Hut 8 Corp.

Thank you for standing by. At this time, I would like to welcome everyone to the HUT 8 third quarter 2025 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to Sue Ennis, Head of Investor Relations. You may begin.

Good morning, and welcome to HUD-AIDS Third Quarter 2025 Financial Results Conference Call. Joining us today are our CEO, Asher Janoot, and our CFO, Sean Glennon. Following the presentation, we will open the line for questions. This event is being recorded and a transcript will be made available on our website. In addition to the press release issued earlier today, our full quarterly report on Form 10Q is available at hut8.com, on our EDGAR profile at sec.gov, and on our CEDAR Plus profile at cedarplus.ca. Unless otherwise indicated, all figures discussed today are in U.S. dollars. Certain statements made during this call may constitute forward-looking statements within the meaning of applicable securities laws. These statements reflect current expectations and are subject to risks and uncertainties that could cause actual results to differ materially. Certain key risks are detailed in our Form 10-K for the year ended December 31, 2024, and our other continuous disclosure documents. Except as required by law, we assume no obligation to update or revise any forward-looking statements. During the call, management may reference non-GAAP measures such as adjusted EBITDA. We believe these metrics alongside GAAP results provide valuable insight into our performance. Reconciliations of GAAP and non-GAAP results are included in the tables accompanying today's press release available on our website. With that, I'll turn the call over to our CEO, Asher Janoud.

Thank you, Sue, and good morning, everyone. Earlier this year, we introduced our 2025 strategy. At its foundation is our development flywheel, a framework designed to compound returns through four integrated stages of platform development, origination, investment, monetization, and optimization. This model defines how we scale across our power, digital infrastructure, and compute layers under a unified, tile-first architecture. The third quarter marked a clear inflection point in the velocity of that flywheel. That acceleration is evident not only in our financial results, but also in the step-change extension of our near-term growth runways. Together, these outcomes reflect the strength of a diversified platform operating as a single integrated engine. Let's begin with our results. I'll share the highlights now before turning it over to Sean for a detailed review later in the call. In the third quarter of 2025, we delivered revenue of $83.5 million, up 91% year over year. This increase was driven primarily by the expansion of Bitcoin mining revenue through American Bitcoin, the purpose-built Bitcoin accumulation vehicle we launched earlier this year. American Bitcoin has scaled rapidly since its debut on the NASDAQ, contributing to significant top-line growth in our compute segments. Because American Bitcoin is a consolidated subsidiary, its revenue is reported entirely within our compute segments. Meanwhile, the infrastructure and services it consumes from HUD-8 are treated as intercompany transactions and eliminated in consolidation despite representing real and recurring economic activity. In effect, what appears in compute today reflects only the surface layer of a robust commercial engine fueled by our power and digital infrastructure businesses. Importantly, our results reflect not only top-line growth, but also early evidence of commercial and financial synergies across the platform. Net income was $50.6 million versus $0.9 million in the prior year period, and adjusted EBITDA was $109 million versus $5.6 million in the prior year period. These metrics reflect a $76.6 million gain on digital assets versus a $1.6 million loss on digital assets during the prior year period, both reported in accordance with FASB's fair value accounting guidance. Beyond strong headline performance, the third quarter demonstrates the structural advantage we have unlocked by carving out the majority of our legacy Bitcoin mining business into a standalone entity. That separation has clarified our mandate and streamlined our capital allocation framework, enabling us to focus on scaling lower cost of capital businesses, such as co-location. During the third quarter, that clarity drove tangible momentum at the foundation of our development flywheel. the power layer. From the outset, we recognized that large load technologies like Bitcoin mining and AI computing are at their core functions of how effectively energy can be harnessed, deployed, and monetized. That insight shaped how we built HOT8. We engineered the business around power expertise and designed it to transcend any single application. Today, surging computational demand has transformed energy from a background input into a defining constraint to growth. For us, that constraint represents an advantage. HUD-8 was built from day one with a power-first, innovation-driven strategy. By integrating power, digital infrastructure, and compute assets at scale, we aim to address energy demand from the world's most transformative technologies for decades to come. Early last year, shortly after I became CEO, we began translating our Power First strategy into our external reporting. We introduced new performance metrics, such as energy capacity under management and energy capacity under exclusivity, which reflected the utility-grade depth and rigor with which our Power Native team operated and scaled the business. At the time, our focus on energy was contrarian in a sector still oriented around exahash and other end application metrics. Since then, the exponential rise of AI and the broad adoption of energy-based performance metrics have validated our founding conviction that energy is not merely an input, but a structural source of value creation and competitive advantage. This shift underscores a fundamental distinction in the role of power within our business. For many, power is a reporting overlay on a legacy model or a reactive pivot to capture new value. For us, it has always been the foundational driver of our growth, the lens through which we scale, deploy capital, and allocate resources. The development flywheel we introduced earlier this year codifies that foundation. It defines how we originate, invest in, monetize, and optimize critical infrastructure assets across four interconnected stages. By aligning these stages under a single power force framework, we can systematically convert development opportunity into tangible value with increasing speed and capital efficiencies. As the benefits of this framework have compounded across our organization, our flywheel has entered a new phase of scale and execution. In the third quarter, that momentum drove the launch of our largest expansion initiative to date. Expanding four U.S. locations with a combined 1,530 megawatts of utility capacity, this initiative has the potential to more than double the scale of our platforms. diversify our presence across strategic energy markets, and position us to meet growing demand across energy-intensive applications. It underscores both the depth of our development pipeline and the scalability of our platform. In conjunction with the launch of this initiative and building on our early sector leadership in power-first growth and performance metrics, we refined our reporting framework more precisely capture the maturity and velocity of our development flywheel. This refinement is formalized in a new stage of our development pipeline, energy capacity under development, which is positioned between energy capacity under exclusivity and energy capacity under management. Capacity under development bridges origination and monetization, providing greater visibility into late-stage projects that have advanced beyond exclusivity. It applies to sites where critical development work is underway, including the execution of land and power agreements, site design, and infrastructure build-out, and engagement with prospective customers. Capacity advances from exclusivity to development, ultimately converting to energy capacity under management upon monetization. In the near term, our focus is on commercializing the four sites in our expansion portfolios. representing 1,530 megawatts of energy capacity under development. The sites range in scale from 50 megawatts to one gigawatt of utility capacity, each selected for near-term power access and the potential to support commercialization across a range of advanced technologies. Guided by our first principles approach to digital infrastructure, we continue to advance design, and commercialization initiatives with prospective customers. Where appropriate, we will seek to incorporate next generation architecture that enables rapid capital efficient deployment and the flexibility to support a range of customer requirements. Across our expansion portfolio and broader development pipeline, we continue to execute against a long held ambition to build a platform that evolves alongside energy-intensive technologies for decades to come. From the world-shaping innovations of today to the nascent ideas of tomorrow and the breakthroughs yet to be achieved, today the conversation is rightly dominated by AI. The scale and intensity of AI compute demand is unlike anything the power sector has seen. But we believe this is only the first chapter of a much longer story We believe the same power infrastructure that underpins AI in high performance computing today will over time form the backbone for a broader class of next generation technology. While it is still early, we're beginning to see directional interest from adjacent sectors that recognize that large scale power infrastructure will be foundational to what comes next. Our platform is designed for that future. and we are building it for now. As always, we will remain disciplined in how we structure and underwrite new opportunities, deploying capital only where we see a clear path to long-term value creation. We will not chase trends and will continue to prioritize durable returns over short-term gain as we try to build an enduring generational business at the intersection of energy and technology.