CleanSpark Q2 2026 Earnings Call - Mining Funds the AI Infrastructure Pivot

Brian Dobson, Analyst, Clear Street2: Good afternoon. My name is Krista, and I will be your conference operator today. At this time, I would like to welcome everyone to CleanSpark’s Fiscal Second Quarter 2026 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker’s remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad. If you would like to withdraw your question, press star 1 again. Thank you. Harry, you may begin your conference.

Harry, Investor Relations / Moderator, CleanSpark: Thanks, Krista, and thank you for joining us today to review the second quarter 2026 financial results for CleanSpark. We encourage you to review our earnings results press release, which was filed today and is available on our website. A webcast replay and transcript of today’s call will be added to our website as well once available. On the call today, I’m joined by Matthew Schultz, our Chairman and Chief Executive Officer, and Gary Vecchiarelli, our President and Chief Financial Officer. Some of the statements we make today will be forward-looking, based on our best view of the world and our business as we see them today. The statements and information provided remain subject to the risk factors disclosed in our 10-K. We will also discuss certain non-GAAP financial measures concerning our performance during today’s call.

You can find the reconciliation of non-GAAP financial measures in our press release, which is available on our website. With that, it’s my pleasure to introduce Matt Schultz.

Brian Dobson, Analyst, Clear Street4: Thank you, Harry, and thank you everyone for joining us this afternoon. This quarter represents continued meaningful progress in CleanSpark’s evolution into a digital infrastructure and data center development company. One that utilizes our heritage as energy natives, builds on the strength of our mining operations, and ultimately expands the set of opportunities our portfolio can support. I’m going to take a few minutes to share what we are seeing in the market, how that informs our higher-level strategy, and then provide an update on Sandersville and the unique opportunity it represents, as well as our broader portfolio. We are in the midst of a technology wave similar to the personal computer, the internet, mobile phones, and cloud computing. Except in this case, it has a larger potential total addressable market and an outsized impact on the infrastructure layer required to power it.

AI is different because it is compute denominated, and compute is a function of access to energy and data center infrastructure. We’ve all watched the hyperscalers guide to higher CapEx this year, and the central question was if those investments would have a return profile sufficient to justify them. The revenues reported for the AI labs and the cloud service providers are proving this now in real time. The commercial landscape for AI is converging across hyperscalers, chip manufacturers, Neoclouds, and the AI labs themselves. Demand for compute continues to grow, but real-world constraints challenge their ability to secure what is required to continue scaling. Power and infrastructure are at the heart of the supply squeeze. Grids are rapidly adjusting in conjunction with their largest customers to meet the moment and deliver capacity for data centers while maintaining service reliability and price stability for households and businesses.

That dynamic aligns directly with how we built CleanSpark. We’ve spent years operating dynamic, energy-intensive infrastructure. At a high level, there are 4 key activities that enabled our evolution into a large-scale digital infrastructure business. These are in various stages of completion but cover the full scope of our activities. First is land and power. This has been the core of the business for years. We have cultivated a range of key relationships across the country that propelled our growth to 1.8 gigawatts of currently contracted capacity and will continue driving fundamental value as we add high-quality assets and projects to our portfolio. We are always striving to enhance or expand existing sites. I can proudly share that we added 25 megawatts of contracted capacity to one of our metro Atlanta locations just last month, making the existing footprint more attractive for HPC utilization.

In keeping with our conservative and transparent approach, all of the megawatts are fully contracted and approved, and they do not include our multi-gigawatt growth pipeline or potential expansions at our existing facilities that we’re pursuing. Second is commercialization. We’re focused on long-duration leases with high-quality tenants as our priority. As the landscape for compute evolves, we will always stay nimble and aggressive. One important shift we are seeing, prospective tenants engage with us on a portfolio basis rather than just a single site. This is reflective of their demand for capacity and of our large, diverse set of assets. Third is financing. Gary will share more detail on our capital strategy, the markets are constructive, and we have a range of attractive options across the entire project lifecycle. Finally, construction and delivery.

We’ve spent a significant amount of time building out the internal talent and key relationships required to deliver projects on time and on budget. We are setting up the supply chain to create repeatable processes, allowing us to rapidly scale up and scale out. Importantly, this includes working with suppliers that have manufacturing and fabrication processes that can reduce on-site labor by up to 70% by moving production out of the field and into the factory. This business transformation is the largest endeavor CleanSpark has ever embarked on. It pulls on the threads that made us a market leader in energy development and management, also the discipline and operational excellence that propelled us to become the largest domestic producer of hash rate. Now we have the pieces in place to execute on building the AI factories that are required for the intelligence age.

As we actioned our go-to-market efforts for the portfolio, Sandersville was the natural starting point, given that all 250 MW are live. We have a rock-solid community relationship. In January, we closed on an additional 122 acre parcel necessary to support full greenfield data center build. In marketing the site, we received a range of indications of interest, with several coming from high credit quality tenants. Among those, we are progressing with a lead prospective tenant. We understand their engineering requirements and their basis of design. In parallel, we have been negotiating the commercial relationship and the associated suite of contracts. While the process is complex, we’re encouraged by the progress and confident that we can offer a compelling solution to their significant data center needs.

Ultimately, we know how valuable Sandersville is in this environment, and we’re committed to providing the right shareholder value through its monetization, while also building a relationship with this tenant that can extend far beyond Georgia. Our approach to counterparty selection is disciplined and prioritizes long-term, risk-adjusted equity value creation. We are thinking about the potential multi-decade relationships and how to best deliver over those type of time horizons. At the heart of everything we’ve done in Sandersville is a commitment to win-win outcomes. That meant a power arrangement that protected residents on reliability and affordability while securing the volume and pricing we needed. It meant adding substantially to the local tax base. It meant hiring full-time staff and contractors locally, and it meant showing up. Youth sports, holiday events, and local business patronage.

When you put down roots in the American heartland, you join those communities, roll up your sleeves, and you contribute. Our community focus is why the acquisition of the additional acreage was seamless. The local economic development authority knows what CleanSpark has built over several years, and they have confidence in what comes next. We are working to replicate this model everywhere we operate. It is the right way to build infrastructure in this country because it creates structural advantages that protect and accelerate our projects for the long term. Looking beyond Sandersville, the same principles apply across the portfolio. We are building a platform, not a single site strategy. On our last call, I described the formation of what we see as a Houston area infrastructure hub. Sealy and Brazoria together represent nearly 900 megawatts of current potential utility capacity, strategically selected to support multi-phase AI campus deployments.

Sealy has 285 MW approved, with just over 200 MW scheduled to come to energize in the first half of 2027. Substation construction is already underway. We have strong visibility into the energization timeline and are running a parallel commercialization process. Brazoria has 600 MW in two phases. ERCOT approval is already in hand for the first 300 MW, a meaningful milestone that reflects the scale of the opportunity and the coordination required to advance projects in the market. The second 300 MW is progressing through review, and we look forward to growing across the region. I also want to highlight a capability, excuse me, that has continued to differentiate us in tenant conversations, our ability to expand within established grid relationships. Historically, we increased at Sandersville and Washington. More recently, we added 25 MW to our metro Atlanta footprint.

When a prospective tenant asks what the growth path looks like, we can show them a real track record of unlocking additional scale. We see significant expansion opportunities at several sites throughout our portfolio. Across the broader land and power portfolio, we hold 1.8 GW of currently contracted capacity. Not every site will transition to HPC, and that is not the goal. The goal is optionality, aligning the right assets with the right opportunities as demand evolves, with discipline around capital allocation and shareholder returns always at the center of the analysis. Access to grid-connected power at scale remains scarce, and we believe it will remain so. The ability to find, contract, and develop that power is what we’ve spent years building, and that is exactly what is most necessary to meet the market’s relentless demand.

As always, none of this is possible without our world-class teams working tirelessly to push the business forward. Their grit and their talent continues to inspire me every day. With that, I’ll turn it over to Gary to walk through the numbers. Gary?

Gary Vecchiarelli, President and Chief Financial Officer, CleanSpark: Thank you, Matt. Good afternoon, everyone. Before diving into the numbers, I’m going to briefly cover the role that mining continues to play in our operations and how we see its evolving role in our strategy. Mining remains foundational to our business. It generates the cash flow that allows us to develop our platform deliberately. It provides operational flexibility. It continues to give us a strategic advantage when competing for power in grid-constrained environments. Our thesis has remained the same for years now. Energy production is not coming online fast enough. Our infrastructure-first approach to building our almost 2 gigawatt portfolio is reflective of that strategy. As we expand into AI and HPC, we are building on mining, not moving away from it. Both businesses share the same foundation, power, land, and operations. Mining funds the platform. AI monetizes it.

Together, they create a more balanced, durable business, and as we evolve, mining is the engine that funds our future growth. Turning to the numbers, the average Bitcoin price in Q2 was approximately $76,000, which was a 24% difference from the prior quarter, where the average Bitcoin price was $100,000. For the quarter, our revenue decreased compared to the immediately preceding first quarter by approximately $45 million or 25%, directly attributable to the decrease in Bitcoin price. During the quarter, we mined 1,799 Bitcoin, which was only 22 Bitcoin less than the prior quarter, indicating network hash rate growth has flattened, while our operations team has maintained its industry-leading uptime. Despite the lower revenues, we maintained a healthy gross margin of over 40% for the quarter, compared to 47% for the previous quarter.

Power prices were more favorable this quarter at $0.052 per kilowatt hour, compared to $0.056. Our best-in-class team continues to execute and deliver regardless of the market climate. This quarter, we recognized a net loss of approximately $378 million, which was flat compared to the net loss in the prior quarter of the same amount. The current quarter’s net loss, it is important to note that it includes unfavorable non-cash charges of approximately $263 million related to GAAP mark-to-market adjustments on Bitcoin balances. Our adjusted EBITDA was negative $241 million, compared to negative $295 million last quarter, which is indicative of the significant drop from the Bitcoin highs of approximately $126,000 in early Q1.

Turning our attention to the performance of the second quarter versus the same quarter last year, revenues declined approximately $45 million or 25% to $136 million. Our Bitcoin production for the current quarter decreased approximately 7% year-over-year due to difficulty, but we saw lower power prices of $0.052 per kWh compared to $0.06 in the same period last year, which helped margins in this lower Bitcoin price environment. Net income decreased year-over-year by approximately $240 million, which was almost entirely due to non-cash mark-to-market adjustments. I will also point out that the average Bitcoin price in the same quarter last year was higher at approximately $94,000, and our HODL balance increased by almost 1,700 Bitcoin year-over-year, which further amplified the mark-to-market adjustment.

As of the March 31st balance sheet date, our liquidity remains strong with almost $1.2 billion of liquidity, as we had $260 million in cash and 13,561 Bitcoin worth $925 million. It is worth noting that as Bitcoin prices have started to recover since quarter end, the value of our HODL alone sits at approximately $1.1 billion as of today. Additionally, we have the entire $400 million capacity on our Bitcoin-backed lines of credit available to us. The strength of our balance sheet is a key feature for CleanSpark, as we have sufficient capital to acquire land and power while also preparing our sites for long-term tenancy. We have always taken a disciplined approach to capital stewardship, as demonstrated by the significant reduction in our share count over the last 18 months.

This evolution into AI and HPC infrastructure development is exciting because it opens the door to long-term, predictable, and high-margin cash flows, along with access to capital at much lower costs than we have seen historically in the mining business. You have heard us use the word optionality in our prior calls, and that approach has not changed. We have designed our capital strategy to be flexible in order to take advantage of real-time opportunities in the marketplace. Multiple instruments are available for us to finance, either CapEx for high credit quality tenant AI site builds or acquisition of new land and power sites. We believe we have a fundamental second mover advantage. For example, over the last year, pricing and terms have become significantly more favorable for data center landlords. Recent financings have been priced constructively with investor demand far in excess of the offerings.

Recent deals have been oversubscribed as much as 5x-6x. Additionally, several of these deals have priced at slightly over 6%. This is a large reason why counterparty selection is so important and why we are taking a disciplined approach to commercialization. Next, I’d like to provide an update on our digital asset management activities, where we continue to lead and innovate in the monetization of our Bitcoin HODL balance. While Bitcoin and markets broadly experienced elevated volatility and a significant drawdown during the quarter, we were still able to drive net positive cash returns of approximately $4 million, bringing the total cash generated from DAM activities to $17.2 million for the fiscal year to date.

Brian Dobson, Analyst, Clear Street4: I would note that these numbers are being generated while we are only activating less than 40% for Bitcoin and DAM strategies. While the overall cash returns were lower this quarter, we view this as validation that our approach has durability across different market environments. 3 considerations here. Foremost, we generated a yield on our Bitcoin balance in a down market. Second, our active risk management and approach to trade execution allowed us to be nimble, flexible, and aggressive in managing downside risk. I would also note that the investments we are making in people, process, and technology in the DAM team will further enhance our capabilities and drive returns going forward. Lastly, the data and experience that we are capturing each day are enabling continued innovation across our institutional-grade desk. We have proven our DAM strategies produce meaningful cash flow to supplement our mining operations.

During this last quarter, we saw elevated volatility and a much lower Bitcoin price, which, while challenging, proved that our institutional-grade 24/7 desk was able to both manage risk and monetize the volatility. The actions taken this past quarter will further help us refine our trade execution and risk management. Since quarter end, we have already seen a resumption of returns similar to those we experienced in the first quarter. With that, I’ll hand it back to Harry to lead us into Q&A.

Harry, Investor Relations / Moderator, CleanSpark: Thanks, Gary. We’ll now open the floor to questions from the analyst community. Operator, please provide instructions and manage the Q&A for the Q&A session.

Brian Dobson, Analyst, Clear Street2: Thank you. Your first question comes from Nick Giles with B. Riley Securities. Please go ahead.

Brian Dobson, Analyst, Clear Street1: Yeah. Thank you, operator. Good afternoon, guys. You know, just thinking about your portfolio, Sandersville, Brazoria, Sealy, those seem to be the obvious targets. When you zoom out, you know, which other assets could be converted that you once thought might only be for Bitcoin? You know, how much expansion potential do those sites have? Thank you.

Brian Dobson, Analyst, Clear Street4: Hey, thanks for the question, Nick. This is Matt. Within our portfolio, we have a number of sites, and what we talked about was, when we, when we started Washington, or excuse me, College Park, we had 5 megawatts of capacity. We expanded that to 50. When we started Washington, we had 36. It’s now 86. We’ve duplicated that process across the portfolio. We have some phenomenal assets. Washington probably is the next highest probability in the pecking order. It’s got 86 megawatts energized capacity right now, but we’re in the process of completing a line study with significant expansion possibility. Additionally, we acquired 60 megawatts of capacity in Jackson, Tennessee that also looks very promising for AI development. Last but not least, we have 110 megawatts in Cheyenne, Wyoming, and we’re fence line neighbors with another hyperscaler.

There’s tremendous opportunities to convert that from an interruptible load to a firm load to accommodate the needs of potential data center clients.

Brian Dobson, Analyst, Clear Street1: Super helpful, Matt. I appreciate that. Maybe just as a follow-up, can you just speak to how much capital you’ve deployed to date at Sandersville? And then what’s really the threshold, you know, of the amount of capital that you’re willing to deploy at any given site before lease signing? Thank you.

Gary Vecchiarelli, President and Chief Financial Officer, CleanSpark: Yeah. Hey, this is Gary. I’ll take that question. We’ve deployed $200 million, which includes the miners. While we may be subject to some impairment like one of our peers are once we convert to AI, that’s simply gonna be a book adjustment. We feel pretty confident that we’ll be able to move those some of that infrastructure and miners elsewhere. Until AI is up and energized, we’re gonna be able to monetize those megawatts at that point. Right now, the amount that we’re actually investing in the site is minimal. You know, as you know, we acquired some additional acreage adjacent to the current Sandersville site. Really what we’re doing is we’re clearing those trees and moving some dirt.

Brian Dobson, Analyst, Clear Street4: You know, we’re talking, millions, not tens of millions of dollars that we’re doing because we wanna make sure that we have a lease signed before we deploy significant amounts of capital.

Brian Dobson, Analyst, Clear Street2: Your next question comes from the line of Gregory Lewis with BTIG. Please go ahead.

Gregory Lewis, Analyst, BTIG: Yes. Thank you and good afternoon, and thanks for taking my question. You know, Matt, I was hoping you could elaborate more on the comment you made around, you know, I guess some of the conversations around an agreement or potential multi-site deployment with maybe one tenant. Just kind of as we think about that, is that like broad strokes in terms of, you know, the first deployment maybe to the next deployment? Is there kind of a target range of power these could be, you know, these potential tenants are looking for? Any kind of comments around elaborating on that I think would be helpful.

Brian Dobson, Analyst, Clear Street4: Yeah. Greg, good to hear from you. Sounds like you’re fighting the same cold I am. I’ll tell you how it got to be really interesting. You know, obviously, we consider ourselves to be pretty experienced in land and power. When it comes to fit up and fit out of the data centers, obviously there are third-party vendors that provide a significant portion of that build-out. What we talked about in our comments was that 60%-70% of the data center build that we’re contemplating takes place in a factory. It short-circuits the time to market, but it also decreases the on-site specific build. Well, in meeting with some of those vendors, they obviously have strong working relationships with the hyperscale tenants, as a result, they understand the demand for capacity.

It’s through some of those relationships that the introductions have been made to potentially deploy a portfolio approach where we can meet the needs of a single tenant that has requirements across a diversity of geography. We have some low latency opportunities, and then we have larger scale opportunities. What we found is that there are single tenants that require many of those characteristics. While it’s still early, I can tell you those conversations have been very fruitful.

Gregory Lewis, Analyst, BTIG: Okay, great. My other question was around, you know, future power acquisition. Clearly, you already have a lot of power that we can deploy to kind of build out the HPC business, but also accentuate the Bitcoin mining business. You know, as we sit here in, I guess, what, May 2026, you know, I guess, how is the company thinking about incremental power acquisitions?

Brian Dobson, Analyst, Clear Street4: Like, that’s a fantastic question, and I wanna be really clear about the way we disclose this. The 1.8 gigawatts is power that’s approved and contracted and available. When we sat down earlier this year with our leadership team and we designed OKRs, you know, kind of a strategy for accountability going forward, we talked about the pipeline. In our pipeline, there’s greater than 5 gigawatts of capacity beyond what we shared on the call. However, that’s speculative or potential. I think there are a lot of companies that disclose maybe capacity that they’ve had discussions about. We’ve had many of those same discussions. We’re in meaningful conversations about significant additional power, we’re very careful, the number that we disclose is restricted only to what is already contracted.

I would say that the future is pretty bright for us. You know, everybody’s seen the political headwinds on data centers. One of the positive comments that we received as we’ve put these sites available to the market is that we have manageable amounts of power and meaningful amounts of land in different jurisdictions. It doesn’t create, you know, like what we’ve seen with Kevin O’Leary’s proposed site of 9 GW and whatever the case may be. It’s caught some tremendous political headwinds just based on scale. Being disciplined and have a bite-sized approach with communities and utilities that actually want us there based on prior experience with us, it’s created some interesting tailwinds.

Gregory Lewis, Analyst, BTIG: Okay. This is super helpful. Thanks for all the detail, guys.

Brian Dobson, Analyst, Clear Street2: Your next question comes from the line of John Todaro with Needham & Company. Please go ahead.

John Todaro, Analyst, Needham & Company: Hey, guys. Thanks for taking my question. Congrats on the quarter. Matt, you had mentioned earlier progressing with a lead prospective tenant. Just wondering if we could get a little bit more on it. Is it still kind of the advanced conversations that it was framed before as an IG hyperscaler? Is that the right way to think about it, or is that evolved at all? Then I have a follow-up.

Brian Dobson, Analyst, Clear Street4: I think that’s pretty consistent. We’re, you know, we don’t have another update beyond that, but our conversations remain consistent with the first tenants that we’ve been talking with.

John Todaro, Analyst, Needham & Company: Okay. Understood. Thank you for that. I guess just a housekeeping item, maybe for Gary on Bitcoin mining and the hash rate. You know, just kind of as we think about more site portfolio going towards HPC, just any kind of range we should think about on hash rate moving forward?

Gary Vecchiarelli, President and Chief Financial Officer, CleanSpark: Yeah, great question. As I mentioned in my comments, look, Bitcoin mining is really our functional currency going forward, and that’s what’s gonna pay the bills until we get, you know, a stabilized lease. I think that, you know, that’s one of the benefits of having a very large fleet at scale with one of the most efficient fleets, at least of the public miners who are in North America. We did see through our last contracted commitment with Bitmain. We have some immersion miners that have landed that we’re gonna be deploying at various sites. The great thing there is that that’s gonna drop our efficiency even more from the 16 joules terahash that we currently are posting, which will increase margins.

Brian Dobson, Analyst, Clear Street4: The best part is these are gonna be in immersion pods that we can then up and move as part of our AI strategy. I think you’ll see the hash rate start to tick up. I mean, our Bitcoin production has broken 23 just recently. You know, obviously some of that’s gonna depend on Bitcoin difficulty, you know, network difficulty and Bitcoin price. But you’ll probably start to see this trend to 55 through the end of the year.

John Todaro, Analyst, Needham & Company: Got it. Understood. Thank you for that. Appreciate it.

Brian Dobson, Analyst, Clear Street2: Your next question comes from the line of Brett Knoblauch with Cantor Fitzgerald. Please go ahead. Brett.

Brett Knoblauch, Analyst, Cantor Fitzgerald: Hi, guys. Thank you for taking my question. Matt, maybe just on the tenant conversations and the maybe evolution of this portfolio approach. Is that the same tenant who was looking at Sandersville, who was also looking at maybe some of the other sites? Does this portfolio approach potential maybe pushback when the first lease signing could be? Or do you think it doesn’t change the timing from your lens?

Brian Dobson, Analyst, Clear Street4: No, I don’t Brett, first of all, thanks for the question. It was good to connect with you at the Bitcoin conference. It doesn’t change the timing whatsoever. They have value individually and independent of one another. I think for us, first prize is having the right credit quality tenant that has interest across the portfolio. You know, it doesn’t change timing. I feel really good about where we are in the cadence we’ve had to date. I think, you know, the portfolio approach is more frosting on the cake.

Brett Knoblauch, Analyst, Cantor Fitzgerald: Understood. Gary, on the Bitcoin side, would you guys be looking at, you know, maybe co-locating Bitcoin mining with AI? Is that something that you have discussed with tenants? Do we think, you know, every site is either gonna be bifurcated between it’s just gonna be AI or it’s just gonna be Bitcoin mining?

Brian Dobson, Analyst, Clear Street4: Yeah, look, you know, We think that we’re innovators in this space when it comes to pairing both AI with Bitcoin mining. You know, in my comments, I’m not sure if you caught what I said exactly, but I think that the Bitcoin mining is actually gonna allow us to land new land and power opportunities, because we’ll be able to monetize that energy, you know, near to 100% of that base load. We are having conversations, and I think you can expect different flavors of AI and, you know, AI and Bitcoin mining.

One of the ones that we’re really looking forward to is this, you know, builds right now are, you know, 18 plus months right now for AI or HPC, and if the site is energized, we can plop down some mining pods and actually monetize that energy while we’re waiting for the AI site to be built. Again, there’s different flavors that this will come, and I think that because it’s rather innovative and new to the market, it’s gonna take some time and education for all parties. That’s part of our strategy, and we think it’s pretty viable. Maybe just to add a little flavor on that, Brett.

We have a patent from our Bitcoin mining days, and the patent basically says that the control module has the ability to make a decision if and when to distribute power to a requesting module. Back when we were in the microgrid business, we had a controller that would allocate power as requested based on a number of criteria. The idea is that with many of these data center loads, the peak PUE, as an example, on Sandersville, the discussions around that, the peak PUE for the tenant would be in that 1.4 range. The average annual PUE would be around 1.15. That leaves a significant amount of MW available 93+% of the year. The challenge then becomes for the utility to have that power available to meet the five nines requirement for a hyperscale tenant.

What do they do with those non-monetized megawatts? The conversations that we’ve had contemplate utilizing Bitcoin mining to make sure they meet the minimum utilization thresholds to ensure the pricing that’s so important for the hyperscale tenants, but also having the ability to mine Bitcoin profitably, and even in some instances, potentially subsidized using that spare capacity. It’s early in the discussion yet, but it really creates a win-win scenario. The utility doesn’t have on-demand available yet underutilized power. They still have the ability to monetize that to create the revenues to invest in future CapEx. It’s a hybrid approach, but we’re really excited about what the potential looks like.

Brett Knoblauch, Analyst, Cantor Fitzgerald: Awesome. Thanks, Matt and Gary. Well articulated. Appreciate it.

Brian Dobson, Analyst, Clear Street4: Thank you. Thank you.

Brian Dobson, Analyst, Clear Street2: Your next question comes from the line of Paul Golding with Macquarie Capital. Please go ahead.

Brian Dobson, Analyst, Clear Street3: Thanks so much for taking the question. Just wanted to ask around the incremental capacity under review at Brazoria, 300 megawatts. Was just hoping you could give some detail around how that review process is going and maybe as a foretelling of how markets may look over time in terms of incremental power acquisition you may be able to do. Is the market tightening here? Is the review process fairly stringent in scrutinizing this capacity? How should we think about this review process and the current sort of pipeline of interconnect capacity and the availability of powered land, or I should say, lack thereof, impacting powered land banking going forward in your view for your portfolio? Thanks so much.

Harry, Investor Relations / Moderator, CleanSpark: Awesome. Thanks, Paul. It’s Harry. Excuse me. I think that the most important piece in all of this is that our process by which we achieve contracted power, approved power starts during our site evaluation and M&A process. We have a team that has done this very, very many times across a diversity of markets, I think we’ve been able to build a reputation for being an incredibly strong deal partner in the acquisition of powered land assets. The ability to work with the approval bodies, whether that’s a cluster study or something else, that all begins early on in the acquisition process, actually. It’s a function of our diligence. It’s a function of the way that we engage cross-functionally.

The full stack of not only the utility, but also the regulatory body, as well as the landowner, as well as the adjacent parcels should we need additional capacity as well. How does that relate exactly to Brazoria is that we came into that process with a very clear understanding of the greater Houston market. Because if you remember, we closed on our Sealy asset just 60 days prior to that. We’d already been in market with ERCOT. We’d already been in market with CenterPoint. We understood the nuances, the zoning, the planning, et cetera. We came in from a position of tremendous strength to that conversation. It’s why we were able to strike such a constructive deal there.

It’s also, you know, why we were able to close on the 300 at the full approval status with the second 300 in a deeply progressed posture. Ultimately, you know, our sense of it, from CenterPoint and from ERCOT is that we’re living in bad zero territory for the additional component. It also signals this track record that we have, which is that we enter a market, we land there, and then we very rapidly expand there. It was the same playbook in Georgia, obviously a very different power market. Same in Tennessee, about as different from ERCOT as you can get with a fully federally regulated utility there. Now you’re seeing us do that in ERCOT in the greater Houston area, and we didn’t just trip, fall, and land in the greater Houston area for no reason.

It was about the transmission availability there as well as the range of utility sophistication that we’re excited to grow with.

Brian Dobson, Analyst, Clear Street3: Thanks so much for that, Harry. I was also hoping that you might be able to comment on maybe incremental acreage you would need to acquire at any other sites as you think about the spec that’s unfolding for Sandersville. You did the incremental acreage acquisition there. Are you looking at your portfolio right now and thinking about that spec as a blueprint for additional land you may need to acquire at other sites? Is that filtering out some of the sites from an HPC viability perspective? Thanks so much.

Harry, Investor Relations / Moderator, CleanSpark: Thanks, Paul, and great question. I wanna tackle it in pieces by region. In Texas, the land parcels that we’ve acquired as part of the power acquisition are sufficient to build the AI campuses that we’ve contemplated. That’s the benefit of going in on a purpose-built kind of acquisition trajectory as we did in that market. I think Sandersville looks different because we were able to land 250 megawatts of mining on a 50-acre parcel, whereas the data halls and the adjacent required mechanical, electrical, and plumbing are gonna be a much larger physical footprint. That’s why we took down that additional acreage. I think what’s great about the way, and you’ll hear this from us many times, is that community relationships are a business tool as well as doing the right thing.

Because we’ve built the community relationships that we have, the ability to acquire additional land where necessary is something that is very kind of fertile ground for us and very low friction. Ultimately, we’re gonna evaluate this on a site-by-site basis. I think we have sites today where there is sufficient land. I think there are others where we’re gonna look to get a little bit more elbow room in order to take down a full HPC deployment. Ultimately, what’s important is that we have the real estate chops and the development chops in order to be able to do that in a seamless way.

Brian Dobson, Analyst, Clear Street4: You know, Paul, this is Matt. Just to give you a little bit of color on how that works. When we met with the economic development director in Sandersville and told them what we were contemplating doing, not only did they assist us in securing the 122 additional acres, it’s not a fence line neighbor parcel. It’s driver 9-iron away. They then assisted us in negotiating a right of way for the easement to pull the power across. We still have the ability to mine Bitcoin up until the day we cut it over, and then we can mine it in conjunction. The reason that that’s important is this was the city taking the initiative to ensure that our requirements were met, and they were excited to do so based on our history. That’s consistent across our portfolio.

You know, there have been times that we show up at a little town in Tennessee or a little town in Georgia and wearing a CleanSpark golf shirt, I can’t pay for a cup of coffee because folks are happy about us being there, and they’re excited with what we’ve created. It’s a, it’s a wildly differentiated approach to what you’re seeing in the media.

Brian Dobson, Analyst, Clear Street3: Awesome. Thanks so much.

Brian Dobson, Analyst, Clear Street2: Your next question comes from the line of Brian Dobson with Clear Street. Please go ahead.

Brian Dobson, Analyst, Clear Street: Hey, good evening, guys. You know, earlier, you likened the AI data center build-out to that of personal computing. I guess we’re still in the very early stages. You know, maybe can you just articulate your vision for CleanSpark in, say, 2030, a few years down the road once you’ve been able to start out on this or rather embark on the build-out?

Harry, Investor Relations / Moderator, CleanSpark: Hey, Brian. Thank you. I think what’s important to understand about where AI build-outs are happening, and I really differentiate it from sort of the dark fiber wave of the Internet, is that that was a opportunistic speculative build-out where the fiber was laid, and because you were digging the trench one time, it made more sense to lay 50 strands, not five strands. Ultimately, the users at the other end of those strands just weren’t there yet. Not because the Internet wasn’t gonna become a valuable tool, but because there was a distribution curve that the Internet had to go through to get the economic purchasing power into enough hands to make it, you know, the globally transformative technological platform that it is today. You know, AI is building on the shoulders of giants because we’re all walking around with laptops and mobile phones.

We’re all walking around with connectivity in our houses and in our cars. Because the distribution rails were built 30 years ago, AI is able to proliferate across the user base at a much, much more accelerated fashion than with prior computing waves that were, you know, that were fundamentally hardware enabled. How does that read through to our portfolio and our vision for the business is that every megawatt that can be economically pushed into an intelligence posture is likely going to be over time. What does that mean in the short term? It means that we don’t have enough electrons.

The electrons that are available to be built out into infrastructure environments are going to be very rapidly and are gonna be done through a very aggressively bid process by which those tokens can get into the hands that they can do the most economic good for the most people. That means 10, 20, 50 megawatt sites out of the gate if you look back to 2022 and 2023. It meant 250+ megawatt sites if you look 2022 to today. It’s gonna look like gigawatt campuses if you look out into the future.

What’s important to note is that just because the gigawatt campuses today are providing tremendous economic value, the 250s are still producing, the 50s are still producing, the 10s are still producing across the entire spectrum of these deployed token factory environments. What’s the next phase for this? It’s gonna be continued proliferation and distribution of intelligence as a fundamental economic good. Our job in the midst of all of this is to make sure that the communities that didn’t benefit from the proliferation of the smartphone and the internet are not gonna get left behind in this AI technology wave. These are the places where infrastructure is gonna fundamentally change the lives of hundreds of thousands of people.

If we can be the developer who can bring and distribute that, we’re gonna do that on behalf of the places where we work and on behalf of the shareholders who supported us.

Brian Dobson, Analyst, Clear Street4: Brian, you know, I wanna apologize for Harry’s lack of enthusiasm there.

It’s quite all right.

One thing to note, there’s a study called Rethinking Load Growth that Duke University published. What it discusses is the fact that as of today, right now in the 22 largest power grids in the nation, there’s between 76 and 125 gigawatts of headroom that is unlocked and available if it’s able to be curtailed between 0.5% and 1.5% of the time. We hear all this about the grid is overtaxed, it’s over capacity, it’s overstressed, it’s overstrained, but in reality, there’s 100 gigawatts of headroom that if you can curtail 115 hours a year, you really unlock that capacity.

What we found is by working in some of these smaller jurisdictions and by discussing the ability to add Bitcoin mining, which is a rapidly interruptible load to that factor, it really changes the way that these discussions open up. We’re excited about not only the gigawatt campuses and the 250 megawatt campuses that we’re working toward deployment. We’re also very excited about the 20s and 50s and 60s that we have. In fact, you know, to not go too far down the rabbit hole, we’ve had conversations with tenants that have specifically asked, "How much can I buy 60 megawatts or above between now and 2027?" The demand is everything you have as fast as you can get it.

It’s become more of a sorting process to ensure that the financial capability of the offtake and the financability of the project is well within scope.

Brian Dobson, Analyst, Clear Street: Excellent. Thanks very much.

Brian Dobson, Analyst, Clear Street2: Your next question comes from the line of Mike Colonnese with H.C. Wainwright. Please go ahead.

Brian Dobson, Analyst, Clear Street0: Good afternoon, guys. Thanks for taking my questions. First one from me. It sounds like you will be taking a pretty unique approach to data center construction with your vendor relationships and strategy here. What do you think your estimated data center deployment timelines could be once you’ve signed your first lease and the associated expected CapEx cost per megawatt for these builds? It sounds like you guys might have a bit of an edge here. Just want to get some more information around that.

Harry, Investor Relations / Moderator, CleanSpark: Thanks, Mike. You know, you’ll get tired of us telling you that we’re conservative in everything that we do and say. Ultimately what we think from a build and deployment perspective is that from lease signing, you’re really looking in the 14-18-month range for delivery. That’s a function of 1st data hall versus last data hall. It’s a function of project size and some of those pieces. Ultimately, what we’re looking to do is be conservative and deliver aggressively on time and on budget out of the gate, over time, be able to smooth and innovate across supply chain and delivery such that we’re able to compress those timelines project by project.

Like we saw with our Bitcoin mining deployment learning curve, we were able to get a lot better by the nth build, not the first build. We expect to be able to integrate those similar type of learnings and innovations into our deployment for this as well.

Brian Dobson, Analyst, Clear Street0: Got it. Is there any CapEx advantage to using this more modular sort of factory-based, data center construction approach, or is it pretty much in line with what you’ve seen in other builds?

Harry, Investor Relations / Moderator, CleanSpark: Yeah, I think that these are gonna be really in line from a build and deploy perspective. What we’re looking to be able to do is create an offering that’s gonna have the best total cost of ownership for the client over multiple refresh cycles. There’s a component of this that’s fundamentally grounded in future-proofing because we wanna be able to meet their needs as effectively as possible, and that means delivering that total cost of ownership differential, not just when they put their first GPU in, but when they refresh it, refresh it again, and refresh it again.

Brian Dobson, Analyst, Clear Street0: Very helpful. Thank you for that, Harry. The second one for me, when we look at GPU ownership versus co-location opportunities, would you guys still consider pursuing GPU cloud service opportunities out there based on current economics and implied return profiles? If that’s the case, which assets in the portfolio would make the most sense for you to own your own GPUs versus going the co-location route?

Harry, Investor Relations / Moderator, CleanSpark: Yeah. Look, I think that if, you know, if you rewound the clock four or five years when the first H100 hit the market, nobody would have thought that they’d be renting for the prices that they’re renting at today. That is a hugely positive sign, not only for the GPU as a service business model, but for the overall health in the demand profile for AI compute as an overall sector. Ultimately, for us, what we wanna do is be able to come to market with the very high stability, high margin, and long duration cash flows that co-location and tenant relationships are able to deliver. We’re never gonna be in the business of saying never say never.

Ultimately, what we wanna do is be able to put 1 foot in front of the other, look at the projects and the opportunities directly in front of us, execute aggressively against those, and then we can turn our focus to other opportunities that are further out the curve, but we have to deliver first.

Brian Dobson, Analyst, Clear Street0: Great. All the best with your ongoing negotiation.

Brian Dobson, Analyst, Clear Street4: Thank you. Thanks, Mike.

Brian Dobson, Analyst, Clear Street2: Your next question comes from the line of Matthew Galinko with Maxim Group. Please go ahead.

Matthew Galinko, Analyst, Maxim Group: Hey, thanks for taking my questions. Firstly, how do you manage, I guess multi-site risk across your portfolio? Or, you know, I guess in other words, would you be comfortable with a single tenant saturating your pipeline, or would you look to have kind of multiple of these multi-site agreements?

Brian Dobson, Analyst, Clear Street4: Hey, appreciate that question. Thank you. This is Matt. I think it really depends on the credit quality of the tenant. you know, throughout this process, we’ve had a tremendous amount of inbound inquiry. You have to consider if we do a Neocloud deal, we can print a higher rent figure. It requires a wrapper, and oftentimes the wrapper comes with a cost, and many times it includes a significant scrape of equity. As we look at this, it really just comes down to balancing the credit quality and risk with the ultimate value or the cost long term for our shareholders. I wouldn’t say that we, you know, have an aversion to concentration risk if it’s the right trillion-dollar tenant. but I would say that it really is on a case-by-case basis.

We certainly don’t want overexposure to a Neocloud and end up having to print a tremendous amount of warrants just to get the deal financed.

Matthew Galinko, Analyst, Maxim Group: Great. All right. That makes sense. As my follow-up, I think you mentioned in the script that you’d be able to relocate some of the Sandersville fleet, you know, on conversion. Are you looking to retire some of the fleet there, or is it a lack of space elsewhere? I’m just curious how you envision that moving. Thanks.

Gary Vecchiarelli, President and Chief Financial Officer, CleanSpark: Hey, hey Matt, it’s Gary. We have XPs and the most recent S21s there in addition to the newest immersion miners. I think naturally as time goes on, we will retire some of those ASICs. You know, we’ll just do what we’ve always done, and rather than just wait for them to completely die, we’ll look to monetize those while they still have some useful economic life. Ultimately, I think that, you know, I just refer to my comments about optionality and flexibility. Like, we can be very responsive to the market, right?

Brian Dobson, Analyst, Clear Street4: If Bitcoin goes to $125,000 tomorrow, XPs are probably gonna see a spike in price per terawatt or terahash, and we could probably move some of those, and we might be opportunistic. Ultimately, you know, our team is evaluating in real time what the best use of those mining assets and ASICs are, including which sites to have them at. I think it’s just gonna be an ongoing part of the operations that you’ve seen from us over the past couple years.

Brian Dobson, Analyst, Clear Street2: Your next question comes from the line of John Hipman with Leydenberg. Please go ahead.

John Hipman, Analyst, Leydenberg: Hi. I’m not sure who wants to answer this question, but I’m a little confused about the ability to provide, you know, 0.95 power for a hyperscaler and still meet the needs of a community that is used to getting all the power they want whenever you know, need to turn off or on your Bitcoin mining. How do you balance that out?

Brian Dobson, Analyst, Clear Street4: Thanks, John. Ultimately, what’s great is that we work hand in glove with the utilities and the communities as we go through a transition phase for some of the power contracts that are gonna go through that. I think Sandersville is really the place to start with that. The utility goes. You know, thinking through how the power is procured in Georgia, utility goes out to market and procures the power over duration, directly for the contracted demand that we represent at that location. By moving into that method of procurement, they’ve mitigated the community risk for any passback of that because they’re essentially procuring that power on the open market, knowing exactly where it’s gonna get landed, which is with us.

On our side of the fence, we have a capacity factor obligation under that because we agree to consume a certain percentage of uptime underneath that power. Because of the way that they go out to market and because of the way that we agree to consume on behalf of our tenant, there is no pass back into the community as it relates to that, you know, to that type of contract migration. What’s great about Texas is that the deregulated market in ERCOT doesn’t contemplate that type of interruption or expectation of interruption in the market writ large. We went to that market explicitly for the purpose of building large scale AI data center campuses because we know that the power market there is more than able to support it.

The tenant community is obviously very constructive about growing their footprint there as well. I think in Georgia, it, you know, it looks a little bit different than it does in Texas, but the net result is that we’re able to provide that very firm and high uptime to the tenant, and we’re able to source that power in a way that is low impact to the community and the infrastructure.

John Hipman, Analyst, Leydenberg: The community in Sandersville that’s used to this Bitcoin mining operation, they’re gonna be okay if you know, turn it into HPC?

Brian Dobson, Analyst, Clear Street4: they’re incredibly supportive of our business evolution.

Okay. Thanks. That’s it for me. All everybody else’s questions have been very helpful.

Brian Dobson, Analyst, Clear Street2: Your next question comes from the line of Michael Grondahl with Northland Securities. Please go ahead.

Michael Grondahl, Analyst, Northland Securities: Hey, guys, and thank you for taking the question. I just wanted to get an update on how demand has kind of evolved for some of your smaller sites and kinda where does that demand sit today?

Brian Dobson, Analyst, Clear Street4: Yeah. I appreciate the question, Mike. I can tell you we had a stand-up call today with the Neocloud company, and their ask was, "Show me all your sites that have 60 MW of power or more available today or in the short term." The demand is going nowhere but up. In fact, during that call, they commented that they’re aggressively seeking 8 GW of capacity. We’re seeing the, you know, 500 MW or 1 GW minimum thresholds really start to drop because of a couple of factors. First and foremost, a lot of those mega sites that are grid connected are years away or already under discussion or leasing. Secondly, there’s a real risk attributed to behind-the-meter power generation.

Many of the companies that have made behind-the-meter gas decisions are facing energization delays or utility costs that are double or triple what we’re seeing for grid connected sites. Now, I think that, you know, that there were some constructive conversations that took place at the White House with hyperscalers agreeing to generate additional power and push it back to the grid. I think that kind of flies in the face of that Duke University study that identifies 100 gigawatts of headroom on the grid today.

I think if you can find a way to balance that with a portfolio approach, using incremental components to make up that eight gigawatts of demand, for example, from a specific client, and use interruptible loads to pair with firm loads for data centers, I think you can unlock a tremendous amount of capacity that has previously gone, I think, unnoticed.

Michael Grondahl, Analyst, Northland Securities: Sounds good. Nice to see it moving down to some of those smaller sites. That’s for sure. Thank you, guys.

Brian Dobson, Analyst, Clear Street4: Absolutely. Thank you.

Brian Dobson, Analyst, Clear Street2: We have time for one more question, and that question comes from James McIlree with Chardan. Please go ahead.

James McIlree, Analyst, Chardan: Yeah. Thanks a lot. I was hoping you could address how you’re looking at managing securing talent for engineering as well as labor, particularly after the next 12 or 18 months at the next phase of build-out.

Brian Dobson, Analyst, Clear Street4: Yeah. That-

James McIlree, Analyst, Chardan: Talent specifically for building out the, you know, the next wave of data centers.

Brian Dobson, Analyst, Clear Street4: That, that’s a fantastic question, and it’s a very real concern. We, you know, we’ve done some data center consulting and development with companies like McKinsey, and one of the things that was identified is the labor bottlenecks in markets like Texas. You look at the demand for plumbers and electricians over the next 36 to 48 months, and it’s terrifying. I think we’ve done the best we can to mitigate that. I’ll, you know, give you an example. Everybody’s kinda heard talk about the West Texas development for a major hyperscaler that has changed direction and ownership and had some real challenges. You know, we’ve all read the stories that there are 4,000 to 6,000 guys driving on dirt roads every day, and they’re bringing in fresh porta potties just to keep it rolling up.

Well, our conversations with our development partners take about 70% of that out of the way. As an example, Sandersville will be a 494,000 sq ft building, and it would be 400 full-time employees on the construction team rather than 4,000 to 6,000. That comes a function of building a significant component of the data center in a factory. It’s duplicatable, it’s consistent, it’s an assembly line process. You can meet the specific requirements from the chip manufacturers as an example. You build to suit that particular design, and then you duplicate that, and you simply install it in the field.

The guys in the field are, you know, construction, plumbing, and electrical, only to the point that it feeds the MEP that we’re bringing in in a modular solution and decreasing some of that risk. We have a pretty robust team so far. We’ve engaged with, as I mentioned, McKinsey and a couple of others, Accenture, to assist us in that roadmap going forward. We’ve had a tremendous amount of inbound inquiry because what we’ve done historically is hire locally. There are a number of trades in a lot of the jurisdictions that we currently operate that aren’t chasing data center builds around the country. They’re looking for opportunities at home, and we’re finding that we have a significant amount of talent locally that can help support what we need.

Brian Dobson, Analyst, Clear Street2: That concludes our question and answer session. I will now turn it back over to the presenters for closing comments.

Brian Dobson, Analyst, Clear Street4: Everyone, thank you again for joining today’s earnings call. We look forward to staying in touch and sharing future results with you in the coming quarters. Stay tuned for more progress and exciting achievements ahead of us at CleanSpark.

Brian Dobson, Analyst, Clear Street2: Ladies and gentlemen, this does conclude today’s conference call. Thank you for your participation, and you may now disconnect.