SharonAI Holdings, Inc.

Good day, everyone, and welcome to the Sharon AI First Quarter 2026 Conference Call. At this time, all participants are placed on a listen-only mode. If you have any questions or comments during the presentation, you may press star 1 on your phone to enter the question queue at any time, and we will open the floor for your questions and comments after the presentation. It is now my pleasure to hand the floor over to your host, Ross Barrows, Head of Capital Strategy and Investor Relations. Sir, the floor is yours.

Good afternoon and welcome to our earnings call to discuss Sharon AI's operating results for the quarter ended March 31, 2026. Joining me today is James Manning, Sharon AI's chief executive officer, and Tim Broadfoot, Sharon AI's chief financial officer. I'll now take a moment to read the safe harbor statement. During the course of this conference call, we may make certain forward-looking statements within the meaning of the federal securities laws. including statements regarding our expectations, plans, prospects, strategies, future operating results and financial performance. Although they reflect our current expectations and are based on our current view of the industry and our business, they are not guarantees of future performance. These statements are subject to risks and uncertainties that could cause our actual results to be materially different from those expressed in these statements and speak only as of the date of this call. For more details on factors that could affect these expectations and cause these differences, please see our most recent Form 10-K and Form 10-Q and other SEC reports filed with the Securities and Exchange Commission and available on the SEC's website and in the Investor Relations section of our website. Share and AI undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information or future events. In addition, during this call, we may discuss certain non-GAAP financial measures. Reconciliations to the most directly comparable GAAP measures and related disclosures are available in today's earnings release and or on our Investor Relations website. I'll now turn the call over to James.

Hello, everyone, and welcome to Sharon AI's first quarter 2020 C-Service call. My name is James Manning, and I'm the chairman, CEO, and co-founder of Sharon AI. This is our first earnings call since we listed on NASDAQ, and we plan to work with the following format. A brief summary of the quarterly highlights, a short overview of what Sharon AI does for those who don't know our business, some insights into the specific events over the quarter, and a brief business outlook. Finally, we'll have some time for some Q&A at the end. And what an amazing first quarter it's been as we transition to life as a public company. Just looking through this chronologically, in January, I was appointed CEO of Sharon, replacing Wolf Schubert, who continues to work with the Sharon team on their North American projects. In late January, we executed definitive agreements for the sale of Texas Critical Data Centers, and I'll talk to that a little bit more later on. In February, we listed on NASDAQ under the ticket code SHAZ, S-H-A-Z, in a transaction with Soros rates $125 million led by Lucid Capital. And we formalized our agreements with Canva, Sunny, and MSF. In March, we signed GMI, and then we executed the ESDS contract. And today, we are announcing our upgraded data center capacity to 100 megawatts by early 2027. Against all of this, we continue to build our team and government structures, continually improving the way we operate. Importantly, we added Ben Adams and Drew Kelton to the board, both in a non-executive director capacity. So who is Sharon AI? And Sharon AI is one of Australia's leading AI clouds. We deliver AI-native HPC-grade computing infrastructure for our customers with the goal of servicing three primary customer segments, hyperscalers, AI-natives, and enterprise. And we do this by partnering with global leaders in industry to deploy the latest generation of GPU compute. While geographically deployed in Australia, our customers are truly global in nature. Our recent customer wins reflected its story with regional compute contract for global compute needs. And this reflects the desire to deliver mission critical workloads in safe and secure compute environments. Australia's geographic location in the world means it's well suited to respond to GPU compute demands, being both close enough for latency, but far enough away from a security perspective. And latency remains an important consideration for GPU use, but arguably less so than most people think. While it's shared geographic location in the world is somewhat isolated, the upsides really outweigh the downsides. We're only 81 milliseconds to Singapore, 130 to Hong Kong, 165 to the west coast of the US, and 225 to the east coast. And while latency is a factor in the way you think about your compute loads, the security benefits of being slightly remote in Australia and servicing that Asia-Pacific region far outweigh the time differences. It's also worth calling out that some of these inference workloads are not as latency sensitive as people believe. And I think the key message for us is that Chain AI, while Australian headquarters, we are Asia-Pacific focused and really servicing compute loads for the entire world. So what is important for a Neo Cloud to succeed? And in our mind, we're solving for one thing and it's scarcity. And we think about it in four broad buckets. We think about the scarcity of computing. Being one of two NVIDIA Cloud partners in Australia at scale, it gives us that sustainable advantage in accessing NVIDIA GPUs. But it's not just the relationship with them. It's the relationship with our OEMs and our partners like WWT that help us procure and deploy that compute at scale and on time. How you get access to power, the scarcity of power is a real component to getting GPU compute workloads on time and online. And so, you know, late 2025, we secured 50 megawatts with Next DC. And today, you know, we've announced that we've expanded that total energy capacity in Australia to north of 100 megawatts for early 2027. The regulatory environment makes scarcity even more complex because not all countries have access to the latest generation of GPUs, and Australia is very fortunate to be a close ally of the US and have that ability to access the latest generation GPUs. And finally, scarcity in talent. And people are so important to our business. And we think having a really experienced team like we do with high-performance compute expertise gives us a differentiator in the market in October. It's fairly simple, guys. The fastest trained models equals the fastest inference, the best insights, and the most innovation. And all of that all requires accelerated computers of service. And that's what an AirCloud is. And we sit right in the middle, between the hyperscalers and the AI natives or the enterprises and the consumers of that data. We're the fabric that pulls together multiple vendors and solutions to drive the fastest accelerated computing. And we achieve that through our partnership-driven model, leveraging the best-in-class expertise across the value chain, both global and domestic, across the hardware, power, security, connectivity fabrics. And by doing this, we reach the market significantly faster and more capital efficiently than the traditional vertically integrated providers who deliver that GPU as a service. And with all that infrastructure in place, commercial success requires two additional components, a really strong go-to-sales, go-to-market and sales strategy, and high-performance connectivity into those customer environments. And at Sharon, we don't try to earn everything, and we have these great partnerships who add that value and ensure our service offering gives us those two huge advantages, which is the best-in-class expertise in every single layer and the ability to move much faster and more capital-efficiently than vertically integrated players. So with the scarcity solved and partners in place, it's on to how we contract. Contract signing isn't where it starts, however. And before we contract, we spend a considerable amount of time behind the scenes working with our DC partners, OEMs, and our internal engineering team to find the best technical solution for the space we are operating in. Once we had that design, we typically run a customer engagement process where we talk to both the available capacity and the compute form that we think we should deploy. Once we find the right customer for that space, we agree principal terms and we sign these non-binding term sheets and move to an MSA agreement. From contract signing, it can take us between three and seven months to deliver the compute infrastructure for the customer. We take delivery, we test, deploy the compute. We verify it's all operational and we hand it over to that customer. The majority of our contracts are five years and all of them are generally take or pay. While an average hourly rate might be inferred by these contracts, the take or pay nature ensures that we're paid for 100% utilisation, which gives us clarity on our revenue forecast. At the end of the term, we can then enter a new multi-year contract or reuse the compute for our on-demand compute platform. And so what's actually converted this quarter? And I think we've announced three meaningful contracts. Firstly, it was Canva. And while it was a financially material contract in its current form, it did highlight the power and the value of the sharing AI platform and how we could provide Canva with both speed and output improvements. We are really confident with that relationship and that we'll be able to expand those services over time. We then won GMI Cloud. GMI Cloud is an AI-nated inference cloud provider in the US and in our largest customer contract state, which was ESDS. And ESDS is an Indian-based IT service provider, where that contract spans a $1.25 billion TCV over five years, with those contracts to revenues expected to begin in September this year. And while not in this quarter, this week we announced a $950 million five-year table pay contract with a global technology company with a major Asia-Pacific presence, with revenue expected to commence in the third and fourth quarter of 2026. Curiously, This takes our TCV to more than $2.2 billion contracted, and we expect our exit 2026 revenue run rate of at least $470 million. And so while we made great progress on customer wins, we also crystallized the gain from our project in Texas, in Texas Critical Data Centers, or TCDC. In January last year, we established a JV with our partner, UERA Energy and Digital. And over the course of in two separate transactions. We signed a non-binding LOI with a hyperscaler. We did a bunch of engineering design work. We then went into exclusivity with a hyperscaler. In late 2025, we agreed to exit that. And in January, we consummated that in a transaction that saw us realize $74 million, generating a material return to the business. While these development opportunities are non-fall to our business, they can be highly profitable. This won't be a material part of our business going forward, but we do reserve the right to continue to explore further opportunities in this space. We can recycle this non-voluted capital and it can be an accelerator for our core GPU business. And now I might just turn to our outlook. So we remain incredibly confident in the ongoing growth of our core operations. We continue to see both Australian rest and world client demand materially outweigh the GPU supply coming to market at scale and in a timely manner. Our position of one of Australia's leading NVIDIA cloud partners, or NCPs, together with our strong partner network, positions Sharon and I to continue to capitalize on these strong GPU market dynamics. And today we've announced the expansion of our data center capacity from 70 megawatts in 2026 to over 100 megawatts in early 2027. This reflects our ongoing ability to secure additional power allocation and data center capacity from our network of data center partners. And lastly, but certainly not least, we've made significant additions to our technical management team to support our expected growth. Our people are integral to our ongoing success. Before closing, I'd just like to thank all the people at the Sharon AI team, our partners, investors, advisors, and all the stakeholders that have supported us over the last three months in particular, but really over the last couple of years. We are really excited by what we've achieved in the short timeframe that we've achieved it, but we're even more excited about the opportunities still in our head. Operator, please open the line for some Q&A.