $0.04 for our owned sites in the first quarter of 2026. For context, we believe this remains among the most competitive in the sector at a larger scale. Our purchased energy cost per bitcoin for the quarter for our own mining sites was $40,047 in Q1 of 2026 from $35,728 in Q1 of 2025, primarily due to higher network difficulty driven by growth in global hashrate. This resulted in an 8% decline in bitcoin production at our owned mining sites compared to the prior year period.

Our daily cost per petahash per day improved 3% year-over-year to $27.6 from $28.5 in Q1 of 2025. And over the past 11 quarters has improved by 42%. We believe this remains among the lowest at scale in our sector.

In the first quarter of 2026, general and administrative expense excluding stock-based compensation, was $57.7 million compared to $36.9 million in the prior year period. The increase reflects the scaling of our operations, higher personnel costs associated with headcount growth from the prior year period and administrative fees in support of our expanded global footprint through acquisition and integration costs. Acquisition and integration costs burdened our G&A by $11 million for the first quarter of 2026.

As part of our strategic shift towards AI and critical IT we have realigned our business operations and reduced workforce by 15%, providing combined annualized savings of $12 million. This was a difficult but strategic decision.

In addition, we incurred a restructuring charge of $45.9 million due to elimination of certain business initiatives and realignment. The organization focused on scaling bitcoin mining is different from the one required to build a digital infrastructure company. This realignment positions the company to pursue AI opportunities as Fred discussed earlier. Following this restructuring, we expect our quarterly G&A run rate, excluding stock-based compensation and acquisition integration costs to trend below the Q1 level as these savings are realized over time.

Now let me address deleveraging our balance sheet and our recent bitcoin sales. During the quarter, we retired approximately 33% of our outstanding debt, which included 30% of convertible notes reduction at a discount. This reduced potential future dilution, lower leverage and improved our ability to allocate capital towards higher-return strategic opportunities. We've funded a portion of this debt reduction through bitcoin monetization, the client is only a reserve asset -- it's not only a reserve asset on our balance sheet. It is also a source of strategic financial flexibility. We will continue to deploy thoughtfully when doing so creates measurable value for shareholders and intend to use it selectively to strengthen the balance sheet and fund strategic priorities.

During the quarter, we sold approximately $1.5 billion of bitcoin. These funds were used to repurchase at a discount over $1 billion of face value of our 2030 and 2031 notes and reduced our line of credit by $200 million. In addition, we refinanced $150 million of our line of credit at a 7% interest rate versus 10.5% previously.

I also want to highlight that we have not used our at-the-market equity offering program, or ATM since the end of the third quarter of 2025. We have funded operations and balance sheet actions through bitcoin monetization, not equity dilution. We think this is an important data point for shareholders as we continue to allocate capital towards the highest return opportunities.

Now let me discuss our bitcoin holdings. We held a total of 35,303 bitcoin at the end of the quarter, a decrease of 12,228 from the previous year. Of the total, approximately 28% of the holdings were activated and loaned or pledged as collateral. The loan bitcoin generated approximately $6.4 million of interest income over the first quarter of 2026.

Finally, I want to provide additional clarity on the pro forma capital structure we expect to have in place at Long Ridge upon closing the acquisition. Long Ridge's $400 million term loan is expected to be repaid at closing. We are also currently conducting a consent solicitation to waive the change of control provision in Long Ridge's $600 million secured notes, which would allow the notes to remain in place. The $115 million Can-Am facility is similarly expected to remain in place. As a result, total pro forma debt at Long Ridge is expected to be approximately $900 million, down from $1.1 billion previously with approximately $185 million of tack-on secured notes expected to be issued. We expect to fund the remaining consideration through a combination of cash on hand, borrowings collateralized by bitcoin and potentially proceeds from the sale of bitcoin, depending on the market conditions at the time of closing.

We have also secured a $785 million of commitment letter backstopped by a bridge loan from Barclays in case needed. We have a plan in place to finance this acquisition, and we are very excited about the Long Ridge what it will bring to MARA and our stockholders.

With that, I will turn it back to our -- to Fred.

Thank you, Salman. The actions we've taken so far this year were purposeful and they were interconnected. The Starwood joint venture creates a capital-efficient path to convert our power portfolio into AI infrastructure ownership. Long Ridge adds a differentiated power advantage platform for premier AI and critical IT campus anchored by our existing Hannibal operations. Exaion gives us a second pathway into AI, sovereign and private cloud, domestically and internationally. Balance sheet actions reduced dilution risk and increased our financial flexibility, and bitcoin mining remains our foundation.

We recognize that the market is focused on demonstrated execution, signed contracts, contracted megawatts and tangible proof that this strategy converts into shareholder value. MARA is redefining itself as a digital infrastructure company, controlling and monetizing electrons to their best value across multiple compute markets. This transition is already underway. Q1 2026 was a meaningful step forward.

With that, I'll turn the call over to the operator to open it up for questions.

[Operator Instructions] And your first question comes from Paul Golding with Macquarie Capital.

Congrats on all the progress this quarter. I wanted to ask, as you think high level -- and maybe this is for Fred. As you think high level about the approach to expanding on the HPC strategy, on the one hand, you've got multiple tenant prospects across the portfolio of existing sites and through the Starwood JV. And on the other hand, you also did an opportunistic deal to acquire the Long Ridge asset, how should we think about your broader strategy between commercializing existing sites and adding capacity through these opportunistic deals? Was Long Ridge sort of a one-off because of the relationship and it coming to market? Or is this potentially a simultaneous approach that we should see unfold between assets coming to market that you would look to acquire versus the existing portfolio?

Yes. Great question. So the Long Ridge deal has been in the works for quite a long time since we acquired the Hannibal asset originally actually. The site, obviously, Long Ridge provides us with the land that we need to be able to build a true premier campus. And the original intention with the Hannibal site was to build a much bigger data center facility. And it just took a long while for the respective parties to reach agreement on the deal here, and they obviously had to take it to market through a process to ensure that they were doing the right thing for their shareholders. But that has been a deal that's been in the works for quite a long time, actually.

I think going forward, what you should see is you can think of us as doing focusing on the combination of small sites, which are perfect tuck-ins. We recently added a smaller site earlier at the end of last year, for example, which is now operational as a mining site, which has the opportunity to potentially convert into a smaller token factory facility if we wanted to do that with that site. At the same time, we're going to continue to look for larger lands and power opportunities where we can build significant campuses together with Starwood.

We really have the best of both worlds here because the large-scale opportunities, have you started as a partner just really a wonderful job of de-risking the whole process and ensuring that we're able to execute properly. At the same time, at the smaller scale sites where we know how to develop smaller sites, especially as you start looking in the world of inference, where a lot of this is moving to ASIC technologies away from NVIDIA's traditional GPUs, those facilities now are able to operate more modular data center formats, which are more akin to what we've been doing all along with bitcoin mining, where all our sites operate as kind of modular data centers. And so we believe building this duopoly, if you will, to be able to develop smaller sites that specifically service inference needs for a variety of potential tenants or customers as well as doing the larger sites with Starwood is a way that we'll be able to build a beautiful portfolio of assets that will provide long-term value to our shareholders.

And maybe just as a quick follow-up. I was wondering if I could pull on that inference versus training thread a bit. Are you able to just share any detail around the general mix of interest right now from these prospects? Is it indexing more towards the inferencing use cases? Or is it more towards training or equally distributed?

Sure. So when you generically use the word hyperscaler, you're typically talking about somebody who has large amounts of data that they have collected that they train a model on that they then use that model to do things. Amazon, Google, Microsoft use data they have to essentially do inference train a model and then do inference on that model. So you have a lot of those sites are a combination of training in inference. And if you've been following with Jensen and NVIDIA's been talking about his belief is that these training sites will, over time, do more and more inference. I think the models going forward, you're going to see a need for sites where people can deploy models that they have done in-house and run them. And these are these token factory type sites, which I think we're going to see a lot more of where essentially somebody needs the ability to run a handful of megawatts of model scale.

We're starting to see already financial players, meaning nondata center players wanting to now have data center capacity that they can use for -- it could be financial trading, it could be health care data, it could be other things where the ability to develop models and run your business using these models has become mission-critical and therefore, you don't want to put it up in the cloud, you want to do it in your own private cloud. And so this is where Exaion marries to this model very attractively. We're able to engage with kind of any tenants across whether they want your traditional large hyperscaler site, which is training in inference together typically or somebody who just wants proprietary air gap capacity for either training and/or infants typically together or just inference and just want essentially a token factory. They want to run a coin model. They want to run an open weight model, and they literally are just looking for kind of this mix of lowest cost per token with best quality of service. And so as an example, if you're a financial trading company, you may do model development at a data center where latency is not important because you're really trading our model. But once you deploy that model to actually run it, you're going to run it somewhere on or near prime where latency is next to 0. So that's a quality of service. So you're willing to pay more per token if the quality of service suits exactly your needs.

And if quality of service, meeting latency speed and connection time isn't important, then you can run it at a token factory that's more remote. So we believe the market is going to consist of a variety of those tiers, and we're already in talking with enterprise customers is doing part of our market research.

What we're finding is there are companies who, their public cloud bills, if you would, their invoices have gone from hundreds of thousands of dollars a month to millions of dollars a month because of the fact they're running models in the public cloud, and they're finding it's just financially not an option. You're also seeing, however, the large model providers needing more and more capacity to run their models. And as they develop more and more tools, and I'll use as an example, Anthropic has just released these new tools for financial analysts for investment banks. They're doing all of these vertically designed genetic frameworks. These are systems that consume huge amounts of tokens, but they still are running essentially on your data, but it's still claw that's running in the background. So there's a need to be able to run across a huge infrastructure of sites globally to be able to operate these things.

And so I think you're going to see a pretty -- you're going to see inference growing, but trading is still going to be growing for the foreseeable 6, 7 years, I think, but you're just going to see inference volumes increase dramatically as more and more agent technology comes to play. We're seeing thousandfold increases in agentic in token consumption when somebody moves from chat to using a Cowork or Claude Cowork, for example.

Just talk to any CIO and ask what their token bills are lately. And they'll share with you the token maxing is not something they want to really incentivize people to do.

Your next question comes from Chris Brendler with Rosenblatt Securities.

I wanted to ask on the G&A line, has seen a pretty significant increase over the last couple of quarters even if you back out stock-based comp and call out on acquisition expenses. And just sort of trying to reconcile that versus the headcount reductions. I know that you're probably more forward-looking, but can you talk about a little bit about some of the investments you've made in what areas? And I was struck by your comments about sort of repositioning the organization. As you outsource more and more stuff to Starwood, I would think the organization may not be as large in the future as more and more bitcoin mining folks are repositioned. Just can you talk about the path of expenses? Because it seems like it's a little elevated still in my mind. Salman, do you want to do that?

Sure, Chris. Thank you for the question. As you know, we've said this before, we've been growing over the years. And we've -- as part of our announcement in Q1, we looked at our organization and reorganized ourselves more focused on what is in the pipeline in the future. And as we discussed in today's call, we've got the Long Ridge acquisition, we've got Starwood, which we're very excited about. What you have to remember is that we are still very good at what is MARA good at? MARA is extremely good at securing low-cost power and scale, $0.04 per kilowatt hour at 2 gigawatt capacity that is not many people can claim that they have that on of power. So we have the operations to manage that from a bitcoin mining perspective today. And that capacity that we have and the additional capacity that we plan to acquire gets dropped into our joint in certain cases, for example, at Starwood because we maximize our return on that by not having to invest incremental dollars because we get credit for the assets that we drop into the partnership, our dilution compared to other miners is much lower.

So I'm just going back to the structure long-winded answer, MARA historically was a pure-play bitcoin miner. We were growing and we had certain technology initiatives. MARA going forward continues to remain a technology company that happens to be surrounded by energy in the middle and AI and critical where we expect to monetize and generate free cash flow from a long-term perspective. So we looked at the overall structure and whether what are the skills that we're missing that we need to add to get there and what are the skills that we don't need for the growth of our previous [indiscernible] bitcoin mining business, and that's what resulted in.

In terms of the cost structure, the cost structure for our company size, I would expect, as we have stated in our prepared remarks to be lower than what we incurred in Q1, but that to also realize that when we are having these transformative transactions and acquisitions, there are costs associated with those. And as we have disclosed in our adjusted EBITDA disclosures, we will continue to disclose this and isolate those costs so that you can see what are the recurring nature of costs and what are nonrecurring nature of those and that way it helps modeling the cost better.

And then, Chris, the other thing is, obviously, the transition takes time in the sense that if I sign a lease tomorrow, that site is still mining bitcoin for another 18 months, maybe while the sites being built. So it's not just we're going to let go of a whole bunch of operations folks just because we're transitioning the strategy. It takes time.

Yes. Okay. My follow-up question was on the funding plan, a lot of [indiscernible] have sort of started shying away from the ATM. You mentioned you haven't used ATM since September. As you think about your, you have a lot of cash in picking the balance sheet for Long Ridge, but are you striving to be more of an investment grade credit and use more traditional equity funding methods in 2026? Or is that more of a longer-term plan?

Yes. So a couple of things to think about, Chris. The transactions that we're talking about, and we have, you can look at the examples of what other miners have disclosed with HPC conversions. We expect to -- as we've stated previously, we expect to have a few announcements around the tenant in the second half of this year. And usually, these transactions are either with an investment-grade counterparty or backstopped as other people have announced. So from a financing perspective, yes, those financings are considered investment grade from a finance, project finance standpoint.

And when you talk about our profile and our cash flows our goal and intention is to enter into these -- to create this vehicle where we continue to acquire these low-cost power sites and drop them into the partnership with a little amount of capital needs depending on the size of the project. and continue to have those triple-net lease revenues flowing through our P&L. So that generates a you get to have more predefined future free cash flows generating for income, your cash flow statements, then obviously, our balance sheet position improves our overall, whether you want to call it investment grade or non-investment grade, then you can have a better conversation around what your balance sheet looks like.

As you know, historically, the sector has not been valuated much or paid attention to when it comes to credit rating agencies. But as with 2 gigawatt capacity power and so many opportunities to generate free cash flow from a long-term perspective, 15-year risk-free or low risk rate of return type projects is certainly that the attention from a rating perspective.

Okay. Thanks so much for the color Yes. Next question comes from Brett Knoblauch with Cantor Fitzgerald.

Fred, on the Long Ridge acquisition, you outlined like a path to get that to maybe, I guess, 600-megawatt AI campus. Could you maybe help put a time frame around that? Like where are they in terms of that extra 200-megawatt kind of grid connect that they're pursuing now? And then how long would it take maybe to expand the generation capacity what approvals would you need?

Sure. So the behind-the-meter expansion is already in process so on a shorter-time frame than the grid expansion, and the grid expansion application submission process is what it is. But we figure that, as you look at the development time frame, from a 200-megawatt facility will likely take 18 to 24 months before it comes online by that time, an additional 200 megawatts behind the meter should be available. And shortly thereafter, we expect the other 200 -- the remaining 200 megawatts to come online from the grid interconnection. So the key is getting the first site up and running for the tenant and then just having the power in the queue and ready to go. But the behind the meter, additional capacity is what will come on soonest of the 2 additional capacity increases.

Awesome. Helpful. And then maybe just as a follow-up, I think you guys kind of reiterated expect first lease was the Starwood get signed at some point this year. I guess what's giving you the confidence that this could be executed as quickly as you're expecting?

Competition amongst the prospective tenants to get into the site. We have -- as I think we said in our prepared remarks, multiple tenants looking across multiple sites that make up 90% of our capacity today. And so as this market -- the demand in this market isn't decreasing. People are getting ever more antsy about getting more capacity. I mean you can just see what some of the model players have been doing just to garner more capacity out there. And you are -- as a model provider, you are directly limited in your ability to grow capacity by the amount of compute you have because you can only have so many clients hitting your model. before your compute runs out of gas. And then the only thing you can do is yield management and raise your prices. And so if you look at what some of the model providers have been doing recently is they have essentially gone from, oh, that $200 a month all-in things, guess what we're going to have to put a capacity cap on that and you're going to have to pay higher fees because I don't think anybody fully expected the explosion in demand for tokens that has happened once agentic technologies started to be introduced open claw, open the floodgates for people to start really looking at how to do this.

And this is not just an enterprise play, and it's not just a consumer play. There are, across the full spectrum of users. People are starting to build agents. People are starting to use tools like cloud Cowork for example. You have Google is about to release Remy, I think, is the name of their agenetic helper if you're in the Google ecosystem, which is a huge part of the SMB market, with Gmail, Google Calendar, et cetera. That's an agent that will do essentially what Cowork does, but do it in the cloud, whereas Cowork is local machine-based. And so that's just going to drive more and more and more demand.

And so as you add customers, you need to do more inference. And at the same time, your model sizes are growing. Look at what Anthropic said about ethos. Is it 10 or 100x more compute it needs than the prior model. And so when you look at that increment in both model size and compute requirement for both training and operating plus the inference side of it, there's pretty much just a huge demand for capacity today. And so we have, as I said, multiple prospective tenants fighting over the opportunity to get into some of the sites we're super excited about that. And we're happy to be in the position we are with the amount of capacity that we have and with a partner like Starwood, but we're able to take advantage of that.

Your next question comes from Ben Sommers with BTIG.

So you mentioned conversations with both hyperscaler and enterprise customers. Curious if there's any preference there from your side? I guess also if there's any difference in the conversations than kind of how you think about the customer mix longer term as you build out the HPC business?

Yes. I mean from a per megawatt basis, the hyperscalers are going to dominate by a large extent, just because of the sheer capacity they need. A single enterprise, 25 megawatts would do provide a huge amount of capacity for an enterprise customer. So I think it will be in the near term 90-10, and over time, maybe 60-40, but that really is going to be dependent on how enterprises decide to do things. If they decide to do it on-prem private cloud and we have the Exaion solution to service that need, and we're able to go in and help them operate that. If they want private cloud in a near-prime or remote solution, we can do that as well. But we think that the hyperscalers are going to be the first sets of tenants that we scale with. And then over time, you'll see the enterprise kind of customer mix increase.

Got it. Super helpful. And then I know you mentioned scaling the Starwood partnership with new sites. I guess just kind of curious since announcing that partnership, if there's been any kind of change in how you're thinking about developing the power portfolio moving forward kind of if their long-tenured expertise in the power market just kind of help potentially scale what MARA currently has in the power portfolio.

I'd say that the -- what is the beauty and the partnership is that we are really good at building pipeline, of sites, acquiring land and power at power attractive prices and paying the right price, if you would, for land and power. They are really good at finding tenants getting sites designed that built and operational. And so it's a perfect complement. There's no real overlap in that regard. And that's what really makes this relationship work as well as it does. So we're just very focused on continuing to fill that funnel of prospective sites such that we continue to be viewed by the prospective tenants as a reliable source of capacity going forward.

just one other comment I'll make is that a key difference between our model and what most of our peers are doing is they are typically starting with 1 reasonably sized site, 250 megawatts, 300 megawatts, something like that. And then they have to sink all their attention to capital into getting the upside done, and then they go to the second site, and then they go to the third.

With the Starwood model, we can just go out and acquire and then they can do their part of the deal, and we can move at a much faster pace and scale much faster than we were trying to do this all on our own. And I think that's where, while we may be late to the party, I think we're going to catch up quickly. And I think we'll go to scale past what some of our peers are doing because of the value of this partnership.

Thank you. And that's all the time we have for questions today. So I'll hand the floor over to Robert Samuels for closing remarks.

Thanks, operator, and thank you, everyone, for joining us today. If you do have any questions that were not answered during today's call, please feel free to contact our Investor Relations team at ir.mara.com. Thanks very much. Enjoy the rest of the day.

Thank you. All parties may disconnect.

Greetings, and welcome to the MARA conference call. [Operator Instructions] Please note that this conference is being recorded.

I will now turn the conference over to Robert Samuels, VP of Investor Relations. Thank you. You may begin.

Thank you, operator. Good morning, and thank you for joining us on such short notice. With me on today's call are our Chairman and Chief Executive Officer, Fred Thiel; our Chief Financial Officer, Salman Khan; and Chief Growth and Strategy Officer, Duncan Dickerson.

Today's call includes forward-looking statements, including those about our growth plans, liquidity and financial performance. These involve risks and uncertainties, and actual results may differ materially. We disclaim any obligation to update these statements, except as required by law. For more details, please see the Risk Factors section of our latest 10-K and other SEC filings.

We also reference non-GAAP financial measures like adjusted EBITDA, which we believe are important indicators of Long Ridge Energy's operating performance. Please see our press release and investor presentation for reconciliations to the most comparable GAAP measures.

We'll begin with prepared remarks from Fred and Salman. After their comments, we will open the call to Q&A. I'm going to turn the call over to Fred to kick things off. Fred?

Thank you, Rob, and good morning, everybody. Thank you for joining us on such very short notice. We're excited to announce our definitive agreement to acquire Long Ridge Energy & Power from FTAI, a transaction that we believe is both highly strategic and financially compelling for MARA. Salman and I will walk you through the presentation, and Duncan Dickerson, our Chief Growth and Strategy Officer, will join us for Q&A.

Let me begin with how this transaction fits into our broader strategy. We've been very deliberate in evolving to maximizing long-term value by expanding into Energy and AI/HPC. This has included reallocating capital towards these higher return opportunities, including entering our partnership with Starwood Digital Ventures as well as reducing costs in areas that do not support the strategic direction.

At the core of that strategy is a simple idea. Power is the most important input, and we want to deploy it across the highest value applications. That includes AI and high-performance computing, critical IT infrastructure and flexible compute, including Bitcoin mining.

Power is at the core of that model, owned, operated behind the meter and grid connected, and our objective is to dynamically allocate that power to maximize returns over time. Against that backdrop, the agreement to acquire Long Ridge Energy is a significant step forward in executing our optimized digital infrastructure strategy and increasing our market position in AI/HPC infrastructure.

The assets we will acquire will establish a leading AI/HPC data center campus in the PJM Interconnection, one of the most active data center and power markets in North America. In a market where power and infrastructure constraints take years to solve, we believe Long Ridge Energy will provide exactly what is needed to immediately deliver value to our shareholders upon closing.

This is not raw land with a long development time line, but rather a site that is already operational and that gives us immediate access to the infrastructure, interconnection and physical footprint required to support expansion. The power is there, the land is there, the water is there, the fuel supply is there and the interconnection is there.

In total, the site supports more than 1 gigawatt of total potential power capacity across generation and load with up to 600 gross megawatts for AI/HPC and critical IT loads. Assets of this scale and quality are increasingly difficult to replicate given the time, cost and complexity required to secure power, land, permitting and interconnection in today's market.

We are acquiring assets that would take up to 10 years to assemble on our own. These assets are also strategically located and that they are anchored by our existing footprint at our Hannibal site, where there has already been interest from investment-grade prospective AI/HPC tenants. Taken together, this transaction will increase our owned and operated capacity by 65% while adding $144 million of contracted EBITDA based on Long Ridge Energy's annualized second half 2025 results.

It is also worth noting that MARA does not expect to reduce Long Ridge Energy's current supply of power generation into the PJM grid and does not anticipate any impact to consumers. As we develop additional compute capacity behind the meter, we expect to pair that demand with incremental generation over time.

Turning to Slide 7. You will find specifics on the assets and the team that will become part of MARA at close. Long Ridge Energy campus includes a 505-megawatt nameplate combined cycle gas plant. It is one of the most efficient combined cycle turbines in the PJM interconnection and provides stable cash-generative operations. It generated $144 million of annualized adjusted EBITDA with 76% contracted capacity based on second half 2025 performance.

In addition to the combined cycle gas plant, the campus has over 1,600 contiguous acres and 200 megawatts of existing MARA capacity already operating at Hannibal that I mentioned. Following the closing of the transaction, MARA plans to retain Long Ridge Energy's team of 25 full-time engineers and employees. These team members have operational knowledge of the facility and will supplement the MARA team's existing expertise. When you compare this site to other digital infrastructure campuses, what stands out is the completeness of the platform illustrated on Slide 8.

You have colocation generation, vertically integrated fuel supply, firm grid access and proximity to core AI demand at the Northeast and Mid-Atlantic. That combination is rare and increasingly hard to find in today's market. To put that into perspective, if you look at Slide 9, if you were trying to build this from scratch today, you're looking at $2 billion to $3 billion of capital and 7 to 10 years of development time. So we are effectively stepping into a platform at closing that is already built, already operating and already generating cash flow.

From a capacity standpoint, this is a very scalable platform. We start with 505 megawatts of generation, plus 200 megawatts of existing MARA capacity and then have multiple paths to expand from there via grid expansions and on-site power generation. That gives us over 1 gigawatt of total potential capacity and the ability to scale to 600 gross megawatts of AI and critical IT load over time.

What makes this especially compelling is the flexibility. This is not a single-use asset. It is a multi-revenue platform where we can monetize power through long-term AI/HPC leases, flexible compute operations and wholesale power generation. That flexibility is critical because it allows us to allocate power dynamically based on where we see the best returns.

On the demand side, our Hannibal site has received inbound interest from multiple potential investment-grade AI/HPC tenants. In terms of the path to getting additional capacity in service, this is where our partnership with Starwood Digital Ventures plays an important role. We expect this campus to be developed as part of our broader platform alongside Starwood, leveraging their development capabilities and tenant relationships to build capacity to market faster. We expect an initial 200-megawatt AI/HPC build-out with construction beginning in and around the first half of 2027 with initial capacity coming online in mid-2028.

Looking at our owned and operated power generation capacity, this transaction is a step change. It will increase our owned and operated capacity by 65%, taking us from 1.3 gigawatts today to 2.2 gigawatts with the addition of the Long Ridge Energy Power Plant and our planned expansion. This will be a meaningful increase in both scale and capability. We are excited about what this enables to MARA and the value it will deliver to our shareholders. We look forward to updating you as we move forward through the closing process and begin executing on the development vision at Long Ridge Energy.

I'd like to turn it over to Salman now to go over the financials. Salman?

Thank you, Fred. Before I get into the transaction economics, I want to reinforce a few of the strategic points Fred made. First, Long Ridge is a current operating asset generating free cash flow, not a development bet. The Long Ridge Energy Power Plant currently generates approximately $144 million of annualized adjusted EBITDA with about 76% contracted, which gives us stable visible cash flow from day 1.

Second, this acquisition is a bolt-on to our existing Bitcoin operations. Our Hannibal site is already operating at this campus. This is an extension of what we are already doing, expanding MARA's footprint on infrastructure we know well. Third, the strategic upside here is significant. The acquired asset positions us to develop critical IT and HPC infrastructure in one of the world's largest AI corridors. The combination of location, existing infrastructure and scalability is what makes this especially compelling.

And fourth, the vertically integrated natural gas and power plant structure is a competitive advantage. Operating at less than $15 per megawatt hour, all in is a low-cost position that few can match. We believe that cost structure will directly translate into MARA's ability to operate an HPC complex profitably. It is the economic foundation that makes this platform so compelling.

With that context in mind, let me walk you through the financing discussion. On Slide 13, I will review some transaction details and financing. Under the terms of the agreement, MARA will acquire Long Ridge Energy for approximately $1.5 billion, including the assumption of at least $700 million of debt backstopped by a bridge loan from Barclays.

We plan to fund the equity portion of the transaction through a combination of existing cash and Bitcoin-backed financing capacity. As you can see in the slide, we have over $500 million of restricted and unrestricted cash on hand, approximately $2.4 billion of [ BTC holdings ] based on a Bitcoin price of $70,000 per Bitcoin and more than $2 billion of near-term liquidity.

This gives us line of sight to completion -- to complete the transaction in a disciplined way with non-dilutive financing sources that we have available to us. At a high level, this transaction is expected to be immediately additive to EBITDA upon closing and will provide stable free cash flow that we expect will help support the build-out of our AI/HPC platform without relying entirely on external capital.

With that, I'll turn it back to Fred. Fred?

Thank you. Yes, thank you, Salman. So with that, we believe this transaction will give MARA a scaled power advantage platform, immediate durable cash flows and a clear path to build one of the leading digital infrastructure campuses in the market.

It will strengthen our ability to maximize the value of every megawatt we control, which remains our guiding direction strategically. We're excited about what this enables for MARA, our shareholders and all our stakeholders.

And with that, operator, we're ready to open the line for questions.

[Operator Instructions] Our first questions come from the line of Brett Knoblauch with Cantor Fitzgerald.

Congrats on this transaction. It's awesome to see. Curious with the initial 505 CCGT. How much of that is contracted to third-party or a grid? Or can you use, I guess, for captive use for your own data center build? And is there any regulatory process you have to go through in order to use that for a data center? Or can you just maybe just walk us through how that would work?

Yes. Why don't we have Duncan do that for you. He has the detail of his fingertips.

Yes. And thanks. Great point. I think the current plant just is at -- operating at a 485-megawatt interconnect. So they're selling that power into the grid, and it's about 76% hedged under a financial swap. And that power is incredibly valuable to Salman's earlier points about operating cash flow.

And we don't currently intend on taking that behind the meter for projects. And we also believe that the line of sight for grid expansions and other on-site power give us plenty of growth paths for AI and critical IT.

So the 505, we're going to keep as effectively just kind of selling energy and then kind of just use this one combined campus to co-locate your Hannibal data center with Long Ridge Energy. Is that the plan?

Yes.

Awesome. And then the other capacity, I think you noted Long Energy has in PJM. How does -- are you acquiring those assets as well? Or do they just have rights...

We already have 200-megawatt load interconnect at the site, which makes it such a strategic bolt-on. And this acquisition gives us also the land to deliver the campus. And so really unlocks a lot of the potential across our existing portfolio.

And then in process, we already have permits and line of sight to another 200 megawatts of grid capacity there. And then the Long Ridge team also has permits in process and all the necessary supply for another 200 megawatts of on-site generation. So all of that's expected to be delivered at the latest by 2030 and -- but it's anchored with our existing already operational 200 megawatts of capacity.

Our next questions come from the line of Jason Mandel with RBC Capital Markets.

Congratulations. I was wondering if you could just clarify, I think on Slide #13, just to be clear, I think as I understand it, the debt that's being repaid as part of this is the existing term loan that exists in Long Ridge and then the bonds remain outstanding. And then the financing that's potentially being done regarding the Bitcoin that would essentially sit outside of Long Ridge and be part of MARA secured financing on Bitcoin. Is that all accurate?

The way to view this is that the existing debt stays with the -- which is asset-backed debt, the senior secured notes, the term loans. And then we have a backstop as we get to the closing. Obviously, we -- this is an announcement today for the signing of the transaction as we go towards the closing, there are a couple of steps before we get there.

So as a backstop, we have $785 million secured through a backstop with Barclays. And then the rest of the equity check that comes from a non-dilutive source, as I mentioned earlier, we have option to do financing against Bitcoin. Our thesis around Bitcoin remains bullish from a long-term perspective. And we -- from a capital stack standpoint, we are in lots of gratitude that we are in a position where we can use nondilutive sources as an option to finance against Bitcoin as an example.

Okay. And maybe just one quick clarification point. I take a quick spin through the purchase agreement. And it does, if I'm not mistaken, appear that there's a requirement to deliver a payoff letter of the term loan, but it sounds like you're saying the term loan remains outstanding. Just to help clarify.

Yes. The term loan will be repaid at close, and we have the incremental bridge from Barclays to both handle that, but then also to reflect any available for incremental capacity beyond the existing bonds and CanAm loan that are on the facility.

Our next questions are coming from the line of Michael Donovan with Compass Point.

Duncan and Rob, congrats on this deal. Just wanted to get clarification on the build-out for AI workloads. So would Hannibal be converted over to HPC? Or would you first work on the initial 200-megawatt grid expansion?

The first target is going to be Hannibal, of course, because that's ready to go from an interconnect perspective and load perspective. So that's the first target. And as you know, these campuses are done in phases typically. If you're looking at, say, 200 plus an additional 200, that first 200 phase may take 24 months potentially to build.

And as that's being done, the second 200 megawatts will become available and then you roll into the second phase of the campus to build the additional buildings for that part. So what we really love about this is, a, we have capacity we can directly apply today for use for AI/HPC, which is why we already have tenants looking at it. And we really just had to wait until we could announce the deal to say we actually had the additional land capacity under control. And now that we've done that, these conversations will advance fairly quickly, we're certain.

But this unique combination of grid attached power with an opportunity down the road to have behind the meter potentially and all this land in this one location just make it such an attractive opportunity. And we think that obviously, the fact that it's already cash flowing is very additive for MARA's shareholders as well. So we think this is a win all around, and we're super excited about it.

Appreciate that, Fred. Now can you talk more about the inbounds you're receiving in terms of the types of AI workloads? I know in the past, you mentioned sovereign and enterprise HPC. Can you get a little bit more color there?

Duncan, do you want to handle that?

Yes. And I think that the thing that I would start with on that, just to qualify, we have no preconceived notions about the workloads that a lot of the customers expect to run the site. And I think that we've had interest from AI workloads and critical IT workloads equally, especially given where the site is located and really a premier market.

It really opens the alternatives for both cloud and -- or traditional workloads and AI and inference at this site. So we've had really a diverse inbound of potential customers and tenants that I think has been one of the things that's given us such conviction to really move on something like this. But of course, you can't lease what you don't own. So that's one of the main reasons to do this transaction, highly strategic in that way.

And then -- but it's been -- it's been a fantastic time working with the site through the -- with our partnership with Starwood, getting it perfected for leasing. And just to be directly clear to your question, we've received inbound interest from both the investment-grade hyperscale tenants that you would expect to see from some of the larger deals and then also the kind of the neo-clubs with shadow investment grade or other alternatives too. So it's been a comprehensive view of demand.

That's helpful, Duncan. One final question, if I may. On Long Ridge Energy's adjusted EBITDA estimates based on 2H '25 results, is there a degree of seasonality here?

Yes, there is always, especially in this area. But the key thing to keep in mind is the vertically integrated and owned gas supply. And then also the fact that 76% of the capacity is hedged eliminate that a little bit. I would -- I think that, that gives us so far tracking north and strongly versus the last year's numbers, but the seasonality there is largely moderated by the vertically integrated benefits of the plants and the fact that it's hedged.

We have reached the end of our question-and-answer session. I would now like to turn the floor back over to Robert Samuels for any closing comments.

Thanks, operator, and thank you, everyone, for joining us this morning. We look forward to speaking with everyone again soon.

Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. Please disconnect your lines at this time, and enjoy the rest of your day.

Greetings, and welcome to MARA 4Q '25 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Robert Samuels, VP Investor Relations. Thank you, Robert. You may begin.

Thank you, operator. Good afternoon, everyone, and welcome to MARA's Fourth Quarter and Fiscal Year 2025 Earnings Call. Thank you joining us today. With me on today's call are our Chairman and Chief Executive Officer, Fred Thiel; and our Chief Financial Officer, Salman Khan.

Today's call includes forward-looking statements, including those about our growth plans, liquidity and financial performance. These involve risks and uncertainties, and actual results may differ materially. We disclaim any obligation to update these statements, except as required by law. For more details, see the Risk Factors section of our latest 10-K and other SEC filings.

We also reference non-GAAP financial measures like adjusted EBITDA and return on capital employed, which we believe are important indicators of MARA's operating performance. because they exclude certain items that we do not believe directly reflect our core operations. Please see our earnings release for reconciliations to the most comparable GAAP measures. We hope you've had the chance to read our shareholder letter and look forward to your back.

We'll begin with some brief prepared remarks from Fred and Salman. After their comments, we will open the call to Q&A.

I'm going to turn the call over to Fred to kick things off. Fred?

Good afternoon, everyone, and thank you for joining us. Before we get into the results for the quarter, we're excited to discuss our just announced strategic partnership with Starwood Digital Ventures, the data center development platform of Starwood Capital Group and one of the premier data center developers and operators in the world. This joint venture accelerates MARA's expansion into AI and high-performance compute and represents a meaningful step forward in the evolution of our platform from a pure-play Bitcoin miner into an energy and digital infrastructure company.

Alongside other actions we have taken, including closing our investment in Exaion, we are strategically positioning our platform to support a broad range of AI deployment requirements from large-scale cloud environments, to private enterprise and sovereign deployments, where AI inference operates closer to its contextual data with reduced latency constraints and enhanced operational control.

Through our partnership, MARA and Starwood will jointly develop, finance and operate next-generation digital infrastructure capable of meeting growing demand from enterprise hyperscale and AI customers across MARA's existing power rich portfolio. MARA will contribute dedicated energy, advanced data center sites, while Starwood Digital Ventures will lead, design, development, tenant sourcing, construction and facility operation with Starwood providing investment expertise to support enhanced project level economics.

We have the option to retain up to 50% ownership in the joint venture positioning us to participate in future cash flows while capturing long-term value creation. The joint platform is expected to deliver more than 1 gigawatt of near-term IT capacity with a pathway to more than 2.5 gigawatts. This JV structure accomplishes several things at once. It accelerates speed to market and introduces institutional grade development and tenant relationships. Importantly, it also allows us to leverage the wealth of power capacity embedded in our existing energized sites in the near term. These assets were built around power and hyperscale cloud remains the fastest path to monetization that power at scale today. At the same time, the structure allows us to continue mining through a lease arrangement while accessing excess power at preferred prices during lower hyperscale utilization. That flexibility improves economics and smooths load across the site.

Now let me address directly why we chose to partner with Starwood. Enterprise, hyperscale and AI customers are inherently risk averse when selecting infrastructure partners. They require certainty of execution deep development expertise, balance sheet credibility and a proven track record of delivering mission-critical facilities on time and on specification. While MARA brings the power, the sites and the operational expertise, Hyperscalers typically do not award large-scale AI workloads to first-time developers without institutional backing.

Partnering with Starwood ensures that we're not asking customers to take that risk. Starwood has decades of experience as a real estate asset investor and developer established long-term relationships with hyperscalers and enterprise customers. and a proven ability to finance and deliver complex data center projects globally by aligning with an experienced tenant first developer we expect to increase execution certainty and accelerate our ability to secure institutional grade tendency. This is about optimizing probability of success and compressing time lines, not simply proving we can build stuff alone. Demand signals are already strong. MARA and Starwood have been engaged in at discussions with hyperscalers and leading HPC tenants reflecting meaningful early interest in Power Advantaged AI read capacity across our sites.

In parallel, design, permitting and commercial leasing processes are well underway, with applications submitted in electric markets to support accelerated delivery time lines. In other words, while we are formally announcing this partnership today, we are already well down the path towards securing a [indiscernible].

We also announced that we closed our investment in Exaion, acquiring a 64% stake and expanding our enterprise-grade AI and HPC capabilities. Through Exaion, we can deliver Infrastructure-as-a-Service and edge inference solutions for large energy and industrial customers, particularly in environments where requirements around data locality, latency and operational control how compute is deployed.

Importantly, Exaion fits in a broader international strategy Building on our proven success in the UAE and the recent launch of our pilot site in Oman, we are accelerating conversations with energy majors in France regarding global opportunities, including in Brazil as well as domestic energy producers in Saudi Arabia. These initiatives are all part of a deliberate strategy to expand our global footprint across energy-rich regions, where access to reliable, scalable power supports long-term infrastructure development.

Starwood [indiscernible] complementary elements of the same strategy, where Starwood partnership accelerates our ability to serve hyperscale cloud customers. Exaion strengthens our ability to deploy private enterprise and sovereign cloud environments. This is especially important in international markets where Exaion already operates data center infrastructure and provides a foundation for sovereign grade AI and high-performance compute deployments. Together, Starwood and Exaion give MARA multiple proven pathways to deploy the same assets, power sites and infrastructure in ways that maximize long-term value as demand evolves.

Now I'd like to take a step back and put this strategy in context. Jensen Huang said something on NVIDIA's earnings call last night that captures exactly what we are building towards. He said simply, compute equals revenues. His point was that in this new AI economy, the ability to generate tokens to run inference is the direct input to revenue growth for every enterprise and hyperscale customers in the world. That compute requires power. Power is the scarce input, and that is precisely what MARA controls. Our sites were originally developed to mine Bitcoin efficiently, but they were built around power.

As we continue this transition and as demand for AI and HPC at our sites accelerates, the economics of our sites will increasingly reflect long-term infrastructure characteristics. When the site supports contracted AI or HPC workloads, the underlying drivers of value shift, cash flows become longer duration and more predictable, execution risk is reduced and the operating profile increasingly resembles infrastructure rather than pure compute. We believe the same underlying assets can support different economic outcomes depending on how they are deployed. That is why optionality matters.

Bitcoin mining allows us to monetize power immediately and flexibly while AI and HPC workloads and when demand supports them, monetize that same power through longer-term contracts and higher-value use cases. Our responsibility is to allocate capital where the return profile justifies conversion and to manage our sites in a way that maximizes long-term value across market cycles.

This quarter, we've also advanced our strategy in other important ways. We increased our Nebraska footprint through the recent acquisition of a 42-megawatt data center adjacent to an existing site, expanding the campus by approximately 40%. With below-market power rates, this lowers our average cost to mine while strengthening operational efficiency. That same site also provides option value for AI and HPC workloads over time.

Lastly, we doubled our NGON gas to power operations from 25 megawatts to 50 megawatts during previously flared gas into some of our lowest cost mining power. Given the recent decline in Bitcoin price and considering the potentially accretive impact of the Starwood JV, we are adopting a capital allocation priority to focus on the highest-value near-term opportunities. While we are continuing to advance discussions with MPLX regarding development of integrated power and data campuses in West Texas. This is a longer-term project with significant capital expenses. The scope under consideration has evolved from the initial letter of intent, and we remain engaged in evaluating a transaction structure that aligns with our capital allocation priorities.

All of this is designed to expand margins and be accretive to NOI over time. Now Bitcoin remains a core pillar of our strategy. Despite a proven sell-off and continued volatility and we increased energized cash rate from 53.2 ex a hash to 66.4 has during 2025. We deliberately chose not to pursue projects that failed to meet our return thresholds. Capital discipline remains central. Historically, we retained the majority of the Bitcoin we mined as the long-term strategic assets.

Beginning in the second half of 2025, we began selectively monetizing Bitcoin to support operations. Given recent weakness and volatility in Bitcoin price, we have -- that have impacted both sector sentiment and elements of our trading performance, believe maintaining flexible -- sorry, financial flexibility is particularly important.

Looking ahead, we expect to continue taking an opportunistic approach using Bitcoin to enhance financial flexibility where appropriate. As always, these decisions will be guided by market conditions, and our capital allocation priorities with a clear focus on strengthening the balance sheet and enhancing long-term shareholder value. While the timing of a recovery in Bitcoin prices is difficult to predict, our long-term conviction in the asset class remains unchanged.

Let me close with this. MARA is no longer simply a Bitcoin miner. We are already well down the path of building an energy-dominant digital infrastructure platform. Starwood accelerates hyperscale development, Exaion strengthens our enterprise AI layer. Digital infrastructure and Bitcoin mining provide the economic engine and power ownership provides a strategic advantage. Every decision we make is guided by one principle to maximize the long-term value of every megawatt we control. We believe this strategy positions MARA to deliver durable, compounding shareholder returns.

I'll now turn it over to Salman to discuss Q4 financials.

Thank you, Fred. I'd like to begin by highlighting the strategic and financial significance of our partnership with Starwood Digital Ventures, a global leader in data center development and operations, as Fred mentioned earlier. From a financial perspective, we expect this joint venture to generate meaningful net operating income or NOI and free cash flow over time by reducing earnings volatility relative to a pure Bitcoin mining model. Importantly, partnering with Starwood enhances our access to institutional investment-grade capital as we jointly develop and finance utility scale AI and HPC infrastructure across our power advantage portfolio.

With a pathway to more than 2.5 gigawatts of potential capacity that could be allocated to AI HBC over time, we believe this partnership will materially improve MARA's long-term NOI profile, cash flow visibility and overall valuation framework for our business. We are also pleased to have completed our acquisition of a majority stake in Exaion which we expect will further diversify revenue as it expands its sovereign cloud and enterprise AI compute offerings. Together, these initiatives reflect this strategy focused on expanding free cash flow generation and driving long-term shareholder returns.

During the quarter, Bitcoin price volatility was the defining market force. Bitcoin began the period at roughly $111,000 and reached a new all-time high near $125,000 in early October. However, an overnight liquidation event compounded by broader negative market sentiment drove a sharp reversal with prices falling to roughly $87,000 by quarter end. This nearly $40,000 swing created one of the most challenging macro environments we have faced in recent periods and served as a significant headwind to our financial performance. Against this backdrop of falling Bitcoin price, global hash rate increased modestly as miners remain disciplined and cautious in deploying additional capacity amid the volatility.

Now let me give an overview of our key financial results and operational highlights which are still quite sensitive to fluctuations in the price of Bitcoin as well as the total network hash rate, which affects the total amount of Bitcoin you mine. For example, every $10,000 change in the price of Bitcoin results in approximately a $538 million change in the value of our Bitcoin holdings.

Revenues in the fourth quarter were $202.3 million compared to $214.4 million in the fourth quarter of 2024. For 2025, revenues grew 38% to $907.1 million from $656.4 million in 2024. Although Bitcoin's average price increased year-over-year, contributing $24.8 million to our 2025 results. Production volumes were lower throughout the year. We mined an average of 21.9 Bitcoin a day in Q4 compared to 27.1 Bitcoin point in Q4 2024, resulting in approximately 481 less Bitcoin mine this quarter.

Q4 marked exceptional operational performance across our core owned mining sites with several operating at or near 100% uptime. The decline in production, however, was primarily driven by higher network difficulty level due to rising total network hash rate. While we had the opportunity to deploy additional exahash more aggressively, we chose to remain disciplined and measured in our expansion given broader market uncertainty.

Despite the increasingly competitive operating environment, we continue to grow both our compute capacity in Bitcoin Holdings. Between Q4 2024 and Q4 of 2025, our Bitcoin holdings increased by over 20%, growing from approximately 44,000 Bitcoin to nearly 54,000 Bitcoin. Over the same period, our energized cash rate increased 25% from 53.2 exahash to 66.4 exahash. We reported a net loss of $1.7 billion or $4.52 negative per diluted share last quarter compared to net income of $528.3 million or $1.24 per diluted share in the fourth quarter of 2024. It's important to note of this net loss for the fourth quarter 2025. But due to the decline in the price of Bitcoin, we booked a [ $1.5 billion loss or $1.5 billion loss ], which was due to a change in fair value of digital assets, including Bitcoin receivable.

For the full year, we recorded a net loss of $1.3 billion compared to net income of $541 million in the prior year period. During the quarter, we also recorded a non-cash goodwill impairment charge of $82.8 million following our annual impairment review. This change is entirely non-cash and had no impact on liquidity, operating performance or cash flows.

On the cost side, our cost per kilowatt hour for our own sites were $0.04 in 2025. Our purchased energy cost per Bitcoin for the quarter was $48,611 compared to $31,608 in Q4 of 2024. Importantly, our daily cost per petahash per day improved 4% year-over-year to $30.5 from $31.7 in the fourth quarter last year and over the past 11 quarters has improved by 36%. We believe this remains among the lowest at scale in the sector.

MARA is the one of the largest corporate public holder of Bitcoin, and we actively generate returns on our holdings. The Bitcoin on our balance sheet strengthens our debt profile, reinforces resilience and provides flexibility to pursue disciplined growth opportunities when they arise. I would like to remind everyone that we are not a digital asset treasury company. MARA is an operating company, not a passive Bitcoin balance sheet vehicle.

During the quarter, we mined 2,011 Bitcoin and purchased an additional 1,670 as part of our trading strategy. As part of our digital asset management strategy, we aim to deploy Bitcoin holders through risk-optimized trading initiatives, lending arrangements and collateralized borrowings under credit facilities. As of December 31, 2025, we held a total of 53,822 Bitcoin, an increase of 8,929 over the previous year. Of the total 15,315 Bitcoin were [indiscernible] actively managed or pledged as collateral.

9,377 Bitcoin coins were known to counterparties, generating approximately $32.1 million of interest income during the year. We also pledged 5,938 Bitcoin to access financing, supporting liquidity while minimizing dilution. In total, approximately 28% of our total holdings were activated through our digital asset management strategy as of the year-end.

Now let's turn to our balance sheet. I want to address our debt maturity profile. $925 million notes due 2031 and $1 billion notes due 2030 have a [ clip right ] exercisable on June 4, 2027 and December 1, 2027, respectively. These represent a meaningful cash obligation that could come due in 2027, and we are proactively planning for that scenario today. I want to be clear about how we think about managing these obligations.

First, our Bitcoin holdings at current market price represent approximately 2x of these puts. Second, the [ 0 coupon ] structure on the vast majority of our notes means we have no material ongoing cash interest burden related to these notes eroding our liquidity between now and those [indiscernible]. Third, we have a history of prudent balance sheet management with our previous converts. The path we are building through the Starwood JV and our infrastructure transition is specifically designed to generate contracted cash flows that diversify our liquidity resources -- excuse me, liquidity sources beyond Bitcoin and load. We are not managing this balance sheet reactively. We are managing it with full visibility into every obligation on the horizon.

Now historically, we held the Bitcoin we produced as a long-term investment. In the second half of 2025, we began selling Bitcoin to fund operations. In 2026, we expect to continue to monetize Bitcoins opportunistically to enhance our financial flexibility, including to provide liquidity or to fund capital projects and other initiatives that we believe enhance long-term shareholder value. subject to market conditions and our capital allocation priorities. In response to the more volatile pricing environment, we elected to suspend news of our ATM at the end of third quarter of last year and instead funded operations through the sale of a portion of our mine Bitcoin.

Notably, Q4 marked the first quarter since 2022 that we did not utilize our ATM program. By shifting to operational funding through Bitcoin sales from production, we strengthened near-term cash flow while maintaining a disciplined and flexible balance sheet strategy.

With that, I will turn it over to the operator to open it up for questions. Operator?

[Operator Instructions] First question comes from the line of Paul Golding with Macquarie Capital.

Congrats on the partnership announcement. I wanted to ask Fred, you noted that the partnership gives you the opportunity to retain a 50% stake in these projects. Could you give some more color around the financing dynamics around the 50%, whether there's an opportunity to contribute the powered site in exchange for other forms of consideration outside of the JV? Or what you meant by that comment in a bit more detail.

And then as a follow-up, you also made a comment around -- it seems like load balancing across mining and HPC at certain sites that are part of this partnership going forward. Could you speak to the technical requirements of that and how we can think about mining versus HPC as you progress with this partnership?

Sure. So thank you for your question. When you look at the JV structure, essentially our initial contribution to the JV to each specific -- for each specific site would be the asset itself. And then additionally, we would capitalize a share of the -- we would provide capital for our share of the development costs. where we could retain up to 50% of the JV. And hopefully, that clarifies that part of it. There are mechanisms within the agreement that allow us to essentially decide not to fund our portion and [ there are ] methods within the agreement that allow us to essentially be liquidated, if you would, at an attractive prices or option or the -- if we don't fulfill our obligations and we decide to drop out, if you would. And I think we can provide more detail on that later.

The key thing regarding load balancing is a combination of technologies that we've developed by leveraging special battery technology. We've announced previously a partnership with TAE batteries, which is a very advanced battery technology that can switch at subsecond rates such that we are able to essentially balance load within data centers. If you think about the data center development project, our ability to be able to retain Bitcoin mining at the site while the project is being developed and then even retain a portion of the power at the option of the tenant allows us to act as a load balancer.

Depending on the type of compute load that's executed at the site, there may be for example in the case of inference loads, a variation in that load over the course of a 24-hour period or even over a period of a week, where the inference demands on that site may decrease at night, for example, or over weekends. And having Bitcoin mining at the site allows us to, again, based on the arrangement with the tenant mine whenever power is available that isn't being used at preferential prices. Hopefully, that answers your question.

It does. And maybe just as a quick follow-up, at those sites would the partnership then benefit from any revenue generated from the Bitcoin mining that happens when the load balancing is occurring? Or is that something that would be retained entirely by MARA?

Yes, it's primarily by MARA.

Our next question comes from the line of Reginald Smith with JPMorgan. .

Congrats on the announcement as well. I guess you guys are the last major Bitcoin miner to make the switch, so I guess, welcome to the party. Question, you mentioned Starwood and the fact that having a partner, you're not going at it alone. And obviously, using other Bitcoin miners spine deals. So my question is, should we expect the time to sign a deal to be shorter because just Starwood, along with you, does that alleviate some of the risk and maybe collapse the time line? And then I have one follow-up.

Yes. I think as I said in my opening remarks, this isn't a relationship that just starts with the signing of this agreement. It's been developing for quite some time. And we've been very actively working with prospective tenants. As I mentioned, the permits have been submitted already for some sites. And we are actively engaged with tenants. And the idea with working with Starwood was, again, many fold.

On the one hand, having a partner who has relationships with the tenants and that the tenants already trust, if you think about Starwood, they have built and operated sites for, I believe, 3 of the 4 Tier 1 hyperscalers. And having those relationships and the trust that exists because those relationships dramatically reduces let's just say, the courtship period that a newcomer to the market like ourselves would have to do. And so because of that trust it's easy for Starwood and prospective tenants to have a very accelerated time line on the process of evaluating a site, submitting permits, getting things going such that we can work towards getting leases done in a more accelerated fashion than if we had done it ourselves.

Additionally, Starwood's captive EPC capabilities again, dramatically facilitate the ability to build and execute these things in a very efficient and timely manner. The single biggest challenge today for hyperscalers is the ability to have certainty about power availability. And Bitcoin miners provide a lot of certainty because of the fact that we're currently consuming the power. One of the advantages with some of what we've done also is that we have been already operating inference on one of our sites in a containerized fashion. And if a tenant were to be interested in a modular approach versus a traditional box approach, if you would, of building a large building, especially for inference applications.

And just as a reminder, Jensen Huang in his comments that inferences where the revenue is in AI and inference is becoming the most important part of AI deployments today. And we believe that we're going to see a lot of advancement in the side of how these sites are designed, how these sites are constructed, which will align very well with the experience that we've previously developed in this area.

That makes sense. We've historically told clients and investors that take 9 to 12 months for a deal to sign, but it sounds like you guys are on an accelerated time line.

And second question, it sounds like you're putting the MPLX deal on the back burner for now. My question is, are you still in the market for sites that are already powered or have been approved? Is that something that would also be more of a longer-term investment or we view those types of opportunities. So a site in some other city in Texas like would that be something that you may pursue now? Or is that also something that would be viewed as less immediate and probably on the back burner?

No. So you have to look at what the market needs are today. If we're talking about power that will be available after 2030, there's not an aggressive demand for that capacity. The hyperscalers themselves have many efforts around developing sites, building their own energy generation for that time period, that is 4-plus years out from now. What they desperately need now is power that's available today where they can quickly get a site permitted, build and deploy and be turned on in a short time as possible. So we're prioritizing the ability to deploy capital where we can most readily convert it into those types of opportunities. So yes, we are still pursuing sites both domestically and internationally.

As we mentioned in our prepared remarks, we have spent a lot of time working with large French energy majors who are global leaders in energy, especially in the U.S., Latin America and the Middle East. And we're actively engaged to develop sites over time with those partners in regions of the world where we believe it will be very attractive to develop sites that have the ability to be used maybe initially for Bitcoin mining and then convert it over time into HPC AI or other enterprise workloads.

Our next question comes from the line of Greg Lewis with BTIG.

Fred, I did want to touch a little on -- you've been kind of alluding to the fact that this has been ongoing and we've been kind of building towards this for a while. I can appreciate it. That being said, there's definitely probably still some work to do to get the pen of the paper. But as we kind of look across your own portfolio, obviously, you have the nice presence in Texas, or Ohio, [indiscernible]. I mean you've e's presence across the mid part of the United States. Are there any areas that are kind of gaining more interest as you and Starwood continue to look out to look to kind of onboard that first customer?

I think typically, what tenants are looking for is, as I said earlier, the power has turned on. It's easy and fast to build and there's access to Internet and if there's need for [ water, water ] at the site. And a number of our sites fit that profile, obviously. If you look at other locations across the country, it's a question of really triangulating high-speed Internet, always on power and access to water. And all of our peers, ourselves, the [ Neo ] cloud providers and many others are all chasing opportunities around the country.

And obviously, our focus is to initially monetize the sites that we have because the power is already on, if you would. And we don't have to do any building to any greater extent to convert those sites. There may be upgrades to substations, things like that, that have to happen before somebody comes in and starts converting the site building buildings or doing whatever they're going to do for their specific needs. But the goal the fact of the matter is the power is the important thing, right?

Okay, super helpful. And then just realizing probably not as familiar with Starwood Digital Ventures as I'm probably going to [indiscernible], but kind of curious, clearly, they have a presence already in Europe with data centers. You mentioned some of the things you're looking to do. As we think about this relationship going forward, could this be an opportunity for kind of clearly where Marathon already has owned infrastructure that's an easy lift for getting more involved in some of these projects. But as we think about the next, I don't know, maybe not the next 12 months, but the next 3, 4 years, do you see an opportunity for MARA to kind of build with Starwood beyond just what you have is your own infrastructure?

If you mean by our existing infrastructure, absolutely.

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

Congrats on progress here. I'd like to ask on sort of a trays question on the portfolio of data centers today and locations. And I noticed there was a comment in the deck that you have a gig of critical IT available today, that seems to include some of the sites that you're currently in hosting mode. So I was just wondering if you think you can potentially either acquire or run AI data center loads at these other sites that you're currently in hosting arrangements? Or am I reading that wrong?

Yes. I think good question, Chris. I think you have to also not look at those sites, the hosted side so much as while we operate a certain amount of load at existing sites, there is additional capacity available or expansion readily at hand with some of these sites, the substations, for example, are ready for expansion, additional load can be made available. and the name take capacity of the sites and the number of cases is greater than that, which we operate today.

Makes sense. Follow-up question would be just there wasn't a lot of numbers in this relationship presentation. And obviously, it's a huge pivot and exciting development. Just wondering like what kind of size projects are you thinking of in this sort of -- I don't think we're thinking about 200-, 300-, 400-megawatt sites like some of your competitors have. It sounds like it's going to be smaller. I know there's always been some question to the time line, but just thinking about sort of the numbers impact, how much do you expect -- I guess it depends on your ownership, but how much would you expect in the short potty envelope the economics on this joint venture compared to current Bitcoin mining operations at today's prices.

I'm not going to go into the economics today. I think more information about that will become more evident as we actually start speaking more about the specific sites and specific tenants because, obviously, who the tenant is and the economics will vary because of that. But to your question on size and scaling, you could look at a site, for example, like one we have in Texas, which currently operates over 200 megawatts of capacity in that site can be converted directly to a hyperscaler site. So are we looking at doing 40 and 50-megawatt sites? No. We're looking at doing much bigger things.

Okay. Great. And I guess you said that you'd have more detail as you make progress. Is that going to be -- we have to wait for contracts to be signed? Or are you planning on disclosing and presenting more information even before then?

So [ take ] it this way, you have to look at this almost like a real estate development project. It all depends on who the tenant is, what has to get built what the economics of the development costs are going to be, what percentage of the JV we're going to have with that specific project. Again, we will retain up to 50% of projects. or ownership in projects. So -- and then you have to look at, at the end of the day, what the lease rate is going to be. So every project will be different. So -- it's a little hard today to say, "Well, here's the number."

Our next question comes from the line of Kevin Dede with H.C. Wainwright.

Could you offer a little color or deeper color maybe on time lines on these project enhancements with Starwood? When do you think shovel start hitting the ground and when do you think they might actually start running for customers?

So you don't turn a spade until you have a tenant typically signed because that tenant has a specific use for the site. So it's not -- we're not building on spec here, right? We're not doing with some of our peers have done where we're going to build a powered shell and we're going to either fill it with somebody's compute or just build a powered shell and see who comes.

Starwood's expertise is that they've worked with the top tier hyperscalers and they understand what they want and a tenant looks at a site and looks at what can I do to that site to have what I want. They work with Starwood to design, get it permitted and built as opposed to building and hoping somebody will come like some of our peers have done. We are very focused on rapid execution with a lot of certainty. And one of the key reasons we chose Starwood is dramatically increasing certainty of execution and by partnering with somebody as all the relationships that are required on the hyperscaler side, has EPC capability in-house and it has the ability to have very good credit profile to be able to ensure these projects get funded and built.

And I think if you look at -- a key signal will be we have signed a lease for the tenant. And at that point, there's a clock that starts ticking to ensure that permits have been approved and then spades can start digging in the ground. But as I said in my prepared remarks, we have had very fairly advanced conversations with tenants, permits have already been applied for at sites. And our expectation is that this will be an accelerated process and that we will see updates regarding leases in a time period that I think most people will think is pretty accelerated.

Would you mind taking a minute or two to sort through Exaion, it's not absolutely clear exactly how MARA intends to lever that. I little digging, I understand it operates under MARA France, and I think you have 3 board seats of the 8. And I'm kind of scratching my head on how you intend to leverage that deal?

Okay. So Exaion was developed within EDF, which is a French state-owned energy companies operates one of the largest fleets of nuclear reactors in the world as well as huge renewables. I believe they're one of the largest electrical energy producers in the world. Certainly, the greenness with about 70% plus of their energy generation being green between hydroelectric capacity, other renewables and nuclear.

France, especially EDF has huge needs for AI. They have very large needs around private cloud because if you're operating nuclear reactors and you have the plethora of data that's coming off them and you're running AI models to ensure that they're operating up just safely, but you're optimizing how they're running. They did not want that as an outsourced service to a third-party provider. And so they built that competency in-house.

There came a point though where they believed it was better to take in external capital to advance the funding of that team and take what that team had built. And in is, I think today, about 90 people. They have built infrastructure tech stack and systems and services to be able to operate the data centers on behalf of EDF. They also operate a quantum computer in their Montreal facility, for example. And they are a team that has built systems specifically for private sovereign cloud type operations of data centers where you're running inference loads where data security is the absolute top priority, and they today operate 4 data centers, including Tier 4 data center capacity.

With the mix of AI loads traditional CPU load storage. They also have built infrastructure around blockchain. And for example, they provide for a major French bank, the underlying infrastructure that manages stable coin issuance for another French entity also real-world tokenization financial assets. So they have very advanced technologies. This is a group that is primarily engineers and technicians, operators, if you would. And our investment in Exaion will own 64 -- we now own 64% of Exaion. It is really focused on being able to leverage the infrastructure as a service technology, the platforms and service technologies that they've developed and deploy that in data centers around the world.

One thing you have to realize is geopolitically, we live today in a multipolar world. Gone are the days where U.S. companies could dominate the data center operations around the world. Countries do not necessarily want U.S. hyperscalers subject to the Cloud Act to operate in their countries where their sensitive data may be subject to U.S. government control. And this is especially true in Europe. What does that mean? It means that Europe is erecting walls where potentially it will be harder for U.S. hyperscalers to provide the types of services that they provide to enterprises in the U.S. to key strategic enterprises within Europe.

Our investment in Exaion is specifically targeted at 2 things. One, getting the technology platform so that we can deploy highly sophisticated private cloud with full security and data integrity globally in data centers for enterprise customers as well as within France and across Europe, provide private cloud infrastructure and services to leading enterprises where they would prefer not to make that data available to hyperscalers who are subject to the U.S. Cloud Act.

In a way, it's almost a market where there's an advantage to being outside of the U.S. And we are very bullish on the opportunities that Exaion's going to provide us. They know how to service energy majors very well. And we believe that our relationships with the other fringe energy majors will be an advantage there as well as in other countries around the world. And one use for our smaller data centers is specifically as private cloud operations. The vast majority of corporate data today resides not in the public cloud, but in private cloud or behind the firewall of the corporations -- financial services companies, health care companies, drug research companies, defense industries and other strategic industries do not put their data in the public cloud. People will put e-mail, they'll put other general-purpose data, but they will not put their core operating data into the public cloud. And if you want to run AI, it means you have to run it in the private cloud.

We have spent a lot of time leveraging one of our key board members [indiscernible] George, who today runs a large part of the efforts at Mastercard and previously did so at Intel and at Oracle. And we've spent a lot of time to really understand the needs of enterprise customers, not just in the U.S. but internationally and understand where their key pain points are.

When you look at the hyperscalers today, and Jensen Huang said this in his earnings call yesterday, the majority of the inference that's being done by the hyperscalers is in improving their own search products, their own product selection and recommendation engines. And the tools that -- and services, they are already used for selling to customers and improving their advertising basis, Google, for example.

What you're starting to see now is corporations wanting to start deploying vertical AI solutions for example, production optimization, fraud detection, things like that, all of which they're going to run behind their firewalls or in full private cloud. And companies that want to run that are going to need infrastructure. and the infrastructure they're going to need has to have the ability to be fully secured, belly private cloud and ensure that the owner of the data has full control over the data regardless of who operates the data center. And these are the core technologies that Exaion brings us, and we're super excited about this because it really allows us to totally differentiate ourselves from people who are just offering basic services to [ Neo ] clouds or even [ Neo clouds ] themselves because it's a much more sophisticated infrastructure that we believe will generate much more value per megawatt, which again is our core metric and is much stickier.

[indiscernible] that you'll be allowed to take that technology to geographies outside of Europe.

Yes. So we own -- we have majority control of Exaion. You asked a question about the Board seats. There are 8 members of the Board, 3 from EDF, 1 seat is the CEO of Exaion, we have 3 seats and then a French technology entrepreneurs, [indiscernible] has 1 seat. And we're very excited to have him on board because of his background. You guys can do your own research on who he is. He invested personally in MARA France, which is our holding company through which Exaion is owned.

There are no further questions at this time. I'd like to pass the call back over to Robert for any closing remarks.

Thanks, operator, and thank you, everyone, for joining us today. If you do have any questions, that were not and during today's call, please feel free to contact our Investor Relations team at ir.mara.com. Thanks very much, and enjoy the rest of the day.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

Greetings and welcome to MARA's Q3 2025 Earnings Conference Call. [Operator Instructions]. Please note, this conference is being recorded.

I will now turn the conference over to Robert Samuels, VP of Investor Relations. Thank you. You may begin.

Thank you, operator. Good morning, and welcome to Mara's Third Quarter 2025 Earnings Call. Thank you for joining us today.

With me on today's call are our Chairman and Chief Executive Officer, Fred Thiel; and our Chief Financial Officer, Salman Khan.

Today's call includes forward-looking statements, including those about our growth plans, liquidity and financial performance. These involve risks and uncertainties, and actual results may differ materially. We disclaim any obligation to update these statements, except as required by law. For more details, see the Risk Factors section of our latest 10-K and other SEC filings.

We'll also reference non-GAAP financial measures like adjusted EBITDA and return on capital employed, which we believe are important indicators of operating performance because they exclude certain items that we do not believe directly reflect our core operations. Please see our earnings release for reconciliations to the most comparable GAAP measures.

We hope you've had the chance to read our shareholder letter and look forward to your feedback. We'll begin with some brief prepared remarks from Fred and Salman, after their comments, we are going to be conducting an analyst interview with management.

Today's session will be conducted by Reggie Smith, analyst at JPMorgan. And with that out of the way, I'm going to turn the call over to Fred to kick things off. Fred?

Thanks, Rob, and thank you all for joining us. This quarter, we continued to evolve MARA from a pure-play Bitcoin into a vertically integrated digital infrastructure company, one that converts energy into both value and intelligence. At the heart of our strategy is a simple belief, electrons are the new oil, energy is becoming the defining resource of the digital economy, powering everything from Bitcoin mining to artificial intelligence. And we believe those who control abundant, low-cost energy will shape the future of both finance and intelligence.

Bitcoin has now entered its institutional phase. We're seeing financial leaders such as BlackRock, Citi Corp and now even JPMorgan integrating Bitcoin into traditional frameworks. And we're seeing the establishment of strategic Bitcoin reserves by corporations and governments alike and even the -- Treasury has posted positive notes of up Bitcoin on X.

What miners have always understood is now being recognized by global markets, Bitcoin has Digital Energy, a mechanism for story and transmitting value. As one of the largest bitcoin miners in the world, MARA sits at the center of this shift. Our NP value infrastructure allows us to convert raw power directly to Bitcoin that we hold on our balance sheet, a distinct advantage that grounds our broader mission, transforming energy into intelligence.

Every electron has potential value and artificial intelligence represents the next frontier events of the transformation of energy into even higher value. We believe that inference AI with the value of AI is actually created and drive and not treating in foundational models is where the industry will create the greatest amount of value over time.

Every insight produced by an AI model has a cost per token, driven by the cost to build and operate the data center, of which the energy cost ticks up a major component. Over time, compute and the cost to build the data center will drop as technology advances such as HODL ASICs open-source models and the ability to operate in less sophisticated and less costly data centers drive efficiencies resulting in rapidly declining drops in cost per token, making the AI data today unable to compete on cost per token over time about significant technology refreshes, requiring even more and higher capital injections.

We believe energy not compute really becomes the primary constraint on AI growth. We are already seeing the alternatives to GPUs enter the market and open source AI is making it far easier and much less expensive for companies to deploy advanced AI systems directly in their own private cloud environment.

In the past, most models were only available through public cloud APIs. That meant enterprises had to send data offsite and pay high per token fees to access AI capabilities. But today, many of the world's most capable models like LAMA straw and others are available in open source form, giving companies full control to run AI more cost efficiently and fine-tune their models privately.

This is a major inflection point for enterprise computing and the shift that plays directly to our strength as we build out low-cost, high-efficiency compute powered by our own energy infrastructure. we believe we're positioned to provide the kind of private, scalable environment enterprises need to deploy these open models securely.

MARA has positioned itself at the nexus of these 2 AI trends, open-source AI expanding the addressable market for private cloud compute. We believe that the future in structure will be able to serve that demand efficiently and profitably. This is where MARA's expertise in securing and operating low-cost power gives us a distinct advantage. Just as we optimize for the lowest cost per petahash and mining, we're now optimizing for the lowest cost per token in AI inference.

Our long-term vision is to integrate these 2 energy pathways, Bitcoin and AI into a single platform. Bitcoin mining monetizes underutilized energy and stabilize grids, while AI inference transforms that same energy into intelligence and productivity. By bringing Bitcoin and AI together, we seek to maximize the value of every megawatt hour we manage.

We've already begun executing on this strategy. This quarter, we installed our first AI inference rack at our Grand Berry site within a modular nonwater-cooled containerized data center. This site currently has 300 megawatts of nameplate capacity with potential opportunities to expand our growing AI inference business in combination with our Bitcoin mining operations at the site.

This milestone marks a significant step forward in proving out our AI infrastructure and next-generation interim hypothesis. It also demonstrates the versatility of our platform, underscoring the potential flexibility of our mining sites to support AI workloads along with Bitcoin mining.

Two major initiatives this quarter are propelling our strategy going forward. First, our pending acquisition of Exaion, a subsidiary of EDF in France. Once regulatory approvals are completed and closing conditions have been met, Exaion will expand our capabilities through enterprise-grade, AI-optimized private cloud and HPC infrastructure. We believe this will position MARA as a credible -- for enterprises seeking secure localized inference capacity.

Second, today, we announced an initiative with MPLX, a separately traded public company formed by Marathon Petroleum Corporation the largest petroleum refinery operator in the United States to develop and operate multiple integrated power generation facilities and state-of-the-art data center campuses in West Texas.

Under this initiative, MPLX will provide long-term access to lower-cost natural gas at scale where Mara will develop and operate on-site power generation and compute infrastructure. The initial capacity is expected to reach 400 megawatts with the option to expand to up to 1.5 gigawatts across 3 plant sites. We are also evaluating additional prospective sites to support modular AI and HPC data centers alongside mining operations, creating optionality future AI inference workloads. MARA's approach is to deploy smaller modular facilities directly at lower-cost power sites instead of building hyperscaler campuses. We believe this distributed model will enable us to capture value at the inference layer while continuing to monetize mining and grid sales. This modular structure also gives more the optionality to shift capacity towards HPC over time. As an -- economics and infrastructure maturity support greater AI utilization.

We believe MARA is positioned to capitalize on a key structural advantage as power becomes the primary key strength in AI growth. Together, Exaion and MPLX connect the 2 sides of our AI and data center business, energy and compute and strengthen our ability to control both cost and performance from power to inference. Internationally, we're deepening relationships across Europe and the Middle East, where we see significant opportunity to deploy our integrated energy and compute model.

Our pending Exaion acquisition exemplifies us, and we're honored to welcome Gerard Mestrallet, President Macron Special Energy Envoy, as an adviser tomorrow. His expertise strengthens our global strategy as we pursue our goal driving 50% of revenue from international operations by 2028.

On the financial front, we continue to operate with discipline and transparency. We ended the quarter with 52,850 Bitcoin having mined over 2,100 BTC during Q3. We remain focused on improving free cash flow through ongoing cost optimization level efficiency gains and disciplined capital allocation. We have begun opportunistically monetizing Bitcoin from production to fund operating expenses and aim to limit reliance on our ATM to support growth initiatives, helping to mitigate shareholder dilution.

As I spoke about last quarter, Bitcoin prices have consolidated within a range of at least Q2. With intermittent volatility, we view this as a healthy period of equilibrium characterized by institutional inflows into ETF and balanced by long-term holder liquidation activity using [ Dority Visitors ] IPO analogy Bitcoin is going through an IPO where early investors in BCs are exiting and institutional investors are coming in forming a new base and foundation for growth.

Meanwhile, broader macro trends, including rate cuts, and expanding liquidity suggest improving condition for risk assets. Regardless of short-term volatility, our long-term trajectory remains unchanged, building enduring value through energy ownership, operational excellence and strategic execution.

Finally, I want to provide an update on TPIC. While we continue to recognize the long-term potential of 2-phase immersion, Its practical broad application is still a few years out. And directorship cooling remains the preferred COO methodology of data center operators and compute OEMs.

We have exited near-term investment in 2 phase immersion to focus resources on opportunities with a more immediate and higher return potential. In closing, MARA is evolving from a Bitcoin miner into a digital infrastructure leader, combining energy generation, Bitcoin mining and AI compute under 1 scalable platform. Our guiding metric is simple profit per megawatt hour. It measures how effectively we convert energy into value, whether in Bitcoin, AI inference or grid stability. As we continue to execute, we believe the market will increasingly recognize the strength of this diversified model and the strategic importance of energy ownership in the digital economy.

I want to thank our employees for their exceptional work this quarter and our shareholders for their continued support as we build Mara into the world's leading digital energy and infrastructure company.

With that, I'll turn it over to Salman to review the financials.

Thank you, Fred. During the quarter, global hash rate grew by roughly 20%, with the hash rate and network difficulty both hitting new all-time highs by end of the quarter. Bitcoin's price remained relatively range found, trading between $104,000 to $224,000, closing the quarter with a modest $7,000 gain. It was one of the most competitive mining environments in recent times and a difficult backdrop for our performance this quarter.

Despite this, Q3 was the highest revenue and exahash quarter in the company's history. Our focus on operational and financial discipline over the past year is reflected in the substantial growth of our compute capacity and deploying holdings. Between Q3 2024 and 2025, our Bitcoin Holdings expanded by over 98%, growing from approximately 27,000 to nearly 53,000 bitcoin.

Our energized hash rate also expanded, increasing 64% from 36.9% to 60.4 exahash per second. Bitcoin price appreciation resulted in approximately $4.3 billion or 256% increase year-over-year. While Fred spoke to our vision and strategy, our vertical integration and capital allocation strategy is reflective on our financial results.

That balanced execution allowed us to expand our holdings and take advantage of favorable market conditions, while maintaining liquidity and flexibility. We mined 2,144 Bitcoin and purchased an additional 2,257.

The impact on our financials is evident in the results we achieved. Let's dig in. Revenues increased 92% to $252.4 million from $131.6 million in the third quarter of 2024. Bitcoin's average price increased 88% over that time period, which contributed $113.3 million. We mined an average of 23.3 BTC a day throughout Q3 compared to 22.5 BTC in Q3 of 2024 which resulted in 74 more bitcoin mined this quarter.

Our strategy to deploy exahash responsibly resulted in growth of our BTC mine despite a significant growth in global hash rate and with network difficulty levels. We reported a net income of $123.1 million or $0.27 per diluted share last quarter compared to net loss of $124.8 million or negative $0.42 per diluted share in the third quarter of last year.

We also booked a $343.1 million gain on digital assets, including Bitcoin receivable during the third quarter of 2025. The reflecting the positive impact of the Bitcoin holdings on our balance sheet. Now let's talk about our cost structure.

Our purchased energy cost to Bitcoin for the quarter was $39,235, and our daily cost per petahash per day improved 15% year-over-year, which we believe at scale is one of the lowest in the sector. This improvement is directly tied to our growing inventory of owned and operated sites, which now account for approximately 70% of our nameplate megawatt capacity.

That transition supports our vertical integration strategy, but also pays dividends, both financially and operationally. Since we do not control the price of Bitcoin -- mine, minimizing the cost of inputs like energy are critical to the financial resilience and long-term success of the company.

Next, I'll provide some insights into our Bitcoin Buildings and digital asset management strategy. MARA is the second largest corporate public holder of Bitcoin, and we seek to generate returns on our holdings as Bitcoin price appreciates. Our approach combines the potential for long-term discount appreciation with disciplined efforts to generate return while managing risk.

Additionally, we have also used Bitcoin as a collateral to borrow under lines of credit. As of September 30, 2025, we held a total of 52,850 Bitcoin, including 17,357 Bitcoin that per loan actively managed and pledged as collateral.

As such, approximately 1/3 of our total holdings were activated through our digital asset management strategy. In Q3, we issued $1.025 billion or $1.025 billion of 0 coupon convertible notes due 2032, extending our maturity profile and increasing balance sheet optionality.

With additional liquidity, MARA gains strategic flexibility to act on opportunities, whether that's acquiring morbid coin, funding acquisitions balance sheet management or general corporate purposes. We have positioned MARA to act in response to market conditions in order to maximize long-term shareholder value. As of September 30, 2025, we held over $7 billion in liquid assets, giving us the flexibility to fund domestic growth and pursue international expansion.

To streamline our communications starting in Q4, we will share our production on a quarterly basis. Investors can continue to monitor our monthly MARA pool production in real time on the manpool.

As we have stated previously, electrons are the new oil, and we are laying the groundwork for 2026 and beyond. We're executing on a pipeline of energy infrastructure projects both in the U.S. and internationally, and we expect these investments to expand our capabilities while keeping costs low.

With that, I'll turn it over to Reggie Smith from JPMorgan. To begin our management interview. Reggie?

I appreciate you selected me for this call here. obviously very big announcements this morning. I guess kind of help me interpret this morning's announcement versus, I guess, kind of your prior strategy. Like what's being emphasized, deemphasized? Maybe talk about that from the -- like what's the most that you're placing on the business and maybe the lease because there's a lot going on here, certainly relative to the other Bitcoin miners, I know the other guys is either deploying mining or kind of colocation. You guys seem to have a lot more live mobile and maybe talk through those differences.

If you think about the deal we announced today, it's about getting access to low-cost energy that is reliable, available 24/7, because we are the generator, it provides us with a very low cost. If you look into the details of the announcement, you'll see that the pricing on the gas is amongst the lowest in the market.

The other thing is that it gives us now the capacity to add potentially up to 1.5 gigawatts of data center capacity if we want to -- which gives us lots of flexibility. A lot of our Bitcoin mining sites are very attractive to use for inference AI, as we discussed earlier. We talked about what we're doing at Granbury and what we'll be able to do at some of our other sites in a similar fashion where we can blend inference AI in Bitcoin mining.

But the relationship with MPLX and the opportunities it provides give us a much broader canvas that we can paint on, whether that is traditional HPC, like some of our peers have done or whether we want to build it out as hybrid AI, inference AI and Bitcoin mining sites. So it gives us a lot of flexibility. And we believe controlling and owning power is the core part of any company that operates in the digital infrastructure space.

When you look at the spending that's going on. And I think Sachin Ardell said this in a recent podcast that was quoted where he was quoted as saying that compute isn't the constraint, energy is the constraint. And so access to energy, we believe, is critical.

We think inference over the long term is where all the value is going to get created in this space. But we believe that Bitcoin mining has a very important role to play in which is balancing grids, but providing a flexible load when mixed with AI, such that AI can begin to operate in more places than it does today.

And the last thing I'd say is that we believe that the technology curve is going to move so quickly in this space. Because you have to realize that just like in Bitcoin mining, where cost per petahash is the most important metric that drives profitability in the AI business, unless you are in the application layer.

In other words, running -- owning the data and the application that is generating value for the enterprise in health care, owning the health care data, running the actual analysis. The only thing hosting providers and model operators provide our tokens in the sense of we need lowest cost per token if we're going to use that service. And using the APIs when the cloud providers is a very expensive way of running AI and most enterprises today are being confronted with the fact that the cost per token is too high using existing systems, and they want to move to lower-cost systems, and we're going to start seeing that we already are seeing ASIC-based solutions coming open source models, all of which will allow enterprises to build their own and operate their own private cloud or use those services from third parties, allowing them to drive value from AI.

So I think for a lot of the big guys, the challenge is they are doing deals with colocation partners where they are not taking on the debt. The debt is being laid on the joint venture or the SPV related to that colocation facility. And that correlation partners having to deploy a lot of capital to build the sites and equip those sites and you have technology obsolescence over the course of a 10-year lease, you will have to upgrade the hardware in that location. And you have to estimate that in the cost of where it's going to be to build and operate. And I think there's a risk potentially, that $1.4 trillion of data center contracts signed by OpenAI over the -- that will have to be operating in the next 5 years according to what was recently reported in the press, that some of that may not actually be able to come online and generate revenue. So I think our approach is much better, more prudent, certainly much more capital efficient.

And by being at the end of the spectrum where we're vertically integrated and able to operate at lowest cost per token and deliver lowest cost per token, we will have a significant advantage in the marketplace.

And Reggie, just a reminder, we -- today, we control approximately 2 gigawatts of capacity. And this added capacity is incremental to that, that takes us to close to 3.5 gigawatts over a period of time.

Got it. Understood. I'd like -- I appreciate the color there, and I was doing some kind of light math this morning. And when I think about, I guess, kind of AI and HPC, you made a comment in your shareholder letter about the price of power and the price to compute. You made some parallels between Bitcoin mining and HPC. And I was looking at the numbers, and I think they may be a little bit off, but directionally, this is like a fair statement.

When you look at Bitcoin Mining, the price of power and the price of the actual ASICs, you think about depreciating per hour are about the same, like a 1:1 ratio there. For GPUs, that ratio is more like 1 per 10 GPU, some depreciation charge and not really depreciation is super high. So you talked about ASICs and somehow, I guess, driving the cost of the hardware, am I thinking about that right, like what are you seeing and kind of where do you see the role going there?

Just think about it this way. When Bitcoin mining started, we were running CPUs, right? Then we went to GPUs, then we went to FPGAs, then we went to ASICs. And when you look at the amount of compute power, for -- think of it as the number of terahash we could produce for a jewel of energy. It has dramatically changed, so you are now processing many more calculations at much lower cost of energy. And in our business, we depreciate the compute over 3 years.

So if you're a hyperscaler and you're signing a deal for 10 years, some of these are 15 years and the depreciation schedule is 5 years for the machines. Does that mean they're going to have to replace those machines 3 times in that cycle, right? And to your point, GPUs to power is most probably a 10:1 ratio.

And as you get to ASIC, that starts dropping and power starts becoming an even more important component. And when you start looking at the end cost per token, at that point, the model cost also comes into play. And so if you have open source models, if you have low-cost hardware, that's energy efficient, you're operating in data centers that don't cost you $10 million of megawatt to build. You start getting to economics, would start resembling Bitcoin mining overturns.

Understood. Now help me understand this. I want to understand or make sure I'm hearing you correctly. When you think about kind of the investment risk and the CapEx risk within the chain. Obviously, you've got guys that are building data centers, you've got people that are buying like GPUs and hardware and then you say, obviously, you got the model guys as well. I guess your comments on kind of where the CapEx risk is greatest. Are you suggesting that the people that are buying the machines are taking on the most risk? Or do you think there's still substantial risk in building big dissenters. And I ask you that in the context of you guys just, I guess, bought a few GPUs yourself, like help me square all of this together to understand kind of what your view is there?

Right. So part of the question is, are you in the business of being a bare metal shop, right? You're providing essentially hosting and GPUs. Looking at what iron is doing, right? Bare metal, somebody has to load their software on it, but they're renting capacity on GPUs effectively. And that deep cloud as it's called, that case, the owner operator is funding the GP purchases, right?

In the case of a colocation, there are some deals that have been done where the operator is funding the GPUs and there are other deals where the lesser of the space, if you would, is bringing the GPUs, and they are the buyer and operator. So if Microsoft comes and is going to contract with you to just buy capacity from you, they're going to bring the GPU, so far, you would hope at least, and they're taking that risk.

But there are lots of different models out there being operated by people. What we're doing with inference at the edge is much more around providing inference AI, which is not running on GPUs. We're running on ASIC type solutions. And so it's a very -- it's a different model from a hardware cost perspective. It's air cooled that's not liquid cold, for example, which means your infrastructure is much less expensive. You're not having to spend many millions of dollars per megawatt on building infrastructure, specialized cooling infrastructure. And all of that adds up to the economics of what you can do.

But inference is also done at smaller volumes, right? You don't have to do 100-megawatt sites yet. Most of the needs for inference still are quite young. It's early in the market. But if you believe what Gartner and the Analyst Day, over the next 3 to 5 years, the inference will be the primary generator of revenues and value creation within the AI space. So that's where we're swimming.

Understood. You've got to skip around a little bit here. I wanted to talk about Exaion, I think kind of looked back into the broader discussion. But obviously, you guys have enough set of acquisition. Help what they do today? Maybe talk about the scale of their operations, like are they running data centers today? And if so, what's the size of those what do they do exactly?

Yes. Exaion is today until we close a full subsidiary of EGF that operates EDF data centers were all of the data for the nuclear fleet operates in this process. So they run EDF AI and traditional data centers across the EDF enterprise. They have about 4 data centers today, 3 in France, 1 in Canada. They also operate quantum technology in the Canadian data center, which is made available for research purposes, and they have built a whole set of software solutions that allow you to operate the data center, store data in full private mode, meaning the user's data fully encrypted. Exaion doesn't have the keys to that data. And so we're that data center to be broken into, if you say, of somebody were to steal data, the data in the data center is encrypted. So the customer holds the key to that data.

And so it's a way to build private cloud solutions that are fully secure. And so the whole reason for making investment in Exaion is it gives us access to a team and an existing set of data centers that are Tier 3 and Tier 4 already. They know how to operate the most sensitive data, data to protect it. They have existing customers. So they have experience and we are going to leverage their knowledge, their experience, their technology and their platforms to expand what they do on a global basis.

Got it. So they're asset like. They're more of a service layer, they're engineers or software, things like that, like they don't actually own any data centers. It's really running that data center securing data, is that the right way...

Yes.

Understood. Okay. Is there a way to frame it maybe early their revenue run rate? And interestingly, about that transaction, I think the first transaction, you bought them for $168 million. The next 11% will be at a much higher rate. Like what was the thinking there...

I think you can think of how many times deals like this are structured, you're paying for a portion of the business based on where it is today? And then the growth opportunity for the existing investors is in executing on a plan to help grow the business and therefore, you're going to pay a higher multiple for that. That's how you should think...

Okay. Now on the tile. So the MPLX transaction, real quick on that, does it require any like ERCOT approval like these guys have the natural gas, you guys would make the power plant or from the generation assets and the data center but is anything needed from ERCOT? Any road blocks there? And how quickly could you -- data center up in kind of running?

Yes. I think you have to think of it more as the first thing we're doing is building a power generating station, which will be gas-fired power plant. So you have regulatory requirements around air permits, for example, which in the current political environment should not be exceedingly difficult to acquire. We feel fairly confident that we'll be able to get those without much problem.

So once you build a power plant, then because you are not directly bird attached yet you then have to apply to attach to the grid and be a provider to the grid. So there's a regulatory process for that. Meanwhile, you can be producing energy and operating data center fully behind meter. And it's -- ERCOT gets involved when you connect to the grid or the utility stuff. When you connect to the grid.

And the goal here, what's really important to remember about this MPLX relationship is it gives us the ability to own and operate gas-fired power plants with very low cost gas with the ability to colocate large-scale data centers with reliable 24/7 power is a very attractive part of the marketplace. And so it gives us a lot of control to really drive our growth in a very cost-effective way. And I think it positions us very well come what may in this HPC AI market and give us a lot of opportunities. to really operate and continue to generate a lot of value for our shareholders.

No, I agree. It's been thinking about this idea of like vertical integration, and I didn't know if it was going to be a tower company acquiring data center capabilities and the other around. So this is very interesting. If I could dig in a little bit more. So I think you talked about [ 400 ] megawatts of capacity to start. Should we think about like the minimum effective dose kind of get started. So I don't know if you want to commit to 400 megawatts were out the bad, is it at -- megawatts and how quickly can set like this come together? And then I know it's early days, but like we've heard estimates of up to $10 million per megawatt to build out a data center, like what are you thinking about from that perspective as well?

So you don't build a power plant in 20-megawatt increment. You build it right to a certain size at each site. So there are 3 sites will likely think of it in 100-megawatt increments initially, but you have the ability to scale these plants, much larger.

As it relates to the data centers, we have the optionality. We can build these as traditional Bitcoin mining data centers that are fully containerized at somewhere around $1 million including hardware costs for compute. If you then want to look at going the AI route, if we're doing it similar to how we're running the inference AI, we're running today, the actual infrastructure cost is very similar. It may be on a little bit more expensive, depending on the cooling technology, if we use direct-to-chip cooling or we continue to use air cooler. And if you use direct-to-ship cooling, your cost of infrastructure will end up somewhat higher.

But the key is we're not building buildings that take 3 years to build. We're doing these as modular container solutions, which gives us full flexibility to reconfigure a site depending on whatever we want to do at it. And I'm a big believer that you will see very high-performing HPC capable modular solutions on the marketplace within the next 2, 3 years, where you will be able to deploy the same sophisticated solutions you're building in these very sophisticated data centers, where people can run some of the most sophisticated they need to.

Remember, there are not many customers in the world who need data centers of the scale that open AI needs it, right? OpenAI needs a lot of compute capacity because of the breadth of data and the breadth of solutions their models operate.

If you remember what DeepSeek did and how deep sea create the turn in the market, it's because instead operating with a broad foundational model, they only load into memory, specifically the model segments that they need and the data to solve the query, which means you now don't need all of that scale. So what I think will happen in the marketplace is that you're going to have efficiencies and models going to open source, clients developing their own models and training their own models because the clients don't want to give the data to OpenAI.

And I'll give you an example. I was at FI last week in Saudi Arabia, and I was sitting with the Head of Strategy for Aramco on a panel. And they don't put their seismic data in the cloud. They're not going to do that. What do they do? They build their own models. Other companies do the same thing. Look at what Lockheed just did the deal the -- with Google right? It's an on-prem solution. You are not -- I'm not going to put my data up into your cloud, Google. You're going to build a cloud instance on-prem, on my site that is airgap from your systems.

That's what corporations want. They want data sovereignty. They want private cloud. They don't want to run up in Meta's cloud, Amazon's cloud or open AI systems. 70% of corporate days today is still not in the cloud. There's a reason for that. And I think when you look at inference, inference is driving insights from the data that runs your company, right?

If you're in the health care business, doing drug discovery, it's all the patient data, the lab samples, et cetera, all that data you're driving insights from it, right? And if you are doing building airplanes, it's all the design data and the manufacturing data. If you're running a factory, it's the operations data of the factory, right? If you're running a power plant, it's the operations data of that power plant. You don't want to run that off site. You want to actually run it on site because as those systems become mission-critical and actually operate the resources and operate parts of the business, you can't take the risk that you have a system failure that brings your whole business down just because you lose a lead to a cloud or Amazon goes offline like it did the other day.

So I think people really have to understand that there is a limit to what data and how much risk people want to do in putting their core critical assets into a cloud operated by a third-party. And if they can solve the model issue and do it at lower cost, near prem or on-prem in a private environment, they will do it. And I have been speaking with the heads of AI for major corporations in the financial market today, who tell me that they are relocating AI systems out of the cloud back to near-prime on-prem private solutions because it is significantly less expensive to operate than doing it in an Amazon cloud or other places like that.

And I think that the analyst community really needs to do a much better job of talking to the enterprises who are the users, these are the people who are actually going to pay the money that will allow open AI to be successful or not, that will allow Microsoft to be successful or not. You can talk to your blue interface with the people building these things, but it's like building railways. If there isn't passenger traffic and there is any cargo, the rail line fail. So that'd be down on this, but this is an important thing that a lot of people aren't doing. You need to talk to the customers, who's going to pay for this stuff.

And I want to make sure I'm hearing this right and connect these debts. So I think you mentioned kind of a smaller kind of, I think, a 1 megawatt -- what do you call it, I guess, kind of like a sample or a small -- data center. If I'm hearing this right, are you saying that like that could become like the prototype for enterprises having their own on-premise like AI...

Yes. So think of it this way, right. Give you an oil drilling example, right? So you have an exploration drill that's drilling, you have seismic data. Today, you have to plan exactly the drill profile and what some -- what the drill operator is going to do. And so the oil companies have built these very sophisticated AI models that run in a module container typically out on the drilling side that are collecting real-time data from the drill and then feeding back instructions into to the drill master. That's an existing example.

You can go to a trading, a financial trading company. And their whole thing is speeding latency. They want their systems operating on their local network, not on a wide area of connection where there's latency because 25 millisecond delay in a response means they lose the profit on a trade. And so there are -- whether you're looking at defense, which is going to be a huge growing sector when it comes to AI, just look at the amount of AI that's needed to operate in any third of war today.

Look at health care, look at manufacturing and production, look at the movie television industry, the single largest consumer of tokens in AI are video illustrations and audio generation. Those are the systems that consume that these diffusion models are the single largest consumer of tokens.

And so cost per token is very critical to them because if you're going to generate a 5-, 10-, 15-minute clip of video, it takes multiple factors in magnitude, more tokens than asking OpenAI where your feed your lunch today.

And so I think, again, the marketplace gets all hyped up about these big contracts, but they really need to look at who's actually going to use this stuff? What are they going to use it for? What can they afford to pay for it? Will the pricing trends be over time and to use the worn out win rest technology, if you're in our business, you want to be skating to where the puck is going to be, right? You don't want to be chasing the puck. And I think there are a lot of people announcing deals out there getting on the bandwagon to pump their stock when they need to look at what's this industry going to look like in 5 years.

That actually is a -- question, Fred. So thinking about announcements and catalysts like what should we look for from MARA to know that like this strategy is taking form and we can start to frame an economic story or accretive story around some of these initiatives. Like what are the milestones and announcements we should be looking for from you guys?

So here's what I think you should look for. 4 years ago, I made a presentation at a conference where I said that Bitcoin miners are either going to be energy companies or be owned by energy companies. I think what you should look for is when large energy companies start signing partnership agreements with companies like us to monetize their energy assets at large scale. That will tell you that if that happens to be of that they have chosen us to do with because they feel we are the best option for them to maximize the value of the electrons that they produce. That's 1 step.

The next step is as you start seeing customers using more and more inference AI. And you see us reporting a greater and greater mix of inference AI in our data centers. And the real metric you should look for is what is our profit per megawatt hour that we talk about. It's not a GAAP measure. So it's not going to be reported that way, but you can think of it as an operational KPI where the profit we can generate from every megawatt hour of energy that we consume or produce, is a data point that our investors will be able to see and that will directly correlate to our profitability and ability to cash-generating business.

Okay. Fair. And just to make sure and I apologize to so many questions. Are you looking to sign colocation clients or deals for this site in West Texas? Or is this something that you're thinking about putting your own machines in...

It gives us I'm not going to answer the question directly because I think our competitors spend more than enough time listening to what I say and then emulating it. So I'm just going to say it this way. It gives us maximum optionality to decide what we want to do with whom.

Got It. Okay. I want to bring it up because you didn't mention signing a colocation as like a milestone.

No, you see, if I can operate inference AI and make money on it without signing a colocation facility. That will give you a little bit more insight into what the business model might actually be. Because think about the best thing about our Bitcoin mining business is we don't have a customer. What's the hardest thing all these colocation deals have? Does that have to go into a customer?

Yes. Okay. Okay. People say change my opinion when the facts change, and that's a pretty -- it seems like a pretty major shift for MARA like I said, you guys bought GPUs, I guess, in the last 3 months and you start to run them, like what in your mind has changed that has changed your opinion or has your opinion changed and strategically, it seems like the company is kind of pivoting. Talk to me about that. Like what have you learned or gleaned in the last couple of months or quarters it is shift.

Yes, Reggie, I wish I could tell you that I had a lightning bolt strike me and I came to Tiffany. But this is -- we're executing the strategy we decided to execute over a year ago. It's just we have decided not to go totally open to market and tell people what we're doing because it just gives our competitors insight into what we do and they can emulate it. and prefer to control the timing on how we talk about what we're doing.

But I've been talking for the longest time about inference at the edge and that's where we would make our market in the marketplace. And we are -- we've talked a long time about owning power and the desire to run our business based on controlling energy assets that were fully virtually integrated. And we're doing that.

There's no change in strategy. There's no pivot. It's just we have been purposely operating more like a startup in the sense that we have really wanted to make sure that we had everything in place so that as the market becomes aware of what we're doing, they just start seeing kind of announcement after announcement after announcement that just gives them more and more confidence in that we're executing on the vision that we set out a year ago.

Yes. No, I'd say from where I sit and I think about all the pieces you guys have, there are a lot of pieces, and I'm not starting to figure out how to put it all together, but it seems like you guys have a lot of ways to kind of win here. I guess we just have to kind of sit back and wait for those announcements as they kind of come through. I know we've kind of spent a lot of time on this. I hope it wasn't a wasted time for people.

Maybe you could shift gears a little bit and talk about your like sovereign and foreign government initiatives and things that are going on there. Like one of the questions I have you think about this, what do you think gives you guys a right to win in the sovereign have you kind of load management space versus competitors? Who's been competing with you?

I think -- so there are a couple of ways to look at it. Most of our competitors enter a marketplace by partnering with somebody or contracting for power. They don't bother talking to the government because they're afraid that if they do, they may not be allowed to do what they want to do. And that's the case in a lot of places in the Middle East.

We, on the other hand, chose to do it the other way. So in UAE, where we've been operating now for a couple of years, we chose to directly go and work with the sovereign. So we partnered with ADQ and IHC and operate a joint venture together with them where we balance the grid in UAE. It's one of the most advanced liquid immersion technology sites in the Middle East. The only one that's bigger than that is the liquid merchant site we operate in Granbury.

And so that has given us the reputation of being somebody who works well with government entities follows the rules and is focused on being a good to grid citizen in balancing the grid. So when we talk to people in other countries such as in France, such as in the U.K., such as in Kenya, in Saudi Arabia in other places. We are welcomed with open arms because we are focused on how can we make your grid more efficient and more effective? How can we make sure that every electron generators generate maximum value?

And we are here to be a good grid citizen, and we are here to operate such that your grid becomes more stable, and it becomes easier for you to bring on new types of loads and see them AI data centers or whatever. And the challenge, the way most people see it, that takes time, right? I have been crossing the Atlantic very frequently. But I have been having meetings in at the top levels of government, and we have a lot of support. We certainly have seen lot of support on the European side because there are certain dynamics in Europe that create very large opportunities for us.

And so same thing exists in Saudi Arabia, for example, in other places. And we think that we -- it's worth our effort to spend the time and takes the time to do this carefully and prudently and well thought out so that we're able to execute successfully and have long-term success in the countries. Because if we're friends with the government, then we have the advantage that as they look to expand what they're doing, if we are a good partner, they will come to us and say, hey, we want to do more with you. And that's the type of relationship we want to have with our partners across industry, be it governments, vendors or end customers.

And you haven't talked about Bitcoin mining at all, no running show. Just an update there. Love to hear about the stuff that's happening in the wind farm and some of your flared gas initiatives. Maybe talk a bit about Auradine. And then, I guess, your plans for growing hash rate here and how you think about that in the context of kind of where cash price is and why it makes us to continue to grow your hash rate at these levels.

Yes. So maybe I'll look at this in kind of a somewhat reverse order. So there is more hash rate coming online every day from lots of players. There are very well capitalized to the companies who are not public who are -- have access to huge amounts of capital who have a stated goal of becoming the largest bitcoin miner in the world. And if we don't grow our cash rate, we will have an ever-decreasing amount of the global hash rate and produce ever decreasing amounts of Bitcoin. And we think that it's our duty to continue to grow hash rate, not just in the United States but globally to support the security and diversity of the Bitcoin blockchain and the Bitcoin network because we don't want it to be dominated by any small handful of players. And so we believe it's our duty to continue to grow cash rate.

So how do we do that economically, we do it with low-cost power, which we can control. which ties to the MPLX deal, it ties to what we're doing with our wind farm Texas. It ties to what we're doing with flare gas. We have doubled by the end of this year, we'll have doubled our flare gas capacity, and we're going to continue to grow that. The wind farm is fully built out from a data center perspective, and that's running. And we're going to continue to look at opportunities to require more energy at low cost that we can then allocate between Bitcoin mining or AI. You have to kind of think of us as we are going to own lots of our electronics, and we're going to put those electrons to best possibly use.

In regards to Auradine, Auradine's more recent hydro model, which competes very well with the Bitcoin and other vendors models is doing well. We're deploying -- in our fleet. We're not putting exclusively Auradine at this point. There are still different machines, different characteristics that are really good for different environments, and we have a lot of different environments. And so we're continuing to deploy a mix of systems.

But over time, it would be logical to feel that we're going to add more and more Auradine to our fleet. Their systems offer them very unique capabilities, especially around load balancing that in a model such as the one that is beginning to gain steam in Texas, where the utility wants to regulate your curtailment and shut you off and turn you on.

That requires special capabilities in the miners, and that's something that exists in the Auradine systems. And so as more and more utilities start looking for those capabilities amongst miners who are on grid, I think they will continue to gain some market share there.

Other than that, they have spun out some very interesting AI-related businesses, one or escape, which is around securing large language models, which recently had a lot of positive reviews at the RSA show earlier this year and then also scaleup, which is a start-up around ultra-high-speed cluster interconnect switch technology. So that has been a great investment for us, and we continue to look for investments like that where we can acquire or build technologies that can become part of our solutions over time.

And I guess last one for me. You kind of talked about it earlier, but obviously, a lot of market cap, a lot of value created in the Bitcoin mining space amongst the publicly traded guys. I'd argue that you guys haven't received or gotten your share of that. Like what do you think the market is missing. And hopefully, we'll come to appreciate in the near term or medium term.

Yes. I mean I think the key for us is the floor on the valuation of our stock is essentially the value of our Bitcoin Holdings. And people don't put a lot of value on the Bitcoin mining infrastructure or the Bitcoin mining business per se. And I think as our business continues to evolve, especially with the energy generation story and as AI becomes a bigger piece of this and we generate more profit per megawatt hour consumed we'll start getting more attention from people. And I think you'll start seeing people realizing really the benefit of what we're doing in our model, and we'll get more credit for that.

Reggie, just to add to that, the power capacity that we have secured through these transactions that puts us at the forefront. And here's where the actual value flows with Bitcoin mining option value between AI-ready assets, our operational flexibility with integrated power. That's what's going to drive value for our stockholders from a long-term perspective.

Thank you, guys. Congrats in the quarter.

Thank you.

Thanks, Reggie. We appreciate it. Most of the questions that we received from our retail shareholders have been answered. We're obviously running -- short on time, but thanks, everyone, for joining us today. If you have any questions that were not answered during today's call, please feel free to contact our Investor Relations team at [email protected]. Thanks very much, and enjoy the rest of the day.

Welcome, welcome, welcome. Thank you so much for coming to the HCW conference this year. This is the most highly anticipated event of all of our crypto stuff, the Bitcoin Mining Panel. Of course, we're going to talk about HPC and how business models evolve.

And it's my honor to introduce Russell Cann, who will be moderating the panel. I used to do it a long time ago, but it's way above my pay grade now. And you've got a better man here. I've known him for years covering Core Scientific. He's phenomenal. Core Scientific is one of the many companies he's founded. He's still a Chief Development Officer there. And most importantly, he's probably the best MC at any pool party.

Take it away, Russell.

Thanks, guys. I'm going to -- we've got a short time here because of the time between you guys and President Bush and all that. But I want to get started. I'm just going to kind of go down the list on this. We have a couple of questions that everyone is going to answer, then we're going dive into the specifics around the business models each company has here.

But first off, just please give a quick introduction of yourself, your company, your capacity in the company. Talk about your specific operating strategies your company was founded on and how that has evolved over the years either because of new tech or changes in tech or changes in strategy. And then if there's been any kind of things around HPC demand, how those kind of things might have changed as well. But just a quick introduction.

Matt, start us off.

Thank you, Russell. Great to be here, everybody. My name is Matt Schultz. I'm the Co-Founder, Chairman and CEO of CleanSpark. We operate 50 exahash across 33 data centers in 4 states.

Our business is interesting because we joined -- we got into the Bitcoin space through energy. We owned a series of portfolio patents on distributed energy resource management. So we built microgrid solutions and worked in conjunction with military bases and embassies around the world. And so that kind of fundamental working knowledge of energy really helped us in the Bitcoin mining space because, as everyone knows, that's our biggest input.

As far as evolution, we've -- I think we fancy ourselves as experts at land-and-expand, and we identify opportunities in utility markets regionally and build relationships and grow from there. And what that's presented us with is a portfolio of assets that have tremendous value for the Bitcoin mining ecosystem, but also lend value to potentially other types of compute.

Thanks. Salman?

Good afternoon, everybody. Salman Khan. I'm the Chief Financial Officer for MARA Holdings. MARA has evolved over a period of time, to use the term that you use. And it's -- we own and operate approximately 60 exahash to date and control about 1.7 gigawatt worldwide. We operate in 4 continents and have 15 data centers worldwide.

Our story has evolved over a period of time. We used to be an asset-light company just 2 years ago. And last year, we ended up buying 800 megawatts at half the cost of build multiple. And as a result of that, we converted our asset-light model to 70% owned-and-operated, thereby reducing our operating cost or our electricity cost per coin as one of the lowest in the sector.

While we did that, we did not stop there. We also bought a generation of electricity. We are not a utility company, just to be clear, but we like when we can marry intermittent power that is low cost and combine that with Bitcoin mining. And that makes it so much, after every 4 years of halving, that we don't have to worry about the costs and the global hash rate when we marry the Bitcoin mining with wind farms, for example. We own more than 100 megawatts generation capacity in Texas.

We also recently announced investment in Exaion. Exaion is a subsidiary of EDF, world's largest -- one of the world's largest clean energy utility company. And they're focused on -- as a Tier 4 data center operator. They have sites in Canada and in France. And their model is primarily focused, very different from traditional AI colocation service. Here in the U.S., they're focused on sovereign or edge compute. We're very excited about that. That's expected to close by end of this year.

All in all, a global footprint, great people that we've been able to attract to our company. I'm very excited to be here in this room with some awesome panelists here.

Okay. Tyler?

Hi, everyone. I'm Tyler Page. I'm the CEO and Founder of Cipher Mining. We are a data center development company. We began life as a greenfield developer of Bitcoin mining sites about 5 years ago. We secured power contracts and built from dirt our own first 5 data centers where we are operating 477 megawatts for Bitcoin mining today, that produces about 23 exahash. We have, typically, the lowest power cost of any company in the space. We've been very focused on securing low power costs in that business, with a very efficient fleet.

What we have found ourselves in the middle of over the last, I'd say, a year or so, and we're not unique up here on this panel, is a position where we were securing and developing large power interconnects for years before that became to be in such high demand, because of the rise of large language models, HPC and the desire for hundreds of megawatts at a single data center.

I'd say about a year ago, we really aggressively positioned ourselves on the thesis that we could have very large interconnects in more remote locations and the traditional HPC data center world would migrate to us. We're in the middle of that. Right now, we have 450 megawatts that is ready to go with a substation currently electrified waiting for tenants, and we're having lots of discussions around that. So I think when we do this meeting next year, we'll have a very robust HPC business to discuss, and it is complemented very well by our existing mature Bitcoin mining business.

All right. Brian?

Sure. Thanks, Russell, and thank you, H.C. Wainwright, for doing this conference. Had a lot of very valuable conversations over the last couple of days. I co-head the data center business at Galaxy.

Galaxy is a little bit of a unique company in that we have 2 large operating businesses underneath the parent company. The first and the one that we traditionally were better known for was the digital asset business. This business has a large global markets business, which includes the derivatives business and market-making business, a very large trading business kind of generally and lending business as, well as sort of the boutique advisory firm.

We also have an asset management business, which has about $6 billion in AUM. And it's taking business that has another $3 billion, a little bit more than that, on platform under stake for a little over $9 billion in assets on our platform.

The other business, which is a little bit newer, is the data center business. And that's what I'm the co-head of. This came out of our Bitcoin mining business that we've been operating for several years. In particular, we focus on our asset, Helios, which is in the panhandle region of West Texas, near Lubbock.

We made the decision early last year to transition that business from a Bitcoin mining business to traditional data center business, and we signed, first, 1 lease agreement with CoreWeave, covering about 200 megawatts of gross capacity, followed by a second lease with CoreWeave which was an incremental 400 megawatts of gross capacity. And CoreWeave has also committed for the final 200 megawatts of the 800 megawatts that we have proved for -- at that campus.

So we are currently building out that campus right now and we plan to energize in Q1 of next year. That's the business that, of course, is a little bit more similar to the other types of businesses that my panelists up here are also running.

Thank you. Asher?

Cool. How's it going, everybody? My name is Asher. As of, I guess, last week, I helped run 2 publicly traded companies. One is Hut 8, which I'm the CEO of, and the other one is American Bitcoin, which I'm the Executive Chairman of. So Hut 8 is a business that we have merged -- we found a company called U.S. Bitcoin Corp. We merged into Hut 8 and then I took over in the leadership role beginning of last year.

When we started kind of the business, the thesis behind Hut 8 is that as technologies continue to develop in advance and kind of push humanity forward, their reliance and their consumption of power has ever-increasingly gone up. And so how do we build the company at the intersection of energy technology? And how do we harness an electron to push advanced technology forward, to push humanity forward?

And so at Hut 8, we see ourselves as what we call kind of a next-generation energy infrastructure platform and how do we build campuses for any net new technologies that have large demands of power. So that was where we started, which was kind of Bitcoin mining and Bitcoin compute and securitizing the Bitcoin blockchain. Today, obviously, like many of the folks up here, tons of demand around traditional Tier 3 AI, data centers for AI computing use cases, primarily training, inference in some locations as well.

I think for us, a big inflection point last year was when Coatue invested into the company and our institutional shareholder base kind of grew exponentially at that time. And we started having really 2 groups of shareholders, one that believed in kind of the long energy data center thesis, and the other one that was kind of core to Hut 8, Hut 8 was one of the first publicly traded companies that held Bitcoin on the balance sheet, I think, the first, the old CEO likes to tell me, but like -- and so you have this kind of core Bitcoin audience and shareholder base.

And what we realized was that those businesses ultimately have very, very different types of capital -- cost of capital. At Hut 8, our goal is to drive volatility down and to lower our cost of capital. Whereas on the Bitcoin side, you monetize that volatility via, for example, convertible note, you see kind of MicroStrategy having successfully implemented that strategy. And the goal is to keep vol to be able to sell volatility.

And so ultimately, we didn't see that these were 2 kind of asset classes that should live within the same capital stack. And so we decided to spin out American Bitcoin into a separately-run company. And so the way to think about it is American Bitcoin is an anchor tenet of low-redundant data center capacity for Hut 8. And so Hut 8 is long energy and American Bitcoin is long Bitcoin.

And so Hut 8 is, today, we have about 1 gigawatt of capacity under management, 90% of that is contracted. About 30% of that is power generation facilities we own. 70% of that is data centers primarily supporting Bitcoin compute with 5 traditional retail colo data centers in Canada that are smaller as well. And then we have about 1.5 gigawatts of owned land and power agreements and net new development sites that we're expanding into right now.

And then with American Bitcoin, we really kind of took a first principles approach of why do investors historically invest in Bitcoin mining businesses? Why are they investing into these treasury accumulator businesses? And I think ultimately, it's to get a levered kind of exposure to the underlying asset class.

And so we kind of branded the company as a Bitcoin accumulator. It's not looking to be a mining company, it's not looking to be a treasury company. It's not focusing on how many exahash we have, it's not focusing how many Bitcoin we have. But the ultimate goal is to increase Bitcoin per share, and that's kind of the ultimate metric, and we have a multipronged strategy in doing so.

And so I think it's been a fun journey, and we'll talk a lot about the data center side on the panel today.

Thank you. Sam?

So my name is Sam Tabar. I'm CEO of Bit Digital. I'm also CEO of WhiteFiber.

A couple of years ago, when ChatGPT came out, we had sort of an epiphany moment that this is going to be huge. And we were really turned off by the Bitcoin mining business, especially because of the halving, which is basically your profits are basically cut in half every 4 years, which we thought was a crappy business model.

So we abandoned Bitcoin mining, and we focused on HPC. We landed our first cloud customer in early 2024, January of 2024, for a $150 million contract over 3 years. And we now have 23 customers. Our revenues are about $100 million per year. Backing that is a portfolio of 4 data centers across Canada and the United States. We also have a partner in Iceland.

That HPC business was doing so -- continuously to do so well that we decided to IPO that business just last month, about 32 days ago. And so we IPO-ed that. That's called WhiteFiber, ticker is WYFI. And with respect to RemainCo, that being Bit Digital, we sold all our Bitcoin, we stopped investing in the Bitcoin mining business, and we became an Ethereum treasury strategy. And so that's what Bit Digital is now, a pure-play ETH strategy, but we do own 71.5% of WhiteFiber.

And for us, our vision is that we think the 2 largest story arcs of our time is Ethereum and artificial intelligence. And so Bit Digital is an ETH play and owns 71.5% of a very successful company called WhiteFiber, which is a pure play on AI. And that's the position we'd like to be at.

Thanks, Sam. I'm also -- for the sake of time, we're going to -- I'm going to combine the next 2 questions, I want everybody have a chance to answer though, okay? What are your company's strongest assets? Why do you see them that way? Has your opinion of that changed over the last 18 to 24 months? And then how do you think investors perceive your company, particularly, what's the thesis on why investors -- what kind of exposure are they getting their company?

I'll start again with Matt, we'll go down. And then after that, we'll be diving to some individual questions for each depending on your strategy.

You're not making this easy. We -- I would say the strength of our company is the team of people that we've assembled. We've been we're very fortunate in the fact that we have 50 exahash across 33 data centers, just over 1 gigawatt of power under management, and we're able to manage to the industry's 1 of the top 2 most efficient fleets with the top 2 most efficient uptime. So our personnel, the team that makes that work, is really the lifeblood of what we do.

And we've created this opportunity for growth by making commitments to rural communities throughout the United States where, previously, there may have been a textile manufacturer or some other industry that has subsequently been offshored. And so these towns that bonded their share of development and distribution of electricity are now sitting on unmonetized megawatts. So we create relationships whereby it's mutually beneficial for both the city, who's our utility, and for our company. And that really has grown over the years as a result of the relationships that we've developed.

So how have I seen that change? Well, we're unique, I think, amongst all of our peers in that, not only are we fully vertically integrated as a self-miner, we own and operate our facilities in 250,000 Bitcoin mining machines. But we also have, I think, the top 6 or 7 largest treasuries of Bitcoin of any publicly traded company. And it's important to note that we mined each and every 1 of those Bitcoin. We've never borrowed money to buy Bitcoin or sold equity to buy Bitcoin.

So we've got a very strong balance sheet. We put up a convertible bond a year ago, $650 million, 0%, converts up 100% with a share buyback. So we've been very disciplined with our capital strategy. And we like to say that we operate at the intersection of capital efficiency, capital stewardship and operational excellence. And so our people are really key.

Now how do I see that changing? When we entered the Bitcoin mining space, our first 2 locations were in Metropolitan Atlanta. We have College Park, which has a total of about 100 megawatts of capacity, and then a second facility in Norcross which is about 20 megawatts of capacity. Both of those facilities, when we acquired them, were traditional data centers. So we actually entered the Bitcoin mining space through acquiring operating data centers and subsequently fired all of our customers to convert those to Bitcoin mining.

The opportunities have now changed because we've found ourselves with the ability to deploy very rapidly. We secured 100 megawatts in Cheyenne, Wyoming. And the other bidder on that project was Microsoft. Well, why on Earth would a utility pick a company like CleanSpark over Microsoft? And the simple answer was we were able to monetize those megawatts within 60 days where to build out a proper data center to Microsoft's level is a 4-year process.

So what we found is that we can enter these jurisdictions, we can put up Bitcoin mining. And now we have a unique opportunity with the geographic diversity that we have, that we can now create meaningful relationships with other data center development companies to build data centers while we're monetizing the megawatts through Bitcoin mining. And if and when the time comes to shut down the Bitcoin mining assets to flip those traditional -- to traditional data centers, high-performance compute, artificial intelligence, whatever the case may be, we can then duplicate those efforts.

Now in Cheyenne, Wyoming, we went from scraping the ground to having a 6-megawatt immersion-cooled pads deployed and hashing inside of 6 months. So that efficiency and speed to market is a huge differentiator. And through some of the relationships that we've developed, it's been very clear that there's demand for that because there are megawatts that have been paid for that exist that are doing nothing until they're monetized. So we find that it's a very unique relationship.

And the last thing I'll say about that question, when we had the opportunity to attend the Proto miner launch at Russell's facility in Dalton, we -- as we left there, the Chairman of the local utility grabbed and Harry and myself wanted to have a conversation because, obviously, there's a ton of demand for compute energy.

The challenge that they're seeing in the State of Georgia particularly is that they forward-sold power. So with all this increased demand, I don't think they contemplated 5 years ago that all these megawatts that were previously allocated for textile manufacturing would be soaked up very rapidly by compute opportunities. So what they're now lacking is the flexibility or an interruptible load.

And so in many of these jurisdictions, throughout Georgia, we have a distinct advantage because we can provide up to 200 hours a year of power-backed utility based on demand, allowing them a lot more flexibility, acting as a shock absorber.

So now that we're seeing a tremendous amount of inbound inquiry, specifically for the Metro Atlanta facilities, as an example, we have a unique position in that we can blend traditional compute, high-performance compute with Bitcoin mining to provide that shock absorber, that interruptibility on the network and provide a mutual benefit to the community.

So I think I answered all those questions, but we're really excited about what the future looks like for the combined enterprise.

Thank you. Salman?

Well, MARA is, with the 1.7 gigawatt capacity that we own and control today and the multi-gigawatt pipeline, we believe the biggest asset for us is a combination of the electrons that we own and control that can be utilized for Bitcoin mining today or AI in the future. Our goal is to maximize our dollar profit per megawatt hour, whether it's Bitcoin mining or whether it's AI inference on the edge. So that's one aspect of it.

But I want to reflect a little bit on what Matt mentioned about people. People is one of the most important things for us. And we've been fortunate to have attracted one of the best talents in our sector, when it comes to our management team, when it comes to people in the field in operations who are running on a day-to-day basis, and also at the Board of Directors. We are fortunate to have attracted some really serious talent.

Our company is not run founder-run. We are all hired help. And all of us have done some really interesting things in our prior lives, whether it's technology industry. Our CEO spent 40 years in tech. I spent 2 decades in oil and gas and renewable energy and energy transition space. And the resume continues across the board. And the people is an important part of our story.

Why do I say that? It's not just the electrons, you need smart minds to convert that electron into value. And that's where the real value is created for us, where you take smart people, for example, to give you an example, somebody mentioned this is a difficult industry. I think, Sam, you mentioned a few moments ago.

It is a difficult industry to operate in. Nothing is easy. It's not easy to make money, especially when there are 4 -- every 4 years, there's halving happening. So how do we plan that from a long-term perspective?

Creative minds coming together, we looked at wind farms, and we found opportunities to acquire wind farms cents to the dollar because of the market conditions where it exists today with wind farms. And the marginal cost to produce those electrons is close to 0 because all you need is a person or 2 to monitor the wind farms.

When the electricity is generated from those wind farms, we consume that electricity for generating Bitcoin. And yes, it's not 100%, 24 hours a day, but it's marginal electricity at almost 0 cost to produce. And those are the kind of innovative ideas that come out not just from electrons, but having smart people in the room.

Thirdly, an important aspect, we are the second largest holder of Bitcoin worldwide in corporations. And I say that with conviction. We are not a treasury company, like Strategy and others, but we do hold a large stack of Bitcoin that we've held for a long duration of time. We're in a full huddle position since last year, we made that decision as a capital allocation decision. And we've continued to hold Bitcoin since then. We also have a treasury operation within our company, some very smart people who know how to create value out of Bitcoin, not just hold it, but also create a yield around that.

So all in all, in summary, it's not just one asset. It's a combination of different things. And it's a difficult space to operate, but there is value to be created for people who can think out of the box.

Thanks, Salman. Tyler?

So I'll give an unoriginal answer, but I promise I'm going to put an original spin on it, okay? I'm sure everyone's going to say that their team is their greatest asset, and of course, that's what I was going to say, and I would have said it first if I were sitting down there. But I was late to the stage. However, I do have an original angle to think about it.

So this is an equity research conference. Thank you to everyone. I see some familiar faces in the room that met with me yesterday. I had one-on-ones all day. As always, HCW puts on a great conference with a great crew of investors to speak with.

I think the one thing I found that I want to remind everyone about our stock, if you're looking at Cipher, is that, of course, I'm going to argue, we do have the best team in the industry. But let me tell you why that matters to you and I think investors would be well-served to evaluate any company at this conference on this front.

What I have found is that too many investors in this space are looking at each of these companies as sort of like a bag of assets that they want to come up with a present value on and then say, "Is this stuff cheap or rich?" And that's a wonderful value framework to think about investing, okay? I wouldn't -- I think it's a wonderful place to start.

The thing I would encourage you to remember and, certainly, I think, applies to our company is that, if you look at our team, we are where we are because we have a team that is particularly strong at originating, great power contracts and building great data centers. We have, give or take, a dozen ex-Google data center employees on our staff, including basically our entire construction and operations team. Okay. So we also have a person who I think is the greatest originator of the strongest power contracts in this space.

And the thing I remind people of is that we've got a wonderful Bitcoin mining business. You can have a view on that and value it. Kevin or Mike can give you a framework to help think about it from the HCW perspective in terms of what things are worth. We also, hopefully, will have a series of HPC contracts where we're doing co-location where you can come up with your version of the execution discounts and the net present value.

The thing I'd encourage everyone to remember is those awesome people that originated the 11 data center sites we have now still come to work every day. We're going to buy more sites and we're going to do more contracts and we're going to build more things. And part of what you're trying to do as an equity investor is think about: what is that upside? What's the sort of cheapness of the upside option in front of this massive wave of change that's coming into this space?

So what I would try to convince you for Cipher that's differentiating is, yes, it is a team that is our greatest asset, but I would argue it makes us the most attractive to an equity investor in terms of that upside potential that is created by this current marketplace. I told you I could try to be original.

Thank you. Brian?

Yes. My answer is sort of straightforward, which is that we are building a massive data center campus and that campus itself is our most valuable asset. When we acquired this asset, which we call Helios, back in 2022, we purchased it because there was a massive amount of power that was available there, that was already approved, that could come online very quickly.

We thought about that in the context of Bitcoin mining. You can mine Bitcoin reliably and inexpensively. But it's been very validating to us when early last year, we pivoted the site into an AI and HPC site, and we're looking for tenants.

We marketed that site to CoreWeave as well as hyperscalers, and the response was the same regardless of who we shared that with, which is like you're sitting on a pile of gold in this site. 800 megawatts at a single campus with already immediately available power, where we've already procured the long lead time equipment was just incredibly valuable to these guys and it was easy to set up site visits after that. Then chose to work with CoreWeave. We've been scaling up-site from them.

I will touch on the people component as well. I think the unique thing about Galaxy is that we are a very diverse company. So my team has a lot of smart and experienced people on it and they're thinking about data centers every single day. So we also have a lot of different pockets of experience in the digital asset space that we're able to leverage, which has been very useful when looking at pieces like financing or looking at new opportunities or identifying new risks that maybe we wouldn't see if we just hired good people thinking about data centers every day.

The last piece on our campus as well that I do want to highlight is, not only do we have those 800 megawatts available now, but we also have an incremental 2.7 that we have applied for and we are waiting for approval for it. So upon approval of that, we really believe that this asset can be one of the largest data center campuses in the world. And we're well underway in getting there with a Q1 energization.

Thanks, Brian.

Cool. I think the biggest thing that I've learned since we became public is, the more you do as a company that, like we trade anywhere between, call it, $2 billion to $3 billion in any given day, the more you do as a company that's smaller on that kind of market cap size, the less time an investor is willing to take to truly understand the business. So the more simple it is, the easier that people can go to understand the business.

I think if you look at our company today, we have about $1 billion of Bitcoin on the balance sheet. Our equity stake in American Bitcoin is worth more than the whole company today in totality, plus we have the 1 gigawatt of assets, 1.5 of net new assets.

But I think long term, the fortunate kind of place that we've been able to operate from is, in financing a lot of these opportunities that are in front of us, we don't need to raise net new capital. And so we've been able to take a much longer perspective on building the business. And honestly, I haven't really cared about short-term share price. And as a result, have focused kind of heads down on what do we have to do and what foundation do we have to put in to actually build a strong business with a defensible moat. And I think there's 2 areas when we think about defensible moat on the Hut 8 side of the business.

The first, and Tyler, kind of piggybacking on what you said, is monetizing the 1 gigawatt we have or the 1.5 gigawatts we just announced, it's great. But really to build a really meaningful company in the long term is being able to develop a flywheel of originating new sites, developing those sites and commercializing those sites. And I think renewable energy companies are a great example of that. They did that 20 years ago and built multi-hundred billion companies in doing so.

And so I think, do we have a differentiated moat and flywheel of generating net new opportunities, developing those opportunities, building those and commercializing them? So I think that's kind of the first part.

And I think we have experiences in different buckets, from power generation and facilities that we own there. We have about 500 megawatts of behind-the-meter facilities that we run today as well. So a deep experience there. And then have pretty large front-of-meter sites. We just announced 1.5 gigawatts with a 1 gigawatt campus just a couple of weeks ago. And so we believe the ability to continue to develop kind of that flywheel of net new growth.

And then the second is if you have the ability to find power, which we believe will become a scarcer and scarcer asset, then are you just in the business of selling kind of access to power, or do you have a right to actually build upon that power and build digital infrastructure? And then the question is, what is your kind of defensible moat around building that infrastructure stack itself?

I think in building a traditional Tier 3 data center, like there are a lot of very capable people in the world that have built these data centers. I mean there's no secret that there's a set few firms, the general contract owners, A&E firms, MEP firms that design the majority of data centers that help build the majority of data centers and get hired.

And so one area we spend a lot of time thinking about is, is there innovation that can happen on the digital infrastructure stack on the data center stack? I think in mining, an area we've prided ourselves in a lot, was being able to develop high quality at a low cost.

So most recently, we developed a site called Vega in Amarillo, Texas, which was a liquid-cooled data center. And the thesis there was, can we develop a liquid-to-chip cooled data center for the Bitcoin business that had analogies to AI data centers? And can we sell a low-redundant infrastructure stack at a lower cost to customers?

I think what we learned from that -- so we built basically a 200-kilowatt per rack liquid-cooled data center for under $450,000 a megawatt. What we learned from that was customers cared about speed more than they cared about cost. And so v2 of that design that we're working on is, can we design a form factor that starts with low redundancy, but we design it in a way and spend a little bit more money upfront where we can actually upgrade it into Tier 3 standard so we can deliver speed of power yet still use Bitcoin as the original initial underwriting to be able to capture land and monetize land?

And so I think there is short term, which is build Tier 3 data centers that people know what they look and feel like, with counterparties that they trust, and deliver those to markets and we get some type of NPV on those cash flows. I think that's great. Great, we'll create a couple of million dollars of value of doing that. But like long term, where is truly a bigger [ so-what ] on like what gives us the right to compete in this space.

And the 2 areas for Hut 8 are the ability to procure power at scale and a continued ability to be able to do so. And second, a differentiated moat in designing and building data centers that is able to drive innovation around the infrastructure stack to either drive speed and/or costs relative to quality.

And so spending a lot of time doing those efforts. And I think, I don't know, our conviction is that price will always catch up to intrinsic value over time. And as long as you don't have to raise capital, it doesn't really matter and the market will work itself out.

Thanks, Asher. Sam?

Yes. Look, I think that the marker of a successful business is really simple. Do you have clients or not? So we have 23 clients. And the reason why we have 23 clients and growing is we have a very special approach to data center build-out.

So we have what we call a retrofit model where we're able to build 2x faster and 40% cheaper. In fact, we just got this client called Cerebras. Some of you guys may have heard that. We identified a mattress factory back in February. We're handing over the keys to them next week. And that is a facility that we're able to turn into a Tier 3 data center in 6 months.

We were very allergic to greenfield. We think there's a huge execution risk in greenfields. That takes about 18 months. And there's a lot of moving parts on a greenfield. So we focus on retrofits, which takes about 6 months. We just acquired a data center in North Carolina, 1 million square foot facility in North Carolina, that was a textile factory that has about 99 megawatts associated with it. We already have a whole bunch of LOIs attached to it.

And the reason why we have all these clients is because we could do it 2x faster and 40% cheaper, and we have a track record of that. And the latest example of that is Cerebras, where we're handing over the keys to them next week. That thing used to be a mattress factory just 6 months ago.

All right. Next question, and I'm going to let someone who's passionate about it give the first answer, and we'll see where we're going to go. Where do you see the data center industry in the next 5 years, or in 5 years' time, not the next 5 years, but in 5 years' time? Specifically as it relates to Bitcoin mining, which note will be [ after ] halving, HPC consumption, AI consumption. And then how that's going to interact with the utility grid -- the global utility grid, but also the local utility grid. So that's 3 very distinct things, but 5 years out. Who would like to take that?

Salman?

Well, I think it's -- look, it's -- when you look at Bitcoin mining, literally every U.S. corporation that does Bitcoin mining is talking about AI, right? So it's, certainly, AI is going to be an important play in the next 5 years. When we talk about Bitcoin after every having, it becomes more difficult, and cost is important. So being innovative as to how you mine Bitcoin is going to be important.

Just like we talked about, MARA has been focused on finding opportunities where we can mine Bitcoin irrespective of what hash price does, irrespective of what global hash rate does. I think those innovations are going to be important in this sector to continue to evolve over a period of time.

Modular approach to AI is going to be interesting. When you think about current model of AI HPC with large-scale models and large-scale data centers being built with the reliance on 1 big customer, that's an interesting model for some, not for everybody. MARA has chosen not to follow that path. We are more a believer of inference on the edge.

And that's going to be important because there's been -- there's data, there's security. Coca-Cola doesn't want to share their information with PepsiCo. JPMorgan would not want to share their information with Bank of America, for example.

And that's where Exaion is important in our story because we believe, in the future, that becomes a $170 billion market or TAM in the next 4 or 5 years or so, that allows us the opportunity to tap that and have customers who are recurring -- paying over a period of time as a recurring revenue platform-as-a-service model.

The other thing is that it's very important to note that Tier 4 data centers, I'm sure you can talk for hours about that, tier 4 data centers are very different from picks and shovels like Bitcoin mining, and you need a different level of expertise for that. So over time, you would expect that people will learn and evolve over a period of time. So there's a lot of learning and education when it comes to Bitcoin mining going into AI or software-as-a-service or e-commerce -- I'm sorry, software or platform-as-a-service.

In terms of inference, as I had mentioned previously, we are subject to closing this transaction in Q4. Exaion is an NVIDIA partner and GDPR certified, which means that they have access to compliance of data and also access to sovereign customers. And that's the kind of stuff we believe is going to create value from a longevity standpoint.

Sorry, I'll jump in real quick. I mean I do think the curtailability of the Bitcoin mining load is extremely valuable as the data center industry evolves. By analogy, this is my second company. I've been a part of founding in the Bitcoin space. And I used to travel around the world speaking to the world's biggest institutional investors to convince them to buy Bitcoin. And none of them would do it because it's like, "Well, I don't want the reputation risk, and I don't know." And now, of course, everyone knows, Larry Fink is like one of the big cheerleaders for Bitcoin, right? And I could have told you in 2018, 2017, that would eventually happen. I just didn't know when it would happen, because it was just so rational that it would happen.

And I look at pairing Bitcoin mining with HPC data centers, traditional data centers as the same thing. I mean you measure a peak PUE, by definition, most of the time, the data center is not operating at that peak and there's extra power there. And so the ability for Bitcoin mining to soak up that excess, and also work with the grid operators, to your question, to be able to like, if they're in a position where they have so many data centers, they have to be able to curtail part of a load, it's very natural that the 2 eventually grow together. It will be interesting to see how we get there, but it seems inevitable at some point.

I agree with what Tyler was saying about pairing those assets together. But I think there's something that we don't talk about enough, and that is Salman's company holds billions of dollars in Bitcoin, and Michael Saylor's company holds billions of dollars in Bitcoin. And during the prior administration, there was a concerted effort to drive Bitcoin mining out of the United States.

And I believe that providing and securing block space for those massive treasury companies for American investors, for American corporations that hold Bitcoin on their balance sheet, is a national security issue.

We had a letter that was issued today referring a couple of players in the space, Cango and Bitmain, to the Department of Treasury as a potential CFIUS risk. And they're talking about the consolidation of Chinese ownership of the block space and Chinese sovereign ownership of data centers and energy assets within the United States as a security risk.

So while we're focused on maximizing the value of each and every megawatt that we control, 1.02 gigawatts -- currently under contract with 1.2 gigawatt pipeline spread over 5 states, we believe that providing security and support to the blockchain is, in fact, a national security risk. And so there is a value in providing that function that I think has gone maybe unrecognized.

And the Bitcoin mining space is really a challenge because each and every one of us at some point over the last 2 cycles have been the pretty girl at the events. I mean today, it's Asher. Sometimes it's somebody else. But as Bitcoin mining comes back into vogue, I think the companies that are -- that remain committed to operational excellence and capital stewardship are going to differentiate themselves because there is absolute need to maintain that support of the blockchain.

Yes. Look, I agree on the securitization. I think on the question of kind of 5 years out from today, the question we always ask ourselves is just what is our right to deliver this capacity. And I think 5 years out for today, the question is going to be, what is the supply and demand kind of balance look like? Today if you have power and you have access to power, if you can execute on it, if people can give you the trust, then you can deliver a data center to them.

The reality is every hyperscale self-builds their own data centers, and that's their preference, if they can. I think you'll see a lot more of these AI labs starting to self-build these data centers as well. And so the question is, do they need additional demand and capacity then they can build themselves? And if so, they'll sign colocation [ space ] just like they're doing today.

And so the question is in 5 years is, if that kind of supply and demand mismatch is in there, then what is the -- what can you deliver to them that they don't have? Is there something unique on the infrastructure stack that you can deliver? Is there price differentiation? Is it a cost of capital gain because you can drive lower cost of capital and you can deliver that relative to them building themselves?

And so I think 5 years from today, if the power story and just being able to have access powers up -- like when we started these conversations 2 years ago, you have access to 100, 200 megawatts, great, people are interested. I think today, unless you have a minimum of 300 megawatts, scaling up to 1 gigawatt plus, people have very low interest. I think those bogeys will continue to increase and those bars will get higher if they're not self-building and they're building externally.

And so I think how we think about kind of the market is where is our competitive moat in building -- finding power and building -- being able to build power infrastructure at scale. And then secondly is on the infrastructure stock itself, how do you actually compete? I think, thinking about kind of -- I think with a lot of training customers, you'll see them force into curtailing. You're not going to have them up 24/7 365. A lot of the AI labs are already willing to start thinking about curtailability, and I think you'll see that happening on training clusters.

And then in regards to Bitcoin mining, I really want us to continue to build and scale Bitcoin mining in the U.S. I think Bitcoin mining to just develop on its own underwriting in the U.S., unless you have some behind-the-meter, stranded power, curtail power, low-cost power, et cetera situation, it's hard to compete against other places that have much cheaper stranded power and are very cheap to build.

And so as a result, like I think on Hut 8, being able to underwrite a site for longer-term value of megawatts, and then being able to have Bitcoin mining there and your underwriting is not purely on that use case, that's how you can kind of justify it. But overall, I think in 5 years, all of these companies, I believe, up here will all find their niches and will find their competitive moats and will be different types of businesses that evolve and change and target a specific part of the market. And so I think the demand cycles will change and companies will improve their value over time.

Just 30 seconds to add to that, it's related. One piece. The data center market is going to be significantly bigger in 5 years. And a point that Asher said that I totally agree with, is that these campuses though are multi-hundred megawatt campuses and that densities that we've never seen before.

And so putting that together, we're going to have a lot of new players in the market that are not thought of as traditional data centers today, because the traditional data center companies rather have not built these types of campuses before. And so that's where I do think there's incredible opportunity for all of the companies on stage, just as Asher said, define their niche.

All right. We could go on forever, but we're between you and the President, so we have somewhere else to go. Thank you, everybody.

Thanks, everyone, for being here. Excited to have the MARA team with us. We have Fred Thiel and Salman Khan. We've got 25 minutes so I've got some Q&A we'll run through, and we'll go a bit deeper than the corporate panel if any of you were in here for that. And we'll open it up for questions at the end. I assume that either folks remember what you said an hour ago or are familiar with you, but maybe just 30 seconds on MARA just in case there's anyone new in the room.

Sure. So MARA is the largest publicly traded Bitcoin miner and second largest publicly traded holder of Bitcoin in the world. We operate data centers, 16 data centers on 4 continents, and we also own wind farms. We own flare gas power generation sites and we use energy off the grid. We have operations and joint ventures in UAE with the sovereign there. We operate in Finland, for example, where we heat 80,000 homes with the heat from our data centers. And we also operate in Paraguay. The majority of our operations are in the U.S.

We are technologically vertically integrated, everything from ASICs all the way up to orchestration software. And we recently, as of yesterday, announced an investment, a control investment in a French technology company, which is a leading provider of inference at the edge sovereign pool -- sovereign cloud and ESG-controlled compute, if you want to call it that.

It's a company that was originally owned by the founders and the corporate venture arm of EDF, which is the largest low-carbon energy company in the world. EDF remains an investor in the company, and we now control a little over 60% of the company with an opportunity to grow our ownership even more. And they operate 4 data centers, all HPC AI that are Tier 3 and Tier 4, so that now allows us to enter the AI HPC space in a very strong way on an international basis.

I want to get there, but before we go there, maybe just to sort of level set across the core mining business and just the landscape competitively. I mean I think the scale of MARA is understood, but maybe just paint a picture of who you see out there and how it sort of evolved evolved over the past several years. And then anything on new entrants that you'd flag?

Sure. So the industry started as a bunch of -- like the tech industry, a bunch of garage shops and then different people tried to grow at different rates. And starting in really about 2018, 2019, all of a sudden, capital started flowing into the space. And so companies like ourselves that were already public doing other things had the opportunity to go raise money in the first kind of real Bitcoin waves, and we were able to raise a lot of money in scale.

We happened to choose a path that was asset-light originally. So instead of investing in infrastructure and compute, we just invested in compute and rented space and power that led us scale to be the biggest in the world. Today, if you look at the industry, there are 4 miners who together produce -- control about 20% of all the Bitcoin mined in the world, and those are all American companies, publicly traded companies, so ourselves, CleanSpark, for example, IREN energy and Riot.

As you look at new entrants, overnight, all of a sudden, you have people like Eric and Donald Trump Jr. with American Bitcoin, who partnered with an existing Bitcoin miner on a company. You have Tether who have announced publicly, Paolo announced publicly, he wants to be the biggest Bitcoin miner in the world by the end of this year. He's doing a good job buying up every single Bitcoin miner he can. He also wants to be the biggest holder of Bitcoin in the world. But he's got a deep wallet. But so you're seeing kind of this concentration in the industry, certainly, and we'll see more and more consolidation over time then.

It's kind of an interesting contrast to -- on the flip side, there have been some wholesale exits from -- I shouldn't say exits, pivots from miners to HPC. Where is the disconnect there, right? Like what are new entrants seeing that these folks who are pivoting away from mining?

So I think the new entrants are predominantly looking at Bitcoin mining as what is the function of Bitcoin mining? It's the processing of transactions on the Bitcoin blockchain. You assemble transactions and then you write them into blocks. And if you win the compute race, you get the right to write that block and then you write it. So you essentially have control of what transactions get processed.

Tether's whole premise with becoming the biggest Bitcoin miner in the world is so that they can ensure that the U.S. government doesn't sensor the Bitcoin blockchain by forcing all U.S. miners to be OFAC compliant. This is Paolo's whole model is he's always kind of taking this opposite kind of model. He loves decentralization, hates centralization. He's willing to lose money doing it. So that's relative to the new entrants.

I think as you look at the pivot, you have miners who have assets where they sit near some place that has a high-speed Internet connection, fiber connection. They're close to a major metro area. And you have all of these large hyperscalers running around saying, "I need power, I need power," and they think, "Oh, I can convert something that was trading at, let's just say, $1 million a megawatt into something that trades at $10 million a megawatt overnight by just saying it could be an HPC spot.

The truth is, of all the people that have pivoted, only really 2 have been able to announce deals. Core Scientific, who CoreWeave is now in the process of trying to acquire, and I say trying because a lot of Core's shareholders are now starting to push back on that deal, at least to ask for a higher price. CoreWeave, you have to realize, is just a middleman, right? They basically rent capacity and space from facilities and then sell that to Microsoft and others after putting our equipment in it, kind of like what we did in the very beginning. They now are vertically integrating.

And so then you have a handful of others who have been able to sell small tranches. Galaxy is the only other one. And by the way, they also are selling to CoreWeave. So if you were to rip CoreWeave out of the equation, nobody has any deals of note. And when you really look at this, you have to think about the hyperscalers in the world of LLMs. They're looking for 500 megawatts to 1 gigawatt of power at a time. There aren't any miners that have those type of scale other than Riot. They're the only ones with a site of that potential scale. And that's their Corsicana site, which is most probably why they have an activist investor and they're advocating for them to become an AI HPC shop.

But otherwise, you really -- to make money in AI, you can only charge for tokens. By this, I mean, AI tokens, which are a measure of compute output. And you can only do that by inference, right? Learning models don't earn money. It's the querying of the learning model that generates revenues and that's inference. And the vast majority of inference will happen at the edge. It won't happen in the main cloud. Every factory, every airplane, everything that needs to have an AI model running it, that has to run next to the thing because there's network latencies, there's the risk that the network goes offline for a second, things like that.

And so these big hyperscaler clouds are really full of data that the hyperscaler themselves need to operate. Meta needs to run inference about all their users to know what ads to serve them. Amazon needs to know what products to recommend. Microsoft needs to essentially analyze the corporate data they're managing such that Copilot works and it can recommend. 70% of corporate data still sits behind corporate firewalls. It's not in the cloud, regardless of what Amazon, Microsoft, Google like to say. And so inference at the edge is really where the business is going to be.

Yes. Salman, do you want to maybe talk about the model, the mining model today from a financial perspective, why it's getting more challenging for some folks? And then just as you think about this HPC opportunity, like how the model for MARA can change over time?

Look, mining business is a very unique business. It's very different from other industries. I spent 20 years in oil and gas industry, and I thought coming into this industry, that it's a commodity-based industry and it's going to be very similar. Yes, there are similarities but there are very differences -- huge differences compared to that sector.

So when you think about this sector, you are -- as a producer of Bitcoin, we produce Bitcoin. We have to be very efficient not only from a CapEx perspective, return on capital employed which, by the way, we are 3x better than our closest competitor when it comes to that metric. We also have to be highly efficient on the operating side, so both balance sheet and P&L management. And our electricity cost per coin is one of the lowest in the sector. Last year, we were under $30,000 per coin, for example. Electricity cost per coin is one of the most important metric in the sector because that's the biggest line item in the income statement. When miners operate, they operate data centers, they consume electricity and convert those to Bitcoin that we hold on our balance sheet.

So from a modeling perspective, from understanding how the economics work, those are things that are within our control. Now there are many things that are not within our control. One is the global hash rate. The global hash rate directly impacts how much reward do we earn, and that is dependent entirely on how much Bitcoin mining is happening worldwide. The global hash rate has grown over the years. It is expected to grow further. As it grows further, if miners stop growing, their costs will become much more higher to operate than they were previously. So miners have to continue to grow as a result of that to keep up with the growth of the global hash rate. So that's the other aspect.

Then you also have treasury management, which is another aspect to -- which is sort of unique to MARA. We are the second largest holder of Bitcoin. And we're not a treasury company like MicroStrategy, but we happen to have the second largest Bitcoin on our balance sheet. And we like Bitcoin. It has given us great rate of returns historically. But we are very prudent in how we manage that. We have as an asset management team, we are constantly looking at optimizing that asset and squeezing more out of the system, not only just capital appreciation but also a yield on Bitcoin, which I'm sure we'll talk about in a moment.

But the industry has its own nuances. It can create significant value over a period of time, provided that you have the right mindset and that strategy translates into action. I'll give you one example really quick. Fred mentioned a few moments ago the history of the company, we were asset-light. We became the largest operator as a result of deploying capital on a rented rack space. The result of that was we were the largest, but our cost to operate was on the higher side because we were paying somebody to operate on our behalf.

Last year, we entered the year with 0% owned and operated, which meant that 100% of our operations were through third-party operated sites. We exited the [ year bit] by owning 70% of our production or capacity, whereas 30% is still left, which means that we have more opportunities to reduce our costs. The result of that was that our electricity cost per coin is now one of the lowest in the sector. We pay $0.04 per kilowatt hour on the power side, and that is one of the lowest in the sector, which is very important from a strategic perspective. No matter what happens on the Bitcoin price, every 4 years, this having concept, which is an important concept in this sector, where your reward halves compared to what it used to be. So you have to keep up with the cost. You have to continue to reduce cost.

We did not stop there. We reduced our electricity cost but we also invested, as Fred mentioned, in renewable energy resources. We bought a wind farm. Now we're not an electricity company. We don't want to be seen an electricity company. We don't want to sell electricity either. But we like to consume electrons when they're producing from a natural resource at almost 0 cost because when the wind blows, when the sun shines, electricity produced at almost 0 cost, marginal cost. And that's when we produce Bitcoin on it. And because of the intermittent nature of Bitcoin mining, we don't have to produce when the wind is not blowing. We shut down the operations at that time and still get the better ROI than a traditional grid-connected site, about 85% to 90% better economics than a grid-connected site. So that's what we're excited about on the Bitcoin mining side.

On the HPC side, that's the -- we're still a Bitcoin miner primarily, but we also like diversity in revenues. Our KPI primarily is profit per megawatt hour. When I say profit per megawatt hour, that really means cash flow per megawatt hour. You have to think about it from that standpoint, and with the eye to become free cash flow despite this being a capital-intensive business on both sides from a long-term perspective.

And maybe just to take that last point and run with it a little bit on the HPC side. You talked about the stake announced yesterday. What's sort of on the -- how should we think about the road map to realize this opportunity that you're describing and thinking about the evolution of MARA over a 5-, 10-year horizon?

Right. So the great thing with the data center business, unlike the Bitcoin mining business, so Bitcoin mining, it's a zero-sum game. There are only so many Bitcoin that are awarded for every block, and that gets halved every 4 years like Salman said. So the more compute that you apply to it, you don't increase the amount of Bitcoin you're going to get if everybody else is increasing pro rata, right?

In the data center world, it's a land grab. And so if you have a technology solution and a product offering that's really relevant to a segment, then it's kind of like being in the dry cleaning business, right? You have a back-end dry cleaning production facility, and then you just cookie-cutter set up dry cleaners, front ends. Same thing in the data center business. Inference at the edge truly is at the edge. And you set up small data centers, small meaning not 500 megawatts, you're talking 5 to 10, max 20 megawatts, maybe, data centers in lots of locations.

And you scale the business. You're leveraging that same technology stack and the same set of customers even because they have different branches. They have different operations facilities. And you go after sectors like health care, financial services, manufacturing, industries that need data processed on-site that needs sovereign data. They don't want to let their data up into the cloud and that have a high need for inference.

The inference market according to Gartner or Inference as a Service, Infrastructure as a Service is a $160 billion market by 2028. It's a hellacious growth rate. So we believe if we just take a little sliver of that, and then if we do it in a place where there's a lot less competition, there's a lot less competition in Europe because they want sovereign. They don't want big U.S. companies coming in and setting up shop. They want local companies. So we set up a local MARA France. We've set up a whole process to do that. And we also view the Middle East and the Gulf regions where we're already strong in UAE. We've now set up a regional HQ in Saudi. And we think those areas are going to continue to invest very heavily in being sovereign clouds so people don't put data in Chinese or U.S. clouds.

And so we think there's a -- that's a very big opportunity for us to scale. And done properly, you can use lots of project finance capital. It's a whole different model in the Bitcoin world and Salman will attest to this. Up until very recently, you couldn't get a bank to even open a checking account for you, let alone lend you money to build a facility or buy capital equipment. Totally different story in the AI world. There are people willing to throw money at you in that sector.

Yes. I mean it seems like there's this sort of pivotal point for a lot of miners to take advantage of a large opportunity. I guess, Salman, when you think about the MARA model in realizing this opportunity, this HPC opportunity, how does it look in 5, 10 years, if successful? And maybe fold in just the deployment of Bitcoin on the balance sheet, yield-generating activity. Just how should we think about the evolution of maybe those 3 buckets, mining, deployment of the balance sheet and HPC and just put it all together for us?

That's a great question.

You ask me this question everyday. So talking about MARA 5 years down the line, we would be 50-50 split between international and domestic operations. Currently, most of our revenue is coming from domestic U.S. operations, although we have presence worldwide, but dollar-wise. And in terms of how AI is a fast-growing sector and that can grow very, very quickly in meaningful size, that 50% could become interesting and challenging for us in 5 years, which is a good problem to have.

Yet at the same time, I would expect there are so many uncertainties on the pricing and macroeconomics. But I would expect that we will continue to grow responsibly on the mining side and continue to deploy treasury strategies depending on market conditions. So for example, last year, we were -- beginning of last year until that, we were selling Bitcoin to fund our operations. Just to pause for a second, if you're a furniture manufacturer and you sell furniture, you want to see cash against that and pay for your expenses. But if you're getting cash that you receive from the sellers and that gives you a rate of return of 50%, 60%, 70% IRR in a short period of time, you would want to deploy that into that investment as a treasury. Return on capital will look much better on that versus reinvesting in the business of manufacturing furniture, which may give you a rate of return of 20% -- 10%, 20%, 15% or so in that industry.

So take that example, apply that to us. It's a dynamic model where we look at whether it makes more sense to invest, deploy our capital on buying Bitcoin, which we have bought last year. We raised $2 billion last year with 0% coupon. We did $1 billion -- more than $1 billion this year a few weeks ago, 7 years out. It's one of the longest duration, a testament by the industry and investors that we're the closest to the investment grade as it would be in this sector.

A reminder that there's no credit ratings in the sector as yet. It's a much newer industry. But it's a testament of what MARA has been able to do from a balance sheet and P&L perspective. So 5 years out, I would expect us to be significantly different from now where we are with our strategic plan of growing 50-50 split between U.S. and international, with sovereign AI continuing to grow significantly and be a meaningful part of our revenues, while Bitcoin mining continues to be a growth engine for us. And treasury depends on opportunistic yield generation. If it generates more to invest in AI or Bitcoin, then we would be willing to take that capital that we have sitting on our balance sheet, more than $5 billion, and take that and deploy it to create value for our stockholders. But if Bitcoin as a treasury asset is the best case, then we'll stay put and continue to create that yield that we're working on.

I think an important difference in the 2 business models, in the world of Bitcoin mining, we're essentially being paid a subsidy plus transaction fees. And it's very capital-intensive. We have to continually reinvest. In the world of what we're doing in AI, it's very much a recurring revenue model. And one of the reasons we went this route of investing in a company that already has customers, that already has data centers versus hiring a bunch of people and trying to go sell somebody so we could go build one, is that the roadblock the Bitcoin miners that have tried to pivot have hit is they have not proven that they know how to do it.

So instead by buying somebody who knows how to do it, has the right type of customers, has Tier 3 and Tier 4 data centers, we right away get a stamp of credibility. And we can right ahead go to the scale button as opposed to first figure out what your product is, et cetera. So we believe that because of the recurring revenue model that exists on the AI side, you can just look at SaaS companies and see how they scale once they get traction. And if and when we get good traction on that side, it can scale at very high margins. And unlike Bitcoin, you don't have halvings every 4 years and you don't have all those other things.

Yes. Yes, good. We have maybe a minute left. Any questions from the audience before we keep going?

We wowed them again.

Maybe just to wrap up, Fred, I'd love to get your perspective on -- I'd like to ask like what do you think is misunderstood or missed or underappreciated about the business? And you can take it the mining direction or the HPC direction, whatever you [ prefer ].

I think people think of us as, "Oh, you're the biggest Bitcoin miner in the world so you should just focus on the efficiency of your mining business." What they don't realize is we spend a lot of time and energy, mental energy, at looking and building these technology stacks that make us differentiated. Owning your own technology all the way from ASICs, all the way up to pool or orchestration layer on the AI side, all the way down to how you run your data centers drives your operational efficiency.

And when you make those investments, they pay off over the long term. And so unlike people who just run data centers or just run Bitcoin mining sites, we are a technology company that invests in the infrastructure. And over time, that technology becomes the moat and the differentiator, the ability to do things that other people can't at a cost point that other people can't.

Salman mentioned that we have the lowest energy cost per Bitcoin amongst our peers in our owned and operated sites. Why can't third-party operated sites generate that level of efficiency? A, they don't have our tools. They don't have our technology. And lastly, they don't have teams that are brutally focused on optimizing. And I think when we apply that to the AI side, you're going to see some really magical things.

That's a great place to end. Thank you both for joining us here.

Thank you.

Thank you.

Thanks, everyone.

Greetings, and welcome to the MARA Q2 2025 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Robert Samuels, Vice President, Investor Relations. Please go ahead.

Thank you, operator. Good afternoon, and welcome to MARA's Second Quarter 2025 Earnings Call. Thank you for joining us today. With me on today's call are our Chairman and Chief Executive Officer, Fred Thiel; and our Chief Financial Officer, Salman Khan.

Today's call includes forward-looking statements, including those about our growth plans, liquidity and financial performance. These involve risks and uncertainties, and actual results may differ materially. We disclaim any obligation to update these statements, except as required by law. For more details, see the Risk Factors section of our latest 10-K and other SEC filings. We also reference non-GAAP financial measures like adjusted EBITDA and return on capital employed, which we believe are important indicators of MARA's operating performance because they exclude certain items that we do not believe directly reflect our core operations. Please see our earnings release for reconciliations to the most comparable GAAP measures. We hope you've had the chance to read our shareholder letter and look forward to your feedback.

We'll begin with some prepared remarks from Fred and Salman. After their comments, we are going to be conducting an analyst interview with management. Today's session will be conducted by Chris Brendler analyst at Rosenblatt Securities. And with that out of the way, I'm going to turn the call over to Fred to kick things off. Fred?

Good afternoon, everyone, and thank you for joining us. No matter how you look at it, Q2 was a record-breaking quarter for MARA, setting new highs in revenues, adjusted EBITDA, net income, energized cash rate lead efficiency and blocks produced in a single month in May. Beyond performance, we continued to invest in the infrastructure that underpins our business from scaling low-cost flexible load data centers to exploring international opportunities in regions with abundant energy and growing demand for sovereign compute. This quarter, in support of our strategy to support the load balancing needs of AI HPC data centers, we announced strategic partnerships with TAE Power solutions backed by Google and Pato AI backed by LG.

Together, we're codeveloping grid responsive load balancing platforms that support the next generation of AI infrastructure, enabling us to monetize our energy and compute capabilities across broader markets. As part of our low-cost energy strategy, we completed construction of a new behind the meter data center at our wind-powered site in Hanford County, Texas. This gives us access to low-cost power directly to the source, improving our margin structure and boosting energy efficiency.

And subsequent to quarter end, our holdings surpassed 50,000 bitcoin, a milestone that [indiscernible] MARA as the second largest bitcoin holder globally. More importantly, this is a treasury we built through disciplined infrastructure development, scaled operations and focused execution. Now while some people may see us as a bitcoin treasury company, given the size of our bitcoin holdings we don't consider ourselves as one. We're invaders, builders and operators. We're actively managing our bitcoin holdings to create long-term value for shareholders.

Bitcoin remains our reserve asset and we will continue to build on our holdings, whether through production or opportunistic purchases depending on market conditions. To that end, we made a minority investment in to Prime, a digital asset management firm specializing in risk optimized yield strategies who've been managing a portion of our holdings. We will continue to make prudent decisions around allocation and risk exposure based on broader macro and market conditions.

Regarding the current price of bitcoin, our view is that things feel a little frothy at the moment. While there is persistent demand for bitcoin, this is balanced by an ample supply owing to long-term holders taking profits from bitcoin held in some cases since the earliest years of bitcoin's infancy. Supply is currently being absorbed relatively well. But if the buying demand were to subside, we could see downward pressure as sellers attempt to lock in gains at these high price points. With our recent convertible notes offering, we have significantly bolstered our balance sheet to have the flexibility to act across a range of strategic priorities, including opportunistic bitcoin purchases debt repurchase, M&A and general corporate purposes.

Whether bitcoin goes up or bitcoin goes down, we believe we are positioned to benefit. We're positioning Mar at the forefront of what's increasingly being recognized as digital energy or the use of technologies and data to take energy systems more efficient, reliable and sustainable. This strategic focus enables us to capture value at the intersection of compute and energy a convergence that will define next-generation infrastructure economics. We're exploring ways to design infrastructure for hybrid workloads like AI inference, which is a rapidly emerging which is rapidly emerging as the dominant workload in AI infrastructure.

Another area that we believe will drive value is sovereign edge infrastructure. and allowing enterprises and public sector customers to have jurisdictional and operational control over data, compute and AI outputs. We see growing demand for compute infrastructure that is geographically sovereign energy aligned and secure by design. We believe the addressable market is accelerating, particularly in Europe and emerging markets, where data sovereignty and energy efficiency are critical factors in purchasing decisions.

Our intent is to extend Marrow's vertically integrated compute platform into edge environments that meet the unique needs of latency sensitive, compliance-driven and workload diverse use cases. In this regard, we are working closely with government officials and major energy partners to extend our reach into global markets.

As part of these efforts, we've been laying the ground work for a regional headquarters in Saudi Arabia, and we have established entity in France as a European headquarters. We believe this approach will provide us access to low-cost energy by partnering with energy companies and infrastructure capital providers to lower our capital commitments. Through these efforts, we built a global growth pipeline exceeding 3 gigawatts, positioning us to scale efficiently across key markets. When you put it all together, as inference increasingly becomes the dominant cost center in AI, control over geography, latency and energy cost becomes a strategic advantage. We'll continue to invest here to ensure MARA is well positioned to meet this demand. We're excited to host our first ever Investor Day this fall.

This inaugural event will offer a deep dive into our long-term road map with insights into how we are activating our digital energy strategies across mining, infrastructure and AI. Joining us, please reach out to our Investor Relations team. To wrap up, Q2 was a milestone quarter. We grew our treasury expanded our infrastructure and proved once again that Mara is far more than a bitcoin mining company. We are the category leader in bitcoin mining, but our value lies in the infrastructure that underpins it, infrastructure that we're now leveraging to shape the future of compute. Thank you for your continued support as we build what is next. Now I'll turn it over to Salman for additional insights on the quarter.

Thank you, Fred. In Q2, we delivered record financial performance, driven by strong execution and an improving bitcoin price environment. Over the past year, we've remained laser-focused on aligning shareholder interests with Bitcoin ownership through disciplined operational execution. Between Q2 of 2024 and Q2 of 2025, our Bitcoin holdings surged by over 170% going from approximately 18,500 BTC to nearly 50,000 bitcoin.

During the same period, our energized hash rate expanded by 82%, increasing from 31.5 ish per second to $57.4 million and the market value of our Bitcoin holdings increased by more than $4.2 billion or 362% year-over-year. Let me provide some financial highlights for the quarter. We broke some records. Revenues increased 64% to 238.5% and excuse me, revenues increased 64% to $238.5 million from $145.1 million in the second quarter of 2024. This was the highest revenue quarter in the company history. The increase was primarily driven by a 50% increase in the average bitcoin price, which contributed $77 million. We produced an average of 25.9 BTC each day during Q2 and compared to 22.9 BTC each day in Q2 of 2024, which resulted in 300 more BTC earned. Furthermore, we saw a 52% increase in the number of blocks won in the quarter compared to the second quarter of last year. May 2025 was the highest single month in our history. We reported net income of $808.2 million or $1.84 per diluted share in the quarter compared to a net loss of $199.7 million or $0.72 per diluted share in the second quarter of last year. We recorded a $1.2 billion gain on digital assets, including BTC receivable during the second quarter of 2025. This reflects the impact of bitcoin holdings on our balance sheet. Now let's turn to cost structure. Our purchased energy cost per bitcoin for the quarter was $33,735 per coin, which we believe is among the lowest in the sector. And our daily cost for petahash per day improved 24% year-over-year.

This improvement reflects our growing fleet of owned and operated sites which now account for approximately 70% of our total cash rate. That transition continues to pay dividends, both operationally and financially. Now let me talk about our Bitcoin holdings and asset management. Mara is the second largest corporate public holder of PayPoint, and we seek to generate returns on our holdings as been price appreciates. Our dedicated big client asset management team made up of seasoned professionals with decades of experience in hedge funds and crypto asset management actively pursues risk-adjusted return opportunities to generate cash flows that support our operating expenses. We deploy bit point across a diversified portfolio of investment strategies, including lending, trading and other structured arrangements designed to unlock incremental value.

Our approach combines the potential for long-term bitcoin appreciation with disciplined efforts to generate return while managing risk. To a lesser extent, we have also used that client as a collateral to borrow under lines of credit. Let me dive down a little bit. During the quarter, we entered into a separately managed account or SMA agreement with [indiscernible], which is an external full-service registered adviser and transferred 500 bitcoin in mid-May of 2025, followed by an additional 1,500 bitcoin in late June of 2025.

As of June 30, 2025, a total of 2,004 bitcoin were held and actively managed within that SMA. The 500 bitcoin transferred in May 2025 generated an additional 4 Bitcoin or additional $0.4 million in a short period of time. We managed the SMA to generate returns while limiting risk and it maintains liquidity with short-term notice followed following an initial 1-year lockup. In addition, our bitcoin asset management team may from time to time engage in various bitcoin denominated traits such as options, futures, swaps, covered calls and spot transactions to generate additional returns on our bitcoin holdings.

I want to highlight that subsequent to quarter end, we issued $950 million of 0% convertible senior notes due 2032. With this upsized convertible notes offering, we have significantly bolstered our balance sheet. This additional liquidity gives us the flexibility to act strategically, whether by acquiring more bitcoin funding M&A or repaying debt. Its purpose is not to fund day-to-day operations. We are under no pressure to deploy capital immediately. Instead, we are positioned to act in response to market conditions in order to maximize long-term shareholder value. We are different from other BTC treasury companies, as Fred mentioned.

As a core business is -- our core business is bitcoin mining and large-scale data center operations, even as we hold the second largest bitcoin worldwide amongst public companies. Looking ahead, that sets us apart -- what -- looking ahead, what sets us apart is our thought leadership, worldwide operational scale and capital and operational efficiency. As of June 30, 2025, we held over $5 billion in liquid assets and with approximately $1 billion raised since gives us flexibility to fund domestic growth and pursue international expansion. Unlike passive treasury companies, we treat our bitcoin as a productive risk-managed asset through a disciplined asset management strategy, our holding strengthened the balance sheet and help fund operations, which we believe will enhance long-term shareholder value. We don't just hold bitcoin. We put it to work.

Finally, we remain on track to reach our [indiscernible] by end of the year with all minor secured and funded except for $150 million that we expect to pay in the second half. We are laying the groundwork for 2026 and beyond. We are executing on a pipeline of energy infrastructure projects, both in the U.S. and internationally. And we expect these investments to expand our capabilities, while costs are continuing to be low. With that, I'll turn over to Chris Brendler from Rosenblatt Securities, to begin our management interview. Chris?

And thanks so much for inviting me to do this. This is super exciting to be able to dig through the results with you guys. And also sort of an update on the strategy, a lot going on in corn and crypto these days. So I guess I wanted to start with the mining business, the core mining business. And maybe for Fred, just sort of give me an update on -- so the current thinking around mining versus HPC. We've seen a lot of competitors increasingly look to move there power assets towards high-performance compute and potentially could sort of see a slowing of bitcoin mining competition. But at the same time, I think the network cash rate is reaching new highs again, even though we're in the middle of a pretty hot summer. So I would love to just hear your sort of 10,000-foot view on the big clear mining business as it stands today.

Thank you, Christopher, joining us today. I think the -- as you look at the marketplace today, there's a shift occurring. You have companies who previously were kind of in the mid-tier of bitcoin mining, who have been working on a transition to HPC trying to leverage their energy assets. And you've been seeing really a couple of things happen. For 1 thing is not many of them have been able to secure contracts with hyperscalers and some of them have moved towards essentially trying to go out and get customers, enterprise customers directly who will host with the leverage their capacity. We personally think that, that business is, over time, going to be very price competitive and margins are going to compress because in most cases, bitcoin miners are really just providing power and if they're building buildings and making the investments, which according to some analysts can be as high as millions and millions of dollars per megawatt, well over $10 million a megawatt. It's going to be hard for them to acquire customers. Many enterprise customers, one to work with people who have hosted enterprise customers before and understand how to run those types of data centers and most bitcoin miners don't. So you still haven't seen really any large number of these companies transition successfully HPC outside of a handful. At the same time, you're seeing new entrants come to this market. You have a tether coming in. You have Bitmain, the single largest hardware vendor effectively taking control of a company called [indiscernible], transferring hash rate to that company and becoming the number or largest bitcoin miner indirect competition with their customers. tether themselves have stated the goal that they want to be the largest bitcoin miner in the world. So you're seeing a whole new entrant of people coming into this marketplace and some people leaving the market. We remain very focused on being a bitcoin miner. But we're also very focused on looking at where you have the convergence of inference and the needs of enterprises, especially around sovereign data. And we believe this is a unique area where we're positioned to be quite successful in the long term, and that's why we've been focusing our efforts in developing relationships with sovereigns, with governments, with energy companies in regions where we think there's going to be a huge amount of investment that we can take advantage of to help grow our business along those lines. while at the same time, it continues to grow our bitcoin mining business. As we mentioned on the call, we have a pipeline of 3 gigawatts plus power, and we intend to continue to grow at a very fast rate while also growing our business around sovereign data.

That's very helpful. I guess I'm going to drill down a little bit on the sovereign topic. You mentioned in your prepared remarks the potential for headquarters in Saudi Arabia as well as France and sort of mentioning that or holding the fact that location was important when it comes to inference. Does that suggest that you potentially will enter this business directly? Or it seems like more likely you would do it through partnerships is what I'm guessing.

Exactly. The focus here is through partnerships, partnerships with energy companies. Some have people on this call may recall that 4 years ago at mining disrupt, I did a presentation that most people found a little startling which was I basically said that bitcoin miners will either have to become partners with energy companies or energy companies will take over their businesses. And I believe that unless you as a bitcoin miner own your own energy generation, you have to become a partner with the energy company, not a customer of the energy company. And so if you look at some of these regions, Europe Gulf region, for example, you have very top-down driven energy companies who are typically government-owned or government run or have a substantial percentage of ownership by government and you have to partner with the government and partner with the companies. And in these regions, there is a big demand for sovereign data and AI because the enterprises in those regions do not want to have their data in clouds that are either owned and operated by the U.S. or the Chinese or people outside of their reaches. And so they want that data residing in their countries, within their borders in close proximity to their enterprises. And we believe that partnership of working with government and sovereign controlled energy companies and operating data centers within their orders to provide them with sovereignty over data in the is a combination of factors that could make us very successful.

Makes sense. Is this -- would you just be similar to the experience and the success you've had or it's a joint venture? Or are you envisioning a different type of partnership when you think about these kind of relationships?

That's great that you mentioned the UAE. So -- when we did that transaction, that was very focused on bitcoin mining and remains one of the most successful bitcoin mining data centers that we built from a perspective of uptime and operations. It's an amazing site is clearly still one of the leading immersion bitcoin mining data centers in the world. That taught us a lot about working with sovereigns, especially in that region. It taught us what the right type of partnerships are and how to structure those partnerships. And what you'll see going forward is something a little bit different, where you see the energy companies being more involved in the deal. And also where you see us having a greater degree of control over the terms and the relationships?

Great. Okay. And I do remember that that presentation you gave 4 years ago that was pretty pressing for sure and define surprising to think that energy companies would be directly working in the [indiscernible] mining space, but that seems a lot more likely today for sure. Speaking of [indiscernible], I wanted to ask a question. When it comes to acquiring power assets. And it seems like Merit's own path has slowed a little bit just in terms of growth. I feel like based on the conversations and the pipeline you disclosed just now, there's a lot going on. And is that because you're trying to balance as your needs with your investment? Or is it increasing competition from hyperscalers that are impacting the queue for power assets?

Well, we wouldn't have a [indiscernible] we were competing with hyperscalers, tooth and nail for power assets. We made a fairly concerted decision to focus on growing with the right types of assets versus just growing at any price. Growth at any price can be dangerous in a market where bitcoin price is running high and where cash rate has remained relatively stable because of constraints of either capital or compute or capacity, you can afford to grow in network attached mode. And if you recall, we started as an asset-light company. The reason we were successful in growing to be the largest bitcoin miner in the world using an asset-light strategy was there were enough constraints in the market that you could grow most rapidly by controlling compute because there was ample capacity there was ample access to capital, the [indiscernible] that constraint in our business. Today, it's different. Today, if you are looking at using attached energy at an average price of anywhere from $0.045 to $0.05 a kilowatt hour, you are forced to replace your machines every 3 years, which is a significant capital cost. And as you start looking at having in 2028 and another 1 after that in 2032, you really have to look at controlling your energy assets or being a partner with energy companies where they can contribute energy and your compute. That's the only way companies will be successful in the long run in this business. And so we've been very focused on executing the strategy of partnerships and controlling energy assets. And yes, it takes a while to get that started, and we've spent a lot of time this year focused on getting that process started and initiated. And we've built the pipeline now. We've built the relationships and we're in the phase where we start to begin to execute. And I think this will feed our growth over the next 2 to 3 years quite significantly.

Excellent. And I don't want to get sort of breaking sort of undisclosed ground here, but is it safe to assume that maybe the majority of that 3 gigawatt pipeline is outside the United States?

That would be undisclosed. So I think you can reference what we've said before that by 2028, about 50% of our revenue would come from international, and we're still focused on that.

Perfect. We'll have to stay tuned. I wanted to ask 1 more question on the biomining business before moving on, which was actually maybe 2 more, which was I don't know where the industry stands from a hydro cooling perspective. It feels like it's relatively new technology for large-scale miners. What are your from the '23 from Bitmain or similar models and pivoting to hydro cooling?

Yes. I think early generations of Hydro cooly had lots of challenges, leaky pipes, large consumption of water, which is a no-no in many places and a lot of just glitches. I think Bitmain has most probably figured out how to do this more effectively now. I think the other difference is the form factor for the hydro has changed. They're now doing proper 2U rackmount devices, which means you can start using similar infrastructure for corn mining as AI, which as we've been talking all along is what we view the future as being a mix of AI and bitcoin mining in the same data centers. We in UAE, for example, chose immersion technology because at the time hydro wasn't significantly developed in a way that was reliable to operate in those regions. Today, I think you can go either way, you can continue to go immersion or hydro. I think what's going to be very interesting in the future and one of the things we've learned with our PIC technology is there is this very interesting middle ground around cold plate technology that potentially is the ideal transition, which is slightly different than liquid on chip, which is how the hydro works. So I think we have yet another evolution to go through in this market before the world moves to the need to go to full immersion on AI the heat densities in the next couple of generations, we'll start getting to a point where you're going to have to go to full inversion. But today, you can still make it with liquid on-chip and eventually cold plate technology there.

Okay. Makes sense. I would like to talk about the big mining in the quarter for a second. One of the things that analysts have to realize that these things could ebb and flow and as there is some randomness to bitcoin mining operations. And sometimes you have good months and bad months, and quarter in particular, the market share kind of bounced around quite a bit between April and May was fantastic, and then it came back down in June. Was there any sort of structural uptime or downtime or curtailment that impacted those numbers significantly? Or is it just total randomness?

I think you can look at the year and look at seasonality, we have a large amount of our production in Texas. As you get into June, you start getting into warmer months and curtailment starts happening. There are also things like certain maintenance cycles and other things that can impact any given sight from time to time. Definitely, May was an amazing month where we benefited from the randomness very well. But generally, we have found that when we look at -- to what extent look as it's called in our industry, impacts us. We have over quite a long period, had a minor degree of quite positive look. But that being said, as you get into the summer months, you just have to expect a greater percentage of curtailment if you're operating in states for that's a requirement, which it is in Texas.

Sure, it makes sense. Okay. So that as a big picture question. I'd love to get your current thoughts on -- you mentioned already in your prepared remarks was the corn treasury strategy companies and their success and sort of this frothiness that we're seeing to be in with companies not only announced the bitcoin treasury strategy or other tokens and crypto assets. are now be getting lots of investor attention. I think there's certainly a narrative here that Marathon is different or Emera is different. So I'd love to get your current thoughts on the bitcoin treasury and how we should see that difference play out in market values over time between MARA and some of the competitors?

I'm not sure who to attribute this quote too, but somebody at a recent event that I was at basically said bitcoin treasury companies are the new ICOs. And if you go back to kind of as you said, bitcoin treasury companies, you can basically say you're going to put whatever coin it is into a treasury company raise money for it. And get investors, there's even one for BNB coin that was announced basently. So I think there's a lot of money going at these things. I think a number of analysts and reporters have written about the fact that strategy has done an amazing job of creating this space, include us to Michael and his team for what they've done there. But any advantage in any market starts disappearing when you have lots of companies going after it. I think it was earlier this week, somebody published $82 billion has been raised for Bitcoin treasury companies that are going to hit the market or -- sorry, crypto treasury companies, bit large across all the different coins. And they can't all be successful. And what happens to those companies that are holding coins when their NAV goes to one or worst case, like what happened to Grayscale during a period the NAV goes negative. They likely will have to sell those coins. So my concern and I think the concern of many people regarding the [indiscernible] in the market today is you have a lot of people buying bitcoin with other people's money. And if bitcoin, especially for the newer treasury companies sees a decline they may be challenged and people may sell them the stock to get their money out. Realize that Bitcoin treasury companies are not like in [indiscernible] what people have to do to try and save the money is sell the stock in those companies. And I think with as many companies doing this, there are a certain percentage of them will likely fail and that will negatively impact the price of bitcoin. We've had wallets from 2011, I think this wallet that Galaxy recently traded $9 billion for 80,000 coins [indiscernible]. People are selling at the peak when the whales that have been holding or selling it tells you something. Historically, Wells always sells leading into the peak. They sell into the top in the market. And every bitcoin -- I mean 9 something percent of all bitcoin earn profit today. And the people who are buying and looking to build treasury companies are buying at the absolute top of the market. And at some point, demand will waiver. And you have to remember that bitcoin from an institutional perspective still is a risk asset. It typically while follows 2 on the asset side, liquidity, it also correlates to inversely to the dollar. And the equity markets, it's quite correlated at times. And so I think if we see a deterioration in the economy, if we see deterioration in the equity markets. And we start to see an improvement in the dollar. You may have an environment where bitcoin could see a drop. And I'm not saying it's going to drop 80%, but it could drop 20%, 30%, great buying opportunity for many. But you've, again, got a lot of people who have been holding on for the right time to sell. And if you see any momentum to the downside, you may see a lot of selling, which will just accelerate things. So I think you have to be prudent, and it's an important -- these treasury companies are, again, a bit like ICOs. And I think that too much of a good thing runs the returns for everybody. So I would expect you'd start seeing the MNAV on these things to eventually just hit one. And at that point, you're better off the [indiscernible].

Yes, that makes sense. How do you -- how do you view the MARA [indiscernible] differently? I mean it's gotten very large now. It's over $50,000 coin, over over $5 billion. And I think it's not really sort of tagged for growth purposes. I think it's been pretty clear this is a longer-term investment. But do you foresee sort of building forever? Or is there a point where you would think about potentially selling some of your bitcoin, just given how large it's becoming relative to your market cap.

I think there's -- unlike some treasury companies, there's always a point at which we would sell some bitcoin. There may be a point where, for example, the appreciation of Bitcoin and the volatility of bitcoin decreases to the point where it operates more like gold, for example, in which case the cost of us for the company of holding bitcoin can be such that our average weight of capital to run the business by leveraging equity would become too prohibitive, and it would make sense for us to, like we did in 2023, sell bitcoin from production to pay for operating expenses. That's always an option. We are a bitcoin company. We believe in bitcoin for the long term. And as long as bitcoin continues to perform, we have to do what's right for our shareholders, which as fiduciaries is leveraged bitcoin while it continues to perform and if need be select.

Makes sense. And there was some good commentary, I think it was more some on side about actively managing the Bitcoin treasury and yield strategies to Prime. Maybe give us an update on on the thinking around [indiscernible] and how large -- how much of your bitcoin [indiscernible] are you willing to try to monetize? And does the active management include hedging strategies? And I know there was a a collar strategy in the past. Is that something that's on the table if you think that it's going a little extended? Or are you still more focused on yield than actual hedging?

I'll throw that to Salman.

Chris, when you think about our bitcoin treasury, as you mentioned, 50,000 stack a coin sitting on our balance sheet, we are looking at not just cap appreciation from a long-term perspective. as a treasury asset, but also we want to create a yield and earn cash flows from that bitcoin that's sitting on our balance sheet while it continues to appreciate for a longer duration of time. So it's a two-pronged approach and it's a financial decision. As Fred mentioned, we are a bitcoin mining company. and we produce Bitcoin on a day-to-day basis. Unlike treasury companies will have to go and buy bitcoin from the open market. We don't have to do that as we alluded to our we can produce it cheaper than going out and buying bitcoin from the open market. Having said that, this is -- this industry is much newer than other industries. This is just the beginning. And we have tested multiple investment strategies over the last 2 years by testing the market, testing different partners. And and placing a bitcoin with parties that we trust, and we have verified their credibility from a delivery standpoint. And as a result of that evolution, now we have about a little bit shy of 1/3 of our bitcoin that is activated as we call it, in the active bitcoin asset management strategy. With that, it includes, I would say, hedging is when you say hedging, typically, people think hedge means that we're trying to protect from the price risk. That's not the objective. The objective is to create cash flows. So that could have covered calls that could have multiple trading strategies where we either in-house or through our investment and partnership with [indiscernible]. We go out in we squeeze value out of the Bitcoin. As I've mentioned in the prepared remarks, within a very short period of 1.5 months from 500 bitcoin, we were able to produce for bitcoin. And look, it's infancy stage, newer industry, but we're testing these different strategies successfully. And the plan would be as we test the waters, we continue to expand from here step-by-step basis while keeping in mind the fiduciary responsibility that we have with the stack on our balance sheet that our stockholders own by being a stockholder in this company.

Excellent. That's fantastic [ Salman ]. I want to go back to sort of the higher bigger picture stuff and think about diversification beyond bitcoin mining. I think that was a push at one time to try to diversify the top line and be less reliant on the ebbs and flows of the mining business. Where do you stand today on diversifying the business? And is bitcoin treasury yield strategy as part of that diversification.

I mean, treasury yield is a way to generate yield off of an asset that we have. It's kind of like you think of old money, what does old money do they buy real estate and then they live off the yield of their real estate. If we have enough bitcoin, you can generate a yield off of it that it covers our a good portion of our operating expenses, and that takes pressure off of the other businesses so that we can continue to invest in diversifying revenue. So we are focused on investing significantly in growing our business around sovereign data and inference AI. As we come to a point where we're launching things and announcing things, it will become quite clear. But for the moment, I'll just leave it to say that we're very focused on building the next leg of MARA. So that for the future, we can leverage these great assets that we have, continue to grow them and gain synergies from them as we also add additional revenue streams that let us leverage some of the benefits of those assets going forward. well beyond the period where having produced bitcoin rewards to much lower levels.

I'd imagine that would include sort of along with your international expansion goals as well as you to expand beyond the [indiscernible]

Yes, absolutely.

Okay. One last quick one for [indiscernible]

Just to add to that, Chris. The diversification of revenues. There are 2 ways of unlocking that: One is diversification of revenues; and the other way is to reduce costs. Just a quick reminder for our listeners today that Mara started with asset-light strategy years ago and we grew very quickly over the years. And last year, we pivoted towards asset-heavy strategy, where we exited the year with 70% owned and operated. The result of that was that we reduced our electricity cost per coin in our own mining operations to one of the lowest in the sector. Now we still have a portion of our business that is tied to asset-light strategy from our historical contracts and there's opportunity to reduce costs over time as those contracts expire. And as Fred had alluded to last time, and we have talked about low-cost strategies, the diversification doesn't stop there. We also went out and bought a wind farm that we just provided update on our prepared remarks a few moments ago. Those wind farms, just to pause on that or double click on it. In a traditional bitcoin mining operation, the grid connected, compare that to the wind farm intermittent power, but just consumes power in the electricity is close to low-cost electricity. Marginal cost is almost 0. At that point in time, you're all-in cash operating cost of a traditional bitcoin miner versus a wind farm is about 75% to 85% lower than the traditional decline mining operations. So when we talk about diversification, it's not just diversification of revenues, but also the sources of power and the way we generate bitcoin. And in future, it could be depending on what is the best use of the electronics. So I wanted to highlight that important fact that, that diversification continues to happen at Mara, and our shareholders will get to see those benefits over a longer duration of time, as we are the only large-scale miner where we have opportunity to further reduce cost with these third-party contracts expiring over the years.

Yes, that's a great point. The improvement in cost has been non really helped improve the gross margins and for the leadership position from a profitability standpoint. The quick question I had a follow-up of someone was from a CapEx perspective. How much of the [indiscernible] has been already funded as of this quarter?

Yes. So we -- as we mentioned earlier, almost all of it is funded except for $150 million in minor capital there will be additional electron related capital that may be added to it to get to the 75 x ash, but we are -- our eyes are laser-focused to the 75 x hash as we had publicly disclosed a few weeks ago. and we're excited about that.

Great. Well, again, thank you so much for all the time and the answers here, pretty exciting stuff and look forward to hearing the future announcements on your growth plans. Thanks so much. I'll turn it back over to Rob.

Thanks, Chris. We're now going to take just a few questions from our retail shareholders. And the first one I'm going to address to you, Salman, and it's one that we get asked quite often. Can you talk a little bit more about MARA's cost to mine per bitcoin?

That's a very important question. And on our dressed point blank, it's -- when you think about our financials, you have to think about the evolution of the company. As I had alluded to earlier, we were asset-light strategy company. We grew very quickly but as a result of that, our costs were higher compared to some of the other peer group companies. We -- as a strategic decision last year made the decision to move towards asset-heavy strategy, our vertically integrated model where we own and operate our own sites. We paid sense to the dollar to acquire those sites compared to the market price and also the bill multiple less than 50% the build multiple. And now we're operating those sites. As a result of that, our electricity cost per coin is one of the lowest in the sector. And when you think about bitcoin mining and MARA, bitcoin mining is in our DNA, but we are also focused on other initiatives as Fred has alluded to. So we also own and operate our mining pool. We have our own firmware. We also are investing in R&D that is the future of the business and diversification of the revenues that Fred mentioned around and those costs, it's not fair to compare the total cost of the company on a coin basis because that cost is not attributable to the coin. So if I have to do the math and look at our asset-light and asset-heavy, combination of cost of revenue, cash costs and look at our bitcoin produce quarter-over-quarter, it hovers around $50,000 per coin and that is still more than 50% cheaper than buying in the open market. Now with time, as I had said earlier, we expect these costs to further improve as our third-party mining operations that are more expensive than owned and operated mining operations will expire over a period of time. And as we exit those contracts and continue to build on the low-cost strategy with the wind farms and the and gone, which we plan to expand further the oil and gas operations, where we consume natural gas that was being emitted into [indiscernible] and we reduce the harmful gases by consuming that and put those electrons to use, that those costs are sense to the dollar compared to a traditional mining operations. And with a combination of those things, our focus, our expectation would be that over time, our costs are going to continue to be going down from here as we expand.

Great. And then the second question is for Fred. How will the signing of the Genius Act affect MARA's path to bitcoin mining?

So what the Genius Act does is essentially opens the floodgates to stable coins being integrated with the [indiscernible] system. For example, today, we saw Circle announced that Fiserv and FIS are going to integrate Circle into their payment system and you're seeing the credit card companies developing stable coins. You're seeing banks developing stable coins. What happens when you have stable coins is you now have liquidity that can flow 24/7, 365. For people today wanting to buy Bitcoin, they have to move money from a bank account on to an exchange during banking hours, which means the predominant volume of Bitcoin that trades typically happens during banking hours, 95. With stable coins, people can hold value in a digital currency that's the equivalent of a dollar. So it doesn't have the volatility of something like bitcoin, for example. And they can move on a moment's notice, transfer to an exchange and trade right away. What that does is likely creates a greater incentive for people to trade 24/7. Now there are many traders who take advantage of the lower volumes of trading that happens during nighttime cycles depending on the market you're in. because there's lower volume, which means that if you have -- if you're placing orders at different price points, you can potentially move the market a little easier. But with stable cuts, I think what's going to happen is more liquidity will flow into Bitcoin. You've also seen things like [indiscernible] now say that you should have 15% of your assets in gold and Bitcoin. So I think with stable [indiscernible], essentially, liquidity will flow. And when liquidity flows, people will move that liquidity into whatever asset they think is the best performing place to hold it. So stable coins will increase the ability for people and especially institutions to potentially allocate greater amounts of capital to things like Bitcoin. And so I think it only bodes well.

Terrific. Well, that's all the time we have for today. Thanks, everyone, for joining us. If you have questions that were not answered during today's call, please feel free to contact our Investor Relations team at [email protected]. Thanks very much, and enjoy the rest of the day.

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