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.

Certainly. Everyone at this time will be conducting a question and answer session. If you have any questions or comments, please press star 1 on your phone at this time. We do ask that while posing your question, please pick up your handset if you're listening on speakerphone to provide optimum sound quality. And once again, if you have any questions or comments, please press star 1 on your phone. Your first question is coming from Alex Furlman from Lucid Capital Markets. Your line is live.

Hi, thanks guys for taking my question and congratulations on the successful IPO and the recent announcements that you've had so far. I was wondering if you can talk about your strategy for selling the remaining capacity that you have as well as the new capacity that was just announced here. Looks like the first couple of big deals you've announced have been five-year terms. Should we expect to see more deals of that nature? and then I have a couple of follow-ups there.

Yeah, sure, Alex, and thanks for the question. Look, I would start with the contract duration, because that's the easy one. We are generally trying to target five-year-plus contracts, and I think when you look at, like, the ESDS contract, by example, that's a five-year contract with two one-year options, so it has the option to get out to seven years in total. Critically within that contract, and this is what we're trying to replicate in other contracts, we're seeing the option period renewal to occur in year four. So year four, you've got to make the decision about year six. Part of our view strategically around that is obviously we think the market price will be higher in the early years. So the earlier we get that contract renewal, we think the safer those extension periods will be for us long term. So generally contracts five years is the target. If we can get those extensions and options in them, that makes a lot of sense. I think more broadly and from the thematic that we're seeing is storage is becoming a really important factor in all these contracts. And so we actually see storage as being part of the stickiness of these customer contracts as you get towards the end of term. And we really expect to see those customer contracts, you know, renew on the back of, you know, their stickiness to us fundamentally because the data we're ultimately storing on our equipment and devices. So now... That's sort of how I think about the renewals. I think renewals will occur naturally. I think storage is a stickiness and part of the egress piece that makes it really logical that customers stay with us, apart from us just having that compute capacity online. And when you get to that 50-year period, they've already been with you for a very long period and they know you. And, you know, hopefully, as we're seeing with some of our early customer contracts, they're already talking about that expansion. So, you know, that's definitely something we're thinking about from the contract renewal piece. So then... The other question was talking through our capacity and how we're looking to contract that additional capacity. So I think if you think about how we came to market in February, we said, look, 55 megawatts. We announced the ESDS contract that took us to 70 megawatts. Today, we're telling the market we've contracted an additional 30 megawatts. I think we've been very transparent that we do have a bit of a pipeline of energy assets, and we're sort of matching those two customer contracts as we're getting through customer contracts as well. So... I have at previous times described how we do that contracting process, but broadly, When we get a space like, for instance, M2, which is now our next big project that we're focused on, which is 40 megawatts in the public domain, it's a hugely valuable asset. You know, to get 40 megawatts coming on in Q4 in Australia, which is really a tier one country, is very, very easy asset ultimately to bring to market and sell to end customers. And so it's extremely valuable in the market right now. So we're actively having conversations around that those megawatts and how we place them, we're through the design process for that compute cluster down in Melbourne, for instance, and we're working through how we, you know, just match the right customer with the right customer off-take and get that contracted up. So, you know, I think you'll see us contract that, you know, in the near term, and then we'll announce that and we'll talk to, you know, the other bits of capacity, you know. With the additional 30 megawatts that we've announced today, some of that is in Australia, some of that is in New Zealand. And so we are thinking about, you know, with specific customers for specific end use cases, how those megawatts are going to come online in that space.

Okay, that's really helpful. And then, you know, you mentioned M2. Just kind of curious what your opportunities are with that, right, having a contiguous 40 megawatts to be able to market? I mean, obviously, you could be selling that in, you know, 5 or 10 megawatt chunks like some of the deals we've seen so far. What kind of opportunities are there for you to use a 40 megawatt block that you might not have had with some of the smaller allotments

Yeah, I think you hit it spot on. I think 40 megawatts is a size that's likely to go to a large single customer. So I think when we talk about our customer profile, we've had hyperscalers in the pipeline. We've got AI and ADS and we've got enterprise customers. I don't think 40 megawatts is going to be broken up into a lot of small enterprise customers. It's going to fit into the first two categories. So either a hyperscaler, a large LLM or an AI native enterprise will be the logical offtakers around that sort of contract. So slightly different profile of customers slightly different use case and I think we're looking at a lot of this very much with a lens around storage and you know we want customers that are going to grow not just in the GPU compute but also grow from the storage compute perspective and so we're definitely having those conversations with customers where we think we can add value over time into these contracts because we're seeing in those early customer contracts that the storage demands are exploding, and we're trying to find customers where we find, not just from the face value contract, but that expansion opportunity through the customer lifestyle.

Okay, that's helpful. And then lastly, you know, great to see that you secured another 30 megawatts of power. Interesting that some of that's going to be outside of Australia in New Zealand. You know, curious what kind of a line of sight you have to – additional power availability down the road beyond the 100 megawatts? And are you actively looking at potential data center opportunities in other countries outside of Australia and New Zealand, just trying to understand the roadmap here?

Yeah, so look, I won't talk to, you know, I think what we've done very, very well is trying to not get over our skis the entire time we've been out, you know, since we've been listed and when we've come to market and spoken about this. So, you know, as I said, back to the 55 in February, customer announcement 70, 100 today. I think, you know, we recently did a non-deal roadshow in North America, caught up with a lot of investors that participated in the IPO and the message was, was give us a little bit more guidance about megawatts. And that's what we've tried to do. We've tried to meet some requests for some forward pipeline. And we're confident we have a lot more megawatts in the pipeline ultimately, but we're trying to match those megawatts or when they can come on, who the end customer is, and really go through a bit of a matching exercise around those megawatts to current customer demand. And so guiding towards the megawatts we're announcing are, near a term in nature and we're really trying to find near a term customer contracts attached to those near term megawatts. We're going to stay in our region geographically and what we are seeing is there's for GPU compute in the region is absolutely outweighing the supply. So we're just focused on trying to find those premium global customers that are operating in Asia Pacific, and specifically customers not with just raw GPU compute, but with storage requirements as well.

Okay, that's really helpful. Thank you very much.

Thank you. Your next question is coming from Brett Noblak from Cantor Fitzgerald. Your line is live.

Hi, guys. Thank you for taking my question. Nice to see the additional contracts. I want to spend a minute talking about visibility into GPU deliveries. It feels like you guys are bringing on compute quite quickly, given when these deals are being announced. And what we're hearing is anything in 2026 is effectively going to get sold. So I guess, what advantage do you guys have in terms of announcing a deal, call it yesterday, and saying in four months you're going to be able to start generating pure revenue?

Yeah, so I think there's no... No surprise that, you know, capacity is constrained in 2026. And, you know, what we're seeing for our OEMs, depending on, you know, what form factor you're looking at, and look, we're generally building out in GP300s. We're sort of seeing that 12 to 14 weeks on GPU. network's a little bit longer but we've got really good supply chain partners and our relationship with wwt really helps that um and depending on ultimately who the end customer is you know there's obviously some incentives to try and get these things uh online as fast as possible but for instance we do try and get ahead of some of that supply chain aspects so We have pre-ordered network for the AKB 300 cluster, which enables us to bring some of that timeframe in. And so the longer lead items we are trying to get ahead of from an engineering perspective and procurement perspective. So we're feeling pretty good about our delivery at this point in time and just trying to make sure we manage that to customer expectations.

Awesome. And then maybe just on the, The CapEx and funding side, I think between the two recent deals, we're looking at maybe $700 million or so of money that needs to be spent on GPUs. When should we expect the timing of that to kind of hit the financials?

Yeah, so I think from, you know, timing the capex, well, we brought in curing some of the capex as a sort of indicator. We've gone out and we've spent and pre-ordered storage, for instance. We've pre-ordered network. So some of those longer lead components, we've tried to get ahead of the curve. You know, we're very fortunate with some of the storage deals that we did. We got in prior to some projects. So, you know, we got ahead of some of that, you know, some of that capex. So, you know, we bought about 70,000 GPUs worth of storage to get ahead of the curve on those things. Broadly, capex, if I could guide you, about $39 million a megawatt at present. All in, that's with all the non-reoccurring costs, so the data center inclusive for that. So we're seeing a little bit of, you know, a bit of movement there, but well within the numbers that we planned for and we've sort of disclosed to. But, you know, we're seeing very good order timeframes around that. And then I think, you know, to the capital requirement, we're funded fundamentally from all the equity components for all the currently announced contracts. So between the Oak Tree note, which is due to close early next week, and the IPO proceeds plus customer deposits, we're in a fairly good position from that. We have appointed Jardin domestically up here for the GPU financing route. We have several term sheets, and it's just a matter of us matching the right financing the right term sheet to our ultimate financing desires, I think. So we're very focused on that. We're very, very well advanced on it. So as I said, we're materially advanced enough that we're negotiating term sheets around the debt piece.

Awesome. And then maybe just to hammer home on one point, the additional 30 megawatts that you're talking about by early 2027, should we be expecting, call it by early 2027, 100 megawatts, give or take, of kind of contracted deals? to be up and running.

I think you could guarantee that will be signed, the 100 megawatts. I'm very confident it's going to be 100 megawatts. Perfect. Really appreciate it, guys. Thank you.

Thank you.

And once again, everyone, if you have any questions or comments, please press star then one on your phone. Your next question is coming from Michael Donovan from Compass Pointe. Your line is live.

Hi, guys. Thanks for taking my question. Congrats on progress. I was hoping we could talk about pricing, trends that you're seeing in general for GPU hour, and just customer demand in general for inference. You mentioned storage. So how should we think about customers that do require storage versus just the bare metal compute? Appreciate it.

look uh and i i i'll be look customers each customer's got their own piece and and what their own needs but you know if i talk to you on a megawatt basis we're seeing you know around that 15 million a megawatt uh uh you know from a revenue perspective um that's with a an allowance for some storage. And so if you think about the broader entity, you know, reference architecture, three pib of storage to a 1K cluster is a, you know, broad rule of thumb. What we're now seeing from those customer contracts are, you know, requests of six, nine, and 12 pib. So, you know, 3, 4X the storage component compared to the standard GPU component on the compute clusters. And for us, the storage is quite a high margin component and it's a real value add proposition within the business. So if we think about that, it's really an opportunity for us to get additional revenue but it's different additional revenue on these contracts not just in year one but what we are seeing is your customers get six months into a contract and go we need some additional storage what what are we going to do but then they're already hooked uh on your gpu platform so it's it's quite a easy upsell at that point in time so you know the yeah i'd say that about you know broadly the technology piece the as you've highlighted i think everyone knows market pricing is very strong at the moment giving the scarcity of compute so if you can bring on capacity this year you're in a very strong position um and that material that material materially outweighed outweighing demand and supply dynamics means that, you know, we've seen really strong customer pricing and the customers are really trying to lock in those longer-term contracts because I think what they're seeing is the spot pieces are a lot scarier. Appreciate that.

And then also we could talk a little bit about the tech side and your relationship with vast data. How important is that relationship there and what exactly does it provide you?

Yeah, so vast is out. You know the storage piece on top of that on top of you know that sits alongside the GPU piece and we've got a phenomenal relationship with vast. They've got an incredible technology stack and we are looking to how we further integrate that relationship with vast and they have some amazing tools that allows us to really allow that AI compute access into the data layer to work really, really efficiently. And you know it's. It's becoming, storage becomes that story of 2026 in our mind. You need more and more of that, you know, specialised storage and storage tools that integrate well into your inference engine to get those workloads working really efficiently for the end customer. So, you know, we're making great margins on storage generally and we want to continue to see these customers want more storage for every deployment because it's a great value add for us as far as a business.

Great. Appreciate that.

Thank you. That concludes our Q&A session. I'll now hand the conference back to management for closing remarks.

Please go ahead.

Hi and thanks everyone.

I just want to take a moment to say thank you for joining our first Q1 2026 earnings call. It's the first one since we've listed on NASDAQ and it's one of many more to come. So I really want to thank our staff, our team, all our support from, you know, internal and external stakeholders and our shareholders. You know, if I look back at our business, it's expanding significantly and we continue to see both, you know, Australian and rest of the world demand materially outweighing supply. Having upgraded our expected data centre capacity twice this year from the initial 55 to 70 and now to 100 megawatts and, you know, with the funding in place with the previously announced 350 convertible note, we're well placed to continue to grow our customer base over the coming quarters. And we just want to reiterate that we continue to see that strong demand across enterprise, hyperscale, research, government, and AI native sectors throughout Australia and the Asia Pac. So we're really looking forward to future announcements and getting together with everyone on the next earnings call.

Thanks a lot.

Thank you. Everyone, this concludes today's event. You may disconnect at this time and have a wonderful day. Thank you for your participation.