HIVE Digital Technologies - Earnings Call - Q1 2026

Transcript

Nathan Fast (Director of Marketing and Branding)

Hello, and welcome to today's webcast on HIVE Digital Technologies' financial results for the quarter end of June 30th, 2025. My name's Nathan Fast. I'm Director of Marketing and Branding at HIVE. I'll be your moderator for today's call. Before we get started, on slide two, we'd like to briefly note the disclosures for today's presentation. Except for statements of historical fact, this presentation contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Words such as expects, believes, and similar expressions identify these statements. Actual results could differ materially, and we disclaim any obligation to update them except as required by law. For a full discussion of risk factors, please refer to our most recent SEC filings at sec.gov.

In addition to discussing results that are calculated in accordance with GAAP, we will also reference certain non-GAAP financial measures, including adjusted EBITDA, adjusted net income, and free cash flow. Management uses these metrics to evaluate operating performance and believes they provide investors with additional insight. They are presented for supplemental purposes only and should not be considered in isolation from GAAP results. Reconciliations to the nearest GAAP measures are included in the appendix to this presentation and in the press release and Form 8-K furnished to the SEC. On the next slide, I'm pleased to introduce today's presenters: Frank Holmes, Executive Chairman, Aydin Kilic, President and CEO, Darcy Daubaras, Chief Financial Officer, and Craig Tavares, President and Chief Operating Officer of BUZZ HPC. I would now like to hand the presentation over to Mr. Frank Holmes for a macro recap of the quarter. Frank.

Frank Holmes (Executive Chairman)

Thank you, Nathan, for the introduction, and it's my honor to be with this great executive team. You know, it's interesting. This executive team is, I think, right now the longest-standing CEO and CFO in the industry. The turmoil over the past five years of the changing of the guard of leadership in the crypto mining companies has been over and over, and we've stayed consistent and reliable and always showing up as most efficient, top-tier miner, as we've also built out the first to go and build out the AI sector, so today, I'm going to go through the macro recap of where we have basically had an incredible year and where we're going, so let's hop on the next slide before we get into the granularity.

We'll have five, as you can see from this data, that every asset class has its own unique DNA of volatility, and that's important for investors to understand that, and we'll have 5%± daily volatility for HIVE, for 16% over 10 days. Moves may seem extraordinary compared to the S&P 500 or gold. They are normal in the emergent Bitcoin ecosystem. This volatility is not a flaw. It is a natural byproduct of a high-growth global 24/7 industry and an asset class that is still maturing. And for HIVE, it is precisely this volatility combined with operational excellence and strategic growth in a green-powered infrastructure that creates the, I would say, this unique outsized return, and it's not to become fraught and worried about that DNA of volatility, but to use it to your advantage.

As you can see here, Tesla is very, very similar to HIVE's DNA of volatility and strategy. Michael Saylor's Bitcoin holding company really has a greater volatility. The next is really a recap as to this year. And 2025 is transformative for HIVE because we are the fastest and biggest growth story in the Bitcoin mining industry. Hopefully, we'll be able to show you that in a short notice where it'll also be for next year. This is huge growth coming from 6 EH/s to 15 EH/s. Many people did not expect to anticipate that by August, we would have such great significant growth. The numbers that are coming in for the quarter end is before we hit 15 EH/s, which is today.

I'd like to hop over to the next visual to give you an idea for the comparison of looking at our year-end was March 31st, and that 12-month annual revenue, the gross revenue was $115 million, and the adjusted EBITDA was about $56 million, and the gross operating income was $25 million. We're very proud of those numbers because they include the halving of Bitcoin. Even with the halving, we were able still to generate a gross operating income of $25 million. Now with the scaling underway this year, in particular seeing the growth in Paraguay, the quarterly results are starting to populate.

They're showing you at the end of June that our top-line revenue growth rate was $45 million, and the adjusted EBITDA just for the quarter was $44 million, which was almost what 12 months was after that halving, and the gross operating income of $15 million. Now, what happens is I'm going to walk you through is that many analysts then say, well, that's going to be, if you forecast that for next four quarters, because you're ramping up, these numbers will be much higher. And in fact, since now August, we're at 15 EH/s, these numbers are even greater than the numbers you're looking at right now. Next, please. Using back of the envelope and no past performance is guaranteed for future results, I'm just looking at the revenue for that quarter.

It had a forecast of $182 million top line, EBITDA of $178 million, and gross operating income of $63 million. Today, it's even higher than these numbers. You have to remember, we have to wait for the audit numbers to come out the end of September for this summer quarter and what they will look at. We did make in press releases this top-line revenue growth is running at over $300 million now. Next, please. The largest non-cash items for HIVE for the quarter was the, you could see the revaluation of Bitcoin on our balance sheet and the volatility of Bitcoin can move up and down. These are non-cash items. And we saw a swing here of $23 million.

Depreciation is also another significant issue as you buy new GPU chips for the AI build-out or ASIC chips for the Bitcoin build-out in the data centers. The depreciation charges are quite high. Next, please. These are powerful visuals to show you our scaling to put things in perspective in Paraguay. This is 15 EH/s of Bitcoin hash rate as an advancement in Paraguay. This is accelerated because of our M&A activity and buying of Bitmains, sorry, Bitmain, but Bitfarms operations in Paraguay. That has allowed us to really accelerate our footprint from 100 MW of electricity to 300 MW. The leadership shown by the Country President, Gabriel Llamas, has been outstanding as we've been able to scale more rapidly than anyone anticipated. What's really important in the next visual is that price is what you pay, but value is what you get.

Scaling 4 EH/s with discipline and 4 EH of hydro online leads into the next visual that we do not forget these communities that we're involved with. At HIVE, value goes beyond just record revenue and EBITDA by lasting benefits that we deliver to our communities. We've done this in Sweden with the hockey arena and the hockey team training for kids in northern Sweden. In Paraguay, while we're scaling our renewable power data centers, we invested in the future education of local grade schools, installing air conditioning, which is so key because the temperatures on average are 100 degrees. We've also put street lighting, as this visual shows you here, that the mayor put up, thanking them because we've lit up 14 streets so that the mothers and parents and kids are safe in these small towns where we're located.

This is not just an ESG check-the-box. These are tangible long-term contributions that enhance the quality of life, improve learning conditions, and strengthen our partnership with the local communities. It was a pouring rainy day. I was there last week. And these are fresh photographs of us going and visiting the school and being thanked by the kids who are just out of school. And this is the open forum, whereas in Texas or Canada, everything has four walls put behind it, and here it's still open. And this school is almost 80 years old. Next, please. So truly, we believe in social impact investing for building a brighter future in Paraguay. So let's hop to Toronto in the next visual, please. So we operate over nine time zones in five languages and using sourcing hydroelectricity from three countries: Canada, Sweden, and now Paraguay.

But coming back to Toronto, what's important is that it's not only Canada's largest city. It is now which has surpassed Chicago in population. It's a diverse population from 50 countries. It's a hub of education, research, and innovation, leading to inventions and cutting-edge medical research and globally recognized breakthroughs, including the discovery of insulin for diabetes. This unique mix of scale, talent, and innovation makes Toronto one of North America's most vibrant cities for finance, technology, life sciences, and live theater. It is the third largest live theater city in the world. The underground system, the subway system, is over 50 mi connecting underground the whole city and the surface transportation buses on every major street and small streets and streetcars. It's almost 750 mi of busing coverage on surface.

And when we look at the University of Toronto on the next slide, it's played a pivotal role in the development of deep learning and neural networks, including work by Dr. Geoffrey Hinton with his backpropagation and his other breakthroughs. It was called the Boltzmann machine, which is recognized as foundational for modern AI. In essence, the University of Toronto is arguably Canada's and one of the world's most influential hubs for AI. Its impact stems from academic breakthroughs. And we've seen this where we're based in San Antonio, Texas, that the University of Texas at San Antonio is the leading university for cybersecurity. So therefore, that leads to NSA having huge operations in San Antonio to be able to tap into the intellectual capital. And Toronto's reputation as an AI capital, with Geoffrey Hinton receiving a Nobel Prize next visual for his AI breakthrough, is really quite significant.

The University of Toronto foundational research, institutional ecosystem, over 50 languages, global influence, and applied innovation. We said this is so key and the push now globally for sovereign data centers to have a footprint in Toronto. By building in Toronto, we are leveraging Canada's AI leadership, supporting sovereign data infrastructure. Craig Tavares, our President of BUZZ, will give you more information and give you insights in that. This is a classic. What we've seen with data centers for Bitcoin mining is a stepping stone for the AI build-out globally. We're seeing this all over the world. We are really happy to see that we've got a 40,000 sq ft building that will go from what's called Tier 1 to Tier 3 and then be able to build out our suite of NVIDIA chips, which will be used for our AI business.

We are now downtown Stockholm and in downtown Montreal and hopefully in the next short order to be downtown Toronto. The next visual, please. So what's really been significant for us in moving the head office to San Antonio, Texas has been the comfort of regulatory pronouncements. And we've seen this year. The GENIUS Act signals a major shift toward regulatory clarity, institutional adoption of Bitcoin in the U.S., and being the world's largest capital market for formally recognizing Bitcoin legal status is setting clear compliance guidelines. And we think it's very significant for the global Bitcoin ecosystem. So, what's in the next visual, please. So the GENIUS Act, the 401(k) executive order, Texas Strategic Bitcoin Reserve, all these developments are very important for global Bitcoin mining revenue and the ecosystem and the credibility of the ecosystem.

Also, these acts are very important for America to push back with a blunt push against China's de-dollarization and China's attack with the BRICS nations against the U.S. dollar for trade around the world, so it's important to see that the Clarity Act is another important step in this for progress, and America is showing this leadership. Next, please. Well, price is what you pay is what Warren Buffett likes to say, but value is what you get. And intrinsic value is what is key. And intrinsic value is a true worth based on future cash flows, competitive edge, and business quality. And that's what HIVE is doing. And we're seeing at this stage that we are growing the intrinsic value of HIVE faster than what the price of the stock price is. And historically, there is a snap up.

I think what this release today of showing what's happened this quarter and the end of September quarter are very significant in HIVE being re-rated by institutions. There's other things that are really important in the capital markets, which happened this year in addition to the Bitcoin regulatory guidelines. It is, as you're witnessing, huge stock buybacks. Next, please. I recently wrote on Forbes and discussed the records buybacks and stock buybacks. I've seen that the Wall Street Journal has also commented and written about stock buybacks. Let's hop to the next visual about the analysts and all the research and coverage we're getting targeting a $6-$8 stock price. Why? Where do they get these numbers from? I think the big part is the proving out that you can grow and scale, which we're doing.

And then we're seeing some significant mergers and acquisitions take place in the industry. And it's the unlocking of value in the next visual. What recent deal say about HIVE's worth? CoreWeave, which is a hyperscaler, which has the tremendous support of Microsoft and NVIDIA, is to acquire Core Scientific. Well, why are they buying Core Scientific? And what are the value metrics for that? They're buying it because they've sourced energy and they have land and they have energy. And these hyperscalers need to have access to both land and electricity. With that, we're seeing a huge build-out. And who was first to go into a lot of these sort of areas where there was stranded electricity or wasted electricity had been Bitcoin miners. It was Bitcoin miners in West Texas who were absorbing flare gas, surplus electricity from solar energy and from wind energy.

And so now all of a sudden, there's great value being placed on these early adopters have been the Bitcoin miners. And I look at HIVE as also being very early, being the first crypto mining company, but very early in sourcing and developing. And when we look at Paraguay, not only are we helpful for the government of getting steady U.S. dollar cash flow every month, helping with the ecosystem and building out the infrastructure. What happens when you go to Tier 3? What is the valuation metrics? Well, if you look at data center on the next visual, it's a simple back of the envelope. The data center peer average is about 9x enterprise value to sales. HIVE trades at 1.5x. If you look at enterprise value to EBITDA, it's 3.2x, but the data center average is 21x.

And so therefore, there's lots of upside where price catches up to the intrinsic value that the management team is creating for the HIVE shareholder. Long-term sustainable value creation. The next visual is sort of articulate to explain to investors Stargate, which is in West Texas in Abilene, where there's this massive epic $500 billion AI mega project. There's been wonderful coverage on this in Bloomberg and on YouTube. If you're really curious, you can go and take a look at it. It's over 2,000 acres. It has over 2,500 construction workers. And it is tapping into surplus wind, surplus solar, and natural gas energy to build up for the secular bull market in AI. So stay tuned to HIVE as it participates being early in capturing energy and building out data centers in Bitcoin mining and AI. Next, please.

Welcome Aydin Kilic, our CEO, who will give you more granularity on what's happening in the global Bitcoin and AI build-out. Thank you.

Aydin Kilic (President and CEO)

Thank you, Frank. That was an excellent macro summary. Great insights into the industry and our growth. I just want to add that for the past 10 years, we've really seen Bitcoin mining emerge as a unique catalyst in unlocking stranded or otherwise unused energy resources. By monetizing surplus power, for example, it allows utilities to have a higher baseload and then sell energy to miners when grid demand is low. Really, miners provide a flexible, location-agnostic, and reliable demand source that transforms isolated or excess energy into economic value. And this model incentivizes the build-out of renewable projects by turning intermittent output into steady revenue. We believe that financial markets are increasingly recognizing the positive climate and economic benefits of such operations.

And so the infrastructure that has been built for digital asset mining becomes ripe for new layers, notably HPC and for AI due to parallel requirements for dense power and robust cooling. So with that being said, let us jump into my summary for HIVE's Q1 2026. So it was a phenomenal quarter, a record quarter for us, really. Over $45 million in total revenue. Of that, approximately 90% came from Bitcoin mining operations from our green energy global footprint and approximately 10% from our HPC AI business, which is very exciting. Of that $45.6 million in revenue, we did approximately 38% of a gross operating margin, yielding about $15.8 million of cash flow from operations. And very remarkably, a super strong quarter, $35 million of net income with $44.6 million of adjusted EBITDA. We ended the quarter with 435 Bitcoin on the balance sheet.

Again, we have the Bitcoin pledge strategy where we have pledged a large quantity of Bitcoin at $87,000. We have the ability to purchase that Bitcoin back before the end of the year at zero interest. That's very exciting. That's a strategy that will allow us to increase our HODL as the year goes on and our free cash flow from operations grows. We felt that this was a very creative way to scale our Bitcoin mining business because if we pledged almost $200 million of Bitcoin, that otherwise would have required share issuance or taking on debt. Without dilution and without taking on debt, we've been able to scale approximately $200 million worth of CapEx using this pledge strategy, which, by the way, is now profitable.

Approximate estimates for over $40 million in the money on our pledge strategy right now if we were to look at the value of the Bitcoin that we pledged relative to its current market price today. So I think that HIVE, in addition to having great uptime, low G&A, and best in the sector ROIC, we've been very strategic in growing our business in what we believe is in a creative manner for our shareholders. And the last highlight here is 15% trailing 12 months ROIC, which again leads the sector, and we'll get into more detail shortly. By the way, I would also want to add that I do think that HIVE stands out in this new era of vertically integrated AI infrastructure. We're lightly leveraged. We have a very transparent growth model. We're powered by renewable energy. And we provide regular reporting of our exahash milestones.

Our model, proven through scalable mining in Canada, Paraguay, and Sweden, is rapidly being adapted now for sovereign AI and HPC as well. The recent Toronto data center deal, which we'll talk more about, and the prior acquisition of Bitfarms' Paraguayan assets really positioned HIVE to hyperscale its footprint precisely as the market begins to appreciate that the infrastructure built for Bitcoin is now amongst the most coveted asset class for the AI supercycle and the ongoing global HPC land grab. Let's jump to the next slide. So it is also worth noting that our earnings per share grew 206% year-over-year, $0.18 earnings per share on a diluted basis. And while our diluted shares outstanding increased to 192 million, which is a 74% increase, you could see that our earnings per share outpaced that significantly.

We had significant growth when we completed our construction project in Paraguay, the phase II, sorry, phase I and II, 200 MW of our expansion in Paraguay. We've talked about this before. It was a phenomenal deal. Our all-in cost to acquire and complete the construction worked up to $400,000 a megawatt. 200 MW, that's $80 million CapEx. As well, our 100 MW in Valenzuela, similar cost and other $40 million, that's $120 million in construction CapEx. Of course, you are going to have some equity that goes towards acquiring and building out that infrastructure. $400,000 a megawatt is incredibly attractive. We effectively acquired the 200 MW in Yguazú at cost. That allowed us to bring our hash rate online very rapidly.

Even though we issued shares, we believe it was great in the end as we've seen our revenue per share and now our earnings per share grow. And ultimately, we want to demonstrate the best ROIC for our shareholders. If we are deploying capital, we expect to make more money back from what we spent. And that's just how we strive to do business at HIVE. And I think the numbers show it. Let's go on to the next slide. It was a phenomenal quarter for Bitcoin mining. We did 4.5 Bitcoin per day on average, 406 Bitcoin mined for the quarter. And our average exahash, again, this is period end June 30th, was 8.7 EH/s. Keep in mind, we scaled during this quarter and we brought online our first phase of Yguazú, the first 100 MW.

And since then, what's very remarkable, like in the first week of August, we've continued to scale the business. We're today operating at 15 EH/s, doing 7.5 Bitcoin per day on average today. So again, we've grown our production by over 65% from where we were this fiscal reporting quarter to where we are today in the first week of August. So looking forward and where we are today, really, we've continued to deliver growth and scale. Once fully built out, we'll have a 440 MW green energy footprint for Bitcoin mining. And again, we do this all with our capital allocation strategy optimized for ROIC. And moreover, we accomplish this all having the lowest G&A per Bitcoin mined in the industry and best-in-class uptime. Let's go to the next slide. An overview of our expansion in Paraguay. We've talked about this a lot.

This is just an update of where we are. Again, 2025 has been a landmark year for HIVE as we scaled to 25 EH/s. Keep in mind, we started the year at 6 EH/s. That's over 4x growth getting to 25 EH/s. We're at over 15 EH/s today. You could see that we've been consistently executing on our strategy and showing to the street that HIVE really is a top-performing Bitcoin miner. We're experts in the game. I believe pound for pound we're the best. I think the numbers show that. Phase I was completed ahead of schedule, the first 100 MW at Yguazú, 5 EH/s of air cooled. Phase II, 6.5 EH/s of hydro miners, S21+ from Bitmain 15 J/TH. You could see the aerial photo here. We are over two-thirds done. It's 4.5 EH/s operating today out of 6.5 EH/s.

In the next few weeks, phase II will be 100% complete. And moreover, the third phase of construction, sorry, the third phase in Paraguay, which is Valenzuela, the construction is essentially complete. And we will start installing ASICs in September. So super exciting. Again, we're operating over 15 EH/s today. And another big piece of news, we are fully funded and we have fully paid for all our ASICs to get to 25 EH/s. So between now and American Thanksgiving, we have ASICs arriving on an almost weekly basis to scale us from 15 EH/s to 25 EH/s. That's it. We've deployed the capital. The CapEx is deployed. We're fully funded. And from here, it's just continued growth as the ASICs that have been fully funded and paid for arrive and get installed. So it's a very exciting time.

And we've talked about using our free cash flow from operations to pay for all OpEx. And our Bitcoin CapEx has been taken care of. So we're very excited about that. Next slide. A metric showing our growth. So on an ARR basis, you could see how we are scaling the business here. And so we're at $315 million ARR today. And our fleet efficiency continues to improve because we are bringing on the S21+ hydro in phase II and III of our growth in Paraguay. So that actually improves our energy efficiency from 19 J/TH to 18.4 J/TH, ultimately 17.5 J/TH by calendar Q4 this year. And you can see how our ARR scales with that. So it's very exciting. And let's hop to the next slide. So you can sort of summarize that into two major catalysts. The completion of phase II gets us to 18 EH/s.

Said differently, it's about 9 Bitcoin per day of production at current difficulty. By the way, difficulty is at 129 trillion. We've updated our slides here just to reflect current mining economics. Of course, with 25 EH/s by American Thanksgiving, we are looking at producing approximately 12 Bitcoin per day at current difficulty. I'm here, of course, with Gabriel Llamas, our Country President, Luke Rossy, our global COO, and Carlos Torres, our Site Operations Director. I was just in Paraguay in June. I'm going to be back there in a few weeks. I'm super excited. Big smiles on all our faces. As you could see, a lot of heavy machinery, a lot of earth being moved, a lot of ASICs being installed. Let's hop to the next slide. As a result of those catalysts, you can see here, what does that look like?

Let's use a $60 hash price scenario. As our efficiency increases, our gross mining margin also improves, right? And so as we get to 18 EH/s, that's roughly a $390 million ARR. Well, that would be $230 million of mining margin. At 25 EH/s, and we're talking in a few weeks here, right? Like the target summer, we're on track. We put out press releases every time we hit an exahash just to let the investors and all the analysts know we are hitting our milestones on schedule. So 18 EH/s is slated to come online in the next few weeks. That'll be $230 million of gross mining margin on an annualized basis. And by American Thanksgiving, $335 million of annualized mining margin at today's economics. So very exciting. And I think that we're a bargain right now. Our market cap is $500 million.

We have over 400 Bitcoin on the balance sheet. So you could do the math, right? That's almost $50 million of Bitcoin on the balance sheet. By the way, we have that call option that allows us to get our HODL back to over 2,000 Bitcoin. Our cash flow from operations will be over $300 million in the next couple of months here as we anticipate our third and final phase to complete on schedule. Let's look at the next slide. Here's an update to our annualized mining margin scenario analysis with Bitcoin at $100,000, $125,000, $150,000. Now, the update's because we've seen a new all-time high with Bitcoin at 129 trillion, sorry, Bitcoin difficulty. We've also seen a new all-time high of Bitcoin price at $123,000 this week. So that's exciting.

Really what you're looking at is $49 hash price, $61 hash price, and $73 hash price. So we look at it as miners. If you sort of use a $100,000, $125,000, $150,000 Bitcoin price. So with that being said, all this information is at the top of the chart. Really, what we are looking at, the Bitcoin trades in the mid-range here, let's say around $125,000 through the end of this quarter, our mining margin is about $345 million on an annualized basis. And again, this is based on the 25 EH/s in the next few months. If Bitcoin does rally to $150,000, we are looking at over $450 million of mining margin. Considering our market cap is $500 million today, and by the way, we have about $50 million of Bitcoin on the balance sheet, it's a very attractive time, I think, to be a HIVE shareholder.

Again, you know we've worked really hard to scale quickly and bring this hash rate online. You can't perfectly time the market, but when the wind is at your back, it's obviously a nice situation to be in. So anyways, we obviously plan for downside and we manage risk, but this is what it's looking like based on different Bitcoin price points. So that being said, let's hop to the next slide. From today, where we're at 15 EH/s, growing to 25 EH/s by American Thanksgiving, we still have 67% growth between now and then. The rest of the industry is really kind of tapered off. I mean, CleanSpark and Iris have hit super scale. Mara's got a bit of growth, 10%. Bitfarms, Cipher, and Riot, you know, 5%-8%, not too significant. So again, 2025 is really the year of HIVE. That's why we're so excited.

Obviously, the 300 MW growth in Paraguay has been transformative for us. And I think that, again, with where we are today and where we're going, it's very exciting. And that, again, is 15 EH/s going to 25 EH/s. So let's go to the next slide. As mentioned, 435 Bitcoin held as of quarter end. We, as of today, we've deployed all our CapEx for the ASICs. And so we have ASICs steadily arriving between now and 25 EH/s. We mined 406 Bitcoin for the quarter. Right now, we are trading at the most attractive enterprise value to adjusted EBITDA. And as mentioned, we're currently mining, as in first week of August, 7.5 Bitcoin a day. Plus, again, we have over 5,000 NVIDIA GPUs in Canada and Sweden. We hit our $20 million ARR target, which is very exciting. And of course, we're NVIDIA Cloud Partner. Next slide.

We've talked about having an optimized ROIC strategy. And you will see that we lead the sector, again, in that metric. But it's not just about that, right? We're very disciplined with capital allocation. That's how we realize these yields and best ROIC. It's all data-driven. It's very mathematical. We look at, we're constantly scanning the market for ASIC prices, which, as you know, vary. ASIC prices are a commodity. And it's all really mathematically ordained, looking at ROI, understanding hash price, looking at your machine efficiency, and then performing sensitivity analysis on a multivariate basis. Because again, you really have to plan for your downside. Everybody looks like a rock star in a bull market. It's about how do you do in a bear market.

Again, we've mined profitably every single quarter since the bull market of 2021, you know, through the bankruptcies of Celsius and FTX and all that sort of stuff. We mined profitably. Again, that is how we realize, I mean, we optimize for ROIC. And we do mine our ASICs through the end of their economic life cycle. That way, you maximize your yield on those investments, right? You don't dismantle or unplug ASICs if they're still cash flowing. Of course, we'll do things like optimize firmware, underclock, whatever need be based on hash price at any given time to make sure we truly maximize the life of an ASIC and upgrade when we see a signal in the market that we could get a sub-one-year ROI after operating costs. Next slide. Here's what it looks like. Trailing 12 months, we've realized 15% ROIC.

We lead the sector by a long shot. I expect this figure to grow further as more cash flow comes online this current quarter. Again, we hit 15 EH/s. The previous quarter, which we're reporting on here, was an average of 8.7 EH/s. You could see how our peers there sort of in the 0%-3% range is where a lot of our peers are. You know, even Cipher, you know, we're double that figure there, 7.3%. We're 15.3%. You know, CleanSpark, a respectable 11.2%, but you know, it's still trailing significantly. Let's go to the next slide. Low SG&A, this is done on a cash basis. By the way, our revenue right now, again, we're $315 million ARR.

And so we are looking at today. If we were to represent this bar chart, our G&A as a function of revenue would be significantly less than what we're showing. But again, this is based on our quarterly financials, $45 million of revenue. So that's roughly $180 million ARR based on the quarter. And we're standing at 12%, right? So if we were at over $300 million ARR, that would be closer to 8%. But anyways, you could see we lead the sector. And again, some of our peers have really high cash G&A. We actually strip out the share-based comp here just to look on a cash basis. And again, this is after direct operating costs. This is just corporate G&A, right? And so you see a lot of the peers are north of 20% just on G&A.

So, you know, huge executive cash comp, tons of staff, you know, huge marketing budgets, huge sponsorships. You know, we like to get out to all the conferences. We will sponsor. We'll have a presence to get the HIVE name out there. But you know, we're not spending $2 million on a booth or doing anything like that. And over time, those numbers really add up. And you sort of see here. And some of our peers have huge top-line revenues too. So take that into consideration when you reflect the percentage that's going towards corporate G&A. Next slide. A little summary of our data center footprint. So again, 440 MW of green energy mining hydro for Bitcoin mining business. And of course, we recently announced the acquisition of our 7.2 MW site in Toronto, which is sort of a 5.5 MW IT load.

You know, this recent acquisition in Toronto is a perfect example of how legacy Bitcoin mining infrastructure does really provide an invaluable launchpad for the AI era. This new facility is going to be our first wholly owned Tier 3 quality data center. We're going to leverage liquid cooling infrastructure. It's going to power our sovereign AI strategy for Canadian enterprises and government initiatives. Operating one of North America's densest, fiber optic, and research hubs. I mean, Vector Institute's based in Toronto. Godfather of AI, Geoffrey Hinton. HIVE, we're really future-proofing our business model by transforming existing sites built for proof of work into sovereign high-density GPU clusters, really to position ourselves in the explosive growth of the AI industry. Let's go to the next slide.

We are operating at scale today, again, over 5,000 GPUs, which includes one of Canada's first supercomputer H200 clusters at 63 nodes, over 500 H200 GPUs, and all within InfiniBand. And again, you know, we hit that $20 million ARR. It's a very exciting story. You know, we've talked about that Toronto data center that will house next-generation liquid cool compute. Here's a beautiful photo of our GPU clusters here. And you know, we're developing an enterprise tech stack to power the sustainable compute. So some really exciting things happening. And the way our GPU clusters are set up now through strategic partners, you know, they've got over 10,000 monthly unique accounts, right? So it's about operating and being able to serve a lot of clients. So there's a lot that goes on the back end with the complexity, especially at, you know, the software level.

So, standby for super exciting news from BUZZ HPC as we've branded our GPU pure-play HPC business creative arsenal. We'll be providing some more color on that. Next slide. And our revenue growth, the $100 million target for 2026. We believe that the Toronto data center with Blackwell GPUs will get us to that target. And so standby, it's about a one-year retrofit to bring that Toronto airport site to a liquid-cooled infrastructure that would house either B200s or B300s. But market rates we're seeing that would get us, that would add about $80 million ARR to our current existing. So it's very exciting. And standby for updates as BUZZ provides more press releases as that project advances and we'll be providing more color. Let's look at the next slide. So let's just zoom out and look at HIVE as a stock trading against our peers.

Our enterprise value relative to our hash rate puts us at a very attractive price. If you were to look at the average, the pure average of enterprise value to exahash is about $66. And that would put HIVE at a $1 billion market cap today. And people say, "Oh yeah, but some of these guys have HPC strategies." So do we. You know, we've got a packed $100 million of ARR for 5,000 NVIDIA GPUs. You know, BUZZ is buzzing it. Super exciting. So we're actually, I believe, the first, if not one of the first Bitcoin miners to actually have HPC revenue on our income statement two years ago. So we've been doing this for scaling it. Standby for huge and exciting news. And of course, next slide.

As we get to our 25 EH/s, and then you look at where the peer average is based on projected year-end, it puts us at a $1.3 billion market cap based on the peer group average, again, looking at that exahash to enterprise value multiple, so I think that we are doing great things at HIVE. I think that we're building a lot of shareholder value as our cash flow continues to grow. I think that our stock is due for a re-rating as we hit that critical mass and we hit that critical scale, so it's been a great quarter. Since June 30th, we've continued to grow. Again, we've gone from 4.5 Bitcoin to 7.5 Bitcoin per day. A lot of exciting things happening at BUZZ, and Bitcoin is looking strong in this sector, and by the way, we had increased mining margins.

I wanted to point out hash price was actually down quarter to quarter, about $51 per day in June, and it was $54 per day in March. Our operating margins actually increased by 10%. We went from 28% gross operating margins to 38% gross operating margins. Again, our average cost of power in Paraguay brings down our global average cost. So that's trending in the right direction. Of course, with the new generation Hydro ASICs improving our energy efficiency, bringing down the average cost to produce a Bitcoin. That will continue as we scale to 25 EH/s. Now I will turn it over to the longstanding CFO in the Bitcoin mining industry, Mr. Darcy.

Darcy Daubaras (CFO)

Thank you, Aydin. Good morning, everyone. Thank you for joining us today. For the first quarter, I'll be walking through the results.

As a reminder, we are providing certain non-GAAP measures in our presentation today. The company believes these measures, while not a substitute for measures of performance prepared in accordance with U.S. GAAP, provide investors an improved ability to evaluate the underlying performance of the company. These measures do not have any standardized meaning prescribed under U.S. GAAP and therefore may not be comparable to other issuers. Further details are found in the management discussion and analysis for the three months ended June 30th, 2025. Moving on to the next slide. HIVE ended the year June 30th, 2025 quarter with 204.3 million common shares, 2.7 million options, 9.9 million RSUs, and 32 million, or sorry, 3.2 million warrants outstanding, and on the next slide, let's start with the key highlights for the quarter. For Q1, we generated $45.6 million in revenue and delivered $44.6 million in adjusted EBITDA.

Production for the quarter was 406 Bitcoin equivalent, supported by stable operations and strong uptime across our sites. These numbers reflect disciplined cost management, a focus on efficiency, and the benefit of our diverse global footprint. Let's now, on the next slide, take a look at how this operational performance translates into our balance sheet strength. We take pride in maintaining a very healthy balance sheet. As of June 30th, we held $24.6 million in cash, $47.3 million in digital currencies, and $34.5 million in receivables and prepaids. That totals $180.6 million in current assets against $52.8 million in current liabilities. We also maintained $33.7 million in strategic investments. This liquidity allows us to manage market cycles, invest in expansion opportunities, and avoid over-leveraging the company. With that context, let's now look at how our earning metrics have evolved, starting on the next slide.

Shifting our focus to our gross operating margin on a year-over-year basis, comparing the results of this quarter to Q1 last year, our gross operating margin, which is calculated as total revenues minus direct operating and maintenance costs and high-performance computing service fees, increased to $15.8 million in the most current quarter compared to $10.7 million in Q1 last year. In this most recently completed quarter, we are reporting a basic income per share of $0.0019 compared to a net loss of $0.17 per share reported for Q1 last year. Taking a look at our revenue increases year-over-year on the next slide, we generated total revenue in the first quarter of fiscal 2026 of $45.6 million versus $32.2 million in the previous year's first quarter.

The revenues compared to the same quarter in fiscal 2025 can primarily be attributed to the expanded hash rate that we are experiencing from the Paraguay expansion that is well underway. As mentioned previously, our gross mining margin, which equates to our revenues minus direct operating and maintenance costs and high-performance computing service fees, increased to $15.8 million, or 35% in the most recent quarter compared to $10.7 million, or 33% in the prior year comparable quarter. That's a direct result of our optimization of our mining fleet, the expansion in Paraguay, and improving overall operational efficiency. Now, if we zoom in to just the last two quarters, you'll see an even bigger improvement on the next slide. Comparing our current fiscal Q1 quarter to the previous Q4 quarter, we generated revenue in this Q1 quarter of fiscal 2026 of $45.6 million versus $31.2 million in the previous quarter.

The increase in revenues versus the prior quarter was impacted by increased exahash capacity with the Paraguay expansion, an increase in the price of Bitcoin resulting in higher revenue from digital currency mining, and we also had higher high-performance computing revenues. Our gross operating margin increased to $15.8 million, or 35% in the most recent quarter compared to $8.8 million, or 28% in the prior year's comparative. This increase in gross operating margin versus the prior quarter was greatly due to the comparative BTC prices and resulting revenues and increased exahash. On the next slide, I'd like to remind our stakeholders that our net income is comprised of our operational earnings, our cash flow, plus our investment earnings, which includes realized and unrealized earnings, which often includes non-cash charges.

Our adjusted EBITDA in this quarter ended June 30th, 2025, was $44.6 million versus adjusted EBITDA of -$8 million in the June 30th, 2024 period. I will highlight again that adjusted EBITDA is a non-GAAP figure. For this completed quarter, we experienced net income of $35 million compared to a net loss of $18.3 million in the previous year comparative. On the next slide, the quarter-over-quarter view tells a similar story. Our adjusted EBITDA in this first quarter of fiscal 2026 was a profit of $44.6 million versus an adjusted EBITDA loss of $30.7 million in the previous 2025 Q4 quarter. In the first quarter of fiscal 2026, we experienced net income of $35 million compared to a net loss of $52.9 million in the previous Q4 quarter. Q1 fiscal 2026 was a solid quarter for HIVE. We delivered strong revenue, expanded margins, and maintained a robust balance sheet.

Our operational discipline and cost control measures continue to position us well to compete in a challenging environment and capture opportunities for growth. I want to thank our loyal stakeholders and encourage them to follow our expansion efforts over the next six months.

Craig Tavares (President and COO)

Hi, everyone. My name is Craig Tavares. I'm President and COO of BUZZ High Performance Computing. I'd like to just do a quick introduction on BUZZ. We're a fully owned subsidiary of HIVE Digital Technologies. We're actually one of the first Canadian sovereign AI cloud providers, and I'll explain that a little bit more later, but we essentially own and operate large GPU clusters and vertically integrated data centers around the world. Our legacy as a crypto miner provided us a stepping stone to become one of the leading AI cloud providers as we deployed our HPC and AI business early last year.

Bitcoin, in general, has actually become, you know, that large catapult for AI in general. And if you look at the large data center providers and GPU cloud providers in the market today, you could see that Bitcoin had become that catalyst for those that had access to power and land to develop data centers or those large GPU clusters that consume the data centers. So BUZZ, in general, is very different than a lot of the other providers in the market because we focus on delivering a full suite of infrastructure services and solutions for AI. And we do it by offering a local touch in the domestic markets that we operate in, but we maintain a global reach. We currently operate in Sweden and Canada with a fleet of over 5,000 GPUs. We're a certified NVIDIA Cloud Partner, really building to the highest performance standards.

We're redeveloping a powered facility that we own in Sweden to become a new Tier 3 data center. It's strategically located down the street from a Meta data center, which means that we have rich network access. That's important when you look at the large number of platforms and applications that you might want to host in your data center. We offer a wide range of infrastructure and professional services catering to that AI development that, you know, we hear about in the market today. Being able to really accelerate the AI development is important because it requires that accelerated compute infrastructure at scale. We hit a revenue growth ramp at record speed this year. It's really layered in with a positive cash flow. Now rapidly, we're scaling to $100 million ARR. Being sovereign really means that we secure and guarantee your data.

That also means that that data resides on your nation's soil and immune to foreign policy. This is a large part of our go-to-market. In addition to that, it also means that the infrastructure and operations are all domestically owned. So we operate at scale as a sovereign provider, and we are the experts at building and optimizing large GPU supercomputer clusters. We like to really help promote the development of AI by democratizing access to this accelerated compute hardware. And it really has become a unique thing because it's not easy to manage. It's not easy to maintain. Only the few that have that experience and knowledge that know how to do it will survive in the market and be able to scale in the market. We also do it in a very sustainable way.

We launched green GPUs in the market some time ago based on the fact that all our data centers are powered by renewable energy. Our data center, as an example, operates with the highest efficiency. We run some of the lowest PUEs in the market, which stands for Power Usage Effectiveness. That just means that we're using power in the most effective way so that we reduce the amount of power consumption to cool and operate the data center, but also create higher margins in our business. Ultimately, when you look at all those vectors, we're bridging the gap between AI and sustainability. The last thing that I want to talk about is really the customer service that we deliver and solutions that we deliver. First, with customer service, we have some of the quickest onboard times into our platform in the market.

We have some of the fastest response times, and we're well known in the market to deliver an amazing customer experience, but we back it up by performance guarantees as well, too, so if you do business with BUZZ, we support that with an SLA or a Service Level Agreement to back up those guarantees for response time, uptime, and at the end of the day, making sure that, again, your environment stays performing to the highest level. When we think about sovereign and you think about the solution set to deliver sovereign, it's become a new standard in the market, and some customers may not need sovereign because we cater to a broad set of customers, whether you're a researcher, a startup, scale-up, and then across the other side of the spectrum to mid-market, enterprise, and government.

All of those customer segments can use our platform and do use our platform. And at the end of the day, sovereign has just become, again, a new standard that defines what we call an enterprise-grade platform. An enterprise-grade platform means that we maintain the highest security level, resiliency level, reliability, and high performance that we can offer to the market. Starting with our data centers, we operate in Tier 3+ data centers, again, maintaining that high performance resiliency in the markets that we operate in. Inside the data centers, we deploy the high performance clusters that I spoke about earlier, which is based on NVIDIA GPUs, InfiniBand networking, and VAST Data storage. On the virtualization layer, we deliver bare metal servers, or if you want containers, we deliver managed Kubernetes and DevPods.

Perhaps you need virtual machines to run your environments layered with Slurm, but whatever it is, we can customize and tailor that environment for you. On the tooling side, being able to build data pipeline support for AI, so we offer all the tools for data pipeline, data prepping, and then if you're training a model, tuning a model, or running an inference endpoint, we have the capabilities to support that as well, too, and then we've really started to build out our agentic workflows as well, too, so if you're developing agentic AI, you can do it on our platform. Equally as important as scaling out our sovereign AI cloud strategy is investing into our own data center assets, so where we owned land and power, we really looked at developing data centers in those markets. Boden is an example of that.

In Sweden, we have owned land and power with a shell and a building that we're developing into a Tier 3 high-performance compute data center. It will be liquid-cooled with high-density racks, so it can support the most, you know, demanding workloads possible in the market. We'll be able to scale our GPU infrastructure out within that facility. In Toronto, we just did a recent acquisition of a seven-megawatt facility that can scale higher. Toronto, again, was a key market for us because really, when you look at data center development, it comes down to three major things. One is access to the power to scale, the type of power, cost of power, and then the other one is really a geographic location based on its network connectivity.

So really having that low latency to the internet highway is super important to support many different applications that we see today, whether they're traditional applications or AI applications for inference. You really want to maintain the fastest network access possible to that data center. And then the last thing is really being in a market where we have rich ecosystems built around AI. And that's what Canada is in general, and especially being in Toronto, we're at the center of the epicenter to some of the world's world-class leading institutions for AI, such as Vector, Mila, Scale AI, Amii. So again, being in that market was super important for us. Both of these facilities will go live next year.

In summary, you know, we really achieved maximum utilization across all our GPU clusters earlier this year so that, you know, we ensured we had an ability to really hit that ROI, maintain a high level of profitability, achieving, again, just amazing EBITDA on the infrastructure that we deploy and monetize, and outside of that, you know, we built some amazing pipelines of customer demand, so it's prompting us, again, to expand as rapidly as we can in a lot of the local markets we operate in, but we leverage all our existing powered facilities and access large scale power to accelerate the growth of our data center footprint, again, within Canada and Sweden because it gives us access to the North American markets, to the European markets, and it allows us to maintain really the capacity at scale when the market needs it.

Deploying the latest and greatest cutting edge NVIDIA GPUs is one of the things that, again, we've done really well over the last couple of years and then really continuing to do that in the future, but we're continuing to build out really, again, this compute infrastructure in the market that caters, again, to the sovereign markets and also the global markets. This is not trivial because it's something that even the largest cloud providers haven't quite figured out as yet, and we do it at a fraction of the cost compared to some of the largest players in the market, but in the end, the cloud has evolved and sovereign is a new standard, so BUZZ is really the solution to this new shift, and we're helping to provide the digital infrastructure to accelerate AI innovation domestically and around the world.

Nathan Fast (Director of Marketing and Branding)

Thank you, Craig.

That concludes our Q1 2026 earnings call. Thank you for joining, and we look forward to speaking to you again soon.