Applied Digital (APLD) 11 Apr 242024 Q3 Earnings call transcript

Good afternoon, and welcome to Applied Digital's Fiscal Third Quarter 2024 Conference Call. My name is Doug, and I will be your operator today.

Before this call, Applied Digital issued its financial results for the fiscal third quarter ended February 29, 2024, 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.

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

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

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

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

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

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

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

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

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

to their Thank conference start ongoing call. thanking our joining third I you for Alex, computing afternoon, our mission employees by high-performance service industry. supporting of rapidly and Thanks, for in fiscal to purpose-built growing want good our everyone. the infrastructure hard and work quarter XXXX providing

to for of the Before business. some like across over developments our I'd our turning recent to call CFO, detailed over a share David financial review our results, Rench

encountered HPC power we due services significant key progress in center our hosting center our in quarter, impacted made Ellendale. Despite our the financial the establishment setbacks, XXX-megawatt has our built the of performance challenges data cloud initiatives to several the our that growth and development of special outages During business. in these short-term facility company with business data purpose

newest Our decision AI, Garden service achievements welcoming facility. our Together include our cloud customer, and to strategic City the divest

have financing our also buildings. exclusivity into forthcoming pleased to construction of X executed level a have product and place our facility we an hyperscaler in Ellendale XXX-megawatt for at this current announce campus, LOI discussions in are inclusive signed financing XXX the We megawatts investment-grade we We're for tenant, entered with capacity lease. and of that and with for to hope U.S.-based coinciding

and sales sheet strengthened million asset our after balance with the closed of transactions. financing We $XXX also quarter announced significantly

units. Now update I our an of will provide business each on

data Let's center begin by our discussing hosting business.

full facility This Jamestown Jamestown quarter. sixth achievement full the marks XXX-megawatt uptime uninterrupted the Our throughout quarter consecutive consistently operating capacity facility. met expectations, with has of the operation at capacity for

performance, Jamestown's While at encountered with we facilities. pleased are we challenges our other

failures outage the industry power not were transformers portions Ellendale to additional us experienced down equipment to response January. that a facility power in our have site. these XXX-megawatt due provider North selectively our starting disclosed, in to to Upon affected challenges, standards. installed meeting utility our In previously determined of enable reenergization As Dakota we the

replacement American manufacturers. industry-leading North and from procured successfully transformers now components have We related

megawatts. XX% of Ellendale of the approximately facility been has As or reenergized XX full to today, capacity its

the the The as of received is end will full that May and installed, by capacity remedies also be City, outages. growth it with XXXX. to XX% anticipate to to recoup made the the lost sell new XX% decision of revenues Ellendale strategy. company we and additional compatible the strategic as operating costs transformers are and was identify not pursuing at incurred facility Garden our we Furthermore, to HPC Additionally, rectify

our This The divestment Dakota, optimizing growth service commitment strategic towards financial on asset decision portfolio while our to facility enables in focusing redirect to cloud our resources in core us and sell North and areas. applications. sites initiatives our our HPC this operational bolstering underscores growth to

across As to locations a the to fully capacity volatility of North center insulated megawatts happening markets result of be This data hosting sale, XXX crypto up Dakota. from us contracted event. in maintain in X will leading our the we this positions

to contracts Let's existing pipeline. We've of developments, quarter. customers momentum. quarter we move of our Services turned growth positive in business, revenue exited new in The in fiscal over in the opportunities provide power late seen fulfilling quarter, Cloud lack sequential provides enrollment a which experience including high-performance to revenue and in our EBITDA advance the with like we deployed AI, inflection clusters newly our Despite as Together recently applications. have a segment this rapid significant fourth and to positive continues of and which on positive were will clients clusters due growth to our this delays entering AI computing revenue exploring to generation, significant

Lastly, customers. cloud HPC Lastly, megawatts the to North of including have HPC let across of an in not capacity we update data megawatts purpose-built capacity provide XXX in our have our stores. let service X Jamestown Dakota, development support currently me me at We facility on

During of of liquid in our encourage proceeding channels in facility cost-effective, feature facility HPC demanding Dakota. North visit date. construction the most will our make to as we Ellendale, some the cooled the proud highly of strides This computing continued high-performance designed specifically efficient state-of-the-art significant expected, for quarter, XXX-megawatt infrastructure, to media we progress the images applications. facility. to the are We recent Construction you social is for and

intent tenant. and of hyperscaler a letter entered tailored As progressing capacity U.S.-based for investment-grade we this with financing executed with and level a into XXX-megawatt project for lease a are exclusivity previously mentioned, have

we encouraged growth the by are across positive remain trends business and are we in our trajectory. summary, In our confident witnessing

excited maximize catalysts returns allocate we'll are the We value. achieve risk-adjusted to to shareholder and the on the continue highest capital our horizon, about numerous potential strategically

With that, walk will I an now turn Rench, through David? and financials to over you provide guidance. call the our David CFO, our update on to

good and Wes, everyone. Thanks, afternoon,

we substantial on the by to we Notably, and reported onetime prior begin me quarter's items reporting, comparability of addressing adjusted financial significantly Let $X.X an financial million, performance although approximately service our capital-raising quarters. this loss the EBITDA We of and impacted of financing difference complexity hardware incurred center between a to missed financial delivery out for data our primarily in transactions. service and final cloud business professional timing related opportunities and configuration strategic analysis our initiatives, onetime due expenses to several revenue customer access.

from Additionally, which quarter. data during $X.X outages our at on hosting unexpected Ellendale operating had addressing arose alone loss estimated an expenses center power the facility, million impact

a damaged our facility, on We of transaction financials. accelerated held-for-sale related Garden million the also to the classification which amortization disposal of City the to and of depreciation further Ellendale related the equipment loss impacted incurred $XX.X and $X.X million

revenues and these pursuing are recoup rectify the additional outages. to to identify remedies We and all lost costs incurred available

Services million of data let's third XXXX. for third compared increased -- to in XXXX to of driven Revenues $XX.X from the hosting facilities revenue of Cloud $XX.X the was our contracts. the the items The quarter million for and capacity the move these mind, were quarter. increase results primarily the With across fiscal quarter by increases for contribution fiscal center

revenue. center data Services segment million of hosting Our million Cloud generated revenue, in while $XX.X our generated $X.X segment

used for revenues to higher quarter quarter costs was Cost of attributable in the to third $XX.X for to energy hosting the of as due megawatts 'XX revenues as increases of amortization facilities expenses $XX.X of in million was of were the growth as driven fiscal business third more revenues and cost increase to and The higher the million fiscal well of XXXX. compared energized. by number expense personnel depreciation generate

start-up compared The administrative primarily year supporting a increase assets and $XX.X costs third $XX.X for including -- fiscal cost to to million was general XXXX of in costs due as quarter the costs growth to personnel Cloud ramp expenses lease increases were in as yet overall well on business, business. the of as the Services the prior we Selling, period. not comparable revenue due support and the depreciation, amortization million start-up to

operating $XXX.X loss Net $X.XX diluted was and third quarter fiscal to million. of million. per expenses loss based million and $X share weighted a average approximately quarter average quarter, diluted $XX.X the Cloud of share XXXX or XXXX for alone. Services inclusive of weighted XX.X% per $X.XX the reported the million compares a a and loss of This of million fiscal of quarter based amortization share share basic count in the during quarter a business count basic during depreciation $XX.X third on Notably, net or our in approximately $XX.X this on

We months. losses deploy clusters as next decrease expect these X more to the over we

third $XXX.X million million Adjusted a of loss basic net compares or EBITDA, This per EBITDA XXXX the $XX.X average approximately based for million. quarter. a based $X.XX fiscal adjusted of adjusted loss million measure adjusted to third $X.XX share quarter million. measure, weighted on $XX.X and of to approximately a loss, the of for or $X.X share the during was and third non-GAAP share the $X.X fiscal XXXX was third compared XXXX fiscal share net fiscal weighted of of loss quarter the of for basic quarter quarter of diluted the a per net $X.X XXXX count on average of a quarter diluted count for non-GAAP Adjusted during million of

debt. million $XX.X Moving quarter cash sheet. the cash, third million $XX restricted and fiscal cash We ended to in balance equivalents our in and with

cash We which continue account of maximum Garden sale to location consideration includes improving of work approximately on $XX.X taking the City million. our our into cash position,

relating improvement observed elements of ongoing in the a sale still Garden on $X to in are in holdback the there in million $XX liabilities have including power announced. approval While assets, sheet Texas million City the we an continued we final we of of Digital. the past incurred we a quarter, Applied quarter, $XX including million in our the since promising challenges, confident close balance future that in remain the debenture convertible the recently Despite the

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

the like capital expect David. in our discuss few a formation Thank to business. take you, to minutes fund we I'd strategy to growth our

businesses. been are primarily financings. we segments these growth have capital-intensive highest X funding corporate-level To initiatives Our from date,

for planning the near to are this in future. change We

engaged last we our year large to a Specifically late in to purchases. process to an Cloud at Services GPU directly secure subsidiary debt facility engagement fund since Services, have been Cloud

deployments. indications the some has facility a and attractive goal currently fund parties the we are to received by the multiple the of The relative close from attributes have forward use end leases to debt debt the quarter. current We proceeding facility with fiscal to

current lease we're coming financing seen for schedule balance of reality. assets. facility, to would of useful structures current as X our debt and better income the This in financing our to amortization a the recently capital working X in liabilities align would the in approximately change is securing with will have we to GPUs GPUs. the If GPUs years, aligning assets to reflect would well the which portion near have on in attractive the access positive our market. negative financing This we long-term continue from have more lease it A a significant is entire First, liabilities, balance sheet not on the as while term the to as years expected successful growing the statement asset creates and effect more the life. deploy

Moving center financing. our HPC to data

funding building facility initial the with of level our of cost Ellendale We our the funds. have been corporate

debt have level project been the of this process year. for securing since in last late facility We

parties, from forward. multiple study interested results have positive a have this recent We pushed the process feasibility

We place, the in expect segments. vehicles company building. the in the to financing leave positive it execution the have the different place current Once with flow due these the this will position lease strategic business on in asset a financing level XXX-megawatt to of cash free in are financing

The value. our our significant to differentiated external faced fully challenges with asset and we demand our we this products valuation due but delivering are largely strong to long-term summary, dedicated strengthen robust factors, coupled conviction. shareholder peers, our for attractive services, and quarter, base In of

We time. welcome your Operator? questions at this

[Operator Instructions].

Lucas of line Riley. the from comes question B. first with Pipes Our

strategic. you Ellendale Jamestown and described Wes, as

comment not sold, piece So assets it. I of from those just if BTC specifically that wanted conclude fair to would ask be the to that

Sure. Thanks, Lucas.

sites So to us had have good selling at in fiber versus they future. no the those we that and in those plans those strategic are of in have assets really we what connectivity immediate Texas

inclusive future time. interest and have is That's very then secured? the then with out power about Obviously, for power of first, is assets helpful. a megawatts for you a capacity. And there's than Ellendale, you've this of XXX mentioned or lot been that XXX-megawatt incremental of there And current capacity on this talking how you everything business more BXC long

So think I wonder how should that? about investors

Yes.

of site, to but And XXX. inclusive million right on we've we that megawatts the it's now, at $XXX it secured So the goes BTC. XXX believe

Got on down mechanism it. could through And what's Or expand payments? the bit? a that you

for? the mechanisms sorry, I'm

through mechanisms secured. The which power this is

ESAs. through signed It's

helpful. try I'll squeeze more And to then one in. Very

of Just for debt had that? in potential the could we think the that terms GPUs, mentioned facility you what about for size

somewhere I'm maybe hesitant $XXX roughly size to million, in the $X million but billion multi-hundred say the to range.

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

that XXX-megawatt does new that XXX-megawatt original we big sale? your megawatts hyperscaler part to had the on respect contract. be to with talk Can there in sit that announced? the would relative and about XXX previously a for is obviously, addition call move this Where or you completely to you this have what just Wes, news out the on

Yes.

So is XXX. megawatts the inclusive XXX of the

So The we'll take previous customer go forward. didn't that.

mentioned we're us moving for amount which interest of As at call that effectively last with the site. forward I for our a like have we on entire I with, And forward had in think best call, feel is significant the January, site. party to move I've

Great. Okay.

customer. be in a I very definitionally investors talking finance And challenging bit Is reasonable hyperscaler infrastructure customer get suggestive a a the original high XX-year some the a easier. So therefore, that was talked of to customer to more would substantially finance creditworthy ability that that be to assume This the to contract. would we scenario? little of

about Yes. correct way That's the to that. think

you deal? of XX-year read plus kind $X of a to this -- that? -- when suggestive $X.X how So that announced XXX-megawatt sense of a some XX-year term of about billion. an gave contract the you be deal, Is Would I'm billion

But to looking about ways expect. we sticks like it a we're the to Yes. too economics go past, But I don't this want talked what get many we've of more at megawatt to is because per the commitments. here. into there's the details -- close XX-year in

sort where finally, And inclusive it of how on you sense on of a just get quick to of the give an takes update on GPU of could us well get a any sit, coming your supply in, of just Okay. GPUs, example once sort then the where long And revenue that's recognition. to side, built, how orders InfiniBand? you cluster

just of So clear on sort that?

Yes, sure.

So supply. things a We couple that. shipments, of on seeing everything. We're feel the good including on

we as hit customers to put One little work and bit of team. them blocks to commission because and the these hiring together of turn in there is a amount a significant the limited been a we've we quarter people to over them have more

we've that team. so adding And been to

the cabling of tens need work commissioning, then long that it's be takes connected. of but think involved. a I and of time lot thousands cables The to there's a

in on right we now, should future. customers. bodies and more all shorten over the when site turned with But the being we'll weeks clusters thinking receive about you X to be experience from components with hopefully, So to that the

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

afternoon. Good

a On sense a then that plays the potential out steps steps and of could of financing? us on there give and large are that financing? contracts sense and into negotiating contract, get Or on that? you details timing you Is Just new to it how go go contingent the out. the

Sure.

a lot not we this diligence, now, So of to you the of some I There's things on XX- a where perspective. a work to then And from about go of to process would started. be that worried steps have lot we when done through kind this we from a contracting I'm provide, there's be XX-day one. process, just financing legal expect are from to and a

line trying And of but to site the getting in Okay. up Good. rest transformers for you're time and you you're I on and guess Good. on trying what's speed? or full getting some that that put May, the to the transformer procure -- have place, transformers, the timing

new will They'll a then don't So weeds all be into the transformers connecting are and and site we've -- and installed back too them, as the been well. get the these. procured of There's few the there's a have working not has several indications these. And actually connector component is certain delay it energizing they But all next extraordinarily transformers. the to but the transformers procured just connecting within this already been continue perspective daily on just ramp we've should that weeks. All the up. I performance we on be we much, work from

to expect proceed we so that smoothly. fairly And

that -- not we were to economic with like faster procuring them. the just was found is amount find way. market our -- We found already I painful of in happy It's the for perspective, it site. customer, frame type team transformers But us and the time the down an really And able we shipped the said, this by to being with easy. from transformers and for so

faster the us. So online, get the back we can all that for of better

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

you roughly said start? days megawatts start Just XX contract to you the those XX the When like the that date. from to out that figure Wes, hyperscaler, trying with discussions was did when started. XXX

weeks trying for on think it's is a it, There's of contract. no I'm there's process maybe here. kind X on not but been standard -- discussions. clear, it's to letter make the the just of to which -- or It's going intent, And X it

or started XX weeks have think ago, place? to financing contract it. you might you're saying But I XX time, that Got a from you when days X from in X and

way to right about think the that's I Yes, think it.

you what's the And end of your February? same, own And you'll at many Services for estimate GPU many and be on how the of Okay. were how kind generating GPUs And own end the revenue May? then will the of many revenue? did side, at then how generating Cloud

Yes.

or GPUs. the class I owned, So we HXXX believe, X,XXX, X,XXX

X,XXX And round -- then more before having the there's quarter. number, have so I'm it should X,XXX turned rounded now. but to X,XXX there's So generation end in X,XXX. that There's and being head to the in to we the to that up stage, the my math exact are brought revenue of

it. Got

are X,XXX May? X,XXX So end another of revenue as and the of generating to by X,XXX today

Yes. That's our goal.

Okay.

ones? to in to And Okay. that how cost you much did new transformers roughly, the put the Ellendale need

I have David here, $XXX,XXX (sic) ] Yes. $XXX,XXX apiece? [

total how you And did need? many

XX of the there that We those. ones -- other that of are of the working are still that have replacing We but some needed all them. model we about we're technically,

Got it.

And the question for kind last Okay. committed guys for Do rough rest have 'XX? of me. you of calendar number CapEx a

have we oh, more Well, weeks have calendar sorry. -- I'm we -- X 'XX, of

come on don't that, me We me. Let have back of the to that have for I call. in front Mike. it didn't you here

much We've Mike, accelerating adding make I piece I to the been or point But mentioned business. We've want enterprise did accelerate large working GPU on from on which receiving to that now, is people. from it on been more the seeing to a revenue-generating. we've last one we been and there's customers customers, really and started which demand focused enterprise we're call, on. focused

But pushing, continue deploy as to customers as of so customer the kind aggressively to want transition And current the enterprise up and to. to with base we can really we're close. like we we

just pretty the We're like to to on end the hard of startups. base May, some diversify we there's one in deployment process there, of have through customers right would like of customer our our I think because the diversify that's outside the working now, in reasons we but of love but slowness a I base. that that. those customer few the I just

of Darren Our from with Aftahi comes next Roth. question line the

last could that comment follow Wes, you if up on I made.

going XX,XXX embedded from but achievement in then VC-backed prior of think down to to speak XX,XXX diversified that, goal, a May. guys I call you you diversify clients. if the bogey 'XX? sort into Can as for important, in and your getting less it's guided exiting comment to more that about one So more the important GPU number slowing be to of fiscal that Is still away

Yes.

one, types different of group -- the I think for right all of obviously, away start-up. diversifying it hit the products customers you different on doing from things, they're second the

all in mostly So through it's customers. they're VC-backed. that But and those all it's similar start-ups diversified

rushing for in And think -- more kind single $XXX,XXX think I to date. just to a the the diversification a that to I us the make not term on so I business prior of longer wanted correction, And it's outside instead question. about important over $XXX,XXX of that, just on of transformers, make

And then one the Got data piece. it. center on maybe

financing So you period LOI? prior with the had there like negotiation a hyperscaler LOI, is your

]. No [

that capacity additional does And a LOI ROFR beyond the include megawatts? Okay. on XXX

[ No ].

pricing just change And it. stayed since Any AI on Got me. last moved call has up? the it cloud last for one stable,

Yes, it's been stable.

I call, prepayment and on we've pricing that kind public GPUs I I giving talk for the been level on pricing has where talked hate seen of percentage on pretty if steady kind last think that us split, the about of quarter. out. this hour since the the last per price

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

Just of it here. summarizing kind

So first the piece. GPU on

I generating online You X,XXX now. to brought revenue mentioned, of X,XXX it's end X,XXX May. think

of about as kind exiting that X X,XXX run we think say rate, May revenue? fair So generating to about

close to Could the between is somewhere and think X,XXX about. right X,XXX, be number X,XXX to

so process? enterprise to But kind are into, you we I go the diversify so the on want of, Okay. would in And need still -- to that or slowdown signs. those and just customers sign you'd that still the where out then is aren't those guess,

Yes.

last since advanced the it's So quarter.

mentioned contract it's I and concept think negotiation. -- there's with I in to of proof more we're some, moved

first was where our So contract an I take I -- I think for longer take made much was publicly, process. signed, don't just a customer that qualification. in happy about -- I so X this I'm talked The longer. -- talked but definitely haven't advancement. I've weeks that's it enterprise know -- we initial to they are Those fast. pretty conversation we're But like from process it we signing, has think

XXX on megawatts to site, is so how do basis? additionally kind much how needs on now to the percentage done? much And Got get it. a XXX% just built financing it And then lastly, of

Yes.

now little and So financing, XX% range. site somewhere at we expect the into we're where LTC that over about million $XXX XX% in on negotiating have a the this we point to

to the that going to So we've of in equity put money on put in we're lot the a side. need

[Operator Instructions].

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

a you how -- of me on Can running give and Ellendale off that Minnesota ballpark the have customers AI many now Jamestown you Nevada, sorry, sites? Colorado, like are on

Yes.

have but we We we have primarily X clusters to primarily, have expect some we customers larger that we're smaller, -- deploy bringing that the are And new deployed. with more up.

service that between primarily the yes, X,XXX X So are split in is customers.

Are you next move the you Ellendale thinking you'll there what sites to have be that able in to those colocation quarter? dump and

to to Ellendale our enterprise market. pretty large. going never up. extraordinarily The where So it's it's best loose as I I The potential be just company in problem I think taking some to for all that long-term and of larger and extraordinarily we a think Ellendale hard AI customers not go, is to I right Enterprise cloud for sites, currently our are cut place there capacity valuable. than customer the that structured. think, to And on filling the have we're going capacity. see are those from have those prove would even going demand because won't find we And The dollars. is contract to the at colocation is that's decision

me between the the at versus you? Ellendale you why Ellendale difference the the Jamestown had ones at ones Can help and you transformers failed Okay. understand on

Yes.

don't recoup in get manufacturer had Texas, industry, Ellendale of -- company just haven't we're as lived we the change, in too I So delivery. of from some we've to made far And are they're U.S.-based, We well-recognized went that but there. the Ellendale, non-Americas-based as based going a because the company. specifics But and they to all or X the want when our and costs we I'm transformers spec bought the into -- as concerned. actually a many Jamestown then up pursuing a said, to speed we remedies to be to here

Understood. I appreciate the color.

if I on equipment problems understood I that this issue? I mentioned it. know mentioned Is you evening. just You product. were earlier I some want sure an to no that you getting did you see But InfiniBand okay the source. longer But make remember, it

Yes, no issue. longer an

Okay.

what So would X,XXX you that have you for that goal keep from reaching May?

I will from I be keeps we're in that anything that. said, there don't think process. Like us reaching

As these customers soon that some been other we we of have pursuing. secure as

us which I like the deployment with why can so that see think that. accelerate I you'll is, team said, quickly we're we and augmenting for move

anything see that us. don't will supply chain a side I So stop from

the site sale $XXX does includes for I City mean HPC get think on, you the million, hands. build XXX to, your what, I alluded you far that does Based think How Garden that the of And that fully now? Jamestown in is have and you're that you? paid and just work

a ways. on how between of is in us It's now site and much matter we It Yes, spend just gets a construction out for. paid financing. Ellendale Jamestown level

we the is we going our pause majority are or got But could could. CapEx away X vast that we and pushed, awry that's majority there? -- went funds X if that's our vast where going. this weeks where Yes, to hopefully, delayed because So the at of that's something point. if of And

being sharpest make LOI the that And -- to just to in apologies Wes, is for not shed, turning financing the but site of sure, contract? a a function level the tool the just

Correct.

[Operator Instructions].

comes Pipes Lucas Our line next from question B. with from Riley. the

the if how about. talk LOI of Wes, could maybe little cadence came the a about I wondered bit you

this wings? looking walk up entered you expire? you discussion in prior contingent Did that? a into agreement Did until always color. that of additional before the from with Was to for You decide the Was recently. agreement financing same had kind away the the agreement? hyperscaler Just hyperscaler

Sure.

had that we're we we on but other marketing we exclusivity, because Once discussions. Ellendale constantly XXX both on megawatts, had the the that stopped capacity discussions we've Lucas, and into having agreement additional went at was there that So markets.

were And parties. we so in constant with discussions other

X on different I capacity, our on would X demand don't were lot a know and -- as seeing I we've that. we January, in hyperscalers discussions parts mentioned As we call with classify additional been were if I the of then that and in

continue -- available. constant we capacity it's of kind So that's have we that the a to market

if And yes, about, how, that. those that came so I that's that's how don't discussions know but constantly we're doing

And that is helpful.

call, roughly I in pipeline think we X.X I a don't recall if mentioned don't this working. I of have gigawatts that -- we're but the I

just it's site. so Ellendale And the beyond

a to going pipeline is Wes, can my is that on harp you be expand but on I'm again, sorry all constrained. -- view that to Is this, bit? power

is that power pipeline So that you that to you? have committed

Sure.

to months, these I states, the don't probably the pipeline lot over because of fully of in a have but but we it we next we're Midwest. haven't we the it yet, of want Lucas, in here a process give sites, call few -- So have the signed

have -- for kind we obviously other then area we've the XXX work before. online are sites megawatts that come a in one the XXX XXX 'XX in available for online of have in would North XXX few and we Midwest that that would in that area that 'XX, Utah part northern that site in would not for in we for one you publicly come that now site in the be that a So for that Dakota, but 'XX, that's mentioned

a just few. that's So

what assume the I'd to And that. as Jamestown. Ellendale in similar you kind would cost of power structure be have appreciate I and

attractive price an for HPC application sure. It's Yes. for the

so. $X a million Very the or on Then recourse thinking helpful. follow-up of

is to of is potentially there primary interruption business So supplier? going other Or insurance recourse potential source the sources? back and the

sources warranty available -- But recourse be should yes, there's obviously it obligations us. for here for every other us. and of It's source

closing to There queue. like are back further I'd questions the hand Wes for to no in remarks. Cummins it

for everyone, Thanks, joining.

our on to all forward looking their and us shareholders call. our I quarterly patience catching soon. for Looking forward for to their thank to with employees hard and of work up want to next our you speaking

Ladies does your Thank gentlemen, and today's this teleconference. conclude you for participation.

may lines day. at disconnect You time, and wonderful your have this a