Hut 8 Corp.

conference call. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded and a transcript will be available on HUD-8's website. In addition to the press release issued earlier today, you can find HUD-8's annual report on Form 10-K on the company's website at www.hud8.com, under the company's EDGAR profile at www.sec.com, and under the company's CDAR Plus profile at www.cdarplus.ca. Unless otherwise noted, all numbers referred to during this call are denominated in U.S. dollars. Comments made during this call may include forward-looking statements within the meeting of applicable securities laws regarding HUD-8 Corp. and its subsidiaries. The statements may reflect current expectations and, as such, are subject to a variety of risk and uncertainties that could cause actual results to differ materially from current expectations. These risk and uncertainties include but are not limited to factors discussed in HUD-8's Form 10-K for the 12 months ended December 31, 2024. as well as the company's other continuous disclosures documents. Except as required by applicable law, HUD-8 undertakes the obligation to update or review any forward-looking statements. During the call, management may also make references to certain non-GAAP measures that are not separately defined under GAAP, such as adjusted EBITDA. Management believes that non-GAAP measures taken in conjunction with GAAP financial measures provide useful information for both management and investors. Reconciliation between GAAP and non-GAAP results are presented in the tables accompanying the the press release, which can be viewed on HUD-8's website. I would now like to turn the call over to Asher Goodnoit, CEO of HUD-8.

Good morning, everyone, and thank you for joining us today.

Just over a year ago, when I stepped into the role of CEO, I made a commitment to our board, our shareholders, and our team to set HUD-8 on a new trajectory. Today, I'll discuss how we delivered on that commitment in 2024, through a comprehensive transformation that we believe has positioned our business for profitable growth and long-term value creation. A transformation of the scale does not happen overnight, nor does it happen without deliberate design. Executing on our commitment required a clear vision, rigorous planning, and the conviction to make tough but necessary decisions. Guided by these principles, We focused relentlessly on execution and built the foundation for what we intend to grow into an enduring generational business at the intersection of energy and technology. Before I discuss the key objectives that drove this transformation and the impact it has had on our business, I want to take a step back to something more fundamental, an idea about who we are and what we are building. Next slide, please. At the heart of everything we do is a simple conviction. We believe the value of energy will continue to rise as the technologies fueling both daily life and world-changing innovation place ever greater demands on a constrained electrical grid. Over the past year, this dynamic has accelerated as AI catalyzed a surge in demand for power in the digital infrastructure sector. Our ambition is to build a platform that can meet this demand at scale across energy-intensive technologies for decades to come. But conviction alone is not enough. If the past year has reinforced anything, it is that execution is the bridge between conviction and reality. And execution requires people, a team with the discipline and grit required to make tough decisions, navigate volatile markets, and turn strategy into results. It also requires the trust and conviction of shareholders, analysts, and partners who believe in what we are building and stand with us in making it a reality. So before we turn to the year behind us, I want to recognize the people who have made our progress possible. Some of you have been with us since the very beginning, when we first set out to pioneer a power-first approach to digital infrastructure development. Others have joined us more recently, recognizing the scale of the opportunity ahead. Regardless of when you came on board, we're grateful for your trust and conviction. Next slide, please. Today, I'll discuss how we deliberate on our commitment to set HUD-8 on a new trajectory in 2024. Then Sean will review our financial results and explain how we've refined our reporting structure to better reflect how we operate today and where we're heading next. Finally, I'll outline how we are building on the foundation in 2025. Next slide, please. Over the past year, we executed on a comprehensive transformation of the legacy HUD-8 business, driving measurable improvements in key areas of business performance while setting what we believe is a resilient foundation for profitable long-term growth. This transformation was driven by three objectives. First, optimizing operations through a comprehensive restructuring program. Second, fortifying our capital strategy to support balanced risk-adjusted growth. And third, developing a high-velocity utility scale power origination pipeline. Let's discuss each in turn. Next slide, please. Optimization was the foundation of our transformation. We use the term optimize deliberately. Our restructuring program was driven by calculated trade-offs designed to drive sustained profitability while setting a foundation for growth rather than indiscriminate cost cutting. Data-driven analysis informed the shutdown of our underperforming Drumheller site, the energization of our new Salt Creek site, the relocation of our fleet from hosted to owned facilities, and the rollout of our proprietary energy curtailment software, Reactor, across the legacy HUD-8 portfolio acquired in the business combination. These initiatives delivered measurable impact, including a 30% reduction in our average energy costs per megawatt hour from Q4 2023 to Q4 2024. They supported an approximately eight point increase in gross margin per Bitcoin mined over that same period. And earlier in 2024, our continued focus on value engineering enabled us to complete our latest Salt Creek project in an all-in cost of approximately $250,000 per megawatt, approximately $100,000 per megawatt less than our first greenfield development site in Arracott. Beyond metric impact, we institutionalized decision-making rigor and operational discipline at every level of our organization. We restructured our team, optimized headcount, and recruited veteran leaders from the energy and digital infrastructure sectors. In parallel, we expanded our in-house development program, enhanced our proprietary operating technology, and established a data science function to optimize energy consumption across our portfolio. We believe these investments have extended our competitive advantage in rapid, cost-efficient infrastructure development. Yet optimization is not static. The optimal solution will evolve as decision variables shift. So while we believe we have built a solid foundation, we are committed to driving value through continuous improvement in the years to come. Next slide, please. Our second objective was to fortify our capital strategy. A well-designed capital structure should not only provide resilience against market volatility, but also enable agile, flexible growth. In a capital-intensive business like digital infrastructure development, these are critical advantages. To reinforce these advantages, we executed an integrated capital strategy focused on risk reduction, market access, liquidity expansion, proactive treasury management, and institutional alignment. Strategic deleveraging was central to our approach. We converted the $37.9 million balance of our Anchorage digital loan to equity and unencumbered 827 Bitcoin initially pledged under our Coinbase loan. Thoughtfully structured debt continues to serve as a valuable tool to fuel our growth. This includes our existing project level financing at the TZRC joint venture, which is ring fest at the subsidiary level with no recourse to the parent entity and our Coinbase loans, which was amended this year to, among other things, remove the parent guarantee. In addition, in 2024, we entered into a strategic partnership with CO2, whose convertible note investment reflects their conviction in our long-term value creation potential. Expanding market access and deepening liquidity were equally critical. Together with our inclusion in the Russell 3000, shelf eligibility brought in our investor base and created new capital pathways. enabling us to launch a $500 million ATM program, which we announced alongside a $250 million stock repurchase program. Together, these programs support a robust capital formation toolkit that bolsters our ability to navigate the volatile markets in which we operate. Further strengthening our capital position, we introduced a proactive treasury management framework designed to enhance capital efficiency and generate risk-adjusted returns that outperform idle cash. Under this framework, we expanded our strategic Bitcoin reserve with the purchase of 990 Bitcoin, growing our strategic Bitcoin reserve to more than 10,000 Bitcoin with a market value of approximately $950 million at year end. Together with cash on hand, our liquidity position enables us to act decisively to capture compelling growth opportunities while instilling counterparty confidence in our ability to execute on large-scale development initiatives. The strength of our capital structure is increasingly reflected in our shareholder base. Institutional ownership of HUD-8 increased from approximately 12% at the end of Q1 2024 to approximately 55% at year end, a testament to our focus on long-term value creation. The institutionalization of our business was marked by key milestones like a strategic investment from CO2 and the conversion of our Anchorage loan to equity. Today, we continue to engage actively with strategic capital partners to strengthen our financial and competitive position. In summary, we believe the integrated capital strategy we have implemented is now aligned with the scale of our ambition. Looking ahead, we will continue to focus on optimizing our capital structure, exploring non-dilutive sources of funding whenever possible. Our long-term aim is to drive down our cost of capital, minimize enterprise risk, and maximize shareholder value as we build our business. Next slide, please. The final pillar of our transformation was building the engine of our Power First strategy, a high velocity, utility scale, power origination pipeline. In a supply-constrained market, access to power is a competitive advantage. Outside value creation, however, requires a disciplined, strategic approach to site selection and portfolio construction. This level of rigor is only possible with a development pipeline of institutional scale and velocity. Over the past year, we have engineered our origination strategy around these interdependent pillars. Increasing scale has expanded and diversified our opportunity set, allowing us to secure what we believe to be the right assets under the right conditions at the right time. Meanwhile, increasing velocity has brought in deal flow visibility, equipping us with the market context and conviction required to rapidly advance high potential opportunities to exclusivity. Together, these pillars enable disciplined capital allocation to opportunities we believe will drive superior risk-adjusted returns. At year-end, our pipeline of development capacity under diligence had more than quadrupled to 12,000 megawatts, while capacity under exclusivity had more than doubled to 2,800 megawatts. Securing exclusivity is a critical milestone in our development process because it defines a clear pathway to ownership. either through exclusivity agreements that prevent the sale of designated land and power capacity to another party or through a tendered interconnection agreement. Origination is above all a matter of people and execution. It is a highly specialized discipline that requires deep market expertise, regulatory insight, commercial acumen, and industry credibility. These capabilities are neither widely held nor easily acquired, which is why building the right team has been one of my highest priorities since the early days of building our business. Today, our PowerNative team has many decades of collective experience across the development value chain, led by former senior executives and team members from some of North America's largest generation owners, utilities, energy investment firms, infrastructure developers, and trading desks. It is the foundation of our utility scale origination platform. More than that, we believe it is a source of durable competitive advantage that positions us to scale with uncommon speed and discipline. With that said, our focus now shifts to execution as we continue to advance the highest potential opportunities in our pipeline. I'll return to this later. Next slide, please. Today, we operate from a position of strength We have optimized our operations, built a world-class team, and embedded institutional discipline at every level of the organization. We have fortified our capital strategy to drive balanced, risk-adjusted growth. And we have built a high-velocity, utility-scale origination pipeline spanning 12,000 megawatts, setting the foundation for disciplined, long-term value creation. Next slide, please. Before I turn it over to Sean, I want to set the stage for what comes next. The transformation we executed over the past year is meaningful only to the extent that it drives long-term shareholder value. Maximizing shareholder value requires us to not only deliver on our strategic priorities, but also to communicate our outcomes under a framework that enables investors to accurately assess our financial performance, operational efficiency, risk management and long-term growth strategy. A key enabler of this clarity is our reporting structure. It functions as a critical bridge between the internal reality of our business and how that reality is understood and evaluated by the market. A well-structured reporting framework should provide investors, management and the broader market with the transparency and insight needed to make informed benchmarking, valuation and investment decisions Over the past year, as we executed our transformation, it became clear that our legacy reporting structure did not adequately align with our transformed business. Built around narrow operational capabilities like Bitcoin mining and managed services, it did not reflect the power first strategy and platform driven business model through which we manage and assess the performance of the business. Instead, It elevated specific activities within each layer of our platform, such as Bitcoin mining and managed services to standalone segments while under-representing distinct and fundamental value drivers like power acquisition and digital infrastructure development. Ultimately, it no longer aligned with how we deploy capital, scale our platform, and drive sustainable returns. With that, I'll turn it over to Sean to explain how our new reporting structure addresses these challenges.