Dillon Heslin

Dillon Heslin asked if colocation was considered in the Microsoft negotiations or if Microsoft specifically requested an AI Cloud deal. He also inquired about the significance of the 200 MW size of the Microsoft deal and if Microsoft had interest in the remaining Childress campus capacity.

Answer

Daniel Roberts (Co-Founder and Co-CEO, IREN) explained that conversations with Microsoft evolved, and while hyperscalers often prefer colocation, IREN focused on the cloud deal due to its attractive terms, including a 20% prepayment and 35%+ equity ARR. He generically stated that there is appetite from multiple parties for cloud and other structures well above the 200 MW signed with Microsoft at Childress, without commenting specifically on Microsoft's interest due to confidentiality.

Dillon Heslin, a Research Associate at ROTH Capital Partners, asked whether colocation was considered in negotiations with Microsoft for the AI cloud contract and how the deal structure evolved. He also inquired about the significance of the 200-megawatt size of the Microsoft deal and potential interest from Microsoft in the remaining Childress campus capacity.

Answer

Co-Founder and Co-CEO Daniel Roberts explained that while conversations with Microsoft evolved and other hyperscalers might prefer colocation, IREN pursued the AI cloud deal due to its attractive terms, including a 20% prepayment and over 35% equity IRR. He generically stated that there is significant interest from multiple parties for cloud and other structures exceeding the 200 megawatts at Childress, without disclosing specific details due to confidentiality.

Dillon Heslin of ROTH MKM questioned the basis for Marchex's confidence in its 2025 sequential revenue growth outlook, asking what differentiates this forecast from similar past projections. He also inquired about the potential impact of tariffs on the company's auto vertical.

Answer

Chairman Russell Horowitz and CEO Edwin Miller cited the completion of the 'OneStack' unified platform as the key differentiator for 2025. They explained this technological foundation enables faster innovation, expansion into new use cases like customer service, and new 'one-to-many' channel sales models. Miller added that a unified UI and single sign-on will unlock cross-sell opportunities into new business units. Regarding tariffs, Horowitz stated that while the situation is fluid, the company has not yet seen any disruptive impact on its auto customers' strategic roadmaps.

On behalf of Darren Aftahi, Dillon Heslin asked about the expected delay between HPC facility construction completion and revenue generation, and for a comparison of the long-term economics of bitcoin mining versus HPC hosting.

Answer

CFO Patrick Fleury stated that for 2025 financial modeling, the company assumes CB-1 will generate revenue for nine months and CB-2 for six months. He explained that HPC hosting offers a stable margin of around $100 per megawatt-hour, whereas bitcoin mining profitability is highly volatile, depending on both bitcoin price and network hash rate. He confirmed the next 500 MW of expansion is dedicated to HPC.

Dillon Heslin from ROTH Capital Partners inquired about the impact of macro factors like COVID-19 on Q3 demand, the reasons for gross margin pressure, and the strategy behind the company's multi-service worker deployment.

Answer

Chairman and CEO Leslie Yu confirmed strong demand despite macro challenges and detailed the nationwide multi-service deployment strategy, which uses an algorithm-based system to match workers to new job opportunities. CFO Sandra Ji explained that Q3 gross margin pressure was due to one-off investments in advance hiring and winter equipment to prepare for anticipated strong Q4 growth, noting that margins are expected to improve.

Dillon Heslin from ROTH Capital Partners inquired about potential Q3 consumer demand weakness due to COVID-19 and macro factors, the reasons for gross margin pressure and the forward outlook, and the go-to-market strategy for the company's multi-service worker deployment.

Answer

Executive Leslie Yu confirmed that despite external pressures, Quhuo saw strong growth and expects continued demand in Q4. Executive Zhen Ba attributed the temporary Q3 gross margin pressure to one-off investments in staffing and equipment in preparation for strong Q4 demand and extreme weather. CFO Wenting Ji added that Q4 gross margins are expected to improve. Leslie Yu also explained the multi-service deployment is a nationwide strategy using an online training system and an algorithm-based platform to match workers with new job opportunities, which drove a 28% quarterly increase in multi-job workers.

Dillon Heslin, on for Darren Aftahi, asked about the strategy to increase customer adoption of dynamic pricing, which grew from 2,300 to 3,000 studios, and inquired about its international penetration.

Answer

CEO Rick Stollmeyer explained that dynamic pricing is currently only available in the U.S. The adoption strategy focuses on direct outreach to early-adopter businesses, followed by promoting their success stories to create a pull effect among more conservative owners. He anticipates its adoption will follow a curve similar to or faster than that of introductory offers, as consumers have responded very positively.

Dillon Heslin inquired about the progress of the national rollout of dynamic pricing and its integration into the new mobile app. He also asked for customer feedback on the new, higher-priced software tiers, particularly from high-value subscribers.

Answer

CEO Rick Stollmeyer reported a great response to dynamic pricing, with 2,300 studios adopting it, and confirmed it will be a core feature in the redesigned app. He stated there has been no statistically significant pushback on the new pricing tiers, as the repackaging provided more value and has not negatively impacted attrition rates for high-value subscribers.