Bitfarms Ltd.

Ladies and gentlemen, thank you for standing by. Welcome to BIFARM's second quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. And to ask a question during this session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to turn the conference over to Lane Yonker, Director of Investor Relations. Please go ahead.

Thank you, and welcome to BITFARM's second quarter 2025 conference call. With me on the call today are Ben Gagnon, Chief Executive Officer and Director, and Jeff Lucas, Chief Financial Officer. Before we begin, please note this call is being webcast with an accompanying slide presentation. Today's press release and our presentation can be accessed on our website, bitfarms.com, under the Investor section. Turning to slide two, I'd like to remind everyone that certain forward-looking statements will be made during the call and that future results could differ from those implied in this statement. The forward-looking information is based on certain assumptions and is subject to risks and uncertainties, and I invite you to consult Bitfarm's MD&A for a complete list. Please note that references will be made to certain measures not recognized under IFRS and therefore may not be comparable to similar measures presented by other companies. We invite listeners to refer to today's press release and our MD&A for definitions of the aforementioned non-IFRS measures and the reconciliations to IFRS measures. Please note that all financial references are denominated in U.S. dollars unless otherwise noted. And now, turning to slide three, it is my pleasure to turn the call over to Ben Gagnon, Chief Executive Officer and Director. Ben, please go ahead.

Good morning, everyone, and welcome to Bitfarm's second quarter 2025 earnings call. We made strong, steady progress in Q2 with several key developments that advanced both our Bitcoin mining and HPC and AI businesses. Today, I'll walk farms to execute on our HPC and AI growth strategy, through which we believe we'll be able to maximize the value and potential of our energy portfolio. Turning to slide four, I would like to start with an update on the low CapEx Bitcoin mining foundation that is underpinning our transition to an HPC and AI infrastructure company. In the second quarter, we installed more than 12,000 miners. completing all of our Bitcoin mine growth plans and initiatives across all of our facilities, where we mined 718 Bitcoin for a direct cost of $48,200 and achieved revenues of $98,000 per Bitcoin. During the quarter on May 12th, we also received notice that our electricity provider in Argentina would be halting service immediately, pending negotiations with its creditors. We spent the last three months working through the various options available, Argentina facility. These negotiations are moving slowly with no visible pathway to re-energization. So, with rising costs in the country following the Argentina IMF deal in April and no electricity supply, the company has made the difficult decision to shut down our mining operation in Argentina by November 11, 2025. Notably, Argentina had our least efficient mining fleet, rising energy costs, and our least reliable electricity supply. So, while our hash rate is down as a result, the impact on free cash flow is partially offset by the improvement of other fleet-wide key performance indicators, which have improved from the shutdown. Energy efficiency is up 1%, average electricity price improved 2%, direct hash costs improved 5%, and uptime is up 2%. These improvements help to offset the impact on free cash flow and further de-risk our mining operation through more competitive performance. In early July, we also completed the Bitcoin miner repair and upgrade program with one final transaction upgrading more than 10,000 T21 miners for approximately 8,500 S21 plus miners under the same terms and conditions as previous upgrades. This last round of miner upgrades included all of our new T21 miners from Argentina, as well as T21 miners from other facilities. All of the new S21 Plus miners were imported into the U.S. in advance of the August 1st tariff rate hike and are actively being marketed for sale. Our older M50 and S19 miners, as well as the various mining equipment from Argentina, have either already been sold or are actively being marketed for sale. expect estimated proceeds from Argentina's shutdown of approximately $18 million through the elimination of site remediation liabilities, recovery of prepaid deposits, reduction in lease expenses, a free termination option, and equipment sales. This is equivalent to over two years of free cash flow from Argentina mining operations with current economics. This plan is expected to reduce risk of operational efficiencies while improving financial liquidity to support our U.S., HPC, and AI growth initiatives in the near term. Turning to slide five. With all mining growth initiatives complete and the Argentina shutdown underway, I would like to provide a snapshot of where we are today. We are currently operating 17.7 exahash at 17 watts per terahash across our 14 data centers. which is generating free cash flow for mining operations of approximately $8 million a month. We continue to sell Bitcoin from our mining operations to fund OpEx, Overhead, and CapEx, but we have also increased Bitcoin holdings to approximately $1,200, up 25% from year-end 2024, representing a value of approximately $145 million with a Bitcoin price of approximately $119,000. So while ExaHash is pulled back with the Argentina shutdown, our Bitcoin mining business remains a low-risk cash flow foundation with minimal CapEx needs for the foreseeable future and considerable upside to rising Bitcoin prices, enabling us to invest all our time and capital into developing our HPC and AI business. Turning to slide six, I would now like to provide an update of our North American energy portfolio and its HPC and AI potential. Bitfarm stands out from other public mining companies with a unique energy portfolio built over many years of operation. In North America, we believe we're the largest public miner in Quebec and Canada, have the biggest footprint in Pennsylvania and PJM, and have the largest footprint in central Washington. The geographic diversification across data center hotspots gives us a serious advantage in the HPC and AI race, which is still in the early innings. Here's the portfolio. With over one gigawatt in the pipeline, our Pennsylvania portfolio is comprised of three sites, Panther Creek, Scrubgrass, and Sharon, and is where the bulk of our U.S. portfolio lives. Amazon has recently committed to investing over $20 billion in their data center campuses less than 40 miles to the northeast and southeast of Panther Creek, and Corweave has recently committed to investing over $6 billion in their campus 30 miles to the southwest of Panther Creek, leaving Panther Creek in the center of it all. With robust energy, fiber infrastructure, and recent strong political tailwinds for data centers, which I will speak more to in a second, Pennsylvania is well-positioned for massive strategic wins with large hyperscale clients. On the opposite side of the U.S., our Washington portfolio is much smaller at 18 megawatts, but is strategically located in the largest data center cluster on the West Coast. With approximately one gigawatt of data centers in the region, including Microsoft and Cybersphere One within a 30-mile radius, and some of the lowest cost energy for data centers in the U.S., Washington is well positioned to service prospective HPC and AI enterprise clients and generate attractive margins. North of the border in Quebec, our 170 megawatts of reliable and cost-effective hydropower makes us the largest Bitcoin miner in Quebec and in Canada overall. The province's robust supply of cost- the east coast of the U.S., and Europe has attracted the development of approximately 700 megawatts of traditional data centers in Quebec, representing over 50% of all data centers in Canada. Major players including Microsoft, Google, Amazon, and Vantage are all present and looking to expand in the area. With recent pushes by federal and provincial governments on data sovereignty and privacy, The development of data centers in Canada has emerged as a rare, nonpartisan objective that has strong support through federal and provincial governments. If BitFarms converted all of our Canadian Bitcoin mining megawatts to HPC, it would represent up to a 24% increase in data center megawatts in the province and make us one of the largest HPC data center operators in Quebec and Canada. In order for us to capitalize on this opportunity, it will require regulatory approval for converting our crypto mining megawatts to traditional data center megawatts. While this has broad political support, and we have received initial indications of support at various levels for such a conversion, it will take some time to run its course. In the meantime, our mining operations in the province continue to be profitable, and we are tentatively planning conversion of the portfolio in 2027 and 2028 in advance of the next having event. We will provide further updates on Quebec as they materialize. This unique portfolio is attracting huge interest from counterparties, and our scale and positioning are unmatched. As we replicate the lessons from Panther Creek across our North American sites, we are well positioned to capture meaningful market share in these high demand HPC markets. Turning to slide seven. In recent weeks, there has been a surge of new data center announcements in Pennsylvania. Big names like Google, Meta, Blackstone, Brookfield, and CoreWeave have committed over $90 billion in investments, citing robust energy and fiber infrastructure and close proximity to the largest data center cluster in the U.S., Data Center Alley, and major East Coast metropolitan centers. The robust investment into these data centers and the meaningful job growth that accompanies them will be transformational for many towns and counties across the state. And as a result, they're receiving robust political support and attention from the local level all the way up to the Oval Office. As the only public Bitcoin miner with a big Pennsylvania footprint, we're perfectly positioned in what is emerging as the new AI hub. This isn't just luck, it's vision. We've been evaluating Pennsylvania for years, focusing on the same opportunity that is currently taking the industry by storm. With surging demand for power, record capacity auctions, and a renewed interest in traditional thermal generating assets, the power plants we acquired in the Strongblood acquisition are worth significantly more now than when we bought them just a few months ago. Turning to slide eight, our flagship campus in Pennsylvania, Panther Creek, is advancing rapidly. In the past few weeks, the electric utility PPL has given us the green light for expanding our grid connection. confirming firm service at 50 megawatts by year end 2026 and additional 300 megawatts as early as 2027. That means more power on a faster schedule confirmed. To support the development, we've also executed binding purchase and sales agreements that more than double the acreage of the site, paving the way for a contiguous and marquee 350 megawatt HPC campus in eastern Pennsylvania. The conceptual master site plan that you are looking at on screen now is based on the new power schedule and expanded acreage. This master site plan is finished and has been submitted to Macquarie. It is important to remind everyone that the master site plan may be modified based on the multiple conversations we currently have going with potential customers, but it's a rock-solid base to develop the site and customer conversations expeditiously. Phase one hits 50 megawatts by the end of 2026, and phase two at 300 megawatts as early as 2027. The plan includes the development of four buildings, housing 350 megawatts in total, with room for additional expansion in a phase three with a fifth building once the ongoing FERC, TALEN, and Amazon issues are settled, or we have confirmed an alternative arrangement that permits us to use our existing grid connection and power plants for the HPC data center campus. Finally, Our new partnership with T5, a top-tier data center developer who's worked with every major hyperscaler to build and operate data centers, is a big deal. T5 will be responsible for managing the development of our Panther Creek campus and is yet another proof point to investors and prospective customers that validates the development potential. Next steps for Panther Creek include fast-tracking permits, locking in long-leave items like transformers and generators, and breaking ground as originally planned in Q4 this year. CapEx-wise, the Macquarie facility will be sufficient for Phase 1, and with just $10 million of planned CapEx for the remainder of this year, the majority of CapEx will fall into 2026. Turning to slide 9. While Washington is much smaller than Pennsylvania, this site is a gem. It's positioned in the West Coast data center alley. and the utility has confirmed that all of our Bitcoin mining megawatts can be converted to HPC with no regulatory red tape. Better yet, converting our megawatts would cut our energy cost per megawatt hour by almost 50%, below $30 per megawatt hour, and make it some of the cheapest power for data centers in the US. To help us further advance customer conversations, we have executed a binding PSA for adjacent land that will more than double our acreage and is expected to give us all the space we need to develop a state-of-the-art HPC facility. In Washington, we're eyeing enterprise customers where the smaller site can be used to greater effect, generating incredibly healthy margins and providing portfolio diversification. Turning to slide 10. Following the successful rebalancing of our portfolio earlier this year and the Argentina shutdown, our current operational megawatts are now over 80% North American. And with the majority of our growth pipeline in the U.S., our pivot to the U.S. is in full swing. Our actions are not limited to the expansion of energy and the development of HPC infrastructure in the U.S. Recently, we've announced the opening of our second principal executive office in New York City and our planned transition to U.S. GAAP accounting for full year 2025 results. These actions are expected to simplify our reporting processes, reduce administrative and legal costs, broaden our U.S. investor base, and improve our eligibility for inclusion in certain stock indices, among other potential benefits. These are important steps on our journey to becoming a U.S. domiciled entity. which we plan to achieve in 2026. We strongly believe the strategic transition will better position BitFarms to execute our HPC and AI growth strategy, driving improved operational efficiencies and maximizing shareholder value. Turning to slide 11. While we have accomplished a lot in the last year, I'm particularly proud of our accomplishments over the last four months. Our Bitcoin mining business is locked in projected to produce strong free cash flows of approximately $8 million per month, with minimal capex and numerous improvements across key performance indicators. With more than one gigawatt, our Pennsylvania pipeline is a goldmine in what is quickly emerging as a major AI hub, fueled by massive regional investment. HPC and AI development is taking off with rapid progress at our flagship campus, Panther Creek, backed by top advisors, strategic partners, and financing. We've taken key steps towards a planned 2026 U.S. redomicile, which will drive index inclusion and expand our access to U.S. investors and capital. Our portfolio has rebalanced to 80% North American, with all U.S. sites well-positioned for conversion to HPC. And we have dramatically strengthened the balance sheet, with approximately $230 million in cash in BTC as of August 11th, and access to up to an additional $250 million in the Macquarie facility for Panther Creek development. Our confidence in our business and ability to both execute and create long-term value in this transition has never been stronger. Despite our strong performance, we believe that the market is undervaluing both our Bitcoin business and HPC potential. Accordingly, we have recently launched the company's first-ever stock buyback program for up to 49.9 million shares, or about 9% of outstanding shares. I'm proud to say that in the first two weeks, we have already repurchased roughly 5 million shares, equivalent to 10% of the total share buyback program. With strong cash flows, ample liquidity in financing, we plan to continue buying back our shares under this program for the foreseeable future. Now, turning to slide 12, I'll turn the call over to Jeff for the financials.