Darren Aftahi

Darren Aftahi asked about the significance of the pre-lease financing facility, particularly what it conveys about Applied Digital's confidence in developing sites before securing signed leases.

Answer

Wes Cummins, Chairman and CEO, clarified that utilizing the pre-lease financing facility, such as the Macquarie equipment capital, signals a high degree of confidence in securing a lease with a new investment-grade hyperscaler for new campuses. He stated that this strategy allows them to initiate groundwork and construction, aiming for diversification in both location and customer base, with expectations for new lease signings in early 2026.

Darren Aftahi asked for a definition of Applied Digital's 'active pipeline' of four gigawatts. He also questioned how the company balances human capital and resources when doing multiple sites simultaneously, and what potential headwinds could deter the 12-month construction timeframe.

Answer

Wes Cummins, Chairman and CEO, defined 'active pipeline' as projects expected to move into construction within the next 6-12 months. He explained that the company has aggressively prepared internally for scaling, secured supply chain early, and plans to mitigate localized labor force limitations by expanding to other states to maintain the aggressive construction timeline.

Darren Aftahi requested a definition of 'active pipeline' for the 4 GW mentioned and asked about the company's strategy for balancing human capital and resources when developing multiple sites simultaneously, particularly regarding the 12-month construction timeline.

Answer

CEO Wes Cummins defined 'active pipeline' as projects expected to move into construction within 6-12 months, with active work on permitting and power. He explained that the company has aggressively scaled internal resources, pre-secured supply chain, and plans to leverage different local labor pools by developing campuses in other states to maintain aggressive timelines.

Darren Aftahi asked about the mid-2026 timeline for Building 2, whether it was aggressive, and if penalties exist for delays. He also inquired about site selection preferences beyond the Dakotas, particularly regarding PUE.

Answer

CEO Wes Cummins expressed confidence in the timeline for Building 2, citing significant process improvements that have halved build times, and confirmed standard late-delivery penalties are in the lease. Regarding location, he stated that while they are focused on North Dakota, they are also evaluating other sites in the MISO territory, including in the southern U.S.

Darren Aftahi of ROTH Capital Partners asked if there was prior inbound interest in the AI cloud business, sought clarification on the resolution timeline for technical issues, and questioned if hyperscaler demand for data centers has shifted recently.

Answer

Executive Wesley Cummins declined to comment on prior interest in the cloud business. He confirmed that technical issues with the multi-tenant cloud configuration were resolved in early March. He also explained that while overall hyperscaler demand remains strong, the active party in leasing discussions tends to rotate among the major players.

Darren Aftahi questioned the strategic timing of the Macquarie announcement relative to the hyperscaler lease negotiations and asked if the 400-megawatt Ellendale campus could potentially be split between two customers.

Answer

Executive Wesley Cummins stated that the timing of the Macquarie deal was driven by securing the right terms, not by other external factors. He also affirmed his strong belief that the entire Ellendale campus will be leased to a single customer.

Darren Aftahi from ROTH Capital Partners, LLC asked for clarification on the hyperscaler lease, questioning if it was solely for 100 megawatts or included options on additional capacity, and later followed up on the structure of future leases and potential for prepayments.

Answer

Executive Wesley Cummins confirmed the initial lease is for 100 megawatts, but it is expected to include a reservation for the remaining 300 megawatts for the same tenant, to be covered under a second lease. He noted one lease would be a colo model and the other a yield-on-cost model, but with similar economics. Regarding future builds, he stated that while they won't build speculatively, the market is showing signs of hyperscalers offering upfront capital.

Darren Aftahi inquired about the assumed CapEx per megawatt for retrofitting or greenfielding data centers to Tier 3, as well as HIVE's AI cloud strategy, specifically regarding GPU financing, leasing arrangements, and the assumed useful life of GPUs.

Answer

Aydin Kilic, CEO and President of HIVE, detailed CapEx for Boden ($25 million) and Toronto ($40 million) conversions. He explained the lease-to-own model for GPUs with a de minimis buyout and provided a conservative useful life estimate of five years, noting historical resale values of 90% after three years for Ampere GPUs.

Darren Aftahi asked about the assumed CapEx per megawatt for retrofitting or greenfielding data centers to Tier 3, and inquired about HIVE's AI cloud strategy, specifically regarding the financing and lease-to-own model for GPUs, and the assumed useful life of these GPUs.

Answer

Aydin Kilic, CEO and President of HIVE, detailed the CapEx for Boden ($25 million) and Toronto ($40 million) conversions, noting Bell's colocation involves no significant CapEx. He confirmed the GPU financing is a lease-to-own model with a de minimis buyout, and conservatively estimated a useful life of five years for GPUs, citing past sales at 90% of face value after three years.

Darren Aftahi of ROTH MKM asked for details on the logistical steps and potential obstacles in closing the Bitfarms site acquisition in Paraguay and ramping up to the 25 exahash target. He also inquired about any recent changes in the demand environment for the AI cloud business.

Answer

Chief Financial Officer Darcy Daubaras addressed the Paraguay acquisition, stating that communication with Bitfarms is strong and he foresees no major obstacles, with the focus being on due diligence and strategic equipment deployment. The question regarding the AI cloud business was directed to CEO Aydin Kilic, who was experiencing audio difficulties and could not provide a response.

Darren Aftahi of ROTH MKM inquired about the logistical steps and potential obstacles in closing the Bitfarms Paraguay acquisition and achieving the 25 exahash target. He also asked about any changes in the demand environment for the AI cloud business.

Answer

Chief Financial Officer Darcy Daubaras detailed the progress on the Paraguay acquisition, citing strong communication with Bitfarms and local partners with no major obstacles foreseen. He noted the focus is on due diligence and strategic equipment deployment. A response to the AI demand question was not provided due to audio difficulties experienced by CEO Aydin Kilic.

Darren Aftahi from Roth Capital Partners inquired about the composition of Antalpha's Q4 revenue guidance, specifically whether it's purely organic or includes contributions from Aurelion. He also asked about the geographic expansion, particularly U.S. penetration, and the impact of new growth vectors like DATT financing and RWA on the guidance. Additionally, he sought clarification on the company's reported pricing power.

Answer

Herman Yu, Head of Strategy for Antalpha, clarified that Aurelion does not contribute to Antalpha's revenue; rather, Antalpha pays Aurelion a fee for lending gold, which strengthens Antalpha's balance sheet. He stated that Q4 guidance is primarily driven by the existing Bitcoin mining pipeline, with new loan scenarios not yet materially impacting numbers. Regarding geographic expansion, Yu noted that while U.S. infrastructure is being built and hiring is underway, significant U.S. revenue is expected next year. On pricing power, Yu explained that despite Fed rate decreases, Antalpha maintained tech fees and reduced funding costs, attributing improved margins to enhanced branding from its U.S. listing and increased scale.

Darren Aftahi from Roth Capital Partners inquired about the composition of Antalpha's Q4 revenue guidance, specifically whether it includes any contributions from Aurelion or is purely organic. He also asked about the impact of geographic expansion (U.S. penetration), DATT financing, and RWA on growth vectors, and sought clarification on the company's pricing power.

Answer

Herman Yu, Head of Strategy for Antalpha, clarified that Aurelion does not directly contribute to Antalpha's revenue; instead, Antalpha pays Aurelion a fee for lending gold, strengthening Antalpha's balance sheet. He stated that Q4 guidance is based on the current pipeline, primarily from the historical Bitcoin mining business, with new loan scenarios not yet materially impacting numbers. Regarding regional expansion, U.S. revenue is not expected to be material in Q4 but is anticipated to grow next year. Yu attributed improved pricing power and better margins to Antalpha's enhanced branding and scale since going public, despite general interest rate decreases.

Darren Aftahi inquired about White Fiber's colocation pipeline beyond North Carolina 1 (NC1) if current interested parties don't secure capacity, and sought clarification on the term 'formalized in the coming weeks' regarding NC1 contracts.

Answer

Sam Tabar, CEO of WhiteFiber, and Billy Krassakopoulos, President of WhiteFiber, explained that multiple highly interested parties are engaged for NC1, with clarity on commitments expected very soon. They noted that one customer doubled their initial LOI capacity, another pivoted to unreleased NVIDIA hardware, and a third expressed interest in a new market deployment contingent on NC1. These changes require redoing technical and financial plans, causing slight delays but still targeting Q1 2026 delivery. Erke Huang, CFO of Bit Digital, Inc., added that the pipeline beyond NC1 includes sites in Arizona, Texas, New York, and another in North Carolina, though these are in early stages. Management emphasized White Fiber's ability to build 2x faster and 40% cheaper using a retrofit model, citing the Cerebras project as an example.

Darren Aftahi inquired about White Fiber's colocation pipeline beyond North Carolina and sought clarification on the 'formalized in the coming weeks' statement regarding NC1 contracts.

Answer

Sam Tabar, CEO, and Billy Krassakopoulos, President of Data Centers, explained that multiple parties are highly interested in NC1, with one doubling capacity and another pivoting to NVIDIA's latest hardware. They emphasized White Fiber's ability to build two times faster and 40% cheaper using a retrofit model, citing the Cerebras project as an example. Billy also mentioned exploring new sites in Arizona, Texas, New York, and another in North Carolina.

Darren Aftahi with Roth inquired about WhiteFiber's colocation pipeline beyond North Carolina (NC1) and sought clarification on the term "formalized in the coming weeks" regarding NC1 customer contracts.

Answer

WhiteFiber CEO Sam Tabar and President Billy Krassakopoulos explained that multiple highly interested parties are engaged for NC1, with one customer doubling capacity and another pivoting to new NVIDIA hardware, requiring quick formalization for Q1 2026 delivery. They highlighted a broader pipeline in Arizona, Texas, and New York, emphasizing WhiteFiber's retrofit model for 2x faster and 40% cheaper builds, exemplified by the Cerebras MTL-3 project. Erke Huang, CFO of Bit Digital, Inc., also commented on the early stages of other site developments.

Darren Aftahi questioned the strategy for Horizon 1 and 2, noting that the planned 50MW for Horizon 2 at Childress implies displacing existing Bitcoin mining capacity. He also asked about the demand drivers from partner FluidStack in the Neo Cloud space.

Answer

Co-CEO Daniel Roberts confirmed that Horizon 1 is for liquid-cooled GPUs, with monetization options including IREN's own cloud service or colocation. He acknowledged that expanding AI capacity could involve displacing Bitcoin miners, which is consistent with the company's long-term strategy, and that miners could be reallocated to other sites like Sweetwater. Regarding FluidStack, Roberts indicated that IREN's current model of owning and operating GPUs with attractive financing offers a more compelling return than some third-party colocation deals.

Darren Aftahi from ROTH MKM questioned how IREN achieves its competitive CapEx per megawatt for the Horizon 1 project, which includes UPS and diesel generators, and asked for a profile of the potential customers engaged in discussions.

Answer

Kent Draper, Chief Commercial Officer, attributed the cost efficiency to over seven years of experience in building power-dense data centers, optimizing designs, and leveraging existing infrastructure. Daniel Roberts, Co-Founder and Co-CEO, emphasized that IREN's in-house, first-principles engineering approach avoids layers of third-party contractor markups, creating a significant competitive advantage in delivering a new asset class of power-dense computing infrastructure.

Darren Aftahi questioned the ROI calculation behind reallocating 5 exahash from Bitcoin mining to the Horizon 1 HPC project and asked about the strategic motivation for announcing the Sweetwater 2 development despite its inherent risks.

Answer

Co-CEO Daniel Roberts explained the decision was strategic, capitalizing on a unique market opportunity in liquid-cooled AI that offers compelling returns and unlocks value for the entire platform. He added that announcing Sweetwater 2 provides crucial context for the Sweetwater 1 strategy and the broader market's demand for multi-gigawatt campuses. CCO Kent Draper noted that customer demand for liquid cooling has recently crystallized, supporting the timing.

Darren Aftahi questioned the strategic thinking behind accelerating the 50 exahash target versus other opportunities and asked for a breakdown of the prepayments on the balance sheet.

Answer

Co-CEO Daniel Roberts stated that building out Bitcoin mining currently presents the best risk-return proposition, though the company retains optionality to pivot if a superior AI colocation deal materializes. CFO Belinda Nucifora clarified that the prepayments consist of $122 million for mining hardware, $8.1 million for GPUs, and collateral related to the Childress electricity contract.

Speaking for Darren Aftahi, Dylan Hessling asked about TerraWolf's ability to maintain or expand its unlevered yield-to-cost on future projects and sought to quantify the amount of capital required from the markets for the build-out.

Answer

CFO Patrick Fleury and CEO Paul Prager affirmed their commitment to maintaining pricing discipline due to very strong market demand. Regarding financing, Fleury explained that the Google partnership fundamentally improves their credit profile, enabling them to pursue a series of lower-cost capital market initiatives with their advisors at Morgan Stanley, rather than providing a specific capital requirement.

Darren Aftahi questioned what triggers or milestones are needed to secure future HPC capacity deals and sought clarity on the company's confidence in achieving incrementally higher adjusted EBITDA margins on that future capacity.

Answer

CEO Paul Prager stated that no specific 'bogey' is required to sign new deals as conversations are ongoing, but energizing the first Core42 building (CB-1) will serve as a powerful proof point to accelerate customer commitments. CFO Patrick Fleury explained that higher incremental margins are expected due to operating leverage; with base costs for the site already in place, additional capacity can be added at a much higher margin than the initial 75% projected for the first phase.

Darren Aftahi from ROTH Capital Partners inquired about the operational status and timeline for the initial 72.5-megawatt CB-1 building for Core42. He also asked about TeraWulf's contingency plan if Core42 does not exercise its option for additional capacity.

Answer

CEO Paul Prager declined to provide a specific timeline for the Core42 deployment, explaining that the schedule depends on ongoing discussions with the customer regarding their power option and evolving needs. He assured that TeraWulf has a robust 'Plan B,' with multiple, mature dialogues underway with other high-quality potential customers who have NVIDIA allocations and long-term growth plans.

Darren Aftahi of Roth Capital Partners, LLC inquired about the expected ramp-up of payment customers in the second half of the year and the status of the potential sale of the EveryLife brand.

Answer

Michael Seifert, Founder, President, CEO & Chairman, confirmed the thesis for a significant revenue ramp in H2 2025 holds true, noting that onboarding has been slightly delayed as merchants opt for a more comprehensive bundled checkout offering of both payments and credit services. Regarding the EveryLife sale, Seifert stated the official process began this week with positive early interest, and the company anticipates completing the transaction by the end of Q4 2025.

Inquired about cross-selling trends between business segments, the status of the GMV pipeline against the $10 billion target, and whether adjustments to AI-driven credit underwriting would alter the fintech revenue mix.

Answer

Currently, 90% of cross-selling synergies come from BNPL merchants adopting payments, but this will balance out with marketplace merchants following the new Shopify integration. The company is focused on onboarding the first $2.5-$3 billion of its over $10 billion GMV pipeline this year. Changes to AI credit models are not expected to alter the guided revenue mix for 2025, as the company has levers to manage performance.

Speaking on behalf of Darren Aftahi, Dylan inquired about cross-selling synergies between business segments, the progress on onboarding the payments GMV pipeline, and whether adjustments to the AI-driven credit models would impact the FinTech revenue mix.

Answer

Chairman and CEO Michael Seifert explained that cross-selling is currently dominated by converting BNPL clients to payments (90%), but will shift toward marketplace merchants following the new Shopify integration. He reiterated the 2025 focus is on onboarding $2.5B-$3B of the >$10B GMV pipeline. Seifert and Chief Strategy Officer Dusty Wunderlich clarified that AI-driven credit tightening was anticipated and will not alter the previously guided FinTech revenue mix, thanks to flexible liquidity strategies.

Darren Aftahi asked about the short and long-term business impact of the recent election, sought clarification on Fintech pipeline metrics, inquired about the investment needed to reach 2025 goals, and asked for details on the $11 million cost-saving plan and Fintech gross margins.

Answer

CEO Michael Seifert stated the election provides a "wind in our sails," anticipating a favorable regulatory environment. He clarified the $1B in contracted payments GMV is entirely from their existing merchant ecosystem. Seifert also noted that significant investment in the Fintech platform has already been made, requiring minimal future capital to hit goals. CFO Brad Searle detailed that the $11M in annualized savings is primarily from a 35% workforce reduction and reduced contractor spend, with savings beginning in Q4 2024. Searle and Seifert explained that Fintech margins are high for credit products and are expected to be 10-20% for payments, with plans to increase the payments margin over time.

Darren Aftahi of Roth Capital Partners followed up on the master site design, asking how critical its completion is for advancing negotiations with potential tenants. He also inquired about the long-term strategic plans for the Rockdale facility beyond its current use for Bitcoin mining.

Answer

CEO Jason Les explained that the basis of design is foundational for engaging in serious discussions with a wide range of potential customers. Regarding Rockdale, he stated that while the primary focus is on developing Corsicana, the strategy is to monetize Rockdale's power with Bitcoin mining in the near term, with the ultimate goal of transitioning that capacity to data center use as well.

Darren Aftahi of ROTH MKM asked about the theoretical HPC capacity of the existing Corsicana pad, the timeline and steps needed to develop the newly acquired land, and the feasibility of converting the acquired Rhodium building for HPC use.

Answer

CEO Jason Les estimated the existing pad could support 100-200 MW of critical IT load, depending on tenant preferences for density. He explained that the newly acquired land provides more development options and would require civil and electrical work to prepare. Regarding the Rhodium assets, he stated it's too early to decide the best use, but retrofitting the existing building for AI/HPC is unlikely; instead, they might build a new data center on the available land to use the secured power capacity.

Darren Aftahi asked for more detail on the size of the additional land being acquired at the Corsicana facility and questioned if there is an economic scenario where Riot would consider converting the entire Rockdale facility into an HPC campus.

Answer

CEO Jason Les stated that Riot is procuring 'hundreds of acres' to maximize optionality at Corsicana. He confirmed that if the economics were compelling, Riot would 'certainly be interested' in converting the entire Rockdale site for an HPC opportunity, highlighting the strategic advantage of offering 1.7 gigawatts across both sites to a single partner.

Darren Aftahi inquired about the specific logistical best practices, beyond new machine installations, that are contributing to improved hash rate utilization. He also asked if the planned 600-megawatt expansion at Corsicana is exclusively for Bitcoin mining or if Riot has other aspirations for the capacity.

Answer

CEO Jason Les explained that utilization improvements stem from a wide range of initiatives, including electrical infrastructure upgrades, cooling tweaks, enhanced analytics, and better on-the-ground minor repair organization. Regarding the Corsicana expansion, Les confirmed the current plan is for Bitcoin mining but stated Riot is open to other opportunities, like HPC, if the economics are superior for shareholders, noting preliminary discussions are ongoing.

Darren Aftahi from Roth Capital Partners, LLC asked for a breakdown of the 3.1 gigawatts under exclusivity between dual-purpose use and next-gen compute.

Answer

CEO Asher Genoot estimated that approximately 1 gigawatt of the pipeline is suitable for Bitcoin mining, with the remainder being either dual-purpose or exclusively for AI compute. He emphasized a strategy of securing both near-term and long-term power to ensure continuous growth and development.

Darren Aftahi of Roth Capital Partners, LLC asked for a breakdown of the 3.1 gigawatts under exclusivity between dual-purpose use and next-gen compute.

Answer

CEO Asher Genoot stated that approximately 1 gigawatt is targeted for Bitcoin mining, with the remainder being either dual-purpose or exclusively for AI compute. He highlighted a focus on both near-term power availability and long-term capacity planning, with more site-specific details to be disclosed next quarter.

Darren Aftahi inquired about the new Elevate program, specifically how it enhances profitability per transaction, the expected agent onboarding cadence, and its potential impact on ancillary businesses. He also asked if the launch of Elevate has accelerated discussions with other large agent teams about joining Fathom.

Answer

Executive Marco Fregenal explained that Elevate's 20% commission split and the efficiency of the intelliAgent platform are expected to increase gross profit margin per transaction by 3x to 4x. He noted that a soft launch attracted 120 agents in four weeks, with a goal to onboard 100 new agents per month by year-end. Fregenal confirmed that Elevate has significantly increased conversations with other brokerages and partners, with potential walkovers in Q3 and licensing announcements within six months. He also mentioned plans for specialized versions like 'Elevate for teams'.

Darren Aftahi inquired about Fathom's new 'Elevate' program, focusing on its specific impact on per-transaction profitability, the planned agent onboarding cadence, and its potential to positively affect ancillary businesses. He also asked if the program's launch has accelerated discussions with large agent teams or potential brokerage partners.

Answer

Marco Fregenal (executive) explained that Elevate is projected to increase gross profit per transaction by 3x to 4x, thanks to its 20% commission split and the efficiencies of the intelliAgent platform. He noted that a soft launch attracted 120 agents, with a goal to onboard 100 agents per month by the end of the year. Fregenal confirmed that Elevate has significantly increased inbound interest from other brokerages and technology partners, with potential walkovers and licensing deals anticipated in the coming months.

Darren Aftahi of Roth Capital Partners inquired about the impact of the Fathom Max and Share commission plans on agent recruitment and retention, and asked about strategic initiatives to accelerate the adoption of mortgage and title services.

Answer

Executive Marco Fregenal explained that it's early to gauge the full impact of the new commission plans, with 5% of new agents choosing the 'Share' model and 95% choosing 'Max'. He noted that while agent turnover is slightly higher, it remains concentrated in low-producing agents. For ancillary services, Fregenal highlighted that their growth is outpacing the brokerage, driven by programs like the 'ambassador program,' which is a key part of the strategy to achieve positive EBITDA in Q2 2025.

Darren Aftahi sought clarification on whether the 2025 SaaS guidance reflects a 'business as usual' outlook or incorporates conservatism for potential tariff impacts. He also asked about the initiative to encourage residential service providers to sell more commercial solutions.

Answer

CEO Stephen Trundle stated the guidance does not model a significant tariff impact on demand but does include some conservatism by modeling a normalization of revenue retention. He explained that while Alarm.com encourages dealers to have a diverse business mix, they are also actively prospecting dedicated commercial integrators who have not traditionally been partners.

Darren Aftahi asked for an update on the integration of the EBS acquisition and its potential impact in 2025. He also sought clarification on whether the increase in the 2025 SaaS guidance was entirely due to the CHeKT acquisition or included organic strength.

Answer

CEO Stephen Trundle expects meaningful sales from the EBS platform to begin mid-year 2025, describing it as a 'little bit of a blue bird' for the international business in the second half, rather than a massive needle-mover. Regarding the SaaS guidance, he clarified that the increase was not solely due to the CHeKT acquisition; the company was positioned to hit its initial numbers organically. The final guidance reflects a contribution from CHeKT that is less than the total increase from the preliminary look.

Darren Aftahi questioned the upward shift in EBITDA margin targets from a previously mentioned 18% level to the new 19%+ range. He also asked about potential areas of upside that could counterbalance the known headwinds to SaaS growth in 2025.

Answer

CEO Stephen Trundle acknowledged his prior commentary on 18% margins and explained that with several growth initiatives reaching a more impressive scale, the company is now comfortable guiding to a 19%+ EBITDA margin level going forward. For potential SaaS growth upside, Trundle pointed to possibilities like landing new domestic or international logos, corporate development activities, or faster-than-expected acceleration in the international business, while noting the current forecast is based on more tangible factors.

Darren Aftahi asked about agent adoption metrics for the Leo AI co-pilot and its impact on productivity, as well as the trend in gross margins given the pressure from an increasing number of capped agents versus the growth of new ancillary services.

Answer

CEO Tamir Poleg explained that Leo AI is currently focused on internal agent support, so consumer-facing productivity metrics are not yet available as that functionality is still in testing. CFO Ravi Jani stated that while the higher mix of capped agents will continue to impact margins in Q2, he expects this to be increasingly offset by recent fee changes and growing contributions from ancillary businesses as the year progresses.

Darren Aftahi inquired about the factors behind The Real Brokerage's strong Q4 performance, which defied typical seasonal dips, and asked about the strategic initiatives for 2025, particularly concerning the scaling of ancillary businesses like title and mortgage.

Answer

Chairman and CEO Tamir Poleg attributed the strong quarter to aggressive market share gains and unexpectedly favorable market conditions in December. Regarding 2025 initiatives, Poleg highlighted the hiring of Nancy Marsden to scale the title business, noting current attach rates are around 1% for mortgage and 4% for title. He mentioned new product initiatives are planned to drive these rates higher. CFO Michelle Ressler added that 2025 will be an investment year for operations, product, and compliance, but the company aims to grow gross profit faster than operating expenses.

Darren Aftahi asked about the sustainability of the high adjusted EBITDA flow-through from gross profit and whether the business has reached a sustainable inflection point. He also inquired about the reasons for the significantly lower revenue churn observed year-to-date compared to the previous year.

Answer

Chief Financial Officer Michelle Ressler affirmed that the operating leverage is sustainable due to efficiency and automation, but noted that investments in regulatory compliance will temporarily increase costs over the next year before stabilizing. Chairman and CEO Tamir Poleg added that this profitability was impressive given the heavy investment in new technology. Regarding churn, Mr. Poleg attributed the low 2-3% quarterly revenue churn to the platform's strong value proposition for productive agents, who see no better alternative in the market.

Darren Aftahi asked for a comparison of lease signing timeframes between large enterprises and hyperscalers, whether the company has an internal preference, and about the expected delivery cadence of the upcoming 8 MW and 40 MW of capacity for financial modeling purposes.

Answer

CEO Adam Sullivan stated that large enterprise contracts have faster timelines and offer higher return profiles, making them attractive potential anchor tenants for new sites. Regarding the delivery cadence, he explained that energization is a day-by-day process, making it difficult to provide an exact date for modeling.

Darren Aftahi asked for details on the permitting process that extended the HPC capacity delivery timeline and for an update on the Alabama site's progress with Alabama Power.

Answer

CEO Adam Sullivan explained that the permitting delay stemmed from a major design adjustment at a specific site to optimize scale and efficiency, a process that is now complete. Regarding the Alabama site, he expressed high confidence in securing more power and noted that significant capital deployment is contingent on finalizing a new customer contract, with limited CapEx planned until then.

Darren Aftahi asked about the expected timeline to secure the additional 300 megawatts of power at existing sites. He also questioned how the company balances customer concentration against deal economics, particularly whether it would prioritize diversification over another attractive deal with CoreWeave.

Answer

CEO Adam Sullivan noted that the timeline for securing new power varies by utility but is being accelerated by the involvement of potential clients, with some approvals possible before the end of 2024. While acknowledging the CoreWeave deal is 'extraordinarily attractive,' he stressed that diversifying the client base with other large tech companies is a long-term necessity for stability, indicating a strategic focus on balancing both objectives.

Darren Aftahi of ROTH MKM asked about the timeline for securing an additional 300 megawatts of power and how the company balances customer concentration versus deal economics, particularly regarding its available capacity.

Answer

CEO Adam Sullivan stated that securing the additional power is an ongoing process that varies by utility, but some approvals could be secured by the end of 2024. On customer strategy, he acknowledged that while the CoreWeave deal is "extraordinarily attractive," diversifying the client base with other large tech companies is a key long-term goal for stability and growth.

Darren Aftahi inquired about the company's strategic approach to its existing mining sites following the vertical integration move in Alberta. He also asked how Bitdeer balances the decision to self-mine versus selling its rigs, especially given the strong oversubscription for its SEALMINERs.

Answer

Chief Strategy Officer Haris Basit affirmed that the company remains bullish on Bitcoin mining at its existing sites and the Alberta acquisition does not alter that strategy. He elaborated that the near-term priority is using new miners for self-mining to fill capacity, with a gradual shift toward more external sales expected in 2026, particularly with the A3 miner.

Darren Aftahi of Roth Capital Partners asked about the company's strategic decisions regarding its fully verticalized Alberta site versus existing sites, and how it balances selling its highly sought-after miners versus using them for self-mining.

Answer

Chief Strategy Officer Haris Basit explained that the company remains bullish on mining at its existing sites and the Alberta acquisition does not change that strategy. He clarified that the current priority is to use new miners for self-mining to fill internal capacity, with a likely shift toward more external sales in 2026, especially with the next-generation A3 miner.

Darren Aftahi of ROTH Capital Partners, LLC questioned the potential impact of a new U.S. administration on the ASIC business, the strategy for acquiring human capital for the HPC venture, the preferred operating model for these data centers, and the comparative regulatory environments of Texas and Ohio.

Answer

Executive Jihan Wu and Head of Capital Markets Jeff LaBerge stated they do not anticipate a significant impact from a new administration on their ASIC plans. Jeff LaBerge explained they are open to various partnership models for HPC, which will determine human capital needs. Executive Haris Basit added that both Texas and Ohio offer pro-business environments and commercial factors, not regulations, will drive decisions.

Darren Aftahi of ROTH MKM asked if any factors beyond the Discovery content drop were creating headwinds for advertising growth. He also inquired about the relative profitability of new stand-alone premium packages and the potential for cannibalization.

Answer

CFO John Janedis confirmed the Discovery content drop was the main headwind but also highlighted a difficult year-over-year comparison of 34% growth in Q3 2023. He noted the two-year stacked growth actually accelerated to 11% in Q3. Regarding new offerings, Janedis stated they will be accretive to margin dollars and will have a similar margin profile to the core product, expressing confidence that they will improve overall margin dollars over time without significant degradation.

Darren Aftahi inquired about the timeline for the Q4 product rollouts, the potential sales impact from these new products, and for more details on Marchex's current and developing AI capabilities.

Answer

CEO Edwin Miller explained that new AI-driven solutions for specific verticals are being launched in Q4 2024 after successful client pilots. He emphasized that product innovation is a continuous process, not a one-time event, and that the migration to the 'OneStack' platform is freeing up resources for go-to-market investments. Miller highlighted that the company is already actively developing and selling its AI capabilities.

Inquired about the use of machine learning in performance marketing, the expected duration of the short-haul flight impact on metrics, and the normalization of operating cash flow.

Answer

The company uses AI/ML for revenue management optimization and real-time campaign analysis. The impact from short-haul flights is expected to continue for a while, with comparisons normalizing in the second half of the year. While Q1 free cash flow was exceptionally strong due to specific initiatives, the company reiterated its expectation for positive free cash flow for the full year 2024.

The analyst asked about the business mix post-LBF divestiture, future operating leverage, the status of AI marketing spend, and detailed questions about the R&D costs and P&L impact of both Mondee's internal AI development and the Purplegrids acquisition.

Answer

Executives clarified the air vs. non-air mix remains around 75-80%. They pointed to the 10-Q for pro forma modeling and explained that some of the planned marketing spend for the AI marketplace might be deferred to 2024. They also detailed that AI development costs have been ongoing and capitalized, and the Purplegrids acquisition is a strategic, cost-efficient move that evolved from a prior consulting relationship, with its platform expected to drive savings across the business.

Darren Aftahi sought clarification on year-over-year core business growth after excluding political ad spend from the prior year. He also asked about the revenue impact of the player attrition, the gross margin profile of new partners, and the prospects for the 'Local' advertising initiative in 2024.

Answer

The company confirmed that the core business did grow year-over-year when excluding political ad revenue from the prior year's quarter. The revenue impact from the removed players was minimal as they were low-performing units. New partner deals have better terms and revenue shares for Loop, contributing to a better bottom line. The 'Local' initiative had no meaningful revenue in the quarter as it was in beta, but they are optimistic about its contribution in the second half of the year.

Darren Aftahi of ROTH Capital Partners inquired about the impact of China's current economic conditions and COVID-19 policies on business performance in the latter half of the year, and whether sourcing fulfillment workers has become more challenging.

Answer

Chairman and CEO Leslie Yu stated that while on-demand delivery growth has slowed, mobility and housekeeping services are performing well, a trend expected to continue into Q4. He noted that zero-COVID policies increase reliance on online ordering. Paradoxically, these same policies have stabilized the workforce by limiting travel, making recruitment and deployment less challenging.

Darren Aftahi of Roth Capital Partners inquired about ongoing supply chain challenges for procuring international brands, the company's strategy for substituting with domestic or private label products, and the gross margin difference between private label and branded goods.

Answer

Co-CEO and CFO Lisa Tang stated that overseas brand supply chains have not significantly recovered, and Boqii is compensating with private labels, which increased from 13% to 17% of the product mix. An Unidentified Company Representative added that private label gross margin is approximately 33% versus 20% for non-private label products, with a future target of 35-40% for private labels.

Darren Aftahi from ROTH Capital Partners asked for details on integration challenges within the salon and spa vertical. He also requested an update on the progress of upselling Booker clients, referencing a prior data point about new customer price points being significantly higher than legacy ones.

Answer

CEO Rick Stollmeyer outlined three challenges for the salon and spa vertical: ramping up the former Booker sales team, which was not in a growth mode pre-acquisition; a delay in releasing the branded mobile app for Booker; and a longer timeline for integrating Booker inventory into the main MINDBODY app. CFO & COO Brett White provided an updated metric, stating that for the full third quarter, the average monthly subscription for new Booker customers was up 60% compared to Q2 2018.

Darren Aftahi asked for more details on the 50% increase in average subscription fees for new Booker customers since the July 1st pricing alignment and the strategy for upgrading Booker's existing installed base.

Answer

CEO Rick Stollmeyer clarified the 50% increase in average monthly subscription revenue applies to new customers acquired since July 1. For the existing base, he stated there are no price increases planned for 2018. The large cohort of customers paying less than $125 per month represents a 2019 upsell opportunity.