HIVE Digital Technologies Ltd.

Good afternoon everyone and welcome to the HIVE Q1 2025 earnings call and webcast. At this time all participants are in a listen only mode. Later you will have the opportunity to ask questions during the question and answer session. You may register to ask a question at any time by pressing star 1 on your telephone keypad. You may withdraw yourself from the queue by pressing star 2. Also, today's call is being recorded, and if you should need any operator assistance during the call today, please press star zero. And now at this time, I'd like to turn things over to Holly Schoenfeld, Director of Marketing. Holly, please go ahead.

Hello, everyone, and welcome to today's webcast reviewing Hive Digital Technologies' financial results for the quarter ended June 30, 2024. On slide number two, I would like to briefly note disclosures, except for statements of historical fact This presentation contains forward-looking information within the meaning of the applicable Canadian and U.S. securities regulations. These forward-looking statements are based on expectations, estimates, and assumptions as of the date of this presentation. On the next slide, I'm pleased to introduce today's presenters, Frank Holmes, Executive Chairman, Iden Killick, President and CEO, and Darcy Dubaris, Chief Financial Officer. On the next slide, I would now like to hand the presentation over to Mr. Frank Holmes for a macro recap of the quarter. Frank.

Thank you, Holly. And it's great to see how dynamic we are. And then we're functioning in all these different jurisdictions from Vancouver to speaking for this conference. I actually from the Canaccord small cap, mid cap biggest conference in the East Coast in Boston. I'm in San Antonio, Texas. And we function in nine time zones in Bitcoin mining and running and managing data centers. So I think it's really quite amazing how fluid this is. But as we jump into the next slide, the DNA of volatility is understand the risk. And I think this is a very important visual for investors to recognize all these external forces that do impact the daily volatility. And one standard deviation is for the for bitcoin is plus or minus 2% is normal, but over 10 days is 8%, which is, you can see, four times greater over 10 days than the s&p 500 nvidia is 9% and micro strategy is 21% and hive digital technology is 23% on a daily basis, it is a non event for micro strategy or high digital to go up or down 6% a day. And that's predominantly because of external forces such as Bitcoin prices, geopolitics, geo economic events, which recently happened in Japan. But during all of this volatility in the next slide, I like to point out that Hive is operating in nine time zones, four languages, soon to be five. We have locations in Switzerland. and functioning facilities in Sweden, Iceland, and Canada. We have offices in Bermuda and in Texas, and I'm calling in from San Antonio, and we are expanding into Paraguay in South America. Next slide. Hive Digital is proud to be bolting ahead, in particular sourcing green energy, which has been a big challenge to get size, like 100 megawatts, which we've been able to do in Paraguay. But we're the first to go public of all the crypto mining companies in 2017. And actually, you know, we're first to hodl. We launched hodling Ethereum and then Bitcoin. We were first to develop our own ASIC mining rig with Intel, first to buy data centers, first to be green energy focused, first to balance the electrical grid, in particular, hedging currency volatility and electricity prices. And when we look at Sweden, and then we're first to have an AI strategy repurposing our GPU chips. Hive announces plans to build, in the next slide, a 100 megawatt hydroelectric data center in Paraguay, targeting to double the revenue and increase the hash rate. And I think it's really important to recognize that when we look in this last quarter and the results, those results capture the halving. And how do they compare to the first quarter? And how do they compare to last year? It's really quite significant. as we go through this presentation on the financial results, even with the halving taking place. That is the halving meaning that the amount of Bitcoin eligible to be mined each day is gone from 900 to 450. But what's really important is that Bitcoin during this period has gone from 30,000 to 60,000. And that's been much more significant when you run a lean GNA operation like we do. We also were very happy to see be Riley securities initiate coverage on hive and give a suggestion for a much higher stock price. And I think a lot of it has to take a look at the value metrics and when you look at performance 15 to 21 times EBITDA for data centers, especially with HPC. So we take a look at this past quarter, even with the having and you were to do a simple projection, it means that based on. relative valuations to data center business that are not mining Bitcoin. Hive is an extremely attractive asset to own in a portfolio. Look at this volatility from weak hands to strong hands, understanding the yen Japanese carry trade. I've lived through it before. I saw what it did in 97. I was in Hong Kong at the time when it started to take place and all the countries in Asia had borrowed cheap money from Japan. Japan wanted $250 billion back, but the money had gone into buildings and skyscrapers. So countries had devalued their currency like Indonesia by 70%. Philippines had devalued their currency by 25%. And so you saw this sort of currency devaluation in emerging markets take place. And you saw any asset that was speculative all of a sudden be sold down. And we saw this. only 10 days, not even 10 days ago, with Japan raising rates. And its carry trade is estimated to be a trillion dollars. And a lot of Bitcoin was leveraged in owning. And all of a sudden, Bitcoin falls from 60 to under 50 in this massive liquidation and panic. It was incredible last week for four days. I don't know if it's over. Historically, it doesn't all end in one day. But it's just one of those factors that Bitcoin ecosystem of almost 20,000 nodes around the world continued to mine and function 24 seven brokerage firms in the U S basically had to, couldn't take trades. They had shut down, but Bitcoin network, it continued to function. And so did hive. We continue to through this storm, like other storms is to continue to produce and function like we do every day. Recently, we were at the Nashville bitcoin convention, which was incredible for many reasons this event was extraordinary the national bitcoin conference was epic. And I think it's because you have high profile speakers participating the conference attracted. As you can see here, President trump and Robert F Kennedy jr and both endorsing and supporting bitcoin as a strategic asset. Then you saw a global representation, a networking group of 20,000 people from 50 countries showcase their global reach and the adoption of Bitcoin. And many ideas and collaborations were taking place. And the focus on Bitcoin's future and innovations. The conference, it featured cutting edge discussions on the future of Bitcoin. And I think it was an incredible epic presentation by Michael Saylor, which is like 42 minutes. And so we had Holly who started this presentation off today. She has done a three minute YouTube summary. If you don't have time to watch the full 42 minutes off that slide presentation by Michael Saylor. And I think it's just fantastic and informative and timely. Last week we saw during this volatility Morgan Stanley on the next slide says it is allowing 15,000 wealth advisors to sell Bitcoin ETFs to their clients. This is all part of that slow adoption process that's significant in the Bitcoin ecosystem. And then we saw what really drives a lot of alternative asset classes on the next visual. The idea of owning an asset like gold or art from original painters, the growth of art like Andy Warhol or Picasso prints, the original signed prints is gone up 30, 40 fold over time. Since the sixties and seventies and and I think it's important that a lot of that corporation has to do with money supply. And a lot of the original gold bugs that went into gold as an alternative asset class, they articulated this and we've seen this growth in the Bitcoin ecosystem that the adoption of young smart minds into web three. all understand why you want to own an asset class like Bitcoin with cap that 21 million coins and something like 93% has already been mined. But as the money supply continues to grow to all time high, that is just extremely bullish for the global network, for the Bitcoin global network. And as we see the adoption taking place, I think we can see Bitcoin trade at much higher prices over time. But during all of this, I mentioned earlier, we, in the next slide, we function 24 seven and the team meets every morning in nine time zones to make sure that the machines are plugged in. And why do we do that? Well, when we look at Bitcoin mine to the average active hash rate, we show ourselves being up there, you know, in the highest rankings. And we're very proud of that. Now there's a couple other companies that have shown up in this data set, but they're less than an X a hash. I've not included them or they have a lot of where they basically have other people using their data centers. So it's really not reflective of them mining Bitcoin for themselves. And that's something that Hive does. And we hodl, as you can see, on a regular basis, as much Bitcoin or balance sheet as possible. And that has had a significant impact. Like I mentioned earlier, Bitcoin a year ago was $30,000 and now it's $60,000. but our total position has increased substantially. So that is creating wealth for the long-term shareholders of Hive. Ranked by utilization, we have a 95% ranking, and that is just from our self-mining, not from other people using our facilities. I think that that's just really important in this equation. And then revenue is energized by PETA hash for July. As I said, I look at the The big miners out there and hive is an incredible number and it's at a consistent basis being a leader in revenues that are energized for pet us. And we do it with green energy. We're not doing with, with other sources of energy that are coal related. And it's been a big challenge to find reliable green energy and that's a big reason why we said we're going to expand and double our footprint in paraguay because we're able to source competitive inexpensive on a relative basis, but competitive green energy for our future. As you can see, ranked by btc production for extra hash. But I find it interesting that Marathon, who I have the greatest respect for the company and the CEO, that their number would be bigger when you look at it. So they must have other sources of revenue showing up. But still, it really is important for investors to look at how lean our team is. Having the lowest GNA to mine a Bitcoin when you look at relative market caps with Aydin will go into greater detail and granularity for you and how we function Because most of these other companies function in one country or just in one state, they are not diversified and they do not have to rely on sourcing green energy. And during all this journey of being the first crypto mining company of September 2017 to date, this visual highlights about being lean and functioning and we have not had this experience of Negative big losses. We do not leverage our equipment. We've never leveraged our equipment. We've not gone through the bankruptcies of many of our peers have. And we have been able to, even during the worst of times, when FTX blew up, we were able to come in and buy machines at great, great prices because we had cash in the balance sheet and we've already received our money back on buying them at a great, fantastic price. So this is an important visual that is not just last quarter. This is showing you going back quarter in quarter out year in year out up cycles, down cycles, Ethereum, which was a big profit center leaving us and how we repositioned the company and to continue to prosper. Positive corporate margins through the bear market. This is just another visual. highlighting the previous one, showing you quarter over quarter of what we've been able to do. And this is a important indication of our capacity to adapt to these external forces that happen. So you can see here that we have about 117 million shares outstanding. We've done analysis that our peers have in this time period in the past year increased their number of shares out by 300%. So we have the amongst the lowest GNA and the number of shares issued to attract and retain great employees, to expand and buy new equipment, to increase our global footprint. Now I'd like to turn it over to the longest standing CFO in the Bitcoin industry, a snapshot for growth by our CFO, Darcy DeBaris.