IREN Limited

Thank you for standing by, and welcome to the I-Rent Second Quarter Fiscal Year 2025 Results Conference Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you'll need to press star 1-1 on your telephone. If your question has been answered and you'd like to remove yourself from the queue, simply press star 1-1 again. As a reminder, today's program is being recorded. And now I'd like to introduce your host for today's program, Lincoln Tan, Director of Investor Relations. Please go ahead, sir.

Good afternoon to those joining us from North America, and good morning to our listeners in Australia. Welcome to IRON's second quarter FY25 results presentation. My name is Lincoln Tan, Director of Investor Relations, and I'm pleased to be joined today by Daniel Roberts, co-founder and co-CEO Belinda Nusifora, CFO, and Kent Draper, Chief Commercial Officer. Before we begin, please note that this call is being webcast live accompanied by a presentation. I'd also like to remind you that some statements made during this call may constitute forward-looking statements. These are based on certain assumptions and subject to risks that could cause actual results to differ materially from our expectations. Listeners should not place undue reliance on these statements and please refer to the disclaimer on slide two of the accompanying presentation for further details. With that, let's get started.

Over to you, Dan. Thanks, Lincoln. Good afternoon, everyone, and thank you for dialing in to our Q2 FY25 results presentation. So straight into the highlights, a record result in Q2 underpinned by Some pretty rapid growth over the last six months, 12 months, and low cost Bitcoin production. So the investments we've made in scale and efficiency over the past 12 months, as you can see, are starting to flow through to our earnings. $18.9 million of NPAT recorded last quarter. We expect this continued earnings momentum in tandem with that growth profile, noting that the 31 exahash of energised capacity was only achieved at the end of the second quarter. And you can see that the average operating hash rate for the prior quarter was substantially lower than that. So as we continue into ramping up to 50 exahash by the middle of this year, we expect to see those numbers to continue to grow in parallel. Final point on this is to note that, yes, every miner's strategy and financials are slightly different. But these financials are not impacted by any Bitcoin revaluations. We don't hold Bitcoin on our balance sheet. There's no fluctuations in the value of those up or down, sideways. And consequently, our results reflect the pure profitability of our underlying operations. On the growth front. Three key initiatives which we'd like to highlight today. So firstly, we're excited to announce Horizon One. Horizon One is our new 75 megawatt liquid cooled AI data center to be delivered at Childress this year. 75 megawatts of capacity translates to around about 50 megawatts of IT load. And what we've seen, particularly coming into the start of this year, it's increasingly clear that that there is a strong market opportunity for us to capitalise on the shortage of liquid-cooled data centre capacity. So as many of you would know, the liquid-cooled Blackwell GPUs from NVIDIA are in the process of coming to market and the required rack densities are continuing to escalate with this generation and subsequent generations of GPUs. So we are future-proofing this deployment. We're designing and building for densities of up to 200 kilowatts per rack, well beyond the 120, 130 kilowatt rack density required just for the Blackwell GPUs. So we're excited. There appears to be a real scarcity of liquid-cooled data center capacity, and we feel that we're in a relatively unique market position to deliver this type of capacity in a relatively short timeframe. Secondly, we're excited to announce the development of Sweetwater 2, a new 600 megawatt site that will further strengthen our position in West Texas. Situated around 28 miles from the 1.4 gigawatt Sweetwater 1 project and about 39 miles from Abilene. This expansion would create a two gigawatt data center hub at Sweetwater with design work already underway for a direct fiber loop between the two sites. We've secured over 500 acres of land. We're in the process of finalizing a 600 megawatt grid connection agreement with a target energization date of around 2028. Now, one important caveat, We always talk about ones and zeros with grid connection agreements. We do not have one yet. So at the moment, this is a hypothetical project. However, we've chosen to disclose the details today for two key reasons. One, this project is in late stage development and we're getting closer to the execution of binding agreements. But secondly, the two gigawatt data center hub, it potentially creates with Sweetwater One, is material to the market opportunity we are seeing in West Texas. So while this is still a project under development, Sweetwater 2 would provide yet another organic growth pathway for our AI and mining business. However, more importantly, expands upon the potential value of the single site AI opportunity at Sweetwater, something that we'll come to a little bit further on in the presentation. Finally, let's not forget about the rapid expansion of our Bitcoin mining business. Our operations from 31 exahash today to 52 exahash this year. We're dedicating 75 megawatts of Childress Phase 6 to Horizon 1. And as a result, this adjusts our prior expansion plans from Bitcoin mining from 57 down to 52 exahash. But to reiterate, we remain on track to hit that 50 exahash target by mid this year. The 500 plus site team at Childress continues to be well positioned to deliver 50 megawatts every month of data centers. In terms of the corporate and funding update, we're pleased to confirm that US domestic issuer status and US GAAP reporting will commence from half to 2025. Our balance sheet remains robust. We closed our oversubscribed convertible note at the end of 2024 and recently put in place a $1 billion ATM facility to provide flexibility to fund growth initiatives. However, market conditions, as we've all seen, are very dynamic and we are always looking for ways to optimise our capital structure and we remain continuing to evaluate alternative funding options. Finally, in terms of investor distributions, as you can see from this result, there is significant operating free cash flow being generated. However, from a capital management perspective, we've made a decision to accelerate our investment into the strategic initiatives that I've outlined, and as a result of deferring the consideration of potential investor distributions. So into a little bit more detail about Horizon One. As mentioned, we are planning to deliver a 75 megawatt liquid-cooled AI data center within Childress Phase Six, targeting completion the second half of this year. That will support a 50 megawatt IT load and include the installation of backup generators and UPS systems for power redundancy. Building this as part of Childress Phase Six, you can see on the map in the blue overlay. It is designed to support 200 kilowatt rack density, well beyond what's required for the NVIDIA Blackwell GPUs, and consequently with an eye to be able to accommodate future increases in rack density architecture. We've been working with a leading global EPC firm to deliver this project and leveraging our existing data center footprint with an estimated build cost of $6 to $7 million per IT megawatt. So why, why are we doing this? Well, liquid cooling is a key priority for large scale customers. And what we've observed is a very limited availability of liquid cooled data center capacity able to come online in 2025. Meanwhile, the liquid cooled NVIDIA Blackwell GPUs are expected to ship in more meaningful quantities in the second half of this year. Iron is uniquely positioned to address this growing market demand, leveraging our immediate access to power and our existing infrastructure onsite. 50 megawatts of IT load is a size that appeals to both smaller as well as larger customers, and also caters to NVIDIA's reference architecture, allowing a single cluster of up to 16,000 Blackwell GPUs. We have a unique opportunity to move fast, in a market which is changing quickly. Horizon One will enhance delivery certainty for customers. It helps them cut through the chicken and egg dilemma by showing them more concrete plans around design and delivery. Initially, we're focused on Childress and building out a multi-tenant site there. We're engaged in meaningful two-way dialogue with a variety of prospective customers, noting That again, Childress will be prioritised for multi-tenant co-location in respective AI data centres, preserving the Sweetwater data centre hub and Sweetwater One site for more single site opportunities, which I'll come to later in the presentation. So uniquely, we have this opportunity to continue to scale this approach across our entire portfolio, something which we are actively looking at. Noting, of course, that the critical piece, access to the grid connection, the power and the land, is already secured. With grid connections already secured, we're seeing it's four to seven years to bring these projects from origination into the real world. The data centre buildings are already in place. All we need to do is to continue to install liquid cooling and power redundancy to scale up this side of the business into the market demand. So the two gigawatt Sweetwater data center hub. We're very excited to announce our new 600 megawatt Sweetwater II development. We're in the process of finalizing the grid connection agreement. As mentioned earlier, it's situated on over 500 acres of land, 28 miles from Sweetwater and approximately 39 miles from Adeline. Design work has already commenced on a direct fiber loop between the two data center campuses to support network connectivity, and create this two gigawatt data center hub. We expect it to energize around 2028. And again, I'll caveat this, it's not signed yet, so there's absolutely still risk around this development. But the development process has been in the works for some time. We feel it's getting closer to a potential outcome. Importantly, in the context of our strategy, how we're thinking about Sweetwater One and the single site, this two gigawatt data center hub it potentially creates with Sweetwater One is material to the market opportunity we are seeing in West Texas. In terms of the existing 1.4 gigawatt Sweetwater One project, it's full steam ahead towards energisation in 14 months. Procurement is well underway to support energisation of the full 1.4 gigawatt bulk substation and additional primary substations all by April next year. As mentioned earlier, we're working with a leading EPC contractor with experience on hyperscale deployments, general site and civil works to support construction are commencing shortly. Clearly with the recent market announcements, there's an increasing level of focus and interest on West Texas as a data center market. Accordingly, this is a very exciting opportunity for Iron to build one of the largest data center sites and maybe hubs in the world. I'll touch a little bit more on how we're thinking about this site strategically later on in the presentation. Large scale, low cost Bitcoin mining. So two key pieces I'd like to reiterate today. One is the scale of our operations. 31 exahash installed. It was on time as we said it would be. We're on track for 50 exahash in five months and then 52 exahash shortly thereafter. This delivers economies of scale today and will continue as we continue to expand. We've got a demonstrated track record around operations, our uptime and ability to deliver projects on time. The second point I'd like to make is we are a low cost producer. It supports strong unit economics and ultimately earnings for shareholders. Since announcing our plans in May last year to expand, all of the investments we have been making are starting to flow through to operating efficiency and earnings. We have best-in-class efficiency at 15 joules per terahash. Our spot pricing strategy has delivered actual power prices of 3 cents a kilowatt hour, where the majority of our operations are today at Childress. Finally, you've seen this to start to show in our quarterly earnings, but also in our monthly updates. Our hardware profit margin is over 75% now as we've scaled over that 31XR hash mark. So the expansion to 52 exahash, as we've discussed, allocating 75 megawatts of Childress Phase 6 to support Horizon 1, adjusts our prior mining expansion plan from 57 to 52 exahash. To reiterate again, our 50 exahash target remains on track to be delivered in whole in the next five months. Continuing to build, 50 megawatts per month of data centres at Childress. The efficiencies that we have with large single site expansions, 500 people on the site, effectively copy pasting every single building. As you can see on the right hand side, the schematic diagram that reflects our data centre construction status. To the extent you're interested, you can continue to track our progress in our monthly updates. Our mining economics remain strong. We've seen the material step up in earnings and cash flow generations as we scale up. And on the left-hand side of the page, you can see some illustrative economics that reflect where we are today and where we expect to go. So the escalating power shortage, and escalating seems to be the only word that we can use given what we're seeing in the markets. Clearly, it's been a very interesting couple of weeks with Stargate and DeepSeek. However, if we look through some of this volatility, nothing has changed for us. If anything, we've seen an uptick in observed interest in cloud and co-location services. AI doesn't live in a vacuum. Humans crave more and more, particularly if it gets cheaper over time. And I think the Wikipedia page for Jevons Paradox has never seen so many hits over the last two weeks. So on this slide, we illustrate two market dynamics that are relatively well documented. The first is hyperscale capex continuously being revised upwards. The second is the power scarcity dynamic looking at a 36 gigawatt shortage in data center capacity across the US. With over two gigawatts of secured grid connected power and land, This creates a compelling opportunity for Iron. This two gigawatts, 2.3 to be precise, is not hypothetical potential megawatts. This is power that is either flowing today or is secured by binding into connection agreements with utilities being delivered by April next year. This slide essentially summarizes the macro backdrop of the opportunity for us here at Iron. Picks and shovels for the digital age. So just to change tack for a moment and share a bit about our history, why we are in this position and ultimately set the scene for my final slide where I'll discuss our strategic focus. Will and I have been setting this platform and gearing up for this market backdrop since day one. There's been no pivot. This has been a deliberate strategy. It can be traced back to our earliest investor presentation, as you can see on the right-hand side, in 2020, a vision which has remained unchanged. The value then and the value now is in access to large-scale renewable energy required to power the future of supercomputing. Whether that be Bitcoin mining, whether that be AI, two super trends that are front of mind right now, as well as whatever comes tomorrow. We have delivered on our strategy to bootstrap a large scale and profitable business with Bitcoin mining and continuing to leverage that asset base into new higher value and new increasingly interesting use cases such as AI. Our team's depth of experience in energy infrastructure, data centres have allowed us to organically develop a leading data centre platform from the ground up. And our ability to continue to find and incubate greenfield opportunities and then execute upon them is a very important differentiating factor and an enormous opportunity for us in this power constrained and constantly evolving market. Finally, we've covered a lot over the past 20 minutes. So to try and tie it all together and highlight how Will and I are thinking about our strategic priorities. The market context, as we've covered, presents significant opportunities for Iron. The escalating demand for power and liquid data, the escalating demand for power and liquid cooled data center capacity, as long with the increasing institutional adoption of Bitcoin. If we start with our existing data centers in British Columbia, they continue to mine Bitcoin profitably and generate positive free cash flow. But how are we thinking strategically about British Columbia? Well, firstly, we continue to grow our AI cloud services business in a sensible way. Currently operating side by side with Bitcoin mining. As many of you would have seen in our Prince George data center, we have Bitcoin mining ASICs securing the Bitcoin network operating right next to latest generation NVIDIA H100 and H200 GPUs. providing cloud services to AI clients. This is something that we will continue to explore, and it's been pleasing to see even an uptick in observed demand post deep seek. In addition to that, we're continuing to explore AI co-location opportunities at these sites. Again, that strategy of bootstrapping sites with Bitcoin mining, and then as higher and better value use cases come along, looking to insert them on our infrastructure base. At Childress, fair to say it's a very exciting data center campus today and a hive of activity. We're growing Bitcoin mining capacity to 52 exahash this year and continuing to generate, again, significant operating cash flows and profitability from these operations. However, we're also really excited about delivering Horizon One, our 75 megawatt liquid cooled data center to be brought online this year. The way we think about Childress strategically is as follows. Firstly, once again, underwritten by Bitcoin mining, as was the plan five years ago, as is the plan going forward. Then utilize the site for higher value use cases as they emerge. We believe liquid cooling AI data centers is likely to be one of those and are accelerating our investment into this space. Importantly, from a strategic standpoint, we view Childress as a focus for multi-tenant co-location, preserving Sweetwater, which I'll come to in a second, for a potential single site deal and tenant. Sweetwater, the Sweetwater data center hub. So we have terminated the site sale process with Morgan Stanley. We're now working with a range of different advisors, brokers and partners on a broader range of opportunities where almost all of those opportunities now involve us retaining long-term ownership of the site. Given the scale of the site and the market backdrop of hyperscalers chasing one gigawatt plus single site campuses, we are prioritizing Sweetwater One as well as the emerging Sweetwater Data Center Hub for a whole of site single tenant co-location opportunity. Sweetwater Two and the potential creation of this two gigawatt data center hub in West Texas only goes to further strengthen the strategic opportunity in this area. In the meantime, as we continue to explore those conversations, we will retain flexibility to once again bootstrap this site with Bitcoin mining as we've done with the rest of our portfolio since day one. Belinda, over to you to cover the financials. Thank you.