HIVE Digital Technologies Ltd.

Hello, everyone. Welcome to today's webcast on Hive Digital Technologies financial results for the quarter and year ended March 31st, 2025. My name is Nathan Fast, Director of Marketing and Branding at Hive, and I'll be your moderator for today's call. Before we get started on slide two, we'd like to briefly note the disclosures for today's presentation. Except for statements of historical fact, this presentation contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Words such as expects, believes, and similar expressions identify these statements. Actual results could differ materially, and we disclaim any obligation to update them except as required by law. For a full discussion of risk factors, please refer to our most recent SEC filings at www.sec.gov. In addition to discussing results that are calculated in accordance with GAAP, we will also reference certain non-GAAP financial measures, including adjusted EBITDA, adjusted net income, and free cash flow. Management uses these metrics to evaluate operating performance and believes they provide investors with additional insight, and they are presented for supplemental purposes only and should not be considered in isolation from GAAP results. Reconciliations to the nearest GAAP measures are included in the appendix to this presentation and in the press release and Form 8K furnished to the SEC. On the next slide, I'm pleased to introduce today's presenters, Frank Holmes, Executive Chairman, Ivan Killett, President and CEO, and Darcy DuBaris, Chief Financial Officer. I would now like to hand the presentation over to Mr. Frank Holmes for a macro recap of the quarter. Frank?

Thank you, Nathan. So let's do a macro recap. Starting the big picture, the transformative year, the most incredible year and Hive's history outside when it first went public become the first crypto mining company. And it's really quite impressive how the team is gelling and let me walk you through why this is a transformative year for Hive. Next visual, it really is important for investors to understand the concept that they say that Bitcoiners buy the tips, stock the coins, and hold on for dear life. Well, clearly what you can see here is the daily volatility of Hive is greater than Bitcoin. And MicroStrategy, now called Strategy, is double what Bitcoin is on a daily basis. And over 10 days, it's even more so. So it's really important when you look at Hive, and we have lots of people like to try to trade like Bitcoin, etc., It's almost like you want to buy. If it's up 5% in a day, it's not the best day. But if it's down 5%, the math says it's time to buy. And that's really contrarian to how most people think, except where I've found that the Bitcoin ecosystem has this concept that talks about it so often everywhere, every day, Reddit, X, LinkedIn. Next, please. Well, I mentioned this is a transformative year. But to make it a transformative year, you need great leadership. And Hive has expanded its senior leadership. And two of the key people that are helping scale our business is Greg Tavares. Greg has tremendous experience in Canada in building data centers. in particular to run Buzz, be the president, which he is, the chief operating officer. And so we take a look in the past six months, the run rate of our HPC, high performance computing business using NVIDIA chips has doubled. The run rate has doubled and it'll double again. And you see that we made a serious press release this week on a major acquisition in Toronto, which is the financial capital of Canada, the biggest city in Canada, with tremendous infrastructure, intellectual capital, universities, noble lord for AI last year was from the University of Toronto. So having him join our team is just a wonderful statement about Hive. and what we're doing and then to build and acquire uh assets in in paraguay and acquire bit farms assets and fast track uh we were able to have gabriel lamas uh to join the team electrical engineer uh person with tremendous high voltage electricity experience um and understands the country and his father's an engineer uh so that uh it's really deep in the in the bones and muscles of people like Gabriel to lead the charge. And he's been doing a spectacular run so far this year that our growth rates have shocked a lot of people. They didn't expect us to be able to scale as fast as we're doing. Next please. I love this video. It's a short clip, a drone going over the new assets that we have. It's helped us surpass 11x a hash, if you recall. A year ago, it was less than 4x a hash. So, it's moving and it's grooving and it's very exciting that we're a serious investor in the country of Paraguay and there's lots of other positive developments happening with the country. So you can see from this other picture with Ivan Killick, our CEO, and Mr. Lamas, Gabriel Lamas, big guy, you know, 6'4", and all the muscle that's needed to scale our business. And the other person is a real important wingman for him in running the facilities is in between Ivan and Lamas. uh gabriel and that's uh carlos so we're really happy uh where we're taking the business next place uh scaling and we're doing this hash rate with tremendous discipline uh well organized building beautiful campuses um we've also i've been adding air conditioning to all the kids schools that are near us because they have electricity but they do not have the air conditioning that's necessary so we've gone ahead as part of our strategy to be involved with the community and we've lit up the downtown of valenzuela where we are at for 100 megawatts so now women and children are safe in the streets at night and the mayor has been very very positive response from helping light up the streets next please so this is another simple visual Hive's future hash rate growth is going to double again by American Thanksgiving. And taking from 11X a hash, now scaling at 25, what's going to happen here is margin expansion. In particular, the revenue will grow substantially, and at Bitcoin at $100,000, the revenue gave over 400 million dollars on a run rate but when we look at uh the margins of whether we're having they will expand substantially uh on a historical basis that's what scaling is about so it's not to forget what we're doing in the bitcoin ecosystem bitcoin a year ago uh was 65 000 average price now 100 and two years ago it was 25 000. So it's interesting to see, it's continuing to grow and we're now scaling with it. Next please. The HPC, the High Performance Computing, business is still exploding. I'm right now in Boston. I'm at MIT with 100 CEOs from 50 countries, boot camp AI, and seeing how you build a business model, what used to take weeks now take hours. So it's been very exciting. And it's a On the backdrop of this visual, when OpenShot came out in November of 22, it exploded with 1 million users, and very quickly it was 100 million users. Unprecedented growth of the Megatube, and now it has a run rate of about 5%. 100 million users, and so many on the $20 a month. And then there's the enterprise system that OpenAI's annual run rate as of June now is 10 billion, and some expect it to be a billion dollars a month by December of 25. So Hive is positioned and Hive is growing with this spectacular growth in AI. Next, please. so this is a transformative year hive is growing the forex and revenue to become three percent of the bitcoin network hive is scaling its hpc ai business acquiring a 7.2 megawatt uh toronto data center and we'll upgrade that from bitcoin mining data center because that's all the power that's necessary and all the fiber optics necessary, dense fiber, to be able to expand that footprint. We made an announcement also we bought more clusters from NVIDIA. So Hive is also in this transformative year of expansion. It's gone through its move to Texas as head office, but more important, Hive has transitioned now from IFRS accounting reporting to US GAAP. And that's been a tremendous amount of work on the accounting team. It's transformative for us because it allows you to compare high to most of the other US Bitcoin miners on an equal footing, simple basis. Next, please. Highest value bump in the upside potential, I think by November, targeting 25x a hash. When you look at the pure average valuation, it's 100 billion per x a hash. So high upside potential is 7x. And I think that's why many analysts are calling it $7 to $10 in their forecast for the stock price. Next, please. And a big picture, our year end is March 31st. And Darcy and I will give you a lot of granularity to the quarter. But I want to highlight it's transformative because we've changed our accounting practices and reporting. And with that, how did it look last year under GAAP? Well, we did about $115 million in revenue. $10 million of that was for the NVIDIA chips we have for high performance computing. And that is expanding, as I mentioned, now has a run rate over $20 million. So it's doubled under the leadership of Craig Tavares. And the adjusted EBITDA is around $56 million. And the gross operating margin is about $25 million. Next, please. So some of the largest non-cash items in that transformative accounting movement from IFRS to GAAP is depreciation. It's still pretty high, $64 million. And the stock-based compensation was de minimis as compared to our peers. It worked out to $11 million. And the revaluation of the digital assets, mark-to-market will create value. unrealized losses and gains every quarter in addition to our investments. But some of this stuff is like a $5 million non-cash charge for currency volatility. So as we all know, in the past three months, with the terror of war was happened to the us dollar well you're going through these movements in the past year and having operations over nine time zones five languages uh it it does create uh an impact the way gap i want you to express uh those translations so these are some of those charges but that's all behind us from an evil of an equal footing and next please So this is the most famous falls. It's in the Western Hemisphere and very close to it is the largest dam in the Western Hemisphere, partnered between Paraguay and Brazil, and Hive is leveraging green energy in Paraguay. The movie, The Mission, which made Robert De Niro and Jeremy Irons famous, is one of the top 50 movies by the Vatican to watch because it's based on a true history and has to do with these beautiful, spectacular waterfalls and Catholic Catholicism spreading through Latin America. Next, please. So crypto education, enthusiasm, Paraguay. There's conferences coming up. The president of the country is also a YPO member, Young Presidents Organization. And in September, he's hosting an event for 150 CEOs from around the world on what makes Paraguay interesting and a great opportunity to invest in. I've mentioned this before that Paraguay is very much aligned with America in many ways. And the president of the country went to the University of Columbia, New York City, also worked for the World Bank. So he really understands American institutions and global institutions and has done a great job in having the country's currency go through an upgrade in the rating and the value of how they're running their country. But nothing is greater than right now is all the money we're putting in. And Bitcoin mining means he's going to get U.S. dollars every month. And that's very important because Andy, their utility energy company is owned by the government and having stable fiscal policies come from stable income. And so we're thrilled to be part of that growth. Next, please. In Paris, I recently spoke and I said, I was not here to chase hoarders. We're here to build decades of digital infrastructure and decentralized freedom. We mine Bitcoin not for today's price, but for tomorrow's paradigm shift. Now I'd like to turn it over to our CEO, Aiden Kelly. Thank you.

All right. Thank you, Frank, for that intro. Let's have an executive overview of the year to date. as well as some highlights from recent milestones. So it's been a stellar year for Hai. The headline is $56 million of adjusted EBITDA. We're trading at a $350 million market cap. And by the way, we have over $60 million of Bitcoin on the balance sheet, 610 Bitcoin in the treasury, 56 million of adjusted EBITDA on 115 million total revenue. So I think Hive is an incredibly attractive buy, especially with a strong catalyst to grow this year. Our revenue was 105 million from Bitcoin mining and 10 million of HPC AI revenue. We did have 20 million ARR in May, so we'll 25 million gross operating margins, so it has been a strong year considering we navigated the halving. Our fiscal year is starting from March 31st, so this year are effectively all post-halving economics. I want to point that out. A lot of our peers have a December 31st year, and ours is March 31st, so this is effectively full post-halving economics. And by the way, 53% net cash to Bitcoin per share. We're trading at $1.75 today. And we've realized 22% ROIC in the last 12 months. So I think we've done a phenomenal job navigating post-halving economics, which are bearish, of course. And as the industry gets ready to torque up, I think it's going to be a phenomenal year for Hive. Let's jump into it. So, again, how do we realize these numbers? We prioritize ROIC and our capital deployment strategy. We've got prudent stable growth across cycles, bear and bull. We mined over 1,400 Bitcoin in this fiscal year. By the way, we hit 11.5 heads of hash in June, and we've been mining 5.5 Bitcoin daily since awareness. We're at a $200 million ARR. That's $600,000, about $550,000 on the Bitcoin, and over $50,000 a day, closer to over $60,000 actually, on the HPC business. So $200 million in annualized revenue. We'll be at approximately 3% of the global Bitcoin mining network when we hit. 25 exahash and of course we've got our vertically integrated hpc strategy for building and operating tier 3 data centers as well as the gpu cloud video cloud partner we're targeting high value contracts on our hpc business we've got over 5 000 gpus right now in our gpu cloud we have that 20 million dollar ar figure um let's jump into it next slide Here's an overview of the Bitcoin mining footprint. 440 megawatts of green energy globally between Sweden, Canada, and of course, Paraguay. As mentioned, we've been mining 5.5 Bitcoin per day since we hit our 11.5 exahash target. We're over 1% of the network today. That's today. And we're scaling on track to get to 25 exahash by this fall. hoping to get the benefit of the doubt multiple that some of our peers get because we brought on an exahash per week for five weeks in a row as we grew from six exahash to 11 exahash in the last month. Check out the press releases. We put out a press release every single time we get an exahash. And again, we've accomplished this with a disciplined ROIC strategy. Last December, we announced our landmark purchase sub-one-year ROI on these ASICs at $55 hash price after a 5 cent cost in our model. So we are very much primed to have a lucrative next three years ahead of us as we have modeled to be profitable up to $21 hash price. And so we very strategically and selectively deployed our capital, not only for high ROI but for positive cash flow through to the next halving. And by the way, we accomplished this by having the lowest G&A for Bitcoin mine in the sector, of course, which is shored up by our best-in-class uptime. Next slide. So a beautiful overview. This is our Paraguay site. It was at 200 megawatts. You actually see the substation in the bottom right-hand corner. And then above, you've got 10 air-cooled buildings, and you see all the civil work has been completed for the 100 megawatts of hydro miners. So the air-cooled is done. That got us to 11.5 megs a hash a few weeks ahead of schedule. And the second 100 megawatts is the hydro on the left, and that'll come online this summer. I was actually just in Paraguay a couple weeks ago to oversee the progress. Very exciting. Our first few containers are actually being installed. I mean the hydro mining containers, both the dry chillers and the actual hydro containers are on site. We put that in a press release a couple days ago. next month, so it'll be very, very exciting. Stand by for updates there. And of course, the third 100 megawatts is in Valenzuela, our other site. Some work is also completed. So we're fully funded for the 25x a hash. I want to highlight that. We're fully funded for a growth to 25x a hash. We fully pay for all the ASICs to get to 18x a hash. And so those are just arriving week over week throughout the summer. And we have all our deposits in place for the 25x a hash as well. Again, we're fully funded for that. So I'm very proud of our team. is now we're just bringing the hash rate online, we've effectively executed on the infrastructure. Let's hop to the next slide. So here's a layout for all the analysts out there of how our 440 megawatts is allocated between Canada, Sweden, and, of course, Paraguay. And on the right-hand side is our Tier 3 footprint. So we have GPU Cloud running in Stockholm, Montreal, and now with the announcement of the data center in Toronto we're acquiring, it's a 7.2 megawatt infrastructure load and a 5.5 megawatt IT. So we just announced the acquisition of this site. We have a binding purchase agreement. We hope to close on it very quickly. And we will upgrade this Toronto site to be liquid cooled for next generation GPU compute. Of course, we're going to be an NCP partner. So very exciting as we scale our HPC business to go from 20 million to 100 million. More details on that later in the presentation. Next slide. This is the ramp on the Bitcoin mining business, of course. As mentioned, we've successfully completed the first phase of the air-cooled 11.5 exahash. Our global fleet efficiency is 20 joules a terahash today. That will incrementally increase as we bring on our hydropowered S21 plus miners from Bitme that are 15 joules a terahash. It'll bring our global average down as we fully ramp. Very exciting time to be a high shareholder. I like to describe this moment in time as an elbow as a hockey stick ramps up. Again, this is a four-year overnight success. We scoured the globe for cheap hydro energy at scale, and we found it in Paraguay. We have been very active as well in Paraguay. We're electrifying 18 schools in the rural regions of Valenzuela, In fact, we've completed six of these 18 schools. I met with the chief technology officer of ONDE, which is a national power provider. We'll be attending a YPO event that the president of the country will be throwing in September. In fact, the president of the country, Santiago Pena, is a YPO member. Him and our executive chairman, Frank Holmes, have a personal rapport. So we're very much engaged at the geopolitical level. It's just how we like to do business at high. Next slide. So, taking into consideration the improving efficiency of our global feed, once we're at 25 exahash, here's a snapshot of what it looks like. At 900, sorry, 900 exahash network efficiency, sorry, 900 exahash of global network hash rate, 126 trillion network difficulties worldwide. of 12.5 Bitcoin a day. And at today's Bitcoin price, that's $1.3 million a day. That's over $400 million of annualized revenue. It works out to over $250 million of gross mining margin on $100,000 Bitcoin. Our cost of reuse of Bitcoin will be about $42,000. If Bitcoin rallies to $150,000 later this year, which a lot of people are speculating it might go from $150,000 to $200,000, but $150,000 Bitcoin, we will be doing almost $2 million a day. It's roughly $700 million of annualized revenue and almost $500 million of annualized gross mining margin. Again, we're fully funded for this growth. We'll be at 25 exahash this fall, 18 exahash this summer, and our market cap is $350 million. So I think Hive is an incredible value right now. We have 600 Bitcoin on the balance sheet, but we also have a pledge to buy back 1,300 Bitcoin at $87,000. So as our market cap increases moreover, We can either use free cash flow from operations to buy back Bitcoin at 87,000 or utilize proceeds from our ATM in an accretive manner to buy back Bitcoin. So our strategy is to get our hodl back over 2,000 Bitcoin by buying back our pledge by the end of this year. You'll buy a lower cost of capital as our free cash flow from operations increases as we've had this momentous scaling. Next slide. We've got the biggest growth in the sector this year. Some of our peers have hit a super scale of 50x a hash, have tapered off, and they won't be expanding. Aside from Cypher, that's got 1.6x growth. Hive has got 2.2x growth for the balance of the year. And by the way, we started the year off with 4x growth, and we're executing on that beautifully. So we've got the biggest growth profile of the entire industry this year. It's a huge headline. Next slide, please. We're also trading at the best multiple in the sense that we're trading effectively at $10 an exit hash. When you look at our enterprise value and where we're at at the end of this year, our peers are trading at $30, $40, even upwards of $50 an exit hash. We have moved our principal executive office to San Antonio. We are looking at a U.S. domicile, and we believe that as we hit $500 million market cap and a billion-dollar market cap, we're due for re-rating. As some buy-side funds have a mandate based on market cap or liquidity, we are a very liquid stock. Our three-month average is over 10 million shares a day. We hit almost 20 million shares of volume on some days. So I really think 2025 is the year of high as we scale to 25x a hatch. Again, we're trading a very attractive multiple to our peers. under $350 million, and with $65 million of Bitcoin on the balance sheet, I think that we're a very attractive multiple. And by the way, again, we also have the $20 million of capitalized revenue on the HPC business. Let's go to the next slide. So these are some of the merits of how we run a business. Always try to source ASICs at the lowest cost. We try to buy spot so we get immediate delivery. We lead the sector in uptime. We run our ASICs their full life cycle to maximize free cash flow, lowest G&A in the sector, and what does that yield? Best-in-class ROIC. Next slide. And here it is by the numbers. Huge numbers, 22% annualized ROIC, or sorry, 22% ROIC for the last 12 months. And you can see how this compares to our peers. We are effectively double the next contending companies, RS15 Spark at 12%, and from there it sort of drops off. million at ASICs. You've got to make well over $100 million after cost. Otherwise, you shouldn't even be mining, right? You should be buying Bitcoin if you can't make money from mining. So we leave the sector. We target under one-year ROI. Again, we targeted, we effectively have an 11-month ROI from the Bitcoin ASIC value by having free cash flow from operations. So we could scale our business with free cash flow and not have to rely on diluted finances. I think the cheat code that emerged in capital markets over the last two, three years as dilution was rampant, a lot of companies were just buying new machines, running them, upgrading them before their end of life just so that they could show high inter-quarter margins. So I'm going to take a find the newest, best machines. In the moment, you could show that you have a high margin, because guess what? The latest ASIC has a better machine efficiency. It has a lower break-even. Okay, so you've got a good margin for the quarter. But have you ever repaid the investment of all these new ASICs you're buying? And that's what's really hard to track. Well, this slide shows the difference. If you actually maximize and get ROI... on your ASICs, it's going to show up in the numbers here. You can see we lead the sector by a long shot. Next slide, please. Lowest G&A for Bitcoin bind as a function of revenue for the last 12 months. Next slide. So it's low cost, but it's also high performance. We've got the best uptime in terms of Bitcoin bind for ExaHash in the whole sector. Third-party analysis from Anthony Powers, power mining analysis. Next slide, please. And of course, the AI business, the recent announcement is 7.2 megawatt data center in Toronto. This will provide five and a half megawatts of liquid compute. We plan to undertake this conversion. We look forward to closing on this facility in the very near future. We just announced the buying and purchase. This will grow our effective HPC footprint by 3.5x. Again, we currently have over 5,000 NVIDIA GPUs operating. That's over 4,000 A-series cards, 344 H100s, and 504 H200s. We hit the 20 million ARR target, and we are looking to hit 100 million ARR. If we were to populate the Toronto facility 5.5 megawatts with H200s, using current market utilization we're seeing, it would add approximately $80 million ARR to our top line. So it's a very exciting time to be a Hive shareholder. And we are having our HPC business in Buzz. And so Buzz is a fully owned subsidiary of Hive. It will be a pure plate HPC focused, vertically integrated business where we build, own, and operate the tier three data centers along with the GPU cloud. Next slide. This shows the growth and how we've got there. Again, we scaled up. We had the 4,000, actually it's closer to 4,250 A-series GPUs, 344 H100. data center will be able to scale BillGP Cloud and get to our $100 million ARR in 2026. Very exciting time. Next slide. Ah, and so I'll turn it over to the longest-end CFO in the crypto mining industry, Mr. Darcy DeVaris.