Joseph Flynn

Joseph Flynn requested more detail on why the 'powered shell' approach is considered optimal for Panther Creek and asked about the strategy for pre-leasing the site in relation to the Macquarie financing.

Answer

CEO Ben Gagnon explained that the primary goal is maximizing shareholder value through long-term, high-margin contracted revenues, with a strong focus on Return on Invested Capital (ROIC). He suggested the powered shell model represents a potential 'sweet spot' that balances capital expenditure with revenue and margin, possibly yielding a better ROIC than a more capital-intensive full build-out. The final strategy will ultimately be driven by customer demand and conversations.

Joseph Flynn of Compass Point Research & Trading requested a breakdown of the remaining CapEx for 2024 and 2025 targets and guidance on future use of the ATM facility. He also asked for additional color on the decision to end the strategic alternatives review process.

Answer

CFO Jeff Lucas detailed that the 2024 growth plan is fully funded, with approximately $140 million in remaining CapEx for the year, covered by liquidity and operating cash flow. He added that ATM usage has been dramatically reduced and will be very selective going forward. CEO Ben Gagnon stated that after a thorough review, the board unanimously determined that pursuing the company's standalone plan is the best path to maximize shareholder value.

Joseph Flynn asked for a detailed update on the data center project financing, including the source of demand, potential structures, and how the offtaker's credit quality impacts financing terms. He also inquired about funding the equity portion of the CapEx.

Answer

Founder and CEO Michael Novogratz explained that the Phase 1 financing should close in weeks, with strong demand from both bank project finance groups and direct lenders. He noted that the lease structure and CoreWeave's credit quality are key factors, and an improvement in CoreWeave's credit should lead to cap rate compression for the asset. For the equity component, he stated that all options are on the table to maximize return on equity.

Joseph Flynn asked for details on the construction timeline for Helios, the structure of the fixed yield on CapEx in the lease, and whether CoreWeave's end customers were involved in the project's design.

Answer

Executive Christopher Ferraro outlined a phased delivery for Helios, with data halls for Phase 1 coming online in early to mid-2026. He explained the lease uses a percentage yield on CapEx structure, which is common for new, collaborative data center builds. He clarified that while CoreWeave is the direct client and partner, the design specs are informed by the needs of their end customers, including large hyperscalers.

Joe Flynn from Compass Point Research & Trading asked about the key drivers behind Arculus achieving positive contribution and questioned the company's capital allocation flexibility for buybacks or dividends amidst macro uncertainty. He also inquired about opportunities for more design wins with crypto exchanges.

Answer

CEO Jon Wilk attributed Arculus's positive contribution to success in three areas: Arculus Authenticate penetrating traditional finance and new sectors, the hardware wallet itself, and the intersection of digital assets and payments. On capital allocation, Wilk confirmed that all options, including the recently increased buyback program, remain on the table for the Board to consider. He also affirmed that the company sees increased opportunity for design wins in the digital asset sector.

Joseph Flynn asked about the market appetite for the upcoming project financing deal, what kind of partners the company hopes to attract, and what terms they are targeting.

Answer

CFO Patrick Fleury stated there is significant market interest. He benchmarked against comparable deals, noting that while their customer is a high-quality credit, it is less known than others. He is targeting a pricing range around SOFR plus 400 to 500 basis points for the initial financing, with hopes to achieve even better terms as they find a long-term financial partner to grow with.

Joseph Flynn inquired about the timing for requesting the subsequent 250 MW of power after the current approval is granted, the status of the Cayuga Lake site request, and how the company plans to use its unallocated cash, including for potential share buybacks.

Answer

CFO Patrick Fleury indicated the request for the next 250 MW would depend on customer expansion plans but could begin next year. CEO Paul Prager added that the Cayuga site is being prepared to meet future demand for TeraWulf, subject to a formal board process. Fleury confirmed the goal is to use project financing for future builds, which would leave the ~$387 million in cash unallocated and available for shareholder returns or other opportunities.

Joseph Flynn asked about the credit enhancements built into the CoreWeave lease, such as customer guarantees or step-in rights, and inquired about initial colocation capital expenditures and development plans for the remaining 100 megawatts in North Dakota.

Answer

CEO Adam Sullivan stated that specific pass-through terms would need to be discussed with CoreWeave, but emphasized the value of the commercial relationship. COO Matt Brown clarified that the recent land acquisition in Grand Forks was to prepare the site for a future high-density colocation facility by enabling access to existing power infrastructure.

Joseph Flynn asked for more detail on the HPC capacity delivery delay, the key challenges involved, and whether future designs will support next-gen GPUs. He also questioned the potential risk from CoreWeave's relationship with Microsoft.

Answer

CEO Adam Sullivan confirmed that future infrastructure is being designed for next-gen GPUs like the GB200 and GB300. He attributed the delivery delays to a combination of increased project complexity, supply chain constraints for specific equipment, and subsequent re-permitting. While unable to comment on the CoreWeave-Microsoft relationship, he noted that CoreWeave's overall demand appears significantly stronger than in 2024.

Joseph Flynn asked for more details on the potential deal structures for new HPC sites and customers, questioning whether they would resemble the CoreWeave colocation model or vary on a site-by-site basis, such as build-to-suit arrangements.

Answer

CEO Adam Sullivan explained that the company is primarily focusing on single-tenant, build-to-suit opportunities for new sites. He highlighted that these deals involve extensive, deep conversations between Core Scientific's design and engineering teams and those of potential clients to ensure all specific requirements and timelines can be met, including supply chain considerations.

Joseph Flynn from Compass Point Research & Trading asked for details on potential deal structures for new HPC sites and customers, and whether there was an opportunity to expand the relationship with CoreWeave.

Answer

CEO Adam Sullivan explained that the strategy for new sites is focused on single-tenant, build-to-suit projects involving deep collaboration with clients on design and engineering. He acknowledged CoreWeave's success and confirmed that Core Scientific continues conversations with them and other cloud providers to capitalize on the growing GPU cloud market.

Joseph Flynn of Compass Point Research & Trading requested more detail on the development at Corsicana, specifically whether the new fiber lines were customer-directed and the timeline for completion. He also asked about the long-term potential for on-site power generation, such as natural gas turbines.

Answer

CEO Jason Les clarified the fiber addition was a proactive measure to enhance the site's attractiveness, not a specific tenant request, with an estimated 12-month completion timeline using a third party. He noted that while natural gas generation is a possibility given their internal expertise, the current plan for backup power at Corsicana is focused on diesel generation as the ideal solution.

Joseph Flynn asked if Riot could share any potential operational metrics for its data centers, such as PUE or build cost per megawatt. He also questioned if maximizing asset value could include an outright sale of capacity and whether Riot has received any such offers.

Answer

CEO Jason Les stated it was too early to comment on specific metrics like PUE, as they depend on the customer and technology. He confirmed that the strategy encompasses a 'whole spectrum' of deal structures, including, at the far end, an 'outright sale of the asset.' He noted that financial advisors were engaged to run a competitive process covering all possibilities.

Joseph Flynn requested more details on the rising SG&A expenses, particularly the onetime litigation costs, and asked about the status of discussions with potential HPC counterparties for the 600-megawatt substation at Corsicana.

Answer

CEO Jason Les attributed the SG&A increase to onetime M&A costs related to Bitfarms and ongoing litigation with legacy hosting customers, noting that run-rate SG&A remains in line with guidance. He confirmed that discussions with potential HPC counterparties are preliminary but ongoing, and Riot is encouraged by the interest from multiple parties.

Joseph Flynn asked about the primary factor driving the decision to build out Childress for AI HPC, whether it's a speculative build, and inquired about financing options like project-level debt. He also asked for the estimated remaining CapEx for the Sweetwater substation.

Answer

CCO Kent Draper explained that coalescing demand and the ability to catalyze customer conversations drove the decision, making it more than a speculative build, and confirmed project debt is a possibility for contracted colocation assets. Co-CEO Daniel Roberts estimated the substation CapEx is in the 'tens of millions' and expressed a preference for controlling projects directly rather than entering into JVs.

Joseph Flynn from Compass Point Research & Trading, LLC asked for more details on the 2-year payback period for H100 GPUs and whether data center designs would need to change for future chip generations like Blackwell.

Answer

Co-Founder and Co-CEO Daniel Roberts clarified that the 2-year payback is a rough guide based on transparent market pricing. He asserted that IREN's data centers, which operate at a high 70-kilowatt rack density, are well-positioned and somewhat "future-proof" for new chips, unlike traditional data centers that struggle with lower power densities.