Bit Deer achieves $155.6 million revenue in Q2, up 122% sequentially; aims for 40 exahash self-mining by October, signaling robust growth trajectory.

OPERATOR - (00:01:44)

Good day and welcome to The Bit Deer second quarter 2025 earnings call. @ this time, all participants are in listen only mode. After the speaker's presentation, there will be a question and answer session. Instructions will be given at that time. As a reminder, this call may be recorded. I would like to turn the call over to Yukiya Zay, Investor Relations. Please go ahead.

Yukiya Zay - Investor Relations - (00:02:08)

Thank you operator and good morning everyone. Welcome To Bit Deer's SECond quarter 2025 earnings conference call. Joining me today are Jihan Wu, Chairman and CEO Matt Kong, Chief Business Officer, Harris Bassett, Chief Strategy Officer and Jeff LaBerge, VP of Capital Markets and Strategy. Harris will begin today by providing a high level overview of Bitdeer Technologies' SECond quarter 2025 results and then cover the company's strategy and a detailed business update after that, Jeff will cover BitDeer's SECond quarter financial results in more detail and then we will open the call for questions. To accompany today's earnings call, we have provided a supplemental investor presentation. This presentation can be found on Bitdeer Technologies' investor relations website under Webcasts and Presentations. Before management begins their formal remarks, we would like to remind everyone that during today's call we may make certain forward looking statements. These statements are based on management's current expectations and are subject to risks and uncertainties which may cause actual results to differ materially. For a complete discussion on forward looking statements and the risks and uncertainties related to Bit Deer's business, please refer to its filings with the SEC. Further, in addition to discussing results that are calculated in accordance with International Financial Reporting Standards or IFRS, we will also make references to certain non IFRS financial measures such as adjusted EBITDA and adjusted profit or loss. For more detailed information on our non IFRS financial measures, please refer to our earnings release that was published earlier today, which can be found on Bit Deer's investor relations website. Thank you. I will now turn the call over to Harris.

UNKNOWN - (00:03:56)

Harris.

Harris Bassett - Chief Strategy Officer - (00:03:58)

Thank you Yuzha and good day everyone. Thanks for joining our second quarter 2025 earnings call. Since our last call, we've made significant progress across all of our strategic priorities and I'm excited to walk you through those updates today. I will begin with a brief overview of our Q2 financial results, then highlight what we're focused on for the remainder of the year and share a glimpse of our outlook beyond 2025. Starting on slide 3, in Q2, total revenue was $155.6 million, up 122% sequentially from Q1 and up 57% year over year, gross profit was $12.8 million and adjusted EBITDA was $17.3 million, up materially from Q1. This significant improvement in our results is from strong execution in our self mining business and commercial sales of our Seal Miner asics. Mass production of our seal miner ASICS enabled us to increase our average operating hash rate by 46% to 14.2 exahash during the quarter from the 9.7 exahash in Q1. In addition, we sold and shipped 5.3 exahash of our Seal Miner A2 mining rig to external customers recognizing $69.5 million in revenue in Q2 as of the end of July. We further grew our self mining hashrate to 22.3 exahash representing a 162% increase from from the beginning of the year. We also sold and recognized revenue on an additional 0.6 exahash of Seal Miner A2s in July. Looking back on the first half of the year, we believe Q1 marked both the bottom and a key inflection point. We are now turning the corner with strong momentum powered by our vertically integrated and technology driven growth strategy. Our decision to invest aggressively in chip design, supply chain and manufacturing built a strong foundation that is now enabling us to rapidly scale our own self mining operations while positioning us to capture a meaningful share of the Bitcoin mining ASIC market. By combining our proprietary technology in house hardware manufacturing and expansive global power portfolio, we've created a highly advantaged and defensible platform for long term growth. Looking forward, our seal miner ASICs continue to roll off the production line and we anticipate continued rapid growth in our self mining hash rate throughout the remainder of the year. We are on track to achieve our previous target of 40x a hash of self mining hash rate by the end of October. Furthermore, wafer supply allocation at our foundry has improved and we expect to exceed this target by year end. This will put us on par with the largest publicly traded Bitcoin miners in the world. As we continue to scale our fleet wide, energy efficiency will also improve delivering better mining margins and operating leverage. Upon exiting this year, we anticipate record results on a run rate basis, setting a strong foundation for 2026 and beyond. Last year when we embarked on our aggressive ASICS roadmap, we understood that building chips alone wasn't sufficient to win in this market. We had to achieve industry leadership in performance and energy efficiency. Today we are proud that our dedicated R and D team has executed this plan with precision, delivering three of the four chips on schedule and on spec with our latest seal miner A3, we now possess one of the most competitive mining rigs in the market, built on leading process nodes and optimized for high efficiency deployment at scale. All machine level validation metrics have met or exceeded our internal benchmarks and we are preparing to initiate mass production. The first batch of Seal Miner A3 mining machines are expected to be available for shipment in October. We expect Seal Miner A3 to contribute to our revenue through both self mining and external sales in 2026. Looking ahead, our R and D efforts have now pivoted to the CL04 chip. We are taking a dual track approach to seal 04 with two completely independent designs to ensure success. The first CL04 chip using a more traditional circuit architecture has already been taped out and we expect initial sample wafers to come back in Q3 2025. Our second CL04 chip will be a completely new next generation architecture targeting breakthrough efficiency of approximately 5 Joules per th at the chip level. This chip is a full redesign that uses new digital circuit architectures that enable breakthrough improvements in energy efficiency. We believe the digital chip architecture utilized by our CL04 chip will set a new standard for Bitcoin mining and also have application to a broader class of high performance, energy intensive compute applications. We have begun the process of filing patents on our technology. Furthermore, in July we made major progress with the successful development of customized silicon design software necessary to fully exploit this new architecture. We have also expanded the senior engineering and software team in the US to support the CL04 chip development as well as added senior roles in legal and IP licensing. We are extremely excited about the CL04 together with our Seal Miner A3 mining rig, we believe these two chips will firmly position Bitdeer Technologies as a leading supplier with the most energy efficient mining rigs in the industry, significantly enhancing our competitive position and unlocking substantial value for both our customers and shareholders. Next, I'd like to provide a quick update on our energy infrastructure that's highlighted on slides 8 and 9 of our supplemental investor presentation. In Q2, we continued our rapid build out of our global power and data center infrastructure infrastructure. As of July 2025, we energized 361 megawatts of data center capacity for self mining, of which 126 megawatts was at our tidal Norway site and 235 megawatts in Jigmeling, Bhutan, Bhutan, bringing our total available electrical capacity to approximately 1.3 gigawatts. We expect the remaining 49 megawatts in Tidal and 265 megawatts in Jigmaling to be energized in Q3 which will bring our total available power capacity to nearly 1.6 gigawatts. In May, we achieved a key milestone by signing the Letter of agreement with AEP Ohio for the second phase of power at the Clarington, Ohio site. This LOA advances the final stages of the contracting process for the full 570 megawatts of capacity. Critically, this document was executed before the Public Utilities Commission of Ohio issued a ruling to classify data centers under an industry specific billing structure. This new structure would have imposed substantially higher collateral requirements and minimum demand charges. Locking in our position ahead of this monumental regulatory shift allows us to proceed with plans for the full build out of this strategic data center with significantly lower cost structure. With regard to our HPC AI initiative in Clarington, Ohio, Ohio, we have entered into advanced negotiations with a development partner that has significant expertise and customer relationships. We are optimistic that we will be able to share more details in the coming quarter. Lastly, on slide 10 of our supplemental investor presentation, we would like to reemphasize our guidance for our self mining hash rate. Given the steady rollout of our seal miner A2 mining rig, we remain on track to reach 40 exahash by October. Furthermore, as I mentioned earlier, wafer supply has improved for both our CL02 and CL03 chips leading us to believe we will surpass this target by year end. Given a significant amount of power capacity we have coming online, our near term plan is to prioritize our current ASIC production towards self mining. In summary, we are pleased with our team's execution across all our strategic priorities. We have successfully met our initial targets for our aggressive ASIC roadmap, our self mining infrastructure and deployment plan and our entry into the massive ASIC market opportunity. We have also made significant strides in our HPC AI strategy as we move into the second half of 2025. We expect these efforts to be reflected in our financial results and we look forward to sharing updates on our progress. I'll now turn it over to Jeff LaBerge, our VP of Capital Markets and Strategy to go over our detailed financial results for the quarter.

Jeff LaBerge - VP of Capital Markets and Strategy - (00:14:32)

Thank you Harris. Before I go over your second quarter financial results, I'd like to remind everyone that all figures I refer to today are in US dollars. Q2 consolidated revenue was $155.6 million, up from $99.2 million in Q2 2024 and $70.1 million in Q1 2025 or up 56.8% year over year and 121.9% sequentially. Self mining revenue was $59.3 million versus $41.6 million in Q2 2024 and $37.2 million in Q1 2025 or up 42.5% year over year and up 59.4% sequentially. These results were primarily due to a 103.3% year over year and 45.5% sequential increase in self money hash rate as well as higher bitcoin prices. These increases were partially offset by the April 2024 halving events and higher mining difficulty. Steel miner Sales revenue was $69.5 million compared to $0 in Q2 2024 and $4.1 million in Q1 2025. Filed hash rate revenue was $0 versus $12.2 million in Q2 2024 and $0.1 million in Q1 2025. This decline was due to the expiration of long term cloud hash rate contracts and the subsequent reallocation of this hash rate to our self mining operations. General hosting was $9.3 million versus $20.6 million in Q2 2024 and $9.6 million in Q1 2025. Membership hosting revenue was $14.6 million versus $22.1 million in Q2 2024 and $16.3 million in Q1 2025. This year over year decrease in hosting revenue was mainly caused by two factors. First, we converted 100 megawatts of hosting capacity at our Texas facility to self mining which has been equipped with steel miner hydrocooled mining rigs. Second, some hosting customers removed less efficient mining rigs after the halving event in April 2024. Some of this extra capacity is currently being replenished by new hosted mining rigs. Total gross profit for the quarter was positive $12.8 million for versus $24.4 million in Q2 2024 and negative $3.2 million in Q1 2025. Gross margin was 8.2% versus 24.6% in Q2 2024 and negative 4.6% in Q1 2025 this year over year decrease in our gross margin was primarily driven by the April 2024 having events impact on self mining, higher mining difficulty and lower hosting and cloud hash rate revenues. Sequentially, our gross margin improved due to the increase in our self mining hash rate, improvements in our fleet efficiency and commercialization of our Seal Miner asics. Going forward, we expect gross margin to improve over the coming quarters as our hash rate ramps and our overall fleet efficiency improves. Total operating expenses for the quarter were $42.3 million versus $26.1 million in Q2 2024 and $75.8 million in Q1 2025. The year over year increase was primarily driven by R and D costs for our CO Miner roadmap and higher G and A. The sequential decrease was primarily driven by our RD costs due to the absence of the tape out cost for CO3 that occurred in Q1 2025. Other operating income was $3.7 million primarily due to the reverse of non cash impairments of Bitcoin. As a reminder, under IFRS Bitcoin is classified as an intangible asset and is measured at cost less any accumulated impairment losses with no subsequent upward revaluation permitted. Other net gain for the quarter was negative $108.5 million versus negative $15.5 million in Q2 2024 and positive $503.1 million in Q1 2025. The net loss was due to the non cash derivative loss on the convertible Senior notes issued in August 2024, November 2024 and June 2025 which I will discuss in more detail in the Liability section. IFRS Net income was negative $147.5 million versus negative $17.7 million in Q2 2024 and positive $409.5 million in Q1 2025. Adjusted profit was negative $24.4 million versus positive $3.2 million in Q2 2024 and negative $89.8 million in Q1 2025. Adjusted EBITDA was positive $17.3 million versus positive $23.5 million in Q2 2024 and negative 56.1 million dollars in Q1 2025. This quarter's higher year over year and sequential top line and non GAAP bottom line performance was mainly driven by higher self mining hash rate, steel miner sales and higher bitcoin prices. These were primarily offset by higher global network hash rate, lower hosting and cloud mining revenue, higher R and D costs and G and A expenses. As previously described, net cash used for operating activities was $334.9 million, primarily driven by $230 million of payments for Seal Miner wafers and related production costs and $27 million for the initial takeout of Seal04. The remainder was driven by electricity costs from the mining business and general corporate overhead. Please note a large portion of the $27 million CL04 tape-out cost is expected to be expensed in Q3. Net cash used for investing activities was $12.6 million, which was driven by $106.5 million of capital expenditure, of which $76 million was related to data center infrastructure and related construction. Proceeds from disposal of cryptocurrency from our primary business was $100.1 million. Net cash generated from financing activities for the quarter was $431.5 million, which resulted primarily from $364.3 million of net proceeds from the Convertible Senior notes issued in June 2025, $180 million of borrowings from a related party and $50 million of proceeds from the issuance of shares in connection with the exercise of the tether warrants. This was partially offset by $129.6 million used for the purchase of a zero strike call option in connection with the Convertible Senior notes issued in June 2025 and payment of $33.8 million in connection with the extinguishment of a portion of the Convertible Senior notes issued in August 2024. There were no shares issued under our ATM during the quarter. Moving on to our 2025 Bitcoin mining infrastructure spend, we continue to expect CAPEX for the continued build out of our global power and data center infrastructure to be in the range of $260 million to $290 million for calendar year 2025. This range includes reported infrastructure CapEx in Q1 in Q2 of approximately $118 million. The remaining projected CAPEX is expected to fund the completion or near completion of our data centers in Kievo, Norway, Jigmeling, Bhutan, Maslin, Ohio and Ethiopia as well as partial completion of the 101 megawatt gas fired power plant in Alberta, Canada. Please note that this guidance only factors in power and data center spend for both bitcoin mining and does not include capex for steel miners. In terms of our balance sheet, we ended the quarter in a strong financial position with $299.8 million in cash and cash equivalents, $169.3 million in cryptocurrencies and $533.1 million in borrowings excluding derivative liabilities. Please note the $169.3 million in cryptocurrencies is accounted for according to IFRS rules and is currently below its market value. Derivative liabilities were $438 million which relate to the August 2024, November 2024 and June 2025 convertible notes, representing a $181.2 million increase compared to the last quarter. This is a non cash fair value adjustment driven by the increase in our stock price and does not impact our liquidity or operations. Under IFRS, certain derivative instruments, such as warrants and convertible debt are required to be revalued at fair market value each reporting period. As our stock price increases, the fair value of these instruments rise, resulting in a higher reported liability and vice versa. The recorded liability will ultimately be netted at settlement either upon conversion to equity or expiration, and does not represent an actual cash outflow. In June, we successfully closed a $375 million convertible senior note through an oversubscribed private placement offering. The note bears interest at 4.875% and is due in 2031. Finally, regarding our outstanding ATM facility, we have not sold any additional shares in Q2 2025. Thank you everyone. That concludes the prepared remarks section of our earnings call. Operator. Please open the call for questions.

OPERATOR - (00:24:50)

Thank you. If you'd like to ask a question, please press star 11. If your question has been answered and you'd like to remove yourself from the queue, please press star 11. Again. Our first question comes from Greg Lewis with BTIG. Your line is open.

Greg Lewis - Equity Analyst - (00:25:07)

Yeah, hi. Thank you and good morning, good afternoon, good evening and thanks for taking my questions. I did want to touch on the prepared remarks around the data center opportunity, you know, realizing, I guess it sounds like you're in active negotiations with that, so understanding what you can and cannot say, but kind of curious as we think about it, you know, one of the things that I think the market's trying to understand, you know, as you kind of pursue with a partner. Is. Like, how are we. How is Bit Deer thinking about, you know, the risk around construction? You know, it sounds like in the past we've talked about financing being done with the partner, you know, in terms of sourcing general contractors to do the work, you know, any kind of color you can provide around that. And then as this is the Clarington site, are we pursuing something similar at. I know in the past we've talked about potentially Rockdale and even Norway. Is this partner. Is this a multi. Do we think this could be a multi partner relationship across multiple sites or is this potentially a one off?

Harris Bassett - Chief Strategy Officer - (00:26:27)

Hey, thanks Greg for the question. So the focus right now is on the Clarington site. However, as we've reported in the past, we have had inbound requests for both the sites in Norway and Rockdale, and we're, you know, in discussions there, but they're much less advanced than the Clarington site. Our current thinking around the Clarington site is that our capital requirements would be very minimal, that it would be provided, you know, through the partner and then of course, construction loans on top of that. Does that answer your question?

Greg Lewis - Equity Analyst - (00:27:16)

Yeah, that's super helpful. And then my other question was, just as we look at, as bitcoin ASIC production becomes more important to the company, it looked like maybe pricing improved a little bit for your sales. Is that maybe a sign, Is there some strength in the market or is that more of a shift in you selling more efficient rigs? And maybe it's a little bit of both. So I think pricing was fairly consistent to last quarter. We are seeing increased demand, obviously increasing strength due to rise in hash price. Bitcoin price obviously has helped that out as well. So the demand has definitely increased and we think the demand for Seal Miner E3 will obviously be much higher as well. Okay, thank you.

Harris Bassett - Chief Strategy Officer - (00:28:15)

Thanks, Rick.

Dylan Heslin - Equity Analyst - (00:28:18)

Thank you. Our next question comes from Dylan Heslin with Roth Capital Partners. Your line is open. Hey, good morning. Thanks for taking my question to follow up on some of the HPC comments in Clarington. I mean, have you sort of solidified with your partner at all the approach you're going to take in terms of what that could look like? Would that be a collocation deal like a lot of the peers have done? Would you try to do a powered shell or given your experience running the GPU clusters, would you try to do more of a full stack? Just how are you thinking about that opportunity?

Harris Bassett - Chief Strategy Officer - (00:29:01)

The Clarington site is quite large, you know, 570 megawatts gross power. And so a full stack is not currently in our thoughts. We're really looking at trying to focus on a build-to-suit. However, the main thing to remember here is that, you know, we're flexible and that as we move forward it will depend to a large part on which tenant we end up with who's the final customer for the site. So it's hard to answer those questions definitively other than our target is to do a build-to-suit.

Dylan Heslin - Equity Analyst - (00:29:41)

Got it, thank you. And just as a follow up on the wafer availability, like what is the sort of timeline into when you get better clarity as to the chip or the wafers you're going to be allocated?

Harris Bassett - Chief Strategy Officer - (00:29:59)

Well, you know, we get, we're in sort of constant communication with TSMC and it's hard to, you know, predict exactly when we get allocations of new wafers, but we're also not really publicizing our wafer allocations ahead of time. So or even as we get them, we're, we, you know, we report the amount of machines that we produce and use internally and that we sell in, you know, as the quarter or the month ends, but not in advance.

Dylan Heslin - Equity Analyst - (00:30:38)

Great, thank you.

OPERATOR - (00:30:42)

Thank you. Our next question comes from Mike Colonise with HC Wainwright. Your line is open.

Mike Colonise - Equity Analyst - (00:30:49)

Hi, good morning guys. Thanks for taking my questions today. First one for me and Jeff, you alluded to a bit of this on the demand side, but if you could provide more color around some of the early demand you're seeing for the seal miner A3 and how that matches up against expected manufacturing capacity. Harris, I think you mentioned that the first batch will be ready to ship sometime in October. That's correct. So we are planning to have the first batch available this year. Again, we've not given any guidance on the total hash rate that will be available. You know, we can't say that we likely will be using a large portion of that internally, but we'll plan to sell some of those as well.

Harris Bassett - Chief Strategy Officer - (00:31:34)

We are not actively marketing the A3 at this point, so at least not extensively for out external use. Got it.

Mike Colonise - Equity Analyst - (00:31:45)

Thanks for the guys and the follow up for me. Just curious to get your general outlook for ASIC prices based on current Bitcoin market dynamics and the broader competitive landscape right now and really how that A three chip or ASIC will stack up on pricing compared to what some of your peers are charging for their most efficient ASICS out there in the market today.

Harris Bassett - Chief Strategy Officer - (00:32:10)

Well, I mean we always have to be competitive on pricing. The A3 is, it's a great product, it has significant efficiency advantages and so we haven't determined pricing. As I said, we're not going out there really pushing it as an external sales right now. Our plan is to use the bulk of the initial batches to for internal use. So I mean, I can't really say what our external pricing will be. It will be better than the A2. Of course it'll be higher than the A2 because it's a much more efficient machine. But we haven't set that price yet and it's probably premature.

Mike Colonise - Equity Analyst - (00:32:53)

That's all for me, thanks.

Harris Bassett - Chief Strategy Officer - (00:32:55)

Thanks, Mike.

OPERATOR - (00:32:57)

Thank you. Our next question comes from Mark Palmer with the Benchmark Company. Your line is open.

Mark Palmer - Equity Analyst - (00:33:04)

Yes, good morning and thanks for taking my questions. With regard to the use of the production of various seal miners going forward, how are you thinking about the balance between use for self mining versus external sales and what are the factors that are going to enter into that? Including obviously the price of bitcoin on the one hand, but also demand for those units on the other.

Harris Bassett - Chief Strategy Officer - (00:33:36)

So, you know, as we've said, we are prioritizing our internal use and that's driven by the fact that we don't want idle capacity, that the margins for self mining are actually quite high and that we think we are, you know, still in the early stages of bitcoin boom cycle. So we're certainly prioritizing that our internal capacity will gradually fill up, you know, in the coming months and quarters. And so you'll see naturally a transition from using these mining rigs internally to selling more and more externally. Long term, of course, our goal is to be a major vendor of these to the overall market and not just for internal use.

Jeff LaBerge - VP of Capital Markets and Strategy - (00:34:22)

Yeah, Mark, I would just add to that. We want to be in a position where we can always be very market based in our approach, have a home for every ASIC that we ever manufacture and be able to decide really what the highest and best use for it is, whether it's using it internally or selling it to third parties. As of right now, because we have significant capacity coming online, we obviously don't want that sitting idle. So we are prioritizing that. But moving forward, we will be able to have that much more market based approach. And kind of along the same lines in terms of the options on the table, what is your current thinking with regard to the use or non use of the bitcoin on the company's balance sheet in terms of accumulation versus liquidation and funneling the proceeds from that into the development of the company's platform.

Mark Palmer - Equity Analyst - (00:35:23)

Thank you.

Harris Bassett - Chief Strategy Officer - (00:35:27)

Yeah, so I think, you know, we started, our policy had been to sell most or all the bitcoin that we mine up until I would say toward the end of last year where we did start, start holding? Obviously we do see value in holding bitcoin on the balance sheet. We're very bullish on it long term. You know, I don't think it's something that we're necessarily idealistic about, but Jihan, do you have any other comments on that?

Jihan Wu - Chairman and CEO - (00:35:52)

Yeah, basically we are taking a kind of a balanced approach. We sell some and we hold those on. We need to sell some bitcoin to make sure that our binance share in the accounting perspective in US dollar in long term can be binance. Right. Because we borrow money, we will borrow US dollars and we raise US dollars through equity. So anyway, one day we need to return the capital to our investors in equity or in our debt. So sell some of the bitcoin I think is necessary, but also help Bitcoin into the long term. I believe it's a good activity, good deploy of capital because I believe that like 80 years Bitcoin can grow up to like $1 million. That's like 10 times from 10 or 8 times from now. That's almost a 30% IRR investment. So I think that's also good for investors. But during this kind of a turbulence of market, we need to take a kind of a bias approach. So that's our philosophy here. Thank you.

OPERATOR - (00:37:11)

Thank you. Our next question comes from Kevin Cassidy with Rosenblatt Securities. Your line is open.

Kevin Cassidy - Equity Analyst - (00:37:20)

Thanks for taking my question. You know, to me it was a surprise how much. Seal miners you sold externally. Can you say where they were sold geographically, Was the tariffs at all involved?

Harris Bassett - Chief Strategy Officer - (00:37:39)

We've not disclosed specifically where they were sold from a geographic location. You know, we can say they were sold really throughout the world. Some of the US some obviously ex US so but we've not disclosed the buyers or actual geography.

Kevin Cassidy - Equity Analyst - (00:37:57)

What was the last part of your question, Kevin, was what involved? Yeah, reference to tariffs in the US. If there were high tariffs on equipment. Sold into the US.

Harris Bassett - Chief Strategy Officer - (00:38:10)

So the tariffs over the last 90 days have still been on the pause. So any. Wouldn'T expect him to have. Significant tariff exposure at least in the last quarter.

Kevin Cassidy - Equity Analyst - (00:38:24)

Okay, great. And you know, I understand the strategy is to use the equipment more for. Internal, but would we expect that this. Is a run rate for equipment sales each quarter?

Harris Bassett - Chief Strategy Officer - (00:38:41)

Not necessarily. So again, I mean this, it will come down to allocation we have from TSMC and really just the cadence of the, of our power coming online. So we are expecting quite a bit of power this quarter and we are expecting to ramp to that 40 exit # Target that we've set and possibly beyond that by year end as we kind of roll into, into the 2026 first half of 2026, you know, we'll expect to have the, the Maslin Ohio site come on, that's another 221megawatts. So there will be quite a bit of additional new capacity that we'll want to fill with co miners. So it really will come down to allocation, but I think we'll always want to keep a bit of a balance between internal use and sales. But in this kind of short term period, over the Next, let's say 2 to 4 quarters, 2 to 3 quarters, it will likely see a higher balance or higher Allocation to self mining. So while the numbers are still relatively small, there'll be more volatility in how much gets sold externally. But, you know, going. If you go past the three or four quarters, then you'll see that become a more steady and predictable number. Okay, thanks for that clarification. Thank you.

OPERATOR - (00:40:03)

Thank you. Our next question comes from Mike Grondle with Northland. Your line is open.

Mike Grondle - Equity Analyst - (00:40:09)

Hey, guys, how would you describe the demand environment and sort of pricing based on your discussions over the summer for Clarington? I don't know. Did that pick up? Did it moderate? Just kind of curious, the cadence.

Harris Bassett - Chief Strategy Officer - (00:40:28)

So, you know, we haven't seen any decline at all. And so, you know, it's hard to say if it's, you know, how much is picked up. It's been hot the whole time, I think it's fair to say. Yeah, I think we've seen a lot, a lot of folks back in the market over these last several months, at least. Last couple months, the market's definitely picked up from a demand standpoint. So overall, yeah, we've not seen any slowdown by any means. And, you know, you've mentioned Rockdale and Norway.

Mike Grondle - Equity Analyst - (00:41:01)

Do you have a priority as to.

Harris Bassett - Chief Strategy Officer - (00:41:03)

Which you think you'd develop next? Not necessarily. I mean, I think we're going to see where the market goes. We think the opportunity in Norway is a very interesting1 because EU is quite a ways behind where we are in the US Is from an adoption standpoint. So we think that opportunity may have a longer tail to it. We think it's just an advantage for us. I think more price discovery that happens. But we do think that's going to be a very interesting asset given that it is 100% hydropower. Norway is very well interconnected from a latency standpoint. Good fiber that runs right adjacent to our property and obviously a good climate for cooling. So we're very bullish about that opportunity.

Mike Grondle - Equity Analyst - (00:41:48)

Okay, thank you.

OPERATOR - (00:41:53)

Thank you. Our next question comes from Brett Knobloch with Equity Research Analysts. Your line is open.

Brett Knobloch - Equity Analyst - (00:42:02)

Hi, guys. Thanks for taking my question on maybe. Just the performance of the A2s that you guys have sold and also just used internally, I guess. How is that standing up to your expectations in terms of uptime and overall availability?

Harris Bassett - Chief Strategy Officer - (00:42:20)

Well, so I think the uptime and reliability are quite good and it's about what we expected based on the early results. But maybe I'll ask Jihan. I think he has more direct interaction with the customers if he wants to add to that. Yes, excellent, I would say. All right, well, Said, and then maybe.

Brett Knobloch - Equity Analyst - (00:42:46)

Just on the development partner, kind of advanced negotiations, I guess. What's the next step in that process? Is it formalizing an agreement with a development partner? Is it looking to find maybe a JV partner after that? Or what should we be thinking? The cadence is for Clarington.

Harris Bassett - Chief Strategy Officer - (00:43:08)

So the next step in the. Are you talking about the Clarington, Ohio site? Yes. Yeah, the formalizing the agreement with the development partner is the next step. And then after that, well, then, you know, the immediate next step is to identify a tenant and to sign a lease with that tenant. There will be some work done while that's going on, but that would be, you know, the highest priority. Yeah. Confirmed to that we could see horizontal construction on the property as well.

Brett Knobloch - Equity Analyst - (00:43:44)

Thank you, guys.

OPERATOR - (00:43:48)

Thank you. Our next question comes from John Tadero with Needham. Your line is open.

John Tadero - Equity Analyst - (00:43:54)

Hey guys, thanks for taking my question. Not sure if I missed this on the seal miner sales. Do we have the units? Is pricing the same as we were kind of guided to before? Anything kind of change on that. And then I have a follow up on the HPC side of the business. Yeah, no pricing remained relatively consistent from last quarter. You know, I think from the, you know, obviously sales increased. The amount of hash rate we sold was quite a bit higher, but pricing was pretty consistent. Got it. Understood. Thanks for that, Jeff. And then on the HPC part of the business. So still need to finalize the agreement with the development partner. The development partner, I wouldn't assume, also is financing. So then you get the tenant, you get some debt financing, but then you bring a JV partner in for an equity piece as well. Should we anticipate some equity given up in this process? Yes. So the development partner we're looking to work with, we were looking for a partner that would actually bring the project equity to the table as well. So our goal is to finance that. The whole. The majority of the project at the project level, whether, you know, both project equity obviously, as well as project finance debt.

Harris Bassett - Chief Strategy Officer - (00:45:18)

Got it.

John Tadero - Equity Analyst - (00:45:18)

Understood. Thank you for that. Appreciate it.

Harris Bassett - Chief Strategy Officer - (00:45:21)

Yeah, thanks for the question.

OPERATOR - (00:45:25)

Thank you. Our next question comes from Brian Kinslinger with Alliance Global Partners. Your line is open.

Brian Kinslinger - Equity Analyst - (00:45:32)

Great, thanks. A little bit of a follow up on Clarington. After an agreement with a development partner. Is in place, do you think any other actions need to be completed before.

Harris Bassett - Chief Strategy Officer - (00:45:45)

A tenant moves forward with their own negotiations? Well, whether they need to be completed or not, we will be doing other actions. You know, there will be sort of engineering work done. We'll order long lead time items what's called horizontal work, things like that. So, you know, a lot of that stuff that's sort of agnostic to who the end tenant is and is relatively low cost. We will very likely start on that immediately in parallel with looking for and signing the tenant. Finding the. Identifying and finding the tenant is, you know, doesn't take that long. But actually finalizing a lease with the tenant can take, you know, quite a while. Just because the leases tend to be quite complicated.

Brian Kinslinger - Equity Analyst - (00:46:40)

Yeah, I mean in an ideal scenario. We would have a, you know, we.

Harris Bassett - Chief Strategy Officer - (00:46:44)

Would finalize an agreement and then start that horizontal construction and ideally be ready to go vertical. You know, once we had a tenant.

Brian Kinslinger - Equity Analyst - (00:46:54)

Great. And then Harris, you mentioned one of your comments was that the results will get stronger sequentially. Was that a comment on total revenue and adjusted ebitda or is that commentary just on self mining given it doesn't sound like the third quarter will produce.

Harris Bassett - Chief Strategy Officer - (00:47:11)

As much in external sales. I could say just generally speaking, obviously we're looking at a much higher run rate now at 40 eggs of hash going into the fourth quarter versus the nine we were at coming into the beginning of this year. So the run rate I think we have, I think set a new bar on the self mining side. As Harris said earlier, the sales side might be a little choppier just given the allocation from self mining versus external sales. That will kind of vary a little bit more over these next two to four quarters after that, like we said, we would expect it to be more heavily weighted potentially towards sales after that.

Brian Kinslinger - Equity Analyst - (00:47:56)

Okay, thank you. Absolutely.

OPERATOR - (00:48:00)

Thank you. As a reminder to ask a question, please press star 11. Our next question comes from Nick Giles with B. Riley Securities. Your line is open.

Fedor Shabalin - (00:48:11)

Thank you very much operator and good morning everyone. This is Fedor Shabalin on Nick Child. My first one is regarding Clarington. So you mentioned.

Harris Bassett - Chief Strategy Officer - (00:48:25)

Can you provide a bit more color on what advanced stage of negotiations mean and when should we expect an incremental update on the process? Thank you. So I mean advanced stages means, you know, the final legal documents and final due diligence, things like that. We are hoping that in this quarter Q3 we will have something to announce. Thanks for that. And follow up question regarding the A4 chip. What is the likelihood that this chip design could be adopted for applications beyond Bitcoin mining? So if such adoptions are feasible, what specific applications or use cases would be the most suitable? Thank you. So the A4, you know, is split now into two A4s. And so if you're talking about the one using the new technology. You know, we need to do a lot more work to validate this. But the initial indications are that it should work quite well in many digital applications where there's very energy intensive usage. So chips that have a lot of compute compared to other. So if a chip is very IO intensive and most of its power is through I O then it will be less beneficial if it's very compute intensive. That's where this technology helps the most. And also so this is sort of a long term thing for using this technology on other non bitcoin chips. You're talking a couple of years out at least in order to get this adopted by other applications. I just want to make sure you're aware of that timeline. Yeah. Thank you very much Harris and Jeff and the team continue. Best of luck. Thanks.

OPERATOR - (00:50:41)

Thank you. Our next question comes from Bill Papanasu with kbw. Your line is open.

Bill Papanasu - Equity Analyst - (00:50:48)

Yeah, good morning. Thank you for taking my questions and congrats on the strong equipment sales performance this quarter. Maybe you could just speak to the customer composition. As you're selling the different series of seal miners, are you seeing a lot of customer retention and repurchasing of some of the newer series or is that kind of distributed towards new customers? Curious to hear how that's performing and kind of your expectations. Thank you. Hey Bill.

Harris Bassett - Chief Strategy Officer - (00:51:23)

Yeah, thanks for the question. So you know, again, we've not really disclosed the exact composition of the any names of customers. What we can say though is that it has been a good mix of both public private miners, large and small. Our goal really was to get this, the C0 miner A2 in the hands of as many end users as we can to get just to get more market feedback. So while some of the larger pubcos we believe will likely be more interested in the seal minor A3, we have been able to distribute some of the A2s for testing as well.

Bill Papanasu - Equity Analyst - (00:52:00)

Great. Appreciate that. Color. My other questions were already answered.

Harris Bassett - Chief Strategy Officer - (00:52:04)

Thanks.

OPERATOR - (00:52:06)

Thanks Bill.

A - (00:52:09)

Thank you for your participation. There are no further questions at this time. You may now disconnect everyone. Good day.