Applied Digital (APLD) 9 Jan 232023 Q2 Earnings call transcript

Good afternoon, and welcome to Applied Digital's Second Fiscal Quarter 2023 Conference Call. My name is Doug, and I will be your operator today.

Before this call, Applied Digital issued its financial results for the second quarter of fiscal 2023 ended November 30, 2022, in a press release, a copy of which will be furnished in a report on Form 8-K filed with the SEC and will be available in the Investor Relations section of the company's website.

Joining us on today's call are Applied Digital's Chairman and CEO, Wes Cummins; and CFO, David Rench.

Following their remarks, we will open the call for questions.

Grampp Group Jeff brief make begin, statement. introductory we from will Gateway a Before Mr. proceed. please Grampp,

Good you. Fiscal Call. XXXX Digital's and Second Conference Thank everyone, Quarter afternoon, welcome to Applied

remind formal may today considered number forward-looking laws would Before of we're securities be remarks, under involve begins some statements their like management to and everyone statements risks that making uncertainties. we a and

actual many that results of materially described we result, a are a which differ there could events caution control, and you cause are to from which in of statements. As beyond the our factors, number those forward-looking

For relating after made obligation as the to by to are update please earnings statements, more occur Commission. the uncertainties reflect detailed in made, statements except and or undertaking circumstances release risks, Exchange and any with to our our disclaim statements disclosures that the assumptions date forward-looking Securities forward-looking events filings required forward-looking or public the and see We law.

well non-GAAP encourage as our you applicable the metrics. variable financial our with to, carefully descriptions GAAP release We to detailed annual on uncertainties for will Exchange refer Risk in identified of you earnings business Factors and and We circumstances, metrics Form other our under measures tables Securities read also report you our consider and Commission of reconciliation and filings discuss in the disclosures uncertainties to to our these and including, as risks but disclosures XX-K. limited and as not the caption

may for SEC Commission at free filings Applied by and the Securities website Exchange You visiting www.sec.gov. get Digital's

a available section recorded and everyone that for in remind the Digital's call will replay of like website. Applied being available Relations also is would to I Investor be made link via this

to I Now Cummins. turn Wes? the CEO, Wes over Applied Digital's and call Chairman will

Call. everyone. for you quarter fiscal our second afternoon, us XXXX and Jeff, joining for good Conference Thanks, Thank

last to as quarter's results of Jamestown the $XX steady-state the strong we couple in call in the our capabilities for exceeded which When quarter, revenue that in long-term, of our expectations expected performance with million perform Our continues ability discussed facility expected. top the above term, on are represents line with cash XXX-megawatt high-margin, $XX.X million confident to to and that City Jamestown that sustainable we deliver our company. Garden of are be we energized our the facilities our near Ellendale flow facility,

me you our update let X the now of So upcoming progress on facilities.

Ellendale, the Our We've approval at miners construction the in complete, in installing final City utility and regulatory North partner. wind technical Texas actively working City, XXX-megawatt we're facility XXX-megawatt received our facility. In facility and and are of with Garden Garden our facility is Dakota. and the details through

We to of expect by quarter. fiscal end our current energize the

made Dakota. has strides winter poured, key line the on was Our buildings and are concrete Ellendale item the gating great facility which construction All of spite actively the of has weather the stood North up. harsh in determining been time being construction

of Marathon Ellendale We to quarter years. the contracted expect by towards Recall fiscal be well. as X end the is for Ellendale current energized fully

and graphics centers, use wide-ranging we have centers, change made power core reflects Applied's for accurately our broad needs. to image business update Applied more the of and data Applied cost assets which power the who have In changing customers also offerings to name data name addition we machine processing, and cases applications. from mission The are important applications of our build-out Ultimately, WebX Blockchain to Digital. intelligence, reliable an high-performance rendering next-generation contracts in learning, next-generation computing artificial cryptocurrency, services including beyond our our various branding low-cost require serve company low their and

HPC globally applications next-generation to $XX market, XXXX. digital a company our to the billion data for important many which look it's set we computing capitalize as us cryptocurrency infrastructure remain for distinguish reach as provider other will is to by but high-performance that We premier rapidly a of center on miners, growing support

To capacity sector continue system. low-cost bottleneck be demand of clear, we dynamics still our irrespective that to remains the as in macro hosting the capacity miners see in from robust cryptocurrency the exceeds

we However, on grow to We're in interest exposure the broader shareholders of market high-growth is this it other to believe customer to our HPC base the market. diversify our of and best opportunities. HPC beginning our segments capitalize

Jamestown host announced for a broke hundred stand-alone ground graphics on several adjacent processing learning site we to last we machine application a will new month, X-megawatt our customer. As facility a units that with

growth higher cost and more the centers data latency compute low market about next-generation HPC of customer, purpose-built existing opportunities power. and which also our retrofitted data delivering generally where support with optimistic small a in various ability HPC locations We're more demonstrates accommodate to to traditional Jamestown a we solution offer centers in a WebX high existing that our application our customer to than our on are -- also facility focused we're non-crypto needs. portion Concurrently, another modify

I financials. address turn in over I to line our call Before to David, items few the want a

expense almost stock-based high recognized being in comp effective the years the quarter. a single X resale registration statement compensation becoming in in triggered October. is our a which of First, was stock-based by quarter, This extremely result was of

traded traded than the RSUs significantly stock stock higher OTC. being the quarter, In RSUs in recognized value granted was our thinly having This since addition NASDAQ single the the the price multi-quarters many due any to has was listing. at cases the been to on our when the were of in

margin September in are quarter, as margins occurred partial Second, gross the that fiscal to our in of QX, fiscal in see current our This is will David's more site Jamestown first significantly normalized quarter. higher happened in in be to Gross the the partially due expected that outage a level. you guidance. lower was billing from adjustments

to turn now David financials our closing over walk to through our my I'll before Rench, CFO, David? you call the providing remarks.

good Wes, and afternoon, Thanks, everyone.

a note to did would year be providing that comparable like not remarks, call, year-over-year any ago like will Before period, we in I last have I since comparisons. we operations quarter's begin my not

Jamestown Revenues Jamestown, in North quarter were our which Dakota, hosting at fiscal quarter. were second operations capacity in $XX.X site the the entirely full the operated throughout to million, attributable

in revenues depreciation power $XX.X million, our amortization hosting can at other agreement cost, Jamestown were working second second of on cost hosting services while which quarter recent variability in of personnel largely million generate our a prices, of based facility. be consisting revenues, quarter our energy energy $XXX,XXX employees the were and Jamestown our $XXX,XXX of directly fixed Note that than for seasonal Cost expense to and there higher for periods. has fiscal $XX.X expenses of quarter-to-quarter

in embedded second seasonality expected quarter, revenue but of for electricity this over Adjusted XXXX. onetime third normalizes cost the is revenue and full measure quarter itself $X.X a of or our periods. impact also profit, our that may charges revenues was of depreciation, in gross fiscal non-GAAP fiscal XX% excludes that This year million

expenses have with Operating other the anomalous is fiscal a The dictated administrative currently to of awarded were general amortization costs of stock-based on and is, $XXX,XXX $XX.X that rules it's and elevated $XX.X our had quarter resale and stock as for $X.X depreciation included XXXX catch-up million do a course, registration of outstanding going second expenses during million, as We our and we awards, of restricted note potential compensation important which stock -- these of selling, such of occur noncash restricted to we statement forward that of expense. not units. to effective previously accounting the stock-based the quarter compensation, million stock-based based recording and events the related declared expect compensation expenses.

of of Adjusted average XX.X on net loss the $X.X share continuing quarter was $XX.X $X.X $XX.X loss basic count weighted the million second a a $X.XX Adjusted of ] basic Net weighted fiscal [ for loss share based loss based or approximately average a operations diluted during during diluted million loss of of and quarter second fiscal count XXXX of the from quarter million quarter $X.X XXXX and for of the EBITDA, Digital of non-GAAP per was to second for quarter loss of the a $X.XX Applied a or million. million. attributable was a million. a measure XXXX on loss approximately fiscal per (sic) share share of a

sheet, balance cash and XXXX equivalents million $XX.X cash and in in $XX.X of second quarter million the debt. our with ended on Lastly, fiscal we

benefit major funding deposits to cash it second centers. fiscal that are the the During with of we $XX.X million collectively customers net contracts, $XX.X customer back year deposits cash amortized with net the helps million upfront the In incorporate certain needs to and of with recognition, in their amounted no deferred prepayments customers of as quarter revenue, first which out net our flow inflow to revenue in commercial and the impact CapEx structure contract XXXX, million upfront to arrangements and company data we received the in the our of our is prepayments. due $XX.X but build with the us a timing the cash that over to to

from we our regard we Jamestown slightly expect our be I'm With the revenue providing sequentially facilities to quarter, online generated our generated guidance. Garden sorry. the expect forward of both not guidance will be Now revenue sequentially With in slightly to explicit to -- turning our site, our to Ellendale site, given to come to quarter. revenue Similar materiality QX. current and for last expect quarter, to Jamestown we be regard up fiscal that City we

We XX% expect gross margin to and be revenue of higher. number non-GAAP or

my completes That summary. financial

call I'll closing Wes Now the for to remarks. over turn

you, Thank David.

quickly and Applied uptime focused includes our business, Q&A, facilities reliable of we energizing execution I'd of to day-to-day that get the we our the Before and like as and Jamestown To Garden goals and start, high performance company our Ellendale in some initiatives with term. operating near the over we for look remain future City and to on Digital. go to

in to We to capacity close rate EBITDA once adjusted an continue of hosting this put $XXX annualized million. us that expect should run online,

financial have trajectory, growth position. in on strong this on execute also remaining a focused we To

over stated, David providing agreement ended future Ellendale of facility and facility. million on liquidity our capacity cash Garden us sources As million loan of to the equivalents cash our with nondilutive currently have optionality of $X unlevered, build-out. our Also, City for undrawn we fund $XX is and additional for quarter

our are continue actively data pilot use higher for a of business cases traditional to customers eager this see of less centers to with demonstrate and other us for operations can our previously that We're applications. We efficient to other in non-crypto discussed than out assets. our initiate significant we center broad potential discussions cost is the in part and the data provide. prospective next-generation I as HPC are additional solution our Lastly, building focus capabilities strategic

and industry construct be operate market will infrastructure hit Digital in by digital With Applied and that capitalize approximately in set confident that our this the to remain centers, on digital low-cost is $XX continue to we leader proven infrastructure to ability next-generation data a -- billion XXXX. opportunity

to want Digital. to our out To thank continue demand we're time remain extremely build accommodate is this industry, I are both out that crypto their customers our is Digital time position part to an services. the these ever. by turbulent come for difficult our we facilities a be and optimistic all strong as our times Applied of a in for stronger This secured exciting service to Applied members to close, of have and we to than incredibly about while crypto and of team for dedication the we non-crypto future confident

We're happy Operator? to questions. now take

remarks. on This it today's release. I $X.X which is X CFO, David from misspoke was referenced I loss, is adjusted of actually I quickly want net $X.X earnings operations clarify the million, Rench. everyone. Hi, metric loss million in during to continuing reflected that

now questions. We Thank can take you, operator.

Lucas first Pipes Instructions] with question B. [Operator line Riley. comes of from Our the

can through and everyone, if current to congratulations detail is first sites, year, the the in kind status. you side. regards both Ellendale on and City. us progress HPC for I more -- new Happy in on My the Garden the the on question of wondered walk

today, at City, facility more were what today? you exactly site to If would the we being is preventing what then energized specifically Garden the from see? And

Sure. Thanks, and comments question. the Lucas, for the

miners is pictures, basically media fully see them. I would racked feed, -- at can think in think, you City, up the of but Garden So I X social you facility. There's on our see have as what buildings some constructed a

last that And continuing mostly instrumentation week transformers. do around technical and of that. approvals very last metering are pieces needed. We, the to puzzle so the The recently, here received we we're

And so that. we're finalizing

line of time finalize we end so on set February. energized before to And and expect that, the obviously, that the we

time fully frame. light to frame. So to Recall May, energization be the there's online But is like way online bring that than talked, that facility sooner that are largest buildings that looks we we've that customer expect up time the we we for by June there, available. the expect XX, our

helpful. That's very

in the Ellendale The front up. Let December. buildings. buildings me the We're There X late time standing. there to I you'll sat see follow in is missed PSC piece. in racks we the of putting X line

very February. kind I to but think for to item, our buildings by work again of there. the the I we'll we on confident either, but There's the approvals get about the aren't some that that feel interconnection. yet That's the finalized also utility substation ready be by process. end of gating primary turn expect there on done

is question Jamestown. second My on

a that facility last miners additional week, customer, release Your that already take press contracted. there. place fully given installing in to allows noted What this was

question. good a That's

little additional So a power, power we're bit Jamestown. at additional of getting

So there's optimizing X Jamestown. pieces. It's

will installed for trial immersion Marathon, It with and be power on containers immersion. additional a some have we us site. we've for So X

think that know been through pretty already it I in-depth and they've works. how

for there. are They're connected mostly waiting a those to actually ready final turn sign-off. We're So on. and

next those hopefully, Marathon. and in on weeks turn for So us the for few

we And in some then cool. so have additional the air space

we're to capacity that megawatts and XX -- Garden We're Garden we've not or place Marathon. contracted in one our putting Jamestown of moving this in again, that we're down of month customers it's mostly. will their any And some some not -- to of the happen and their City, City, miners shuffling with Marathon of

over. Very before turning do helpful. one one I'll last it

the On having relationships. in a discussions mentioned in the the you're currently? of discussions of HPC commercial you're for you for magnitude give side, us additional terms order Can sense you

Sure. great Lucas. That's a question,

phases. in So to customers The trialing is going up. on I HPC some this a locations. about I it facility about it's that GPUs is should some way couple we're working site have think those you built think the GPUs running happen think already putting of we -- being in in We and have Jamestown, and

happens So phases. X in it really

up. first There The GPUs that XXX phase be goes will run.

And proving those a And out and from year. would really another that's then X megawatts. a little We the by a of kind over there's GPUs. megawatts then have happen it we'll works little that X expansion later this in expand for over by customers there X how third

couple months apart of each So staged of it's kind a on one.

we'll customers, no doubt a at view But I had do very potential this proven is the down signing these a with some additional initial amount customers. But the large And not the a get way going up we a -- this successfully over look to next sign is them customers demand. few running few there's seeing my few we're is track we're I those of initially. once we've customers if that. months, significant out, we'll sign and but have but discussions with that

before think that what kind be customers small few similar sure the later a an to thinks Bitcoin tuned this then did year. we call make we add But of would where to tenant should the where is I and anchor and the what they mining of rather add maybe these I should strategy have kind team with they be We'd facilities do to that. we

comes Our the Company. Todaro from Needham with next & John of question line

revenue gross First XX% as so we Jamestown. margin, question, do for about think of

the Texas sites and we of a With well? there up margin gross they're Ellenville expect profile running, when and should similar as kind

Yes.

get is up we than a to once I will site around little for the we're and couple those John, have shooting margin mean profitable quarters we for, a I the to bit expect more It sites target there. be Jamestown. be think need of gross to running everything XX% optimized.

dialed what to is in be a electricity bit we optimized now, XX% to where on right spread to. generally, towards can a and think customers. because trying target to But think a charge we're we focuses little that's our gross looking where I I can between margin Now moving business that where our get get

And Great. me for it. other Got Okay. on question one just HPC.

being Is just building more guys demand? remind waters what And is testing I of that? do? pilot Or this if before and us look for there in some you time program? -- would a sorry the the line just really is So kind to optimization of this missed kind determined

of both It's actually. Yes. those

putting it's then for sure up. So putting the the facility correctly up designed it facility, making it works We've the and application.

software for So software we're well specifically on we through partner working this that how working that works a with on machine have and site, as learning.

sure we're works truly putting those. and making yes, both making there. And can good, that Jamestown, it's expand looks on up, -- it so location this it's in sure of then design we from But

GPUs I XXX in the expanding the running by are there, things of full expect of end running on be should you running to we'll if and now, well X from we be to should right so March, be expect the But the that. expand megawatts and there. But year fully And the next to facility 'XX. then already

the comes from line Lake of Street. question with next Rob Our Brown

CapEx completing City? Just much for Ellendale wondering how do you project and Garden

that. David take let I'll

I more lined and think have to $XX we those, have in in CapEx $XX that to of loans complete up. we and potential million cash both million

we're shape good So in there.

And additional we have prepayments.

Yes.

prepayments. Additional

important think we're -- the to I Garden Ellendale Rob, City, that is build finalize think HPC well. as fully part center we funded and the to of X-megawatt

then Okay. that longer how on years midterm, out maybe of or HPC playing see the out? -- of business the in, X do say, your you kind Great. business, term mix And

Yes.

now HPC years current besides this from end XX-XX good is a coming shooting a question. Bitcoin at X that's The we're by for revenue So now, for of year. split of XXXX. the goal by our least calendar right us XX% And from

line Our Brendler D.A. next of question with Davidson. Chris comes the from

or charges margin And with last little this, pressure, is like? shutdown follow-up the gross in but non-GAAP a normalized a some giving gross look color note came some there about and press needs have under missed may quarter's release there. margin I the the from

month really was We the credits in had August. there that from the of September. way specifically The Chris, adjustments customers got we build. shutdowns in for So

And so see that you gross margin. hit the

a for negative margin the month because of adjustments. we September, So in gross actually slightly had those

quarter. impacted the expect that then we gross full above So as guidance, be XX% margin for comments, And I've current David's in the the in made to quarter.

a significant margin the more is XX% in for earlier So think I gross be to question margin up. time. us the then that answer right of back you move a And that expect gross here think us should had, normalized for And over that. John goal I the to

charge fair last it this Great. also the is comment higher sort being margin Is onetime a to Or power there little quarter? a that estimate from of take normalized and on quarter? cost

In roughly Jamestown well Ellendale plus through both for to mechanism year. that, contracts us actually Dakota. will it, a to our North cost we The the that allow average it expected changes and for the but as which you'll have it this bit year, in somewhat but little the power We out or XX% to in in call lagging. we minus, adjust have a do, it's cost,

below you're North that. some So have fixed lot see above level how because it Excess and we're and a in be Dakota, some prices. that the on gross to overearn where to call level of quarters will gross it. we where margin going more It's quarters margin underearn. on structured stable doesn't of we that seasonality than we're It more

of a worse lot Okay. questions. Separate rather and better. than Great. That's getting in of stress helpful. crypto-mining the sector Obviously, it's area

public, outside good you kind monitoring? private situation have your have? feeling we update which is customer it more information more customers of is can any you how but still on deserves base the lot If feel Or of that your about as base, and there you customer Marathon, a

haven't anything We seen yet.

are have kind about We of have other customers go as think far the of fairly the as facilities. have the GMR, types financially. miners those the Bitmain, -- previous call, large remain we And best we of those I best we Antpool. talked that So in

issues. So Obviously, any we Marathon. can haven't see had you

think that liquidity talked they're I sheet about I I and think best-in-class. time, balance that last position, a where from

their even liquidity better position I December. think in made they've

that have as give more I issue -- of can a think neighborhood, anything have possibly you don't of that houses industry I We've color but no as the nature. than we got in base or the payments bad best that good it can a any I know So with there's customer call defaults we that. in or

being installation. guess recent benefit relatively a from I you

profitable I machines So SXXs some than of customers imagine they're have lot operating of better, so more or out a older the your there?

and think will XPs equipment well. SXX lot then as the Marathon all a I It's -- pros or be of

efficient reasonable our at very customers charge marketplace. the some efficient operation, we in So an it's -- of most miners have end, the the We've price. and run a

I makes our very competitive think market. customers So the in it

or question going the that? fund from $XXX setting or independent One you're Excellent. Is to is require side that up. participating that you're on helping contributing to what is million last any capital that just your

It's distressed to that. ability who a not the a are independent from distressed a we participate want in for miners us. people this professional do host -- environment, -- It's to is industry them vehicle just have to if

participating so financial And we're from in commitment. a that, but not

Our George next Craig-Hallum. Sutton with the line question of from comes

that result inorganic further for of of and Wes, you opportunities, bad in surprised being with larger have not? now a expansion a opportunities The make spot. as you're seeing and we should best just bets neighborhood, that be address or you can just would in to inorganic see you going -- the this your and plans couple house a future congratulations

But for thanks the opportunities George, X some past -- types where are I -- bids. like assets at we of that there's months And lot the some feel still question. time don't spent selling So We're we in looking those of I now. distressed prices. seen we've interesting. have are just things at feel made that over a some distressed I not processes like

what than that. to where I'm the costs going So at that even I like good, not anything know I build see equipment when just buy us good. is site the moving know I at is a to or price it higher is assets

further comfortable is with, that the some If something we that we're the looked we anything are makes I the a we see just I that out that shareholders. customers trigger or a seen conversations opportunities and think lot. of have there. I pull could our sense for get to get And see front, see versus at haven't really -- harder money talking attractive on something really us the more I price having, we're HPC potential you type the along me and and it's But for towards to I opportunities going talking customers mining the that -- we're justify Bitcoin getting seeing on just harder our to on HPC, specifically and what just we're well-recognized in the having phone of here of have on most names, with AI, conversations would and a machine interest. we're learning people called the lot there's -- just we're

And kind if that it going at stopping us another higher do need but we're something get from a like we it's so looking it's week. to of every -- not look over hurdle single to that,

following HPC, the you've assuming versus number into piece split business? XXX mining of are of further your mining that outside years are we that X So relative the out to megawatts you in expand XX-XX to announced, the continuing

with soon or focused But that? find be they another couple a it, interesting opportunities customer think have should -- you really expect No. us us customers, seeing on I HPC. the we're expect I to be more focus you said, you HPC Absolutely. focused to I conversations locations. to and the really we build we're having, potential me and if -- we're site do the we really should Would on think I side. Like think of should the don't the that there, on to ask largest

we're in going of live once out going just split. megawatts, to we're -- on that fully to to XX build split, put And to that need XX-XX perspective, XX get we're get to so the need to XX-XX HPC that to megawatts to to XXX

was XX, -- then ORCA you. needs you that necessary even there's actually January there part an a that are that meeting Or LF LT is process agenda? that that I approval? meeting on Got an for not you? formal of Is anything finally, And curious, a

on that not agenda. We're

[Operator Instructions]

Our Mike with Markets. Northland next from the Grondahl comes Capital question line of

talk Can is This retrofitting Pochucha or Mike application that of how you that? to much about difficult for that that more Jamestown, talked play? WebX Is on for plug Maybe Grondahl. less go customer. just about you is? how Mike and kind into has on Or

extra play. Yes, but put it do to X extra it's that. walls little it's some not and It took a -- take weeks filtration, We long. about plug up didn't

to this thought was wanted we So application quickly space a to if two, one, needed find GPU, as we it it get can trying CPU on needed we quickly. wanted we retrofit online pretty can space that, nice put of as for some this. -- we we do inside it of I exercise far to of this run we can. more to because We But fairly and and were

it long. didn't either. So -- that but not take it's And wildly expense

of Got of it. higher Is use more type And amount CapEx it deal megawatt like Jamestown? a you of where space of broadly, a a add there becomes then bring either just, kind to learning certain new of talked megawatts about kind at certain the X Jamestown more or machine level to case. in power like

Yes.

to CapEx a substation running going It's like prohibitively that. more spend at be like on we not there the some or Jamestown, So we're line, mostly but if won't want anything expand additional expensive. have to or to infrastructure, Bitcoin HPC electrical a

we in extra, that the dispense expected have that half but -- second I year growing some to. but So will we're to as is mean do because doing HPC of hope that stuff that the this we will

with Kevin the Dede comes Wainwright. H.C. Our of next question line from

latency. you, Applied for side, additional you it whatever facility? go-to-market of market that the the the and I seems do how that power is that fact nonredundant your color I can that costs. versus, strategy say, gain your for sacrifice even set the -- guess on And how provide customers balance sacrifice high still it Azure? or though you to AWS seems or On HPC you're pretty much is a like was demand wondering sort offering your

a It's great Sure. question.

set that going It's be to us things the not of total the of apart, couple cost. cost power the a there's So just infrastructure.

by, of to And them can don't is nearly require bitcoin in have is a AI them and do to going be type year just -- are of fashion. goes to company center a necessary the machine ultra-efficiently. learning that we really that that infrastructure detail sorry, it require so is. We how specific interruptible our we even in has applications formed as this. software the The similar machine style ultra-low interruptible, we built but data mining the company We're learning lot of that Many as -- development but give to applications run the specifically a expect don't not software these with more much. latency applications a software for run partnership

I think is down cost compute playing the to we're this game facilities cost And these put lowest just come North in of be provider. Dakota. We going a through And so to compute. of

have this. another facility cooling for we're for is we're because other that purpose air a here, of power, the here big built Kevin, designed the about this, again, doing use power. talked And we've vast it We component majority And around low-cost the of cooling wind climate. going is for to

et about the XX% does centers for things. networking, compute HVAC. for that And and usage a at couple and most cetera, data is The electricity of XX%

using what be air another for or take refer using that down even to to HVAC. as HVAC of We're using computing energy, And that, lower some computing. less primarily than But so significant if being green to renewable electricity cost truly to instead green saving. we it's that's also can going burn or than cooling people we're XX%

about to, the so well. that that of aspect And absolutely we're care it customers perspective, which they talking as from

truly anything up that's you're par with provide else, performance they applications. So sign computing and for on green can these lower cost, specific if the for -- significantly a

track the to we're we're the on conversations we're compete think here. really of and right me in I position a good tell having kind that

Okay.

we're how at that least looking on Wes, around also Can you I last getting alluded the on think, me that little seem manage guess, from some to pressure their side, you seems And little through at managing it outside getting with anything Marathon, fully But the pushback. difficult, mining seems just negotiations? winter. pretty and customers arms my bit to be to that's, XX% it booked of a them would a doesn't you me Bitmain just downturn, to was add the Bitcoin of get also it last profitability. it price those listen, your helping it's that. to a where the but it I half you're you're I up, you're On that kind that know bit

Yes.

reductions at time. say trying mean be negotiate haven't -- wouldn't even to customers, be all were, to the it where to had all. always any price best we would aren't fair prices it I price So our the that prior

So industry of is are the that. ongoing. think our for there. operators think don't But out I that's one unique cost lowest And we I

-- don't pushback lot to about we I else don't really a I And get And know that. say of don't about so what that.

mentioned fair. enough. Yes. brought understand at And I it No, perhaps do. the I there. that's investment well appreciate up opportunities Chris is -- you fund, looking don't I and I the color. understanding am

it? how just hosting So not your thinking sites. straight on the to here on assets help me to about whether or exclusively that Is think participation get of that my your is your partners deliver

twofold. It's

think as would the And management it share the the fund, But actual So on in mining the the things fund would run hedge plus the of the we into GMR or that. and of but or guys they would far it, of site need sense? much, contract and get run it from and Does there's -- as they GMR and the do on run then don't a at too that fund. like SPV fee fees. get XX% -- And we things economics do selling the a make it. I hosting around it some fund, to hedging mining as would

yes. yes, Yes,

the run machines. So the you they fund, run

management. The

but fees, I the the mined. -- management The guess, bitcoin not

No, investors. the to that goes

Right.

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