CleanSpark, Inc.

On the call today, I am joined by Matt Schultz, our Chairman and Chief Executive Officer, and Gary Beccarelli, our President and Chief Financial Officer. Some of the statements we make today will be forward-looking, based on our best view of the world and our business as we move forward.

One that builds on the strengths of our mining operations while expanding the set of opportunities our assets can support. We continue to operate a large scale, fundamentally sound Bitcoin mining business that generates durable cash flows and balance sheet strength. What is different today is what those cash flows now enable. CleanSpark is no longer a single track business. We're building an infrastructure platform with multiple independently valuable earning streams, all anchored by scarce utility grade power. Bitcoin mining funds the platform. AI monetizes it, and digital asset management optimizes it across all cycles. To frame how we think about AI development, we see three phases. First, securing scarce power and land. Second, tenant-driven technical and commercial alignment, and third, structured long-term monetization. We are now firmly in the second phase across multiple assets. As a result, when we look forward, we increasingly see a company defined not just by hash rate, but by the quality, scale, and flexibility of its infrastructure. and by its ability to allocate capital into the highest return opportunities available at any point in the cycle. As we evaluate the opportunities for expansion into AI, we are seeing improving economics per megawatt, driven by scale, power quality, and contracting structures, even as capital intensity increases. Despite this evolution, Bitcoin mining remains foundational to our business. We are fully operational, hashing every day, and generating strong cash flows from a scaled mining footprint of more than 50 exahash per second. During the quarter, despite challenging Bitcoin price action and rising network difficulty, we generated more than $180 million in revenue at a gross margin exceeding 47%. Those cash flows allow us to fund growth deliberately. They give us the flexibility to hold assets in a fully monetized state while we complete diligence and commercial alignment, rather than being pressured into a speculative development. We built this strategy to perform across a range of market conditions, including lower Bitcoin prices, slower AI deployment, or tighter capital markets without forcing reactive decisions. In November 2025, we completed a $1.15 billion convertible offering as part of our strategic evolution. Part of the use of proceeds was used to repurchase $460 million worth of shares, bringing total share repurchases to over $600 million since December 2024, resulting in approximately 20% of our shares outstanding being repurchased. Because we believe dilution is not a strategy, discipline is. Turning to our power and land strategy, historically we built CleanSpark by acquiring and optimizing a large number of sub-100 megawatt sites. Those assets continue to perform well and have appreciated meaningfully as energized land has become increasingly scarce and valuable. As we evaluated the AI market, we recognized an opportunity to capitalize on the demand for larger sites. Until recently, Sandersville, with approximately 250 megawatts of already live power, was our only large-scale asset capable of supporting hyperscale workloads. That has changed. In October 2025, we acquired 271 acres in Austin County, Texas, along with 285 megawatts of contracted power, fully approved by ERCOT with certainty on energization and the potential gas capacity for significant behind the meter optionality. In January, we followed with a second development initiative in Brazoria County, Texas, supported by a transmission facilities extension agreement enabling an initial 300 megawatt demand load expandable to 600 megawatts. Together, these assets establish a Houston area infrastructure hub with almost 900 megawatts of aggregate potential utility capacity assembled intentionally to support multi-phase AI campus deployments. As we look ahead, we expect to move from portfolio formation into commercialization milestones. Those milestones will take different forms, site-specific announcements, development partnerships, and structured long-term offtake agreements. But they all reflect the same underlying reality. Our assets are being pulled into the AI market, not pushed. We believe that over time, as those options convert into contracted visible cash flows, the market will increasingly recognize the embedded option value in our power and land portfolio. At Sandersville, we further strengthened our position with the acquisition of a 122 acre parcel in direct proximity to our substation and power infrastructure. These additions were made in close consultation with a select group of potential counterparties. Importantly, these discussions are no longer theoretical. We are operating from tenant-driven specifications, not internal assumptions. We are now past initial screening and into advanced diligence across multiple sites, including power studies, cooling validation, and commercial structuring. The decisions we are making today around substation design, cooling architecture, and campus layout are not reversible, and they reflect confidence in where demand is heading. What excites us about AI monetization is not just scale, but the duration, predictability, and capital alignment of those cash flows relative to traditional compute. Throughout this process, we are expanding responsibly. That means being infrastructure first, aligned with customer requirements, and disciplined in capital deployment. In this market, moving too fast is often riskier than moving deliberately, and we are intentionally optimizing for durability rather than velocity. As we plan this evolution, We have established an optimized operating model that allows us to continue running our mining infrastructure right up until load transition. When that transition occurs, we expect to redeploy miners elsewhere in our portfolio where they can continue to operate profitably. Earlier, I said that Bitcoin mining will always be core to our business. And that's because it continues to provide us with a strategic advantage in power acquisition. That advantage is now translating directly into differentiated positioning in AI infrastructure. We've seen this movie before. The discipline that allowed us to scale mining profitably across multiple cycles is the same discipline we're applying here. Only now, with larger contracts, stronger counterparties, and materially longer duration cash flows. Before turning to digital asset management, I want to briefly comment on the AI lease market. We believe there are meaningful second mover advantages in AI infrastructure, similar to what we experienced in Bitcoin mining. Lease economics have continued to improve across multiple dimensions. Rates have risen, risk sharing terms have become more balanced, and credit markets supporting these projects remain deep and constructive. When negotiating large-scale contracts, we are balancing lease rates, delay provisions, capital structures, and counterparty quality to optimize the holistic return profile. Our goal is not to win a single deal, but to build durable, scalable relationships that monetize our growing portfolio over time. I also want to briefly touch on digital asset management. DAM is not a trading function. It is a capital allocation and liquidity management capability with defined mandates and risk limits. During the quarter, DAM generated over $13 million in premiums and cash. That represents about 24% of normalized adjusted EBITDA and improving capital efficiency across our business. These results are process driven and fully integrated into our broader financial framework. As we look forward, we see multiple paths to value creation unfolding in parallel. Continued strength in our operations, increasing visibility into AI monetization, and disciplined balance sheet management that preserves strategic flexibility. With that, I'll turn the call over to Gary.

Thank you, Matt. Let's dive right into the numbers for fiscal first quarter 2026. For the quarter, our revenue grew year over year by approximately 19 million, an increase of almost 12%. Our Bitcoin production was relatively flat, but we saw revenues of almost 100,000 per Bitcoin in the quarter compared to 84,000 in the same quarter last year. Our gross margins declined slightly from approximately 57% a year ago to 47% this quarter. This decline was mainly driven by the year over year increase in network difficulty. Power prices also increased marginally to 5.6 cents per kilowatt hour up from 4.9 cents a year ago. However, this reflects our decision to continue hashing to higher cost, higher revenue periods than curtailing based solely on an arbitrary power price threshold. This quarter, we recognize a net loss of approximately $379 million compared to net income of approximately $247 million a year ago. This change was driven primarily by marked market adjustments to Bitcoin's fair value at the end of each respective period. Our adjusted EBITDA was negative 295 million compared to positive 322 million a year ago, also driven primarily by mark-to-market adjustments. Turning our attention to the performance of the first quarter versus the immediately preceding fourth quarter, revenues declined approximately 43 million or 19% to 181 million. This drop is primarily due to a combination of two external headwinds, rising network difficulty and softer Bitcoin prices. Because of these pressures, we experienced some of the lowest hash prices in history during the quarter, underscoring the importance of having a fleet with high uptime and efficiency. Quarter over quarter, our cost per kilowatt hour decreased marginally from 5.9 cents in Q4 to 5.6 cents in Q1, partially offsetting our 19% revenue decline. As a result, our gross margins remained healthy at 47%. With respect to our overhead expenses, it is important to note that the prior quarter includes approximately $25 million of expense related to separation from our prior CEO. As mentioned on last quarter's call, we do expect that our professional fees, payroll, and G&A line items will increase as we execute on our AI strategy. Additionally, I want to underscore that the AI data center business comes with stable cash flows and high margins. both of which will help clean spark through the peaks and valleys of Bitcoin mining economics. Our adjusted EBITDA was negative $295 million for this quarter compared to positive $182 million for the fourth quarter. It's important to note, again, that the difference relates to non-cash mark-to-market adjustments for which the current quarter includes approximately $350 million of these charges. On a normalized basis, taking the mark-to-market adjustments into account, our normalized EBITDA would be $55 million or approximately 30% normalized margin for this quarter. This represents cash generated from our operations. Bitcoin value as of our September 30th balance sheet date was approximately $1.5 billion. And as of December 31st, it was $1.15 billion, which the difference is the non-cash mark-to-market adjustment of $350 million. which I mentioned earlier. Turning our attention to the balance sheet, you'll see our cash balance increased over 400 million compared to Q4. This is due to the 1.15 billion 0% convertible transaction we closed in November. As you know, we used a portion of the proceeds to pay off the outstanding balances on our Bitcoin-backed lines of credit and also repurchased 463 million of stock. This left approximately 420 million of net cash proceeds, the majority of which we will still have on our balance sheet. In addition to our cash balance, we had approximately 1.15 billion of Bitcoin value as of the end of Q1. Our total debt is approximately 1.8 billion, which on a net debt basis is approximately a 1.1 debt to liquidity ratio. Most importantly, the converts do not come due until 2030 and 2032, and numerous options remain available to us for capital also important to note is that our outstanding share count has decreased almost 20 percent in the last 15 months as we have not issued a single share of equity on the atm or other offering to echo matt dilution is not a strategy discipline is turning our attention to our balance of over 13 000 bitcoin i want to point out that we are one of the first if not the only company which has scaled operations that is also using Bitcoin as a productive capital asset. On the last call, we discuss in detail our DAM strategy in its first full quarter. You may have also heard us previously talk about our crawl-walk-run approach, which I'm happy to say we're now fully in the walk phase. We're at full utilization of the portion of our Bitcoin balance we expect to use for yield generation, which is 40%, or approximately 5,200 Bitcoins. Our DAM strategy generated $13 million in cash returns on the Bitcoin throttle during the quarter, where Bitcoin price was down mark to market. I want to highlight several key numbers which speak to our core DAM strategies. We overlay a covered call derivative program on our monthly production and sales of Bitcoin, which resulted in an uptick of $7,700, or 8% per Bitcoin, over the average sales price of approximately $97,200. Overall, the $13 million in total premiums also represents an annualized return of 4.2% on our average total balance, which surpasses our target of 4%. We accomplished this all within six months of our first trade. Importantly, this was all achieved by monetizing elevated volatility, especially in October, while keeping the average delta low 20%. I also want to point out that we have added an additional tool to our treasury management tool belt. The basis trade is a market neutral strategy that captures the difference between the forward price of Bitcoin and the spot price. Importantly, this strategy takes no price risk and generates returns from the same types of market structure dynamics that we noted in our thesis in the first place. This basis trade allowed us to put our cash balances to work and exceed the risk free rate by almost 200 basis points, as we saw an analyzed yield of over 5.5% on the cash allocated to the basis trade. All these opportunities are cyclical. We will continue to be opportunistic based on market dynamics, filling out the flywheel we initially envisioned when we launched our DAM team. On a final note, I'd like to take some time discussing our capital strategy going forward, especially in light of our expansion into AI data centers. From a capital perspective, I'm confident that the capacity and appetite for financing an AI data center with a grade A tenant is strong. We saw a high yield deal from our friends at Cypher, which priced at an attractive six and an eighth percent, which is indicative of the quality of recent leases being signed and the capital available in this market. Their recent $2 billion bond had approximately 13 billion in demand and over a subscription of six X. While we have not committed to one specific means of financing our AI data center builds, we are focused on building a capital stack which minimizes dilution. This continues with the sale of monthly Bitcoin production to cover our OPEX. Between our current cash balance and capacity on the Bitcoin-backed lines of credit, we have over 800 million of liquidity available without selling any of our Bitcoin HODL. This liquidity provides us optionality. and we will continue to use the lines of credit opportunistically in the marketplace for creative purposes. Matt spoke about our current efforts and where we are going, and we are excited to share on future calls the relationships and ecosystem we are building, one that is a more fulsome approach than exists in the market. While we are early in the innings of our AI data center journey, the market is moving quickly and CleanSpark is responding decisively. Our conversations with Grade 8 credit quality tenants are ongoing, and it is not a matter of if, but when. With that, I will hand it back to Harry to lead us in the Q&A.