Bitfarms Ltd.

Good day, and welcome to the BidFarms fiscal 2025 conference call. At this time, all participants are in listening mode. After the speaker's presentation, there will be a question and answer session. Instructions will be given at that time. Please note this call is being recorded. I would like to turn the call over to Jennifer Drew-Behr from BidFarms Investor Relations. Please go ahead.

Thank you, and welcome to BidFarms fiscal year 2025 conference call. With me on the call today are Ben Gagnon, Chief Executive Officer and Director, and Jonathan Murr, 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 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 the 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 10-K for a complete list. Also, please note that references will be made to certain non-GAAP financial measures and therefore may not be comparable to similar measures presented by other companies. We invite listeners to refer to today's press release in our 10-K for definitions of the aforementioned non-GAAP measures and their reconciliations to GAAP 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 over the call to Ben Gagnon, Director and Chief Executive Officer. Ben, the floor is yours.

Good morning, everyone, and welcome to our fiscal year 2025 earnings call. In 2025, we made a bold decision to walk away from our legacy business, Bitcoin, and build the infrastructure in North America for what comes next, HBC and AI. It was a year of deliberate and consequential transformation with a clear mandate. Secure a North American pipeline, strengthen our balance sheet, accelerate site development, and position ourselves to engage customers from a place of operational momentum at the peak of the energy bottleneck constraining the growth of AI. I can say with confidence and pride that we accomplished exactly what we set out to do. The foundation you see today, the capital structure, the sites, the team, the strategy, was engineered through deliberate choices, developed with discipline, and built to propel us forward. We made foundational changes to reposition the business and made 100% of our focus on North American HPC infrastructure development. No half measures, no compromises, and in time, no Bitcoin. We built a new company. And while we are presenting as big farms today, tomorrow marks our beginning as keel infrastructure. The name says it all. A keel is the bottom-most structural component of a vessel. It's what keeps it stable and moving forward in the right direction, regardless of the condition above the waterline. It is structural, it is essential, and it is exactly how we see our role in the HPC and infrastructure landscape. We are not here to compete with hyperscalers or neoclouds. We are here to enable them. Our focus is providing the critical and largely invisible foundation that will allow the world's most advanced platforms to deploy on time and scale without interruption. We expect to close the redomiciliation and finalize our rebranding efforts tomorrow, April 1st, and we'll begin trading under the ticker KEEL two business days after completion of the transaction on the NASDAQ and the TSX. We are entering this new phase from a position of strength. With over two gigawatts in our pipeline, Keele is a regional leader with some of the largest power land portfolios and some of the highest demand markets in North America, and with robust financial strength to execute against our plan. Our current liquidity is far in excess of the capex budgeted to get us through permitting and ultimately to start signing leases, giving the company significant financial flexibility to execute on our strategy. And our strategy is equally as clear. We are designing all of our site and campus developments as either powered shell or colocation facilities. We believe this is where we can deliver the most value to shareholders and serve our potential customers at the speed and to the specifications they need. We were originally exploring, in parallel to colocation, the potential benefits of pursuing a small amount of GPU as a service at our Washington site, Moses Lake. where due to the lowest cost power for data centers in the country and a relatively smaller footprint, we believed it could be an avenue to drive additional shareholder value. Since our last quarterly call, we have spoken with an increased volume of potential customers, and as clear from those conversations, the most accretive business model for the site is one of co-location. This is not specific to Moses Lake and applies to all of our other sites as well, where demand is even higher. So we will focus on what we do best, being an infrastructure developer and owner. This plays directly to our core competencies. We are a team of developers united by discipline action, building cost-effective, institutional-grade infrastructure at the pace our customers require. The same capabilities that built our energy platform, speed to market, capital discipline, operational rigor, are precisely what HPC and AI deployments demand today. This is just the natural extension of what we do best. So with all the pieces in place and with the overwhelming support of our shareholders who voted over 99% in favor of the HPC&I pivot, the U.S. redomicile, and the rebrand, starting tomorrow, we are keel infrastructure. Turning to slide four. When we set on our pivot, we developed a three-year transformation plan, one that as of today, we are nearly halfway through completing. In 2025, we did the intensive foundational work for our transformation. including the stronghold acquisition, securing more power in Pennsylvania, rebalancing the portfolio to North America, a $588 million raise, fully institutional and oversubscribed, our U.S. gap transition, New York headquarters, and establishing a new executive team. This work is done. With power and land secured in some of the power markets that matter most, a team of internal experts and strategic partners that have built data centers for the largest companies in the world, and a balance sheet engineered to CS3 2026, we are well positioned to continue our site development and deliver against the timelines our prospective hyperscalers and Neocloud customers need. 2026 is all about execution. Effective tomorrow, we will have completed our redomiciliation to the United States and officially rebranded as Keele Infrastructure, two major milestones that position the company for the next phase of growth. With that complete, we expect the next significant milestones to come from executing against our development at Panther Creek, Sharon, and Moses Lake, where we are moving full steam ahead and working diligently across three simultaneous and active work streams. One, finalizing permits, which we expect to be done in the coming months. Two, continued work on architecture and engineering in line with ongoing customer conversations and requirements. And of course, three, our go-to-market to secure highly financeable leases with investment-grade tenants. Commercialization is well underway. The upcoming milestones investors can expect are completion of pre-construction activities like permitting, progress in customer engagement, and ultimately lease execution, which we are confident we can achieve this year and will be major catalysts. 2026 is also the year where we expect to leave Bitcoin and Bitcoin mining behind. While we were probably one of the first miners to commence wind down of our Bitcoin mining exposure to reinvest that capital into infrastructure for HPC and AI, we will be accelerating those efforts in 2026 as site developments progress. 2027 is all about delivery. This is the year when we anticipate that sites would come online, we'd begin delivering megawatts to customers, HPC and AI revenue really begins, and we complete our transition to a premier North American HPC and AI infrastructure company. By the end of 2027, we expect Keele will be a proven infrastructure developer and a regional leader across Pennsylvania, Washington, and Quebec. And we will just continue to grow and scale from there in 2028 and beyond to over two gigawatts as we execute against our expansion capacity. Turning to slide five. In HPC infrastructure, Power, location, and timelines are everything. We hold something scarce and valuable. Secured power, land, and expansion capacity in Pennsylvania, Washington State, and Quebec. Some of the most in-demand markets with some of the biggest barriers to entry. We know it, and so do our potential tenants. Our campuses offer solutions to hyperscalers and neoclouds' greatest scaling problems. Location. Proximity and fiber connectivity to major metro areas and data center clusters, solving for latency issues and giving our tenants proximity to their own customers and other data centers. Timelines. A robust, secure power for 26, 27, and with expansion capacity in 2028 is highly coveted in an environment where energy capacity is hard to find and multi-year wait lists are the norms. We create value for tenants by enabling them to deploy years earlier by leasing from us rather than to invest in growing organically. An energy efficient, cool climate. The lower the PUE, the more critical megawatts. Panther Creek is a great example of seeing the hyperscaler and neoclouds appetite at play. While there was a lot of interest in the site last year, inbound customer activity surged after we secured zoning in February. This is not a coincidence. This is a proof point and one that we've been making for the last year, but may still be confusing to some investors. So we'd like to be clear that investment-grade tenants value de-risk sites where they can move from lease to revenue fast. The more we advance, the better our leverage. The better our leverage, the better the leases, and the more long-term value we create for shareholders. Turning to slide six. It is indisputable that power is the binding constraint for AI infrastructure deployment and will remain so for the coming years. Leading investment banks, Goldman Sachs, JP Morgans, Wells Fargo, Guggenheim, Mollis, they've all published extensively on this. And the consensus is clear. New power generation cannot come online fast enough to meet AI demand today, tomorrow, or in the next five years. This bottleneck is structural, not cyclical. Hyperscalers and neoclouds that used to plan on 12-month horizons are now locking in 24 to 36-month supply chain commitments, not tied to specific projects, but as platform-level agreements, and are now actively competing for the power and land to deploy it. While you are probably familiar with this information, here you can see a summary of the five development sites, the power we have secured, and in some cases, the incremental power opportunities that make up our 2.2 gigawatt pipeline. Turning to slide seven, I want to take a moment to put our current valuation context because there's a meaningful disconnect between where we trade today and the value we are positioned to capture as a company. When we analyze our current valuation against our peers, the picture becomes clear. At approximately 1.9 million per available megawatt of secure 2027 capacity, we're trading in the middle of a Bitcoin miner group valued at roughly 1.7 to 2.1 million per 2027 megawatt. meaning we are being valued based on having power, but not what we are doing with it. For shareholders and bondholders, we see three distinct catalysts, each capable of driving meaningful re-ratings. The first is obviously lease execution. Across our sector, companies that have signed leases trade at four to six million dollars per 27 megawatt, a two to three times premium to where we are today. This is the market's consistent signal, driven entirely by lease execution. not facility delivery, not revenue generation, just signed leases. A signed lease secures revenue and financing, de-risking the developments. The market pays for that. With nearly 500 megawatts actively being commercialized today and visibility on permitting across Panther Creek, Sharon, and Moses Lake, this catalyst is well within reach. The second catalyst, and arguably the most powerful for long-term holders, is securing our expansion capacities. Two-thirds of our 2.2 gigawatt portfolio, or approximately 1.5 gigawatts, is expansion capacity, which we believe the market is assigning little to no value. While securing these megawatts is a process that will take more time, we believe additional megawatts can be secured in the second half of 2026, requiring very little capex, but representing significant embedded value as powered land, even before a lease is signed or there is a shovel in the ground. The third catalyst is delivery in 2027. Once facilities are de-risked through commissioning and begin generating revenue under long-term contracts, the development risk should drop dramatically and the operator evaluation numbers become transformational yet again. We are not taking a leap of faith on technology, our ability to steer power, or market demand. The tech is here. The power is secured. The sites are advancing. The inbound demand is real. What the market has not yet priced in is the transformation that happens when a developer becomes a counterparty. when we move from site advancing to lease executing. This is the main opportunity ahead of us to accelerate permitting, execute leases, secure our expansion capacity, and ultimately deliver to our customers. This is how we will create value for our shareholders and bondholders. Turning to slide eight. Our execution plan is defined by six key areas, each supporting our ability to deliver at the pace and scale our future customers require. First, We've secured our deep bench of talent by adding over 60 years of infrastructure and development and over 50 years of data center construction experience combined in just the past few months. People have delivered at scale for the most demanding customers in the world. Jonathan Murr joined as CFO, bringing 25 years of energy infrastructure strategy and project finance expertise. We have also added an SVP of construction and of power, a VP of HPC operations, and a head of permitting to oversee the execution of these critical functions. we've assembled the right team to execute on our vision. Second, we are engaging the right industry leaders as partners. T5, Turner Construction, Corrigan, CWWT, Vertiv. These firms have built data centers for the world's largest hyperscalers, not once, but hundreds of times. When customers look at our project partners, which will be available on the new website when it launches tomorrow, they will see that we have also assembled the right partners to ensure better outcomes. Third, we have the capital required to bring our sites to market. As of March 27th, 2026, our liquidity stands at $520 million in cash and Bitcoin, which we expect is much more than the CapEx budgeted to get us to a lease at Panther Creek, Sharon, and Washington. Jonathan will go into more detail on our capital position and financing strategy shortly, but the headline is simple. We're well-funded and can move fast. Fourth, a disciplined Bitcoin exit. It is clear we are no longer a Bitcoin miner. However, with strong, robust liquidity, we can have a disciplined approach to our exit strategy. We will continue to operate up until the time sites need to be prepared for construction, maximizing free cash flow before selling the miners. We will also opportunistically sell Bitcoin into strength to capture and reinvest every dollar we can into HPC and AI infrastructure. Fifth, power assets that cannot be replicated. Our megawatts sit in regions with large barriers to entry. Pennsylvania, Washington State, and Quebec all have multiple year wait lists. No one is cutting the line. Our 350 megawatts at Panther Creek, 110 megawatts at Sharon, and 18 megawatts in Washington were secured before the AI demand wave made these markets highly coveted. This isn't power others can easily replicate, giving us competitive edge with high quality tenants who understand these markets and are hungry for assets like ours. which leads us to our sixth point. In this market, speed to power is what drives value. For our customers, the opportunity cost of delayed deployment is huge, so the priority is getting capacity online as quickly as possible. Every day of delay is lost revenue. As a result, power availability and certainty of delivery are the primary drivers of lease economics. This dynamic has pushed lease rates higher since our Q3 call, exactly as we said it would. The opportunity in front of Keele Infrastructure is real. We now have the assets and the team is ready. I'm so proud of what we built in 2025 and I'm confident in what we'll deliver in 2026 and 2027. With that, I'll turn the call over to Jonathan.