DGXX

Good morning, and welcome to Digi Power X Inc.'s 1st quarter 2026 financial results conference call. Please note that this event is being recorded and a transcript will be available on DigiPower X inc.'s website. At this time, all participants are on a listen-only mode. A brief question-and-answer session will follow the formal presentation. Unless otherwise noted, all amounts referred to during the call are denominated in U.S. dollars. Certain comments made during this call may include forward-looking statements or forward-looking information within the meaning of applicable U.S. and Canadian security laws. Such statements and information reflect current expectations and, as such, are subject to a variety of risks and uncertainties that could cause actual results to differ materially from current expectations.

Those risks and uncertainties include, but are not limited to, factors discussed in DigiPower X inc.'s report on Form 10-Q for the 3 months ended March 31, 2026, and the annual report for the year ended December 31, 2025, as well as the company's other disclosure documents. Except to the extent required by applicable law, DigiPowerX undertakes no obligation to publicly update or review any forward-looking statements or information. During the call, management may make reference to certain non-GAAP financial measures that are not separately defined under GAAP, such as EBITDA and adjusted EBITDA. Management believes that those non-GAAP measures, when considered in conjunction with GAAP financial measures, provide useful information for both management and investors.

Reconciliations between GAAP and non-GAAP measures are presented in the table accompanying the press release highlighting DigiPower X financial results as the quarter ended March 31, 2026 have been filed and made accessible under the company's continuous disclosure profile on SEDAR+ at www.sedarplus.ca and are also available on the SEC's EDGAR website at www.sec.gov/edgar. I would now like to turn the call over to Michel Amar, CEO of DigiPowerX. Thank you. Please go ahead.

Good morning, everyone, and thank you for joining us today. Our Q1 2026 results underscore a transformational year in which the company strengthened its balance sheet, commenced the ramping down of its cryptocurrency mining, and positioned itself as a capital-light infrastructure scale AI computing platform with a clear path to nine-figure annual revenues. First quarter 2026 financial highlights. Three months ended March 31, 2026. Positive adjusted EBITDA of $1.1 million from a negative $1.3 million last year, Q1 2025. Revenue of $6.8 million, reflecting the planned wind down of legacy operation as the company transitions to AI compute and colocation revenues. Balance sheet and liquidity as of March 31, 2026. Cash and cash equivalents of $71.4 million. Working capital of $67.2 million compared to negative $0.8 million at March 31, 2025.

Digital asset holdings of $13.6 million, up 208% year-over-year. Net fixed assets of $26 million, up 29% year-over-year, reflecting capitalized investment at the Columbiana, Alabama facility. No long-term debt. Balance sheet and liquidity as of May 15, 2026. Approximately under $25 million in cash and cash equivalents, about $15 million in digital assets, and approximately $45 million in year-to-date capital expenditure deployed toward GPU equipment and data center build-out, principally at the Columbiana, Alabama facility. Operational highlights. Columbiana, Alabama AI Campus. The company is targeting phase 1 ready for service December of 2026 and completion Q1, 2027. NeoCloudz GPU as a service. NeoCloudz, the company's GPU cloud business, will recognize its first revenue in May 2026 from its initial fleet of NVIDIA B200, B300 GPUs deployed at the company's Alabama facility. Closing message.

Q1 2026 marks an inflection point for DigiPowerX. adjusted EBITDA turned positive even as we deliberately ramped down legacy revenue to make room for a much larger AI compute business. Our balance sheet is the strongest it has ever been. We hold approximately $125 million in cash and $15 million in digital assets as of today, with no long-term debt. We have already deployed approximately $45 million of CapEx year-to-date into GPUs and infrastructure at Columbiana. That is the firepower to execute phase one and the operational platform that follows. Thank you for joining us today. We will now take questions.

Thank you. We will now discuss some questions we had from shareholders with DigiPower X's CEO, Michel Amar. For Q1 2026, can you please discuss the financial results, specifically your cash and cash equivalents as of March 31, 2026?

Good morning, everyone. As stated earlier, we ended up with actually $73 million cash March 31st. With an adjusted EBITDA of positive $1.1 million, compared to negative last year. The adjusted EBITDA is basically all the non-cash item deducted from the net loss. It reflects a disciplined capital management and provide us with enough cash to execute on our phase 1 Columbiana commissioning. It also allows us to leverage our balance sheet to get better debt financing for the future.

Thank you. Do you have any debts?

As of March 31st, 2026, we continue to maintain a zero debt capital structure. As of May 15, we still maintain that zero debt. We are in discussion with different lenders in order to mitigate dilution. With the strongest balance sheets we've ever had in the history of the company, between cash and cash equivalent of $125 million and digital assets that are unencumbered of about $15 million. We basically have $140 million cash equivalent, and digital assets that we can leverage to get a comfortable debt financing some future data center developments, so we don't tap into the equity dilution.

Thank you. Can you discuss the decision the company made in 2025 to strategically pivot and transition from crypto mining to AI data centers?

That was the greatest decision we made. The decision to transition from Bitcoin mining to AI infrastructure was the most consequential strategic decision in company history. In 2025, 2 realities that converged. First, the economics of Bitcoin mining had become increasingly compressed and cyclical, while demand for AI compute infrastructure was entering a generational growth phase driven by frontier model training and inference scaling. Most importantly, we have spent years assembling a portfolio of power-rich sites in Alabama, Niagara Falls, North Carolina, Buffalo, and they were uniquely suited to hyperscale AI workloads. It took us about 10 years to accumulate these assets that are fully owned by the company and that are very, very valuable today in a twofold. 1, speed to market.

We don't need to wait for a interconnection with the utility. We, we own the substation. We have utility interconnections. We also generate power through our combined cycle gas power plant that we acquired in 2022. That allow us to be in a very, very strong position in terms of speed to market. That's why one of the reasons that we were able to get a major contract from a major frontier AI company and deliver in a basically record time period by the end of this year.

Thank you. How is the company positioned to capture AI infrastructure demand at scale as compared to conventional colocation and cloud competitors?

We're not a traditional colo operator. We're not an hyperscale cloud. We believe in the structural advantage for the current AI demand environment. Few points to underpin. We own and control our power. We have a total footprint of power of about 393 MW over 4 sites. We have 2 stream of businesses. 1 is a NeoCloudz GPU as a service, which by the way, we are live as of today, which de-risk greatly our ability to execute. We are actually live and getting AI revenues as of today, through a contract that we signed and announced a few weeks ago.

This is our first NVIDIA B200, B300 GPU as a service offering that we intend to scale up. Then we have the colocation strategy, which is basically a modify lease structure where we basically sign a 10-year deal for $1.1 billion that ensure stability and income without the enormous CapEx of GPUs. Our business model today is to develop both businesses colocation, because we do have the power and sizable power, and GPU as a service because we are vertical and the we try to optimize every megawatt of power we own. Being vertical give us a much bigger revenue stream.

Thank you. How is the company planning to fund its expansion in 2026 and beyond?

We went through the painful last 6 months of raising capital, therefore diluting the company. Now that we have basically under $25 million of cash and no debt, we can leverage that balance sheet, and we are able now to avoid future dilution or mitigate dilution by financing the growth of our future data centers through debt financing. Having a strong balance sheet helps you to get, you know, better terms in terms of financing. We are thinking about a 70/30 LTV loan to cash. Instead of going from a 100% self-financing, we're gonna go to 70/30% loan to cash financing. We already sign a term sheet with a lender in order to grow our business through smart debt financing.

Thank you. How much available capacity does the company have in terms of power MW at its various sites?

So far today, we have connected to the grid about 210 MW live connected to the grid that we can turn into AI revenues. We have coming up basically another 180 MW where we should get back our load study by end of 2028. Which will give us a total of about 393 MW of secure capacity across our sites that we own. We also have a LOI that we announced few months ago with a massive power plant in West Virginia of 1.3 GW that now we are better positioned to explore and come to terms, if possible, in order to scale up our business exponentially for 2028, 2029, 2030.

Thank you. Can you discuss some of the company's key accomplishments year-to-date, specifically surrounding site expansion, 24-month contract signed with SubQuadratic AI, and current balance sheet and liquidity?

The year-to-date was an execution achievement. We executed a bare metal GPU rental agreement with SubQuadratic, a new upcoming lab, and we delivered in a very short period of time and on time. You know, our contract was as of May 15, RFS, and we delivered on time. We believe it was a very incredible teamwork. We teamed up with, you know, the NVIDIA team and Supermicro team and our team in Alabama, and we delivered our first GPU bare metal rental as of today. That was one major accomplishment. The second, we financially developed a very strong balance sheet that we can leverage for our future, and we do not have any concerns of lack of cash today.

We can grow. Third, we signed a massive contract with one of the top, a world top chip maker of $1.1 billion expandable up to $2.5 billion. That give us a steady, predictable revenue for the next 10 years. Also a lot of credibility. Now we are in discussion with many top players for expansion in the next 3 years.

Thank you. When does the company expect to begin generating its first AI revenues?

Today. We started today. We ended up last night, the first GPU bare metal GPUs to our customer. You know, been working very hard in the last few weeks. We received the GPUs from NVIDIA first few days of May. We tested it, commissioned it, and delivered the GPUs to the customer. We are starting our AI revenues as of today.

Thank you. How many MW of total live AI infrastructure across the company's multi-site portfolio does it expect to activate in 2026 and 2027?

2026, we expect to expand our GPU bare metal with another few megawatts. Today that first contract that we delivered was a little bit under 1 MW, and we expect to deliver by the end of the year an additional 6 MW. We'll get the revenues potentially last quarter of this year or early quarter next year. We're going to deliver the first phase of this colocation contract December 2026. It's about 15 MW. We'll end up internalizing the second phase, Q1 2027, which would be an additional 25 MG for a total of 40 MW, which will be a running $8 million-$9 million a month run rate for colocation. It's about in GPU, it will be about $7 million-$8 million a month, first quarter of 2027.

Thank you. What are the company's revenue projections for the next three years?

We don't have a, an issue with power. We do have one of the most important bottleneck for most of the companies to get access to power. We do have access to power. Our strategy is to turn that power into AI revenues. Our goal is to for 2027, be active with 90 MW worth of colocation and basically 10MW, 12 MW of GPU as a service. That would give us a total run rate of $300 million a year. In 2028, we plan to add an additional 50 MW of colocation and 20 MW of GPU bare metal. That would give us a $450 million-$500 million a year run rate.

In 2029, an additional 100 MW of colocation, an additional 50 MW of GPU bare metal that would give us a $800 million-$1 billion run rate per year. This is our goal. It can be accomplished as long as we get the financial strength and the debt financing instruments in place, which we are executing now on the financial side. Our stock is very liquid, so very attractive to the different institutions. We are getting a lot of interest in firms to partner or lenders to partner with us and support our growth. This is our plan for the next 36 months.

Thank you. That brings us to the end of today's question and answer session. We would like to thank everyone for their participation and interest in today's conference. You may disconnect your lines or log off the webcast at this time, and enjoy the rest of your day.

Good morning, and welcome to DigiPower X Inc.'s Third Quarter 2025 Financial Results Conference Call. Please note that this event is being recorded, and a transcript will be available on DigiPower X Inc.'s website. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. Unless noted otherwise, all amounts referred to during the call are denominated in U.S. dollars. Certain comments made during this call may include forward-looking statements, or forward-looking information within the meaning of applicable U.S. and Canadian securities laws. Such statements and information reflect current expectations, and as such, are subject to a variety of risks and uncertainties that could cause actual results to differ materially from current expectations.

Those risks and uncertainties include, but are not limited to, factors discussed in DigiPower X Inc.'s report on Form 6-K for the three and nine months ended September 30th, 2025, and the annual report for the year ended December 31st, 2024, as well as the company's other disclosure documents. Except to the extent required by applicable law, DigiPower X undertakes no obligation to publicly update or review any forward-looking statements or information. During the call, management may make reference to certain non-IFRS measures that are not separately defined under IFRS, such as EBITDA and adjusted EBITDA. Management believes that those non-IFRS measures, when considered in conjunction with IFRS financial measures, provide useful information for both management and investors.

Reconciliations between IFRS and non-IFRS measures are presented in the tables accompanying the press release highlighting DigiPower X financial results as of the quarter ended September 30th, 2025, have been filed and made accessible under the company's continuous disclosure profile on SEDAR+ at www.sedarplus.ca, and are also available on the SEC's EDGAR website at www.sec.gov/edgar. I would now like to turn the call over to Michel Amar, CEO of DigiPower X. Please go ahead, sir.

Good morning, everyone. Q3 2025 was a transformational quarter for DigiPower X, as we strengthened our balance sheet, accelerated our shift into AI infrastructure and delivered positive net earnings. Quarter highlights, working capital went from $500,000 in Q3 2024 up to $15 million this quarter. Net income is +$300,000 versus a $6.4 million loss last year. EBITDA, $1.9 million positive, adjusted EBITDA $0.8 million positive. Digital assets, BTC holdings up 143% to 97 Bitcoin. Ethereum, 1,000 tokens. Total digital currency value, $15.4 million, up 213% year-over-year. Warrants reduced from 8.8 million warrants to 2.6 million outstanding. Debt, no long-term debt. CapEx, $3.1 million in Q3, $9.5 million year-to-date, primarily tied to tier 3 AI data center conversion. Strategic and operational progress. Our first ARMS 200 tier 3 AI pod assembly began in Q4 2025, and will be online in Q1 2026.

Approved 60-MW load study in New York, enabling future AI expansions. First NVIDIA B200 cluster built with Supermicro on track for Q1 2026 activation. Advancing long-term colocation and AI compute agreement with multiple potential customers. Beginning January 2026, ARMS 200 modules will be deployed across all tier 3 sites. Energy revenue grew 112% year-over-year to $8.7 million. Cost of revenue and depreciation reduced by $9.3 million year-to-date. NeoCloud Z, our GPU-as-a-Service platform, launching January 2026. Financial position today, over $90 million in cash, BTC, ETH, and equivalents, the strongest liquidity in company history. Our liquidity equals more than 1/3 of our market cap. This capital fully supports the 2026 AI infrastructure build-out. AI transition across power assets. Phase I deployment, Q1 2026, 5 MW. Phase II, Q2 2026, 15 MW. Phase III, Q3 2026, an additional 30 MW.

By Q4 2026, we would have deployed 55 MW, which is 40 MW critical IT load. Current power availability, Alabama, 55 MW. New York Upstate, 141.7 MW for a total of close to 200 MW of power available for 2026. North Carolina, an additional 200 MW anticipated in 2028. DigiPower X is now firmly positioned as a next-generation tier 3 AI infrastructure company. With the ARMS 200 platform, the NeoCloud Z platform, major power capacity and tier 3 deployment on the way, we are building a scalable high-density AI compute ecosystem ready, to serve both emerging AI companies and enterprise customers. We've never been better positioned for growth.

Thank you. We'll now be conducting a question-and-answer session. Our first question comes from Jeremy Hayes. What are your expectations in AI revenues in 2026 and 2027?

Great question, Jeremy. Related to the scaling up of our first module infrastructure, ARMS 200 in Alabama, which we intend to complete quarter after quarter, up to 40 MW of IT load, mostly 75%-80% will be colocation. The colocation range is about $140-$150 a kilowatt-hour per month. To give you a little bit of a size of income, if we average 20 MW because we are scaling up, we estimate roughly about $50 million in revenues average for the year 2026 in colocation. The second part of AI revenues will be our GPU-as-a-service through our NeoCloud Z platform, which we built with Supermicro. We anticipate about 1,024 B200, B300 NVIDIA chips, GPUs online, generating with a scale-up, about $15 million.

The growth estimate for 2026 related to the execution of the infrastructure through our ARMS 200 system solution, should be roughly about $65 million. On top of that, we will have the existing Bitcoin mining, which should be even with last year, we have to add a fourth stream of income, which is our energy sales to the grid through our power plant, which to give you a sense for this year so far, we are at $8.9 million year-to-date selling energy, which for Q3 was about $3.1 million energy sales, which represents on this quarter, Q3, over 35% of our revenues.

Thank you. What are the current debts?

We do not hold any long-term debts. We are current. We have no obligations, no trigger that could hurt the company. We are completely debt-free. I think we have the lowest payable ever in our company.

Thank you. How is your current cash holding?

We are holding a little bit more than $90 million total. Most of it is in cash. We have a few holdings of crypto Bitcoin mining, about 115 or 116 Bitcoins. We have 1,000 Ethereum. Everything else is in cash. That accounts today, a little bit above $90 million, which allows us to really develop our modular system. We actually, this year, year-to-date, already spent close to $10 million. The first development of Q1 has already been paid for. The first ARMS 200, which will be assembled in the next few weeks in Alabama and that is rated three, will be on end of December. Tested the first week of January, along with the Supermicro team as we plan to have this ARMS 200 system on the partnership book of Supermicro, which will be a very interesting development for us.

Thank you. Our next question comes from the line of Patrick Gray. Can you please describe the ARMS AI-ready modular solution platform?

Great. DigiPower X, wholly owned subsidiary US Data Centers Inc., has developed a proprietary ARMS platform, ARMS for AI-ready modular system. We developed that platform early this year, I would say 10, 11 months ago with Supermicro. It's really an incredible product system that we can also develop for our own sites and for other people's sites. We can deliver this system within 180 days. It's built for all kinds of chips, primarily for the NVIDIA B200, B300. It can be customized for other servers or other chips. It is really a modular system that has three product lines, 1 MW, 5 MW, and 10 MW. We can expand it much faster than a hyperscale building that takes a couple of years. In our opinion, for 2026, this is an incredible demonstration of what we can do at the speed we can do.

Of course, the reason why we can develop it in a faster way than a hyperscale, is that we already have the high-voltage substations. We already have the connection with the grid power. Our power plants generate power as well, so we are connected already with power. All we need to do is to insert this modular system that we're rated three, ready for redundancy and uptime in standard in compliance with the tier 3. I think you're allowed to 1.6 hours of downtime a year, so we got rated three. 2026 is going to be a real transformational year for us, and we expect to enter our full cycle of developing AI.

Thank you. Can you please go into some detail on your relationship with Supermicro Computers Inc.?

We developed a very interesting relationship with Supermicro. They are a pretty large company. They have a very good relationship with NVIDIA. In order to leverage their human resources and resources, we chose Supermicro and we integrated their optimized service rack directly to our ARMS system pods. We designed it that way. Supermicro is doing a very big part of the job by supplying racks ready to go.

We also partner with them on all the software integration, and it's really very, very helpful. That allows us to have a very big team on our side with a very small GNA, because we have a very low SGNA and we are leveraging the Supermicro team. They are coming to our side actually end of this month, November 28. They will come and start to prep with our people the setup of our modular systems, both in Upstate and in Alabama.

Thank you. Our next question comes from the line of Anthony Sphere. Can you please describe the retail compute platform NeoCloud, who the potential customers or end users will be?

We developed that platform. Actually, Alec Amar developed it along with again, Supermicro. It's geared for the smaller players, not for the hyperscaler customers. It's for the AI developers or ML engineers start-up companies. There are plenty of startup companies now that need access to an infrastructure. It is hard for them to get access to a hyperscaler. Research institutions and universities, non-hyperscaler corporations priced out of AWS, Azure, or NVIDIA cloud capacity, HPC workloads for simulation, modeling, and data processing. It's kind of our retail service, GPU-as-a-service. We expect to develop that portal or that direct vertical GPU-as-a-service to be 20%-25% of our total revenue. The breakdown would be 75% colocation with longer contracts. We are in negotiation now, anywhere from five to 10- to 15-year contracts.

There is a lot of demand for 2026, early 2027. We are trying to get the best scenario or the most solid contract, 15-year contract. It's like a modified lease on AI infrastructure. Simultaneously, it is ready, it will be online in January. We are developing this platform, NeoCloud Z, backed by Supermicro. We will be able to integrate multiple customers, all kinds of customers for deep learning, for any kind of applications. That will result in a much higher margin. The colocation margins are pretty set and revenues. The direct GPU at service provides very high margins, so blended, we will have a very healthy margin in the AI business.

Thank you. This concludes our Q&A session. That concludes our call today. We thank you for your interest and participation. You may now disconnect your lines.