Mike Grondahl

Mike Grondahl inquired about Applied Digital's current pipeline and how management characterizes its robustness.

Answer

Wes Cummins, Chairman and CEO, described the pipeline as robust, shifting the focus from demand, which is not a limiting factor, to Applied Digital's ability to scale construction across multiple sites efficiently. He emphasized the internal focus on maximizing annual build capacity while ensuring on-time and on-budget delivery for customers.

Mike Grondahl asked about the strategic impact of the $5 billion Macquarie Asset Management financing on a go-forward basis and sought details on the rough expected terms for the Ellendale CoreWeave 400 MW project financing.

Answer

CEO Wes Cummins highlighted that the Macquarie financing enables larger-scale development, minimizes public company dilution, and unlocks $20 billion-$25 billion in total capital. CFO Saidal Mohmand reiterated expected project financing terms of around 70% LTC and a 400-450 basis points spread over SOFR, structured with a mortgage and a second lien/mezz facility.

Mike Grondahl inquired about the go-forward impact of the $5 billion Macquarie Asset Management financing. He also asked for rough expected terms, including loan-to-cost (LTC) and pricing spread, for the project financing of the Ellendale CoreWeave 400 megawatts.

Answer

Wes Cummins, Chairman and CEO, highlighted that the Macquarie financing unlocks $20-25 billion in total capital, minimizing public company dilution and enabling large-scale development. Saidal Mohmand, CFO, detailed project financing terms, expecting around 70% LTC and a spread of 400-450 basis points over SOFR, with a bifurcated structure for mortgage and second lien facilities.

Mike Grondahl questioned the financing terms for the CoreWeave project and asked for the specific go-live dates for the three contracted buildings at the Polaris Forge One campus.

Answer

CFO Saidal Mohmand detailed that financing terms for an investment-grade tenant are coming in as expected, around SOFR plus the low 400s, with loan-to-cost ratios in the 70% range. CEO Wes Cummins provided the go-live schedule: the first 100 MW building in calendar Q4 2024, the second 150 MW building in mid-2026, and the third 150 MW building in 2027.

Mike Grondahl from Northland Securities asked about the status of negotiations and pricing trends for the Ellendale campus, the key drivers behind the decision to sell the cloud business, and the future revenue potential of that segment.

Answer

Executive Wesley Cummins stated that data center pricing is up year-over-year but stable recently, and discussions continue with multiple hyperscalers. He acknowledged external pressure was a factor in the cloud business sale decision but noted it aligns with their strategy and market timing. He affirmed the cloud business should return to a $110-$120 million annual revenue run-rate.

Mike Grondahl asked for specifics on the total capital invested in the Ellendale HPC campus, the amount of capital that can be recovered via the Macquarie financing, the size of the future development pipeline, and the current pricing environment.

Answer

CFO Mohammad Saidal Mohmand clarified that over $700 million has been invested in Ellendale, and the company expects to recover over $300 million in cash proceeds. Executive Wesley Cummins added that the pipeline includes 1.6 gigawatts of capacity for 2026/2027 and that the pricing environment remains strong, reflecting high demand.

Mike Grondahl from Northland Securities asked about the demand environment beyond the 400-megawatt Ellendale campus, including discussions with other potential customers and the potential timing for a new Letter of Intent (LOI).

Answer

Executive Wesley Cummins highlighted a significant increase in inbound interest from three additional hyperscalers seeking 2025 and 2026 capacity. He indicated the company is actively working to secure another LOI for a different site, likely in the Dakotas, and suggested it could be achieved by the end of calendar year 2024.

Mike Grondahl from Northland inquired about the primary drivers behind Mitek's strong SaaS business growth and requested an update on the progress and momentum of the Check Fraud Defender solution, including details on the number of banks or revenue.

Answer

CEO Ed West attributed SaaS growth to strong market demand, the acceleration of generative AI-driven fraud, Mitek's strategic positioning with large financial institutions, and increased adoption of new products and authentication solutions. For Check Fraud Defender, Mr. West highlighted a 50% year-over-year ACV growth and noted that the consortium now covers over 25% of all U.S. checking accounts, approaching 50% when including institutions in the pilot phase, emphasizing the value of expanding data sets in combating accelerating fraud.

Mike Grondahl asked about the primary drivers behind Mitek's accelerating SaaS business growth and requested more details on the progress and momentum of Check Fraud Defender (CFD).

Answer

CEO Ed West attributed SaaS growth to underlying market demand, the acceleration of synthetic fraud due to generative AI, Mitek's strong positioning, partnerships with large financial institutions, new product adoption, increased transaction volumes, and authentication needs. Regarding CFD, Mr. West highlighted 50% year-over-year ACV growth and the consortium's data sets covering over 25% of all U.S. checking accounts, approaching 50% when including institutions in pilot phase, emphasizing the value of increased data signals.

Mike Grondahl questioned Mitek's competitive landscape and pricing power in the mobile check deposit market. He also asked for details on Check Fraud Defender (CFD), including when quarterly revenue might be disclosed and the size of the investment, as well as the overall OpEx outlook for fiscal 2025.

Answer

CEO Edward West acknowledged Mitek's dominant market share in mobile deposit and stated that pricing will remain aligned with the value delivered. For CFD, West reiterated the $10 million ACV and projected growth, while CFO David Lyle noted a strategic shift to reporting ACV over GAAP revenue. West quantified the CFD investment as a low-to-mid-single-digit percentage impact on EBITDA margins. Lyle projected a mid-single-digit million dollar increase in total OpEx for fiscal 2025, primarily for CFD.

Mike Grondahl from Northland Securities asked about the sales cycle length and revenue potential for the new top-10 bank signed for Check Fraud Defender, and whether mobile check deposit reorders met expectations.

Answer

CEO Ed West described the sales cycle for the large bank as long, over a year, due to extensive validation, but noted other deals can be shorter. He declined to specify revenue potential but called the deal 'compelling' and 'very attractive.' CFO David Lyle confirmed that mobile deposit reorders were in line with expectations for the quarter.

Mike Grondahl followed up by asking where the revenue from the Meritz partnership will show up in Webull's financial reporting.

Answer

Anthony Denier (Group President and U.S. CEO, Webull) explained that the revenues will be baked into transaction volumes, specifically within the equities and, hopefully, in the next several months, options transaction revenue, even if U.S. retail trading volumes slow down.

Mike Grondahl asked for details on the Meritz Financial Group partnership, its global opportunity, and if it represents Webull's first B2B institutional customer. He also inquired about the timeline for Meritz to go live and where the associated revenue would be reported.

Answer

Group President and U.S. CEO, Anthony Denier, confirmed Meritz is the first publicly announced B2B partnership, but not the first overall. He highlighted B2B as a new, significant line of business targeting geographies without Webull broker-dealers and even existing retail markets, projecting a substantial boost to market share and financials. Denier stated that Meritz is currently live, trading clients' orders, and the flow is expected to grow over time. He clarified that Meritz-related revenues are baked into transaction volumes, specifically within the equities segment currently, with options expected in the coming months.

Mike Grondahl from Northland Securities asked about the performance of high school recruiting efforts, tuition increases embedded in the 2026 guidance, and the decision-making process for the number of new campus openings.

Answer

Bruce Schuman, CFO, stated that high school recruiting went as expected, with strategic investment prioritized for Concorde and adult populations in fiscal 2025, but more resources are planned for high schools in 2026 due to new campus openings. Matt Kempton, VP of Corporate Finance and Investor Relations, explained that tuition increases for 2026 are assumed to be 2-3%, constrained by student funding availability rather than unlimited pricing power. Jerome Grant, CEO, clarified that the range of two to five annual campus openings reflects a conservative low end and an aggressive pursuit of opportunities given high demand, with plans for both UTI and Concorde campuses.

Mike Grondahl of Northland Capital Markets inquired about the three-to-five-year outlook for the Concord division now that growth restrictions are lifted, the potential timeline for new Concord campuses, and how investors should think about the impact of investments on EBITDA margins in fiscal 2026 and 2027.

Answer

CEO Jerome Grant explained that lifting the restrictions accelerates their five-year plan by a year, enabling more program launches in 2026 and a couple of additional campuses over the life of the plan. Regarding future margins, he noted that while formal guidance has not been issued, increased investment in new campuses and programs could result in 2026 EBITDA not matching 2025 levels, as these strategic costs are no longer adjusted out of EBITDA.

Mike Grondahl of Northland Capital Markets inquired about the specific programs or campuses driving the strong new student starts and asked for clarification on the favorable macro tailwinds mentioned in the press release.

Answer

CEO Jerome Grant explained that the primary tailwinds are the growing preference for trade schools over traditional 4-year degrees and the national focus on onshoring and infrastructure. He highlighted that new student start strength was driven by increased marketing investment in Concorde's healthcare programs and higher-than-modeled demand for UTI's skilled trades programs, such as welding and HVAC.

Mike Grondahl requested more details on the marketing and admissions efforts driving Concorde's new start growth and asked for an assessment of the macro environment for skilled trades versus traditional four-year colleges.

Answer

CEO Jerome Grant explained that the company is continuously investing in marketing for Concorde to reach more students in local markets until they see diminishing returns or hit enrollment caps. On the macro front, Grant described the current environment as 'very healthy,' with subsided friction and strong lead flow for skilled-collar careers.

Mike Grondahl of Northland Securities inquired about the strengthening macro tailwinds for skilled trades, asking for a comparison of the environment in fall 2024 versus the previous two years. He also followed up on the effectiveness of the marketing funnel, including leads and conversions, following accelerated investments.

Answer

CEO Jerome Grant detailed the market's evolution, contrasting the difficult post-inflation environment of fall 2022 with the strong recovery and growing student interest in skilled trades seen in 2024. He confirmed that leads and conversions are up, attributing the success, particularly at the Concorde division, to accelerated marketing investments that tested market elasticity and delivered results beyond initial expectations.

Mike Grondahl inquired about the delivery timeline and gross margin expectations for the significant 50,000-unit A15 Pro machine order, and also asked for a comparison of gross margins between the home mining sales and industrial mining equipment.

Answer

Chairman and CEO Nangeng Zhang stated that deliveries for the 50,000 A15 Pro units are expected to be completed by the end of 2025, with partial shipments already made, and confirmed a positive gross margin for the order. For home mining sales, Mr. Zhang reported a 33% gross margin in Q3, aiming for 30% by year-end, which is significantly higher than industrial miners, and mentioned plans for new product launches and portfolio refreshes.

Mike Grondahl inquired about the delivery timeline and gross margin expectations for the significant 50,000-unit A15 Pro machine order, and subsequently asked about the gross margins for the Avalon Home series compared to industrial mining equipment.

Answer

Chairman and CEO Nangeng Zhang stated that deliveries for the 50,000 A15 Pro units are expected to be completed by the end of 2025, with a positive gross margin, though exact figures were not disclosed. For the Avalon Home series, Mr. Zhang reported a 33% gross margin in Q3, significantly higher than industrial miners, with plans to maintain around 30% and launch new products to expand market reach.

Mike Grondahl questioned the order lead times required for Q3 or Q4 to outperform Q2 and also asked for guidance on the company's expected capital expenditures for the remainder of the year.

Answer

CEO Nangeng Zhang stated that current machine lead times are about 6-8 weeks due to inventory buildup, an improvement from previous quarters. CFO Jin James Cheng addressed CapEx, explaining it is primarily for wafer supply and managed via a rolling forecast. While not providing a fixed number, he estimated full-year 2025 wafer-related spending would be higher than $400 million, contingent on market demand.

Mike Grondahl requested a product revenue breakdown between the A14 and A15 series for both Q3 2024 and the Q4 2024 forecast. He also asked about the remaining A13 inventory value and for a pro forma cash balance after the latest financing.

Answer

CFO James Cheng clarified that A14 series miners were the primary revenue driver in Q3, with A15 deliveries being minimal. He expects A14 to remain the major component in Q4, though A15 mass production is ramping up for key clients. Cheng stated that A13 models represent about 20% of the inventory value. He confirmed the Q3-end cash balance was $72 million and that the new $30 million financing was in process, which would be additive before accounting for operational investments.

Mike Grondahl asked for an update on the 6,000 new GPUs being deployed, specifically how many are currently contracted, the average contract term (ranging from 3-12 months to 2 years), and the observed demand.

Answer

Aydin Kilic, CEO and President of HIVE, clarified that the 6,000 GPUs are not yet live but will come online in tranches throughout 2026. He stated that more details on contracted GPUs will be provided upon deployment and explained the two-year term for conservative base case modeling, contrasting it with higher-margin AI enterprise services.

Inquired about the High-Performance Computing (HPC) strategy, focusing on customer demand and the types of customers engaged for the 20-megawatt project. Also asked for the company's top three priorities for the second half of 2024.

Answer

The company responded that the 20MW HPC project is currently in the infrastructure phase, and they will engage larger customers as the project progresses. Their top priorities for H2 2024 are: 1) Reaching a $20 million annualized revenue run rate for the AI business, 2) Beginning construction in Paraguay, and 3) Starting the 20MW HPC conversion.

Mike Grondahl of Northland Capital Markets asked about customer demand for HIVE's HPC strategy, the types of customers being engaged for the 20-megawatt capacity, and the company's top three priorities for the second half of 2024.

Answer

President & CEO Aydin Kilic explained that the 20MW HPC project is currently in the infrastructure phase, as large customers typically engage once a project is underway. For H2 2024 priorities, he listed: 1) achieving a $20 million annualized revenue run rate for AI, 2) beginning construction in Paraguay, and 3) starting the 20MW HPC conversion. Executive Chairman Frank Holmes added color on the engineering complexity of HPC builds but stressed the much higher revenue potential compared to Bitcoin mining.

Mike Grondahl of Northland Capital Markets asked for an update on customer demand for HIVE's planned 20-megawatt HPC capacity and inquired about the company's top three strategic priorities for the second half of calendar 2024.

Answer

President and CEO Aydin Kilic stated that the 20-megawatt project is in the infrastructure phase and that larger customers typically engage once projects are underway. He outlined three key priorities for H2 2024: achieving a $20 million annualized revenue run rate for the AI business, and breaking ground on both the Paraguay Bitcoin mining expansion and the 20-megawatt HPC conversion. Executive Chairman Frank Holmes added color on the complexity of HPC build-outs, emphasizing the significant engineering challenges but also the much higher revenue potential.

Mike Grondahl asked about the two biggest challenges in ramping WhiteFiber's revenue and if there were any operational challenges.

Answer

CEO Sam Tabar explained that the primary challenge for WhiteFiber is the time and complexity involved in negotiating large, long-term contracts, which often take longer than anticipated but allow for deal upgrades. He stated there were no operational challenges, crediting the Enovum acquisition team for their expertise in retrofitting existing facilities into Tier 3 data centers efficiently and within budget, citing the conversion of a mattress factory for Cerebras and ongoing work on the North Carolina flagship facility.

Mike Grondahl, Senior Research Analyst at Northland Securities, inquired about the two biggest challenges in ramping White Fiber's revenue and any operational challenges faced by the company.

Answer

CEO Sam Tabar identified the primary challenge as the complexity and extended negotiation timelines for 'generationally long' and high-quantum contracts, noting that patience has allowed them to upgrade deal terms. He confirmed there are no operational challenges, crediting the acquired Enivum team's expertise in retrofitting existing facilities into Tier 3 data centers efficiently and within budget, as demonstrated by a recent project for Cerebras and ongoing work on the North Carolina flagship facility.

Mike Grondahl of Northland Securities asked for clarification on the anchor customer's deployment delay from June 30 to August 20, the reasons for the shift, and the company's options for utilizing the associated GPUs in the interim.

Answer

CEO Samir Tabar and CFO Erke Huang explained that the customer exercised their contractual right to delay to the latest possible date due to an internal product development schedule change on their end. They clarified that the GPUs are already deployed in Iceland and are not sitting idle; they are currently generating revenue through on-demand services with Shadeform and are also being marketed for other multiyear contracts.

Mike Grondahl questioned how Bit Digital will bridge its current GPU rental revenue to its $100 million annual run rate target by year-end, seeking clarity on the Q4 revenue contribution from the Enovum acquisition. He also asked for the Bitcoin mining exahash outlook following the Coinmint contract termination and details on the company's ATM equity issuance since late June, including shares issued and total capital raised.

Answer

CEO Samir Tabar stated that recently signed term sheets and the Enovum acquisition get the company about 90% of the way to its $100 million run rate target. CFO Erke Huang and executive William Schnier clarified Enovum's contribution is a $7 million ARR. Regarding mining, Tabar explained the plan is to reach 3 exahash by H1 2025 by replacing inefficient miners. He also confirmed the issuance of 38 million shares via the ATM to fund CapEx while the company thoroughly evaluates less dilutive debt financing options.

Mike Grondahl inquired about the scaling of the $700 million Boosteroid contract, the company's ability to reach its $100 million HPC revenue run rate without its anchor customer, the status of the new head of sales, potential data center acquisitions, and the financing strategy regarding ATM usage versus a credit facility.

Answer

CEO Samir Tabar explained that the Boosteroid contract is designed to scale in tandem with the customer's growth, with a baseline goal of 30% deployment in 2025. He affirmed confidence in hitting the $100 million run-rate target by year-end due to a strong pipeline, noting the new head of sales has already started. Regarding acquisitions, he confirmed the company is exploring owning its own sites to offer more services. CFO Erke Huang and CEO Samir Tabar added that while they are cautious with the ATM, it's crucial for funding large procurements, and they are evaluating debt financing options but have not yet found terms exciting enough to accept.

Mike Grondahl inquired about the two biggest challenges or potential bottlenecks to meeting the timelines for Washington, Sharon, and Panther Creek, and requested rough guidelines for 2026 CapEx.

Answer

Ben Gagnon (CEO) stated that mitigating construction bottlenecks involves having strong partners (owners rep, general contractors) and internal project management. He noted that 2026 CapEx figures are challenging to provide due to the new Vera Rubin infrastructure and NVIDIA's reference designs still being finalized, with more clarity expected in Q1.

Mike Grondahl requested rough guidelines or a framework for Bitfarms' 2026 capital expenditure.

Answer

Ben Gagnon (CEO and Director, Bitfarms) explained that providing full 2026 CapEx figures is challenging because Vera Rubin infrastructure is new, and NVIDIA has not yet finalized validated reference designs. He indicated that a clearer CapEx outlook for 2026 and 2027 is expected in Q1, once NVIDIA's reference designs are finalized.

Mike Grondahl from Northland Capital Markets asked about the rationale for selecting T5 as a partner, the cost and closing timeline for the Panther Creek land purchase, and the timing of cash receipts from the Argentina shutdown and related miner sales.

Answer

CEO Ben Gagnon explained T5 was chosen via a competitive process for its quality, reputation, and full-service capabilities. He disclosed the land purchase is for 178 acres at ~$3.5 million, closing this quarter. He clarified the ~$18 million from the Argentina shutdown includes ~$13 million from miner sales (expected in 2-3 months) and a ~$3.5 million electricity prepayment to be recovered over 18 months.

Mike Grondahl asked for an internal ranking of the company's U.S. sites beyond Panther Creek and sought clarification on the use of the projected sub-$100 million in 2025 non-HPC capital expenditures.

Answer

CEO Ben Gagnon detailed the unique attributes of each site, positioning Panther Creek as the flagship, followed by the similar but less advanced Scrubgrass. He noted Sharon is attractive for its scale, while Washington offers the lowest power cost, suiting different clients. CFO Jeff Lucas clarified the non-HPC CapEx is approximately $75 million, allocated to miner logistics and electrical infrastructure development at the Pennsylvania sites.

Mike Grondahl sought clarification on the 142 megawatts currently available at the Pennsylvania sites and the scope of the upcoming Q2 feasibility study.

Answer

CEO Ben Gagnon confirmed that 142 MW of data center capacity is active across Panther Creek and Scrubgrass, which can be powered by either on-site plants or the grid. He clarified the regulatory process is for future expansion and redundancy. He also stated the Q2 feasibility studies will be comprehensive, covering all North American sites, including Pennsylvania, Washington, and Quebec.

Mike Grondahl of Northland Securities asked about the specific steps and timeline for executing Bitfarms' HPC and AI strategy, including team recruitment and discussions with hyperscalers. He also inquired about the company's aspirational goals for U.S. megawatt expansion beyond the new Pennsylvania site.

Answer

CEO Ben Gagnon responded that Bitfarms needs to hire talent for HPC-specific data center engineering and management, and is actively recruiting. While discussions with hyperscalers are ongoing, he believes the Q4 2025/Q1 2026 timeline is ample for execution. Regarding U.S. expansion, Gagnon emphasized that the goal is to rebalance the portfolio with a greater U.S. presence, but the focus is on acquiring sites with a competitive, long-term energy profile rather than targeting a specific megawatt number.

Mike Grondahl asked about the timing and impact of Sezzle's decision to de-emphasize on-demand products in Q3, and how the company plans to direct customers towards subscription offerings. He also inquired about take rate trends and whether the shift away from on-demand would naturally lead to lower credit losses.

Answer

Executive Chairman and CEO Charlie Youakim explained that the pivot occurred around mid-Q3 after data showed on-demand conversions (at point of sale and to subscription) and profit profiles were not as strong as initially envisioned. He noted that on-demand will now primarily serve as a tool for winning enterprise merchants, while the consumer focus shifts back to subscription products, which offer higher lifetime value. While GMV growth might be lower, revenue and income growth are expected to improve. Regarding take rate, Mr. Youakim stated the company targets a 60% gross margin (take rate minus COGS). He clarified that the 3.1% provision for credit losses (PLR) in Q3 was in line with expectations, contributing to the full-year target of 2.5%-2.75%. He added that reducing the emphasis on on-demand, which tends to attract more new consumers with higher initial PLRs, could generally lead to a lower overall PLR.

Mike Grondahl asked about Sezzle's strategic shift to de-emphasize the on-demand product in Q3, its anticipated impact on future growth, and how customers previously inclined towards on-demand are now being directed to subscription offerings. He also inquired about take rate trends and the 3.1% credit loss rate, questioning if the reduced focus on on-demand would lead to a natural decrease in credit losses.

Answer

Charlie Youakim, Executive Chairman and CEO, explained that the pivot away from on-demand occurred around mid-Q3 after data indicated insufficient conversion at the point of sale and into subscription, alongside a less favorable profit profile compared to Premium and Anywhere subscription products. He clarified that while on-demand remains a valuable tool for securing enterprise merchants, the consumer-facing strategy now prioritizes subscription due to superior lifetime values, even if it means slightly lower GMV growth in the short term. Regarding take rate, Charlie stated the company targets a 60% gross margin, and the 3.1% PLR for Q3 was within expectations, aligning with the lower end of the 2.5%-2.75% full-year guidance. He added that attracting fewer new consumers, which on-demand tends to do, generally results in lower PLRs.

Mike Grondahl of Northland Capital Markets inquired about the subscriber mix and profitability differences between Sezzle's on-demand, premium, and anywhere products. He also sought clarification on whether the Q2 investment spend was primarily composed of the stated marketing expenses.

Answer

Executive Chairman & CEO Charlie Youakim confirmed the investment was the $8.8 million in marketing. He explained that 'Anywhere' is the most profitable product due to high usage, followed by the high-margin 'Premium' product, with 'On-demand' being the least profitable but serving as a key entry point for new users. He noted that most recent subscriber growth came from on-demand, which has impacted the 'Premium' product's growth, but 'Anywhere' also continued to grow.

Mike Grondahl of Northland Capital Markets asked for a quantification of the financial benefit from the WebBank partnership, the reasons behind the strong stickiness of monthly subscribers, and details on how Sezzle is managing credit quality amidst loosened standards. He also requested descriptions of the new 'Pay in 5' and 'auto couponing' products.

Answer

CEO Charles Youakim addressed the questions, suggesting the WebBank partnership's benefit is best seen in the year-over-year improvement in revenue yield as a percentage of GMV. He attributed subscriber stickiness to the ease of use and peace of mind from having a single, go-to BNPL solution. On credit, Youakim explained that stronger overall profitability allows for a higher provision for credit losses while maintaining target gross margins, and noted that Q1's strong credit performance was also due to better-than-expected repayments and seasonal factors. He described 'Pay in 5' as a customer-driven product offering more payment flexibility and 'auto couponing' as a feature designed to add value and enhance customer loyalty.

Mike Grondahl asked about the primary drivers for the acceleration in Q4 revenue growth, the performance of the Anywhere and Premium products relative to the new On-Demand offering, and the strategy behind the enhanced product marketplace.

Answer

CEO and Executive Chairman Charles Youakim attributed the 100% year-over-year revenue growth to two main factors: the WebBank partnership, which enabled a unified fee structure, and the successful launch of the On-Demand product. He explained the strategy is to use the lower-friction On-Demand product as a bridge to convert users to subscriptions over time. He also noted that continuous improvements to the app's shopping features are driving higher engagement and retention.

Mike Grondahl of an unstated firm followed up on the timeline for launching new bank products, questioning if a mid-2025 launch was still the current expectation.

Answer

CEO Charles Youakim explained that Sezzle is currently prioritizing the enhancement of its shopping features to drive user acquisition and stickiness. While he anticipates launching one or two financial services products in 2025, he offered no firm commitment on the timeline, stating the near-term focus is on the shopping side of the business.

Mike Grondahl asked for an estimate of how much of the 1.5 GW under development is expected to be ready for use in 2026 versus 2027.

Answer

CEO Asher Genoot emphasized the focus on executing and delivering sites thoughtfully and on time, acknowledging the demands on vendors and partners. He mentioned River Bend is targeted for end of 2026, and Corpus Christi has 700 MW available in Q4 2026, with more details on specific sites to be shared.

Mike Grondahl asked for an approximate split of the 1.5 gigawatts under development that would be ready for use in 2026 versus 2027.

Answer

CEO Asher Genoot stated that the ability to deliver depends on supply chain and execution. He mentioned Riverbend, Corpus Christi, a site in West Texas, and Chicago as part of the platform, promising more detailed information on each site soon. Genoot emphasized the focus on executing thoughtfully and setting proper expectations with customers, acknowledging the challenges of building data centers within aggressive timelines.

Mike Grondahl questioned the deceleration in constant currency revenue growth (9% in Q1, 6% in Q2, 1% in Q3) and sought guidance on expectations for Q4 and 2026, including any specific callouts like epay promotions. He also asked to identify the second and third most pressured segments after money transfer, and how capital allocation between buybacks and acquisitions is being considered post-convert transaction and CoreCard closing. Finally, he inquired about the number of shares to be issued for the CoreCard acquisition.

Answer

Chairman and CEO Mike Brown indicated that early October data suggests a turnaround in Q4 revenue, potentially signaling the worst is over. He identified broader economic weakness and inflation as the primary pressures after immigration policies, affecting consumer spending across all segments. Regarding capital allocation, Mr. Brown stated the strategy remains consistent: prioritize accretive acquisitions, and if not found, pursue share buybacks when the stock is undervalued. He expressed a desire for a more balanced 50/50 split between acquisitions and buybacks, compared to the past four years' 85% allocation to buybacks. CFO Rick Weller confirmed that approximately 2.3 million shares would be issued for the CoreCard acquisition.

Mike Grondahl asked for insights into the decelerating constant currency revenue growth (9% in Q1, 6% in Q2, 1% in Q3) and the outlook for Q4 and 2026. He also sought to identify the second and third most pressured areas after money transfer due to immigration. Finally, he inquired about the company's capital allocation strategy post the convertible transaction and upcoming CoreCard closing, specifically the balance between buybacks and acquisitions, and confirmed the number of shares to be issued for CoreCard.

Answer

Chairman and CEO Mike Brown indicated that Q4 bottom-up forecasts suggest a revenue turnaround, with early October trends looking better. He identified broader economic weakness, including inflation and consumer worry, as the second major pressure point affecting all money transfer companies. Regarding capital allocation, Mike Brown reiterated a strategy of prioritizing creative acquisitions, followed by share buybacks if the stock is undervalued, aiming for a more balanced 50/50 split. CFO Rick Weller confirmed 2.3 million shares would be issued for the CoreCard acquisition.

Mike Grondahl of Northland Capital Markets requested an update on epay promotions for the second half of the year and asked for color on the extent to which foreign exchange fluctuations benefited the Money Transfer segment's margins.

Answer

EVP & CFO Rick Weller noted that a few epay promotions are scheduled for late Q3 and early Q4, but described the outlook as 'business as usual' without any expected dramatic changes. He confirmed that the Money Transfer segment did benefit from FX volatility during the quarter, which helped improve margins and supported the 33% year-over-year operating income growth, also noting a higher average transaction value.

Mike Grondahl asked for an update on European ATM trends, summer travel outlook, and how foreign exchange rates are factored into the company's 12-16% adjusted EPS growth guidance for 2025.

Answer

CEO Michael Brown reported that early April travel trends are tracking to plan, with more travelers expected this summer. CFO Rick Weller explained that the guidance assumes flat FX rates, meaning a stronger Euro could provide a tailwind. Weller emphasized that the core 18% growth in operating income, driven by business diversification, is the primary factor supporting their confidence in the full-year earnings guidance.

Mike Grondahl of Northland Securities asked about the specific operating income contribution from surcharge and interchange fee increases in 2024 and the expected impact in 2025.

Answer

CEO Michael Brown declined to quantify the specific impact but confirmed that fee increases occurred throughout 2024, which will provide a full-year benefit in 2025. CFO Rick Weller added that the regulatory environment has shifted favorably, with governments now supporting measures to ensure cash access, creating a 'wind at our back' for the ATM business, which now constitutes 19% of total revenue.

Mike Grondahl inquired about the rationale for selecting FluidStack as a partner, the demand for the associated power, the 30-day exclusivity on additional capacity, and the calculation behind the $1.8 billion Google backstop.

Answer

CTO Nazar Khan explained that FluidStack is a premier AI cloud platform that diversifies TerraWolf's customer base. CSO Carrie Langlais added that the exclusivity for an additional building (CB5) is on a tight timeline with identical terms, including the Google guarantee. CFO Patrick Fleury clarified the $1.8 billion backstop represents approximately 50% of the total lease payments over the 10-year term.

Mike Grondahl asked about the two or three biggest learnings for TeraWulf from its extensive partnership discussions and design process with Core42 over the past several months.

Answer

CEO Paul Prager emphasized that the biggest lesson was the importance of selecting the right partner, which enabled a collaborative and cooperative design evolution rather than a confrontational one. Executive Nazar Khan added that the process involved refining every design component, leading to a 'perfected' data center design and underscoring the value of a true partner in navigating technical trade-offs for a new and evolving technology.

Mike Grondahl of Northland Securities asked whether TeraWulf has begun marketing the 250 megawatts of remaining capacity at Lake Mariner and sought clarification on the energization timeline for the first 150 megawatts at the Cayuga site.

Answer

CEO Paul Prager clarified that the first 150 megawatts at the Cayuga site are expected to be energy-available in 2026, with the data center build-out timeline dependent on customer requirements. Regarding Lake Mariner, he stated that while not being broadly marketed, the company is in 'deep discussions' with potential long-term counterparties for the remaining capacity.

Mike Grondahl inquired about the HPC demand environment, asking how pricing and contract terms have evolved in the last 90 days, and sought confirmation on the company's strategy to fund the expansion without issuing new equity.

Answer

CEO Paul Prager stated that pricing per kilowatt-hour has increased and that potential customers are showing greater interest in securing large blocks of megawatts at single sites. CFO Patrick Fleury reaffirmed the company's plan to use a one-year customer prepayment and project financing, noting this market is becoming more developed. He emphasized TeraWulf's positive EBITDA this quarter, contrasting it with peers who incurred losses.

The analyst inquired about the pro forma balance sheet following the BuyerLink merger, specifically focusing on cash levels, debt refinancing plans for both companies' existing notes, and future CapEx requirements. He also asked about the timeline and investment needed to integrate BuyerLink's technology to drive growth for Inspirato, as well as the standalone growth profile and key business drivers for BuyerLink.

Answer

The company is planning to recapitalize the combined business and is in discussions with its lenders, who are supportive of the transaction. They anticipate refinancing the Capital One note at close. No significant change in CapEx is expected, as Inspirato will leverage BuyerLink's existing technology. The integration work has begun, with benefits expected in 2026, funded by resource prioritization rather than new capital. BuyerLink's growth is driven by adding new marketplace verticals and increasing liquidity in existing ones, with a historical five-year CAGR of over 20%.

Mike Grondahl of Northland Capital Markets asked for details on the pro forma balance sheet following the BuyerLink merger, focusing on cash levels and debt refinancing plans for Capital One and BuyerLink. He also inquired about future CapEx requirements, the timeline for integrating BuyerLink's technology to drive travel leads, and the standalone growth profile and key drivers of the BuyerLink business.

Answer

CFO Michael Arthur stated that both senior lenders are supportive of the transaction, with plans to refinance the Capital One note at closing while continuing with Citi as part of a broader recapitalization. He added that he does not anticipate a meaningful change in CapEx. CEO Payam Zamani clarified that BuyerLink's expertise is in building marketplaces, not just lead generation, and that foundational work to leverage this for Inspirato has already begun, with benefits expected in 2026 through resource prioritization rather than new CapEx. Zamani noted BuyerLink's growth is driven by adding new verticals and marketplace liquidity, citing a historical growth rate north of 20%.

Mike Grondahl asked about the required investments to reach a member count inflection point, CEO Payam Zamani's key focus areas for 2025, and the expected revenue and EBITDA seasonality for the upcoming year.

Answer

CEO Payam Zamani described a 'U-shaped' recovery for member growth, expecting an inflection point in 2-3 quarters driven by a larger sales force and a focus on acquiring the 'right' members. Zamani outlined three key priorities for 2025: achieving operational efficiencies, enhancing the brand's luxury promise, and building a scalable technology platform for digital marketing. CFO Michael Arthur confirmed that historical seasonality should continue, with Q1 and Q3 being the strongest quarters for travel, revenue, and EBITDA.

Mike Grondahl of D.A. Davidson & Co. inquired about the source of the increased annualized cost savings from $25 million to over $40 million, the status of the Capital One partnership, details on the return to a legacy club membership model, and the financial outlook for 2025, including Q1 profitability and Q4 seasonality.

Answer

Incoming CFO Michael Arthur attributed the incremental savings primarily to non-payroll operating costs like software and professional services. President David Kallery noted that while the Capital One integration is complete, the current focus is on achieving profitability. Chairman and CEO Payam Zamani confirmed the definitive shift to a club model with initiation fees and annual dues starting January 1, 2025, to improve member stability. Zamani emphasized that 2025's priority is margin expansion and achieving adjusted EBITDA profitability and positive cash flow in Q1, not top-line growth. Arthur added that Q4 is seasonally slower for revenue but should show continued EBITDA improvement.

Mike Grondahl of Northland Capital Markets inquired about Bitcoin Depot's revenue per ATM trends, cohort performance, and the number of kiosks remaining in inventory. He also asked for year-end kiosk count goals, the gross profit outlook, Q2 relocation activity, and details on the term loan and Up-C structure payment.

Answer

Scott Buchanan, Director, COO, and Principal Financial Officer, noted that mature kiosks saw performance improvements and that 1,700 kiosks remain in inventory. He stated there is no specific year-end kiosk goal but expects gross profit margins to hold steady or decline slightly due to seasonality. He also confirmed relocation rates were steady and the Up-C payment is complete. CFO David Gray added that further term loan paydown depends on M&A opportunities.

Mike Grondahl of Northland Securities inquired about Bitcoin Depot's kiosk count goals for year-end 2025 and 2026, the associated CapEx, and the potential revenue lift from the 3,200 kiosks that have been operational for less than a year.

Answer

CEO Brandon Mintz stated that while there are no public year-end kiosk count goals, the company is focused on deploying its existing inventory, with some reserved for international expansion into Australia and potentially two new countries. He clarified that significant CapEx is not anticipated for 2025 due to the nearly 2,000 kiosks still available for deployment. Regarding newer kiosks, Mintz noted that machines typically see at least 50% revenue growth in their second year compared to their first.

Mike Grondahl asked for clarification on kiosk inventory and deployment targets for 2025, the pace of machine relocations in Q4, the drivers behind the gross margin increase to 18.6%, and whether the current $15 million operating expense is a sustainable run rate.

Answer

Executive Brandon Mintz confirmed the inventory figures include Australia-bound kiosks and that reaching 10,000 installed machines is possible, with the pace dependent on Australian market success. He noted that relocations continued aggressively in Q4 and are now a core part of the business model. The margin improvement was attributed to optimized spreads, lower armored transport costs, and reduced average rents. COO and Interim CFO Christopher Buchanan added that the $15 million OpEx is a good run rate, with potential for slight reductions as legacy legal costs decrease.

Mike Grondahl of Northland Capital Markets asked about the top two priorities for the newly hired Chief Data Center Officer, Jonathan Gibbs, for the remainder of the summer and fall.

Answer

CEO Jason Les outlined two parallel top priorities for Jonathan Gibbs: first, building out the data center team with more veteran talent to create a platform that meets hyperscaler expectations, and second, completing the 'basis of design' for the Corsicana site to facilitate more substantive discussions with potential tenants.

Mike Grondahl of Northland Capital Markets asked for any interesting or helpful feedback received from potential tenants about the Corsicana site. He also inquired if any one or two potential tenants are emerging as front-runners in the discussions.

Answer

CEO Jason Les shared that feedback from tenants and advisors prompted Riot to proactively enhance the site by adding more land, water access, and fiber connectivity to make the offering more compelling. He stated that the entire hyperscaler landscape and beyond are potential tenants due to the site's prime location near Dallas, and did not single out any front-runners, emphasizing the broad interest.

Mike Grondahl asked if the interest from hyperscalers was specific to the new 600 megawatts at Corsicana or if it also included the existing 400 megawatts there and the 700 megawatts at Rockdale. He also requested Riot's operational goals for its mining business in 2025.

Answer

CEO Jason Les clarified that inquiries from hyperscalers have been broad, focused on securing power quickly rather than being specific to any particular block of capacity. For 2025, he stated Riot's goal is to increase its Bitcoin mining hash rate by approximately 22% to 38.4 exahash, primarily through expansion at its Kentucky facilities.

Speaking on behalf of Mike Grondahl, an analyst asked for more color on Riot's power curtailment strategy and the reasons for the year-over-year decline in power credit revenue.

Answer

CEO Jason Les explained that Riot's strategy involves curtailing when spot prices are high and monetizing hedges during periods of volatility. He noted that power credit revenue was lower year-over-year because the summer of 2024 saw significantly less price volatility than the summer of 2023. However, this lack of volatility also resulted in lower spot power costs for the Corsicana facility, contributing to a low overall cost of power.

Mike Grondahl of Northland Capital Markets asked which of Cipher's sites are currently being actively marketed for HPC development and requested specific commentary on the Stingray site's potential.

Answer

CEO Tyler Page explained that Barber Lake is being marketed for a single large tenant, while Black Pearl Phase 2, Stingray, and Reveille are being marketed to a broader range of tenants. He noted Stingray is attracting a 'middle tier' of the market, such as HFT firms, who value its remote location and low latency to Dallas.

Mike Grondahl asked about the next milestones for the Barber Lake site and inquired about the level of tenant interest for the Stingray and Reveille sites.

Answer

CEO Tyler Page stated that the next major milestone for Barber Lake is signing a lease with a tenant, noting they are in advanced discussions with multiple parties. For the 100 MW Stingray site, he mentioned recent interest from a different category of enterprise clients. For the 70 MW Reveille site, he sees future flexibility, including potentially working with smaller clients or managing a colocation facility.

On behalf of Mike Grondahl, an analyst asked for details on the evaluation process for using the 150-megawatt Phase 2 of the Black Pearl site for HPC versus bitcoin mining, and for an update on the ideal timeline for the Barber Lake project following recent expansion announcements.

Answer

CEO Tyler Page explained that the decision for Black Pearl Phase 2 involves weighing the immediate revenue opportunity from bitcoin mining against the long-term strategic and financing benefits of securing an HPC tenant. He expects a decision by the next earnings call. Regarding Barber Lake, Page highlighted the recent acquisition of 337 additional acres and an MOU for an adjacent 500-megawatt site, creating a potential 800-megawatt campus. This expanded scope is favorably evolving discussions with potential tenants and financing partners.

Mike Grondahl asked about Cipher's capital allocation strategy between its Bitcoin mining and new HPC verticals, and the progress of discussions with potential HPC customers and financing partners.

Answer

CEO Tyler Page explained that capital allocation is driven by shareholder returns. He contrasted the cyclical nature of Bitcoin mining with the stable, long-term cash flows of HPC hosting, which can be heavily debt-financed. Page noted that the HPC business is complementary and leverages Cipher's expertise in site origination. He confirmed that discussions with potential HPC tenants are "pretty advanced," with interest driven by the scarcity of large-scale sites available in 2025, and described the typical lease structure as a long-term agreement with payments as a percentage of the total build cost.

Mike Grondahl of Northland Capital Markets asked about the key drivers for the 20% year-over-year collections growth and requested a breakdown of collections performance versus forecast for the U.S. and European segments.

Answer

President & CEO Ashish Masih attributed the strong collections growth to three factors: high levels of recent portfolio purchases, a stable U.S. consumer, and significant operational performance improvements within the MCM business. He clarified that of the $55.6 million in total 'changes in recoveries', approximately $45 million was attributable to the U.S. MCM business, with 95% of the total representing cash collected above forecast.

Speaking on behalf of Mike Grondahl, Logan from Northland Capital Markets asked for clarification on the core EPS impact of the $21.5 million change in recoveries, the expected pace of share buybacks for 2025, and the specific attractions of the current U.S. purchasing market.

Answer

President and CEO Ashish Masih calculated a direct EPS impact of approximately $0.73 from the change in recoveries but cautioned against simply excluding it as it reflects real performance. Regarding buybacks, he stated that future activity depends on market conditions, balance sheet strength, and purchasing opportunities, without committing to a specific pace. Masih described the U.S. market as highly favorable, with record lending and a 10-year high charge-off rate providing ample supply at strong returns, leading to an expectation of record U.S. purchasing in 2025.

Mike Grondahl asked for the rationale behind Cabot's strong Q4 portfolio purchases occurring simultaneously with major ERC write-downs, the specific age of the vintages affected, and the likely timing of share repurchases given the declining leverage.

Answer

President and CEO Ashish Masih clarified the $200M in Q4 Cabot purchases were opportunistic spot buys and not indicative of future levels, which he expects to be lower in 2025. He stated the ERC reductions were concentrated in pre-2019 vintages. Regarding capital returns, he confirmed the company expects to resume share repurchases in 2025 as leverage is nearing the midpoint of its target range, but did not specify a quarter.

Mike Grondahl requested the collections performance as a percentage of expectations for both the U.S. and Cabot. He also sought to clarify if the new emphasis on share repurchases adds discipline to capital allocation, asked about the current buyback authorization, and inquired about the potential impact of Fed rate cuts on the company's floating-rate debt.

Answer

President and CEO Ashish Masih provided the collections figures: 105% of expectations for the U.S. (MCM) and 97% for Cabot, for a consolidated 103%. He reiterated that portfolio purchasing is the first priority and that repurchases would resume as leverage nears the midpoint of the target range, as the company can delever while still buying portfolios. He also confirmed a $92 million remaining buyback authorization. EVP and CFO Jonathan Clark noted that while the company was 99% fixed-rate as of Q3, it would return to a 20-25% floating-rate debt mix by year-end after redeeming certain notes.

Mike Grondahl of Northland Capital Markets questioned if the average loan size would continue to increase, the company's reaction to recent jobs data, the specific amount of collections in Q2, future OpEx growth expectations, and updated thoughts on capital allocation, including M&A and buybacks.

Answer

CFO Pamela Johnson stated that average loan sizes would likely see an incremental increase as larger loans are still being integrated into the portfolio. Founder, CEO & Executive Chairman Todd Schwartz explained that while they monitor macro data like jobs reports, they rely more on their own early repayment data, which remains strong. On capital allocation, he mentioned exploring M&A in adjacent spaces, while both he and Johnson highlighted that stock repurchases are a key consideration due to a perceived disconnect between the stock price and the company's value. Johnson also provided specific recovery figures: $10.7 million in Q2 2025, up from $8.4 million in Q2 2024.

Mike Grondahl asked for the rationale behind leaning into growth in 2025, inquired about successful marketing channels, and questioned the company's plans for its significant free cash flow generation.

Answer

CEO Todd Schwartz expressed strong confidence in their underwriting model's ability to target high-quality customers, allowing for growth. He highlighted that improved auto-approval rates enhance the customer experience, justifying increased marketing spend and testing new channels. For capital use, Schwartz described a 'menu of options,' including funding growth, high-ROI internal projects, share buybacks, dividends, and potential inorganic acquisitions, all aimed at the highest and best use of capital.

Mike Grondahl of Northland Capital Markets asked about the initial target market for the Cerus farmland acquisition, questioning whether the focus would be on RIAs, institutional clients, or family offices. He also asked leadership to identify the two most exciting developments for the digital asset strategy that are expected to drive success in the second half of 2025.

Answer

Global CIO Jeremy Schwartz identified the RIA channel as the primary initial target for the Cerus products, particularly through WisdomTree's model portfolios, which can effectively deliver the diversifying asset class to advisors. Regarding digital assets, President & COO R. Jarrett Lilien highlighted the validation of their regulated-first approach and the fundamental appeal of tokenized yield products. CEO Jonathan Steinberg emphasized the strategic advantage gained from their early entry into tokenization, which he believes is now paying off as the market matures.

Mike Grondahl requested an update on WisdomTree's crypto funds and digital assets, their development outlook for the next one to two years, and the pipeline for new ETF launches.

Answer

Jeremy Campbell, executive, detailed the crypto strategy, highlighting a Bitcoin focus in the U.S. and broader, basket-based leadership in Europe, which has seen over $100 million in crypto inflows this year. He noted the restrictive U.S. regulatory environment but pointed to new thematic funds launching in Europe. William Peck, executive, added that there is a robust client pipeline for WisdomTree Connect and that the company is well-positioned to benefit from potential stablecoin legislation in the U.S.

Mike Grondahl of Northland Securities, Inc. asked for a summary of WisdomTree's European crypto fund offerings, the potential for U.S. expansion, and how staking fees are treated within those products.

Answer

CIO Jeremy Schwartz detailed the broad suite of European crypto products, including those for Bitcoin, Ethereum, Solana, and others. CEO Jonathan Steinberg added that he expects a similar product rollout in the U.S. under the new administration in 2025. Executive William Peck explained that staking yields from these products are shared between investors and WisdomTree.

Mike Grondahl from Northland Securities asked for an update on the performance and market reception of newer ETFs and inquired about the top strategic priorities for 2025 to sustain business momentum.

Answer

Executive Jeremy Schwartz highlighted the success of the QGRW quality growth ETF, which has gathered nearly $0.5 billion in AUM and outperformed the NASDAQ since its late 2022 launch. CFO Bryan Edmiston stated that 2025 priorities will be a continuation of the current strategy: investing in global products, portfolio solutions, and digital assets while seeking operational efficiencies, summarizing it as 'more of the same.'

Mike Grondahl of Northland Capital Markets asked for the outlook on healthcare advisory and requested a description of typical debt advisory and private capital market transactions to better understand these growing non-M&A advisory businesses.

Answer

Chairman & CEO Chad Abraham stated that healthcare advisory has been 'quite strong' this year, rebounding significantly after being down last year. He explained that debt advisory has been one of the firm's fastest-growing areas, driven by the proliferation of private credit funds. A typical transaction involves arranging financing for a sponsor's acquisition or recap by navigating the complex landscape of alternative lenders.

Mike Grondahl asked whether client uncertainty is driven solely by tariffs or if other factors are at play. He also inquired if the recent rebound in the S&P 500 had caused any noticeable change in client sentiment during the week of the call.

Answer

Chairman and CEO Chad Abraham responded that the primary issue is general uncertainty impacting CEO confidence, which is crucial for M&A. He specified that the key question for clients is how global trade issues will impact a company's P&L. He acknowledged that the market can change quickly with sentiment, citing the recent market bounce, some successful muni deals, and a couple of IPOs on the road as positive signs that demonstrate how fast things can turn.

Mike Grondahl asked management to outline their top priorities for 2025, specifically for investment banking, fixed income, and the brokerage business.

Answer

Chairman and CEO Chad Abraham highlighted three key priorities: 1) expanding investment banking industry teams, with a major focus on doubling the talent in technology; 2) leveraging product expertise like restructuring and capital advisory across the MD platform; and 3) emphasizing growth in the fixed income business. President Debbra Schoneman added that for fixed income, the priority is a 'slow and steady build' of talent, while for equity brokerage, the focus is on product build-out in electronic trading and geographic expansion in the UK/EU.

Mike Grondahl from Northland Securities asked for the outlook on the fixed income business for Q4 and 2025. He also sought clarification on the commentary that Q4 2024 revenues would be similar to the strong fourth quarter of 2023.

Answer

President Debbra Schoneman expects Q4 fixed income results to be similar to Q3, supported by depository client activity, and noted a normalized yield curve would be a positive catalyst for 2025. CEO Chad Abraham confirmed confidence in matching Q4 2023's strong performance, citing a robust start to October in ECM and Advisory, assuming stable market conditions.

Mike Grondahl inquired about Intellicheck's current exposure to the retail sector, asking for an updated percentage compared to the historical 70% and whether this vertical acted as a drag on Q1 growth.

Answer

Executive Bryan Lewis confirmed that revenue from the traditional retail credit card vertical was down 26% year-over-year in Q1. He noted this highlights the success of the company's diversification strategy, as overall SaaS revenue still grew 6%. Lewis stated that while retail is not a current growth driver, the company's focus on high-stakes verticals like banking and title insurance has offset the decline.

Mike Grondahl questioned the total number and focus of the sales team after recent hires, the company's top priorities for 2025, and the composition of the $10 million in annual contract value (ACV) resigned in Q1.

Answer

CEO Bryan Lewis stated his top priority is 'sales, sales, sales,' and that the three new salespeople are focused on consultative selling across verticals, supported by new digital marketing efforts. He explained the large Q1 ACV renewal figure was due to the timing of large contracts, including a major bank's annual renewal and another bank that exhausted its transaction bucket ahead of schedule, leading to a new, larger commitment.

Logan, on behalf of Mike Grondahl from Northland Capital Markets, asked for details on retail volume trends during Q3 and any early indications of Q4 seasonality, also questioning the potential for year-over-year growth in the fourth quarter.

Answer

Executive Bryan Lewis explained that key retail sectors like department stores, apparel, and jewelry saw double-digit declines in transaction volume. He stated it was too early to comment on Q4 seasonality but expressed hope for overall growth, contingent on the timing of new, large clients going live in other verticals.

Mike Grondahl sought clarification on AUM inflows, asking if the $123 million was solely from private funds and the $44 million was incremental for ETFs. He also asked for the consolidated AUM balance and an updated timeline for the Abacus Wealth Advisors strategy.

Answer

CEO Jay Jackson and CFO William McCauley clarified that total net inflows for the quarter were nearly $160 million, comprising approximately $123 million from longevity funds and positive net inflows from ETFs, led by a $44 million increase in the real assets ETF. McCauley stated the consolidated AUM balance would be in the forthcoming financial supplement. Jackson projected that the Abacus Wealth Advisors division would see significant opportunities materialize in Q3 or Q4, becoming a meaningful revenue contributor in 2026.

Mike Grondahl requested an update on the year-end and current Assets Under Management (AUM) for the recently acquired Carlisle and FCF Advisors, along with their expected growth rate in 2025. He also asked if leads from the Abacus website have been integrated with the FCF business yet.

Answer

CEO Jay Jackson could not provide non-public Q1 AUM figures but stated the market response to both acquisitions has been very positive, with significant new capital interest for Carlisle. He noted the FCF Advisors rebranding is complete and its strategies are attracting strong interest. Jackson confirmed that website leads have not yet been integrated into FCF, but this is part of a broader strategy for the ABL Wealth division.

Asked for an update on the competitive environment and the company's top two priorities for 2025.

Answer

The executive identified the top 2025 priorities as expanding marketing and education, and pursuing horizontal growth in adjacent industries like servicing and ABL Tech. He described the competitive landscape as a 'tight industry' where Abacus has a significant advantage as the only publicly traded company, positioning it well for future growth.

Mike Grondahl of Northland Securities asked for an update on the competitive landscape and inquired about management's top strategic priorities for 2025.

Answer

CEO Jay Jackson outlined two key priorities for 2025: expanding marketing to increase education and awareness, and pursuing horizontal growth through acquisitions in adjacent industries like servicing, valuation, and technology. Regarding competition, Jackson stated that Abacus holds a significant advantage as the sole publicly traded company in its space, which aids in capital access and market positioning.

Mike Grondahl of Northland Securities requested an update on the competitive environment and asked about management's top two priorities for 2025.

Answer

CEO Jay Jackson identified two main priorities for 2025: first, expanding education and marketing to increase awareness of the asset class, and second, pursuing horizontal growth through acquisitions in adjacent industries. Regarding the competitive landscape, Jackson emphasized that Abacus's position as the sole publicly traded company in its industry provides a significant advantage in terms of capital access and institutional credibility, allowing them to maintain a competitive edge.

Mike Grondahl of Northland Capital Markets questioned if the company had considered slowing its digital investment, whether the 'wires as a service' pipeline was included in guidance or represented upside, and sought to quantify the impact of the shift to larger, less frequent transactions.

Answer

CEO Robert Lisy affirmed a 'full systems go' approach to digital investment, calling it the right long-term strategy and highlighting the 'wires as a service' pipeline as a 'positive sleeping giant' that represents upside not fully baked into guidance. CFO Andras Bende quantified that with normal transaction behavior, Q1 revenue would have been $7M-$10M higher and adjusted EBITDA $2M-$3M higher.

Asked about the company's commitment to its digital investment strategy, whether the wires-as-a-service (WaaS) pipeline is included in guidance or represents upside, and for quantification of the impact from the shift to larger, less frequent transactions.

Answer

Management is fully committed to the digital investment ("full systems go"). The WaaS pipeline has been conservatively forecasted and represents potential upside. The shift in transaction behavior was the primary driver of the Q1 miss; had transaction patterns been normal, EBITDA would have been $2-3M higher and revenue $7-10M higher.

Inquired about the potential impact of immigration policy changes on the business and asked about the company's appetite for share repurchases in 2025 given its cash position.

Answer

Management believes the impact from immigration policy changes will be limited, as their customer base consists of working individuals and economic factors like the job market are more significant drivers. Regarding capital allocation, the company has planned for approximately $40 million in share repurchases for 2025, with the potential to be more aggressive if opportunities arise.

Mike Grondahl questioned Intermex's specific actions to address retail market challenges and sought details on the planned digital investment, including its size and customer acquisition cost (CAC).

Answer

CEO Robert Lisy clarified the company is addressing retail headwinds with strategic pricing and a fully staffed sales team of 50 people. Regarding digital, Lisy and Head of Digital Marcelo Theodoro confirmed the company is ready to invest now that unit economics are highly favorable (gross margin >$6) but declined to specify an amount. Lisy also highlighted the 'wires-as-a-service' partnership strategy as a way to lower overall customer acquisition costs.

Mike Grondahl requested specifics on what "invest in digital" entails, questioning if it is primarily marketing spend. He also asked for clarity on whether the challenges in the retail channel are macro-driven or stem from the competitive environment.

Answer

CEO Robert Lisy confirmed that future digital investment will be focused on marketing to drive customer acquisition, as the core application is already built and performing with strong unit economics. He reiterated that the challenges in the retail sector are overwhelmingly due to macro conditions causing the market to contract, rather than pressure from competitors. Lisy emphasized that Intermex's strong free cash flow allows it to fund this digital growth without incurring losses.

Mike Grondahl sought more detail on what "invest in digital" entails, asking if it primarily means marketing spend. He also asked for confirmation that the challenges in the retail channel are macro-driven rather than from competitive activity.

Answer

CEO Robert Lisy explained that the primary technological investment in the digital application is complete, so future investment will focus on marketing to drive customer acquisition. He emphasized that Intermex's strong free cash flow allows for this investment without incurring losses. Mr. Lisy also confirmed that the retail challenges stem from a cyclical, macro-driven market contraction, not from increased competitive pressure.

Mike Grondahl of D.A. Davidson & Co. asked about the top products driving the company's subscription mix, the specifics of the go-to-market strategy, and any medium-term goals for gross margin and adjusted EBITDA margin expansion.

Answer

Executive Brian Balbirnie identified news distribution as the primary product driving growth, acting as a hook to sell broader IR and PR platforms. He highlighted the ACCESS PR subscription as the second key driver. Balbirnie described the go-to-market strategy as centered on a unified platform offering a single point of contact and payment, which provides a competitive efficiency gain. He also noted that a fixed-fee, all-inclusive model is a key differentiator. For medium-term goals, Balbirnie projected gross margins could increase by 2-4% over the next year to the low 80s, with a long-term target for adjusted EBITDA margins in the 22-23% range, driven by AI-led automation and increased scale.

Lucas John Horton, on behalf of Mike Grondahl, asked about the drivers of the recent volume rebound, the factors contributing to the 15% price increase, and the process and timeline for the planned divestiture of the Compliance business.

Answer

The volume increase is attributed to market share gains from new sales leadership and the strength of the ACCESSWIRE brand, rather than a general market lift. The price increase is a combination of acquiring new, larger customers at higher price points and upselling existing customers on distribution add-ons. Regarding the Compliance business sale, a formal process has not yet begun as internal details are being worked out, but the goal is to complete a transaction by year-end if a suitable valuation is achieved.

Mike Grondahl of Northland Capital Markets inquired about the key products driving the company's subscription mix, the go-to-market strategy for this shift, and any medium-term goals for gross margin and adjusted EBITDA margin expansion.

Answer

Executive Brian Balbirnie identified the news distribution product as the primary driver for subscription growth, serving as a hook to upsell broader IR and PR platforms, with the ACCESS PR subscription being the second key driver. He described the go-to-market strategy as centered on a unified platform with a single payment, offering efficiency and competitive pricing, particularly for SMBs. Regarding margins, Balbirnie projected that AI-driven automations could expand gross margins by 2-4% over the next 12 months, with a long-term adjusted EBITDA margin target in the 22-23% range, fueled by increased scale and cost containment.

Mike Grondahl asked a high-level question about the primary hurdles that have made it difficult for Repay to return to double-digit top-line growth.

Answer

CFO Tim Murphy identified the timing of significant client losses in Q3 and Q4, continued macro headwinds in the auto and ARM verticals, and softness in the AR business as the main factors. He contrasted this with strong bookings and the ramp-up of new enterprise accounts, which provide positive momentum. CEO John Morris added that accelerating growth is a key objective of the ongoing strategic review.

Mike Grondahl asked about the financial impact and benefit from the favorable court ruling on 'one-to-one consent' rules. He also sought to understand the primary drivers behind the recent step-up in the home equity business.

Answer

Scott Peyree, COO, explained that the home equity surge was driven by both strong client demand, as lenders reoriented their focus from mortgage refinances, and robust consumer demand to tap into rising home equity. Douglas Lebda, CEO, addressed the consent ruling, stating it averted significant short-term revenue disruption that would have occurred while the market adjusted to new lead dynamics, ultimately preventing a period of financial pain.

Mike Grondahl asked about the $125 million Accounts Receivable balance, its composition, and the cash collection cycle. He also asked for guidance on free cash flow conversion from adjusted EBITDA.

Answer

CFO Jason Bengel explained that the high AR balance is primarily related to the significant growth in the Insurance business. He noted that the change in AR is roughly offset by the change in Accounts Payable, as the company has worked to manage working capital by aligning inflows and outflows. To calculate free cash flow from adjusted EBITDA, he advised subtracting capital expenditures (roughly $3M/quarter) and interest paid, noting that working capital changes should not be dramatic going forward.

Mike Grondahl asked for an overview of the HPC/AI demand environment, including how many megawatts Bitdeer is offering for this purpose. He also inquired about the expected timing for the next batch of A2 miners beyond the initial 35 exahash.

Answer

Chief Strategy Officer Haris Basit explained that HPC/AI allocation is considered on a site-by-site basis, with the Clarington, Ohio site being a prime candidate. Regarding future miner batches, Basit expressed optimism for additional allocations this year but reiterated that the company does not pre-announce them until they are secured from the foundry.

Mike Grondahl from Northland Capital Markets asked for an overview of the HPC/AI demand environment, how much power Bitdeer is offering for this purpose, and the expected timing for the next batch of ASICs beyond the current allocation.

Answer

Chief Strategy Officer Haris Basit explained that HPC/AI development is being considered on a full-site basis, with the 266 MW Clarington, Ohio site being a primary candidate. Regarding future ASIC supply, he expressed optimism for additional wafer allocations in 2025 that could increase the year-end hashrate target, but stated the company does not pre-announce these allocations.

Mike Grondahl of Northland Capital Markets asked about the team size dedicated to the HPC initiative, the general terms being discussed with financing partners, and the progress toward securing initial orders for the new ASIC miners.

Answer

Executive Haris Basit stated three people are working on the business development side of HPC, supported by consultants. Head of Capital Markets Jeff LaBerge added that financing terms are not disclosable but could involve project-level equity/debt or development partnerships. Executive Jihan Wu revealed a "capacity lock-in" process showed strong demand, with fees for 12,000 units already paid by customers.

Inquired about which programs showed stronger-than-expected enrollment, sought clarification on the Contra Costa Medical Career College (CCMCC) acquisition and its 14 programs, asked about the M&A pipeline's reaction to the new administration, and requested an update on early 2025 enrollment trends.

Answer

Cardiac sonography, MRI, and nursing programs were particularly strong. The CCMCC acquisition added 14 programs to the company's portfolio, and the integration is going well. The M&A pipeline has increased since the new administration took office, as more owners are looking to sell. Demand and leads for enrollment have remained very robust into January and February.

Mike Grondahl of D.A. Davidson & Co. inquired about the financial model for achieving breakeven, asking if approximately $10 million in quarterly revenue with a 30-35% gross margin would be sufficient.

Answer

CFO Alex Hawkins clarified that at a $10 million quarterly revenue run rate, the company anticipates a more attractive gross margin profile, potentially in the high 30s to low 40s depending on the mix. Hawkins further stated that the target for achieving adjusted EBITDA breakeven is actually between $9 million and $10 million in quarterly net sales.

Mike Grondahl inquired about how Stryve Foods plans to solve its working capital shortfall, the amount of capital needed to drive a significant sales inflection, and the expected timeline and revenue contribution from the new air-dried pet food initiative.

Answer

CFO R. Hawkins explained that the company will continue to explore creative financing options, such as the recent convertible promissory notes, acknowledging a reliance on external capital to fund its substantial growth plans. CEO Christopher Boever added that the company's cash burn is rapidly decreasing as it approaches profitability, and the capital required is not a large amount. Boever also noted that the pet treat strategy has been conservatively factored into guidance but holds significant upside potential through a new multi-SKU brand launch and potential co-manufacturing deals, which could positively impact cash flow with little upfront investment.

Mike Grondahl of Lake Street Capital Markets inquired about the re-entry of the Vacadillos brand into Costco, focusing on improved pricing and economics. He also asked for the key drivers behind the expected revenue ramp and questioned the company's ability to finance the required working capital.

Answer

CEO Christopher Boever explained that the new Costco partnership is built on corrected unit economics, ensuring profitability, and noted strong early velocity. He attributed revenue ramp confidence to the significant velocity lift from new packaging and opportunities for expanded distribution. CFO R. Hawkins confirmed that existing facilities are insufficient to fund the growth and that additional capital will be required.

Sought more clarity on the timing and revenue impact of the announced new distribution wins, and asked for an explanation of the complementary co-manufacturing agreement.

Answer

Executives indicated that announcements for new distribution wins are expected in the coming days and weeks, with products hitting shelves before the April/May resets. They will provide more financial details in the next annual operating plan. The co-manufacturing deal involves using their unique USDA-certified facility to produce air-dried beef products for a partner in a non-competitive segment, which will absorb overhead, increase revenue, and improve profitability. Details are being finalized.

Asked which new vertical has the most upside, for a concrete example of the 90% margin strategy, and about business trends in October.

Answer

Executives are most excited about the credit card vertical due to their ability to apply a unique, data-driven personalization strategy. The 90% margin strategy is executed by acquiring customers directly into their marketplace and by cross-selling third-party products to their existing, highly-engaged user base via their PFM super-app. They did not comment on October business trends.

Mike Grondahl asked about the remaining opportunity in pricing initiatives and the specific process for cross-selling multiple products to larger ICPs.

Answer

CFO Bea Ordonez described pricing as a long-term driver with future opportunities from new products like the 'Pro' account. CEO John Caplan detailed a dual cross-sell strategy: a 'high-touch' motion with dedicated CSMs driving adoption of products like cards, and a product-led motion using bundles to surface relevant features to customers at scale.

Mike Grondahl of Northland Securities, Inc. asked about the drivers for the strong recreation loan originations and the outlook for Q4. He also sought clarification on the EPS benefit from taxi medallion collections, the appropriate core provision run rate, the potential bottoming of the net interest margin, and the economics of the growing fintech partnership loan volume.

Answer

Executive Anthony Cutrone attributed strong Q3 originations to typical seasonality, cautioning that the portfolio may stay flat or contract slightly in Q4. He quantified the taxi collection benefit at approximately $0.08 per share for the quarter, above the typical $0.04 run rate due to a large settlement. He estimated the core provision is likely between $20 million and $22 million. Regarding the net interest margin, Mr. Cutrone believes it is very close to its bottom. Executive Andrew Murstein explained the fintech partnership model, where Medallion earns a fee (e.g., 50 bps) plus float for briefly funding loans with no credit risk.

Mike Grondahl of Northland Capital Markets asked for projections on the Renovation business, including potential 2025 revenue and adjusted EBITDA margins. He also questioned the company's operational capacity to handle growth and the key risks associated with the new venture.

Answer

Chairman and CEO William Shepro stated that while 2025 plans are not finalized, the Renovation business could become a meaningful contributor, with potential margins in the 10-15% range, possibly higher. He expressed confidence in the company's capacity to scale, citing regional managers and back-office infrastructure. Regarding risk, Shepro explained that their bidding process is robust and that unforeseen costs, like mold discovery, are handled through client-approved change orders, mitigating the risk of significant overages.

Asked for the revenue and margin potential of the new Renovation business for 2025, as well as the company's capacity to handle increased volume and its risk exposure in this new venture.

Answer

The executive provided a hypothetical revenue scale based on referral volume ($1.5M revenue/month from 15 referrals) and stated that EBITDA margins are expected to be in the 10-20% range. He affirmed the company has the capacity to scale its operations in key states and manages financial risk through a detailed bidding and change-order process for unexpected costs.

Inquired about the outlook for BaaS deposits, the revenue model and customer usage of the new IDV product, and the competitive landscape in the higher education sector.

Answer

BaaS deposits have stabilized. The IDV product has a hybrid SaaS revenue model (subscription + per-use fee) and is applied to all university applicants to combat fraud. The competitive environment in higher education remains stable, with BMTX confident in its value proposition.

Inquired about the deposit outlook for the higher ed and BaaS segments, the reason for the Q3 operating expense increase, the terms of the core processor contract extension, and new product features for the higher education business.

Answer

The company is focusing on its student business rather than rate-sensitive deposits, with impacts from new initiatives expected in late 2024. The Q3 OpEx increase was confirmed to be seasonal. The core processor contract was renewed on satisfactory terms to avoid a disruptive conversion. A new cash-back rewards program is planned for Q1 to meet student demand and create a new revenue stream.

Mike Grondahl asked for the total loan portfolio value at the end of Q1, the company's target for year-end 2024, the interest rates on new loans, and the source of the funds being lent.

Answer

Executive Sundie Seefried reported the loan portfolio was approximately $40 million at quarter-end, with a year-end target of $60 million, and new loans carry interest rates of 15% to 18%. Executive James Dennedy added that the funds for these loans are sourced from the deposits held at Safe Harbor's partner financial institutions.

Asked about regional travel performance, the significant increase in non-air revenue, and the future outlook for the air segment's contribution to net revenue.

Answer

The company noted strong performance in Asia Pacific and Latin America. The shift to non-air revenue (now 51%) was slightly ahead of their plan to have air constitute about 50% of the business. They clarified that part of the shift is due to flight bookings being included in higher-margin packages, and they expect the air component to remain around 50% going forward.

Inquired about the performance and marketing spend for the Abhi AI platform in 2023 and 2024, the strategy for incentivizing travel agents, and the expected filing date for the 10-K.

Answer

Management spent $3-4 million on the Abhi launch in 2023 and has earmarked $4-5 million for 2024, though spending will be cautious pending a new version of the AI platform. Agent incentives are becoming more efficient and targeted through the use of AI and data analytics, moving away from broad discounts. The company was working to file the 10-K by the deadline, which was the next day.

The analyst asked about the financial contribution of the Purplegrids acquisition, sought clarification on the terms of the LBF divestiture (shares received vs. cash outflow), and inquired about the original purchase price of LBF.

Answer

Executives stated the Purplegrids acquisition is strategic for its AI platform, not for immediate financials, and is cost-neutral as it replaces consulting fees. For the LBF divestiture, they clarified that Mondee received 200,000 of its own shares as payment and the $7.4M cash outflow was for one-time transition costs. The original LBF purchase was part of a larger 2019 deal, and they are retaining the other, more valuable parts of that acquisition.

Mike Grondahl from Northland Securities inquired about the specific terms that led to the rejection of previous AR facility offers and asked what level of revenue is needed for the company to become consistently EBITDA positive and generate cash flow.

Answer

CEO Michael Mathews clarified that earlier AR facility term sheets were rejected due to unacceptable regulatory covenants related to the pre-licensure program's probation, not due to pricing. CFO Matt LaVay explained that the company is already adjusted EBITDA positive due to restructuring. He stated the plan for fiscal '24 and '25 is to manage marketing spend to maintain a breakeven adjusted EBITDA level while growing the online business. He projected more significant EBITDA growth would begin in late fiscal '25 and into '26, once the pre-licensure teach-out is complete.