SharonAI Holdings, Inc.

Good day, everyone, and welcome to the Sharon AI second quarter 2026 conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. 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. Welcome to our earnings call to discuss Sharon AI's operating results for the quarter ended June 30, 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 may 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. Sharon Iyer 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 Iyer's second quarter 2026 earnings call. I'm James Manning, CEO and co-founder of Sharon AI. I'll begin with the highlights from the quarter and an overview of our market position. I'll then cover some of our recent customer wins and I'll talk about some of the additional capacity and our capital strategy moving forward. The central message from the quarter is that we have materially increased each of the three inputs required to scale this business. AI factory capacity, contracted customer demand and capital. Let me give you the headline numbers first, then I'll unpack them. As of today, we have 212 megawatts of total secured AI factory capacity across Australia and New Zealand, which is an upgrade of 80 megawatts from our last guidance of 132 megawatts. 120 megawatts are contracted through multi-year table pay agreements, and I'll expand further on the updated capacity shortly. We expect to have more than 64,000 NVIDIA GPUs deployed by mid-2027. We've raised approximately 2.2 billion US dollars of capital since December 25 and we've executed roughly 8.8 billion of total contract value year-to-date. Three months ago, our portfolio was comprised of 100 megawatts capacity and 2.2 billion dollars of TCV. So the contracted book has grown by roughly four times and our secured capacity has more than doubled since. That demonstrates both the strength of demand and our ability to expand our supply to meet it. On customers, the standout is a six-year strategic compute collaboration with Nvidia worth $4.9 billion in total contract value. Alongside that, we've signed a five-year table pay agreement with a global AI lab worth $1.32 billion and a five-year table pay agreement with a global technology company worth $950 million. A few days ago, we secured a five-year take-home pay agreement with a global AI platform worth $373 million in TCV. Notably, this is a B300 deployment with a record price of over $4 per GPU hour. On platform, we have a growing pipeline beyond our announced capacity, and we've expanded our partnership with Vast Data to 600 petabytes of storage commitment. provided sufficient back-end infrastructure to support continued growth of up to 100,000 GPUs. On capital and governance, we completed a $1.6 billion oversubscribed financing round in June, which followed a $350 million convertible note in April. We've made three significant leadership appointments, Anuj Gul, formerly of Macquarie Group, joins as our CFO, Melissa Anastasia joins as our chief legal officer and Andrew Penn has been appointed as the non-executive chairman of the board. Bringing in CEE the leadership of Andrew, Anuj and Melissa's calibre strengthens our government's ability to execute shared AI as shared AI enters its next phase of growth. I'm delighted to welcome the multiple new team members we have added across the organisation, including technical, operations and sales to the team. Sharon AI is a leading Australian Neocloud and trusted AI infrastructure partner. Sharon is purpose-built to power the next generation of artificial intelligence and high-performance computing. We do so through our partner-led ecosystem, enabling our customers to confidently build, train and deploy AI that drives productivity, innovation and growth for their customers and themselves. What that practically means is we design and operate AI infrastructure optimized for large-scale training, inference, and high-performance compute. We deliver GPU as a service, AI platform layers, and high-performance storage as one integrated solution. And we serve enterprise, government, hyperscaler, and AI natives. I'm often asked, why are we well-positioned? And I like to think of it this way. Our NVIDIA cloud partner status supports our prioritised access to NVIDIA's latest generation of GPUs. Our networking, storage and orchestration are purpose-built for AI HPC workloads. Our Australian New Zealand hosted sovereign infrastructure is particularly relevant to regulated and related sensitive customers in the region. A capital efficient deployment model is built around partnering with leading data centre operators to deploy their tier 3 and tier 4 facilities. and by co-locating with the improvement data center infrastructure we accelerate our deployment reduce capital requirements and minimize the development risks associated with greenfield builds finally while we're headquartered in australia our customers are global and our contract to it wins this year emphasized just that point i said last quarter that we solve for one thing and that's scarcity and using that framework, which hasn't changed, I'd argue this quarter has validated it on all four fronts. From a GPU allocation, finally access to NVIDIA's GPUs remains one of the most critical constraints in this market. Manufacturing constraints and demand from hyperscalers continue to limit the supply available to everyone and emerging providers are facing long lead times. NVIDIA Cloud Partner status and now a six-year collaboration with NVIDIA puts us in a unique position to provide access to AI compute. Power. High-density GPU clusters need substantial, reliable power. However, ready data center sites with source power are becoming increasingly scarce due to grid constraints and long regulatory queues. Our multi-site data center relationships underpin our secure capacity, which has now grown to 212 megawatts. On the regulatory front. Data residency and sovereignty requirements are becoming increasingly important across a number of markets. That trend supports our locally hosted model and we extend our footprint this quarter with our first New Zealand facility. And finally, on capital and talent. Executing in this market takes significant capital and highly specialised HPC talent. Our successful capital ratings to date address the first issue, and our senior hires, as I mentioned earlier, address the second, in addition to our ongoing technical team build-out. So let me spend a bit more time on NVIDIA and our relationship. This is our first of its kind partnership, six years and initial 72 megawatts. 40,000 GB300s and $4.9 billion of minimum revenue or an average of $817 million of revenue per annum at implied base rates. But this partnership does two things. It expands our ability to provide computer access to the broader AI ecosystem, namely AI-made decent enterprise customers, and it reinforces supply certainty at scale through the NVIDIA Cloud Partner Program. but the other thing we've seen it do is reaffirm to our partners globally that sharon is a regional leader in ar compute we are well positioned to expand our megawatts and gpu opportunities throughout the region with the support of all our partners and including nvidia next i want to be clear about how this works commercially because i think it's been misunderstood based on some of the commentary we've seen under the agreement nvidia provides a six-year anchor commitment That commitment helps de-risk the capital investment by providing NVIDIA-guaranteed minimum revenue stream for the initial six-year period of the hardware deployed. This is viewed very favorably by debt providers who help fund the substantial capital investment in the GPUs and associated infrastructure as they can bank the guaranteed revenues in their models. But the pricing under this agreement is guaranteed as minimum only. That is, it provides a floor, not a ceiling. We expect to secure customers for a significant portion of the GPU capacity at prices above the guaranteed minimum. In those cases, we retain 100% of the anchor price and then share the incremental revenue above it. Importantly, NVIDIA will share in this incremental revenue too, which creates a new strategic alignment with NVIDIA who are incentivized to support us to both deliver a premium GPU service and to source and secure higher rate paying customers to maximize the share of the incremental revenue. Importantly, if we perform successfully under the initial 40,000 GB 300 allocation, we believe there may be an opportunity to expand the program over time. On the contracting model itself, not much has changed from what I described last quarter, but it's worth reiterating. Here's an example showing what a contract might look like. In month one, the customer contracts and prepays an amount. That prepayment lets us submit the purchase orders for the specific GPUs and network infrastructure in a way that reduces our upfront capital outlay. Over months one to four we receive and install the hardware. The GPU and the other hardware is delivered within three to four months. Our final payment lands on delivery and installation and configuration takes two to four weeks. From month five onwards we recognise monthly revenue on reserve capacity for the full term. For a take-or-pay contract we are paid irrespective for whether they use the compute 100% of the time or 40% of time which gives us real clarity on the expected revenues. and at the end of the term depending on tenure there might be several years less useful economic life so we can re-contract or sell to the on-demand market. The question we get asked the most is whether customers actually re-contract and I'd like to point out a few things. Data gravity or moving petabytes between clouds is a real switching cost not moving compute and the 600 petabytes committed under the Expanded Vaas Data Partnership is there for customers to grow into. Second, the platform itself. Because networking, storage, and orchestration are tuned to each workload, switching means rebuilding and revalidating their stacks. Third, the time to compute. Because redeployment elsewhere means a multi-month hardware and deployment lead times all over again for the customer. And finally, the upgrade path. Because as an NVIDIA Cloud partner, we have priority access to generational upgrades of future GPU allocation, we can save the customer from joining the queue for scarce supply. So who are our partners? We see our partner ecosystem as a unique differentiator. We orchestrate a best-in-class ecosystem around a single AI cloud platform. Compute, data, networking, data centers, procurement and installation, and hardware lifecycle support. We don't need to own every layer. Instead, we combine leading technologies and infrastructure partners within a single sharing AI platform. That model is designed to support faster deployment and more capital efficient growth. To name a few, NVIDIA is our primary supplier of compute. NextDC is our primary supplier of data center capacity and recently our agreement with Vaas has notably strengthened our storage strategy and we can't forget worldwide technology which is our exclusive APAC procurement testing and implementation partner. It's also worth calling out that this partnership approach has had two big impacts. One is that this results in low operational risk, greater market validation and credibility, and two, that an internal technical headcount does not need to scale as fast as some others as they internalize these capabilities. And now to capacity, and this is a piece of news I want to make sure doesn't get lost today. Since our last capacity update, we've secured an additional 80 megawatts in Australia, taking our total secured AI factory capacity to 212 megawatts. To put that trajectory in context, we had 54 megawatts at the start of the year. We have therefore increased our secured capacity roughly four times year-to-date while accelerating customer wins. Demand has consistently run ahead of what we can supply. So having 92 megawatts of secured available capacity heading to the back half of this year is exactly the strong position we wanted to be in. But pipeline isn't just a number. It's a commitment to deliver compute online. And so I'm pleased to confirm that we have successfully handed over a B300 cluster to one of our customers this month as well. We are actively focused on our next deployments of both B300s and GB300 equipment into the balance of this quarter and the early quarter four. If you look at how the contracted revenue book has built throughout the year, it's a fairly steep line. We started Q1 with Canada, GMI and ESDS with a $1.3 billion of total TCB. In May, we announced a global technology company with a major Asia-packed presence for a further $950 million. In June, NVIDIA for $4.9 billion. And in July, the Global AI Lab for $1.32 billion. And just a few days ago, we signed another agreement with the Global AI Platform for $373 million. That takes us to roughly $8.8 billion of total contracted value for the 120 megawatts of contracted capacity, which leaves us with 92 megawatts available to sell. Finally, it's worth turning to our capital strategy. And we secured approximately $2.2 billion of cash since December 2025. That includes the recent $1.6 billion strategic financing closed in the second quarter. The June financing was oversubscribed and led by a cohort of top-tier institutional funds, and we remain grateful to their ongoing support. Many of you will have joined the call today, and we appreciate your continued support and suggestions as we work to deliver our GPUs to customers. I'll now close with four points on our outlook. First, demand continues to materially outweigh supply. and we secured 212 meg watts of capacity for deployment by the end of 2027, while our contracting visibility now extends out through to 2031. Second, we're well-funded for our near-term build-out following the $1.6 billion financing and other capital raises to date. Third, we expect the first material revenue to commence in the fourth quarter of 2026 as large-scale B300 and GB300 deployments come online. and fourth we're targeting more than 64 000 gpus deployed by mid-2027 across our footprint in australia new zealand we've made significant progress in a short period of time but the hard work is still ahead of us contracted revenue becomes recognized through execution delivery and operating at the high standards our customers expect that's what the next 12 months is about and i'm confident in our ability to deliver Finally, on a personal note, I wanted to take this opportunity to thank Tim Broadfoot, our CFO, for his work in getting to Sharon where it is today. This will be Tim's last 10Q, and we look forward to a new school joining our team and leading the next core. Tim will continue consulting the company for a period, and we wish him all the best in the future. Operator, please open the line for some Q&A.