Nathan Fast, Director of Marketing and Branding, HIVE Digital Technologies: Hello, and welcome to today’s webcast covering HIVE Digital Technologies’ financial results for fiscal Q1 2027. My name is Nathan Fast, Director of Marketing and Branding at HIVE, and I will be your moderator for today’s call. Before we get started on slide 2, I would 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 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 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 in Form 8-K furnished to the SEC. On the next slide, I am pleased to introduce today’s presenters, Frank Holmes, Executive Chairman, Aydin Kilic, President and CEO, and Darcy Daubaras, Chief Financial Officer. I would now like to hand the presentation over to Mr. Frank Holmes for a macro recap of the quarter. Frank?

Frank Holmes, Executive Chairman, HIVE Digital Technologies: Thank you. Let’s do a quick macro recap of what has been affecting stock markets and HIVE stock price and valuations over this past recent quarter. Next, please. Before we jump into those granular details, it is always important to understand the DNA of volatility, and every asset class has its own DNA of volatility. This is the highlight that for especially we find so many people like to trade HIVE. It is because of that volatility. It is a non-event over 1 day to go up or down 6%, and over 10 days, 23%. You can see that it is a little more than CoreWeave. It is substantially 3 times more than what Bitcoin is and 4 times more what NVIDIA is when we look over 6 trading days.

It is just a factor of these macro forces pulling with these announcements from what Bitcoin is doing on a daily basis to the announcements of our AI build-out. When we have a strong Bitcoin day and good AI sentiment, the stock has these big surges. Vice versa, a negative day in the world of AI and Bitcoin down, and you get these down drafts. These appear to be the factors driving a lot of the sentiment. The leadership team has been up here before. Aydin Kilic, CEO, the best operator in the data center business. Craig Tavares, our superstar sovereign builder that I mean, incredible builder of data centers, build out our vision, in Canada in particular. It was just the fastest track that we have. The government is committed to it with having a minister for AI.

Darcy Daubaras, our CFO, Gabriel Ibghy, who is in Europe, and Gabriel Lamas, who is in Paraguay, and Johan Kornbluth, who is also in Europe. HIVE operates over nine time zones in five languages, and we are able to manage that complexity and still be one of the most efficient Bitcoin miners and our HPC AI data centers that we have functioning today in downtown Montreal, Stockholm, in Manitoba and British Columbia. Our efficiency is always ranked by third party. It is the top of the stack. HIVE has always used green energy. Canada, Sweden, Paraguay. Low electricity cost, low temperature, fast internet connection. What we have been doing is to accelerate the AI build-out is largely dark fiber. Dark fiber in British Columbia. No, sorry, dark fiber in New Brunswick in Canada, and dark fiber is next to be laid in Paraguay.

We have been able to demonstrate, on this ability to export, convert electrons, and export, they call compute power 5,000 miles away. That is pretty impressive. We are pretty excited about what the opportunities down the road is from Paraguay. I want to thank all the shareholders. You can see Invesco, Citadel Advisors, Millennium Management, Two Sigma Investments, Charles Schwab. Charles Schwab is probably the biggest in the retail component, from registered investment advisors and the retail public. Thank you all for listening to the call, for being shareholders. For the quarter ended June 30, you can see that HIVE outperformed its 50-day moving average. It had a big sell-off along with the whole industry in July. It was one of the biggest outpouring in the month of July by hedge funds.

A lot has to do, which I will mention later on, about the carry trade out of Japan and the significance of this sort of domino effect, a contagion. Japan wanted their money back as rates are going up, and it impacted first the Korean stock market, which was one of the best performers last year, up about 100%. It had a huge correction as, in particular, technology and AI-related stocks sold off out of South Korea, and we saw that domino effect impact in America, and we saw a lot of AI and anything related also being de-leveraged. I think that that sort of worst is behind us. These sentiment factors, they swing back and forth.

What investors have to realize is this carry trade Japan is quite significant in my years as a money manager of seeing the swings back and forth globally of what it has done. It appears that the worst is behind us right now out of the Japanese economy. We are happy to see that HIVE outperformed Bitcoin at the end of June when you look over that time period this year. I think a big part is much of our AI strategy and announcing the growth in the revenue from $1 million a month to $3 million a month, and now expanding that, we will be going to $5 million to $6 million to $10 million a month with these contracts that we are building.

We have machines that are increasing this year to date, substantially over the year, the daily cash flow coming from our GPU chips, in particular the suite of NVIDIA chips we have. I mentioned earlier that Japan carry trade unwind is a macro risk. I think the worst is behind us, but any rising rates in Japan will have a big impact. We have seen the administration come in to support Japan’s currency, even though rates were rising. It appears to be sort of an aftermath of COVID, that after three decades, inflation started showing up in Japan and rates started rising. They went for three decades of basically, at majority of the time, issuing zero cost of capital or 10 basis points. Funds would borrow in Korea, in U.S., Canada, England, and get U.S. rates from 4% up to dividend-paying stocks and in speculative stocks.

That was starting to unwind as Japan started seeing their rates rise and they want their money back. This is a real important phenomena for investors just to be able to follow the Japan carry trade because it could impact you. You do not realize why the stocks are up or down during the day. There is no news, and it could be an unwind or reloading around the world. It has been exciting in respect that last year we substantially increased our hashing power, in Paraguay in particular, taking a rural complex from 6 exahash to 25. That gave us economies of scale, and that gave us the ability to deal with the drop in Bitcoin pricing and the difficulty rising. Those are two real significant headwinds, especially in February of this year we hit.

We have been able to make money every month, even though, and I can share with you, had we not strapped on that additional power, it would be very difficult to be operating a Bitcoin operation today. But we have this key scalability at 2% and then redeploying our Bitcoin into expanding our AI gigafactory vision. Aydin is going to give you, and Darcy, our CFO, and Aydin Kilic, our CEO, is going to give you more granularity on these numbers. But underneath the hood, underneath all these non-cash charges, such as the depreciation that we have to take for our chips, and in particular the non-cash charges out of Sweden, which we will have more discussion on as we go on this ongoing battle with the Swedish Tax Agency, which changed the rules from when we initially went there. The interpretation. The laws have not changed.

It is their interpretation because they are very anti-crypto industry. Even though we try to explain that we are exporters of electrons, we take hydroelectricity, run them through an ASIC chip, and we export that hashing power, compute power to Foundry, which is a pool in the U.S., which is SOC 1 and 2 compliant, and they pay us our Bitcoin in Bermuda. It is an export industry. What is really exciting is that Paraguay’s central bank gets that, and it is important now for them in calculating what the GDP is and the contribution to their GDP of how we use a chip. AI business is very similar, and that is you take the electrons, you run from the hydroelectricity of Hydro, they go through your GPU chips, and you can transmit that GPU power, the compute power to New York City. We demonstrated that in a test 5,000 miles.

Now, you cannot send electricity on transmission lines 5,000 miles, but you can convert them into compute power and send along fiber optics cables along the bottom of the ocean 5,000 miles. Someone can create models at New York City at Columbia University, which has basically validated that exercise. When you look at a Bitcoin mining industry or you are looking at an AI gigafactory, what investors have to realize is that you do not have an ATM, you do not have a Bitcoin machine that spits out Bitcoin. No, you really export out to a pool that is Bitcoin mining or to an end user wants your compute power, and you can transmit that.

This is phenomenal because you can take all this abundance of electricity in Paraguay, and you can turn around and export by converting those electrons into compute power, and they can be used all over the world. It is very exciting what we are doing on that, but it does not stop still this ongoing saga in battling with Sweden, and we believe that based on law and our expert witnesses, we will go through this process, and we believe that justice will prevail. What is important for you is to recognize underneath the hood is that the revenue quarter grew 10%, net operating income grew by 86%, because the beginning of this year, February, was a very big challenging month. The year-over-year, it goes to show the significance of the scaling.

I mentioned at the very beginning, taking revenue as a year-over-year grew by 73%, even though Bitcoin fell by 40%, and operating net income grew by 50%. We are really thrilled of our positioning of having 2% of that global network and continue to build out that dual engine. In particular this year is our HPC, high-performance compute strategy to build AI gigafactories. Craig Tavares will give you more granularity as we go on, but who is really going to really carry that ball for you today is going to be Ivan Kelic. The team is very, very proud of closing another 130 million of exchangeable notes, zero cost of capital for interest payments. That money is not earmarked for Sweden. That money is earmarked for the fastest path to cash flow and revenue, in particular in our partnership with Bell Canada.

The countries that win the AI race won’t just produce the smartest engineers. They will build the infrastructure to support them. Data centers are becoming as essential to economic growth as railroads were a century ago. A quote I have been saying in speeches, and one of the things that in our gigafactory being the biggest in Canada, I think what is really interesting is that it is really not taught in school in Canada to the degree, but I grew up there as a child, and Toronto was very proud of their medical breakthroughs and research.

It inspired me to, and part of my journey of education was to going into medical school before I pivoted to go into business and economics because I was just so in love with what was taking place in Toronto and Waterloo and the University of Western Ontario, where the founding school is called Huron University, which I sit on the board of. I was always thrilled to know in 1921, insulin was discovered in Toronto. Pablum was developed in Toronto. The pacemaker was pioneered. Polio vaccine and scaling it was in 1955 when I was born, was done in Toronto. The first successful double lung transplant, cystic fibrosis gene. I could go on, but it has rich with intellectual capital with two major schools, the University of Toronto and University of Waterloo, which is like Canada’s MIT.

There are many other schools all around, like the Schulich School of Business is famous for business in Toronto, but there is many scientific research laboratories in that area. Toronto is the financial capital of the country. Ottawa is like Washington, D.C., is the political capital of the federal government, but the universities are really in that greater Toronto area. We did a campaign to try to educate investors in Canada as well as in the U.S. about the University Health Network, SickKids Hospital. One of my friends is a doctor, a pediatrician, and his internship was in Toronto at SickKids. The Princess Margaret Cancer Centre, the Vector Institute, where the Nobel Prize winner two years ago, Geoffrey Hinton, was at the University of Toronto. This use of artificial intelligence to improve cancer diagnosis, drug discovery, medical imaging, it is very, very big.

What they do not have are these big gigafactories, AI gigafactories, and that is where HIVE’s buzz is buzzing with activity to build out. Other things just to understand and appreciate Toronto more outside of the Maple Leafs or the Toronto Raptors basketball and the Toronto Blue Jays baseball. The telephone innovation was not too far from the city of Toronto. The electron microscope in 1938. MTGGC 41. Deep Learning 2006. Ethereum, next please, was discovered by a student out of University of Waterloo. What is also important in this visual is to show you the triangle of concentration of internet nodes and, in particular for AI and transferring of data, the big concentration is from the Toronto region up to Boston and down to Virginia.

This is a visual to show you where Lake Ontario is and Finger Lakes, as you see, is New York and the University of Toronto and the BUZZ HPC gigafactory is right in between University of Waterloo and University of Toronto. The University of Toronto is much closer to where Toronto is than this map. It gives you an idea that this is an important intellectual capital. Just like I mentioned before, that you look at bio research, 50% of bio research is done in Boston, San Diego. If you look at other types of gaming, there are clusters of software coders that show up. When you look at cybersecurity, one of the biggest clusters is right here in San Antonio, Texas, with The University of Texas at San Antonio, which has the biggest cybersecurity school in the country with 10,000 students.

Vitalik Buterin, the creator of Ethereum, went to Waterloo, aka, as I call it, the MIT of Toronto because of the software, the number of geniuses that come out of that school. This is to give you an idea from a macro point of view, which has happened this year, is that semiconductors have had a big run, and they started coming off of the correction, as you can see here in July. A lot of this had to do with the contagion from Japan to Korea to North America to Europe. It looks like the worst is behind us now. What is important when I look at and I hear, "Oh, it is a bubble. It is the worst ever. It is a bubble." All these people are coming in with PhDs in bubbleology. I share with you that it is far from that.

The amount of these collateral minerals, you need lithium batteries, not just for cars, but you need them for all these data centers. You can see the drive for lithium, and graphite, and nickel, and zinc, and copper. Copper is making an all-time high because a gigawatt of electricity, converting that to an AI factory like Abilene, Texas, is going to consume 50,000 tons, not copper, tons of copper. Most people think of pounds of copper. No, 50,000 tons, and that is 2,000 pounds per ton. That is a significant amount. When we look around the world, it means that the supply is limited and it continues to have big demand globally. That is another sort of demand that I see that is going to continue with building out of AI centers. There are lots of political headwinds.

It is election year, so it becomes on the agenda, but it is not going to stop this build-out. This is just looking at spending for you, and you have seen this in other visuals, but it is just important to recognize the peripheral equipment for computers. Those stocks have been on a tear. It is not just here in America. It is a global phenomena that anyone is involved in the building construction of these data centers. I was thrilled. I meant to show you that Bitcoin, particularly with the Central Bank of Paraguay, recognized that Tier 1 data centers are a big contribution to the GDP because it is a way for the country to export besides food and beef. They are able to export electrons, and they export them with compute power. That is a significant contributing income to the country for its size.

I am very pleased that the central bank has had this ability to really grasp the significance of this being an export industry. Hopefully other countries will all of a sudden recognize that, like Sweden and Canada, Norway, and Iceland, that it is an important component of converting hydroelectricity or any other type of electricity with GPU chips to be able to export that compute power. This is a visual for you to grasp. You cannot transmit electricity from Paraguay to New York, but you can send AI compute power. Those GPU chips is what we do, and we have shown it, we have demonstrated, and that is a big breakthrough. We think this is very significant, what we have been able to demonstrate.

After we lay all the dark fiber necessary in Paraguay, like we are doing in New Brunswick on the border of Maine, I think the ability to move those molecules, electrons into compute power will even accelerate. That is the team. 300 megawatts building out in Paraguay and expanding another 100 megawatts. This will give you more granularity of other things we are looking at. We are looking in Texas, Paraguay substation being built. Boden, the land that we have ended up purchasing in a separate entity, as we repurpose the land and power in Sweden. Then the gigafactory that is taking place in Canada, in particular in New Brunswick. Then this joint venture with Bell Canada rapidly expanding in British Columbia. So we are coast to coast and the biggest technically hyperscaler in Canada.

That is the building, a beautiful data center that we bought in northern Sweden with the land and long-term power contracts. We have a very strong footprint in the community. There is the HIVE hockey arena, in which we sponsor 12 kids learning how to play hockey. This is a draft, a visual for what we expect to see over the next couple of years in Toronto for the AI gigafactory. This is really quite phenomenal that, I did not give you more granularity, but the relationships that Craig has been able to build and accelerate with other key groups and entities. I think it is really important to see that a couple of years ago, it was predominantly the relationship that we had with NVIDIA and Aydin and myself had been the person, a lot of NVIDIA chips.

What we have seen with Craig taking that ball and running with it, has really accelerated these other relationships and the thrust to be in these other countries that have sovereign data centers. This is just to give you an idea. We are traveling all over the world all the time, meeting with captains of industries, like Michael Dell several times, President Peña, Jensen Huang. So we are meeting with very important people that have visions. President Peña has an incredible vision for the country. You can see Gabriel Lamas with his arm on President Peña’s shoulder. The big vision is to make that the biggest AI destiny center for gigafactories in Latin America. So it is great to be with young executives like Santiago Peña, the president of Paraguay, that has this phenomenal vision. We hope to be fast-tracking that process and growing with his country.

Here as I turn it over to Aydin, and that is Aydin Kilic a touchdown pass to Craig Tavares, which I just mentioned. Aydin Kilic is our electrical engineer. He is our CEO, was originally our president and chief operating officer and saw the building and construction of New Brunswick and helped dramatically build out Paraguay for HIVE. I think it is important that you listen to him give you the story. Also been very much involved in Wall Street in raising capital for this growth we have for our gigafactories. Here you go, Aydin.

Aydin Kilic, President and CEO, HIVE Digital Technologies: Thank you, Frank, for the excellent strategic overview. Now let’s get into an executive summary of the quarter to date, our recent accomplishments, and some exciting things in the pipeline. Starting here, financial highlights for the quarter period ending June 30. USD 79 million of revenue, USD 24 million of gross operating margins, and USD 15.2 million of earnings from operations, which is revenue less COGS, less corporate G&A. We do have a USD 143 million net loss, which is really driven by two non-cash items. This is depreciation of about USD 54 million and this roughly USD 85 million provision for tax liability in Sweden.

This is actually a longstanding issue that we’ve previously disclosed over the last two years, going back as far as 2023 related to the Bitcoin mining business in Sweden and VAT tax treatments for ASICs imports in the Bitcoin mining business. We are appealing it, we are contesting it, we do not plan to pay, and that is why it is a non-cash charge on the financials. There’s further disclosure in our earnings press release, but I really want to focus on the operations of the business. We did make USD 15 million this quarter on non-cash basis, or if you interpret through adjusted EBITDA, USD 13.4 million. And of course, the depreciation. Look, we have a very aggressive two-year depreciation cycle for those ASICs. That means over eight quarters, ASICs will get depreciated to zero. Well, guess what?

We imported about a quarter billion dollars of Bitcoin mining equipment, the containers and ASICs to Paraguay last year. So that depreciation is still hitting us quarter-over-quarter, and we have four-year depreciation for the GPUs. And of course, as we have GPUs from the past and bring online more, that’s really where that non-cash number comes from. Quarter-over-quarter and year-over-year, I’m very pleased it was a strong quarter. Growth 10% in revenue quarter-over-quarter, 74% growth year-over-year, again, driven by the expansion in Paraguay. Moreover, if you look at the earnings from operations, again, that figure USD 15.2 million, that’s up 86% quarter-over-quarter. Again, last quarter, Jan, Feb, March, we saw the downturn on February. Mining economics were the lowest they’ve been. We navigated that.

With the business generating USD 8 million on a cash basis this quarter, April, May, June, that number almost doubled to USD 15.2 million. And year-over-year, that number is up about 60%. Again, having a lean and mean corporate G&A, we’ve made a lot of strategic hires to scale the HPC business, but we really want to focus, does the business fundamentally on a cash basis make money? So what is your revenue? What are your direct operating costs or your COGS? And of course, your corporate G&A. You can find this nicely summarized on page 20 of the MD&A, but here it is graphically represented. This is a breakdown of the Bitcoin mining versus HPC revenue.

Currently, our HPC revenue is represented by the GPU cloud revenue, $7.1 million for the quarter, represents about 10% of the total revenue this quarter and $72 million is Bitcoin mining, about 90%. I want to point a couple things out. The last four quarters, the previous four quarters, we’re doing roughly $5 million a quarter. We’re at that $20 million ARR figure. In May, that B200 cluster went online in Bell Canada’s Winnipeg facility, and that got us to $7 million of actual revenue for the quarter. You’re seeing that growth, and that number is going to continue to grow, and we’re going to explore why. Just looking at the quarterly analysis, Bitcoin mining revenue grew 7% quarter-over-quarter, 77% year-over-year, again, having Paraguay fully at scale.

As I mentioned, HPC is growing. If you look at that $7 million realized for the quarter of HPC revenue, that’s about $28 million ARR if you annualize it. Let’s go to the next slide. That means by Q2, we exited the quarter at $28 million ARR. We’re actually doing $35 million ARR today because we’re about $97,000 daily HPC revenue. Here’s the big news, everybody. We just hit a massive milestone. So excited to share. Team’s done a tremendous job, and we are at $180 million of contracted revenue because we just announced a new five-year deal which adds $70 million ARR to our HPC business unit. This is brand new. We just announced it this morning. This is in addition to the Cohere deal, which we announced a few months ago.

You now have $180 million of combined active and contracted revenue. We’re very excited. This is a five-year contract that we just announced. These are GB300s, 2,088 GB300s are going to go to the Bell Merritt facility. These will be delivered in Q4. It is a five-year contract for $360 million total contract value, therefore, $70 million ARR. Super excited. We funded the acquisition of these GPUs using proceeds from our June convert, where we did the $130 million convert, 0% coupon. Lenovo is our partner for the OEM on these GPUs. This gets us to that sweet $180 million number. By the way, we’re still targeting $200 million ARR for the GPU cloud business with before we still have more GPUs to bring online in the pipeline. We’re at critical mass now, ladies and gentlemen.

Very exciting, and of course, this will go into the Bell Merritt facility, which will be closed loop liquid cooled ultra-low PUE. I was actually just there last week on a site tour. The facility’s looking phenomenal. That Merritt facility will house both the Cohere cluster of GB200s and this new GB300 cluster. This is with an investment-grade global technology giant that we signed this deal with. That’s fantastic. They’re actually putting a 10% down deposit of total contract value, about $35 million. That’s very exciting. If you zoom out and look at the total contract value now of the cluster deals we signed, we are up $600 million of GPU cloud TCV signed this year. The BUZZ team has done a tremendous job. Craig Tavares, Mark Folk, Mario Sergi, they’ve all been doing a phenomenal job.

Gabriel Ibghy, really the whole executive team, him, of course, Darcy, everybody has been working around the clock to make this a reality. It all really started with Frank’s vision when we ordered those NVIDIA GPUs back in 2021, the pivot from Ethereum mining to HPC cloud. To see here today that we have $600 million in total contract value signed really this year, and our market cap is about $800 million. You see how attractive we are. I think that the stock should be due to re-rate with this fantastic news. These are long-term contracts. We told the Street when we were doing our converts to fund this growth, that we were going to focus on long-term 3- to 5-year contracts, which is exactly what we have done.

The Cohere contract, 3-year, $225 million TCV, and this new GB300 contract with the global tech giant, investment grade, it is a 5-year deal. Very exciting stuff. Of course, that is a snapshot, a picture there of one of our actual clusters. This is a snapshot of the two convert deals we did this quarter in April and in June. Collectively, almost a quarter billion dollars to zero coupon debt 5-year bonds. We did purchase a capped call for each to minimize dilution. The capped call conversion premium $4.92 for the April bond, and then $8.53 for the June bond. Those capped calls are very attractive as you minimize dilution and of course, having that zero coupon interest. We are delivering on our promises. The proceeds from these notes were to go towards the acquisition of these GPUs.

The GPUs we still finance. We put a healthy down payment down and try to minimize our cost of capital all the way around and then have financing for the rest. I am targeting about 20% to 30% down per GPU cluster and the balance you finance. This is just an overview for all the analysts and enthusiasts out there if you want the granular details of the three deals we have now. Three deals in Bell AI Fabric data centers in the Winnipeg facility and of course the Merritt facility. Those are going to get delivered and deployed in Q4 of this year. The GB200 cluster for Cohere and the GB300 we just announced. We talked about that landmark $180 million of contracted revenue. Here is the breakdown.

Again, this is a really handy slide if you want to pause on this slide for all the analysts and enthusiasts out there. Shows you that we have approximately 5,500 GPUs online today doing $35 million ARR, and then the two large clusters coming online in Q4, which brings us to 9,800 GPUs contracted or active, bring us to that $180 million ARR target. Again, by the way, our year end, we are still targeting $200 million by Q4. We still got some more bullets in the chamber, so to speak. For the most part, we have done a tremendous job. It is August and we are already at $180 million of that $200 million target that we had. Very proud of the team. It has been a tremendous quarter and I think it is going to be an amazing year. Let us go to the next slide.

We also announced Impala Y for our Boden site, and this is an HPC colo lease. This is for $45 million ARR. We announced it in June. 25 megawatts of IT load. I want to pause here and let this sink in. We are at $180 million of active and contracted revenue today with our GPU cloud business. If you add this $45 million ARR HPC colo deal, which we will announce the total deal size, how many years, et cetera, when we announce the definitive, which we hope to announce before the end of September, then it puts us at $225 million ARR of contracted HPC revenue with cloud and colo. I think that is really exciting because our target was $200 million for the end of the year. We are blowing past that target ahead of schedule once this deal is announced formally.

I just want to put that into context. Really exciting stuff. Nothing is slowing down. We just announced this $350 million five-year GPU cloud deal with the GB300s, and we have already got another bullet in the chamber. Really exciting. Let us hop to the next slide because I want to underscore the value proposition. The value proposition, if you look at having a diversified sum of the parts valuation, we have still got the Bitcoin mining doing about $750,000 a day of revenue, $275 million ARR to date. We have got the $180 million signed contracted revenue, including $35 million active. Then, of course, once we bring online that Boden HPC colo deal, what you can look at here is if you look at the multiples that our peers are trading at.

On the cloud, looking at the CoreWeave, Nebius, Hyrens of the world, it is about a 5.5x based on two-year forward revenue multiple. If you look at the HPC colo, your TeraWulfs, your Ciphers, your Hut 8s, it is about almost 11x multiple. If you apply those multiples and do a sum of the parts, then you sort of have the nominal valuation based on where our peers are, such as Marathon Digital and CleanSpark that still have large hashrate online. The composite sum is a $2 billion enterprise value. Again, we are hoping to announce this Boden HPC colo lease before the end of September. I think that there is a lot of real exciting near-term value growth.

In fact, I think with the announcement again of this GB300 deal, we are due to re-rate as we have massively grown our ARR to that $180 million contracted number. This is the case for a $2 billion enterprise value near-term based on where our peers are trading. Recap, I know it is a lot going on. We huddle every day over nine time zones. We operate in three continents, Europe and North America and South America. We have got $35 million ARR active to date. Again, that really bold and $180 million contracted GPU cloud revenue ARR. Then that lease, which was announced in June for Boden. Again, we also announced the AI gigafactory in May. That was technically in this Q2. Just giving you a quarterly recap. It was a very dynamic quarter, so very excited.

Here is a bit of a double-click on this Boden data center LOI. It is 32 megawatts of utility load, which would be 25 megawatts of IT load. We have a fit test complete. We have a tier 3 data center builder actually do some tier 4 as well. It is very prevalent in the Swedish market. They have been at it for 9 months. This is not something that we just picked up last week, guys. We just announced the LOI, so that is why it is new news. This is a legacy site. We have been operating here since 2018. This is the GPU super site where HIVE was mining with 130,000 GPUs Ethereum in the Ethereum mining heyday, almost 6% of the network at its peak.

What the catalyst is, the catalyst was that we got approval from the Boden municipality to buy this building because this was a long-term lease with the municipality. They actually owned the building, and we just got approval to buy it, and that was the catalyst that suddenly made it an HPC colocation conversion candidate. That was the big news in June. Here it is by the numbers, what it works out to. That colo rate, by the way, is about $150 a kilowatt a month. Very strong, very comparable to some primary U.S. markets that we have seen our peers sign data center deals for colo throughout the U.S. Very exciting. Now, once we announce the definitive deal, we will have the total contract value, we will have the length of the lease.

Right now, on an indicative basis, you know it is $45 million ARR HPC colo, and it is with an investment-grade Swedish offtaker as well, a telco company. We have talked about the Gigafactory, the crown jewel of our Canadian assets. We announced this in May, and of course, this slide was in our last quarterly update. Here it is again, just as a frame of reference. Expect a lot of news as we advance this site. It is very exciting. We expect to energize the site end of 2027 and have compute come on early 2028. Our dual engine strategy. We are at approximately $850,000 today, and that comes from $750,000 a day of mining Bitcoin. Got 24 exahash operational. It is actually 25.3 installed. We just optimize with firmware and down clocks the machines. Again, we are in bear market economics, so how do you maximize your profit?

That is throwing off about $275 million ARR. Then on, of course, BUZZ HPC is about $97,000 a day. You add that up, there is about $850,000 a day of total revenue. If you look at our COGS in SG&A, so total cash cost to run the company globally. Again, I always like to go to page 20 and 21 of the MD&A. Got a nice chart. It is my favorite page in the MD&A, which is a long and it is a great document for all the analysts and enthusiasts out there. If you add our total operating cost, about $63 million. For the quarter, of course, about $690,000 a day.

And as CEO, that is just a good number I like to have at the tip of my fingers because if we are doing $850,000 of daily revenue on a cash basis and our global operating cost, everything, going to conferences, paying for data centers, electricity, you name it, salaries, everything. It is about $690,000 a day. That means we are printing, we are doing about over $150,000 a day of profit. So that just gives you a sense of the health of the business. And I know, again, you have all these non-cash charges and accounting treatments, et cetera. I am an engineer, I just want to know as a businessman, fundamentally, are we making money on a cash basis? Yes. Great. Let us look forward. So once we get to that 180 million contracted, those go live in Q4. Once those go live in Q4, it is really easy math.

180 million of GPU cloud business, about $500,000 a day. So what does that mean? Well, hashprice can vary, but let us just assume economics are similar in the next three to four months, which is not far away. We are in August right now. That would be $750,000 a day on Bitcoin mining and $500,000 a day on HPC, which includes our GPU cloud revenue. So that is about 40% of global revenue is what the HPC business is going to constitute, with Bitcoin being 60%. So again, this quarter it is 10% AI and 90% Bitcoin mining. Within the next few months, that is going to be 40% on the AI and 60% on Bitcoin mining. So really exciting outlook on the dual engine strategy. Zooming out global power footprint, we have 860 megawatts globally.

That includes 440 megawatts active of tier 1 sites and of course, the additional 420 megawatts, which is 100 megawatts in Iguazu that we are building out, a substation, of course, a gigafactory in the Greater Toronto area. So what you can see on this slide to try to make it easy for the viewers is the sites that we have highlighted in green are sites that we own the land. These are sites that are candidates for conversion to tier 3. And if you tally that number up, it is about 440 megawatt pipeline between Canada and Sweden for our conversion to tier 3, which is very exciting. And by the way, there is on top of that, Iguazu as well, so it is very exciting and I think that if you look at the value proposition and what that looks like on a revenue basis on our two-year vision.

Let us go to the next slide. So on the left, GPU cloud, on the right, HPC colo. So again, we are at 180 million contracted today. We went over that earlier in the presentation. We still have some room in Quebec. Let us put another 500 GB300s in. That will add 20 million ARR. So our end of year target is actually 200 million ARR on the GPU cloud business, and we are so close to that given that we are at 180 million contracted now. And then on the right-hand side, if you look at the portfolio of sites, the Toronto site or both of our Boden sites, of course, New Brunswick and the Gigafactory on an HPC colo basis, 325 megawatts of critical IT load would generate at prevailing lease rates, $150 a kilowatt in Boden, $130 in New Brunswick, so on and so forth. The Gigafactory gives about $160 a kilowatt.

If you do the math, what that works out to accomplish is $500 million of HPC colo revenue with these sites being developed over the next two years. On a total basis between AI cloud and HPC colo, $700 million ARR, and that is very exciting. Now, by the way, any one of the sites on the right, HPC colo, you could stand up GPUs as well. We have that optionality. If we did that, those sites on the right would be able to accommodate over 120,000 GPUs. That is very exciting. Of course, Boden has already been earmarked for HPC colo, but just to give you a flavor. The other sites, New Brunswick, GTA Gigafactory, and the Toronto airport site, we still have that optionality if you want to stand up more cloud. To keep it simple right now, we have done the research.

We have had talks with parties that are interested in colo at any of these sites. That number on prevailing market rates, $500 million target ARR plus of course the $200 million for GPU cloud. $700 million is the number to take away from this slide. That is the vision plus of course the Bitcoin mining revenue. Now where will Bitcoin mining be over the next two years? Of course it depends on hashprice, but if it is where it is at today, that puts us collectively at almost $1 billion in combined revenue. So very exciting. As we continue to grow, we want to see the stock re-rate, circulate the lowest cost of capital. We have seen high yield bonds being used to finance the construction of data centers. A lot of our peers have done that. We are exploring that as well.

Of course, the convertible bond market, we did two of those deals this year, has worked out very well for us and of course leveraging vendor finance for the GPUs as GPUs are emerging as an asset class. So we have got a very methodical and forward-looking strategic cost of capital to plan to realize this growth. Let us go to the next slide. On a sum of the parts, $5.2 billion is the implied enterprise value because you look at having $200 million of GPU cloud revenue, $500 million of HPC colo revenue, and again you apply those industry multiples. This is actually a base case. We are not even using our pure multiples. We are discounting it a bit. We are going 3.5x on cloud and 8x on colo. Then, of course, you have the Bitcoin mining business.

Puts it at a $5.2 billion base case, and you can see here how you get to that number doing the sum of the parts. If you actually go to where our peers are trading and you use the same multiples, so the mid-range case is actually a $7 billion market cap USD as we scale towards those revenue targets we presented. So that is very exciting. On the upside case, depending on peers trade at higher multiples, as high as $8 billion. But really to be conservative, we say the base case is $5 billion. Again, these are sites we own. This is land and power that is secured or sites that are operational that are converting from catas to tier 3, and of course the growth in our GPU cloud business. A summary of the land and power we are advancing on that.

We’ve talked about everything except Paraguay. We have completed the civil work. We’ve talked about that all summer. We just had two 80 MVA transformers installed. By the way, in June, we announced the proof of concept between New York and Asunción. That is the cherry on top. I would say, stay tuned for updates there, but, just a little bit of eye candy for everybody. Let’s go to the next slide. Here is one of those 80 MVA transformers that were just delivered and dropped on the site last week. Again, we were doing the civil work. This is heavy civil infrastructure, guys. We’re trenching. There’s large concrete pads that go deep underground, et cetera. Of course, you’ve got cables and so forth.

This is a 200 MW substation in Iguazu that is going to have an additional 130 MW of utility load from these two 80 MVA substations, which will allow for 100 MW of IT load. This is just at Iguazu in the backyard of the Itaipu Hydrodam. It’s a 1.2 GW substation regionally that we feed off of, which directly feeds off the Itaipu Dam, which is a 14 GW dam. Yeah, just letting you know, a lot of things happening and progressing in the background. Again, we are data center builders and developers and operators, so we do everything from substation construction, maintaining substations, of course, building the data centers and operating them. Steady progress on all fronts around the world. Just a little bit of context. Iguazu is very close to São Paulo. Why São Paulo?

São Paulo is where the hyperscalers in Latin America are mostly serviced out of. There’s a data center park in São Paulo. NVIDIA’s Latin American headquarters is in São Paulo. São Paulo is kind of the hub for Latin America. But most of the data centers there are one, five, or 10 MW. This will be, we believe, based on our market research, the largest AI factory in Iguazu with 100 MW of critical IT load. Design development is underway as well. We’re completing a basis of design, so stay tuned for updates there. This is a little bit of a geographic snapshot of how close we are to the region that is currently serving all of Latin America. Again, with that proof of concept we did earlier this year, we’re in talks with different groups there.

There is a lot of international interest in Latin America as the market emerges. Let’s go to the next slide. Looking at the last 12 months, here you’ve got the revenue, and here you have earnings from operations. $330 million of revenue in the last 12 months. I would say that is very impressive. Almost $1 million a day we’ve done. Again, that’s navigating the downturn in calendar Q1 of this year for the entire market. It was tough, but we persevere, we optimize, and on a cash basis, we still made money every quarter. Again, that earnings from operations is revenue minus cost of goods sold, minus corporate SG&A. We have done $80 million of earnings from operations in the last 12 months, which I think is very impressive. Again, we’ve seen bull markets and bear markets in the last 12 months.

We are showing five quarters here. I realize that it is just so you can do the year-over-year comp as well. If you look at the last 12 months, that is what those sums are. Let us actually zoom out and look at how the industry has done. I think what is overlooked, everyone is so hyper-focused on the next year or two. That is great. We have got a two-year target of 700 million ARR. We are at 180 million contracted revenue now in GPU cloud. That is great. That is great. I think it is about getting the story in front of peers. We should be Russell 2000 qualified by end of this year. We, of course, filed US GAAP. Now principal executive office is in San Antonio. We are very much aware of the, it is important to have a strong presence in the U.S. capital markets.

Let us look at the actual revenue. We have done, amongst this peer group here, and you have got $2 billion and $10 billion companies represented here. We have done more revenue than all of our peer groups, $331 million in the last 12 months. Some of our peers have done half of that, which is interesting. In some cases, their farm revenue is actually trending down. We get it. People are focusing on HPC conversion and colo, and we are too. I think it is important to point to a track record. We stood up 300 MW in six months in Paraguay. We have got 9,800 GPUs now contracted, 5,500 active. We are not only pointing to the growth, but we are actually doing it today.

I think it is very noteworthy to point out a strong track record of accomplishment is a good indicator of future success, at least in our opinion at HIVE. We get it. It is all about megawatts, power glands. If you look at what we have got secured in our pipeline, when you compare that to our peers, we have a very healthy 860 MW. Of course, you have got the Hut 8s of the world with 2 GW. Outside of them, our pipeline is in line. I think it is really just framing this in context for the street, I think HIVE is an incredibly attractive value proposition now. We have got some really smart money in our cap table, and we look forward to growth, and our team is working hard around the clock to build value for our shareholders.

This is just a quick crib sheet for you as Bitcoin price fluctuates, that $60,000, $70,000, $80,000. This is just what the mining margin is after electrical costs using an indicative $0.05 OPEX. You could see a hashprice series versus Bitcoin price, et cetera. Right now we are sort of in the 36% range, given where Bitcoin is, 36%-40% margin on that $750,000 daily revenue that we are at right now. Just a handy reference slide, and I am going to turn it over to Mr. Darcy Daubaras, the longest standing CFO in the industry since 2018. Darcy, thank you so much, and the team working tirelessly. It was a super solid quarter. Over to you.

Darcy Daubaras, Chief Financial Officer, HIVE Digital Technologies: Thank you, Aydin. I will take the next few minutes to walk through HIVE’s financial results for the first quarter of fiscal 2027. This was a strong quarter from an operating perspective. We delivered significant year-over-year revenue growth, improved our gross operating margin in dollar terms, returned to positive adjusted EBITDA, and substantially strengthened our liquidity position. At the same time, our reported GAAP net loss was significantly impacted by several non-cash items, most notably a provision associated with the ongoing Swedish tax matter, which I will discuss in more detail. Before getting into the financial results, I will briefly highlight our capital structure. At June 30, 2026, HIVE had approximately 271 million common shares outstanding, together with approximately 3 million warrants, 2.6 million options, and 16.7 million restricted share units.

Our shares continue to trade on the Toronto Stock Exchange and Nasdaq under the symbol HIVE, as well as on the Colombian Stock Exchange under HIVECO. Turning to our first quarter financial highlights, there are several numbers I want to emphasize. HIVE generated $79.1 million of revenue, compared with $45.6 million in the same quarter last year. Bitcoin mining remained our largest contributor, generating $72.1 million of revenue, while our HPC and AI business contributed approximately $7 million. Importantly, our gross operating margin increased to $24.2 million, compared with $15.8 million in the prior year quarter. We also generated positive adjusted EBITDA of $13.4 million. Our reported EBITDA was negative $86.3 million, and our GAAP net loss was $142.9 million.

However, there is an important distinction between the operating performance of the business and the reported GAAP loss this quarter. The net loss included an $84.7 million non-cash provision related to regulatory liabilities associated with our ongoing Swedish VAT dispute. It also included $53.7 million of depreciation, $7.1 million of share-based compensation, and the impact of fair value adjustments. So while those items are appropriately reflected in our US GAAP financial statements, they are important to consider when evaluating the underlying performance operationally of the business. We ended the quarter holding 190 Bitcoin in treasury. Stepping back from the individual line items, three numbers really summarize the quarter for me. First, revenue of $79.1 million demonstrates the increased scale of HIVE’s operations.

Second, adjusted EBITDA of $13.4 million returns to positive territory after negative adjusted EBITDA in the fourth quarter. And third, we produced approximately 1,004 Bitcoin equivalent during the quarter. Taken together, these metrics demonstrate the operating leverage we are beginning to see from the investments we have made in our global infrastructure. We continue to balance growth in our core Bitcoin mining operations with the development of our higher value HPC and AI infrastructure business. That operating performance is supported by a substantially stronger liquidity position. We finished June with $208 million of cash, compared with approximately $23 million at March 31. In addition, we held approximately $11.2 million of digital currencies, $10.9 million of investments, and $18.9 million of receivables and prepaids.

Total current assets were approximately $280 million, compared with current liabilities of approximately $143 million. The increase in cash primarily reflects the financing activity completed during the quarter, including our exchangeable senior note offerings and proceeds from our ATM program. These financings have provided HIVE with significant liquidity as we continue investing in our Bitcoin mining infrastructure and increasingly focusing on our HPC and AI growth initiatives. Our objective remains to maintain financial flexibility while deploying capital into opportunities that we believe can generate attractive long-term returns for shareholders. Turning from the balance sheet back to operations, gross operating margin showed meaningful year-over-year improvement. We generated $24.2 million during the quarter, compared with $15.8 million in Q1 of last year. That is an increase of approximately 53% year-over-year.

This is particularly noteworthy given the substantial increase in the scale of our operations during the past year. Our basic loss per share was $0.54, compared with earnings per share of $0.19 in the comparable quarter. Again, the current quarter loss per share reflects the significant non-cash charges recorded during the quarter, particularly the Swedish regulatory provision and depreciation associated with our expanded infrastructure base. The year-over-year comparison really demonstrates the increased scale of the business. Revenue increased from $45.6 million to $79.1 million, representing growth of approximately 73%. At the same time, gross operating margin increased from $15.8 million to $24.2 million, an increase of approximately 53%. As a percentage of revenue, gross operating margin was 31%, compared with 35% in the prior year period.

While the percentage margin moderately somewhat, the absolute dollars of gross operating margin increased significantly as we expanded the scale of the business. This is an important measure for us because it demonstrates our ability to generate positive operating contribution, substantially larger revenue base. Sequentially, the trend is also encouraging. Revenue increased from $71.8 million in the fourth quarter to $79.1 million in Q1, an increase of approximately 10%. More importantly, gross operating margin increased from $17.5 million to $24.2 million, or approximately 38% quarter-over-quarter. Gross operating margin as a percentage of revenue improved from 24% to 31%. Sequentially, we saw improvement in revenue, operating margin dollars, and the margin percentage. That combination is a positive indicator of the underlying operating performance of the business as we entered fiscal 2027.

From an earnings perspective, it is important to distinguish between our underlying operating results and the impact of several significant non-cash items. Adjusted EBITDA was $13.4 million, compared with $44.6 million in the same quarter last year. The year-over-year decline reflects a number of factors, including the changing economics of Bitcoin mining and the increased operating cost base associated with our expanded global infrastructure. Our reported US GAAP results moved from net income of $35 million in the prior year quarter to a net loss of $142.9 million this quarter. Again, the most important point when interpreting that result is the magnitude of the non-cash items. The quarter included the $84.7 million regulatory provision associated with the Swedish VAT matter, together with $53.7 million of depreciation, as well as share-based compensation and fair value adjustments.

The Swedish provision reflects our accounting assessment following the adverse court of appeal adjustments. We continue to pursue the available legal avenues in Sweden. Accordingly, we believe adjusted EBITDA provides investors with an additional perspective on the underlying operating performance of the business alongside our US GAAP results. Finally, looking at earnings sequentially provides another useful perspective on the quarter. Adjusted EBITDA improved significantly. We moved from negative $9 million of adjusted EBITDA in Q4 to positive $13.4 million in Q1, an improvement of more than $22 million. That improvement is consistent with the stronger revenue and gross operating margin performance we discussed on the previous slides. Our US GAAP net loss increased from $76.3 million in Q4 to $142.9 million this quarter.

But again, the comparison is heavily affected by the $84.6 million non-cash Swedish regulatory provision recorded in Q1. For that reason, we believe it is important to look at both the US GAAP results and the operating metrics when assessing the quarter. Overall, we entered fiscal 2027 with a larger revenue base, improving sequential operating margins, positive adjusted EBITDA, and a substantially strengthened liquidity position. That financial position provides us with flexibility as we continue executing on both sides of HIVE’s strategy, operating our existing Bitcoin mining business efficiently while investing in the growth of our HPC and AI infrastructure platform. With that, I will turn the presentation back over to Nathan.

Aydin Kilic, President and CEO, HIVE Digital Technologies: Thank you, Darcy. That concludes the presentation portion of today’s call. We will now begin the question and answer portion of our call. Analysts on the line, if you could please click raise hand when you are ready with your questions, we will begin to choose and ask you to unmute. Our first question comes from the line of Joe Vafi from Canaccord. Joe, feel free to unmute. Proceed with your question.

Joe Vafi, Analyst, Canaccord: Hey, guys. Good morning. Great progress in the business, especially this new cloud deal with the investment-grade tenant. Maybe we could double-click on that. I know it is a five-year deal. Could we get some perhaps initial thoughts on if you have run some IRRs on the GPU investment, what kind of returns potentially you are getting there, and maybe some additional thoughts on CapEx here on the build-out? I know you have got a deposit, I know you have done some of your convert deals. Just kind of what the rest of the financing stack might look like here. I have a quick follow-up. Thanks.

Aydin Kilic, President and CEO, HIVE Digital Technologies: Hey, Joe, this is Aydin. Great question. Thanks for tuning in. It’s good to see you last week at the conference in Boston. Having that five-year term locked in, we put in the press release that CapEx is about $185 million for the GPU cluster, of course, with the InfiniBand and so forth. Really just to have an NVIDIA reference architecture design for the 2016 GPUs. If you do the math indicatively model, of course, it’ll be delivered and deployed in Q4. We’re expecting EBITDA to land in the 75%-80% range. If you do the math, you’re paying off the GPUs completely in about three years, and the balance of that two-year term is free cash flow. You effectively bake in a 1.6x return roughly speaking on the GPUs, and then you owe them out right after the term.

We’ve also financed the GPU, so we’re putting a portion down, about 20% down the cost of the GPUs. We can provide subsequent market updates with the financing terms. Really, the inaugural release was to let The Street know that we’ve now hit that $180 million ARR target well on our way to the $200 million target end of year, and to show The Street that we were delivering and deploying the promises from our converts in April and June to use that capital as down payments to lock in these GPUs. The financing actually doesn’t kick in towards when the GPUs ship. As we get closer to the deployment dates, et cetera, POs are secured for the GPUs and that means they go into production, which is so critical and that’s really what locks in.

Having the capital from our converts, the $245 million collectively that we raised allows us to have those GPUs POs accepted, hardware going into production, and then of course you’ve got a shipping date, which is important and critical for the off-taker, for the client, so they have assurance that the infrastructure and by the way, the data center’s ready. I was actually just at the Bell Merritt facility two weeks ago doing a diligence visit with one of the lenders and I’m going again tomorrow for another trip. Things are really moving forward. I hope that covered your questions.

Joe Vafi, Analyst, Canaccord: Deal sounds like it’s well on its way. Down in Paraguay, I know there’s a lot of things, the substations are going in for that additional build. The benchmark testing’s been done. What should we be looking for down there as kind of a next step in the evolution of that power portfolio? Thanks a lot.

Aydin Kilic, President and CEO, HIVE Digital Technologies: Mm-hmm. I would say the next thing to look forward to is just updates as we work through the basis of design. I am actually planning to go to Paraguay at the end of September. I have got a trip to New York planned the third week of September, and then I will actually stop in São Paulo. I plan to visit NVIDIA down there and then go straight to Asunción, do a site tour. We are engaged with a design build firm that has built a lot of data centers in the region. We are working through a basis of design. I think as we work through that process, that we will be providing updates just the same way that we put a photo of the substation being deployed last week. We will keep The Street updated with progress as we work towards that.

That substation we expect to be energized towards the end of this calendar year. In parallel, of course, working through that basis of design. That is all I am going to say for now, I think. But really, we like to let people know as a multinational company we have progress in different jurisdictions. A lot of the growth, like the revenue growth, is happening in Canada this year, with the deployment of these GPU clusters. Of course, we will work on the conversion of the Toronto airport site, the New Brunswick site as well. I was actually just in New Brunswick last week after Boston.

I flew to New Brunswick, to Fredericton, to meet provincial government, NB Power as well, to talk about our vision there to make the New Brunswick site in Grand Falls the largest AI token factory in the Maritimes, which I think will be of national significance. Of course, that complements the gigafactory in Ontario in the Greater Toronto area. I would say stay tuned for updates coming out of Canada as we advance the conversion of those data centers. Then, of course, the Big Boden site, I would say that is actually furthest along because we have that LOI signed with an offtaker as well. The next step there is really to watch out for the definitive agreement to be announced, and then that plays into the growth of our ARR targets as well, which was highlighted in my section.

I would say keep your eyes peeled for updates on Big Boden, Canada, and then Paraguay is just the icing on top. We will update the market, but focus on Sweden and Canada for now.

Joe Vafi, Analyst, Canaccord: Exciting. Great work.

Nathan Fast, Director of Marketing and Branding, HIVE Digital Technologies: Thank you.

Bill Papanastasiou, Analyst, Chardan: Thank you, Joe.

Nathan Fast, Director of Marketing and Branding, HIVE Digital Technologies: We’ll keep the Q&A moving next to Chris Brendler from Rosenblatt.

Chris Brendler, Analyst, Rosenblatt: Hey, thanks, Nathan. Good morning, folks. Congrats on the results here. Nice to see the progress in a tough market for Bitcoin, but you guys are executing pretty well. My first question is on the high-performance compute business, given all the progress there, I was hoping you could give us a little color on what you are targeting for a gross margin. In the Q, it looked like it was at 44% this past quarter. I know as these contracts ramp up, I think you will become less impacted by the service fees and potentially go a lot higher than 44%. Any thoughts on the target gross margin for the HPC business after signing these contracts? Thanks.

Aydin Kilic, President and CEO, HIVE Digital Technologies: Yeah. That is an insightful question, Chris. So our fleet right now is comprised still of, we have got about $20 million of our $35 million active revenue coming from Hopper series GPUs at a combined total of 844 H200s and H100s. Then the balance is about 4,200 A Series cards. So the A Series cards are legacy. They have been running on cloud since 2023, which is a testament to their fortitude. But as older generation cards, those rent out for $0.40 a GPU hour. Now, keep in mind, an A40 only uses 400 watts. It is still doing almost $1 a kilowatt hour. But still, of course, as we bring on GB200, GB300s, these are more profit dense per watt. Also, of course, with scale, you get economies of scale.

So those two factors, newer generation GPUs coming online at scale, both are indicative drivers for that margin to go up. Again, as we have built the business, of course, you need to have the foundation in place to scale. So some of that cost base is somewhat fixed. Of course, as the scale grows on a relative basis, that fixed cost diminishes. So hence, you can expect margins to improve substantially.

Chris Brendler, Analyst, Rosenblatt: Okay, great. Thanks, Aydin. That is good color. My second follow-up question is sort of open, jump ball for Frank or Aydin, is the Bitcoin mining business actually doing pretty well. You have gained hash rate share, the gross margins there also improved sequentially despite a pretty tough environment for Bitcoin. We have seen hashprice stabilize. Network hash rate has also come down from the peaks. Just wondering how you feel about the Bitcoin mining business to this point and any updated sort of big picture thoughts on Bitcoin. I have been a long-term believer myself and just sort of waiting for the next cycle. Is that kind of what you guys are thinking about it as well, or are we in a new paradigm for Bitcoin? I would love to hear your thoughts. Thanks.

Aydin Kilic, President and CEO, HIVE Digital Technologies: Yeah. We see hashprice stabilize around the $31 per petahash per day level. We saw lows as low as $28, $27, which was not long-lived, but for a week or two, and we’d see difficulty adjust. It seems that the prevailing floor of this bear market is just above $30 hashprice. What does that mean? Well, in our case, in Paraguay, we’ve got, I think last time I checked, about 19.5 exahash because we’ve optimized with firmware, and we had earlier in this year, we had some S21 XP orders go down and replace some of the HIVE BuzzMiner. We are actually at 19.5 exahash in Paraguay. That is new generation gear that on a blended average is below 15 joules per terahash. We’ve got a large amount of new generation hashrate.

Of course, Paraguay’s got very attractive power costs too, so that just forms part of that hash flow engine in a dual engine strategy. I think that it is anyone’s guess, of course, with Clarity for Payment Stablecoins Act, if that gets pushed through in September, that could be a catalyst. But I think the street is really looking for a catalyst for what is going to be the next breakout for Bitcoin price. But 100% of our growth is in HPC and AI. Again, we have new generation gear in Paraguay that is performing phenomenally well, very close to 100% uptime. The hydro infrastructure we deployed has worked very well for the climate there. We’ve made some modifications to it. Yeah, it is there, it is performing exactly what we expected, and it is throwing off cash flow as we focus on growing the rest of the business. I think that we will see.

Bitcoin always tends to come around. Is it going to stick with a cyclical four-year cycle? Will the Clarity for Payment Stablecoins Act cause a big breakout? We will see.

Chris Brendler, Analyst, Rosenblatt: Great. Thanks again, and congrats again on the results.

Aydin Kilic, President and CEO, HIVE Digital Technologies: Thank you.

Nathan Fast, Director of Marketing and Branding, HIVE Digital Technologies: Thank you, Chris. For our next analyst question, we will pass the mic to Mike Grondahl from Northland. Mike, the floor is yours.

Mike Grondahl, Analyst, Northland: Hey, guys. Thank you. Two questions. One, Aydin, is there anything significant left to get the definitive agreement with Boden, or do you just need a little bit of time there? Secondly, could you just talk a little bit about demand trends and pricing trends on both the GPU and the colocation side? Thank you.

Aydin Kilic, President and CEO, HIVE Digital Technologies: The sublease for Big Boden, or sorry, the lease for Big Boden, that process has been advancing. What I can say is that I alluded to in my presentation was a lot of our peers are using corporate bonds, either investment grade or high yield bonds, to finance the construction of these data centers. We see that as an attractive path to raise capital. Moreover, and we are in talks with two lenders on that accord, you want to carefully structure that lease so that the terms are favorable, and you could at least strive towards an investment grade bond, instead of a high yield bond. Really just to lower your cost of capital. It is an active process whereby we are, I would say, refining. I do not want to give the street, obviously, an exact date, but we are well on our way.

The process has been well underway, and it’s really just fine-tuning those nuances in the agreement. But yes, we do have a draft that’s gone back and forth. Just stay tuned. I’d love to give the street an update sometime in September on that definitive agreement. In terms of demand, I alluded to in previous presentations, we had a B200 cluster on a two-year contract, the first one we deployed in Canada in Winnipeg, 504 GPUs, and we rented those at $290 an hour. I think 6-9 months before, I rented a big deployment of B200s at $2.20 an hour. So what that tells you is that there’s increasing demand in the market, and that tells you that you’ve got continued.

I think CoreWeave came out last week and said they had GPUs from 2020 that they booked out to 2029. By the way, no one was really doing GPU cloud in 2020. They would’ve been mining Ethereum. We know the CoreWeave guys well, and they used to be Ethereum miners. So our A40s, we ordered those in 2021. The margins may not be as fat, but they’re still cash flowing those things. So, I think the demand is great. I think that you’ve got frontier labs that are always going to want the latest and greatest hardware from NVIDIA. Then you’re going to have other labs, other AI natives that are more than happy with second-generation gear.

Then people that are just using it for inference and just want the lowest cost per token, they’re happy to use GPUs from early Hopper era and prior generation. So we’ve seen demand very strong. Even in our current deployments, we have a lot of stuff we’re working at. I’m trying to be mindful of my words here, but we’re seeing tremendous demand for new potential deployments of GPUs beyond what we forecast in the earnings presentation today. We’re not stopping at $200 million ARR when we hit that number for GPU cloud. We see the demand taking us well past that number, very far past that number. We just wanted to give the street some very realistic targets that we were going to hit and blow past. So yeah, we’re seeing tremendous demand.

I would say that if we were to bring online another cluster of 2,000 GPUs, we have numerous parties, some that we have existing agency with, that would happily rent that out on a three-year or longer contract. So tremendous demand, and so we’re very bullish right now, just based on the quality of the offtakers, the economic terms. In some cases, we’re seeing dollar per GPU price even higher than what we’ve seen previously. So it’s definitely rising tides environment, which is great for us and our peers in the sector.

Mike Grondahl, Analyst, Northland: Yeah. Hey, thank you, guys.

Nathan Fast, Director of Marketing and Branding, HIVE Digital Technologies: Thank you, Mike. Time for a few final questions here. Next, we will go to the line of Bill Papanastasiou from Chardan. Bill, the floor is yours.

Bill Papanastasiou, Analyst, Chardan: Yeah. Good morning. Thanks for taking my questions, and congrats on the deal announced this morning. Aydin, the team has landed a number of attractive deals standing up GPU clusters. Maybe you can walk us through how management is thinking about weighing co-location opportunities compared to these GPU clusters, given the power portfolio. Thank you.

Aydin Kilic, President and CEO, HIVE Digital Technologies: Yeah. That is a great question, Bill. What we forecast is we have got a target of 10,500 GPUs that we plan to stand up, and that is with our partnership, with Bell Canada AI Fabric, and of course, we have got the Merritt, British Columbia facility and then the Winnipeg facility, and then our existing sites in Quebec and Sweden. After that, we still have a pipeline of about 400 megawatts in Canada between New Brunswick, the Toronto airport site, and the Gigafactory site. That is about 400 megawatts of utility load. If you look at that, I could tell you right now that the Gigafactory can do 100,000 GPUs, liquid cooled, GB300 specs type of GPUs, and New Brunswick would be able to do 20,000. It is 50 megawatts of IT load.

One of those clusters of 2,000 GPUs is roughly 5 megawatts, just for all the analysts, it is helpful taking notes, et cetera. You could do the math and you could say, "Okay, so that is 120,000 GPUs." We could phase New Brunswick, and we have a two-phase design for New Brunswick now. We have a very long stretch, a very long pipeline, and we did cite that in our press release that we have a runway for over 120,000 GPUs for the sites that we own. I think that it is looking at what is the value proposition. If you do the math on a dollar per megawatt basis, take an indicative number, say $150 a kilowatt a month for HPC colo.

What that works out to, if you do the math, 1,000 kilowatts, 12 months, is $1.8 million a year of recurring revenue for HPC colo. You see our peers are trading at roughly 10x that multiple. If you looked at it on an enterprise value basis, it is $18 million per megawatt of enterprise value. Cloud, on the other hand, you do $14 million per megawatt per month. Cluster here, we just announced $70 million ARR, 5 megawatts, $14 million ARR. Depending on the multiples right now, it used to be 5x. I think it is trending closer to about 3.5x. 3.5 times 14, you are well upwards of $50 million enterprise or about $50 million enterprise value per megawatt.

If you are in a megawatt-constrained environment, you can get maximum profit density and based on multiples, enterprise value by going GPU cloud. That being said, The Street is also clearly rewarding people that are signing long-term fixed agreements because they are looking at the total contract value. If you sign a 15-year offtake agreement, the TCV on that, we have seen some of our peers sign deals as big as almost $9 million for 300 megawatts. We could take a similar approach for the AI gigafactory, and that is why we sort of represented it such, we give the base case, hey, $360 million ARR if AI gigafactory was HPC colo. If you did a 15 year on that, it is a $5 billion contract. We will evaluate what we think is the best opportunity, and bring those to life.

We are very much aware of the economics, and it is not like we are done looking for land and power as well. We are constantly on the hunt. I think that it is going to be a really exciting year, but I think that it is a lot more challenging and it requires more CapEx, but we have got the pedigree to do the GPU cloud business. I was at the AMD keynote that Lisa Su gave, where Craig Tavares and I flew down to San Francisco a few weeks ago. When you are actually there in the ecosystem at the industry conferences and you are seeing the amount of demand, the big players that are coming online that are lining up for the next generation of GPUs, it is very remarkable. I think that the GPU cloud business remains very interesting.

And I think the capabilities that it will unlock in the industry will continue to drive demand.

Bill Papanastasiou, Analyst, Chardan: Appreciate the color. Thanks for answering the question.

Nathan Fast, Director of Marketing and Branding, HIVE Digital Technologies: Thank you, Bill. Next question from the line of Brett Knobloch from Cantor. Brett, what’s yours?

Brett Knobloch, Analyst, Cantor: Hi, guys. Thank you for taking my question. On the GTA site, at what point do you guys have to make a decision to start to break ground and build the data center, for that to be ready for service in 2028? Do you need to decide whether that’s going to go cloud or colo when you break ground? Or how you would fund the build-out of that, maybe pre-signing a tenant? Just any thoughts on GTA and timing. Thank you. We will provide The Street updates on that project. We’ve got our basis of design, so I think as we work through the process, we’ll have more, I think, collateral. Again, there was so much excitement when we announced it in May. Just to really announce that we’ve secured the land power and we’ve got the process well underway from design and permitting.

Aydin Kilic, President and CEO, HIVE Digital Technologies: Really just stay tuned, Brett, for more updates on that. In terms of cloud versus colo, it goes back to the last question I answered, where if you just use a nominal prevailing market rate for HPC colo, that site would be over $360 million ARR. That site, our design right now is three phases of 80 megawatts of critical IT load in our basis of design. When you phase that, we could have a government tenant in there doing colo. We can have a hyperscaler. You’d maybe have three or four different clients. That’s not to say we can have a section of it as GPU cloud, but I think that as we advance along that project, there might be a component of it that we’ve funded purchases some long lead items using perhaps we did another financing down the road.

But right now, we’ve got the other more near-term projects that we’re going to be bringing to market. I don’t want to prematurely speak on what financing strategy we’ll take. Obviously, corporate bonds are very attractive. Typically, you’re going to want to have a signed offtake agreement for that before you go to market to get a corporate bond. Again, just the jurisdiction of that site, the amount of reversing Korean demand that we’ve seen, even in our partnership with Bell Canada, a lot of their enterprise clients, et cetera, said, "Gov, there’s a lot of demand." We see really just finding the right mix of offtakers, be it HPC or cloud. When you’re raising capital, you get that lead order, and then it all kind of follows from there. We would undertake. But it’s a three-phase design, if that helps.

We expect the site to be energized end of 2027, with Compute live in early 2028.

Brett Knobloch, Analyst, Cantor: Awesome. Thank you, Ivan. Really appreciate it. Congrats on the results.

Aydin Kilic, President and CEO, HIVE Digital Technologies: Yeah. Thank you.

Nathan Fast, Director of Marketing and Branding, HIVE Digital Technologies: Excellent. Thank you, Brett. I have time for two more total questions. Let’s hear one from Mike Colonnese from H.C. Wainwright. Mike, the floor is yours.

Mike Colonnese, Analyst, H.C. Wainwright: Hi. Good morning, guys. Thanks for taking my question and congrats on all the progress on the HPC AI deployments. Great to see. My question is really on CapEx in the second half of the year and timing to funding. Obviously, you guys have two large GPU clusters that are set to come online over the next couple of quarters. You are doing some design work at a few of your owned and operated data center facilities. So, what are you guys estimating for the total CapEx lift through the second half here, and then expected timing to secure the funding required to pay down some of these chips? Ivan, I think you mentioned the goal is to pay 20%-30% of the purchase price and then look for funding for the rest, if I heard that correctly. So any additional color on CapEx would be helpful.

Aydin Kilic, President and CEO, HIVE Digital Technologies: Yeah. The scale in the near term. So getting to our end-of-year target to 200 million ARR on the GPU cloud is through our partnership with Bell Canada. And the AI fabric facilities are colo. The virtue of that partnership, just to recap for everybody, we are co-locating as a tenant in the Bell AI fabric data centers. There is one in Merritt, B.C. and one in Winnipeg. So they have given us a very attractive colo rate below market. And the other virtue of that partnership is that their enterprise customers who are looking for sovereign AI compute, BUZZ HPC is the exclusive partner on that accord, so we are building and deploying the GPU clusters in their facilities. So we have seen, for example, Cohere come in as a client and tenant through that partnership. So that was tremendous. Now, what were the other benefits is CapEx light.

Being that it is colo, we did not have to shoulder the CapEx to bring this compute online. We think, and as evidenced by the relative valuation slide, there is still a lot of upside very near term. When you look at where we would be with a Big Boden lease signed, and now that we have our two big GPU contracts announced as we promised the street, that was our mandate in April and June. What I am getting at is, I think there is room for the stock to re-rate, and as the stock re-rates, then you can look at whether we use equity for financing some long lead items for some of these data centers. Again, we have seen the corporate bond strategy, investment grade bonds, of course, being the method of choice to finance the construction of the data center conversions that we have in the pipeline.

Really, when you say, "Well, how much CapEx do you need to get through to your end of year target of 200 million ARR?" As we put in this press release, that cluster, the NVIDIA reference architecture, worked out to about $185 million. If you are putting, say, 20% down on that, it is just under $40 million. Then the rest, you get GPU vendor financing with a blue chip lender. You are targeting single digit lease to own. What I could say is directionally, usually the terms of these GPU finance is less than the term of the contract. Again, the actual GPU finance kicks in before the GPU is delivered, because typically there is a big payment associated with that. We will provide the street more updates on IRR, et cetera, the closer we get to the deployment date.

Really, the CapEx is just what I described. It is the down payment requirement. Roughly, I am giving you indicative figures here. It is the down payment requirement on the GPU cluster. There are nominal deposits related to the Bell AI Fabric colo, single digit millions, which were paid up a long time ago. That is what is really exciting. I think that the CapEx to convert the small Toronto site is about $40 million to bring that to HPC tier 3 liquid cooled. That would be able to stand up another 2,000 GPUs or do colo. We have had reverse inquiries on that site just based on where its jurisdiction is. That one is only a 7 megawatt utility load, 5 megawatts of IT load, but again, just based on its location, it is very attractive.

That is the near term stuff, and I think we put in the deck that it is a $200 million CapEx for the Big Boden conversion to get to 25 megawatts of critical IT load. Again, we have got that LOI signed, definitive in the wings. Those are sort of, I would say, the most near term CapEx figures for you, if that is helpful, Mike. Did I answer the questions?

Mike Colonnese, Analyst, H.C. Wainwright: Yes, Ivan, great color. Appreciate that.

Aydin Kilic, President and CEO, HIVE Digital Technologies: You bet.

Nathan Fast, Director of Marketing and Branding, HIVE Digital Technologies: Mike, final question this morning comes from the line of Steven Gladcola from KBW. Steven.

Steven Gladcola, Analyst, KBW: Hey, thank you for the question, and congrats on all the cloud progress. For the $84.7 million Swedish tax liability, can you help us understand the likely timing of any cash payment there, and what avenues remain available to mitigate or defer that obligation, and how management intends to fund that liability if it becomes due? Thank you.

Aydin Kilic, President and CEO, HIVE Digital Technologies: Yeah. Hi, Steven. We do not plan on paying that liability, is the takeaway. We addressed it in the press release, so I would refer you to that as well as to our C section. In our opinion, the treatment of tax is uneven. They gave Northern Data a hard time, too. This is not exclusive to us. It is just how the SCA was such a huge fan of Bitcoin mining. We have paid $50 million of tax already from our normal course of operations, and we have advisors in the country, and we have looked at other remedies in terms of appealing and contesting and even going a step above to the European Union. Again, that commentary is detailed in the press release. I would refer you to that.

But really, we do not think that that is a good use of shareholder capital to pay down this, in my opinion, egregious tax claim. We have paid all the tax in the normal course of business. Again, this is related to VAT on ASICs. It is sort of a fossil, a relic from the past, if you will, that had long been contended for. Really, this goes back to 2023. It has always been there. It has been in our disclosures for the last couple of years. We have not paid it, we do not plan to pay it, and it is just something that we are going to continue to appeal. That is really it.

Steven Gladcola, Analyst, KBW: Okay. Thank you.

Aydin Kilic, President and CEO, HIVE Digital Technologies: You bet.

Nathan Fast, Director of Marketing and Branding, HIVE Digital Technologies: Thank you, Steven. Thank you to all of our analysts. That concludes our Q&A session and our Q1 fiscal 2027 earnings call. Thank you to all of our shareholders and the investment community for joining. We look forward to speaking to you again soon.