Riot Blockchain Inc Aktie

Good day, and thank you for standing by. Welcome to Riot Platforms' First Quarter 2026 Earnings Conference Call. [Operator Instructions] Please also be advised that today's call is being recorded.

I would now like to hand the conference over to Josh Kane, Head of Investor Relations at Riot Platform. Please go ahead.

Thank you, operator. Good afternoon, and welcome to Riot Platform's First Quarter 2026 Earnings Conference Call. My name is Josh Kane, Head of Investor Relations. And joining me on today's call from Riot are Jason Les, Chief Executive Officer; and Jason Chung, Chief Financial Officer.

On the Riot Investor Relations website, you can find our first quarter 2026 earnings press release and accompanying earnings presentation, which are intended to supplement today's prepared remarks and which include a discussion of certain non-GAAP items. Non-GAAP financial measures provided should not be considered as a substitute for or superior to the measures of financial performance prepared in accordance with GAAP and are included as additional clarifying items to aid investors in further understanding the company's first quarter 2026 performance.

During today's call, we will be making forward-looking statements regarding potential future events. These statements are based on management's current expectations and assumptions and are subject to risks and uncertainties. Actual results could materially differ due to factors discussed in today's earnings press release and comments and responses made during today's call and in the Risk Factors section of our Form 10-K and Form 10-Q, including for the 3 months ended March 31, 2026, which will be filed later today as well as other filings with the Securities and Exchange Commission.

With that, I will turn the call over to Jay Les, CEO of Riot Platforms.

Thank you, Josh, and good afternoon, everyone. The first quarter of 2026 was a definitive inflection point in Riot's transition into one of the most significant and capable Data Center operators in the industry.

Looking at our key milestones for the quarter. First, AMD officially exercised a 25-megawatt expansion option, bringing their total contracted footprint at our Rockdale facility to 50 megawatts and validating our ability to execute at institutional scale. Initial Data Center capacity for this expansion will be delivered beginning in November of this year.

Second, on the initial 25-megawatt AMD lease, we delivered the first 5 megawatts of critical IT capacity right on schedule in January, with the remaining 20 megawatts on track for delivery this May.

Third, we continue to make significant progress at our Corsicana facility. We have initiated development of our first core and shell building using our enhanced 168-megawatt standard design, which efficiently consolidates our previous 2 building design, which will now be connected by expanded administrative capacity. Concurrently, we are also securing long lead items to ensure timely delivery of full build-to-suit capacity after the core and shell is complete.

Finally, we achieved this infrastructure growth while maintaining strong capital discipline, proactively funding our Data Center initiatives entirely through operating cash flow and disciplined Bitcoin sales, allowing us to execute on these key growth initiatives without issuing a single share of equity.

Let's dive right into the AMD expansion. When we announced the initial AMD lease in January, we signed a 10-year agreement to deliver 25 megawatts of critical IT capacity at our Rockdale facility with extension options that created a partnership pathway of up to 25 years. That original lease included a 75-megawatt expansion option and a right of first refusal on an additional 100 megawatts. More recently, our partnership with AMD has expanded, as they worked with our team to exercise an additional 25 megawatts of their expansion option capacity.

AMD now has 50 megawatts of critical IT capacity under contract with Riot at the Rockdale facility. This expansion reflects AMD's ongoing confidence in our ability to deliver and is a clear indicator that Riot is delivering exactly as promised, on time and on budget.

To summarize the economics of our expanded AMD lease today, we are delivering an additional 25 megawatts of critical IT capacity, bringing the total lease to 50 megawatts. Total revenue of $636 million during the primary 10-year period. $51 million in average annual NOI over the course of the contract, which, when combined with the reduced CapEx spend will drive an even more attractive development yield relative to the initial AMD lease. The total CapEx required for the expansion is approximately $3.3 million per megawatt, totaling $83.2 million, a significant reduction from the initial 25-megawatt CapEx of $3.6 million per megawatt, driven by a leaner build-out scope following building preparation in the initial phase.

Slide 8 presents a clear visual of exactly how this expansion is taking shape on the ground at our Rockdale facility. On the top half of the slide, you can see the physical layout of Buildings F and G. We are currently finalizing the initial 25 megawatts of capacity for AMD highlighted in yellow. We are already delivering 5 megawatts for AMD with the remaining 20 megawatts firmly on schedule for full delivery next month in May 2026. The AMD's 25-megawatt expansion will be developed directly adjacent to the initial AMD footprint in Building G and will be constructed in 2 phases. Phase 3 highlighted in blue will deliver 10 megawatts in November of 2026. While Phase 4 highlighted in orange represents the 15 megawatts for delivery in May of 2027.

As a result of this phase delivery, we anticipate exiting 2026 with an annualized operating lease revenue run rate of $37.8 million, scaling to a run rate of $55.6 million as we exit 2027 and AMD's full 50-megawatt footprint comes online. Importantly, this provides a highly visible, high-margin baseline that has the potential to scale up even further if AMD exercises its remaining expansion options. You can see the physical footprint of those additional options mapped out in green on the site plan. AMD retains additional 50-megawatt expansion option, and furthermore, they now hold an additional 100-megawatt option, which replaces their prior right of first refusal. Together, this provides a highly visible de-risked pathway to potentially scale our partnership with AMD to up to 200 megawatts of critical IT capacity at Rockdale.

Now I want to provide an update on the development activity underway at our Corsicana campus. As a reminder, at the end of last year, we announced our plan to initiate core and shell development at Corsicana. I am pleased to report that development is actively underway and tracking on schedule. This marks the transition of Corsicana from a site with approved power into an active Data Center development site. Since that announcement, our team has continued to refine our standard basis of design based on market engagement and feedback. The result is a meaningful enhancement to both the density and the flexibility of what we can deliver.

Our updated standard is a 168-megawatt critical IT building engineered to support densities beyond 1,000 watts per square foot. The design is configurable as a 2-story standard or a single-story high-density format with oversized galleries to accept 100% liquid cooling and the dense next-generation equipment without retrofit. We are using prefabricated skids and vendor-agnostic equipment specifications to further compress our schedule and derisk procurement. This is a design built for repeatability, speed to market, and the requirements of the most sophisticated AI and HPC tenants in the market today.

Reflecting this enhancement, we have consolidated the two buildings we previously announced into a single larger building with 168 megawatts of critical IT capacity, up from the 112 megawatts we originally planned across two buildings. The core and shell CapEx is unchanged from our prior guidance, which means we are now delivering 50% more critical IT capacity for the same [indiscernible] spend. This meaningfully improves our capital efficiency at the core and shell level. Development is underway today, and we have a clear line of sight to 160 megawatts of completed core and shell in the second quarter of 2027.

Applying the updated design across the full Corsicana site our total planned campus capacity now stands at 756 megawatts of critical IT capacity, an increase over our prior plan on the same approved power, the same land and the same development time line. Put simply, we are extracting more capacity and more value from the infrastructure we have already secured, and we are doing so on a timeline that matches the urgency of today's market.

Now I'd like to turn it over to Jason Chung to outline our financing strategy and review the quarterly financial results.

Thank you, Jason. Turning to how we are funding this growth on Slide 11. There are 4 primary principles that guide our approach to financing.

First, we carefully manage our current liquidity. This involves the strategic management of cash and Bitcoin holdings to finance initial equity requirements for data center development. Second, we seek to broaden capital availability. By leveraging the credit profiles of our tenants and our highly visible, long-term contracted cash flows, we're establishing new institutional financing and capital sources for Riot. Third, we look to systematically lower our cost of capital. As our asset base matures, we are able to translate the strong credit characteristics and funding profiles into accretive low-cost capital. And fourth, we maintain prudent ongoing balance sheet management. This requires active debt measurement throughout market cycles in order to cleanly recycle capital, preserve our liquidity profile and support long-term growth.

Slide 12 illustrates how these principles work in practice. Our funding strategy utilizes a sequential capital cycle to fund our data center development. In Phase 1, initial development funding we use our balance sheet to advance development as seen with the initial 25-megawatt AMD deployment to just an additional 25-megawatt AMD option and the core and shell development at Corsicana. During the quarter, we funded this CapEx through a disciplined sale of a portion of our Bitcoin holdings, the most capital efficient source of funding currently available to us. Importantly, we did not issue any common equity during the quarter, instead, we leverage our Bitcoin treasury and our operating cash flows to fund this development.

In Phase 2, tenant backed project financing. We actively engage with multiple institutional lenders on project level, non-recourse financing structures for the AMD lease. The quality of the AMD lease has a long-term, high-margin lease with an investment-grade leader in the AI ecosystem makes this the type of asset that project finance markets are designed to finance efficiently. We continue to target attractive loan-to-cost ratios in the range of 80% in these structures. Once we close funding, we will be in a position to recover a substantial portion of the equity we deployed into this first set of projects.

Phase 3 is the capital recycling phase, where equity will recover from either a true-up during the construction period as in our AMD discussions or from refinancing proceeds on completed, stabilized assets close directly back into the next wave of data center development. The cycle is to lease, finance, build and recycle. And as we compound through the cycle, we retained ownership of high-quality cash flowing assets while continuously redeploying capital to finance additional growth.

Let's move on to the first quarter financial update on Slide 14. For the first quarter of 2026, Riot reported total revenue of $167 million. Notably, with the delivery of our first 5 megawatts to AMD this quarter, Riot is now an active Data Center operator. And for the first time, our top line now includes contracted lease revenue from an investment-grade tenant.

We recorded a GAAP net loss of $500 million, or $1.44 per diluted share and an adjusted EBITDA loss of $311 million. This loss was driven by non-cash mark-to-market accounting adjustments on our Bitcoin holdings of $326.7 million and noncash depreciation and amortization expense of $97.7 million, which do not reflect the underlying strong fundamental economics of our operations.

Diving into these operations, our Bitcoin Mining segment performance remained robust. Riot produced 1,473 Bitcoin in the first quarter and ended the quarter with a deployed hash rate of 42.5 exahash. We generated $21 million in power curtailment credits, driving our net cost of power down to $0.03 per kilowatt hour, thereby lowering our direct cost to mine Bitcoin to $44,629 per Bitcoin, a 26% reduction compared to the fourth quarter of 2025.

In our newly added Data Center segment, we successfully exited the quarter with 5 megawatts of critical IT capacity fully online, and generated $33.2 million in total revenue, consisting of $900,000 in operating lease revenue and $32.2 million in tenant fit-out services revenue. Finally, we ended the quarter holding 15,679 Bitcoin on our balance sheet, valued at approximately $1.1 billion, which we will continue to leverage in order to finance the ongoing development of our data center business.

Turning to Slide 15. I'm proud to present the inaugural financial results of our Data Center segment. In the first quarter, this segment generated $33.2 million in total revenue. As we introduce this new reporting line, it is important to understand the composition of this revenue and how it will evolve as our footprint scales. The majority of our first quarter revenue, $32.2 million was driven by tenant fit-out services. This represents the procurement and installation of customer-specific equipment, which is reimbursed by tenants on a cost-plus basis. While this revenue naturally carries a lower margin, it requires no capital risk from Riot and accelerates our tenants' ultimate speed to market.

The fundamental value of this segment, however, is reflected in the operating lease income. We recognized roughly $900,000 in recurring lease revenue, driven by the initial 5-megawatt delivery to AMD in January, which generated a 91% gross margin this quarter. As AMD scales its operations, we expect associated operations and maintenance costs naturally increase, which will normalize this margin towards our previously stated run rate target of 80% plus. As we look ahead, you will see a natural evolution in this revenue mix. While tenant fit-out revenue is elevated today during the development phase as the remaining megawatts for AMD come fully online our high-margin operating lease revenue will scale dramatically. This will layer highly predictable infrastructure-grade cash flows into our consolidated P&L, driving significant margin expansion over time.

Turning to Slide 16. Our Engineering segment comprised of ESS Metron and E4A Solutions serves as a key pillar of our execution strategy. The financial metrics for Engineering remain exceptionally strong. Engineering backlog stood at $193.4 million during the quarter, with approximately 90% of backlog continuing to be driven by Data Center sector demand. Most importantly, the apparent decline in backlog for this quarter was entirely driven by our decision to strategically hold back manufacturing capacity for deployment towards our own Data Center business.

Since acquiring ESS Metron in December 2021, Riot has realized approximately $24 million in cumulative CapEx savings across our development footprint, and these savings will continue to compound as we further scale up. While this compounding cost advantage is accretive, the true strategic value of our Engineering business is control over procurement. Low- and medium-voltage switchgear, transformers and power distribution centers are among the most severely constrained components in the Data Center supply chain.

For developers relying on third-party manufacturers, lead times are lengthening, and these lead times have become a binding constraint on delivery schedules across the industry. Because Riot owns a dedicated switchgear and power distribution manufacturer, we can sequence prioritize and derisk the scheduled critical equipment required to bring a data center online. This vertical integration was a key factor supporting our ability to deliver Phase 1 of the AMD lease on an accelerated time line.

Looking ahead, we'll continue to invest in the strategically important business. In 2026, we expect to increase ESS Metron's total engineering capacity by approximately 25%, and we will be strategically allocating that incremental capacity to support Riot's own data center growth. Further, because we manufacture these components in-house, we design them in parallel with our Data Center engineering team, allowing us to move faster and reducing redesign risk. Just as importantly, the same teams that manufacture this equipment also provide maintenance in the field, which will drive long-term operational efficiencies as our data centers are energized and stabilized.

Taken together, our Engineering business is a core engine of our competitive remote in a market where time to power is the single most valuable commodity.

Now I'd like to turn it back over to Jason Les.

Thank you, Jason. I want to frame one of our key competitive advantages in the broader data center development market, secured power. Today, access to power is a key bottleneck to data center development globally. This makes our large portfolio of 2 gigawatts of fully approved power, a strong competitive advantage, giving us one of the most significant development pipelines in our industry.

However, we are not stopping here. We recognize that the market demand for power is strong, and we are aggressively pursuing growth in our Power portfolio across 4 distinct avenues: First, through greenfield and brownfield development, securing and developing new land assets that offer immediate or near-term proof power capacity; second, through behind-the-meter self-generation, allowing us to strategically co-locate our own power production directly with our critical load; third, through inorganic M&A actively targeting and acquiring portfolios or organizations that already possess established access to power; and fourth, through strategic partnerships, forming joint ventures to expand our geographic footprint, rapidly grow our pipeline and explore next-generation technologies.

To put the scale and rigor of this effort into perspective, our corporate development team has already evaluated over 100 distinct opportunities across these 4 avenues. We have the team, the capital and the strategy to continuously source the highest quality power assets [ required ] to fuel our development pipeline. However, let me be clear. While we are aggressively pursuing these opportunities, we maintain rigorous capital discipline. We will only execute on transactions that are highly accretive, financially responsible and strictly aligned with our target return thresholds.

Now I want to walk through the path we have taken to get to where we are today and provide investors with a clear picture of some of the obstacles Riot has navigated in order to best position our Power portfolio for maximum value creation. At the start of 2025, we engaged Altman Solon to conduct a formal feasibility study on both Corsicana and Rockdale, and the conclusion was unambiguous. We had two of the most attractive data center sites in the country. But the same study also identified two very specific constraints that left unresolved would have prevented us from leasing that power to high-quality tenants at any meaningful scale.

The first was land at Corsicana, where our original footprint was insufficient to accommodate the full 1-gigawatt campus development we wanted to deliver. The second was our ground lease at Rockdale. Until we solve both of these constraints, we were not in a position to meaningfully advance design, development or leasing at either site.

Solving these two constraints require patient, disciplined execution, and that is what we did. Over the course of 2025, we successfully navigated a series of obstacles to acquire land adjacent to our original Corsicana site, unlocking the ability to develop the full 1-gigawatt of approved power on right owned land in a connected campus layout. At Rockdale, we converted our interest from the long-term ground lease into a fee simple acquisition of the 200 acres underlying the site. With those two transactions closed, we own the land, we took control over our own destiny at both sites and we removed the most significant barriers between our power portfolio and high-quality contracted leases.

Critically, we did not wait for one work stream to finish before beginning the next. In parallel with the land work, we systematically built out the organization starting in the second quarter of 2025 with veteran product design and engineering talent. With the Corsicana land situation on track, we completed the initial basis of design for our standard Data Center product and initial campus design for the full Corsicana buildout. Through the end of 2025, we took those designs to market for direct technical and commercial feedback from prospective tenants, initiated core and shell development at Corsicana and brought on senior commercial leadership to drive leasing execution. That disciplined sequenced groundwork is exactly what allowed us to move decisively when the opportunity arrives.

In January of this year, we signed our first Data Center lease at the AMD and delivered the initial phase of capacity within the same month. Since that initial lease, we have expanded the AMD relationship to 50 megawatts, enhance our standard design to increase density and flexibility and are now actively engaged in commercial discussions at both of our sites. Every one of the steps on this time line was necessary in order to maximize our value creation opportunity. Every one of them has been completed on an accelerated schedule. And the result is that we now have an active commercial pipeline underpinned by secured land, a proven design, committed capital and a tenant relationship that is already generating revenue today. This is an excellent position to be in, and we are confident in our ability to continue to execute from here.

Now I want to zoom in on part of that time line and take a moment to elaborate on the team we have built to execute on this opportunity. Over the past year, building out a world-class data center organization has been one of our highest priorities because we knew from the start that the quality of our team would be every bit as important as the quality of our assets. What you see on this slide is the depth and breadth of the capabilities we have now assembled across 4 pillars: commercial sales; critical operations; project execution; and design and construction. Each of these functions is led by experienced credential leadership with direct track records of delivering mission-critical infrastructure at hyperscale grade platforms.

On the commercial side, our sales organization is led by Rhea Williams, our Senior Vice President of AI & Hyperscale sales. Rhea joined us following previous sales roles at Oracle, Compass Data Centers and Digital Realty. And she brings both the relationships and the credibility necessary to engage hyperscalers and other top-tier tenants at the highest level. Rhea directly reports to me, that reporting structure is deliberate. Our leasing strategy is the single most important driver of long-term shareholder value at Riot. And having sales report directly to the CEO ensures that I am directly engaged in every major commercial discussion.

I am also very pleased to announce today a significant addition to our leadership team. Adam is a proven infrastructure executive with more than 15 years of experience leading hyperscale and AI data center development at multi-gigawatt scale. He comes to us most recently from TA Digital Group, where he served as Senior Vice President of Design and Construction. And prior to that, he held leadership positions at both Google and Meta. Adam is exactly the caliber of leader we need at this stage of our development, and we are thrilled to have him at the helm of our design, construction and procurement teams as we scale Corsicana, Rockdale and our broader data center platform.

Rounding up the organization, our critical operations leadership brings deep experience running mission-critical environments to hyperscale SLA standards. Our project execution team combines in-house high voltage and procurement expertise with integrated program management across our development pipeline. And every one of these functions is supported by Riot's broader enterprise platform, including our vertically integrated engineering capabilities at ESS Metron and E4A Solutions.

The result is a data center organization that is experienced, credentialed and deep. This is a team that is already delivering for AMD at Corsicana and across the leasing discussions underway today. We have the right people in the right seats to execute on the opportunity in front of us. And our confidence in this team is reflected in the pace of progress you are seeing across our business.

I want to close by putting this quarter into perspective. Riot has 4 things that in combination are extraordinarily difficult to replicate. We have the assets, 2-gigawatts of utility power, including 1.7 gigawatts of fully approved energized capacity at two of the most attractive data center development sites in the United States. We have the balance sheet, a 15,679 Bitcoin treasury worth roughly $1.1 billion at quarter end, significant cash on hand, operating cash flow from efficient, low-cost mining operations, and strong capital markets relationships give us the ability to fund our growth on value accretive terms.

We have the team. Our in-house data center organization includes veteran leadership across product design, construction, engineering, sales and operations, and they are delivering on the AMD lease, developing our data center product building Corsicana and advancing our next wave of leasing discussions. And we have a repeatable approach. Our powerful strategy, lease to creditworthy tenants, finance efficiently, build a discipline, recycle capital is designed to compound through multiple deals and multiple sites.

Our priorities for the balance of 2026 are clear: first, deliver contracted megawatts to AMD on schedule and on budget; second, execute on additional leases at both Rockdale and Corsicana, with active discussions underway across hyperscale and other high-quality tenants; third, advanced core and shell development to support delivery of Tier 3 build-to-suit data center capacity; fourth, secure attractive, low-cost financing that reflects the quality of our tenants and sites; and fifth, continue to selectively grow our power pipeline through greenfield and brownfield development, self-generation, partnerships and targeted acquisitions.

The opportunity in front of us is significant. Data center demand continues to grow rapidly, driven by the commercialization of AI and the accelerating need for high-density compute. Power, execution talent, supply chain access and capital discipline remain the binding constraints and time lines for new capacity continue to extend. Riot sits on the right side of both of these trends with energized, fully approved power in exactly the right markets, and with a built-out operating model that is delivering. The AMD expansion is a direct reflection of that position, and it is, we believe, just the beginning.

As we continue to convert megawatts into contracted data center leases with creditworthy tenants, we expect the market to increasingly recognize the quality scale and cash flow visibility of our platform and to rerate Riot's valuation accordingly. On behalf of our entire management team, I want to thank our shareholders, our partners and our employees for their continued support as we execute on this opportunity.

With that, we will now open the call up for questions. Operator?

[Operator Instructions] Our first question will come from the line of Paul Golding with Macquarie.

Congrats on all the progress this quarter. I just wanted to ask a couple of questions. First question, on the 25-megawatt expansion with AMD, I was just hoping you could talk through some of the puts and takes. It looks like the total contract value across the 25 megawatts is up versus the initial lease, while as you noted, the CapEx per megawatt is down due to a leaner build-out. I was wondering if you could just give some color on those puts and takes on how you were able to realize a better TCR -- TCV versus a leaner build-out and better CapEx profile? And then I have a follow-up.

Sure. Thanks, Paul. This expansion falls under the original lease that we executed with AMD earlier this year. So it is the same rental rate in terms. I think the only reason you may be seeing the difference there is that there is an escalator clause in our agreement and this new agreement runs after -- over the course of those escalators occurring, but it is otherwise like, substantially the similar terms, similar rate, all of that.

The only economic difference really is that lower build-out cost that you mentioned, and we're able to achieve that lower build-out cost because we're leveraging the full building preparation that was already done in the original phase. So when we did the first 25 megawatts, we had to prepare that full building, and that had some additional expense. And now when we exercise -- execute on the next 25-megawatt expansion completing that building out. We don't have to do that work over again.

So lower cost by leveraging additional work and substantially the same better terms. But as you see on our slide, you combine all of these factors together, and you're having a lower build costs, a slightly higher contract value and altogether, an actual even improved yields from our original deal.

Great. And maybe a two-part follow-up. Just on the back of those comments, it does look like it may be a bit of a longer build-out period for that 25-megawatt expansion. Can you talk to that? And also the ROFR piece that was converted to an option just as a follow-up to that. I know there's another 50 megawatts in that original option as well as the 100-megawatt ROFR, but just to understand how that converted as well as some of the time considerations with the expansion.

Yes. So this is a pretty fast time line to deliver capacity. You see we're signing this deal -- we're announcing this deal here in April, and then we're delivering this at the end of October, beginning of November. So a pretty quick time line here.

To give you some color, when we did the first 25 megawatts for AMD we were making progress on that schedule before the lease was signed. We were taking some calculated risks, manageable risk to be prepared and to get that first lease off the ground. Now with this expansion, you're really the whole process from the beginning. And what that means is this schedule is really broadly in line with the build schedule that you saw in the first phase, difference being just, we just weren't able to announce that until further along in the process.

As far as the expansion option and the ROFR goes. From the very beginning here, we said that we viewed our initial deal with AMD to be the beginning of a larger partnership. And the best way that we at Riot can achieve that is by being a consistent and reliable partner for AMD. And in doing so, we position ourselves as their preferred supplier of choice. So by continuing to do what we're doing, we believe that we are positioned to continue to grow that relationship. And I think the fact that AMD has exercised part of its option so quickly, just a few months after the initial deal, I think that demonstrates that we are succeeding at our goal with growing this relationship.

Now more specifically on the ROFR here. We converted the ROFR to an option really just to simplify the pathway of expansion of the lease of AMD. We want to advance this relationship, AMD wants to advance this relationship, and we want to have a simple pathway to do that. And having an option instead of ROFR really gives them what they really wanted and that work better for us. With the pace of interest at Rockdale and in addition to Corsicana, it was better for us to have a defined mechanism for what AMD is looking for, instead of having to call that ROFR on terms or on a design that's different than what AMD's needs are.

So we simplify our discussions with other potential tenants while also simplifying the pathway for expanding the relationship with AMD. And that's how we were thinking about changing this ROFR to this option.

And that will come from the line of John Todaro with Needham.

Congrats on the additional capacity with AMD. I was wondering if we could get an update on current lease discussions, maybe beyond AMD, on Rockdale and Corsicana, how you would characterize how those have progressed since last quarter, if there's been any kind of sticking points or gating factors in those conversations? And then I have a follow-up.

Yes. Thank you for the question. So over the past few quarters, we laid out the road map that we've been on to execute a commercial process. And what we've done is completed the foundational work that we needed to fill the gaps that we had, we talked about that on the time line side and bring a strong offering to the types of counterparties that we want to lease to. As a result of this preparation, we are able to act on the substantial interest that I kind of got into on our last earnings call. And those discussions have advanced considerably since then. So we're in a great spot. There are no gating items or issues here. We are moving forward. We have interest for capacity across both Corsicana and Rockdale, and we are pursuing those opportunities in parallel.

On leasing, our philosophy has always been to focus on high-quality tenants that can drive the financing terms that maximize value. And the feedback that I can give you is the type of engagement that we're getting has really validated the methodical approach that we've taken. Our ability to succeed in this commercial process is really enhanced when we're going through an onboarding process with a hyperscaler and we can check the box affirmatively on the vast majority of the hundreds of requirements that they have. That is the result of preparation.

Leasing this type of capacity to top-tier tenants, that is an enormous lift. And that can have an unpredictable time line. We've seen some of our peers comment on having multiple deals start to stop or fall through before one got to the finish line. So while it's an unpredictable process, I can tell you that I am more confident than ever at our ability to succeed here based on the progress we've made and based on the type of engagement that we're getting.

So all of this to say, I can't tell you when our next lease will be signed. But I can tell you that I believe you will continue to see us make progress over the road map that we've laid out, ultimately culminating in a full lease-up of our capacity.

That's great. And if I could just get a follow-up on maybe -- kind of just, I guess, more broadly kind of demand signals. Do you think we've kind of seen fewer leases in the public market so far that I think maybe some investors expected in '26. I guess is there anything beyond your conversations where there is changes in demand signals or something of that nature in the last several weeks or months or anything that we could call out?

We see the broader theme of data center demand outpacing supply continuing, and we see that theme continuing for the foreseeable future. The fact is that the commercialization of AI is rapidly advancing and everyone is going to continue to be short on compute because of the data center capacity that's required to support that. And I think that theme was evident on all of the hyperscaler earnings calls yesterday, where hyperscalers are growing CapEx and they are all short on compute and capacity, identified as a key thing that's keeping some CEOs up at night. So that theme remains intact.

But each buyer is always in a different phase of their own buying cycle. And at different times, different companies are in a more urgent state than others. And you can imagine, in this rapidly changing environment that AI is driving this cycle is running through much quicker than it has historically. But you're always going to be seeing the same level of urgency across the field. And then that field will kind of just completely change from 1 quarter to a next as different companies are in different parts of their buying cycle.

The important thing is that we, at Riot, we've built a structure where we can come fully prepared and rapidly respond and engaged as customer interest comes forward. And that means that we are positioned to respond and work with what the market is bringing us, whether it's our reliance on our standard design or specific requirements that our design can easily accommodate. Our preparation is paying off, and we are in the right market at the right time.

And that will come from the line of Mike Grondahl with Northland.

Can you talk about some of the initial data center revenue this quarter, how that related to the initial 25 megawatts you're delivering? And how to think about margins this quarter and going forward?

Mike, thanks for the question. This is Jason Chung. Maybe I'll take a stab at that one. So to get a clear picture of our initial data center financials, it's important to break down the total segment revenues that we reported of $33.2 million for the quarter because there's really two distinct revenue streams at play here. First, the vast majority of that total top line, $32.2 million relates directly to tenant fit-out services, which we execute on a cost-plus basis. And this generated $1.4 million in gross profit at about a 5% margin.

That being said, I think the remaining and more interesting data point is really around the core operating lease revenue, which came in at $900,000 for the quarter. This reflects a little over 2 months of revenue from that initial 5-megawatt delivery to AMD, which occurred in late January.

And so regarding your question on margins. So the margin on the core operating lease component for this quarter was 91%. However, that 91% is a function of being in the early stages of AMD's ramp-up at Rockdale. And that means there's relatively lighter operating costs during those initial 2 and a bit months. As AMD scales into their full capacity and site operations mature, we expect that O&M costs will naturally scale in line with that ramp-up. And that will drive NOI margins towards the targeted 80% range that we put out there publicly before. And we think that will happen as we close out Q3 and head into Q4.

Got it. And then maybe one more for you, Jason. Can you talk a little bit about the financing structure you envisioned for AMD? And I don't know, initial conversations you've had with lenders.

Absolutely. So initial feedback has been really positive on the AMD financing, and that's really based on the strong cash flow profile of the lease, the attractive and high development yield as well as just the overall strength of having AMD as an investment-grade tenant there on site. So while I can't really comment on the specific spreads at this point. We believe that the overall structure of the deal and the combination of the relative lack of supply of AMD debt in the market today, support spreads that will be highly competitive with what we're seeing across the broader financing markets.

One moment for our next question, and that will come from the line of Stephen Glagola with KBW.

Just two parts for me also. With the recent changes in leadership on the Data Center side, has that had any impact on lease discussions you're having with hyperscalers or potential tenants in general? And second, I guess, sitting here today, do you feel you've got the team in place to simultaneously advance, what you've seen efforts at both Rockdale and Corsicana.

Thanks for the question, Stephen. So one of my ongoing responsibilities as CEO is to ensure that we have the right leadership structure and right team in place to execute on our strategy. So to do that, we are constantly looking at how we are organized, and where additional talent can enhance our ability to succeed. Bringing in leaders like Adam Black to lead design and construction is a perfect example of that philosophy in action. And you can imagine, this is not something that happened overnight. It was sometime in the making, and it was the right move in order to enhance our leadership structure.

These changes have had absolutely no impact on development or commercial discussions. And I think our continued rapid delivery for AMD in them deciding to exercise part of their option is a perfect example of that. And I think further, as we continue to make progress, that will become even more clear.

And for the second part of your question, do we feel that we have the right team in place right now? I believe we have an extremely strong team in place to execute at both Rockdale and Corsicana concurrently. And the reason I say that is because we're doing that right now. from a design, construction, commercial sales, critical operations, project execution perspective, we have an incredibly strong leadership team assembled. And they are all working hand-in-hand to advance on our strategy, and we're very, very proud of that.

You can definitely expect some incremental hiring for support roles in those different departments in the future. Our team is going to continue to scale as our business does, but the core leadership structure has been built, and that's the team that's executing today.

One moment for our next question. And that will come from the line of Brett Knoblauch with Cantor Fitzgerald.

Maybe just one to double click on Corsicana. It seems like there's a lot of momentum there. In the last quarter, we talked about conversations or customer conversations for taking down the entire site. I'm curious if that is still the case. Do you have a preference of a single tenant or multi-tenant? And then maybe as a follow-up on the procurement process for the core and shell. I guess, where are you on that as well as the procurement process for what would after the core and shell?

Sure. Thanks, Brett. Your question on the majority of the conversations still around the entire site. Yes, that still remains the case. And that is probably our preference. But I want to emphasize that we still have the ability to accommodate multi-tenant if that is the way the things go. And the only reason I say that is because at a potential of 756 megawatts of leasable capacity, Corsicana is a huge deal. We have not seen any deals signed by our peers at that scale. Now that is the opportunity for us. That's a fantastic asset for us. But it also means that is a big bite to [indiscernible] tenants who would be committing to a multiyear deployment schedule at a huge scale.

So I think that still remains the case. The majority of the interest is for the full site. That's the same as the commentary I gave on our prior call. I'm just giving you some color on the multiple potential outcomes that this can still take, still substantial amount of interest, and we're very excited about that.

On to your question about procurement, we previously secured and have actually already begun receiving the necessary substation equipment, so we are in a terrific position on the long-lead equipment for core and shell. At this point on the core and shell development, it's largely an exercise in mobilizing labor. And to that effect, I'm very happy to share that we've secured a general contractor for this space in the development, and they are executing. In fact, this is the same general contractor who executed and is executing for us with AMD on a very accelerated time line. So we feel great about this partnership.

Beyond core and shell, talking about the Tier 3 eventual buildout of the site. Yes, we have been securing long-lead equipment for that. So when I say long-lead equipment, I'm talking about backup generators, chillers, and as Jason mentioned in the prepared remarks, ESS Metron scaling up and preparing capacity for right use. All of this procurement is a result of our confidence in how our strategy is progressing. We're doing all of this to ensure that we have an attractive offering on an attractive time line. So you can read into why we are making the moves that we are about this procurement. We feel good about the progress that we're making with procurement and development remains on schedule.

One moment for our next question. And that will come from the line of Brian Dobson with Clear Street.

So just one more follow-up on financing in general. Bitcoin sales have been a big part of your upfront financing. Do you expect that to continue? And would you elaborate on your view of, call it, long-term debt financing and how that is your broader strategy moving forward?

Let me turn that question, Jason Chung.

Brian. So that's correct. So right now, our Bitcoin treasury and operating cash flows remain the most capital-efficient, non-dilutive sources of funding available to us. And as a reminder, we executed our Q1 development entirely without issuing any common equity.

Looking ahead to our broader financing philosophy as our leasing pipeline scales, we recognize that establishing deep diversified access to capital is critical. And so we're in active discussions with capital markets participants, and we're evaluating a wide spectrum of debt options ranging from asset-specific project financing to broader corporate debt markets. And so to be clear, we're not looking to push all of our future growth through a single financing channel. We fully expect our long-term capital structure is going to utilize a mix of different instruments. And the specific path we take for any given project is going to be completely dependent on the dynamics of that particular underlying lease, the credit profile of the tenant, prevailing market conditions at the time and Riot on needs.

I think regardless of whether a specific project is funded through project finance or capital markets or otherwise. The mechanics are going to remain the same in that the debt is going to be supported by long duration, highly visible cash flows from investment-grade tenants in line with our leasing strategy. And so by maintaining a strong balance sheet today, what we're trying to do is preserve the optionality to tap into the right market with the right instrument at the right cost of capital for every future lease.

One moment for our next question. And that will come from the line of Nick Giles with B. Riley Securities.

This is [ Henry Harl ] here on for Nick Giles. I wanted to ask about the potential cadence of AMD's remaining 150-megawatt expansion option. And is there a date where the options expire? So I see the illustrative chart on Slide 22, which shows that the second 100-megawatt tranche is contingent on power availability? And what does that exactly mean?

So the cadence of expansion with the AMD lease, that that's really going to be driven by them. Like I said in the earlier question, what we are going to do is continue to be good partners, deliver capacity and ensure that we are the first call that they make when they are looking to expand capacity. As far as the mechanics of the options. So the new 100-megawatt option is conditional on them first, utilizing all of the first option, which 950 megawatts remaining. As far as some of the details of how that option works there's some confidentiality to this agreement. So I don't want to elaborate too much more than that.

But one thing I'll comment on is this original lease and the expansion, it clearly goes into these two buildings that we already have there, Buildings F and G for the next 100 megawatts that would require new building or capacity being developed. So I would say just stay tuned as we work on those plans and that development pipeline comes together.

Got it. And then for my follow-up. In regards to your pipeline and the 4 different growth options, which one do you guys favor most and out of the 100-plus opportunities referenced in your prepared remarks were those mostly greenfield and brownfield behind the meter, M&A or JVs?

I think in this environment, where power is so constrained, I don't think you can have a preference. We laid out that slide because we are pulling on every lever possible to build our pipeline. And as we advance our commercial discussions at Rockdale and Corsicana, this pipeline becomes even more important because that means we've built the base of our business with these huge core assets. And now we're thinking about how we are continuing the story and the strategy from there. So our philosophy is, in this environment, it's going to require creativity and it's going to require being open-minded to all sorts of those options.

I think they all have merit. They all have the pros and cons. And I think you can expect to see a little bit of everything as we progress in building our pipeline.

That is all the time we have today for our question-and-answer session. I would now like to turn the call back over to Mr. Jason Les for any closing remarks.

I want to thank everyone for tuning into our call today, investors, shareholders, analysts and partners. We are incredibly excited about the progress we've made and the position that we're at today. I think we can say we have more confidence than ever right now, and we are very excited to continue sharing progress as we make it. And we will see you on our next earnings call, if not before.

This concludes today's program. Thank you all for participating. You may now disconnect.

Good day, and thank you for standing by. Welcome to Riot Platforms' Fiscal Year 2025 Earnings Conference Call.

[Operator Instructions]

Please also be advised that today's call is being recorded. I would now like to hand the conference over to Joshua Kane, Head of Investor Relations at Riot Platforms. Please go ahead.

Thank you, operator. Good afternoon, and welcome to Riot Platforms' Fiscal Year 2025 Earnings Conference Call. My name is Josh Kane, Head of Investor Relations. And joining me on today's call from Riot are Jason Les, Chief Executive Officer; and Jason Chung, Chief Financial Officer. On the Riot Investor Relations website, you can find our fiscal year 2025 earnings press release and accompanying earnings presentation, which are intended to supplement today's prepared remarks and which include a discussion of certain non-GAAP items. Non-GAAP financial measures provided should not be considered as a substitute for or superior to the measures of financial performance prepared in accordance with GAAP and are included as additional clarifying items to aid investors in further understanding the company's fiscal year 2025 performance.

Forward-looking statements may include, but are not limited to, statements that predict future events or trends, forecast for performance and may contain words such as believe, expect, intend, project, plan, words or phrases with similar meaning. Actual results be materially different due to factors discussed in today's earnings press release and comments and responses made during today's call and in the Risk Factors section of our Form 10-K for the year ended December 31, 2025, which will be filed later today as well as other filings with the Securities and Exchange Commission.

With that, I will turn the call over to Jason Les, CEO of Riot Platforms.

Thank you, Josh. 2025 was a transformational year for Riot Platforms. It was the year we fundamentally repositioned this company to be at the forefront of the data center industry. Today, I am exceptionally proud to share the significant milestones we have achieved and outline the path forward as we continue executing on our strategy to maximize the value of our power portfolio for shareholders. Riot has evolved from a bitcoin mining company with data center potential into a proven data center developer with a track record of rapid execution. I'd like to take a minute now to walk through some of the key achievements that made 2025 truly transformational for Riot. We completed the fee simple acquisition of our Rockdale site, securing 200 acres of critical land now under our full ownership. We also completed our basis of design platform that positions us to deliver data center capacity at the scale and speed the market demands.

We built substantial internal expertise by recruiting veteran data center talent across every critical function. Our team now includes leadership across product development, construction, engineering, sales and marketing with collective experience completing over 200 data center projects totaling nearly 4.8 gigawatts of design and construction experience. This depth of experience is critical. It's what enabled us to give prospective tenants confidence in our ability to deliver mission-critical infrastructure on aggressive time lines. Data center development talent is in high demand, and we are incredibly proud of the depth of capabilities and experience that we have been able to attract to Riot. The quality of our data center team is a critical advantage in ensuring that potential tenants and partners are confident in our ability to deliver at scale.

We have also significantly expanded our land portfolio to support full utilization of our approved power capacity. We acquired 3 additional parcels adjacent to and near our original Corsicana site, bringing our total land footprint at Corsicana to approximately 900 acres. This acquisition simplifies and expedites the planned development of our full 1 gigawatt of approved power capacity at Corsicana, all on Riot owned land in a connected campus layout.

In the fourth quarter of 2025, we closed on the previously leased 200-acre Rockdale site for a total consideration of $96 million. funded entirely through the sale of approximately 1,080 Bitcoin from our balance sheet. This purchase was a strategic imperative, converting our interest from a ground lease to full ownership unlocked our ability to develop data centers at Rockdale and eliminated approximately $130 million in future rental payments that would have been due over the remaining lease term and extension options. And finally, we completed our standard basis of design, which was a critical step in engaging potential tenants on both technical and commercial discussions.

Together, these achievements have positioned Riot for substantial data center development in 2026 and beyond. On the leasing front, we announced our first lease with AMD in January of 2026, demonstrating Riot's capabilities as a credible developer and operator. When a company of AMD's caliber chooses Riot for mission-critical infrastructure, it sends a clear signal to the market about the strength of our capabilities and our team. Our focus for 2026 is clear: one, the delivery of the full 25 megawatts of compute for our AMD lease; two, executing on additional leases at both Corsicana and Rockdale, beginning with the development of our first core and shell at Corsicana; and three, secure attractive low-cost financing that reflects the quality of our tenants and sites.

We now have active discussions ongoing with multiple high-quality tenants who have expressed strong interest at both our Corsicana and Rockdale sites. The absolute certainty to large-scale power our sites offer is incredibly rare in today's market and has led to numerous interested parties actively engaging. Our sales strategy accommodates leasing outcomes that result in either single tenant or multitenant campuses at both locations, maximizing our flexibility.

On the development front, our execution is already speaking for itself. We delivered the initial phase of power capacity to AMD on time and on budget, and we are already generating revenue. In an industry where delays are common, delivering on time to a world-class tenant is a powerful validation of our execution capabilities. Core and shell development is underway and progressing at Corsicana. Our Corsicana substation expansion remains on schedule with total power capacity reaching 1 gigawatt over the next 12 months.

On capital management, Riot is maintaining a disciplined front framework to efficiently fund our data center business. We are activating our strong balance sheet to fund upfront development costs without relying on dilutive equity financing. We will efficiently access project finance and debt capital markets to deliver on high credit quality leases. Upon stabilization of our assets, we plan to refinance with permanent debt to recycle capital into higher return projects, creating a compounding flywheel of development. Initial work is underway to assess financing options for the AMD lease, including additional capacity for future potential expansions in anticipation of AMD exercising their options.

Moving to Slide 8. I want to underscore the philosophy driving our leasing strategy. We are not simply looking to fill capacity. We are focused on strong high creditworthy tenants to match our high-quality assets. The reason for this focus comes down to capital efficiency and asset valuation. In the digital infrastructure space, cost of capital is highly correlated to the credit quality of the tenant, often pricing off the back of their underlying credit rating. By partnering with highly creditworthy counterparties, we secure the most favorable, lowest-cost financing available in the market. This minimizes our equity investment requirements and maximizes our return on invested capital.

From a capital markets perspective, this also drives premium valuation multiples, leading to significant value creation for our shareholders. The AMD lease serves as a validation of our strategy. AMD is a global leader in the AI ecosystem with an S&P credit rating of A and to have a tenant of AMD's caliber entrust Riot to deliver mission-critical infrastructure sends a definitive message to the broader market. This message is that our team, our sites and our execution strategy are operating at the highest possible level and this paves the way for ongoing discussions with other high-quality partners.

Now I'd like to pause and highlight the importance of the achievement that Riot has made. We have successfully commenced Phase 1 of the AMD lease on schedule in January and remain on track to deliver Phase 2 as planned in May. This execution validates the capabilities of our data center team and demonstrates our ability to meet the demanding time lines of premier technology tenants. The speed of our execution was remarkable. We announced the lease in January and delivered the first phase of capacity within the same month, which is something that traditional greenfield developers simply cannot match.

We are delivering capacity in 2 phases to derisk execution. The first 5-megawatt phase was delivered and commenced rent in January of 2026. The remaining 20 megawatts will follow in May 2026, bringing the total initial deployment to 25 megawatts of critical IT load. The capital required for this initial deployment is approximately $90 million, which translates to roughly $3.6 million for critical IT megawatts. And significantly below what traditional new build projects typically require. The expansion potential is significant. AMD holds an option to expand by an additional 75 megawatts of critical IT load, which can be accommodated within the remainder of Building G and Building F using the same capital-efficient retrofit model. Beyond that, AMD holds a right of first refusal on an additional 100 megawatts of capacity.

If AMD were to fully exercise both the expansion option and the ROFR their total footprint at Rockdale would reach 200 megawatts of critical IT load. This slide reviews the key terms of our previously announced deal. With this lease, we have entered into a 10-year agreement to provide customized data center space at our now fully owned Rockdale site. The lease includes 3 5-year extension options, creating the potential for a 25-year partnership. From a financial perspective, the total contract value for this initial 25-megawatt deployment over the 10-year base term is $311 million.

We expect this to generate average annual net operating income of approximately $25 million, representing highly visible contracted cash flows with an investment-grade counterparty. Our Power First strategy underpins everything we do at Riot. The majority of Riot's operating power capacity is currently monetized through Bitcoin mining, which generates strong cash flows to support our operations and development activities. Going forward, we will continue to convert power capacity and pursue data center leases that maximize value for our shareholders. The AMD lease demonstrates this strategy in action.

We leveraged existing infrastructure to deliver at speed and at scale, translating into highly profitable and predictable long-term contracted cash flows with an investment-grade counterparty. The economic comparison is compelling. The AMD lease generates 2.5x more gross profit per megawatt than Bitcoin mining. This economic framework will guide our capital allocation decisions going forward, where we can generate higher risk-adjusted returns through data center leasing with creditworthy counterparties. We will prioritize data center development, where Bitcoin mining remains the highest and best use of our power, we will continue mining while remaining flexible to convert that capacity to data center use.

Slide 14 highlights the significant scale and quality of Riot's power portfolio in Texas. Riot has 1.7 gigawatts of fully approved [ firm ] power across our Corsicana and Rockdale sites. This is not a prospective pipeline or speculative capacity, but rather power that is in use and available for development and utilization today. At Rockdale, we have 700 megawatts of total approved capacity. This power was originally approved in the fourth quarter of 2019 and energized in the second quarter of 2020. In fiscal year 2025, we had an average load of 351 megawatts at Rockdale. The site features a direct non-interruptible evergreen connection to the grid with no intermediaries between Riot and the utility, supported by a 700-megawatt substation already on site and operating.

At Corsicana, we have 1,000 megawatts or 1 gigawatt of total approved capacity. This power was approved in the fourth quarter of 2022 and energized in the second quarter of 2024. In fiscal year 2025, we had an average load of 335 megawatts at Corsicana. The substation expansion remains on schedule to deliver our full 1 gigawatt of capacity over the next 12 months. Both Rockdale and Corsicana are fully approved sites with firm power located in some of the most attractive data center markets in the country.

This distinction gives us a major competitive advantage in today's power constrained environment. Current time lines to procure new power within the Texas triangle are estimated at 4 or more years. So having large-scale energized power today in the right locations is extraordinarily valuable. This scale of energized Power is an extremely high demand asset and forms the foundation of our financial profile. I will now turn the call over to Jason Chung to present our fiscal year 2025 financial update.

Thank you, Jason. For fiscal year 2025, I am excited to present Riot's financial results, which demonstrate both the strength of our operating model and the significant progress we have made in positioning the company for long-term value creation. For the full year, Riot reported total revenue of $647 million, representing a 72% increase year-over-year. This substantial growth was driven primarily by strong performance in our Bitcoin mining business, which contributed $576 million or 89% of total revenue and supported by our engineering and other revenues, which contributed an additional $71 million or approximately 11% of total revenue. Our Bitcoin mining business achieved its highest annual revenue and gross profit on record with fiscal year 2025 revenue of $576.3 million and gross profit of $294 million when including power curtailment credits. This performance reflects the scale and ongoing efficiency improvements in our operations, including our industry-leading power strategy.

Net loss for the year was $663 million or $1.95 per diluted share. Now it's important for investors to understand the components behind this result. This net loss reflects several significant noncash charges and mark-to-market pricing adjustments on Bitcoin held on our balance sheet, including depreciation and amortization expense of $346.8 million, stock-based compensation expense of $125.7 million, a $158.1 million loss on contract settlement with Rhodium and unrealized mark-to-market adjustments on our Bitcoin holdings of $115.9 million as required by FASB accounting standards. Non-GAAP adjusted EBITDA for the year was $13 million when adjusted for noncash and unusual items. Non-GAAP adjusted EBITDA eliminates the effects of certain noncash and nonrecurring items that do not reflect our ongoing strategic business operations. and provides investors with a clear view of our underlying operational performance. Our net cost of power for 2025 was $0.037 per kilowatt hour, representing one of the lowest power costs in our industry. Our power strategy generated power curtailment credits totaling $56.7 million for the full year, equivalent to nearly $10,000 per Bitcoin mined. This power strategy remains a critical competitive advantage for IoT.

Turning to our Bitcoin mining operational metrics. We produced 5,686 Bitcoin during 2025, equivalent to production of 15.3 points per day on average. This represents an 18% increase compared to the 4,828 Bitcoin we produced in fiscal year 2024. We ended the year with 18,005 bitcoin on our balance sheet with a year-end value of $1.6 billion based on the closing price of $87,498 per Bitcoin on December 31, 2025. Our hash rate deployed reached 38.5 exahash by year-end, accounting for approximately 3.5% of the global network hash rate. This represents a 22% increase from the 31.5 exahash we ended fiscal year 2024 with approximately matching the pace of global network hash rate growth and maintaining our significant share of the overall network. Our cost to mine per bitcoin was $49,645 for 2025. While this increased from $32,216 in 2024, it's important to contextualize this in the broader industry environment. The average global network cash rate increased 47% year-over-year, from 630 exahash to 923 exahash. Despite the significant increase in network difficulty our vertical integration and power strategy continued to drive industry-leading cost efficiency relative to our peers.

Hash rate utilization averaged 87% for the year, a significant improvement from 70% utilization in 2024. This improvement reflects the operational excellence initiatives our teams have implemented across our facilities. Our engineering business continues to demonstrate significant strategic value for Riot and represents a key component of our vertical integration strategy. Engineering backlog reached a record $224.6 million at the end of 2025, up dramatically from $55.9 million at the end of 2024, representing a 302% increase over the course of the year. The data center sector represents 90% of our current backlog, reflecting both the strength of industry demand and the positioning of our engineering business to capture it. ESS Metron manufactures low- and medium-voltage switchgear and power distribution centers. These are components that are essential for data center development and power distribution. As industry analysts have noted, transformer and switchgear lead times have quietly become one of the defining constraints in modern data center development. These are the hidden bottlenecks shaping 2026 project schedules industry-wide. Our engineering business creates significant operational advantages for Riot. By vertically integrating the manufacturing of these critical components, we reduce procurement risk improve speed to market and maintain control over equipment that is in short supply across the industry.

Additionally, our servicing and maintenance expertise improved start-up and commissioning processes enhances uptime and extends the life cycle of our equipment. This work generates significant CapEx savings across Riot platforms development activities. Since our acquisition of ESS Metron in December 2021, Riot has already realized $23.2 million in cumulative CapEx savings on equipment purchases alone. And we expect these synergies to continue to scale as we expand the scope of our data center development further. With that, I will now turn the call back over to Jason Les to discuss how all this translates to Riot's valuation rerating opportunity and our path forward.

Thank you, Jason. Slide 19 presents enterprise value per megawatt multiples across selected peers in our sector, which we view as a useful lens for how the market values power portfolios today. Riot currently trades at approximately $2.2 million for 2027 available megawatt. This represents a significant discount compared to peers with signed data center leases despite us having 1 of the largest fully approved and readily available power portfolios in the industry. We do not just view this as a discount. We view this as a clear road map for shareholder value creation. The signing of our AMD lease is the first milestone towards a rerating of the underlying value of our power portfolio from a data center perspective. As we continue executing our data center strategy and converting additional megawatts into contracted data center leases with creditworthy tenants, we anticipate the market will increasingly rerate the value of our assets leading to multiple expansion on our valuation.

I want to conclude today's call by reinforcing why we believe Riot is uniquely positioned to create substantial long-term value for our shareholders. The opportunity in front of us is significant. Data center demand continues to grow rapidly, driven by the AI revolution and the accelerating need for high-density compute. At the same time, power remains the binding constraint with time lines for new capacity extending further every year. Riot is on the right side of both of these trends. We control one of the most compelling fully approved power portfolios in North America located in exactly the right markets and available for development today. Our Rockdale and Corsicana campuses with a combined 1.7 gigawatts of firm energized power, give us a scalable strategic platform that is exceptionally difficult to replicate. As we execute our strategy, we are aiming to systematically convert that power into long-term contracted data center cash flows with creditworthy tenants.

The AMD lease is an important proof point of this approach. It validates our team, our sights and our development model, and it is the first step in building a diversified portfolio of high-quality leases that can support potential portfolio NOI in the range of $1.6 billion to $2.1 billion upon full buildout. Our focus from here is clear, continue to execute with discipline, deepen and expand our tenant relationships, secure attractive long-term project financing and recycle capital into the next wave of development. As we demonstrate repeatable execution of this model, we expect the market to increasingly recognize the quality and scale of our platform and to rerate Riot valuation to better reflect the strength of our underlying assets and contracted cash flows. We are in the early innings of transforming Riot into one of the most meaningful digital infrastructure platforms in the industry.

On behalf of our entire management team, I want to thank our shareholders, our partners and our employees for their continued support as we execute against this opportunity. Before we open the line for questions, I would like to take a moment to recognize an important leadership transition at Riot: First, I want to sincerely thank [indiscernible] Yi for his leadership and service as our Chief Financial Officer since 2022. Colin has played a vital role in strengthening Riot's financial foundation, building out our internal reporting infrastructure and guiding the company through several key phases of growth. We are grateful that Colin will continue to support Riot as a senior adviser, and we look forward to benefiting from his counsel as we execute on our long-term strategy.

At the same time, I am very pleased to officially welcome Jason Chung as Riot's new Chief Financial Officer. Jason joined Riot in 2022 as our Head of Corporate Development and brings nearly 2 decades of experience in investment banking and corporate finance. And he has already been instrumental in shaping our capital market strategy Corporate Development and Investor Relations efforts. Consolidating our finance and strategy functions under Jason's leadership will further align our capital allocation framework with the growth ambitions of our data center platform. With that, we will now open the call up for questions. Operator?

[Operator Instructions]

Our first question comes from Paul Golding with Macquarie.

Congrats on all the progress with delivering the first 5 megawatts. I wanted to ask, around the AMD lease and how things are progressing there, have you come away with any best practices or interesting takeaways like gating factors on conversion with the first 5 megawatts that you're putting to work on the next phase of delivery. And maybe as part of that question, how conversations may be progressing with the expansion and right of first refusal with AMD? And then I have a follow-up.

Thanks for the question, Paul. So I would say the first key lesson is a validation of our commercial approach where we start the conversation with a discussion and understanding of what our customer is looking for and exactly how we're going to deliver that. We think that is an important foundation for approaching these discussions that we ensure that we can deliver exactly what the customer is looking for on the timeline that they need. So I would say that was the approach that we took with and the fact that we've been able to deliver on such an aggressive timeline is validation of that.

I think another thing it validates is the strategic advantage of our internal engineering capability. a huge part of how we were able to deliver for AMD on such an accelerated timeline the fact that we have the internal capability to engineer and manufacture low medium voltage switchgear and other important power components for data center development. So Riot's ESS Metron was one of the biggest suppliers to the development for the capacity that we are leasing to AMD. So I would say it's more of a validation of our approach than anything. And it is a playbook that we are looking to take for leasing to the rest of our pipeline and employ that same playbook, the same strategy to ensure that we are giving our customers what they want, and we are meeting the timelines that we agreed to.

As far as expansion goes, I don't want to comment on specific discussions, but I would say that we are very encouraged by our partnership. I believe that delivering on the initial 2 phases on our aggressive timeline is an important step in growing that partnership. The way we think about the AMD relationship is not a one-off deal. We are aiming to build a sophisticated long-term infrastructure partnership with a well-capitalized and high creditworthy company, such as AMD, as they build out infrastructure to support their AI road map.

And the only way that we can build that partnership is if we deliver and meet our commitments to our customer AMD. So that's what we're focused on there. And of course, if expansion options are realized in the future, we'll be updating the market on those -- when those announcements can be made.

And then you did mention that you're in discussions on financing. I guess given all the commentary in the marketplace around private credit, how are discussions progressing? Any additional color you could provide would be super helpful on available liquidity in the marketplace, cost of capital or anything around that?

Sure. I'll turn that question over to Jason Chung, our CFO.

Thank you, Jason. We've been actively engaging with a number of different banks across the board and of course, have been keeping a close line on developments in the debt capital markets in parallel. I think when we think about the AMD lease itself, we're really talking about 2 distinct risk profiles within the same lease. There's the initial stabilized portion of the deployment and second to that is the future expansion option itself. And so when it comes to the first portion, that's stabilized deployment, we anticipate that given the highly predictable contracted cash flows of the initial 25-megawatt deployment backed by AMD's strong credit. We think we can get a really low cost of capital that essentially removes the development or execution risk that lenders would typically price in.

Then when it comes to the second portion on the expansion option that could potentially be structured as sort of a separate delayed draw type facility, specifically intended to support AMD's 75-megawatt expansion development. So by separating these 2 distinct credit profiles, what we're able to do is avoid paying a blended sort of construction premium across the entire facility. And so we think that will really result in 3 particular outcomes. The first is we should be able to get a significantly lower overall cost of capital on a facility like this. The second is that it will allow us to pull out our initial equity and the third is that will enable us to efficiently recycle that capital to finance additional growth CapEx in the future.

So when it comes to discussions with the banks right now, this is where our primary focus is on we're seeing an incredible amount of liquidity and depth in the project finance markets. And we think that the interest in exploring an opportunity to partner with Riot on this type of facility is very strong.

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

Congrats on the progress with AMD and then still the additional stuff going on, of course, at Canada. I was wondering if we could just drill a little bit more into that leasing pipeline, the demand environment, how those conversations have evolved and kind of any timeline guardrails or just how advanced those discussions are? And then I have a follow-up as well.

Sure, John. So kind of set the stage, we have 1.7 gigawatts of approved power capacity in Texas. And as we see the industry develop, that asset becomes more scarce and more appreciating. So our responsibility here to shareholders is to maximize the value of that capacity, and that's what we're focused on. I want to zoom out and take a look -- reflect on the road map that we've been on. On our second quarter '25 earnings call, we outlined that the next step we were doing was completing our basis of design, and that would lead to technical discussions with the market.

And then on our Q3 '25 earnings call, we shared our basis of design that had been completed and that we were initiating type of discussions, engineering discussions with various customer segments out there. We've done that. We've been able to enhance our design as a result of those discussions. And now we are in the commercial phase. We are in active conversations with multiple parties. That's across hyperscaler, enterprise, neocloud and AI customer segments. The AMD deal validated us as a credible counterparty. And I'd say that has materially increased the quality and the serious miss of the inbound interest that we've received. Of course, it's difficult to predict the exact timing for leases. We are preparing these deals can go through different phases. We've heard our peers talk about it's stopping and starting and stopping with various different deals before they got to the final one. But we are absolutely targeting additional announcements in 2026. We believe we are incredibly well positioned to execute on that, and we will disclose more details when we are in a position to do so.

That's great. That's very helpful. And I know from the prepared remarks, you said these sites could go single tenant or multi-tenant, is there a preference from you guys? Do you want to kind of mix in a couple of these different segments or hyperscaler does have demand for the whole thing? Would you prefer that?

Yes. That's a good question. In the prepared remarks, what we wanted to highlight is that we have the flexibility here. The way our campuses are laid out, they can be single tenant or they can be multi-tenant campuses. We have optionality to maximize the value of our assets here. And that being said, our focus is on high creditworthy counterparties. And in Corsicana, for example, while we have the flexibility to accommodate multi-tenant, I can tell you all of the real interest so far from potential customers has been for the entire site. So I tend to believe that is the most likely outcome for a leasing scenario at Corsicana. Perhaps ends up being different in the end. Perhaps there's a mix at Rockdale.

The important thing is getting good quality leases with good quality counterparties and we have flexibility in how we put that together to end the -- to create the final tenant composition of a site, whether it's one or more tenants.

Our next question comes from Reggie Smith with JPMorgan. Reggie, your line might be on mute. Our next question will come from Mike Grondahl with Northland.

With all the questions around ERCOT recently. I believe Riot's Power is approved at Corsicana. But can you confirm that. And then secondly, does ERCOT's batch process affect Ryan in any way going forward sort of positively or negatively?

So the short answer to your question, the power at Corsicana has been completely approved. We received that approval back in the fourth quarter of 2022. So that cited in operation, receive the approvals back then, and we are fully available to scale up to our 1 gigawatt from there when we're ready. The batch process does not impact right. The new ERCOT batch process that was proposed, not implemented, pertained to loads that had been in different stages of the planning or approval process already before final approval and certainly before energization. So that would affect new sites that have not been energized would not impact Riot sites that have been approved for years and have already been in operation. So we think that just further validates the value of these sites, the fact that they're already approved, and we don't have that same level of risk for them.

Our next question comes from Stephen Glagola with KBW.

Just a quick one for me. On the financing side, can you just talk about how Bitcoin sales are going to continue or not continue to play a role in funding the CapEx going forward here.

I'll turn that over to Jason Chung.

On our financing plan, our funding arc, if you will, starts with the Bitcoin treasury. So in addition to selling all of our ongoing Bitcoin monthly production, we have and will continue to sell Bitcoin directly from our balance sheet in order to fund our operational needs and growth CapEx. So one clear example of this was when we announced the acquisition of the Rockdale site, the $96 million consideration was funded entirely through the sale of nearly 1,100 bitcoin off the balance sheet, and we'll continue to do so going forward. That being said, our strategic evolution towards data center development also opens up access to new pools of low-cost capital. So you should expect to see us look to tap into these lower cost non-dilutive debt structures as well to fund our build-out in conjunction with our Bitcoin sales off the balance sheet. We believe this combination is the most accretive financing strategy for our shareholders going forward.

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

Yes, I want to commend Colin and congratulate you, Jason Chung on your appointment. My question was really just how you're thinking about M&A of new sites and how that could have shifted recently? Have these aircraft developments change things. Some of your peers are either talking about and have already taken action towards adding generation capabilities on site. So is that something you'd consider? Or are you really only interested in opportunities with greater interconnection are ones that really don't require you to operate the generating assets.

Nick. So thanks for the question. As far as developing pipeline goes, there's a question earlier about the ERCOT batch process. Besides that, we've seen it becoming increasingly difficult for new grade interconnections to be approved. So that's to be a double-edged store in our case. And on 1 hand, that makes it harder to get new grade interconnections approved. On the other hand, it makes our massive existing portfolio are already that more valuable. And so when we think about our pipeline, the first thing that we're mindful of is we have a massive pipeline in front of us. We have nearly 2 gigawatts, 1.7 gigawatts just between Rockdale and Corsicana, 2 mega flagship sites that we're able to act on.

That is an enormous value creation opportunity for Riot in and of itself. That being said, we are thinking for the long term. we're not just trying to monetize 2 sites here, we are building a durable platform of durable data center business, and we want to have a repeatable process for future sites. We repeat the process like we've demonstrated with AMD. We have been evaluating an enormous amount of opportunities. You can imagine, there's lots out there. It goes through a very intensive process within our organization, and we filtered down to a few, and we are now involved in several active processes to acquire potential new developments. But I think you raised a really good point on generation. I think the environment that we're in, where it's difficult to procure additional power capacity means that you need to be more creative in how you are solving that problem. It can't just be relying on grid power.

The future of this industry is clearly bringing your own power. That is an area where I think Riot has a tremendous advantage, a lot of our engineering team and operations team come from a generation background. So I can tell you this is something we are looking at very closely and taking very seriously and using all of the resources at our disposal to help build that durable pipeline for us to continue replicating our success on.

Jason, appreciate that perspective. My second question was you've proven your ability to generate revenue very quickly through the AMD contract. That being said, there's still a really high degree of urgency in the market around other megawatts. So my question is really, are there ways that you could accelerate the ultimate energization of data center megawatts in either asset and we kind of have the 112-megawatt target at Corsicana, but can you give us a sense for maybe how many kind of energized data center megawatts could be brought online by '27.

Yes. Nick, the very reason that we initiated on that core and shell development with [indiscernible] in hand was to ensure that we could deliver capacity starting in 2027 and be very competitive with our offering there. Those first 2 buildings, that is just the beginning. We are obviously in a commercial process and we are looking out there marketing and attempting to lease the entire site. And ultimately, we'll have a build strategy reflective of what our customer requirements are. But we have these processes underway to further enhance our ability to deliver timely, we have begun procuring long-lead equipment. In fact, we procured most of the more supply-constrained long-lead equipment that you would need for those first 2 buildings. So when we are having commercial discussions, it's not about 112 megawatts. It's about how we are delivering the full capacity, the 1 gigawatt of utility load available at that site, and those are just the initial parts of that deployment, but we are ensuring we can be very competitive with the delivery time line.

Great. Well, I appreciate all the detail and keep up the good work.

Our next question comes from Reggie Smith with JPMorgan.

My first question is kind of a follow-up to the last point you made, Jason. Obviously, you guys have a massive site that's right outside of Dallas, and your peers have talked about, I guess, contract terms and discussions seem to be getting better where operators are getting better and better economics. A question for you is thinking about that site and something that I've been telling investors for a while now. I kind of want to verify, your proximity to Dallas. Like is there a premium? Or can you extract or get a premium for that proximity, how do you think about valuing that element of it and even the size of the site. There aren't many gigawatt sites for sale or for lease rather out there. So how do you think about those features of your property and how you can price for that. Obviously, you're dealing with top-tier tenants, and there's some negotiation back and forth there. But anything you could share about like how you guys think about that and how it should show up in any deal that you may sign.

Yes, Reggie, thank you for the question. So the attributes of the sites, the sizes, the proximity to Tier 1 markets, Corsicana in particular, it is not as much as an impact on deal economics. Well, I think there's some impact there. The bigger point is the impact it has on the types of tenants that we're able to attract there. The types of tenants that we want to enter into leases with, the types that we can get strong financing and the best valuation multiples off of, they are the tenants that are more selective on location, and they are looking to be placed closer to the Tier 1 markets. That, I think, is the biggest factor there is it's widen the doors of the conversations that we're able to have to the best names out there.

Got it. That makes sense. And then if I could get one quick follow-up. Thinking about kind of milestones, both on the development side and even like contract discussions, what are some of the key things that maybe internally you guys are looking for on the contract side that lets you know that, hey, this is progression maybe educate us on like how those discussions progress and play out. And then again, on the development side, like what should we be looking for over the next couple of quarters to let us know that, hey, the site's being developed on time, et cetera. So anything you can share there would be fantastic.

Yes. So I think that's an important indicator of the serious discussions is how much they end up going to a technical product discussion and how quickly they do. I think that is a strong indicator of how serious the counterparty is with moving forward. That's what we've taken the approach that we have. We wanted to ensure that we had a technically sound offering a product that hyperscaler and high creditworthy investment-grade tenants we're looking for. So the level of technical interest, the level of details that we're getting into for us is a signal of the seriousness of what's going on. But we are very focused on leasing these sites with the right agreements as quickly as we can. So we've been cautious to keep our optionality open. We're engaging, obviously, with multiple counterparties at once to ensure that we can move along in a timely fashion and deliver high-quality outcome for shareholders as quickly as we can.

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

Thanks for squeezing me in here. I guess, Jason, you mentioned that a few times on the call about the benefit of ESS Metron and that acquisition. I guess I'd be curious, it's clearly good to have that inside the portfolio. But as we try to think about the benefits of ESS Metron, is that -- could -- is that more of a speed to market? Or could we actually also see it potentially make projects more economically compelling, i.e., lower upfront costs maybe than some of your competitors?

That's a good question, Greg. For us, the main benefit has been strategic and supply chain visibility. I touched on it on the earlier question from Paul about delivering from AMD. The only way that we were able to do that to deliver on that timeline that AMD needed was having this internal engineering and manufacturing capability, where we could develop a customized solution and prioritize that overall other work out there. No other third-party OEM would be able to do that for Riot or want to do that for Riot. So it has really changed the way in what we're able to offer solutions for customers. And I'll tell you, from the recruiting standpoint, building a high-quality team here is obviously very important for delivery and execution on the data center strategy, a lot of the talent that we've recruited has been particularly compelled and interested by the capabilities that we have with ESS Metron and E4A. So the people that live and execute this for us, they certainly see the benefit for this as well.

So supply chain strategic, but there is a cost savings there as well. On one of our slides showed that since we've acquired ESS Metron, we've saved approximately $23 million on CapEx since that acquisition. We did that acquisition 4 years ago for approximately $52 million in consideration and we've nearly recouped half of that already just in CapEx savings. And that -- those savings have only been realized on relatively smaller scale Bitcoin mining developments and now the AMD development as well.

When you talk about the broader development in front of us building out 1 gigawatt of utility capacity at Corsicana and eventually, all 700 megawatts of capacity at Rockdale. That's substantially more business than we've done with ESS Metron in the past. So presumably, the CapEx savings would even be more considerable over the term of that larger and longer-term project.

That concludes today's question-and-answer session. I'd like to turn the call back to Jason Les for closing remarks.

I want to thank all of our shareholders, investors, analysts for coming on to our call today. Appreciate all the questions, materials available on our website, and our IR team is available for any follow-up questions. We look forward to continue executing on the incredible opportunity in front of us, and we will speak with you again next quarter.

This concludes today's conference call. Thank you for participating. You may now disconnect.

Good day, and thank you for standing by. Welcome to Riot Platforms Business Update. [Operator Instructions] Please be advised that today's call is being recorded, and the presentation is also available on the Riot website.

I would now like to hand the conference over to Josh Kane, Vice President of Investor Relations at Riot Platforms. Please go ahead.

Good morning. Thank you for joining us, and welcome to Riot Platform's Business Update Call. At this time all participants are in listen-only mode. We will hold a question-and-answer session following management's prepared remarks.

Please note, this call may contain forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. Such statements may include, but are not limited to, statements that predict future events or trends, forecasts or performance and may contain words such as believe, expect, intend, project, plan or words or phrases with similar meaning. Forward-looking statements are based on management's current expectations, forecasts and assumptions and are subject to risks and uncertainties that may cause actual results to differ significantly. Listeners are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they were made. For further information, we encourage you to review the risk factors discussed in the company's periodic filings filed with the SEC.

Joining me on the call today are our CEO, Jason Les; our Chief Data Center Officer, Jonathan Gibbs; and Jason Chung, EVP, Head of Corporate Development and Strategy and our next incoming CFO.

We will now begin with remarks from Jason Les.

Thank you. On today's call, we are announcing transformational milestones in Riot's evolution as a leading digital infrastructure platform. I am pleased to share two achievements at Rockdale, firmly establishing it as a premier data center development site alongside Corsicana, giving Riot 1.7 gigawatts of immediately actionable power capacity across both sites.

First, we have completed the fee simple acquisition of 200 acres of land at Rockdale previously leased by Riot. By converting our interest from a ground lease to full ownership, we have unlocked the ability to develop data centers on site. With 700 megawatts of fully approved power already interconnected and contracted, full land ownership allows us to position Rockdale as a premier asset for data center development alongside Corsicana.

Second, we are announcing our first data center lease, a 25-megawatt agreement with AMD, one of the most significant hardware manufacturers in the world and a key leader in the AI ecosystem. This partnership includes multiple options for expansion and represents the beginning of what we expect to be a deep long-term relationship. Our data center team has been designing and customizing this space to meet AMD's specific needs, and we will share more details on the full scope of this lease later during the call.

Taken together, these milestones validate Rockdale as a premier site for data center development, establish Riot as a credible developer and operator for premier technology organizations and create highly visible contracted cash flows with an investment-grade tenant.

More importantly, these transactions demonstrate Riot's disciplined approach to capital allocation as we are strategically deploying capital to build high-quality assets, securing creditworthy tenants and utilizing efficient financing strategies to recycle capital into our next wave of development. This is a major advancement for Riot and vastly improves our position to capitalize on today's lucrative data center market.

I'll now walk through the details of the Rockdale acquisition and our new lease with AMD, following which we will open the line for questions. Turning to Slide 5. I would like to outline the key terms and strategic rationale of the Rockdale land acquisition. Our decision to acquire this site was driven by clear market feedback. In our discussions with potential tenants and lenders, it became evident that a ground lease structure creates unnecessary complexity and risk. To maximize our ability to develop data centers at Rockdale and fully leverage the 700 megawatts of fully approved power on site, we determined that fee simple ownership was essential.

We closed this acquisition in December for a total purchase price of $96 million, funded entirely by the sale of approximately 1,080 Bitcoin from our balance sheet. This allowed us to secure this critical asset using existing liquidity without the need for any equity financing. The acquisition encompasses 200 contiguous acres that are primed for immediate development, and we expect, based on an assumed PUE of 1.5 that Rockdale could eventually support approximately 436 megawatts of critical IT load capacity with potential to expand further.

Importantly, Rockdale has 700 megawatts of fully approved power with an interconnection that is direct to Riot with no intermediaries between us and the utility. This is a direct noninterruptible evergreen connection and is supported by a 700-megawatt substation already on site and operating. In addition, we have secured sufficient water supply with ample capacity to fully support both our existing Bitcoin mining operations and the cooling requirements of future high-density data centers.

Moving to Slide 6. I want to underscore why this acquisition is such a significant value driver for Riot. This was not just a land purchase. It was a strategic imperative to unlock the full potential of the Rockdale site and a critical step in our capital allocation strategy. First and most importantly, this transaction enables us to fully utilize Rockdale's power capacity for data center leasing. As we engage with market participants, it became clear that top-tier tenants and institutional financing partners require absolute certainty regarding land control. By removing the ground lease, we have eliminated the primary barrier to entry, allowing us to market the full 700 megawatts to the world's most demanding tenants.

Second, outright ownership fundamentally changes the risk profile of this asset. Under the previous structure, we face lease expiry risk where ownership of our improvements could eventually revert to the landlord. That risk is now eliminated. Riot owns this site in perpetuity, strengthening our long-term strategic optionality and ensuring that the value we create accretes to our shareholders.

Third, we are looking beyond the current capacity. As part of this acquisition, we have secured easements that provide a pathway to expand power capacity beyond the existing 700 megawatts. In a power-constrained world, having the land and rights to expand capacity at an existing operational substation is a valuable asset. This positions Rockdale not just as a 700-megawatt data center campus, but as a site with a pathway to grow even larger as grid conditions permit.

Finally, there is a substantial and immediate financial benefit to Riot. By acquiring full ownership, we are eliminating approximately $130 million in future rental payments that would have been due over the remaining term and extension options. This immediately improves the operating cost profile of the site and enhances the returns on all future developments.

I would now like to walk through the specific terms of our lease agreement with AMD, an investment-grade tenant with an S&P credit rating of A and highlight why this is such a compelling transaction for Riot, both financially and strategically. We have entered into a 10-year lease to provide customized data center space at our now fully owned Rockdale site. The lease includes three 5-year extension options, giving this partnership a duration of up to 25 years.

Securing the tenant of AMD's caliber, a global leader in the AI ecosystem, validates both our site and our development capabilities. The initial deployment under this lease is 25 megawatts of critical IT load, which will be housed in a retrofit of our existing building G. This allows us to deliver capacity quickly and cost effectively.

We are delivering this in two phases to derisk execution. The first 5-megawatt phase will be ready for occupancy later this month with the remaining 20 megawatts following in May. The capital required for this initial deployment is just under $90 million. This translates to approximately $3.6 million per critical IT megawatt, a fraction of traditional new build cost. By leveraging the power distribution and building envelope already in place at Rockdale, we can deliver uniquely tailored capacity with highly attractive unlevered returns.

From a financial perspective, the total contract value for this initial 25-megawatt deployment over the 10-year base term is $311 million. We expect this to generate average annual net operating income of approximately $25 million, representing highly visible contracted cash flows. Crucially, this 25 megawatts is just the first step. The lease includes an expansion option for AMD to take an additional 75 megawatts of critical IT load, which can be accommodated within the remainder of Building G and Building S using the same capital-efficient retrofit model.

Beyond that, AMD holds a right of first refusal on an additional 100 megawatts of capacity. If AMD were to fully exercise both the expansion option and the ROFR, their total footprint at Rockdale would reach 200 megawatts of critical IT load.

In summary, this lease accomplishes several critical objectives. It establishes Riot as a credible operator for hyperscale tenants. It creates immediate high-margin, long-term contracted cash flows. and it proves that our methodical approach to development can provide unique flexible solutions for the most demanding tenants in the market.

With that, I will hand the call over to Jonathan Gibbs, our Chief Data Center Officer, to explain how we design this deployment to meet AMD's technical requirements while maintaining our capital efficiency advantage.

Thank you, Jason. I want to walk through the time line and the execution milestones for our AMD deployment, which demonstrates both the speed of our data center team and the depth of this partnership.

We signed a lease with AMD earlier this month, and we are moving immediately into delivery. The first phase, 5 megawatts of capacity will be delivered and commenced later this month. The second phase, 20 megawatts of capacity will be delivered in May 2026, bringing the total initial deployment to 25 megawatts of critical IT load. This phased approach allows us to accelerate delivery time lines and lease payments and demonstrates our ability to meet AMD's technical requirements and delivery time lines.

From there, we are positioned to scale immediately. Because we are utilizing the same retrofit model of building F and G, we can execute the expansion options and ROFR capacity with the same speed and capital efficiency as this initial phase. We have the team, the plan and the infrastructure ready to support AMD's growth as fast as they need. The speed, scale and quality of this deployment reflect the strength of the data center team we have assembled and the strategic advantage of our existing infrastructure at Rockdale. We are moving quickly. We are executing efficiently, and we are building a long-term partnership with one of the most important players in the AI ecosystem.

I want to start by emphasizing why AMD chose Riot. While our power and assets were critical, the deciding factor was the strength and credibility of our data center team. AMD needed a partner who didn't just have power and land, but one who had the technical expertise to execute on a complex high-performance requirement. The fact that a world-class technology leader like AMD trusted us with their critical infrastructure is the strongest possible validation of the credible team we have built.

Slide 10 highlights the specific value proposition we delivered. First, this is a bespoke solution. Our engineering team worked hand-in-hand with AMD to design a facility that meets their specific focused redundancy requirements. We did not simply offer a standard off-the-shelf data center product. We collaborated to build exactly what they need for their specific AI workloads, optimizing for both performance and cost.

Second, by retrofitting the second building G, we are leveraging the power distribution and building shell already in place. This is the key driver behind our speed to market and what allows us to deliver the first 5 megawatts later this month, a time line that greenfield developers simply cannot match.

Third, this efficiency translates directly to attractive economics. Because we are repurposing infrastructure and optimizing the design, we have achieved a significantly lower cost of development. This allowed us to pass through those savings to AMD in the form of a highly competitive lease rate while still generating the attractive returns Jason had outlined. This lease is proof that Riot has the technical capability to deliver for the most demanding tenants in the world.

I will now turn the call over to Jason Chung.

Thank you, Jonathan. I want to address how we intend to finance these announcements and demonstrate why Riot is uniquely positioned from a financing perspective. Our approach to capital allocation is methodical, disciplined and designed to maximize returns while minimizing dilution and maintaining financial flexibility.

Riot is exceptionally well capitalized. As of the end of the third quarter of 2025, we held over $2 billion in total liquidity, consisting of approximately $400 million in cash and nearly 20,000 Bitcoin. In addition, our scaled Bitcoin mining operations continue to generate significant monthly cash flows, providing ongoing liquidity to support our business. Our capital allocation strategy follows a disciplined three-phase approach that optimizes our cost of capital and enables efficient scaling.

Phase 1, initial development funding. For the projects we have announced to date, including the Rockdale land acquisition, the AMD 25 IT megawatt build-out and the previously announced initiation of the development of two core and shell buildings, representing a total of 112 IT megawatts at Corsicana, funding for these capital expenditures has and will come through the sale of Bitcoin from Riot's balance sheet.

We anticipate that these initiatives require approximately $400 million in total capital, and we've already begun executing on our Bitcoin sales strategy. In December, the Rockdale land acquisition was funded entirely through the sale of approximately 1,080 Bitcoin. For the AMD 25 IT megawatt build-out and Corsicana 112 IT megawatt Core & Shell development, these initiatives will be funded through the sale of approximately 3,134 Bitcoin based on current market prices. This represents only 17% of the Bitcoin currently on Riot's balance sheet, allowing us to maintain substantial exposure to Bitcoin while funding these important growth initiatives. As our development projects progress, we will continue to strategically liquidate Bitcoin to fund the capital expenditures in a disciplined and measured manner.

Phase 2, tenant acquisition and project financing. As we secure high-quality leases with creditworthy tenants, we intend to utilize nonrecourse project-level debt financing to fund the majority of data center CapEx costs. This approach will allow us to enhance returns on invested capital and preserve balance sheet liquidity by efficiently leveraging the contracted cash flows from our leases. By securing long-term leases with investment-grade tenants like AMD, we create assets that are highly attractive to institutional lenders and which can be financed at favorable rates. We are targeting project financing for new leases at loan-to-cost ratios in the range of 80%, allowing us to externally finance a significant portion of total development CapEx while retaining full ownership of the assets and their ongoing cash flows.

This financing approach serves multiple strategic objectives. First, it optimizes our cost of capital by replacing equity with lower cost debt. Second, it allows us to recycle capital, deploying into our next wave of development projects and therefore, scaling our business in a capital-efficient manner. And third, it allows us to maintain ownership of high-quality cash flowing assets that will generate ongoing high margin and stable returns for years to come.

Phase 3, capital recycling and compounding growth. As we execute this strategy across multiple projects, we create a powerful compounding effect. For projects like AMD, where we will deploy equity first, we can refinance stabilized assets to recover capital. For future projects, we will use project financing upfront to minimize equity deployment. In both cases, the result is the same. We preserve capital for redeployment while retaining ownership of cash flowing assets that generate ongoing operating income to support additional development or be returned to shareholders.

Going forward, our capital allocation priorities are clear. First, deploy capital into high-return data center development projects and secure creditworthy long-term tenants. second, utilize project finance to fund development CapEx in order to optimize our cost of capital and recover equity; third, recycle capital into the next wave of development; and fourth, maintain balance sheet flexibility and strategic optionality.

The ability to fund these critical near-term capital expenditures using our existing balance sheet represents a significant competitive advantage, allowing us to move quickly, capitalize on market opportunities and maintain financial flexibility as we scale our data center platform. More importantly, our methodical approach to capital allocation, lease, finance, build and recycle positions Riot as one of the most efficient capital allocators in the data center industry and ensures that every dollar we deploy generates maximum value for our shareholders.

I will now turn the call back over to Jason Les.

Thank you, Jason. I want to summarize the strategic benefits these transactions deliver to Riot across three key dimensions: our data center team's credibility, the structural advantages of the AMD lease and the validation of Rockdale as a premier development site.

First, the credibility of our data center team demonstrated with AMD and the speed at which we delivered provides clear validation of our operational capabilities and execution discipline. This transaction is the foundation that establishes Riot as the partner of choice for leading data center tenants. The speed, flexibility and capital efficiency we demonstrated with AMD, namely customizing infrastructure to their specific needs, providing a rapid path to quickly energize 25 IT megawatts and providing a clear path to 200 megawatts of expansion makes Riot uniquely attractive to demanding tenants. We have the energized power, the balance sheet to move quickly and the operational expertise to deliver mission-critical infrastructure on aggressive time lines. This positions us as a preferred partner for hyperscalers who need speed, certainty and scale.

Second, the AMD lease significantly derisked our data center strategy. We have secured a 10-year agreement with a top-tier investment-grade tenant rated A by S&P. This lease is highly financeable, meaning we can leverage contracted cash flows to support nonrecourse project debt as we scale our build-out. By securing a blue-chip tenant such as AMD, delivering capacity in phases and generating cash flows within weeks, we are proving our execution capabilities while minimizing capital at risk. AMD's credit quality, the long-term nature of the contract and the high degree of visibility of the cash flows make this an exceptionally attractive asset from a capital markets perspective.

Third, these transactions establish Rockdale as a premier site for data center development. By efficiently converting existing Bitcoin mining infrastructure into a custom data center solution for AMD, we are unlocking the significant value of our underlying assets. More importantly, we are transforming the economics of Rockdale and our entire power portfolio, moving towards long-term contracted cash flows with strong creditworthy counterparties. This will fundamentally improve the profitability and stability of our business, driving higher quality earnings and positioning Riot for a valuation re-rating as we continue our ongoing evolution into a leading digital infrastructure platform.

Collectively, the transactions announced today highlight Riot's focus on efficient capital allocation and financial discipline. We acquired a premier asset using balance sheet liquidity, eliminating future lease obligations and are developing capacity at high investment yields, all at a fraction of greenfield cost. This methodical approach, secure creditworthy tenants, finance efficiently, develop with discipline and recycle capital is how we will scale our platform and maximize value creation for our shareholders.

Taken together, these milestones represent a major inflection point for Riot. We have proven our ability to execute, secured a marquee tenant, validated our development strategy and demonstrated a disciplined, repeatable approach to capital allocation that will drive compounding value creation as we scale.

I'd like to conclude by outlining how the AMD lease fits into our broader pipeline and the significant growth opportunity ahead. The time line on this slide illustrates the rapid progress Riot has made in developing our data center business. Less than 12 months ago, we announced a strategic evolution to explore AI HPC data center development. Last June, we hired Jonathan Gibbs as Chief Data Center Officer.

Today, we are announcing the Rockdale acquisition and our first data center lease with AMD, which will begin generating lease income this month. By May, we will have delivered the full 25 IT megawatts initial deployment. But this is just the beginning. AMD holds an expansion option for an additional 75 IT megawatts and a right of first refusal on another 100 IT megawatts bringing their total potential footprint to 200 IT megawatts at Rockdale. Looking further ahead, our fully approved power portfolio has the potential to support 1.2 gigawatts of critical IT load, which upon full build-out could generate substantial annualized NOI in the range of $1.6 billion to $2.1 billion from long-term contracted leases with creditworthy tenants, cash flows, which command premium valuation multiples in the market.

Before we open the line for questions, I want to step back and put these announcements in context. Today's announcements reflect four critical advantages Riot brought to bear. First, we have the assets, specifically 1.7 gigawatts of fully approved, immediately actionable power at two of the most attractive data center development sites in the United States. Second, we have the balance sheet, including more than $2 billion in liquidity to fund development. Third, we have the team. The AMD lease is a direct result of the quality and speed of execution Jonathan and our team have delivered. And fourth, we have a disciplined methodical approach to capital allocation that sets us apart.

We identify high-quality sites with energized power, immediately monetize with Bitcoin mining where economic, attract financeable investment-grade tenants, develop with capital efficiency and recycle capital to finance the next wave of growth. This approach makes Riot not just a developer, but one of the most efficient capital allocators in the data center industry.

Importantly, our Bitcoin mining expertise provides a unique advantage. It allows us to immediately monetize power capacity while we develop data center infrastructure, generating positive cash flow and derisking our development time line. This optionality is something traditional data center developers simply do not have. The transactions we announced today demonstrate a disciplined, repeatable capital allocation strategy that will enable us to scale efficiently, maximize returns and create substantial shareholder value as we build one of the premier digital infrastructure platforms in the industry.

With that, we will now open the call up for questions.

[Operator Instructions] And our first question comes from John Todaro of Needham.

Congrats on the lease and also unlocking Rockdale. That's huge, represents a lot of immediate power. Question for me. Can you just talk a little bit more about maybe the time line of the AMD deal in terms of how it came about and how you guys approach the opportunity?

And then if I can just get in a follow-up. walk through a little bit more of the economics of the design and then in particular, why you guys found this project attractive. And also maybe on their decision to go with Rockdale in comparison because we know Corsicana is out there as well.

All right. Thank you for the question, John. I will tackle the first part, and then you can remind me of anything I missed in the follow-up.

How the deal came about? This relationship originated from the same -- the sustained interest that we've seen from the Rockdale campus, and that's been driven by the scale of the opportunity there, our power position and our ability to execute on a very quick time line. So -- we've developed a process here, and we approach this opportunity with the same customer-first process that we are using across our pipeline. We first confirm the technical fit, the feasibility of what the customer is looking for. We validate the schedule and delivery certainty. We align with our partner on a commercial structure, and then we move into diligence and finally, documentation.

So from a time line perspective, this has been a process over multiple months that had several clear phases. We had early engagement and technical requirement discovery. We had iterative solutioning and pricing. We had a diligence process on our site and the infrastructure and then [indiscernible] documentation and execution planning.

But the key here is that AMD is a strong validation of our go-to-market strategy. This deal validates the process that we've been talking about. When we see a high-quality demand signal, we can translate that into a structured process, and that process protects the certainty of delivery while still preserving our strategic flexibility for the entire campus here.

So, importantly, what I want to highlight is we are seeing similar momentum across our pipeline. The outcome here with AMD reflects both the attractiveness of our assets and our repeatable approach to converting interest into actual contracted demand without compromising execution rigor.

And then I think one of your follow-up questions was why Rockdale over Corsicana. AMD needed a custom solution. They needed on a client. We were able to work with them leverage infrastructure we already have that could be repurposed for their specific requirements. And that allowed us to move collaborative with them over the process and start delivering revenue this month, obviously a few weeks after deal signing.

And our next question comes from Paul Golding of Macquarie.

Congrats on both deals, big developments here. My first question is around the bigger picture vision for Rockdale. You have 700 gross megawatts at the site, 200 megawatts critical potentially with AMD if all options and the right of first refusal are exercised. Would you look to do something akin to Corsicana and proactively build out Tier 3 cores and shelves? And just thinking about that relative to the efficient retrofit model you're doing for this initial 25-megawatt critical deployment.

And then as a follow-up, just anything that you could speak to in the executed deal or right of first refusal in terms of timing or whether there are any limitations regarding negotiating with other potential tenants on the balance of the site, whether customers or competitors of AMD's.

So, let me first kind of just give you our vision of the layout of our Rockdale campus here. The lease with AMD is just the first step building our data center campus at Rockdale. As we think about the site today, we expect that outside of just the initial 25-megawatt deployment with AMD and the 75-megawatt expansion option that we've announced today, the bulk of the capacity that we have will be delivered in a more traditional Tier 3 format with an eye as always towards maximizing the value of our sites. So think the basis of design that we've talked about, deploying that over the remainder of the capacity. And we'll have some updates on that on our next update call.

But for the avoidance of doubt here, AMD's expansion option for the 75 megawatts of critical IT load capacity is allocated to AMD, and that would not be immediately available to any other customers. With Rockdale, we have 700 megawatts of total capacity. So that gives us a significant amount of runway for future expansion. And we believe that, that capacity is capacity that would interest a lot of hyperscaler and major tenants and the ROFR with AMD does not impact the viability of those discussions, whether or not exercises this ROFR right or not.

I think we've talked about this before, but our campus design, we have the ability, if we wanted, to segment that up and really make customers in distinct areas from each other. So we have a lot of flexibility to maximize value here, whether it's one customer taking all the capacity or we are dividing it up. The lens that we're looking at this is always maximizing the value of our -- the full portfolio that we have.

So I think another part of your question was we are absolutely continuing to have discussions with a variety of customers to lease out our capacity at Rockdale, the full remaining capacity there and of course, our capacity at Corsicana as well.

And our next question comes from Greg Lewis of BTIG.

Obviously, congratulations, guys, on you've been working hard on this for over a year. So it's good to see. I did kind of have a question around -- it was interesting to us when you kind of talked about the press release, you led with the fact that you acquired the land. How important was that to own the land and kind of building this relationship with AMD?

Owning the land was critical. From our engagement with the market, we've got feedback from both potential customers, from financing partners that a ground lease that risk duration, even though we had multiple renewal terms was a real impediment to getting the deal done. So unlocking -- purchasing the Rockdale site and getting out of that lease was really a transformational step here. It's why we're so proud of it today to fully unlocking that 700 megawatts of capacity that we have at Rockdale.

So, yes, Greg, it was very important to -- for Rockdale being a viable site to buy this -- to buy the land, eliminate any lease risk and put it 100% over in Riot ownership.

Okay. Great. And then just the other one for me is -- and I think it's a follow-up to Paul's question around Corsicana. I mean, clearly, that's -- I feel like over the last year, that was viewed as the better site of the two. And so just a couple of questions as we think about Corsicana and the potential to develop both at the same time. Curious how you're thinking about that? Curious -- and then kind of curious, the fact that we have AMD as an anchor, does that at all change how we were thinking about the go-to-market, i.e., customer that we're looking to sign in at Corsicana.

Yes, Greg, this does not change at all how we're thinking about Corsicana. In fact, we view this announcement as just enhancing the attractiveness of Corsicana. We are continuing to engage in commercial discussions for both Corsicana and Rockdale simultaneously, and we're very confident in our ability to develop both sites at the same time.

The fact that we are now a proven developer and that we have signed a lease with an investment-grade tenant, the fact that we are going to demonstrate execution, delivering capacity this month, I believe, only enhances our ability this improves our ability to execute across our whole portfolio.

And our next question comes from Darren Aftahi of ROTH.

I offer my congratulations as well. Just two, if I may. You guys in the release talked about the aggregate build cost. I'm curious if you were to layer on the initial CapEx that you spent on the Rockdale site, what's the aggregate all-in cost per megawatt?

And then as a follow-up, I know Oncor has plans to build a substation in Rockdale, I think, this year. Just any kind of updates there? And then what kind of process would you need to go through with ERCOT in order to potentially expand Rockdale's power capacity?

Absolutely. We laid out the key details for this development possible, the retrofit cost of the building. I want to highlight, we took mining capacity development [indiscernible] at Rockdale in order to support this was equipment that has been deployed for almost five years, so fully depreciated miners, immersion tanks that have been in there for a while. And -- but of course, using the other electric infrastructure at the site.

So even if you are accounting for the existing infrastructure costs in place that have already been spent, this is still a very attractive deal from a yield perspective. But there's a multitude of factors here, right? Like we were -- we were taking off revenue-producing capacity, even though it already older equipment at this point. and there's an opportunity cost to be incurred there. And we were moving rapidly and retrofitting infrastructure that the cost that we've highlighted in the business update.

So, I think you look at all elements combined, it's still a very attractive deal. And that's based on leveraging the existing infrastructure and the retrofit costs that were needed to just change the building we already had.

Great. And then any update on the Oncor substation?

Yes, I'm sorry, second part of your question. So at Rockdale, the first thing I want to emphasize is that we own the land and we control our destiny at that site. And we already have 700-megawatt connection, which is fully approved, and we intend to use that for data center use.

But to your question, as we alluded to we believe expansion to have its power capacity expanded beyond that 700 megawatts. That whole surrounding area is a hot bed for manufacturing. There is a Samsung fabrication plant in Taylor, Texas nearby. There is a Tesla facility nearby. So there's been a significant amount of transmission infrastructure being built up in that area. And the fact that this capacity is directly around our existing site and the fact that we are proven good stewards of the grid and our ability to deploy and operate, we believe puts us in a great position to expand our existing interconnection agreement. And we're in a position to capitalize it on that.

We also highlighted that we have the easements in place in order to bring in new supply lines of power to that site should that be approved. So we will be going through that process. Of course, it's an unpredictable process. A lot of people are, of course, in power capacity. So it's hard to give a time line or much color around that. But the location that we're in and our proven ability to execute and operate positions us very well in that process.

And our next question comes from Mike Grondahl of Northland.

Great progress and very helpful update. Specifically here, this kind of looks like a different design for AMD than maybe what you guys envisioned several months ago. Can you talk about what some of the key differences are?

Yes, absolutely. Let me turn that question over to Jonathan Gibbs.

Thank you, Jason, and thanks for the question, Mike. [indiscernible] there are differences. [indiscernible] is a purpose-built configuration. And it's different than our standard basis of design. that's because we optimized it around AMD's specific high-density liquid cooled compute requirements versus our standard design, which focuses on maximizing the ability to align investment-grade lease-up with design, construction and the associated deployment of capital. It's like the standard.

Maybe to help break this down at a high level, you can think of three differences, cooling and physical layout differences, redundancy philosophy and perhaps delivery-driven choices. From a cooling and physical layout, I would say that Tier 3 design is engineered to serve a broad set of IT loads efficiently. Even so we increased the portion of liquid cooling and adjusted the supporting infrastructure within the white space to match how their equipment is deployed and serviced.

For the redundancy philosophy, which we talked about often here, traditional Tier 3 facility, redundancy is applied in a very standardized way across major systems. AMD's configuration, while the redundancy is still very robust, it's applied more intentionally around specific components and paths that really matter most for their environment. In other words, it's not less redundancy, it's rightsized redundancy design to produce the same outcome. high availability, reliable operations, things that our customers need and in this case, certainly unnecessary complexity and costs that don't add value.

The third I mentioned, another one we speak about often is delivery-driven choices, selections that support a compressed delivery schedule and reduce execution risk, all without comprising reliability. So, for Riot, that includes proven equipment choices, constructability and designs to support repeatable commissioning and operational turnover within a compressed schedule.

I think it would be helpful possibly to also add what I mean by that. In my past nearly two decades of experience in this data center industry, it's told me that it's important to have this flexibility, but it needs to be within a disciplined framework. And what I mean by that is we can tailor the design to meet a customer's requirement but we do it in a way that preserves what we're known for, we know predictable outcomes, safe delivery, schedule certainty, things like that. That said, it's probably important to note too as well that our integrated delivery model matches our customers' buying habits, right? So we have to have sales, delivery operations, all operate as one team from the start in order to be able to deliver this for our customers. At Riot, we treat design as part of execution, not just handoff. And we manage that risk proactively across the areas that are most commonly seen to disrupt projects. So labor availability, supply chain timing, utility coordination, all those types.

With all that said, a significant strength of Riot is our ability to be able to align our product delivery philosophy, which I just outlined with to help drive that execution and certainly maximize returns. And this sort of strategy is what gives Riot where we feel the approach really matters and certainly why we're comfortable delivering a bespoke solution without taking on bespoke risk. I know there's a lot there, but I hope that certainly outlays the differences.

Yes, definitely does. Congrats again, guys.

And our next question comes from Reggie Smith of JPMorgan.

Congrats on the deal. I had one on the financing and listening to you guys, I guess my key takeaway is that project level financing debt, you're using Bitcoin as well to finance it. Importantly, it doesn't sound like equity is in your kind of on your road map at all. I guess my question is thinking about the mix of kind of using cash in Bitcoin. You guys want to say the first Bitcoin operator to talk about selling Bitcoin to build data centers. Maybe talk a little bit about -- am I reading that right in the decision to use Bitcoin rather than cash on the balance sheet or some mixture. And then I have a follow-up on the CapEx side.

Yes. Jason Chung, why don't you take that one?

Sure. Hi, Reggie. So the sale of Bitcoin is a fundamental part of our financing strategy. And to answer your question directly, you should expect to see further Bitcoin sales in the future.

So, from our perspective, we've always focused on having a strong balance sheet with multiple different financing levers, and we continue to have that today. We've got the Bitcoin, whether from our monthly production or on our balance sheet. We have a lot of cash on hand. We've got operating cash flows, access to debt facilities and strong access to capital markets.

But we'll continue to look to Bitcoin sales, both from our monthly Bitcoin production and our balance sheet as our primary funding source for growth. We will be flexible, and we're always weighing the cost of selling Bitcoin versus some of these other financing levers that we have, always with a view towards maximizing shareholder value for the immediate future, utilizing the Bitcoin on our balance sheet for some of these key CapEx spend and key growth initiatives, we see as the most efficient use of our capital. So you should expect in the near term going forward.

Got it. That's good to know. And then just looking at -- you guys had an image in the slide deck. And it looks like from where I said that those two buildings that are allocated for AMD appear to be a little wider than the other ones. I'm not sure if that's just the image or the graphic or whatever, but is there anything unique about those two buildings in particular that made them extra, I guess, ideal for the AMD deal? And then just remind us, if you could, what the general CapEx expectations are for your standard, I guess, kind of you call that prototype build, if you will.

Yes. Thanks for the question, Reggie. I'll -- let me first ask about your CapEx -- answer your CapEx question, and then I'll turn it over to Jonathan to talk about the building designs and why those were chosen here, but -- why they were viable here.

We don't have a full expected schedule or I should say, estimated cost for what the full build-to-suit development would be. I think what we've guided towards is we expect to be within industry norms. Right now, that's around $10 million to $13 million of IT megawatt. Also those costs are driven by the customers. If we talked about here, our effect ultimately that to more than anything. [indiscernible] cost more than anything. But your question on [indiscernible].

Yes, certainly. Certainly, the width, the height of these buildings are exceptionally important for us when we're looking at specific product require ability and our ability to be able to deliver product and mitigate the risk as we go through. But I would not discount the width of the other buildings with -- in the site that they can certainly be applicable as well. A bit more in terms of the logistics of where those are, adjacency to substations, things like that and our ability to be able to derisk the delivery of the product to our customers.

I think we broke up like the last 15 seconds. I don't know if anybody caught that. Maybe you could repeat that the last 15 seconds of what you said.

Yes, no problem. Essentially, [indiscernible] come into play. I wouldn't discount [indiscernible] buildings for future deals. The logistics and the ability for us to be able to derisk delivery for this time line certainly came into play.

And our last question comes from Stephen Byrd of Morgan Stanley.

Congratulations on a great deal. Very exciting to see. One question for me. I guess just given the size and the economics of recent deals that we've been seeing in the market, could you walk us through why you think a 25-megawatt deal with these economics is the best deal that Riot could achieve with one of the premier sites in the country. Could you just sort of walk us through that?

Yes. Thank you for the question, Stephen. So we think this is a fantastic deal for a number of First, we are in the business solutions for our customers. So what we've done here is leverage existing infrastructure, and we're able to meet the needs of our customers revenue from this lease starting this month, this quarter, very quick time line. It's -- I think you have to look at the deal for all the elements combined.

So, yes, on a dollar per kilowatt monthly rate, it is a lower price. However, that is because we had significantly less required spend on CapEx in order to achieve this deal. So, you combine that, and we have a very -- we have demonstrated a very attractive yield on cost for this deal. And of course, the other element is the tenant here. This is an investment-grade tenant. We are demonstrating our ability to execute for an investment-grade tenant. And we think this opens the door for different financing tools that we can use in the future around this deal. And we, as I'm emphasizing, lead to other deals in the future because of what we demonstrated here.

So, in summary, strong economics from a yield on cost basis because the CapEx costs were eliminated and -- I'm sorry, the CapEx costs were less than other deals that we've been seeing out here lately, but also delivering a customer-focused solution to an extremely strong investment-grade tenant. So we're very proud of this deal. This is just the first step that we're taking, and we look forward to executing across the rest of our pipeline here.

Makes sense. Congrats again.

This concludes our question-and-answer session. I would now like to turn it back to Jason Les for closing remarks.

Thank you, everyone, for tuning in today. We are very proud of this deal. I want to thank our full team that came together across the organization to make this possible. You can imagine the amount of effort it takes to deliver capacity on this quick of a time line. I also want to thank all of our stakeholders and partners, now our customer out there for working with Riot to deliver this. And we look forward to sharing more updates on our data center strategy with the rest of the market as we progress. Thank you all.

This concludes today's conference call. Thank you for participating, and you may now disconnect.

Good day, and thank you for standing by. Welcome to Riot Platforms' Third Quarter 2025 Earnings Conference Call. [Operator Instructions] Please also be advised that today's call is being recorded.

I would now like to hand the conference call over to Josh Kane, Vice President of Investor Relations at Riot Platforms. Please go ahead.

Thank you, operator. Good afternoon, and welcome to Riot Platforms' Third Quarter Earnings Conference Call. My name is Josh Kane, Vice President of Investor Relations. And joining me on today's call from Riot are Jason Les, CEO; and Benjamin Yee, Executive Chairman; Colin Yee, CFO; and Jason Chung, EVP and Head of Corporate Development and Strategy.

On the Riot Investor Relations website, you can find our third quarter earnings press release and accompanying earnings presentation, which are intended to supplement today's prepared remarks and which include a discussion of certain non-GAAP items. Non-GAAP financial measures provided should not be considered as a substitute for or superior to the measures of financial performance prepared in accordance with GAAP and are included as additional clarifying items to aid investors in further understanding the company's third quarter performance.

During today's call, we will be making forward-looking statements regarding potential key events. These statements are based on management's current expectations and assumptions and are subject to risks and uncertainties. Actual results could materially differ due to factors discussed in today's earnings press release and comments and responses made during today's call and in the Risk Factors section of our Form 10-K and Forms 10-Q, including for the 3 months ended September 30, 2025, which will be filed later today as well as other filings with the Securities and Exchange Commission.

With that, I will turn the call over to Jason Les, CEO of Riot Platforms.

Thank you, Josh. Riot is in the process of transforming into 1 of the most meaningful data center developers and operators in the market today. The demand for data center capacity is insatiable and growing, and our unmatched portfolio of large-scale land and power assets positions us to significantly capitalize on this opportunity. I am incredibly excited to announce the completion of several key milestones and additional ongoing strategic initiatives, which we are currently undertaking as part of the development of our data center business. And more broadly as part of the ongoing transformation of Riot.

In particular, I am proud to announce today that we are initiating the core and shell development of the first 2 buildings at our Corsicana data center campus, representing a combined 112 megawatts of critical IT data center capacity. We have already been securing long lead equipment and plan to mobilize construction of these 2 buildings beginning in Q1 2026. This announcement has been enabled by 4 key achievements this quarter. During the quarter, Riot acquired an additional 67 acres of land directly adjacent to our original Corsicana site, greatly simplifying the development of our full 1 gigawatt of approved power capacity and enabling the completion of our campus design at Corsicana, completed the campus design for Corsicana with a plan to transform the entire site into a 1 gigawatt utility load data center campus, completed the basis of design for our standard data center build, which has deepened our technical engagement with hyperscaler, Neo cloud and enterprise customers and continue to build out our in-house data center expertise with veteran data center sales, design, engineering and construction talent.

These achievements further advance the ongoing process of transforming Riot into a large-scale multifaceted data center enterprise. We are investing in building out our data center business in order to enhance our conversations with prospective tenants and leverage competitive tension in our leasing process, all with a view towards maximizing the value generated from our portfolio of land and power assets. We are announcing this development of 112 megawatts of critical IT capacity as just an initial milestone in our development pipeline, which consists of nearly 2 gigawatts of secured utility load power. And we will continue to announce further development plans as we progress on our strategy and advance further on customer discussions.

Riot is transforming into one of the most meaningful data center companies at the center of the Fourth Industrial Revolution. We have a significant portfolio of readily available power, an incredibly strong balance sheet and the world-class talent necessary to deliver on our plans. The demand for data center capacity has never been more robust. And on behalf of all of our shareholders, we are incredibly excited to be executing on the enormous value creation opportunity in front of us.

Riot has a tremendous advantage today in our unmatched portfolio of fully approved power and land, located within highly desirable data center markets. We have made significant progress in establishing our data center business, which serves as the foundation not only for maximizing the value of our power portfolio today, but from which we will also continue to scale and capitalize on new opportunities. Over the course of this year, we have completed third-party expert assessments of our 2 primary sites Corsicana and Rockdale, added data center and real estate development experience to our Board of Directors and engaged financial advisers to assist on discussions with strategic and financial partners and on the broader leasing negotiation process.

Most recently, I am pleased to announce we have completed the basis of design for our data centers. Completion of this basis of design has enabled us to deepen our engagement in technical and engineering level outreach with potential tenants, begin procurement of necessary long lead time equipment and begin construction on our first 2 buildings. We will provide additional information on our basis of design later on today's call.

We have also further progressed on the ongoing infrastructure development at Corsicana, including the 600-megawatt substation expansion with the first 400-megawatt auto transformer of this expansion development is now on site being installed and remains on track for energization in Q1 next year. And the core and shell development of the first 2 buildings of our Phase 1 development plan, which will allow us to deliver full build-to-suit data centers in 2027.

On the hiring front, the build-out of our data center team has continued at an aggressive pace. We have in place key leadership across product development, construction, engineering, sales and marketing, which has allowed us to complete the basis of design and rapidly move towards initiating construction. We will continue to build on this momentum by adding additional positions that underpin our data center business, and support future leasing, operational and growth targets. We have made substantial progress on our design program, which will support Corsicana and other sites and have completed a standardized data center basis of design that meets Tier 3 resiliency and efficiency expectations for prospective tenants in the market.

Advancing our basis of design is critical as we engage prospective tenants on specifications and customization. Our design philosophy emphasizes flexibility to address the needs of a range of potential customers and use cases. That flexibility includes multiple building formats, including single, 2 and 3-story configurations in order to maximize campus capacity.

In addition, our design is centered around a 7 module or 7 mod format. With this format, we are standardizing around a 7-plus-1 component design, 7 components plus 1 additional component of redundancy. Our basis of design can easily be adapted to the requirements of any tenant. Each 7 mod is a data hall, representing 14 megawatts of critical IT load capacity. And there are two 7 mods per floor totaling 28 IT megawatts per floor. Therefore, a 2-story building will have four 7-mod data halls, 2 per floor, representing 56 IT megawatts and a 3-story building, we'll have six 7-mod data halls representing 84 IT megawatts. We are confident that this fits within the range of tenants desired topography and allows us to easily adapt to each of the requirements. If a tenant wants more redundancy, we can easily build that in and vice versa.

Riot's basis of design establishes the foundation for our data center development and has been designed in a manner that is intentionally replicable beyond Corsicana, enabling faster, more efficient equipment procurement and delivery on future development in order to quickly seize upon any market opportunities going forward.

One of the most important differentiators we are developing at Riot is the assembly of an industry-leading in-house data center team, with expertise across design, engineering, sales, procurement, construction, operations, marketing and administration. As highlighted here, our growing team brings deep directly relevant experience in building and delivering mission-critical data centers. We have in place the team to deliver on our first phase of construction and development. with collective experience completing over 200 data center projects, totaling nearly 5 gigawatts of capacity.

Data center development talent is in high demand, and we are incredibly proud of the depth of capabilities and experience that we have already been able to attract to Riot. The quality of the data center team we already have in place today is a critical advantage in ensuring that potential tenants and partners are confident in our ability to deliver at scale. These internal data center team capabilities are further reinforced by our engineering business comprised of ESS Metron and E4A Solutions, which provides integrated manufacturing, commissioning and maintenance expertise. These complement our units create meaningful synergies and strengthen our ability to rapidly execute on an expanding data center development program.

In September, we successfully acquired a collection of parcels that total 67 acres contiguous with our original Corsicana site for a total consideration of $40 million. Early on, Riot identified this part of land as the most ideal site for immediate development of our data centers, and I am excited to share an update on what this acquisition has enabled for us. The new parcels proximity to our Corsicana site enables rapid development as it is immediately adjacent to our existing site and, therefore, will not require additional easements or transmission construction, which could potentially have extended delivery time lines.

The ideal condition, gradient and location of this new parcel will allow us to quickly begin development and strengthen confidence in our delivery time lines. Most importantly, the additional acreage we now own next to our existing Corsicana site ensures the ability to completely utilize our 1 gigawatt of fully approved power on Riot owned land for data center use, all in a connected campus layout.

Together with the previous land acquisitions announced last quarter, Riot now owns 925 acres surrounding the Corsicana area, securing long-term development flexibility and fully completes all necessary land acquisitions for potential build-outs.

Our now expanded footprint at Corsicana has allowed us to complete our campus design for the entire site, which we envision taking place across 2 development phases. Development of Phase 1 will encompass 504 megawatts of critical IT load, consisting of six 56-megawatt buildings and two 84-megawatt buildings, spread across both the excess developable acreage on our original Corsicana site as well as on our newly acquired immediately adjacent parcel. As previously announced, core and shell development on buildings 1 and 2 has already been initiated, and we anticipate the first building to be completed in Q1 2027. The overall pace of development in Phase 1 will be driven by tenant commitments and leasing progress, and we are sequencing capital expenditures to maximize power to value conversion. Phase 2 will be comprised of three 56-megawatt buildings, representing 168 megawatts of critical IT load. And over time will eventually supplant our existing Bitcoin Mining data centers.

The completion of our data center designs has enabled us to take the next steps on delivering full build-to-suit Tier 3 data centers. With our initiation of the development phase of our first two 56-megawatt buildings at our Corsicana site, we will begin construction in Q1 2026 on the core and shell of the first 2 buildings. The core and shell construction will consist of a build-out and enclosure of the main structure of the data center, generator buildings and completed power yards, an open interior with operational elevators, docks, logistics areas, lighting, fire protection and security. It will also include the first steps on electrical, plumbing and HVAC infrastructure, which will support full data center build-out and tenant fit-up.

Construction of core and shell buildings will be completed in phases, with the first building expected to be completed in Q1 2027. And will be followed by full fit-out of the data hall with IT equipment, cooling and power delivery systems. The first phase of construction of the core and shell is the most time-intensive, but capital-light portion of the build-out with total expected development cost of $214 million, representing approximately $1.9 million per IT megawatt for the first 2 buildings. Initiating construction on this time line coupled with procurement of long lead time equipment allows us to provide certainty during leasing discussions of our forecasted energization in 2027.

As we progress further in leasing discussions, we will provide cost estimates and time lines on the build-out and delivery of the complete and full build-to-suit of the first two 56-megawatt data centers.

Riot has long focused on maintaining 3 strategic pillars in relation to our Bitcoin Mining business, significant scale of operations, being a low-cost producer and maintaining a strong balance sheet. These strategic pillars formed the foundation of Riot's vertically integrated approach to Bitcoin Mining and the development of a unique portfolio of large-scale powered sites supported with significant cash and Bitcoin on hand. As our strategy has evolved, so has our approach to our Bitcoin Mining business. We no longer see Bitcoin Mining operations as the end goal, but instead as a means to an end and that end is maximizing the value of our megawatts. Over time, this means transitioning the megawatts in our power portfolio for data center development.

Ready-for-service power in the right locations is increasingly scarce and valuable which in turn, forms the basis for the enormous value creation opportunity ahead of us. Monetizing megawatts is how we translate that advantage directly into shareholder value. Bitcoin Mining continues to be a very valuable tool to monetize Riot's large-scale portfolio of power and our Bitcoin Mining business continues to be highly profitable. We will continue to utilize the opportunity Bitcoin Mining brings to secure power and drive strong cash flow that we will leverage to support the ongoing transformation of our overall business.

We just discussed our powerful strategy, which underpins the evolution of our business. On Slide 15, we wanted to provide some context on the underlying significant size and scale of Riot's power portfolio. While many peers reference pipelines of prospective projects, Riot's portfolio totaling more than 1.8 gigawatts is fully approved and available today. This positions Riot as having one of the largest data center power portfolios in North America.

It's also important to consider location. This slide presents total megawatts, but not all megawatts are the same. Approximately 1.7 gigawatts of our total capacity is located in the Dallas and Austin regions, 2 of the most attractive data center markets in the country, offering compelling proximity to existing hyperscaler and enterprise core architecture and tenant demand.

On Slide 16, we show enterprise value per megawatt across selected peers in the Bitcoin Mining space. We view this as a useful lens on how the market values power portfolios today. Some of the companies to the left of Riot have announced lease arrangements and have seen their valuation multiples rerate significantly. Riot currently trades at a meaningful discount to this peer set despite having one of the largest fully approved and readily available power portfolios in the industry. As we execute our data center strategy and convert megawatts into contracted data center leases, we anticipate the market will increasingly reevaluate the underlying value of our power portfolio from a data center lens, leading to a re-rating and multiple expansion on our valuation as well.

More broadly, as the market matures, we expect investors will increasingly differentiate on the quality of power, meaning location, cost of power, schedule certainty and interconnection and on the credit quality and profitability of underlying projects and leases. Our plan is focused on delivering against these dimensions.

I will now turn the call over to Colin Yee, CFO, to present our third quarter financial update.

Thank you, Jason. For the third quarter of 2025, Riot reported total revenue, which consists of Bitcoin Mining and Engineering revenue of $180.2 million as compared to $153 million for the previous quarter, an 18% increase quarter-over-quarter.

Net income for the third quarter equaled $104.5 million or $0.26 per fully diluted share compared to net income of $219.5 million or $0.58 per fully diluted share for the prior quarter.

Non-GAAP adjusted EBITDA for the third quarter was $197.2 million as compared to non-GAAP adjusted EBITDA of $495.3 million for the prior quarter.

During the third quarter, Riot produced 1,406 Bitcoin as compared to 1,426 Bitcoin in the prior quarter. The slight decline in Bitocin production quarter-over-quarter was driven by growth in the global hash rate of approximately 8%, which exceeded Riot's growth in hash rate deployed of approximately 3%, though partially offset by continued improvements in our operating efficiency and utilization rate, which reached 86% this quarter. This improvement in our utilization rate in the third quarter was achieved despite more active employment of our power strategy in the third quarter, during which we successfully generated $31 million in power credits, lowering our net cost of power to $0.032 per kilowatt hour and further solidifying our position as a low-cost leader in the sector.

Riot ended the third quarter holding 19,287 Bitcoin with a market value at the end of the quarter equal to $2.2 billion.

I will now turn the call over to Jason Chung, Riot's EVP of Corporate Development and Strategy.

Thank you, Colin. During the third quarter, the benefits of Riot's large-scale efficient Bitcoin Mining operations and our unique power strategy were all clearly demonstrated in the overall profitability profile of our Bitcoin Mining business. The highlighted column in green provides a step-by-step block through of the key profitability drivers of our operations in the third quarter of 2025.

Top line revenue drivers for our Bitcoin Mining business include the average global network hash rate, Riot's average operating hash rate, average network hash price and our total Bitcoin production for the quarter, which when taken together, resulted in a reported third quarter Bitcoin Mining revenue of $160.8 million.

Total direct cost per Bitcoin for the third quarter was $46,324 and when applied to the 1,406 Bitcoin we produced during the quarter, results in our reported Bitcoin Mining gross profit of $95.7 million or 59% on a gross profit margin basis.

Total Riot SG&A for the third quarter equaled $69.8 million of which noncash stock-based compensation expense represented $32.9 million, resulting in total Riot cash SG&A of $37 million this quarter. Total Riot cash SG&A also included $7.5 million in temporary litigation-related costs and advisory fees as well as costs associated with our engineering business. By breaking out our total cash and noncash SG&A, our intention is to give investors as much insight as possible into the underlying value of our key operating segments.

Our Bitcoin Mining and Engineering operations demonstrated incredibly strong profitability in this quarter. And going forward, we will continue to leverage the significant cash flow being generated from our efficient scaled operations to support the ongoing rapid development of our data center platform.

Our Engineering business is a core asset that uniquely differentiates Riot as we scale into large-scale data center development. In an environment where long-lead electrical infrastructure represents a major constraint to development, owning the manufacturing set from end-to-end creates powerful strategic advantages for Riot. Built through the acquisitions of ESS Metron in December 2021 and E4A Solutions late last year, our engineering capabilities combine manufacturing, engineering design and servicing into a vertically integrated platform predominantly focused on data center grade power systems. Delivery times in the market for key components have extended, but by directly owning and coordinating these capabilities within Riot, we benefit from direct control over the development of long lead critical items, deep supply chain visibility, longer equipment life cycles and resulting lower total cost of ownership and significant total CapEx savings for Riot.

Wall Street analysts have cited low and medium voltage switch gear as among the most supply-constrained items for data center development, which our Engineering business is a leading provider of. By internalizing these development capabilities, we are able to meaningfully derisk the most constrained elements of the development cycle. This not only lowers unit costs, but also protects time lines and shares design quality and enables predictable on-time development. These synergies translate into directly measurable value and derisk the transition of our megawatts into value-creating data center development.

Since our acquisition of ESS Metron, Riot has realized approximately $23 million in cumulative CapEx savings on equipment purchases to date, and we anticipate ongoing savings and logistical benefits to scale, alongside growth in our data center operations.

Riot's operating model continues to scale efficiently. And as the scale of our operations has grown, we are seeing the results of the work we have been putting in to proportionately reduce SG&A and realize a more durable cost structure as we transition to developing data centers.

SG&A has remained relatively flat over the past 4 quarters, while our revenues have grown by more than 110% year-over-year, demonstrating the significant economies of scale that Riot now enjoys. This reduction in proportionate SG&A has been built on 3 key pillars: each implemented over the last several quarters and which are becoming increasingly visible in our financial results. Number one, rhodium settlement and asset acquisition. In the prior quarter, we successfully settled this legacy-hosting contract, which previously led to ongoing losses and litigation costs. The settlement of litigation and asset acquisition reduced legal costs and eliminate future drag on earnings.

Number two, reduction in stock-based compensation. We have previously highlighted the accounting impact from the onetime special awards granted in 2024. Noncash charges associated with this onetime grant of approximately $25 million per quarter will drop to approximately $8 million in Q3 2026 and thereafter roll off entirely, significantly reducing noncash stock-based compensation expense.

Number three, increasingly disciplined internal budget process. We have enhanced our accountability-based budgeting and tracking systems throughout Riot. Teams now operate against more clear targets with monthly variance reviews driving greater predictability in run rate SG&A, inter-department coordination and a continuous improvement cycle, which will be critical as we onboard new hires and systems in support of our data center business development. Together, the impact is visible in our Q3 results.

Revenue increased to approximately $180 million, up 18% quarter-over-quarter, while total SG&A came down and also improved significantly on a proportionate basis. Importantly, we are pairing cost discipline with selective hiring in core areas where hiring is directly tied to expanding our data center development capabilities. We are simplifying our cost base, reducing nonrecurring drags on earnings and have dramatically improved run rate visibility. The result is a structurally leaner organization that can scale data center development with greater operating leverage and stronger earnings quality over time.

I'll now turn it back over to Jason Les for closing remarks.

Thank you, Jason Chung. Riot is in an incredibly advantageous position today because of our industry-wide unique combination of significant scale of readily available power capacity in key high-demand jurisdictions, experienced credible data center leadership and development capability, strong balance sheet underpinned by more than 19,000 Bitcoin and $400 million in cash on hand and significant access to the capital markets. Large scaled, efficient Bitcoin Mining operations generating hundreds of millions of dollars in revenues and cash flows, which will support the growth of our data center business and battle hardened and experienced management and operations teams.

With this framework and these strengths in place, our mission is clear. Riot will maximize value across our entire Power portfolio with a view to ensuring full utilization of our available power capacity and pipeline, leaving no stranded power capacity behind, progressively shift power capacity towards data centers, strategically expand our power assets, utilizing Bitcoin Mining were advantageous and increase our shareholders' exposure to value-accreting assets.

We are strategically positioned at the confluence of surging compute demand and constraints on availability of power, offering compelling potential for shareholder value creation.

We will now open the call up for questions. Operator?

[Operator Instructions] Our first question comes from John Todaro with Needham.

Congrats on all the progress guys, especially at Corsicana. Great to see. Obviously, there's been a number of leases now signed in the space. Can you just give us an update, in particular, on the discussions you're having with potential tenants for those first few builds and what you need to do from here to get a finalized lease? And then I have a follow-up question.

Sure. Thank you for that question. Now what -- I can't comment specifically on any ongoing discussions. But what I will say is that we are incredibly encouraged by our current position in the market. Of course, it's no secret that there's this explosion in AI going on. And alongside with that, demand for power is insatiable. And it keeps growing amongst all players in the market, hyperscalers, enterprise customers, neo clouds, all of these companies are incredibly power constrained. And just as recently as this week and in particular earnings calls yesterday amongst hyperscale companies, we've heard additional commentary indicating, if anything. The bottleneck is growing for power. Data center infrastructure looks like it's likely to extend for years to come that the demand is increasing for them, and they keep thinking they're going to catch up and they're not catching up. And they have historically tried to build on their own and now they're looking for third parties to lease from in order to meet their data center commands.

Meta commented that they keep thinking that they're being too aggressive or being very aggressive at overbuilding and they keep finding themselves on the short side instead. So a lot of positive commentary that I think validates the strategy that we have going on and validates the value of the assets that we have. What I would say also is, we are very focused on high-quality potential tenants. And that's because we're very focused on building this data center business at Riot off on a strong foundation. And these types of tenants, they have enormous power requirements and CapEx budgets. But they are also very careful to commit to.

The projects that they're looking for, they need a lot of certainty on delivery time lines and those ready-for-service states and have very minimal risk of power approvals and permitting and that sort of thing. And that is why we have worked so hard to have taken the time to take these key steps that derisk our sites and ensure maximum credibility in order to deliver on the time lines that we're looking for. We've done that with the team we put in place, completing our basis of design and now advancing on technical and engineering discussions and now initiating the development of the core and shell buildings at Corsicana.

So what I would say is the steps that we've taken, all have been taken to position Riot in front of top-tier potential tenants and set us up to execute on leasing and then match our ability to deliver with the time lines that. Another thing I'll add is everything that you hear about how short on power the market is for at least the next few years and how frenzy demand is for anyone who can reliably deliver power within that time frame, that is absolutely real. We've consistently heard from the leading industry experts, from partners and potential it has strong validity to the power available. So we continue receive a significant interest in that site. So we feel very good with where we're at right now. We've completed the steps outlined earlier in the year that we believe were necessary to make Corsicana ready and as an attractive development as possible. And we feel like we are just in a great position to move forward. And that is the key driver behind today's announcement on initiating the corn shell builds at Corsicana. And that is it.

That's great. That's super helpful. And then just as a follow-up, you did talk about the constrained power environment, which we're obviously seeing as well. But I guess within that, is there still some additional power out there that you guys could procure? Do you still feel comfortable? Is there just additional capacity out there that maybe you could get to add to the pipeline? I don't know, call it a power that's available before 2028. Just maybe frame up some of that, too, on the supply side of what maybe additionally, you could procure.

Yes. We are very active on working on building out our power pipeline beyond just the 1.7 gigawatts that we had at Corsicana and Rockdale. But let me turn that question over to Jason Chung for some more color.

Thanks, Jason. And thanks, John, for the question. We remain very active in looking at opportunities to expand our power portfolio and a large number of opportunities that continue to come across our plate. And we do spend a lot of time as a team evaluating these opportunities. That being said, we've got a tremendous opportunity for value creation on our plate right now, and that's really the primary focus of the management team here. So we do look at opportunities and will act when there's an opportunity that's compelling enough for us to do so, but with perhaps a bit of a higher threshold in terms of where we allocate our time and resources given what we have in terms of our power portfolio that needs to be developed today.

Our next question comes from Paul Golding with Macquarie.

Congrats on all the progress with the site and the basis of design. I wanted to ask, so it sounds like the proactive construction or commencement of construction of this 112 megawatts of core and shell is not a change in approach, given you're still looking at prospective hyperscale tenants. But I wanted to ask, in terms of maybe, Jason, last, your comments around facilitating the most optimal negotiations and getting leverage in these negotiations, could you give some color or unpack how having these shelves being constructed earlier than signing that deal that may come in the future? How that is factoring into these discussions where it's coming into play? Is that the lead time allows you to take more price? Is it maybe helping you attract higher investment-grade counterparties?

And then a follow-up on the comments around ESS Metron and the Engineering segment. Just in seeing how much revenue has grown there and the backlog that's built up, how are you thinking about measuring out third-party engagements for that segment versus internal, given the project you're undertaking at Corsicana?

Thanks, Paul. So let me answer your question. Well, the first part of your question in 2 parts. The first thing I want to stress is, just to be clear, what we're announcing today with the corn and shell development, it's not a shift in our strategy. What I want the market to understand is this is an unveiling of our strategy and how we know that we can best serve the market here. Our focus is owning and operating build-to-suit data centers and the team that we have in place at Riot has the full ability to deliver on that.

So what we bring to the market, which is so important to all types of customers, but particularly hyperscale customers, is a derisked project. And I think that comes through our power approvals are in place. We have up to 1 gigawatt of utility power at Corsicana. That power is running today. We can demonstrate the validity of that power to customers.

Two, we have a team in place that has deep experience building the type of data centers that we're talking about, build-to-suit Tier 3 data centers in the configurations that hyperscalers are looking for. We also have a balance sheet that's able to support development of this project. And with the announcement today, we're showing that construction of the core and shell is already underway for the data center. So all of these elements allow us to communicate the level of certainty to power and ready for service to date that hyperscaler tenants require.

The other thing I want to say is what we announced today and the development in the core and shell is the first step in the eventual build-out of a full Tier 3 data center. And what we talk to, that's $214 million or $1.9 million per IT megawatt, it's actually a little bit more than just a powered shell. Beyond just the water type building, we are also completing generator buildings, fully operational elevators, fully finished admin area, security, access control system and power distribution. So what we're actually in the way that we are providing the components that we know every hyperscaler will require, and we're positioning these buildings so they can very quickly become Tier 3 data centers when those tenant specifications are finalized.

And also -- so those our teams have deep experience and knowledge in building these types of data centers and understand how to make them usable by any potential tenants while providing the flexibility or the tenant to meet their specific specifications. What we're also doing is procuring equipment and locking in our delivery time lines now. So the finished data center can be in line with the timing that hyperscale and -- the timing of hyperscale and enterprise customer buying habits.

Now I know that is a lot, but let me just summarize by saying this. We are executing on our strategy to position us in front of the highest quality tenants and give us more certainty on how and when we will deliver on them -- deliver on building full build-to-suit data centers. This is all under the framework of maximizing the value of the assets that we have. And ultimately, I believe today's announcement is an indication of our confidence in our strategy and our team's ability to successfully develop the data center business along the time line that we envision.

And then your Engineering question. ESS Metron and E4A Solutions comprising Riot's Engineering business has a lot of strategic benefits. Primary reason that we acquired these companies is for controlling our supply chain and derisking that. We've also, in our presentation, Jason Chung talked about the cost synergies that we're realizing there as well. Riot is actually a small portion of ESS Metron's overall business. 90% of ESS Metron's business are data center projects. In fact, some of the biggest data center projects in the country that I'm certain that you've heard of.

So they have a growing business themselves. And they're able to balance the internal demand from Riot and the growing demand reflected in the growing backlog for all these data center projects all over the country.

Our next question comes from Greg Lewis with BTIG.

Jason, I was hoping you could talk a little bit more about Phase 1 in terms of how you're thinking about the sequencing the decision to go with 2 buildings, not 1 or 3. And just how should we think about the timing of the shells being built? And then is this something where the next phase is really going to just be customer dependent, and we're kind of waiting on a customer to see how we think about advancing the shelves?

Yes. Thanks for the question, Greg. So the quarters -- [Technical Difficulty] We're talking about building the Corsicana, which is already an active site. Substation is already active on that side, of course. We already have the pad ready for these first 2 buildings. So this is a development that's far along, and it's just these buildings themselves that construction will begin on in the first quarter of 2026. And then we expect the first corn and shell to be completed in the first quarter of 2027. And because we're building a little beyond core and shell, what we actually call core and shall plus, we are in a position from that point to very quickly get those into build-to-suit turnkey data centers.

This is just the beginning of what our development plans will be. Obviously, we have a total IT load campus capacity at Corsicana of at least 672 megawatts, and we're announcing just 112 megawatts today. The pace of future announcements will be, I think, guided by industry demand and the pace of customer convert -- we felt it was very important to start development right away based on the demand that we were seeing, based on the types of discussions that we are having. And I think you can expect future developments to be announced as we progress on our strategy and we progress on conversations with potential counterparties.

It is relatively simple for us to continue to add on additional buildings. So what we're talking about these first 2 buildings here. And if we have a conversation with a customer who has been demanding significantly more capacity than that, then we are positioned to rapidly spin up additional developments to support their needs. So we're in a great position to be flexible and be aggressive with meeting time lines.

Okay. Super helpful. And I realize there's probably a lot more that needs to be discussed about Corsicana, but I was hoping to get maybe some thoughts on Rockdale. Just as we think about that, everyone, obviously, Corsican has been talked about as being one of the best data sites in the U.S., given its scope size, proximity to Dallas. But like could you talk a little bit how you're thinking about Rockdale. Is that something where we need to really have Corsicana built out before we kind of dividend start developing, opportunities at Rockdale? Or is this something you think maybe we could do concurrently?

Yes. Thank you for asking about Rockdale, Greg. Rockdale shares many of the same characteristics that make Corsicana a highly attractive site for data center development. Just like Corsicana, Rockdale has large-scale secured power, active and operating today, 700 megawatts fully approved electrical infrastructure already in place. Now keep in mind, we already operate one of the world's largest Bitcoin Mining data center campuses on that site. So it is an active operating site. And it also has ample land, water and fiber that can satisfy management and just looking in close proximity, which is a technology [indiscernible], we think this makes rough a very attractive site. Most importantly, having that power approved and in use today significantly derisked the development execution from a potential tenants perspective, and that gives them greater confidence in the opportunity.

Today, we are working to enhance the attractiveness of Rockdale for high creditworthy prospective tenants. And while we do so, we continue to focus on Corsicana as our near-term development opportunity. So today, Rockdale provides Riot with additional optionality for future development of our data center business. But in the meantime, our mining business there continues to generate strong cash flow and helps finance our growing data center business. So Corsicana is a near-term focus for data centers, but Rockdale is the next logical step in the process.

So I'm emphasizing the discount we're off tale from our development pipeline as we continue to work to make the site tenant ready in the meantime. And I feel confident about our ability to execute there.

Our next question comes from Reggie Smith with JPMorgan.

Congrats on the progress. Two quick questions for me. I love that you guys are thinking about maximizing the electrons at Jet sites. I was curious, like what's your thinking today on NeoCloud? Maybe talk us through with the pros and cons of becoming a NeoCloud like iron or someone else. And how you're thinking about that? And then I have one follow-up.

Yes, Reggie, thanks for the question. We are always looking maximize the value of our megawatts here. So that's something that we are thinking about and evaluating all the time. What we believe is the best first step for Riot to maximize value is to focus on this build-to-suit colocation model. Our sites are in very desirable locations. They have very desirable ready-for-service dates. So we believe the best way that we can unlock value today is by building data centers and getting these leases with high-quality tenants. And that's why we're focused on developments that can serve a wide variety of the market. We're focused on building data centers that can meet the needs of any hyperscalers that can service all types of enterprise customers and has the potential I'm sorry, and conserve NeoClouds as well. And of course, that means it could potentially serve an internal NeoCloud business that we decided that we wanted to go that way.

So it's something that we'll think about and waiting, but build-to-suit is a priority today.

Not closing the door on that, but right now, build-to-suit as where you're going. Perfect. And then I guess second question, we've seen quite a few deals struck in the space the last couple of months. I don't think any of them are as ideally located as you guys are in terms of being close to a major city. Are you talking to clients more or do you think you're getting a higher mix of kind of inference clients? Inquiries for your site, should we expect better pricing when a deal is struck because of where you guys are located versus other sites? Are you pushing for that? Like I would imagine that's a point of negotiation where you guys are thinking like, look, we've got great locations. And so what may have flown in a more remote location, we're going to expect more. Is that the right way to think about it?

Yes. I think the location of our sites, but also the timing of being ready for service is what positions us to get the best possible deal here. We believe what we have that we can command very strong economics. And for us, it's twofold. It's both the types of deal economics that we think we can secure with the assets that we have. But it's also the types of tenants that we believe that we can secure with the assets that we have. I would say that I think we're very confident today based on the level of interest that we've received that we could easily enter into a contract with the NeoCloud. But what we are focused on is building a platform that will be able to service a range of potential tenants, hyperscalers, enterprises, and NeoClouds.

And so our priority is building our data center business on a strong foundation. We think that means that with what we have, we can attract high-quality which, beyond just the name recognition. And beyond just the economic terms we can get in the lease make benefits available to Riot in terms of value creation and access to attractive project financing terms. So it's twofold, Reggie. It's -- our assets, we believe both can command strong economics, but can also command because of the properties can command very high-quality tenants.

Our next question comes from Brett Knoblauch with Cantor Fitzgerald.

I think it was just as recently as June as you guys hired Jonathan is kind of with data center team. I'm curious where else on the -- maybe hiring front, you guys have made hires and to what extent there's more hires that you need to go out and make? Or do you think that team is kind of fully in place at this point?

Yes. Thanks for the question. One of our ongoing priorities is building out our team. And what we're doing is building this team in sequence with the steps that we're at in building the business. So you can kind of think of it as like a pendulum where [Technical Difficulty] as the development and engineering part advances, then it swings into the sales side and then eventually swings into the operations side. So we have made a number of key hires over the third quarter. That position us to execute on the development side of the business. Of course, we're still adding talent there, but we have the talent that we need to proceed.

And very recently, we have hired a sales position, our Senior Vice President of AI and hyperscale sales as that now from the development side, more into the sales side. So we have been, I'll say, very pleased with the level of talent that we have been able to attract to Riot. I think that's a testament to the quality of assets that we have, our power, our capital and all the other capabilities that we have at Riot, it had made Riot a very attractive place for veteran data center talent to build their careers and have the opportunity to be a part of building something very big from the ground up. So I've been very pleased with the rapid pace that we've been able to add some incredible talent to our bench. And as that pendulum swings, you'll continue to see us bring in more of that talent to meet the cycle of the business that we're in.

Awesome. And then maybe just as a follow-up, and I don't know if you guys said this, I might have missed it. The, call it, 400 megawatts being used for Bike mining at Corsicana. Is that maybe like the last source of power that you will draw as you kind of build up more on the AI side, like you'll keep mining Bitcoin and so you need that power, I guess, it's a question.

Yes. So on Slide 11 on our earnings section, we'll have a campus layout, and we're breaking it into 2 phases essentially. The first phase is building out on all the unused land that we have at Corsicana. So that means we continue to benefit from the strong cash flow that comes from that site, which is one of the largest Bitcoin Mining sites in the world right now. That site continues to be productive and generate meaningful cash flow for us while we are building out the other buildings on that site.

Once the available land has been exhausted, that would be on our plans, that would mean building out about 504 megawatts of critical IT load, then the Phase 2 option, part of the plan, would be building over where those existing Bitcoin Mining buildings are and adding the final three 56-megawatt building in all critical IT capacity at the site. So that -- our plans call to eventually supplant that. And the pace of that will be driven by customer demand, driven by the dynamics that we're seeing in the marketplace and how our leasing is progressing.

So it's all under the lens of maximizing the value of all of the megawatts that we have, trying to leave unutilized power while we aggressively build out the data center business. And eventually, we aim to have the entire site be a 1 gigawatt utility load data center campus.

Our next question comes from Mike Grondahl with Northland.

Just following up on the discussion you had on expanding the pipeline, do you have any internal goals what you could expand that pipeline to by year-end 2026 or '27? And then secondly, just what are the key next steps you need to deliver the next 90 to 120 days?

We don't have any goals that we would be publicly disclosing at this point. What I would say is we recognize the value of power, and we also recognize our capabilities of securing power. Riot has a proven capability of securing power at scale as demonstrated on one of the slides in our deck at a scale rivaling the biggest data center companies in the world. So when you have an advantage, you press it, and we are looking to press that advantage and utilize the tools at our disposal to add more power to our pipeline.

So the story ultimately would not end at just, Corsicana or Rockdale, but on additional sites that we bring into our pipeline. So not a -- half for you outside of telling you that it is a strategic priority at Riot to build that pipeline.

Key steps for the next 120 days, I think that will really center around the development progressing at the 2 core and shells that we're announcing today. We expect to break ground on construction in the first quarter of 2026 in order to meet the time lines that we've laid out here. I think internally that will be continuing to be advancing on development and further detailed designs of our development. And what we will be doing internally is continuing the technical outreach that we've had, speaking with potential parties and potential tenants to ensure that we are progressing on a design that meets their specification. That isn't something externally looking in. You'd be able to see progress on, but internally, that is what we for the next 120 days.

And congrats on the progress towards HPC, guys.

Our next question comes from Darren Aftahi with ROTH Capital Partners.

Congrats on the Corsicana progress. First, look, Jason, I know you mentioned that the design for Corsicana could be replicable beyond Corsicana. Does that mean you don't need a separate master site design for Rockdale? Or could you just sort of clarify what you mean by that?

Thank you for that question. Yes. So our basis of design is a design that will ultimately work wherever we have a site where we have power. So we have the basis of design now and then the process of putting that on a site is what we call localizing that standard design to the specific site in question. The land profile, wherever the site would be, that determines what the specific layout would be. But it's the same type of building that's being made.

So the fact that we have a standard design means that we're able to be a lot more efficient in procuring equipment and scheduling of the contractors and those contract -- contracting partners, development partners, construction partners, knowing exactly what we're building. It's the same standard design that is tweaked at the endpoint for specific tenant specifications and then localize on whatever site that it's at.

And then like I said, the campus layout where the buildings are actually placed will depend on the land profile of the site. But this is why this basis of design was so important to us. It's really the foundation of our whole development program at Riot for data center. We're not just making a data center for Corsicana. We are making a design to continue to improve on and apply wherever we're able to get access to a power.

Great. And as a follow-up, like when the first 2 power shells plus are done sometime in Q1 '27, like is that the next step that potential tenants need to see your progress on to advance sort of discussions on the lease? Or are you sort of talking with them throughout the process?

We'd be talking with them throughout the process. I think that's the schedule, that's the time line of when those corn shells will be completed. But one of the purposes of initiating this corn and shell development is it enables a more productive discussion with potential tenants. So we would expect to be farther along in our sales and leasing process before those core and shelves are even completed.

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

My first question was you have $330 million on the balance sheet today and they see a lot of all the Bitcoin as well. $214 million for the core and shell. But my question is, are there any other major capital outlays we should think about in 2026? Whether it'd be deposits for long lead time items or just any other moving pieces to keep in mind. I think you've pretty much wrapped up the land acquisitions you set up to make, but I appreciate any color there.

We haven't released our full 2026 CapEx budget yet. But I think with the development plans that we announced today, the majority of it at this stage would be the $214 million for these first 2 core and shells. That doesn't mean though that we have -- we are not progressing on all the long lead time equipment as well.

Even without deposits, we have been able to secure most that would be necessary for those first 2 buildings. And then, of course, we have our internal capabilities that we're using to secure supply chain as well. So we are being very capital efficient with how we secure this long lead time equipment all around the state of this [indiscernible] and making sure that those 2 items are synced up closely. And with our development strategy, we are always positioned to rapidly move to the next step, depending on what the tenant is looking for.

I appreciate that, Jason. And one more, if I may. I think you mentioned that 672 megawatts of critical IT is kind of the minimum you could see at Corsicana. I think that most PE just below 1.5. So my question is, is there any work ongoing today to improve that? Or what could be done to ultimately increase critical IT megawatts at Corsicana?

Yes. So before we get that question, I just want to add one more thing to the previous question that you mentioned. In addition to the cash that we have on our balance sheet, we have -- including restricted cash, we have about $400 million today and our large Bitcoin balance. We also have a robust Bitcoin Mining business that is generating strong cash flows, and that really is a very important and valuable tool to funding all the development that we have going on.

Then your more recent question on PUE, what we've laid out is like kind of our base case. That's the base case PUE of what we are setting out to achieve. Now of course, any improvement in PUE is improved economics for us. So approximately $1.49 is what our base case is. And now what we are setting out improve from that and the better PUE we were able to achieve, the better ultimate economics we're getting from our projects.

I would now like to turn the call back over to Jason Les for any closing remarks.

I want to thank everyone for listening in on our earnings call today. We are incredibly excited about the progress we've made and the strategic milestones that we're announcing today. Look forward to sharing more progress as we accomplish it. And getting together again with you all on our next earnings call. Thank you.

Thank you. This concludes the conference. Thank you for your participation. You may now disconnect.

Good day, and thank you for standing by. Welcome to Riot Platform's Second Quarter 2025 Earnings Conference Call. [Operator Instructions] Please also be advised that today's call is being recorded. I would now like to turn the conference call over to [indiscernible], First Vice President of Capital Markets and Investor Relations at Platforms. Please go ahead.

Thank you, operator. Good afternoon, and welcome to Riot Platforms' Second Quarter Earnings Conference Call. My name is [indiscernible], Vice President of Capital Markets and Investor Relations and joining me on today's call from [indiscernible] Jason Less, CEO; [indiscernible], Executive Chairman; Colin Yee, CFO; and Jason Chung, Executive Vice President and Head of Corporate Development and Strategy.

On the right Investor Relations website, you can find our second quarter earnings press release and accompanying earnings presentation, which are intended to supplement today's prepared remarks and which include a discussion of certain non-GAAP items. Non-GAAP financial measures provided should not be considered as a substitute for or superior to the measures of financial performance prepared in accordance with GAAP and are included as additional clarifying items to aid investors in further understanding the company's second quarter performance.

During today's call, we will be making forward-looking statements regarding potential future events. These statements are based on management's current expectations and assumptions and are subject to risks and uncertainties. Actual results could materially differ due to factors discussed in today's earnings press release. in comments and responses made during today's call and in the Risk Factors section of our Form 10-K and Form 10-Q, including for the 3 months ended June 30, 2025, which will be filed later today. as well as other filings with the Securities and Exchange Commission. With that, I will turn the call over to Jason Les, CEO of Rise Platforms.

Thank you, Phil, and good afternoon, everyone. I'm excited to walk through the results of another strong quarter for Riot. But before we dive into second quarter earnings, I'd like to share Riot strategic road map and provide some additional context to the development of our data center business and how we view all of our operations working together in a complementary manner. We are incredibly proud of the position that our company Riot Platforms is in today. Over the last 7 years, we have scaled incredibly, both in terms of our size and our capabilities. representing the culmination of years of hard work, long-term planning and coordination, all with a view to taking ownership of our future and placing our destiny in our own hands. We have grown and evolved as a company driven by our ability to develop world-class capabilities, including land and power procurement, Bitcoin Mining at a globally significant scale power management and trading at scale, engineering, manufacturing and servicing critical electrical infrastructure and significant access to global capital markets.

Recently, we have added a new world-class capability. With the hiring of Jonathan Gibbs, Riot's Chief Data Center Officer and other highly capable professionals from the traditional data center industry, we find ourselves at the beginning of another exciting chapter in Riot story. With this new capability, we are about to undergo the next step of our evolution as a company. With the ability to build and develop high-performance compute data centers, we will transform it by establishing a robust and scalable data center segment. Successful execution in this regard is Riot's top priority, and we recognize the importance of clearly articulating our approach to investors and stakeholders.

To be clear, we are not pursuing a so-called pivot into AI HBC initiatives with a view of doing a deal. Rather, we have added a new data center development capability which we will apply to as much of our power portfolio as possible and which will transform our company in the years to come. This mindset informs all of our decisions enabling us to capitalize on this exciting opportunity with discipline and foresight. If I had to summarize our strategy into a simple elevator pitch, the pitch would be that Riot is in the business of monetizing megawatts with a view to utilizing as much of our power portfolio as possible and maximizing the value of our megawatts over the long term. We will maximize the value of our operational assets, specifically optimizing our megawatts to use all available power.

We have a great advantage with a portfolio of ready-for-service power anchored by our operational flagship sites at Rockdale and Corsicana. These assets are not conceptual. They are active today, thanks to prior investments in Bitcoin mining infrastructure. This enables more certain execution on our data center development initiatives compared to a stand-alone traditional developer. Our Bitcoin mining capabilities has proven integral to the strategy as they underpin our ready-for-service power portfolio. By utilizing our mining capabilities, we have put ourselves in the fortunate position we find ourselves in today. and we can secure new power sites by playing to our strengths, profitably managing risk and simultaneously creating a sustainable cycle of growth.

Given the attractive economics and higher valuation multiples associated with data center leases to high-quality tenants, converting as much of our power portfolio to data centers remains our preferred end use for those assets. The pace of transition from Bitcoin Mining to data centers will be influenced by customer demand trends, the availability of financing and the general data center market. Our current efforts are laying a strong foundation for a pipeline of future transactions. We have many advantages that have put us in an incredible position because we offer a unique combination of significant scale of readily available power in high-demand jurisdictions, a strong balance sheet underpinned by holding more than 19,000 Bitcoin and $330 million in cash and with significant access to the capital markets. experienced hyperscale data center leadership and development capability, scaled efficient Bitcoin Mining revenues, generating hundreds of millions of dollars in revenues and cash flows annually and [indiscernible] and experienced management and operations teams.

With this framework, Our mission is clear, Riot will maximize value across our entire Power portfolio with a view to ensuring no strange capacity, progressively shift power capacity towards data centers strategically expand our power assets, utilizing Bitcoin Mining or advantageous and increase our shareholders' exposure to value-accreting assets. We are strategically positioned at the convergence of surgery compute demand and Bitcoin growth, offering compelling potential for shareholder value creation. Now turning to the second quarter. We continue to aggressively pursue further development of our data center business build-out and achieved a key milestone in our development plan.

More specifically, we announced the hiring of Jonathan Gift as our Chief Data Center Officer. As we search for the right person to take leadership of this primary initiative for Ria, Jonathan's name, were purely came strongly recommended to us by a number of different industry parties. The market for data center talent is incredibly competitive and professionals with [indiscernible] expertise are in very high demand.

[indiscernible] Riot and lead our data center platform is a testament to the unique opportunity set available to Riot and our ability to succeed. We are incredibly excited to have someone of Jonathan's caliber onboard to drive our efforts. During the second quarter, we also continued to acquire additional land around our Corsicana site and now have a total footprint of 858 acres. Adding additional land ensures that we can fully utilize the large solace to power that we have on site without leaving any power stranded and therefore, maximize the value for which we believe is the premier data center development opportunity in the country. We continue to see strong demand in the market, and we remain engaged in ongoing discussions with interested partners. With that said, in the second quarter, we also continued to make strong progress in our Bitcoin Mining business. where we have made significant operational efficiency improvements that now place us among the most efficient operators in the industry. While also focusing on lower cost and maintaining a disciplined approach to capital allocation. Riot has also maintained our strong balance sheet, a long-standing key pillar of our business. ending the second quarter with over 19,000 Bitcoin and $330 million in cash on our balance sheet, representing $2.4 billion in liquidity today. We continue to sell our monthly Bitcoin production in order to finance our ongoing operations while raising additional funds via a $200 million Bitcoin to lateralized financing facility with Coinbase, allowing us to reduce issuance of stock to our ATM and fund our multiple growth opportunities, driving long-term shareholder value creation. I am proud of what we've been able to achieve in the second quarter. These results and the financial and operational strength of the company will allow us to continue aggressively growing our data center business in a way that will maximize long-term value for our shareholders.

I look forward to continuing to report on our progress throughout the rest of the year and beyond. With that, I would now like to turn the call over to Colin Yee, CFO of Riot Platforms, to present our second quarter financial update.

Thank you, Jason. I am pleased to present Rite's financial results for the second quarter of 2025. For ease of reference, we have highlighted key metrics on Slide 8 and which presents a snapshot of key financial and operating metrics for the second quarter. During the second quarter, Ride increased its self-mining cash free from 33.7 exahash to 35.4x the hash representing a 5% increase over the course of the quarter, while global hash rate rose by 9% in the same period. Brit produced 1,426 bitcoin in the second quarter a slight decrease as compared to the 1,530 bitcoin produced in the prior quarter, driven by the global network cash rate growing at a greater pace than Riot's deployed hash rate given our shift in strategic focus to developing our data center business. Year-to-date for 2025, we have increased Bitcoin Holdings per million fully diluted shares from $44.3 million to $45.9 million representing a bit in yield of 3.7% through the period ended June 30, 2025.

For the second quarter, Riot reported total revenue of $153 million as compared to $161 million for the previous quarter, a 5% decrease quarter-over-quarter, primarily driven by lower bitcoin production due to global hash rate increasing at a faster rate than our self mining cash rate. Gross profit for the second quarter was $70.3 million as compared to gross profit of $73.6 million for the prior quarter. Gross margin in the second quarter equaled 46% and flat with the prior quarter. Net income for the second quarter was $219.5 million or $0.65 per share compared to a net loss of $296.4 million or $0.90 per share for the prior quarter. This net income was primarily driven by mark-to-market adjustments due to the quarter and appreciation of bitcoin price and marketable securities totaling $477 million. As a reference, the bitcoin price at the end of the first quarter was $82,534, while the price at the end of the second quarter was $17,174 resulting in a mark-to-market upward adjustment of $470.8 million for the quarter.

Net income for the quarter also included a $158.1 million loss on contract settlement as part of the Rhodium acquisition, depreciation and amortization expense of $83.2 million noncash stock-based compensation expense of $30.1 million and was positively impacted by the release of $26 million in restricted cash associated with the host closing dispute settlement with Northern Data. Non-GAAP adjusted EBITDA for the second quarter was $495.3 million as compared to non-GAAP adjusted EBITDA loss of $176.3 million for the prior quarter. which included $470.8 million in unrealized gain on Bitcoin Health Cash SG&A for the quarter was $45.8 million, including onetime litigation expenses of $14.3 million and advisory fees of $2 million. Excluding these onetime expenses, Riot's cash SG&A expenses equaled $29.5 million, at the low end of our prior guidance of a run rate of $30 million to $33 million per quarter for 2025.

For the second quarter, Bitcoin Mining revenue totaled $140.9 million, in line with the prior quarter Bitcoin Mining revenue of $142.9 million. Bitcoin Mining gross margin for the quarter was 50%, an increase from 48% in the prior quarter. This margin expansion was driven by higher Bitcoin price. Most notably, Riot's year-over-year hash rate utilization increased from 61% to 87%, demonstrating our strategic focus on improving operations across all of our sites even as we significantly scaled our operations and now positioning us among the most efficient operators in the industry.

Direct cost of mine, excluding depreciation in the second quarter totaled $48,992 per bitcoin, of which power costs amounted to $37,767 per bitcoin or 77% of total direct cost per bitcoin. Direct nonpower costs, which include direct labor, minor insurance, miner and minor related equipment repairs land lease, property taxes, network costs and other utility expenses totaled $11,225, or 23% per bitcoin mined, increasing quarter-over-quarter when direct nonpower costs accounted for 18% of total costs. This increase was almost entirely attributed to the 1-year anniversary of the completion of Phase 1 construction at Corsicana and the resulting property tax bill assessment, which totaled $3.8 million for the quarter, adding an additional $2,650 per bitcoin in direct non-power costs. We anticipate this cost will remain constant at $1.7 million per quarter going forward in our direct non-power costs. Despite this increase in our direct cost of mine, gross profit per Bitcoin Mine for the quarter remained in line with the prior quarter given the higher average price per bitcoin seen in the second quarter. I would now like to turn the call over to Jason Chung, EVP of Corporate Development and Strategy.

Thank you, Colin. As we continue to develop our data center business, we believe that providing greater clarity on our Bitcoin mining business on a stand-alone basis is important information for the market. On Page 11 of our second quarter earnings presentation, we have outlined the underlying run rate profitability of our Bitcoin Mining business for the second quarter of 2025.

The column outlined in the middle of the slide provides a step-by-step walk-through of key profitability drivers for our Bitcoin Mining business, ultimately culminating in run rate EBITDA for the quarter. Top line revenue drivers include the average global network cash rate, Riot's average operating cash rate, average network cash price and our total Bitcoin production for the quarter which, when taken together, resulted in a reported second quarter Bitcoin Mining revenue of $140.9 million. As highlighted on the prior slide, total direct cost per bitcoin for the second quarter was $48,992. And when applied to the 1,426 bitcoin we produced during the quarter, equates to our reported Bitcoin Mining gross profit of $71 million or 50% on a gross profit margin basis.

In order to determine run rate cash SG&A for the quarter, we exclude from total SG&A, the impact of noncash charges, which are primarily comprised of stock-based compensation, cash SG&A related to our engineering business, and nonrecurring expenses, which are primarily litigation and advisory related. Run rate EBITDA for our Bitcoin Mining business for the second quarter equaled $45.6 billion. representing a 32% margin. These results are based on the average network cash price for the second quarter of $51 per pet as per day. While hash price today is currently closer to $60 per pet ash per day.

Our Bitcoin Mining business demonstrates strong leverage to changes in hash price. And as an illustration, applying current cash price of approximately $60 per pad ash per day to the second quarter results would have resulted in a 70% increase in our run rate EBITDA for the quarter. At the same time, we continue to focus on controlling and reducing costs.

Noncash charges, which are primarily comprised of stock-based compensation, are temporarily elevated at present, but will be meaningfully and dramatically reduced from mid next year onwards. And we will provide more detailed guidance on the expected reduction in stock-based compensation in the next quarter. As Colin previously mentioned, litigation expenses represent the bulk of our nonrecurring cash expenses for the quarter, constituting $14.3 million out of the total $16.3 million.

While litigation expenses can be difficult to forecast, we continue to work to reduce the expenses as well. For instance, our recent acquisition of [indiscernible] assets and settlement agreement during the quarter have eliminated litigation costs associated with this dispute. It is important to keep in mind that these results are specific to our second quarter and that historically, the third quarter has been the period during which we have typically seen the greatest reduction in direct costs and therefore, the greatest increase in profitability as that quarter is when we have typically been able to most fully employ our power strategy. I will now turn the call back over to Colin Yee to continue with the second quarter financial update.

Thanks, Jason. Before diving into the financial results of our engineering business for the quarter, it would be helpful to discuss the underlying significant strategic benefits that this business brings to Riot. Our engineering business provides critical long-lead time items directly applicable to developing large-scale data center infrastructure. By directly controlling this business, we can ensure timely cost competitive availability of critical electrical components representing a key competitive advantage in planning for ongoing development of both our Bitcoin Mining and data center businesses at a time when other developers face the supply constraints. Further, through our acquisition of E4A Solutions last year, the engineering business also brings added in-house expertise in commissioning, operating and maintaining electrical infrastructure, allowing us to better maintain existing equipment which reduces downtime and extending the life cycle of our equipment, which reduces additional CapEx spend.

Direct savings to ride on CapEx spend associated with ESS Metro since its acquisition in December 2021 already totaled $18.5 million to date, and we anticipate additional ongoing cost savings well into the future. Now let's dive into the financials. During the quarter, the engineering business achieved a record in order bookings, taking our backlog to $118.7 million and setting the stage for a strong second half of 2025. During the quarter, engineering revenue totaled $10.6 million, a 14% decrease relative to the prior quarter revenue of $13.9 million. Total revenue excludes $5 million of intercompany purchases made in the second quarter by Rye for CapEx. With that, I would now like to turn the call back over to Jason Les.

Thank you, Colin. As I discussed in my opening remarks, Riot's strategy is to maximize the value of the megawatts that we currently have readily available. With the closing of the Rhodium asset acquisition during the second quarter, we now have access to an additional 125 megawatts of power capacity at our Rockdale facility. Following careful evaluation we determined that the optimal use for this additional capacity in the immediate term is created to support enhanced Bitcoin Mining use. As such, we have recently entered into purchase orders with MicroBT for new miners to be deployed at both [indiscernible] and Kentucky. In total, this order consists of 10x of MicroBT's most efficient miner, the [indiscernible] with an efficiency rating of 15.5 tools per terahash.

At current hash prices, coupled with Riot's low cost of energy, we anticipate a relatively quick payoff period on this purchase. Given the attractive economics and higher valuation multiples associated with data center leases to high-quality tenants. Our long-term goal for this additional capacity is to transition it to data center use when appropriate. These capital expenditures are fully funded through year-end 2025 with Riot current cash on hand. As a result of this increase in 2025 CapEx we are raising right fourth quarter 2025 cash rate forecast from 38.4 exahash to 40 exahash, representing a year-over-year cash rate growth of 26%. The A portion of the new minor order previously highlighted will be deployed during the first quarter of 2026. And as such, we are also providing an initial first quarter 2026 hash rate forecast of 45 exahash.

The fifth pace of cash rate growth is anticipated to allow Riot, our approximate 4% share of the global Bitcoin network into the first quarter while we continue to focus on the development of our data center business. In January 2025, Riot formally announced our pivot to utilize the available 600 megawatts of power at Corsicana for data centers that serve high-performance computing. In just 7 months, Riot has accomplished the following: one, engage Altman alone to perform a comprehensive evaluation of the [indiscernible]; two, extended our Board to include key data center and infrastructure development expertise; three, engage financial advisers to insist in our go-to-market strategy, financing and strategic partnership exploration; four, continued development of the 600-megawatt substation at Corsicana with 400 megawatts on track for the first quarter of 6 and the second 200 megawatts expected to come online in the second half of 2026, five, building internal expertise, recruited and hired Jonathan Gibs as Chief Data Center Officer, along with other veteran data center talent; and six, progressing on the basis of design for our data centers.

All of these steps are being taken in a methodical step-by-step matter in order to put us in the best position possible to secure a lease with the tenant and build a sustainable data center business. Further, when combined with our [ Bitcoin ] Mining operations and resulting ability to monetize power land as well as our strong balance sheet, we are well positioned to expand our power portfolio further as attractive opportunities arise. Building a world-class data center team starts with the right leadership.

In June, Jonathan Gibbs joined Riot as our Chief Data Center Officer, bringing more than 15 years of global experience leading end-to-end data center development and operations. Throughout his career, Jonathan has driven multiple aspects of leading edge data center development. spanning capital planning, infrastructure delivery, operations and customer engagement across North America, Europe and Asia. Jonathan has led cross-functional teams responsible for design, construction, procurement, critical operation, ESG, EHS and sales engineering and has successfully led development of over 1 gigawatt of capacity, representing more than $17 billion in global investment. Most recently, he served as Executive Vice President of Product Delivery at Prime Data Centers, overseeing the execution of hyperscale and enterprise data centers across the United States.

Having the right expertise and experienced leadership in place is a critical step towards engaging potential data center tenants and negotiating leases from a position of credibility and strength. As highlighted on the prior slide, building internal expertise represents a key milestone in the ongoing development of our data center business. And with Jonathan now in position leading the team we continue to aggressively push forward in completing our basis of design and ultimately securing a lease in a manner that maximizes value for Riot's shareholders. We are excited to have Jonathan at the helm of our data center platform and look forward to sharing more of his team's progress and vision in the quarters ahead. Altman Solon's feasibility study identified the footprint of our existing site as a potential complicating factor to fully utilizing the entire 1 gigawatt of power availability at Corsicana for data center use in a lowest development cost way due to the different density requirements in comparison to Bitcoin Mining.

We quickly moved to address this. And in May of this year, we announced that Riot acquired a 355-acre parcel expanding our available footprint for additional development. In July, Riot acquired a second 238-acre parcel adjacent to the previously announced 355-acre parcel creating a 593-acre contiguous collection of land in close proximity to our existing site. Collectively right now controls 858 acres of potential development area in Corsicana.

Our goal is to assemble a portfolio that ensures we have maximum flexibility to accommodate any design specifications and requirements of potential tenants. We are frequently asked about our time-to-market strategy and the window of opportunity that we see. Our observation of market dynamics suggest that power availability will remain the key constraining factor to the explosive demand for data center development that we are witnessing and that these dynamics will remain in place for many years to come.

On Page 20 of the earnings presentation, there are 2 charts. The chart on the left-hand side of this slide demonstrates, from 2018 to 2023, U.S. on-grade energy demand growth was nearly flat, resulting in minimal investments into great infrastructure upgrades. Contrast that with projections of 2.2% compounded annual growth in demand for the next 5 years. representing a greater than 10x increase in annual demand relative to the prior 15-year period. and demonstrating a significant and growing gap between this increased demand and more limited growth in supply.

Concurrent to this growing gap in demand for power and relative to supply, time lines to procure power in key markets across the United States are significant, with analysts pointing to lead times in the Dallas and Austin markets where our Corsicana and Rockdale sites are located of 36 and 42 months, respectively. Riot's fully permitted and readily available power located in important in-demand markets positions us to be in the right place at the right time to capitalize on these market dynamics to the benefit of our shareholders.

In closing, we have many advantages that have put us in an incredible position because we offer a unique combination of significant scale of readily available power capacity in key high-demand jurisdictions, experienced, credible hyperscale business leadership and development capability. strong balance sheet underpinned by more than 19,000 Bitcoin and $33 million in cash and significant access to capital markets. large-scale, efficient bit point mining operations, generating hundreds of millions of dollars in revenues and cash flows and battle-harden and experienced management and operations teams.

With this framework, our mission is clear. Riot will maximize value across our entire power portfolio with a view to ensuring full utilization of our available power capacity and pipeline leaving no strained capacity behind, aggressively shift power capacity towards data centers, strategically expand our power assets, utilizing Bitcoin Mining were advantageous and increase our shareholder exposure to value-accreting assets. We are strategically positioned at the confluence of surging compute demand and bitcoin growth, offering compelling potential for shareholder value creation. We will now open the call up for questions. Operator?

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

There's definitely a lot to chew through on the HPC opportunity ahead for Riot. But I did want to ask about the decision. It was clearly a good quarter for generating bitcoin but clearly, from the action, we took that bitcoin generation to really we sold that to monetize. Could you talk a little bit about that decision to do that and how you're thinking about the hotel strategy in the back half of the year or even longer term?

This is Jason Chung. Maybe I'll take a stab at that one. So I think this quarter is an interesting representation of how we think about our financing strategy and the different levers available to us. And just looking at for the past quarter, the -- 2 levers that we exercised most heavily. One was sales of our Bitcoin production. The second was leaning into our Bitcoin Stash to borrowing enter into the [indiscernible] for $200 million. The sale of Bitcoin production allows us to more than cover our operating costs and therefore, frees up the additional capacity or minimizes requirement to issue and really allows us to focus any financing raised through that very specifically towards growth opportunities, which we believe are going to be value accretive to our shareholders.

So I think that's kind of how we think about -- thought about things for the quarter and probably a good reflection of how we currently think about things as well. As Bitcoin prices increase, that does give us additional room or comfort around our leverage levels and the ability to consider expanding the amount of financing you draw on there as well. So I think as we continue to see how bitcoin prices evolve, you'll see us continue to take advantage of different market conditions as we think about what's optimal from a capital perspective for the quarter.

Okay. Super helpful. And then just realizing you're probably limited on what you can say. Maybe we can talk a little bit about what we're seeing in the market in terms of the available power transactions or availability to electricity signing for -- with HPC. If you could kind of talk to the pricing dynamics, how things have been trending? I feel like more recently, it was kind of in the $120 megawatt range in some of the things that we've been hearing kind of curious if that's kind of where you're hearing the market is? And then really the question I have is as we think about sizing. Is there a premium that you're seeing in terms of having larger amounts of power available, i.e., if we're looking at a couple of hundred megawatt power deal versus, say, gig plus, is there any kind of premium for that larger power deal just in thinking about how potential transaction could shake out?

Yes, Greg. This is Jason Les now. I think at a high level, we're seeing very robust demand in the data center market. Our view continues to be that what exists out there in terms of power and infrastructure is really not close to sufficient to meet what's forecasted demand and hyperscalers continuing to announce higher levels of CapEx budgets they have serious demands for more data center capacity that really cannot be satisfied by new power that's expected to be available. What we see is the implications of the AI arms race being very clear here. there's a trend for more compute demand. That's very clear. So we believe demand is going to continue to be robust, and we are building a business here, building a platform to be able to serve it. As far as monthly rates go, I think there's a lot of different components that go into what an ultimate lease might be. And it's important to look at a deal like this as a sum of all of its parts maybe instead of just a single metric. You'll see a range of rental rates, and those will have somewhat of a correlation to the type of tenant that you're getting. There's a bit of credit risk often built into what those [indiscernible] are. And you'll see term and other components of these agreements. So I think it's important to look at these in all of the parts that comprise them and not necessarily just what that monthly [indiscernible]. It can be a range and other components could enhance that deal or make that deal worse off from the perspective of the lessor. Now I think the last part of your question was, is there a premium for large-scale power I don't know if I can comment right now if there's a premium for that power, but what I can say is that there is a premium of interest for large scales of power. So for tenants everyone is natively scaling. Hyperscalers are looking to take out gigs beyond now. And as everyone else increases beer demand for compute, we're now seeing new clouds taking down capacity at levels that hyperscalers once did, and now enterprise tenants taking down capacity at those significant levels as well. So what any long-term growth-oriented tenant is going to be thinking about, is there a pipeline for expanding instead of having a solid probe capacity over and over and over again with different providers. What we see is customers who are interested in capacity available beyond just what their initial lease might be. So when you talk about a premium for capacity, that's how we see. It's a premium that is in essence, garnering customer interest because that -- because they see an ability to expand beyond just what an additional phase of development or lease might be. And that we have found is very helpful for having productive discussions.

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

I think it's become clear that right, it's not going to rush to get a deal done. So I want to commend you for your measured approach. But I think in recent months, forming a basis of design has been at the core for its efforts towards the data center side. And so I was wondering if you could provide any detail on what aspects of that document are clearly defined versus ones you may still be working on? I think factors that come to mind are cooling resources redundancy security roll layout. Any color that you can add there would be great.

Yes. So first off, bringing an experienced data center executive like [indiscernible] on board, alongside other talent that's been recruited with significant experience in data center development. has aided us considerable in building the space of design. Of course, it is this team, this data center teams project and an objective to accomplish here. And this basis of design is very foundational to be able to go to market. What we're putting together here is the technical strategy design elements that we can then take and then have something concrete to be able to discuss with potential customers with potential tenants to ultimately arrive at a more customized design and then a lease. So we see this as one of multiple milestones, but a very key milestone in progressing towards getting the lease year. We have been working on this quite a bit. Jonathan and his team has rather, and there's been significant progress made already. We expect that we will be able to complete this basis of design by the end of this quarter, by the end of the third quarter, that is, and I'll be moving on to next steps in our data center strategy.

Jason, thanks for that color that reminds me, I want to congratulate Jonathan on his appointment. My second question was obviously, long lead times are a key determining factor in development time line. So have you submitted any RFPs to contractors? I mean how much is the tariff landscape ultimately playing into the timing of that?

So first, for some of the critical infrastructure that's needed to build this capacity, we have already secured I'm referring to the 600-megawatt substation that's being built, that's expanding the site to 1 gigawatt. We have already procured that equipment. That equipment is already arriving, and that is going to take our core [indiscernible] to 1 gigawatt in 2026. So we are very well positioned on that critical equipment there. As far as other equipment goes, we are pretty confident in the steps that we're taking to prepare for that. We are looking at long lead times for other equipment, but the time lines for these are not surprising to us that's kind of expected. And the process of procuring the voluming items already underway. And with [indiscernible] and his team on board, we feel like we're approaching this in a very strategic way. And ultimately, we don't believe that the lead times for the equipment is going to impact our ability to secure a lease.

Next question coming from the line of Darren Aftahi with ROTH Capital.

Just following up on the master site design time frame, being completed by the end of this quarter. Can you speak to the potential tenants that you're engaged with? And I guess, like how critical is that master site design in terms of their willingness to kind of continue negotiating Said another way, like, is that something that will accelerate negotiations for you? Or are there folks that have already kind of parallel [indiscernible] things they need while waiting for that master site design. Then my second question, on Rockdale, I know you're upgrading some rigs there. Can you just give us some general long-term thoughts on what that campus potentially could be used for than bitcoin mining and kind of where your head's at is that you have too much to going now with Corsicana, and it's kind of back burner or things simultaneously and potentially market all your power as 1 campus.

Yes, Darren. So the first part of your question. So 1 thing I want to make clear is we are making the basis of design that we believe can serve a wider range of customers. It can serve hyperscale customers, it can serve enterprise customers or [indiscernible] customers. What we want to do is maximize our flexibility. I think that's a theme you've heard us talk about on our earnings call a couple of times now, taking different actions, making moves in order to maximize the flexibility of our site of our data center [indiscernible] and secure the best possible deal here. And if you're talking about engaging with serious counterparties, this is the type of information that they remarks you to come to the table with in order to advance discussions substantially. And that's why we view the building out of this team here, especially led by Jonathan Gibbs and his onboarding is very critical and a very important step we've made to building up this platform. I can't comment on ongoing discussions. I would say that all types of customers are different and maybe approach conversations in different ways [indiscernible] milestone in order to have a serious discussion here. So we look forward to sharing more about this with the market as it's completed and being transparent and sharing our milestones and our road map to building out our platform here and ultimately securing a lease. With respect to long term -- I'm sorry, with respect to Rockdale, our primary focus is scaling our data center business and maximizing the value of all of our power assets. Because of that, because of the economics that you can get with data center leases and how the market values that data centers are the ultimate ideal use for us for all of our power capacity. What's great about Riot is we have a lot of power capacity to work with. [indiscernible] lots alone, which is our available capacity of Corsicana, that represents a very substantial data center campus in its own -- at the same time, we are open to doing finding deals at Rockdale as well. I think what we're just doing right now is prioritizing what we see as the this was. And as we get our data center platform off the ground, we continue to make more progress than that makes all of our power assets that positions all of our power assets in the pipeline for growth of the data center platform ultimately. So you can think of our strategy using Bitcoin Mining at sites like Rockdale to monetize that power to ensure that no power strained and wasted turning that into meaningful cash flows for the company and then ultimately looking to transition that capacity to data center leases when the time is right.

Our next question coming from the line of Brett Knoblauch with Cantor.

Maybe An update on the kind of your Bike mining outlook. I know you guys kind of raised guidance for the end of this year and the first quarter as well. Network cash has kind of been stubbornly continuing to go up. Maybe high level, where you see network cash going? Is there a level where you think maybe it kind of plateaus a bit? And I know you talked about being 4% share. Is that kind of like a goal that you guys want to maintain for the long term? Or how should we think about that? I think the 4% share is not a [indiscernible] that we have. That's something that we see ourselves being in just based on the growth that we've outlined and kind of a near-term estimate of global network hash rate in the next 6 to 12 months. But by no means are we intending to always maintain a certain percentage. But going back to the first part of your question, I think Bitcoin miners will face the same types of scaling challenges that data centers are. There's very limited amounts of power and from what I think we're seeing and what we're excited about is data center customers are paying a lot more for that than Bitcoin miners ultimately would. So while bitcoin miners have other options for power, the data centers don't I think they will also be constrained in how they scale, which has the potential to have a positive impact on cash price in the future. Riot, what we're focusing on is maximizing the value across our power portfolio, trying to maximize the value of all of our megawatts not stranding any capacity. So what we shared with the growth that we have going on in Kentucky and the estate growth that we have at [indiscernible] those are moves in accordance with that strategy, and I think represent measured growth of our Bitcoin Mining segment. We're looking at approximately 6% year-over-year growth from 24.5% and then approximately 10% growth from 2025 to 2026.

That's helpful. And then maybe just on the maybe Corsicana. I think a lot of the conversations we've had kind of suggest that is maybe 1 of, if not the best potential AI/HPC gets intersite out there. Are you guys getting kind of like similar feedback when you guys are looking at potential customers or kind of what to do with maybe the remaining 600 or 4 gigawatt there.

What we're focused on with launching this data center platform is building a strong foundation. We want to get off on the right foot here. And building that strong foundation means getting the right deal on which we can build the pipeline on top of from the start. Now that doesn't mean that we need that 600 megawatts or sign a lease for all of that 600 megawatts to build that first foundation, that first step to build a strong foundation. We are looking at this capacity and building it out as a phased approach. We see building this out in different segments, and we're talking about that more in the future. And the fact that the site has so much capacity means that ultimately, there may be 1 tenant that wants all of that. I discussed an earlier question, the fact that there's so much growth in 1 site is, we believe, very interesting to lots of customers out there who have a very robust demand forecast. So it's to be determined how this is all segmented out, but we are approaching the market with a design that we believe can serve a wide range of the market, hyperscale customers, enterprise customers in [indiscernible] and what's important to us is getting this off a solid foundation to start. And then ultimately, like I stated again, there's lots of room to grow here and the potential to do a larger deal from there.

Our next question coming from the line of Paul Golding with Macquarie.

I wanted to ask about what you can and drill down to some of the infrastructure components. I noticed in the slide on 2025 CapEx that there's a waterline project expected to be completed in Q2 '26? And just overall, looking at the substation development line item for Corsica. I was wondering if you could expand on any of the infrastructure components for Corsicana that are maybe factoring into the conversation still pending with potential tenant counterparties as opposed to these deals having been signed already? And also just to help us understand the extent to which water access has already been secured given the water retention pond that you have and the importance of that for HPC and AI liquid cooling?

So starting on water, Paul, as you noted, we have a significant size of attention that allows us to use a lot of the water that just naturally generated on-site. It's Texas, but still gets a lot of ring. We have secured the plans and the approvals to build up a water line, and that will ultimately -- that's a part of giving us maximum flexibility to serve customer demand. What we're seeing on the data center technology side is cooling technologies becoming more and more water efficient as time goes on. in order to be flexible, we do don't want to bank on that. So we're securing enough water that we believe would be ample for a full 1 gigawatt development if someone needed that amount of water in order to achieve the cooling strategies that they have or that they require. As far as the infrastructure for Corsicana, I think we are in a great position and probably have a considerable leg up on what other data center developers might be at, at this stage. We've already made the decision years ago really to be procuring this equipment. So it's already coming in now. That's significantly, I think, derisked the amount -- I'm sorry, derisk the time line to getting that power online, also combined with the fact that we have this approved already. We have FDA for this already. It is all baked in and ready to go. So That, I believe, puts us in a great position when we have conversations with tenants because this power is not theoretical, because power isn't pending certain steps happening this power is coming in the next 6 months and scaling up from there.

Great. And maybe a follow-on to that. We've talked on the call around about price -- potential pricing in the marketplace and premiums or premium for demand. You've spoken on the call about data center customer requirements and that's factoring into this build concept. As you have these conversations, I just wanted to verify, is the plan still or is what you're pursuing still the option to construct the facility and the power infrastructure for these tenants in a yield on costs or build-to-suit scenario? Or are you getting inbounds? Or are you considering inbounds where someone else is building it and leasing the power in the infrastructure?

So our philosophy at Riot has been to maximize the value of our assets. And we believe that build-to-suit model is going to be the best way to maximize the value of our portfolio of assets especially at Corsicana. That being said, we do not intend on building up the site beyond an initial stage without a lease. We're not looking to build out a site on spec. We believe that by finalizing the design here, understanding what that is with customers and then being able to take initial steps to get things off the ground, which we already have done is building on the substation in the [indiscernible]. These could be foundational steps in any data center we are willing to invest in order to get things moving off the ground and getting to the point of getting the lease, but we are not looking to build to suit a site on spec and take on all that risk without having a lease in hand.

Our next question coming from the [indiscernible] JP Morgan.

Jason, congrats on the quarter. I guess I'd like to follow up on the last question, and I appreciate you guys wanting to actually build to suit -- but I guess my question is if there's more demand today for people just looking to buy our outright. So I guess, if that were your strategy, do you think this plot or your capacity would have been sold now if that makes sense. I'm trying to figure out like is the hang-up that or the delay in the deal being done, the fact that maybe some haggling over whether minor just sales power outright versus a build-to-suit type of situation? And then I have 1 follow-up question.

Yes, Rich. So we're really -- we believe what we have is incredibly valuable. And I think all the data that we're seeing in the market on data center validates that belief. So it's important to us to maximize the value of that. If you're talking about doing something like leasing power land, yes, there is a ton of demand for lease powered land. -- but the value that you can expect to track on that is going to be, I think, pretty significantly mismatched with what I think investors are expecting from this type of data center opportunity. with the assets that we have, with the balance sheet that we have and now with the team that we have, we are in a great position to build a data center platform and be able to pursue the value maximizing approach that we see with this build-to-suit model. We are open to anything that will maximize the value. So we're not closed off to any type of discussion. But this is the avenue that we see as the best pursuit going forward and why we're approaching things in this manner.

That makes sense. And if I could ask 1 more question. One of the points that we've talked about we thought has distinguished you guys from other operators is that you're located so close to Dallas and Austin. As you kind of assess or appraise your assets, how important is that distance from 1 of those cities and determining the attractiveness of partnering with it versus someone else? Is there still a premium for location, I guess, is what I'm asking it.

Yes. [indiscernible], the location is very important. Dallas is 1 of the -- Tier 1 data center market is one of the most in-demand data center markets in the country. That's why I think Corsicana so valuable. You have the great connections, low latency and ability to get people and talent to that site relatively easily as a [indiscernible] -- I'm sorry, as opposed to more remote locations. For that reason, we think Rockdale is also an attractive site. Now Austin, San Antonio, those aren't Tier 1 markets yet, but with the investments that we see in data center CapEx with the revenue forecast for AI software and the margins that AI software service providers are forecast and be able to get we think that will change over time. So by having these 2 sites, both near [indiscernible] market today and Rockdale near what I would say is an emerging up-and-coming market, I think it makes those sites very attractive and allows them because of those elements allows them to command perhaps better economics than other projects out there.

Next question coming from the line of Mike Randal with Northland Capital Markets.

And congratulations on hiring Jonathan Gibbs. What would you say his top 2 priorities are this summer and fall?

So our #1 priority is building this data center platform, [indiscernible], and I would break that down into 2 priorities on accomplishing that. One is building out the team. Jonathan is bringing the critical leadership to making that happen. We've added other individuals that are veterans of data center in development, we are bringing more talent on as we speak. This is important because we want to build up our expertise. We want to build up our platform so it looks in field and acts like a way a hyperscale and enterprise and [indiscernible] expect. So that's the number one priority. I guess second [indiscernible] in parallel, I'm not ranking one over the other is completing this basis of design [indiscernible] this will allow us to have more substantive discussions with potential tenants allow us to advance the design further work in different customers. as necessary and really get the critical parts of negotiations happening. So 2 priorities. #1 priority, building a data center platform [indiscernible]

Our next question coming from the line of [indiscernible]

How will the new requirements in Texas, Senate Bill 6, such as like grid upgrade cost sharing, mandatory backup generation disclosure, curtailment obligations, so forth affect the cost structure and operations of your mining and your HPC activity both Corsican and Rockdale.

So first important to note is that for both the sites, we have FDAs already in place. So we do not expect to need to renegotiate those FDA in any way as a result of this change or as a result of this new legislation, because legislation launches a lot of exploratory work and information gathering. That's something that yet our very capable public policy team, our power team and our industry partners are all very evolved in. One of the parts of [indiscernible] is looking at the [indiscernible], that's something that Brio participates in over to reduce our transmission charges. That program may see changes as the working groups from this legislation progress. We don't we hope and we're working to ensure this doesn't have too much of an impact on our transmission charges ultimately. There's lots of different ideas of how changes to that program could take place. So it's really too early, I think, to speculate on that. As far as the other requirements go, I think that is probably going to impact new FDAs and new interconnection agreements, more than it is us but it's something we're staying very close to and making sure that we're good [indiscernible], we're good industry partners. And we're doing what we can to support the grid and give them the data and the reliability that they need.

I'm showing no further questions at this time. I will now turn the call back over to [indiscernible] for any closing remarks.

Thank you, operator, and thank you, everyone, for joining us on our second quarter call. We look forward to updating you on further progress on our business on the third quarter call in October.

This concludes today's conference. Thank you for your participation, and you may now disconnect.