加载中...
共找到 39,782 条相关资讯
Operator: Good morning, and welcome to TON Strategy Company's Full Year 2025 Earnings Conference Call. Joining us today are Executive Chairman, Manuel Stotz; and Chief Financial Officer, Sarah Olsen. Earlier today, the company filed its annual report on Form 10-K for the year ended December 31, 2025, and issued a press release with its financial results. Both are available in the Investors section of the company's website. This call will also be available for webcast replay on the company's website. Before we begin, I would like to remind everyone that today's call includes forward-looking statements within the meaning of the federal securities laws. These statements are based on management's current expectations and are subject to risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Please refer to the company's filings with the Securities and Exchange Commission, including its annual report on Form 10-K for the year ended December 31, 2025, for a discussion of these risks and uncertainties. The company undertakes no obligation to update any forward-looking statements, except as required by law. With that, I'd like to turn the call over to TON Strategy Company's Executive Chairman, Manuel Stotz. Manuel Stotz: Thank you, operator, and thank you, everyone, for joining us. For today's call, I'll start by framing why we believe TON matters and why we believe TON Strategy Company has a clear role to play in the ecosystem. Then Sarah will walk you through execution in the year's financial results, and I'll come back at the end with a few closing thoughts. Through my work at Kingsway, I've spent years investing in and working around digital assets. And in 2025, I also served as President of the TON Foundation during a very important period for that ecosystem. That experience informs my view of TON and why we believe TON Strategy Company has an important role to play in the market. TON Strategy Company is built to hold Toncoin to stake a substantial portion of the position and to increase TON held per share over time inside a public company structure. At the asset level, we believe TON is a differentiated network because it is designed for real economic utility and activity inside the Telegram ecosystem, where more than 1 billion users already communicate, transact and engage with digital services. The TON blockchain is designed to support payments, stablecoins, digital goods and application activity at scale. And we believe its combination of utility, distribution and still early adoption is what makes the asset compelling over the long term. We also think the network's growing developer and application ecosystem is an important part of that story. At the company level, we believe TON Strategy Company serves an important purpose. We've built TON Strategy to hold and stake Toncoin inside a public company structure designed to provide transparency, discipline and access to that exposure. We believe our structure is particularly relevant now while direct access to TON remains more limited in U.S. markets. We also think the staking component is a meaningful part of our business strategy. By staking a substantial portion of our holdings through institutional custodians and segregated validated structures, we have been able to make our treasury productive over time rather than leaving those assets idle. We took the first major steps in this strategy during the second half of 2025. In August, we raised capital, established our initial position and began staking. Over the balance of the year, we've also built out our operational and reporting foundation needed to support the strategy inside a public company. The fourth quarter was the first full fiscal period with staking in place, which is giving us a better view of how the model operates with the operating infrastructure fully established. I also want to provide a quick update on our CEO transition. As previously announced, the company continues to conduct an active search for a permanent CEO as part of a planned leadership transition. Veronika continues to serve as CEO during this transition, and our Board remains engaged in the search process. I'd personally like to thank Veronika for her integral role in launching TON's strategy and her continued commitment to the Toncoin ecosystem. With that, I'll turn it over to Sarah. Sarah? Sarah Olsen: Thank you, Manny. Thanks, everyone, for joining. I've had the privilege to work across capital markets and digital assets with a focus over the last decade on the intersection of crypto infrastructure and traditional markets. As we've gotten TON strategy up and running, my primary focus has been establishing the operating and reporting framework to support the business within a public company environment. As context for the financial results, our 2025 results reflect both the implementation of our TON treasury strategy beginning in August as well as the contribution of the company's legacy operating businesses. For the full year 2025, total revenue was $12.8 million compared to $0.9 million in 2024 and included approximately $4 million from staking activities following the implementation of the TON treasury strategy. Gross profit was $7.6 million compared to $0.7 million in 2024. Total costs and expenses were $49.2 million compared with $12.5 million in 2024. The increase was primarily due to noncash stock-based compensation expense, treasury implementation costs and costs associated with the infrastructure to support custody, staking, reporting and compliance. Loss from operations was $36.4 million compared with $11.6 million in 2024. Net loss before income taxes was $148.6 million compared with $10.5 million in 2024. Net loss included a $114.2 million net loss on crypto assets, which reflects realized and unrealized fair value changes in Toncoin Holdings during the year. At December 31, 2025, digital assets held a fair value of approximately $356.8 million and cash and restricted cash totaled approximately $39.7 million. From an operating standpoint, the important takeaway is that our treasury is active and productive. As of year-end, we had 219.7 million tons staked, and we earned 2.19 million tons since taking implementation. We expect to continue updating most company reported treasury metrics through our regular quarterly and annual public filings, consistent with our long-term treasury approach. We also recently launched an analytics dashboard on our website, tonstrack.com, to support transparency around the treasury and provide additional visibility into certain market-based and drive metrics alongside the company reported data. Going forward, operationally, our emphasis will remain on disciplined treasury management, which means taking a substantial portion of our position while preserving appropriate liquidity and financial flexibility. We intend to continue being deliberate in how staking rewards are used or retained over time, and we are applying that same discipline to our cost structure, including careful expense management and a continued focus on operating efficiently. I'll now turn it back to Manny for closing remarks. Manuel Stotz: Thank you, Sarah, and I very much appreciate the wonderful job you and the team have done on our first 10-K. To wrap up, I'd like to leave you with 3 key points. First, we entered 2026, having moved through the initial launch phase, and we are now operating the model with the core elements in place, a substantial Toncoin position, staking and the public company structure and processes needed to support the strategy. Second, we continue to believe TON is a very differentiated asset with growing utility and a network that is still very early in its development. Our view is that our public company structure offers a distinct way to access the TON ecosystem through the public markets. Third, our core focus remains on disciplined execution. We strive to manage the position carefully, operate transparently and continue increasing TON held per share over time through a measured approach. Thank you very much for joining us this morning, and thank you to our shareholders for your continued support. Operator, that concludes our prepared remarks. Operator: Thank you. Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day.
Operator: Good evening, and welcome to the Sidus Space Fourth Quarter and Full Year 2025 Financial Results Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Adarsh Parekh, Chief Financial Officer. Please go ahead. Adarsh Parekh: Good evening, everyone, and thank you for joining us for Sidus Space's Fourth Quarter and Full Year 2025 Earnings Conference Call. Joining us today from the company is Carol Craig, Chairwoman and Chief Executive Officer; and myself, Adarsh Parekh, Chief Financial Officer. During today's call, we may make certain forward-looking statements. These statements are based on our current expectations with respect to the future of our business, the economy and other events and as a result, are subject to risks and uncertainties. Many factors could cause actual results to differ materially from the forward-looking statements made on this call. These factors include our ability to estimate operational expenses and liquidity needs, customer demand, supply chain delays, including launch providers and extended sales cycles. We also expect to discuss certain financial measures and information that are non-GAAP measures as defined in the applicable SEC rules and regulations. Reconciliations to the company's GAAP measures are included in the MD&A of Financial Conditions and Results of Operations within Sidus' full year 2025 10-K. For more information about these risks and uncertainties, please refer to the risk factors in the company's filings with the Securities and Exchange Commission, each of which can be found on our website, www.sidusspace.com. Listeners are cautioned not to put any undue reliance on forward-looking statements, and the company specifically disclaims any obligation to update the forward-looking statements that may be discussed during this call. At this time, I would like to turn the call over to Carol. Carol, please go ahead. Carol Craig: Thank you, Adarsh. Good evening, everyone, and thank you for joining us. I want to start by saying that 2025 was a productive year for Sidus, and I am proud of the progress our team has made as we translate several years of development into operational capabilities supporting both space and defense missions across multiple domains. For those who may be new to our story, Sidus was built with a clear mission to deliver end-to-end space and defense solutions, integrating satellite design, manufacturing and operations with advanced computing and data capabilities. Over the past several years, we've made deliberate investments in our technology, infrastructure and talent to support that mission, and we're now seeing those efforts materialize into tangible mission-ready capabilities. As a result, today, Sidus is a proven U.S.-based vertically integrated space and defense technology company, delivering end-to-end satellite infrastructure, space and defense-grade hardware and AI-enabled data platforms. Over the past 4 years since we became a public company through a traditional IPO rather than a SPAC, the landscape has evolved considerably. At that time, our objective was clear: to transition from a predominantly government-focused contract manufacturing business into a diversified space and defense technology company positioned to capitalize on the rapidly expanding commercial space ecosystem while developing capabilities that support both commercial and defense missions. Since then, the geopolitical environment has shifted meaningfully, underscoring the growing importance of space as a national security domain. At the same time, as a smaller company operating with disciplined resources, we have remained focused on advancing differentiated high-performance technologies and integrated capabilities that few others are able to deliver. Our vision is to be a leading innovator and provider of space and defense technologies, infrastructure and actionable insights, and our mission is to deliver cost-effective solutions that enable multi-domain operations through agility and vertically integrated capabilities. This strategy is not theoretical. The strongest validation of our technology is not what we say, but what our systems are doing operationally. With multiple satellites on orbit, Sidus is moving into a new phase where the focus shifts from proving technical capability to executing and operating mission-ready platforms for customers. We launched 3 LizzieSat satellites between March 2024 and March 2025, each building upon the last and demonstrating increasing capability across design, operations and mission performance. Together, these missions validate our platform, strengthen our credibility and support our transition into the next phase of commercialization. An important part of our strategy is that our satellites are company-owned and company-funded with multiple customers contributing revenue before and after launch. Unlike others that may depend primarily on government contracts to finance and build their satellites, we made a deliberate decision to create a Sidus-owned platform, including the underlying intellectual property that can support commercial, civil space and defense customers on a single satellite. This dual-use multi-mission model creates diversified revenue streams, broadens customer opportunities and supports a more resilient business model in an increasingly dynamic geopolitical environment. Another important differentiator is that we intentionally designed our satellites to serve as both development and production platforms. From the beginning, our goal was to build a robust, redundant satellite architecture capable of testing and maturing technologies while simultaneously supporting customer missions, beginning with the very first spacecraft. LizzieSat-1 successfully launched and established communications, enabling us to test our bus structure, radios and other internal payloads. We also successfully executed the requirements for a NASA mission, which led to a follow-on contract for additional support on LizzieSat-1. And equally important, LizzieSat-1 enabled full commissioning of our mission control center, marking a shift from development infrastructure to active mission operations. LizzieSat-1 completed its mission, and we are, therefore, beginning the process of dispositioning. However, we will continue to track our location for situational awareness and orbital monitoring. LizzieSat-2 was launched in equatorial inclination and remains in the commissioning phase. We continue to receive signals from the satellite while working toward establishing consistent and regular communication passes as part of the normal commissioning process. The equatorial inclination was intentional with the goal to test and strengthen our ability to operate satellites across very different orbital environments. Equatorial satellite commissioning is more challenging than polar due to the limited ground station access, resulting in fewer communication windows and longer time lines. The reason we chose an equatorial orbit was for its long-term advantages, enabling repeated coverage of high-value regions near the equator with fewer satellites. Lastly, LizzieSat-3 has completed full bus level commissioning, including successful validation of a new autonomous guidance navigation and control software, achieving pointing accuracy of less than 30 arc seconds. With commissioning complete, LizzieSat-3 is now supporting recurring customer payload operations, including near real-time maritime data through its AIS sensor and on-orbit imaging through HEO USA's non-earth imaging camera payload. Taken together, these capabilities reflect a deliberate evolution in Sidus' role. We are increasingly expanding from discrete mission delivery toward operating integrated platforms that support sustained multi-domain operations for customers. Building on this operational foundation, we continue to advance our onboard computing and AI capabilities through our Fortis VPX platform, including a SOSO-Aligned single-board computer and a PNT card designed for GPS-denied environments. Fortis is a ruggedized modular computing system developed to perform data processing in challenging and constrained environments from seafloor to space. By integrating Fortis with our software-defined satellite architecture and flight-proven AI capabilities, Sidus is enabling more data to be processed closer to where it's collected. This reduces reliance on centralized ground infrastructure, improves responsiveness and supports mission execution in environments where bandwidth, latency and connectivity may be limited. This effort reflects our broader focus on developing practical deployable technologies that align with both defense and commercial needs. In parallel, we're working with commercial customers and defense prime contractors, along with systems integrators to evaluate Fortis VPX for operational use cases, including satellite payload processing, unmanned systems and ground-based computing deployed at operational sites. Our focus is converting these evaluations into long-term programs and support agreements that can drive scalable and predictable revenue as mission needs expand. The continued growth in government spending across defense and space supports demand for our capabilities and a key focus area for us is our recent award under the MDA's 10-year SHIELD IDIQ contract. Our work over the past several years has positioned us to participate in programs of this scale and complexity. The SHIELD program is part of the broader Golden Dome missile defense strategy, which is focused on developing more resilient layer protection across air, missile, space, cyber and other operational domains. The contract vehicle is designed to enable faster delivery of capabilities by incorporating approaches such as digital engineering, open systems architectures and where appropriate, AI and machine learning. For Sidus, this award provides access to a flexible procurement pathway aligned with evolving defense requirements, and it reflects the increasing emphasis on collaboration across primes, emerging companies and research institutions. Our defense strategy is aligned with these types of large-scale programs. We're focused on areas where our capabilities in satellite platforms, onboard processing and modular compute systems can contribute to applications such as persistent sensing and real-time data processing. Our vertically integrated model allows us to move from design through deployment in a more streamlined manner, which is increasingly important as time lines continue to compress. Another strategic area of focus for us is Lunar. We view the lunar economy as an emerging ecosystem rather than a single program, requiring scalable technologies and partners capable of moving quickly. Our approach is to align our capabilities with that direction, supporting both government and commercial missions as activity beyond Low Earth Orbit continues to expand. Expanding beyond LEO, we made progress across our Lunar and GEO initiatives. We signed an agreement to integrate the Lonestar's Commercial Pathfinder mission onto LizzieSat-5, completed the systems requirement review of mission kickoff with an initial milestone payment received, introduced LunarLizzie, our next-generation Lunar spacecraft concept and executed an MOU with a partner to support development of a GEO platform. Our Lunar strategy is aligned with broader national space priorities that emphasize speed, commercial partnership and operational capability beyond LEO. Recent leadership perspectives, including those advanced by NASA administrator, Jared Isaacman, reflect a shift toward a more commercially enabled and execution-focused approach to Lunar and deep space missions. This direction closely aligns with our approach to building scalable, commercially driven space and defense capabilities. Our focus on vertically integrated satellite platforms, onboard computing and adaptable software-defined systems positions us to support elements of the broader cislunar architecture, including communications, data relay and mission-enabling infrastructure. This approach prioritizes leveraging commercial innovation, shortening development time lines and building sustainable infrastructure through public-private partnerships while maintaining a focus on operational readiness, repeatability and cost efficiency over time. As we move into 2026, our strategy and focus are on accelerating commercialization and expanding in defense markets through our technology platforms while reducing reliance on lower-margin contract manufacturing and prioritizing scalable, higher-margin products. Diversification remains central to our approach, and our company remains agile in a rapidly evolving industry. While we have been intentional and disciplined in how we deploy capital, we have built a full technology stack spanning hardware, software and data entirely through organic development, not acquisition. Unlike others that pursued multi-domain capability through large debt finance acquisitions, we built these capabilities from the ground up, leveraging a 1.5 decades of heritage experience while maintaining a clean balance sheet and retaining full control over our intellectual property. As defense priorities continue to shift toward integrated multi-domain operations, we intend to aggressively pursue programs aligned with these needs, including missile defense, space-based sensing and resilient communications architectures. By combining our satellite platforms, onboard AI and modular compute capabilities, Sidus is well positioned to support next-generation defense missions and capture a larger share of this evolving market. One of the key advantages of the LizzieSat architecture is that it is software-defined, meaning capabilities are not fixed at launch. This allows the satellite to be updated, reconfigured and enhanced through software while on orbit. Over the past year, we've demonstrated this by deploying autonomous navigation software and commissioning FatherEdge100i entirely on orbit, delivering capability upgrades to an operational asset without additional hardware or launch costs. This model allows us to extend mission utility and adapt to changing requirements over time while maintaining a more efficient approach to capability upgrades. As we look toward the next evolution of AI infrastructure, including orbital and distributed data architectures, we see a logical extension of capabilities that we've already demonstrated. Our on-orbit experience with software-defined satellites, combined with proven onboard AI processing and edge computing hardware provides a foundation for supporting data processing closer to where it's generated. Recent announcements from NVIDIA and others point to a broader shift toward deploying high-performance compute beyond traditional data centers, including in space. This direction is consistent with how we've designed our systems, integrating software-defined platforms, reconfigurable payloads and onboard processing to enable real-time data handling. This reduces reliance on ground infrastructure and increases operational flexibility. Our VPX-based computing systems, along with our flight proven AI hardware and software position us to support elements of this distributed model across both space and terrestrial environments. These systems are designed to operate in constrained and contested environments, which is increasingly relevant as data processing moves closer to the edge. From a broader perspective, our vertically integrated approach spanning satellite platforms, onboard compute and mission operations allows us to participate in multiple layers of this emerging ecosystem. As investment in the next-generation AI infrastructure continues to grow, particularly in defense and national security applications, we are aligning our technology road map with areas where that resilience, autonomy and real-time decision-making are required. We've strengthened and refocused our sales organization to prioritize high-value opportunities across both commercial and defense markets with an emphasis on programs that align with our core technology platforms and offer the potential for longer-term repeatable revenue. As a result, we're actively engaged with both commercial and Department of Defense customers to address growing demand for cost-efficient, rapidly deployable satellite platforms supporting communications, imagery and intelligence missions. In parallel, we continue to advance our next-generation satellite builds, including LizzieSat-4 and LizzieSat-5. LizzieSat-4 and LizzieSat-5 are being developed as a software-defined platform, incorporating capabilities such as laser comm and software-defined hyperspectral imaging. This architecture is designed to provide customers, including international partners such as the Netherlands Organization or TNO, with the ability to adapt mission requirements on orbit. This flexibility allows for adjustments to sensing, data collection and processing priorities over time, supporting both commercial and defense use cases as needs evolve. LizzieSat-4 also includes integration of the Lonestar payload, further expanding its mission profile. Our mission control center now in its third year of full 24/7 operations continues to support satellite operations, collection management and data distribution for both our own fleet and third-party customers, reinforcing our ability to deliver end-to-end mission support. We also entered into a strategic collaboration with Simera Sense to advance AI-enabled hyperspectral imaging focused on enabling near real-time intelligence-driven earth observation and situational awareness capabilities. To support these initiatives, we executed capital raises to fund key technology development, including our dual-use Fortis VPX product line, while also identifying operational efficiencies to reduce SG&A and maintain cost discipline as we scale. As we move forward, this operational transition informs how we think about scalability, margin durability and capital efficiency. Now Adarsh will walk through how this shift toward owned and operated platforms is reflected in our financial results and outlook. Adarsh Parekh: Thank you, Carol. At Sidus, we continue to build a scalable, vertically integrated company across space, technology and artificial intelligence. Our focus remains on operational excellence, rapid innovation and delivering cost-effective, high-impact solutions for our customers. Our investments to date have centered on expanding our satellite fleet, advancing innovation and implementing a robust ERP system to support scale and profitability. Momentum from 2024 carried through full year 2025, which reflects both our transition to commercialization of dual-use multi-domain products and the near-term financial impacts of scaling a deep tech space-based enterprise. During 2025, we continued our progress in establishing Sidus Space as an innovative space and defense technology company. Our rich space and defense heritage positions us to take advantage of opportunities across multiple sectors with a combined focus on commercial space innovation and national defense priorities. Let's review our results for the year ended December 31, 2025. Total revenue for the full year 2025 was approximately $3.4 million compared to $4.7 million in full year 2024. While this reflects a decrease of about $1.3 million or 28%, the change aligns with our strategic shift away from legacy contract work toward higher-value commercial space-based and AI-driven solutions. This repositioning is intentional and expected to generate more sustainable recurring revenue in future periods. The impact of milestone-based revenue recognition also influenced year-over-year performance and comparison. Cost of revenue was approximately $9.1 million, a 48% increase from $6.1 million in full year 2024. Key contributors included a $2.1 million increase in depreciation tied to satellite and software investments, reflecting the first full year of LizzieSat operations, a changing contract mix requiring greater material and labor inputs, ongoing global supply chain pressures impacting manufacturing operations. Gross loss for the year was approximately $5.7 million compared to a loss of about $1.5 million in full year 2024. This increased gross loss reflects increased depreciation, which is noncash and directly tied to recent investments that position us for future revenue generation, the transition away from legacy high-margin contracts as we focus on long-term value-added offerings, a shift in contract structure, which is expected to yield greater returns in future periods. When adding back depreciation, including in cost of revenue, gross loss for the year was approximately $1.7 million compared to a profit of approximately $453,000 in full year 2024. Selling, general and administrative expenses totaled $22.3 million compared to $14.2 million in the prior year. This $8.1 million increase supported key growth initiatives, including strategic headcount additions to support scale and expanded employee benefits to remain competitive, equity-based compensation and performance-based bonuses initiated during 2025, increased mission operations expenses to support our growing satellite fleet, infrastructure investments in software tools, and it was also -- it also included a $4.5 million impairment of LS-1 and related assets as well as depreciation expenses and severance costs as described further in the notes to the consolidated financial statements. To provide a broader view of our performance, we also report adjusted EBITDA, a non-GAAP measure we use internally to guide strategic decision-making. Adjusted EBITDA loss for the full year 2025 was $17.3 million compared to $12.9 million in full year 2024, reflecting ongoing investment in scaling our platform. The reconciliation table, including interest, depreciation, fundraising, severance, equity-related expenses and impairments is included in our annual report on Form 10-K. Net loss for the year was $29.5 million compared to $17.5 million in full year 2024. This increase is primarily tied to strategic investments in infrastructure, personnel and operational capacity, the $4.5 million LS-1 impairment charge and noncash depreciation related to our expanding satellite fleet. Turning to the balance sheet. As of December 31, 2025, Sidus had $43.2 million in cash compared to $15.7 million as of December 31, 2024. During 2025, we completed multiple capital raises totaling approximately $53.3 million in net proceeds from the issuance of approximately 47.1 million shares of Class A common stock. Notably, we entered 2026 with no outstanding term debt, a meaningful distinction in an industry where many peers continue to carry substantial debt obligations and the associated interest burden. As we move forward, we continue to manage cash conservatively while making strategic investments in our next-generation satellite builds and high-growth product lines. During 2025, we implemented meaningful cost reduction activities and operating efficiencies to support long-term profitability, and we remain focused on driving sustainable growth in the year ahead. With that financial context, I'll hand the call back to Carol for closing remarks. Carol Craig: Thank you, Adarsh. Before I close, I want to address a couple of questions we've received from investors and analysts, particularly related to our stock performance. We recognize the concern, and we view recent movement as the result of broader market conditions, volatility across small cap and space technology sectors and the timing of revenue as we transition the business. We've seen similar patterns across our peer group, particularly among companies moving from development into commercialization. From our perspective, the priority remains execution. We are focused on advancing a more scalable product and platform-driven model anchored by our LizzieSat satellite fleet, software-defined capabilities and Fortis VPX command and data handling systems. At the same time, we have strengthened our sales organization and are prioritizing opportunities that align with larger programs, including defense initiatives like MDA SHIELD as well as commercial applications. We're also maintaining a disciplined approach to capital allocation and cost structure as we move through this transition. Ultimately, our objective is to build a more durable business with higher-margin repeatable revenue streams. As we continue to execute, demonstrate capability in orbit and convert pipeline into contracted programs, we believe that progress will be reflected over time. As we move forward, we remain focused on execution, cost discipline, and innovation, and we are advancing with greater confidence than at any point in our history. Revenue in the period was impacted by the timing of legacy program completions and our transition toward product and platform-driven revenue streams while maintaining a disciplined focus on the programs that offer the greatest long-term value. Operating in a highly competitive industry while using significantly less capital than many peer companies presents both constraints and advantages. Remaining lean requires disciplined prioritization and difficult trade-offs, but it also drives technical focus, speed of execution and operational accountability. Sidus has intentionally avoided the excesses that characterize many space SPAC era entrants choosing instead a staged capital approach tied to milestone completion rather than speculative scaling. At the end of 2025, to ensure uninterrupted execution and reduce structural risk, we took proactive steps to strengthen our balance sheet. The approximately $41 million raised at the end of December was not intended to fund indefinite operating losses, but to improve liquidity, reduce financing friction, evaluate more favorable debt structures and lower our overall cost of capital as we enter the commercialization phase. This capital provides runway stability and optionality, allowing management to focus on execution rather than survival. We fully acknowledge that equity financing creates dilution. That impact is real, and it is not dismissed. However, dilution must be evaluated relative to what it enables. Our objective is not continued reliance on equity markets, but the conversion of validated technology into repeatable revenue streams, margin expansion and operating leverage. Per share value is ultimately restored through execution, not commentary. Sidus has raised material less capital than many public peers while achieving milestones that include satellite launches, on-orbit operations, vertically integrated manufacturing, proprietary computing and AI architectures and a growing patent portfolio. Importantly, we achieved these milestones through organic development alone, building, proving and retaining ownership of every capability in our portfolio. Looking ahead, management is focused on improving capital efficiency with each successive deployment and product cycle, reducing incremental capital required per platform and accelerating the transition from build to revenue as commercialization scales. These capabilities are now moving from demonstration into deployable products and services. So here are our key areas to watch over the next 12 to 18 months. LS-4 and LS-5 are in production as software-defined satellites with advanced onboard AI processing and Fortis VPX, enabling on-orbit data processing, autonomy and mission adaptability. The Fortis VPX platform is beginning customer deployment, marking a key step in commercializing ruggedized multi-domain compute solutions. We're increasing our focus on defense opportunities as demand grows and the convergence between commercial space and national security accelerates. And our collaboration with Simera Sense and other international agencies and partners is advancing AI-enabled software-defined hyperspectral imaging to support more responsive and intelligence-driven earth observation. Together, all these efforts reflect our continued focus on scaling advanced adaptable technologies across both commercial and defense markets. I want to personally thank our team, our partners and our investors for your continued support and confidence. We appreciate you taking the time to join us today. We remain laser-focused on execution, cost discipline and innovation and look forward to the next phase of growth for both Sidus and the broader space industry. Thank you. Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
Operator: At this time, participants are in listen-only mode. Following management’s prepared remarks, we will open the floor for Q&A. Before asking a question, please identify yourself and the organization you are working for. Please also note the call will be recorded. Simultaneous English translation will be available for this call. You can select your preferred language by clicking Interpretation in the Zoom toolbar. Our December quarter and full year 2025 results were released earlier today and are now available on our investor relations website at ir.miniso.com. Joining us here today are Guofu Ye, our Founder and CEO, and Eason Zhang, our CFO. Before we proceed, I would like to refer everyone to the Safe Harbor statements in our earnings press release, which also apply to this call, as management will be making forward-looking statements. Please also note, we will be discussing certain non-IFRS financial measures today. These measures are described and reconciled to their most directly comparable IFRS measures in our earnings release, and in our filings to the SEC and the Hong Kong Stock Exchange. Unless otherwise stated, all figures are in RMB. In addition, we have prepared a presentation featuring financial and operational highlights for today's call. If you are joining via Zoom, you will be able to see the slides. They will also be available on our IR website. I will now turn the floor over to Guofu Ye. Guofu Ye: Good day, everyone. Welcome to MINISO Group Holding Limited’s 2025 December quarter and full year earnings presentation. 2025 was a year of steady growth and continued breakthroughs for the group. Throughout the year, revenue growth followed a strong and constantly accelerating trajectory, rising from 80.9% year-over-year in Q1 to 32% in Q4, surpassing the upper end of our prior guidance and also reaching RMB 6.25 billion in quarterly revenue, marking the first time we have crossed the RMB 6 billion quarterly revenue milestone. Looking at our core brands in detail, MINISO brand recorded its fastest growth rate in nearly eight quarters in Q4 with revenue up by 28%, reaching RMB 5.65 billion. Meanwhile, TOPTOY delivered exceptional momentum, posting 112% year-over-year growth in Q4, with quarterly revenue approaching RMB 600 million, demonstrating the powerful dynamics of our multi-brand portfolio. This year, we achieved higher revenue growth with fewer net new store openings than 2025, with a greater share of the growth driven by same-store sales, reflecting a more efficient and higher-quality growth model, reaffirming the resilience and the long-term growth potential of our multi-IP plus multi-category and globalization business model. Today, against the backdrop of the group's full-year operating performance, I will share with you the significant progress that we made in the past year regarding meaningful strategy, particularly focused on the breakthrough in brand innovation and store experience enhancement. First, let us take a look at MINISO China. In the fourth quarter, the MINISO brand generated revenue of RMB 5,650,000,000. Mainland China contributed RMB 2,870,000,000, growing by 25%, representing 51% of the total. MINISO’s overseas revenue reached RMB 2,780,000,000, up by 31%, accounting for 50% of the total, reflecting robust, balanced growth driven by both domestic and international operations. Let us first talk about strategic initiatives in MINISO Mainland China business. In Q4, MINISO domestic same-store sales grew by mid-teens, a record high for the year, with average daily sales per store surpassing the level achieved in 2023. Given 2023 was largely driven by a surge in post-pandemic pent-up demand, MINISO’s ability to exceed those peak levels demonstrates structural improvement rather than cyclical tailwinds. We have every confidence that, assuming a more supportive macro environment and a gradual recovery in consumer sentiment in 2026, with our stronger brand equity, superior store positioning, more agile supply chain, and competitive standing, we will be able to outperform the industry by a wide margin, capturing more share in the market. By the end of Q4, our domestic franchisee count reached 1,157, a historical high. Franchisees vote with their support. That is the most authentic market signal, and they partnered with us because they have witnessed firsthand the traffic momentum and the financial patterns of our large-format stores. The trust has been earned store by store, IP activation by IP activation. It is something that we hold in the highest regard. At our 2024 Investor Day, we articulated our vision to make MINISO the go-to happy destination for international consumers worldwide. Today, the vision has been realized, one MINISO Land store at a time. By the end of 2025, we had already opened 26 MINISO Land format stores in Mainland China, securing prime locations in tier-one cities like Beijing, Shanghai, Guangzhou, and Shenzhen, and also distinctive retail destinations in Haikou and Guiyang. In January, the MINISO Land opening in Grandview Mall in Guangzhou attracted nearly 10,000 visitors on its opening day, generating RMB 450,000 in sales, a new record for the South China region. Equally impressive is the MINISO Land flagship opening in lower-tier cities in Urumqi and Nantong. The Nantong store soft opening drove 80% year-over-year growth in overall mall foot traffic. Urumqi’s store, featuring a three-story impressive space and a portfolio of 100 IP collaborations, quickly established itself as a regional premier destination. Such high-quality experience stores are, at their core, the engine for IP operations. Through authentic spatial design and curated product presentation, mature consumer and sensory, perceivable and tangible experiences bring IP value to life. They can also help us continue to improve our brand IP ecosystem. MINISO Land stores combined with robust IP activations have become the go-to platform for creating citywide mainstream brand momentum. Tens of thousands of consumers share their experiences on Xiaohongshu, Douyin, and WeChat Moments. That is the reason I always tell you our physical stores are MINISO’s most powerful brand billboards and our most enduring source of consumer traffic. MINISO is not the first brand to pursue a large-format store trajectory. But why can others not follow? The answer comes down to just one thing: a successful large-format store must be built on the conditions of owning proprietary product development capacity. Without in-house design and R&D capacity, a large-format store is nothing but an empty shell. Behind that, we have more than one decade of supply chain deployment, a network of more than 1,500 global suppliers, and a design team of over 1,000 professionals. In this process, no one will be able to copy the successful story unless they build the core capacities. MINISO moved even further ahead. In support of our MINISO Land strategy, we established a seven-tier store format mix in 2024 and continued to refine and evolve it through 2025. Our goal is to ensure every city, every trade area, and every consumption scenario will be served by the MINISO format precisely. In the past, I mentioned the intention to systematically upgrade our store portfolio. I also would like to share with you the reason behind such initiative: why every new store we open must be a large-format, high-quality MINISO Land format store. If we look at our journey, we navigated two distinctive strategic phases: first, rapid global store expansion to build scale; followed by strategic IP positioning, transitioning ourselves from a value-priced variety store into an interest-driven consumption destination. We achieved milestones in both phases. Now we move into the third phase, an immersive retail transformation centered on MINISO Land. It is not only about increasing store size; it is the integration of the store capacities built across the first two phases. Leveraging larger space, creating immersive environments, forging genuine emotional connections, and driving repeated visitors, we are transforming from selling products to selling experiences, from a traffic-driven business to a loyalty-driven, consumer-centered one. People never lack good products. They are truly seeking compelling destinations, memorable experiences, and moments. With our IP-driven formats and designs precisely meeting those needs, we can inspire consumers to share and continue to come back to generate purchase. Regarding international markets, our overseas revenue approached RMB 2,800,000,000 in Q4, an all-time high, representing 31% year-over-year growth. Our overseas store net adds were 159 stores, bringing a full-year net increase of 465 stores. Our largest overseas market, the United States, delivered a full-year growth of more than 60% and in Q4, same-store growth was more than 20%, ahead of our prior expectations. At our Q1 2024 earnings call, I stated improving store operating quality in North America was our corporate priority in 2025. A year on, MINISO U.S. business delivered comprehensive improvements in store quality, operational efficiency, and consumer engagement. For stores, new store quality was further improved. New stores in 2025 have all-time high growth by double-digit numbers; average transaction value and transaction volume are improving, driving meaningfully higher unit-level profitability and conversion rates. At the same time, our mature stores demonstrated strong operating rigor. Leveraging a refined same-store performance tracking model, we established stores to deliver revenue growth in both average daily sales and transactions, improving alongside gains in foot traffic and purchase frequency, especially for our Plaza store format. We opened 48 Plaza locations in 2025. They generate higher attachment rates and average transaction value. The average ASP outperformed most of our estate, establishing a more flexible and economically resilient new store expansion channel. Operationally speaking, we have crossed the base expansion strategy, improving logistics efficiencies and warehouse cost. Employee retention improved, revenue per headcount increased, and labor cost as a percentage of sales declined, achieving a dual optimization on cost and productivity. On the consumer side, membership in the U.S. market grew by 150% year-over-year. Member-driven sales exceeded 50% of total revenue for the first time. Together, those results mark the U.S. market’s transition from a new investment phase into a phase of high-quality, profitable growth, becoming our most resilient and dynamic engine for global expansion. This actually gives us greater confidence for our global rollout strategy. The operational challenges we encounter in other markets were also encountered and navigated in both China and the U.S. We are going to leverage our experience from China and the U.S. to continue unlocking profit potential for international operations. Thirdly, let me talk about TOPTOY. TOPTOY sustained its strong compound growth momentum in Q4 with revenue up 112%, reaching nearly RMB 600,000,000 in Q4. In terms of store footprint, by the end of 2025, TOPTOY operated a total of 334 stores, including 30 international stores in Thailand, Malaysia, Indonesia, and Japan. Brand global expansion continued to accelerate. Domestically speaking, TOPTOY’s growth strategy is centered on a high frequency of proprietary product launches to drive same-store sales. The proprietary IP, Youyou, rapidly gained momentum with sales of more than RMB 200,000,000 and is likely to double in 2026. By 2025, TOPTOY has built a proprietary IP portfolio of more than 20 brands. In 2020, I first introduced interest-driven consumption. The consumer’s core needs are rapidly shifting from pure functional value to emotional and experiential value, which has been fully validated by the market. MINISO stands as one of the most significant beneficiaries and pioneers of this consumption transformation. With our immersive experience and multi-category proprietary development capacity, those are our key and hardest-to-replace competitive moats in the IP-driven consumption era. Our strategic vision is to become the world’s leading IP-driven retail platform. My strategy has been ever clearer. Along the way, we have demonstrated the execution of our strategic development is right. We also witnessed firsthand the genuine and sustainable enthusiasm we have from consumers. For the past year, we delivered strong results in both China and the U.S. The road ahead is strong, but with each step forward, our conviction and confidence only deepen. That is all for my remarks. I will now turn the call over to Eason to walk you through the financial highlights for Q4 and full year. Thank you. Eason Zhang: Thank you. Thanks to Mr. Ye. Welcome, you all. Coming next, let me walk you through MINISO Group Holding Limited’s financial results for Q4 and full year 2025. I will also provide you the outlook. I should also say that all the units would be RMB unless otherwise stated. Let me start by reviewing financial performance for Q4 and full year. In Q4, revenue grew by 32.7%, surpassing the upper end of our prior guidance of 20% to 30%, driven by the outperformance across all business segments. MINISO Chinese Mainland Q4 revenue grew by 25%, exceeding our prior guidance of high-teens growth. MINISO’s overseas Q4 revenue grew by close to 31% year-over-year, ahead of our guidance of low- to high-20s percentage growth. TOPTOY Q4 revenue grew by 112%, above our guidance of 80% to 90% growth. Q4 momentum lifted full-year group revenue growth by 26.2%, exceeding our prior full-year guidance of approximately 25% in the interim result. In Q4, MINISO Chinese Mainland net and same-store sales growth reached mid-teens. U.S. same-store sales exceeded 20%, both surpassing our prior Q4 guidance of lower double-digit same-store growth. Both markets delivered high single-digit same-store sales growth for the full year, in line with our formal guidance but ahead of the internal expectations we had when we provided the guidance back in November. Adjusted operating profit rose by 12% in Q4, in line with our prior guidance of double-digit growth. Full-year adjusted operating profit reached RMB 670,000,000, aligned with our guidance. In Q4, our adjusted operating profit margin was 17%. Especially in 2025, we have already narrowed down the margin compression. Let us take a look at revenue. We have already created three revenue milestones in this quarter. First of all, single-quarter GMV exceeded RMB 10 billion for the first time. Quarterly revenue surpassed RMB 6,000,000,000 for the first time, and full-year revenue crossed RMB 20,000,000,000 for the first time, benefiting from outstanding performance across all of our business lines and over expectations. By brand, MINISO generated Q4 revenue of RMB 5,650,000,000, a 27.7% increase. MINISO China continued to demonstrate great growth. In Q4, its average growth is the highest for the past eight consecutive quarters. MINISO overseas revenue was RMB 2,780,000,000, up by 30.5%. TOPTOY revenue was RMB 600,000,000, up by 112%, also having a triple-digit year-over-year growth with very strong momentum that exceeded our expectations. Turning to the full year, group revenue reached RMB 21.44 billion in 2025. A few highlights I would like to share with you: MINISO Mainland China full-year revenue crossed the RMB 10,000,000,000 milestone for the first time. In such a consumption background, it grew by around 70%. Overseas full-year revenue was RMB 6.86 billion, up by close to 30%. TOPTOY full-year revenue was RMB 1.9 billion, maintaining very strong growth. In terms of geographic revenue mix, Mainland China revenue grew by 22%, accounting for 60% of total revenue. Overseas revenue grew by 33%, representing 40% of total revenue. Let us take a look at the same-store sales performance. MINISO Mainland China Q4 same-store sales continued sequential acceleration reaching mid-teens, beyond our expectation. Looking back to the full-year trajectory of MINISO China same-store sales: from a negative mid-single digit in Q1 to positive low single digit in Q2, to high single digit in Q3, and finally mid-teens in Q4. Sequential progression delivered mid-single-digit same-store growth for the full year, already exceeding our initial target in 2025. As I have already shared with you, delivering the improvement in domestic same-store sales required many hard efforts. In terms of internal management, same-store performance has been built into KPIs. We also have the digital infrastructure making the business flow more digital and intelligent to improve one-team empowerment. Operationally, we improved store SOPs with supply chain optimization, ensuring sustained contribution from top-selling SKUs and minimizing potential sales losses. The product development efficiency has been further improved. We actually have more contribution from new SKUs and speed-to-shelf of new product launches. Lastly, inventory was kept healthy. Regarding operations, we are also working on three fronts including consumer, product, and channel. For consumers, we improved in-store conversion. Our extensive store network serves as a large-scale testing ground and rich data pool. By deploying additional foot-traffic counters, we are able to capture high-frequency store-level data that help to further optimize our store and operations. We also have diversified marketing activations. For example, this year, we have the One-Day Store Manager program on RED, outdoor street pop-ups, as well as in-store meet-and-greet signing events and celebrity store visits, which became viral moments on social media, driving organic brand amplification through fan engagement. Regarding product, let me give you two points. We capitalize on seasonal and holiday product trends while at the same time managing IP and non-IP merchandise with profound understanding. We leverage the traffic-driving power of IP products to generate attachment purchases and lead the basket contribution of non-IP items. Regarding channel, we improved our existing store portfolio. We upgraded and improved 300 stores with tangible results. Regarding MINISO overseas, same-store sales performance differs from region to region. First of all, in Asia and in Latin America, same-store performance lagged behind other international markets. However, our strategic direct-operated markets, the United States and Europe, delivered very good results. Especially our key strategic direct-operated market, the U.S., delivered low-20s percentage same-store growth in Q4, supporting our previous guidance. We are driven by a strong end market and continued polish of our stores. You can also see healthy improvement of same-store profit margins. Through disciplined dollar-driven site selection and cost-based store opening approaches, U.S. back-end overhead costs declined by low single digits, providing further tailwinds to U.S. business profitability. It is also worth noting that in 2025, the U.S. business faced meaningful tariff headwinds. Against a backdrop of significant macroeconomic uncertainties, our team responded with exceptional foresight, sharp market insights, and agile execution, and still delivered standout results. Such results validate our robust business model. Such strength in and out is actually the foundation for our confidence to navigate economic cycles. Where the domestic market, as our strategic home base, delivered sequentially accelerating positive same-store sales growth in a highly competitive market, which demonstrates our strategic model and exceptional execution capacity of the team, creating a favorable spot for further growth. In 2026, successful stories and playbooks from China and the United States will be exported to Southeast Asia. With respect to the challenges in Southeast Asia, we believe the headwinds already met the bottom, and in 2026, through comprehensive upgrades of our channel strategy, product assortment, and organizational structure in Thailand and beyond, we will be able to continue to improve the business in Southeast Asia. Regarding stores, total store count approached 8,500 by the end of 2025. In Mainland China, the net adds were 182 stores compared with 460 in 2024. Recall, MINISO Mainland China revenue growth was around 10% in 2024; however, in 2025, it was close to 70%. In other words, with a clear indication that we have transitioned toward a higher-quality and more-productive growth model with fewer net new stores. MINISO overseas net adds were 465, bringing the year-end total to 3,583. TOPTOY net adds were 58 stores. TOPTOY started global expansion in 2024; within one year, we have 30 stores internationally, present in Malaysia, Indonesia, Thailand, Japan, and Macau. By the end of 2025, our domestic MINISO Land format store portfolio included 26 destinations across 90 cities nationwide. The large-format and flagship stores collectively accounted for 10% of our domestic store count, yet contributed nearly 20% of our domestic GMV. This number will continue to ramp up, which helps validate that big stores drive speed, results, and margin. In 2026, we will accelerate the release of this momentum. You will see locations including SDF in Sanya, David City in Zhengzhou, and Grand Gateway Plaza in Shanghai continue to come online. In 2025, we opened our first overseas MINISO Land at Samyan Mitrtown in Thailand with very strong market reception, which helps us understand the substantial potential of our overseas formats. In 2026, we will continue to bring the immersive brand experience to more retail destinations across the world. For our overseas directly operated markets led by the United States, we plan to have strategic new openings before Q4, so that Q4 will be fully concentrated on in-store operational excellence and experience optimization. When the peak shopping season arrives, we will be able to fully maximize the growth momentum. Regarding gross profit margin, it was 46.4% compared with 47% in the same period last year. For 2025, the GP margin was 45%, flat. For the past five years, our GP margin jumped from 28% to 45%, driven by our brand innovation, globalization, and IP strategy. During the year, we made selective gross margin adjustments across product categories, which enabled better sales performance and overall increases in GP margin. In the near future, we are going to continue to manage the balance between margin rate and sales volume, maintaining healthy, high-quality growth. Regarding operating expenses, operating expenses in Q4 grew by 45.3%. Sales expense grew by 47.4%, 3% higher than the same period last year. Administrative expense grew by 36.3%, accounting for 5% of revenue, flat with last year. The increase in sales expense was attributable to the growth in direct-operated store costs, licensing fees, and advertising and marketing expenses. First of all, our international expansion is still in the early stage. Direct-operated stores need rent and manpower, which was 1 percentage point higher than the previous year, accounting for 40% of total revenue, with the total cost growth at 40%. However, it is already a deceleration from the 54.5% growth rate in the first nine months of 2025. Secondly, license fees grew by 107% year-over-year, accounting for 3% of revenue, up by 1 percentage point compared with 2024. This also reflects our proactive upfront investment in IP strategy. Thirdly, advertising and marketing expense grew by 30%, slightly below the rate of revenue growth in Q4, with the ratio to revenue remaining flat compared with 2024. The increase in A&M then led to adjusted operating flow. Q4 adjusted operating profit grew by 7.7% and adjusted operating profit margin reached 17%. For the full year, adjusted operating profit, no matter on an M/M or Y/Y basis, continued to be well managed. From the P&L perspective in Q4, GP margin declined by 60 basis points because Q4 2024 was our highest GP margin quarter on record, and also direct-operated store cost ratio increased by 1 percentage point, licensing fee ratio increased by 1 percentage point, with a further contribution from miscellaneous items of a few tens of basis points, resulting in a total adjusted operating margin impact of 3 percentage points. For the full year, GP margin was flat versus 2024, mainly due to the direct-operated store ratio increasing by 2 percentage points, licensing and other fees increasing by 1 percentage point, resulting in a 3 percentage point impact. At the same time, you can also see that in Mainland China, from the business unit perspective, the China franchise business saw a margin decline by only basis points against a backdrop of approximately 70% revenue growth, reflecting our conservative approach for gross margin in exchange for healthy volume. At the same time, the growth was also contributed by our super warehouse and e-commerce operation, with a modest dilutive effect on margin. The group-level margin decline was primarily attributable to compression in overseas margin. For example, direct-operated store revenue as a proportion of total gross overseas revenue increased from one-third in 2024 to more than half in 2025. Outside of North America, other directly operated markets remain in the early investment phase and carry lower margins. By contrast, our overseas agent and franchise revenue, which carry higher margins, grew at a relatively slower pace. In our financial statements, we also have some non-IFRS adjustments. There are five points. First, share-based compensation (SBC) was RMB 150,000,000 in Q4 and RMB 370,000,000 for full year 2025, which used to be RMB 85,000,000 in 2024. The increase was mainly because of the equity incentive plan we made for the team. The second is the loss from the derivative fair value changes and the CB issuance cost. The third is the interest expense on CB and the YH investment-related loans. In Q4, convertible bonds interest expense was RMB 51,000,000, of which RMB 47,000,000 are non-cash. Interest expense on the acquisition loan related to YH was RMB 24,000,000. In 2025 full year, the convertible bonds interest expense was RMB 190,000,000, among which RMB 170,000,000 were non-cash interest; on the YH acquisition loan it was RMB 867,000,000. The fourth point is share of YH post-tax loss. In Q4, YH’s net loss was RMB 1,840,000,000. Fifth, we also had fair value changes of the redemption liability arising from preferred shares. The change was related to RMB 150,000,000 to RMB 160,000,000, related to the strategic financing completed last year. In aggregate, the adjustments impacted approximately RMB 900,000,000 in Q4 and RMB 1,690,000,000 for the full year to arrive at adjusted net profit. Excluding the items discussed above, the adjusted effective tax rate was 20.2% for Q4 and 20.1% for full year. Q4 adjusted net profit grew 7.6%, reaching RMB 850,000,000. However, as a result of our active share repurchase and consolidation program, our adjusted EPS grew slightly faster. The adjusted diluted EPS in Q4 grew by 9.4%; full-year reached 7.8%. Regarding working capital, by the end of 2025, inventory turnover was 100 days versus 91 days in the same period last year. In Mainland China, inventory turnover was 74 days. Internationally, inventory turnover was 228 days. The increase in overseas inventory days reflects strategic inventory built ahead of the anticipated tariff impact, booking the cost at favorable levels. We also established local direct sourcing that can help finance inventory pressure and ensure continued new product replenishment. In the near future, we will also adjust our overseas inventory and overall efficiency. By the end of 2025, our cash reserve was RMB 7.1 billion, remaining healthy. In 2025, full-year net cash generated from operating activities was RMB 2,580,000,000, accounting for 90% of full-year adjusted net profit, a reflection of our business’s high earnings quality and strong cash generation. On capital allocation, we will maintain our commitment to rapid business growth. In 2025, we obtained a waiver from the Hong Kong Stock Exchange to repurchase up to RMB 1,800,000,000. We continued repurchases to showcase our commitment and confidence. Looking at 2025 full year, returns to shareholders accounted for RMB 1,900,000,000, about 66% of full-year adjusted net profit, including RMB 540,000,000 in share repurchases and RMB 1.36 billion in dividends. The Board has announced a final dividend of RMB 810,000,000, representing 50% of second-half 2025 adjusted net profit, which is expected to be paid in April. Last but not least, closing remarks and outlook. Looking back at our financial performance over the past five years from 2021 to 2025, revenue CAGR reached 21% and adjusted net profit CAGR reached 44%. Looking to 2026, we expect group revenue will have a high-teens growth rate; three-year CAGR from 2023 to 2026 would be no less than 22%. We expect same-store sales to continue to ramp up. In 2026, same-store sales in key markets like China and North America will maintain healthy low single-digit growth. We plan to have net new store adds of 510 to 550 for the full year, sticking to quality rather than quantity. In 2026, we will balance growth and efficiency, pursuing profitable growth and profit backed by strong cash flow. We expect both adjusted operating profit and adjusted net profit will accelerate their growth rates in 2026. In terms of seasonality, the peak rate season for offline retail in North America and Europe is in the second half of the year. For many Western offline brands, 60% to 70% of annual revenue is generated in H2. Our direct-operated revenue from North America and Europe will continue to grow. Around 60% of the revenue is expected to come from H2, and H1 to account for 40% of total contribution. In 2026, revenue growth will be no less than 25%. China same-store sales will maintain high single-digit growth. North America same-store will deliver strong mid- to high-double-digit growth. It is worth noting Q1 profit will include a significant investment gain from specific investments. It was generated from a test investment we made a few years ago. The company is quite positive on AI. We invested in an AI company. That company has been IPO-ed. The company’s share price appreciated, generating a substantial fair value gain, bringing us an extra RMB 850,000,000 to RMB 900,000,000. It is worth noting that such gains will not showcase our primary business. We plan to exclude this item from adjusted operating profit and adjusted net profit. That is all for our prepared remarks. We will now open for questions. Operator: Ladies and gentlemen, please change your Zoom display name to include your institution name. In order to accommodate more analysts and investors, please raise no more than two questions each time. Thank you. First, let us welcome Michelle from Goldman Sachs, please. Michelle (Goldman Sachs): Hello? Mr. Ye and Eason, thanks for giving me the chance to raise a question. Congratulations on the company achieving such nice growth in a volatile market. I have two questions. First, regarding the domestic market: last year, we drove solid same-store sales growth through refined store operations, stronger faster sales execution, and store network upgrades. Looking ahead to 2026, as Eason has already provided guidance, is it possible for you to be more elaborate on the key levers to drive further same-store sales improvement? The second question is regarding the U.S. market. We do notice the sales were looking right in the United States market. However, localized sourcing would somewhat pressure your GP margin. What are your priorities for merchandise supply chain and store expansion this year? What is the expected impact on margin improvement? That is the two questions I have. Thank you. Guofu Ye: Thank you. Our core levers for driving domestic same-store sales in 2026 are clear. There are three: the right IP, for example the Jennie co-branded product, which can help to further consolidate our revenue and brand impact; the second one is the right product; the third one is the right experience. Regarding the right product, we attach equal importance to product quality and ASP, and we also open large stores to provide full customer experience. You can also see that the Jennie collaboration was first launched exclusively at MINISO Land and select pop-up locations, creating a fully immersive IP experience. The limited-time pop-up at Hong Kong Plaza in Shanghai generated RMB 2,200,000 in sales on the opening day, setting a new single-day record for any MINISO in 2025. This not only validates the extraordinary power of our Land format store as a primary destination for IP launches, it also demonstrates a fundamental truth: prime offline experience combined with top-tier IP content is the golden formula for unlocking global consumer demand and maximizing IP value. As many of you may know, Hong Kong Plaza is a top shopping mall, which is quite influential, and all these stores and brands are super luxury brands. We were able to move into such department stores to launch our IP product. This represents recognition from the top shopping malls and recognition from top, valuable consumers. At the same time, breakout IP products expand our customer reach beyond existing audiences, elevating average transaction value and strengthening repeat purchase behavior. Together with our store operations, they form a powerful virtuous circle. Enhanced store formats provide superior showcases and a vibrant environment for IP, while IP products, in turn, provide targeted and highly loyal customer bases, jointly driving sustained high-quality same-store sales growth. For us, IP business is never purely about selling product. We have sought to leverage MINISO’s global supply chain capacity, category development, equity, and omnichannel reach to give every great IP and every talented creator a bigger stage, and to build more enduring IPs that stand the test of time and earn long-term consumer affection. The Jennie collaboration is a new area we are tapping into, working with internationally well-known celebrities. In the past we had image IP and content co-IP; however, the collaboration with Jennie showcases a new co-branded IP with CDPR release, which provides ample room for future cooperation. You see that for one of our peers, they had a collaboration with Lisa which brought extraordinary global value. Working with celebrities, we will be able to continue to improve and maximize IP value. They are all world top artists and KOLs. At the same time, I would also like to share with you, based upon our latest operating data, we expect domestic same-store sales growth in Q1 will be quite aggressive. In 2026, we hope that we will deliver more surprises. We hope more investors will keep a look at that and our working with more celebrities in the near future. The second question you asked about is product and IP strategy. We will continue to deepen our dual-engine approach of top-tier IP collaboration plus local market adaptation. On one side, we will intensify our partnership with leading global IPs. On the other side, we will further expand our assortment in high-margin categories like home goods, plush, and blind box. Just now you mentioned the U.S. market. In terms of local direct sourcing, we will optimize our SKU architecture to focus on high-velocity and high-margin items, achieving a better balance between scale expansion and GP margin. I just traveled back from the United States. In 2026, we are going to have a more precise analysis on what products need to be sourced locally, and what need to be shipped from China. Sometimes sourcing from China represents higher margin. In 2025, due to volatile tariff policy, we actually already left some room for local sourcing. However, in 2026, we believe tariff turmoil has already gone. We will be more certain and clear on what will be exported from China to the U.S. and what will have localized sourcing. Regarding margin, let me be frank. At the procurement and headquarters sourcing level, we need to further improve our efficiency, optimize the merchandise mix, and then improve the GP margin structure as a whole. Our target is to further improve operating margin in 2026, with a more pronounced recovery expected in H2 of the year. We provide a six-month buffer in H1 of this year. We believe H2 of 2026 will be great, including our Land store format. Internally, we keep a look at increasing ASP and also the price per item. We are working very hard to further improve ASP as well as per-product GP margin. Thank you. Operator: Thanks to Mr. Ye. Coming next, let us welcome Samuel from UBS. The floor is yours, Samuel. Samuel (UBS): Thank you. Thanks for giving me the chance to raise a question. I am Samuel from UBS. I have a few small questions. First, Mr. Ye, in your prepared remarks, you mentioned something regarding IP. I would like to ask you regarding your proprietary IP. What is the progress on proprietary IP? What are the sales targets and the strategic plan for 2026? What are the key third-party IP priorities? Anything you can share with us? My second question is regarding overseas markets, specifically the Mexico market. In 2025, Mexico faced headwinds. What is the outlook for 2026? My final question, I would also like to ask Eason. You mentioned you invested in an AI company. Can you disclose the name of that company? Thank you. Guofu Ye: Three good questions. Let me respond to the first one. First of all, let me talk about our IP, starting with Youyou. With less than six months of its launch in 2025, Youyou has already surpassed revenue of more than RMB 100,000,000. From January to March 2026, Youyou-related sales were already RMB 165,000,000, around RMB 50,000,000 per month. According to this trend, in 2026, for Youyou only, our sales will be RMB 600,000,000. If we also combine the international market, it is going to be RMB 800,000,000 or even RMB 1,000,000,000, likely to hit the RMB 1,000,000,000 revenue milestone. The revenue was beyond our expectation. Youyou is actually a Chinese proprietary IP. If you take a look at our IP portfolio, Youyou is the first one to have revenue exceeding RMB 100,000,000; it took less than six months. There is no other Chinese proprietary IP that could ramp such revenue growth as fast as Youyou. It truly demonstrates our product and IP operation tactics and strategy and our robust confidence and operations of IP management. As we are working on that, we will be able to deliver faster growth. In terms of product approach, we will carry forward the successful logic. We will define the structure and landscape for the designer toy market, maintaining category innovation as a primary driver of IP growth. All three product generations of Youyou released outstanding commercial results. The first generation remains most popular; till now, the average transaction value is still about RMB 400, and the third-generation product demand goes beyond our supply. At the same time, we are also clear that product sales are not the only dimension of IP management. We place greater emphasis on healthy, sustainable development of our IP. We will not sacrifice IP longevity for the sake of short-term sales revenue. I believe 2026 will be a great year for Youyou. We are very likely to have more products working with internationally outstanding IPs. For example, IPs from the Disney family are going to have a co-branded wave with Youyou. That is how our proprietary IP works with international IP for co-branding. Up to now, we have completed a full pipeline of 30 to 40 proprietary IPs. Among them, we have IPs from South Korea, Japan, and Thailand, and from all parts of the world. Especially Kumado, Chiba, and Chuchu have completed the full proprietary process from creative design to product readiness, and they will be introduced to global consumers in the months ahead. Through those pipelines, we aim to fundamentally reshape market perceptions of the MINISO IP category and product potential, creating more robust IPs that deeply resonate with consumer needs. I also would like to tell you, on May 17, we are going to have the MINISO Photo Gallery put into operation in Shanghai. That is going to be another key artist we are going to work with. That artist’s one painting masterpiece can sell for tens of millions of RMB. When our MINISO art gallery is put into operation, we are going to engage more audiences to work with us. Reflecting on what led Youyou to break through successfully, I think we did three things right. First, we constantly held to our core conviction of category innovation to drive explosive IP growth. Product innovation is quite important. The first generation of Youyou is outstanding. The success of Youyou readily allows us to recalibrate our direction for product innovation and how category innovation will be for the IP business. MINISO has been deeply dialed into the industry for many years. We have built world-class capacity in multi-category product development and adapted to consumer insights that help us rapidly convert a creative IP concept into best-selling products. Secondly, we work on IP narrative first and product commercialization second, ensuring that IPs develop their own soul and emotional resonance with consumers before products are launched, to crystallize the value, not the other way around. Thirdly, we build a fully integrated, end-to-end closed loop from upstream creative ideation to back-end supply chain to all the omnichannel distribution, enabling rapid response to consumer demand and efficient product iteration and launch. The IP incubation model is also the way that underpins our future capacity for next-generation blockbuster IPs. This is also a meaningful three-part competitive moat: world-class category development capacity, early-stage IP potential detection capacity, and high-momentum multichannel global distribution capacity. Those are the three strengths that will continue to empower the growth of our OIPs. As you may already note, our flagship and new Land format stores have many Youyou installations. That is quite important for IP promotion. You know that we have a store in Causeway Bay, Hong Kong. When we did not have our proprietary IP, we could only showcase Disney IP. Next month, we are going to have the Youyou artist installations at that store. For any IP, you have to make sure you expose the IP, especially your proprietary IP, at the store. That is our unique advantage of over 8,000 stores worldwide. With installations and Youyou’s presence in the store, that will be the best way to promote the IP at our own stores and make it visible and touchable by the consumer. The third point regarding the third-party IP and proprietary IP portfolio, I have nine words: more IP, more portfolio, globalization. In other words, we need to have global licensed IP plus proprietary IP. International IPs have their advantages. Some already have movies, well-curated content, and strong fanbases. Proprietary IPs also have the attribute of scarcity. If it is only a MINISO proprietary IP, it will protect our business strengths. By having international IP plus proprietary IP, that would be the best business combination. As we are working together, we will be able to make sure we have a stable business and more work to be done. For example, recently, we have the Jennie collaboration and we saw the Instagram movement on WeChat and Xiaohongshu a lot. If it were linked only to proprietary IP, I do not think the popularity would be that good. That is the reason I believe multi-IP, multi-category works for sure. Improving consumer experience also contributes to business stability in the long run. We need to be forward-looking rather than short-sighted. We must fully validate that third-party IP plus proprietary IP is the golden formula. We hope you can see after two to three years whether my words will be validated by the market or not. Till now, we also contracted some incubation of independent original artists and we are also incubating IP projects. Starting from 2026, in 2027 or beyond 2028, our proprietary IP development is going better. From the financial performance standpoint, proprietary IP outperforms third-party IP on gross margin contribution, owing to stronger consumer loyalty, pricing power, and absence of licensing cost. Third-party IP, in turn, provides powerful complementary benefits in new customer acquisition, audience expansion beyond our existing base, and also provides us very good content marketing advantages. The two are highly synergetic, together driving sustained and high-quality growth of our IP-related business. You know that for MINISO, the brand impact continues to ramp up. Many international IPs proactively approach us to work together. Even Jennie, the international top artist, worked with us. Jennie has a nickname as Miss Chanel because Jennie is the brand ambassador for many luxury products. Jennie has been happy with MINISO because of our strong brand and customer experience. Let me now attend to the question regarding the Mexico market. I just came back from Mexico. I am fully confident in that market. I believe it is going to be better in the near future. Mexico is going to be top three in the global arena. I met face to face with the GM of Mexico. We need to do brand operations in Mexico and develop the Land store format. We need a mix of Land and franchise stores. The top 100 shopping malls in Mexico should have GFA more than 800 square meters. In that way, the Mexico market will see explosive growth. You know that I went to Mexico and they have 100 Zara stores. All those stores have been taken in good shopping malls. Mexico’s landscape is very much like China. Their GDP per capita and the consumption structure are very much like China, with lower manpower cost. Mexico is actually in the best time for offline business development. We hope Mexico could become a benchmark market we have in Latin America. When Mexico thrives, the Latin America market will be driven. We are fairly confident in the Mexico market, and we have high expectations. We now define Mexico as our benchmark market. We will spend more effort and resources to make this market right. We have a very clear strategy for Mexico; same-store sales growth and future growth will be quite promising. My first point: you can see in 2026, Mexico will also have fast high-single-digit growth. However, it is still before the explosive growth of the Mexico market. It is still taking the old business model, old format. If they follow my line of thinking, a few stores could be transformed into Land or flagship stores. There is one store with Hermès, Chanel, and Dior as the neighborhood, and these stores should satisfy something unique rather than value for money. So I asked them to please close down that store and reformat it to sell popular IP and premium products. Mexico is often taken as a backyard of the United States. People come to Mexico who really want to shop something unique. We find Mexico is a market with great opportunities. We found that Mexico has a great array of high-quality shopping malls with very strong traffic flow. So we are not going to sell daily necessities. We are going to translate them into flagship stores, sell IP and trendy toys along with immersive experience, and drive interest consumption to improve ASP. I believe after Q2, Q3, and Q4, performance in Mexico will meet expectations. We will retrofit our stores and upgrade top 100 shopping mall locations in Mexico. I believe the performance of that 100 in Mexico will be doubled. The first question was asking about our investment. We were quite lucky to invest in a company named MiniMax. That is an AI company. MiniMax is being applied at our company very well, and I also would like to continue to work with MiniMax. We invested in MiniMax when they still had a very low valuation. Now the return is looking pretty good. So the name of that company is MiniMax. That is all. Okay? Operator: Thank you, Samuel, for your question. Due to time, ladies and gentlemen, please make sure you raise just one question per time. Coming next, let us welcome Renbo from CICC. Yanran Bo (CICC): Hello, Mr. Ye and Eason. Thanks for giving me the chance to raise my question. My name is Yanran Bo from CICC. Just one question from me. In 2025, it seems YH is pressuring your margin and financial statement. What would be your plan for YH business? Thank you very much. Guofu Ye: First of all, I need to clarify to all MINISO investors: my primary focus has always been and will always be MINISO. It is our foundation and the core driver of our future growth going forward, and it is also the foundation to make MINISO great. So you can be reassured 90% of my energy and time will be on MINISO. MINISO will always be my highest priority. My investment in YH will not distract my attention from that. Regarding YH, we have completed a management team transition with Wang Shouchen appointed as YH CEO. Under his leadership, YH has its own complete management team that is now independently responsible for the day-to-day operation and strategic execution of the business. Regarding YH’s future, we still feel confident. For MINISO and me, myself, I still would like to say MINISO will still be my highest priority, and it is also the cornerstone for the company to further expand and make MINISO truly great. I always notice the market development and momentum of MINISO is quite unique worldwide. We will seize the opportunity, continue to ramp up our business, and make MINISO great. Thank you. Okay? Operator: Thanks to Mr. Ye. Coming next, let us welcome Shu Di from Huatai Securities. Shu Di (Huatai Securities): Okay. Thank you. I am Shu Di from Huatai Securities. Congratulations on the company delivering a satisfying scorecard to the market, which is truly in line with refined operations. Mr. Ye, you have already introduced a proprietary IP strategy. We have already noticed in 2026 you take it as an operating year for proprietary IP. For the dimensional elevation for proprietary IP, what is the organizational structure of the proprietary IP team now? What pipeline and marketing initiatives should we look forward to in 2026? Thank you. Guofu Ye: We define 2026 as the evolution year for our proprietary IP. The foundational first step is the comprehensive organizational restructuring and level design of our IP business. We established a dedicated IP business group with full accountabilities across the IP value chain from creative incubation to product development to omnichannel operation. Our leader of merchandise has been placed into the IP business group. We are putting very experienced people to take the lead of the IP business group—the best and most capable people to run the IP business—so you can already notice how important IP business will be for MINISO. You can see that, directly, in many companies people are just using new managers to run new businesses. It is quite risky. We remain confident in our new business. We are using the most capable individuals to run the new business. That is what we do at MINISO. The most capable individuals and the capable team are running the new business, IP business, and that business is fully independent as a new business group. Regarding team build-out, we have completed targeted headcount expansion in IP operation, product management, and creative design, and we also established two new back-end R&D departments including CMF (color, material, finish) and ink and powder development. We are among a few companies that started to enter into material study. So for our trendy toys, we not only do IP, we also do product design and material study and color study and finish study, stressing that IP product manufacturing from supply chain building to product quality continues to consolidate the foundation for long-term IP growth. That is what we did in 2025. We will have the fabrics and raw material aspects, and we have a CMF unit that is established in Dongguan, very close to our headquarters. Regarding marketing and communication, we are working to build global IP influence through a diversified range of activations. For example, attending international art fairs and fashion weeks. On May 17, we are going to have the MINISO Photo Gallery put into operation in one of the best art centers in Shanghai. That also helps to showcase our standing within the artist community. For continued updates, we are going to have our own photo gallery not only in Shanghai, but also a new one in Hong Kong, because Hong Kong is actually the hub for global artists. We are going to build such photo galleries in Hong Kong too. By leveraging those photo galleries, we are going to engage the best artists worldwide, continue to ramp up collaborations, and also leverage KOLs to amplify our brand reach. Last year, for Credit Katy Kitty as well as other international artists, we started to work with them for marketing events. Even some of the short videos and secondary creations have been quite popular. There are many secondary creation contents of Youyou, and even within secondary incubation or content creation, Douyin is actually ranking number one among all IPs. The fans are quite active. Certainly, at retail we actually have IP-specific zones, translating brand impact into actual sales. In Guangzhou, we also have the Artist Street that is about 50 square meters GFA. We are going to allow new artists and new products to be showcased in those Artist Streets, having interactions with consumers. I believe that by so doing, we will be able to continue to scale our investment in proprietary IP incubation, creating an ecosystem and back-end R&D capacity. Our investment is for long-term healthy development of IP, not short-term traffic speculation. We focus on building high-quality IP that accumulates enduring brand value and generates sustainable cash flow, cementing a robust second growth curve for the company’s long-term future. That is our strategy now. In the near future, as we continue to improve our business capacity, we will have new IPs and new strategies to truly unlock the value of IP. Operator: Coming next, let us welcome Anne from Jefferies, please. Anne (Jefferies): Thank you. Mister Ye, thank you very much. I have a question for your SSSG. What is the current same-store sales performance? What about store expansion or site selection? And also the operating margin level in different markets, especially in the directly operated stores overseas. In the past, you were still in the investment stage. When are we going to expect operating return improvement? Thank you. Eason Zhang: Thank you. I am Eason Zhang. Let me help respond to your question. I think for the past 12 months, our growth philosophy is getting more clear: same-store sales growth as a foundation and new store expansion, especially high-quality ones, as incremental upside. Those are working in tandem. For SSSG, our 2026 goal to deliver a positive SSSG globally is quite challenging; however, we have ways to make it happen. Because in international markets, we still have some agent stores. It is not easy to make their growth positive. However, with good assortment, we have every confidence we will be able to handicap them. Regarding store expansion, I have already mentioned a net increase of 510 to 515 high-quality stores globally, with China and international markets serving as a twin engine for growth. In China, we plan net new adds of 120 stores; the majority of them will be the Land format and large-format stores. We will also close our underperforming small stores and continue to optimize the existing portfolio. In 2026, besides same-store sales growth, the high-quality new stores opened in 2025 and 2026 will contribute meaningfully in subsequent years as they mature. In China, we will still harvest good growth, but net growth will be only 120. In international markets, net store growth will be 250 stores, covering North America, Europe, Southeast Asia, and Latin America, deploying a combination of Land format flagship stores plus high-quality standard stores in prime retail destinations. As Mr. Ye mentioned, we need to move into the world-class business streets to improve the brand potential. Regarding North America, same-store growth already exceeded 20% in January and February 2026. We expect OPM to have a low single-digit improvement. In Europe, since the start of 2026, we see SSSG grow by double digits. Store expansion is progressing steadily. For example, in Poland, we opened two stores which are quite efficient working on 20 toys only, making lucrative profits. In Europe, we have another four direct-operated markets. Those are still in the early-stage investment. We hope OPM could be improved further. In Mexico, since the start of 2026, we see SSSG growth being a positive number, and we believe Mexico with the agent model still provides a stable operating profit margin. In Southeast Asia, we see some challenges. However, for MINISO, our business model is globalization. No matter if some markets have been challenged, we can leverage our global expansion to diversify our investment portfolio. We have some challenges in Southeast Asia; however, we are going to return to positive SSSG, working on Indonesia, primary locations, to have new stores. Overall, SSSG and OPM trajectory across all key markets remain healthy, which also showcases that we are still in a fast expansion and growth period. The key drivers are four: optimizing stores, product operations, scale expansion, and, lastly, well maintaining cost and expenses. Thank you. Operator: Thank you, Eason. Next question, let us welcome Madam Xu from CCB International. Please. Madam Xu (CCB International): Thank you. Mr. Ye and the management team, I have a question regarding the Southeast Asia market. Southeast Asia was the first start for international expansion. In 2025 I made a visit in Southeast Asia. The performance of Southeast Asia has been a concern of investors. What is the inventory in the Southeast Asia market? Are you going to adjust operations and product strategy there in 2026? Thank you. Guofu Ye: Regarding the question for the Southeast Asia market, I think in 2026 there will be a huge adjustment. MINISO started our global expansion ten years ago. We made major investments in Mainland China. In 2026, we are going to adjust four key markets: Thailand, Malaysia, Philippines, and Indonesia. In Thailand, we were quite successful and the Land format stores delivered tangible results. Indonesia is going to copy the Chinese model. Southeast Asia is quite close to China, and the consumption pattern is very much impacted by China. The lessons and success we made in China can help guarantee success in Southeast Asia. Recently, we went to Malaysia to have a MINISO Land store with very nice performance. In 2026, we are going to continue to copy what we do in China to key markets in Southeast Asia. I believe after the 2026 adjustment in H1, then in H2, Southeast Asia is going to provide you a good turnaround. We have a very clear and transparent strategy. We are going to execute it right. Madam Xu (CCB International): Thank you, Mr. Ye. No further questions from me. Operator: Okay? We are going to accommodate the final question. Jingyi Yang from Yangtze River Securities, please. Tina Yang (Yangtze River Securities): Thank you. Thanks to the team. Mr. Ye and the management team, I am Tina Yang from Yangtze River Securities. I have a question for you. Regarding the store renovation and upgrade program, is it possible for you to tell us what the strategy for 2026 will be? How many stores do you expect to renovate in 2026? What are the results from the completed renovations so far? Thank you very much. Guofu Ye: In 2025, we completed renovation for 290 stores. The results were highly impressive. Renovated stores’ average sales uplifted by 40% to 50%. The improvement is not attributable to a single factor, rather a simultaneous improvement of foot traffic, conversion rate, and ASP. They are all being improved. At the same time, rent as a percentage of sales has declined meaningfully. Staff productivity and sales per square meter are rising significantly. Single-store profitability has improved too. More importantly, you can see that last year, major landlords have been getting more supportive, and we also got greater support from landlords who are happy to provide better and larger locations to allow us to have Land stores and larger formats. With prime locations, cheaper rent has been provided. In 2026, with our proprietary IP development, some shopping malls and department stores are happy to present the best locations for us to do aesthetic IP exposure and IP presence. That can really showcase how the resources we will be offered. In 2026, we are going to accelerate renovation and adjustment. Underperforming stores will be upgraded and moved to prime locations. 2026 is a year for accelerated renovation. I have already mentioned in the near future 80% of stores need to be renovated and upgraded. With our proprietary IP development, in the near future our stores are going to be quite unique, quite differentiated, and they are going to be more influential in the landlord’s mind and be able to get good leasing terms. That way, I believe assets will contribute to our business growth and profitability in China. Thank you. Operator: Thanks to all the investors and analysts for your time for this conference. If you have any further questions, please reach out to the IR team. Thanks for your attention to MINISO Group Holding Limited. See you next quarter. Thank you.
Operator: Good day, and welcome to the Bitfarms Fiscal 2025 Conference Call. [Operator Instructions] Please note, this call is being recorded. I would like to turn the call over to Jennifer Drew-Bear from Bitfarms Investor Relations. Please go ahead. Jennifer Drew-Bear: Thank you, and welcome to Bitfarms Fiscal Year 2025 Conference Call. With me on the call today are Ben Gagnon, Chief Executive Officer and Director; and Jonathan Mir, Chief Financial Officer. Before we begin, please note this call is being webcast with an accompanying slide presentation. Today's press release and our presentation can be accessed on our website under the Investors section. Turning to Slide 2. I'd like to remind everyone that certain forward-looking statements will be made during the call, and that future results could differ from those implied in this statement. The forward-looking information is based on certain assumptions and is subject to risks and uncertainties. And I invite you to consult Bitfarms 10-K for a complete list. Also, please note that references will be made to certain non-GAAP financial measures, and therefore, may not be comparable to similar measures presented by other companies. We invite listeners to refer to today's press release and our 10-K for definitions of the aforementioned non-GAAP measures and their reconciliations to GAAP measures. Please note that all financial references are denominated in U.S. dollars, unless always noted. And now turning to Slide 3. It is my pleasure to turn over the call to Ben Gagnon, Director and Chief Executive Officer. Ben, the floor is yours. Ben Gagnon: Good morning, everyone, and welcome to our fiscal year 2025 earnings call. In 2025, we made a bold decision to walk away from our legacy business, Bitcoin, and build the infrastructure in North America for what comes next, HPC and AI. It was a year of deliberate and consequential transformation with a clear mandate. Secure North American pipeline, strengthen our balance sheet, accelerate site development, and position ourselves to engage customers from a place of operational momentum at the peak of the energy bottleneck constraining the growth of AI. I can say with confidence and pride that we accomplished exactly what we set out to do. The foundation you see today, the capital structure, the sites, the team, the strategy was engineered through deliberate choices, developed with discipline and built to propel us forward. We made foundational changes to reposition the business and made 100% of our focus on North American HPC infrastructure development. No half measures, no compromises and in time, no Bitcoin. We built a new company. And while we are presenting as Bitfarms today, tomorrow marks our beginning as Keel infrastructure. The name says it all. A Keel is the bottom of structural component of a vessel. It's what keeps it stable and moving forward in the right direction regardless of the condition above the water line. It is structural, it is essential, and it is exactly how we see our role in the HPC and infrastructure landscape. We are not here to compete with hyperscalers or neoclouds. We are here to enable them. Our focus is providing the critical and largely invisible foundation that will allow the world's most advanced AI platform to deploy on time and scale without interruption. We expect to close the re-domiciliation and finalize our rebranding efforts tomorrow, April 1, and we'll begin trading under the ticker KEEL, 2 business days after completion of the transaction on the Nasdaq and the TSX. We are entering this new phase from a position of strength. With over 2 gigawatts in our pipeline, Keel is a regional leader with some of the largest power land portfolios in some of the highest demand markets in North America and with robust financial strength to execute against our plan. Our current liquidity is far in excess of the CapEx budgeted to get us through permitting and ultimately to start signing leases, giving the company significant financial flexibility to execute on our strategy. And our strategy is equally as clear. We are designing all of our site and campus developments as either powered shell or co-location facilities. We believe this is where we can deliver the most value to shareholders and serve our potential customers at the speed and to the specifications they need. We were originally exploring in parallel to co-location the potential benefits of pursuing a small amount of GPU as a service at our Washington site, Moses Lake, where due to the lowest cost power for data centers in the country and a relatively smaller footprint, we believe it could be an avenue to drive additional shareholder value. Since our last quarterly call, we have spoken with an increased volume of potential customers. And it's clear from those conversations, the most accretive business model for the site is one of co-location. This is not specific to Moses Lake and applies to all of our other sites as well, where demand is even higher. So we will focus on what we do best, being an infrastructure developer and owner. This plays directly to our core competencies. We are a team of developers united by disciplined action, building cost-effective institutional-grade infrastructure at the pace our customers require. The same capabilities have built our energy platform, speed to market, capital discipline, operational rigor precisely what HPC and AI deployments demand today. This is just the natural extension of what we do best. So with all the pieces in place and with the overwhelming support of our shareholders who voted over 99% in favor of the HPC and AI pivot, the U.S. redomicile and the rebrand. Starting tomorrow, we are Keel infrastructure. Turning to Slide 4. When we sat on our pivot, we developed a 3-year transformation plan, one that as of today, we are nearly halfway through completing. In 2025, we did the intensive foundational work for our transformation, including the Stronghold acquisition, securing more power in Pennsylvania, rebalancing the portfolio to North America, a $588 million raise fully institutional and oversubscribed, our U.S. GAAP transition, New York headquarters and establishing a new executive team. This work is done. With power and land secured in some of the power markets that matter most, a team of internal experts and strategic partners that have built data centers for the largest companies in the world and a balance sheet engineered to see us through 2026, we are well positioned to continue our site development and deliver against the time lines, our prospective hyperscalers and neocloud customers need. 2026 is all about execution. Effective tomorrow, we will have completed our redomiciliation to the United States and officially rebranded as Keel infrastructure. Two major milestones that position the company for the next phase of growth. With that complete, we expect the next significant milestones to come from executing against our development at Panther Creek, Sharon and Moses Lake, where we are moving full steam ahead and working diligently across three simultaneous and active work streams. One, finalizing permits, which we expect to be done in the coming months. Two, continued work on architecture and engineering in line with ongoing customer conversations and requirements. And of course, three, our go-to-market to secure highly financeable leases with investment-grade tenants. Commercialization is well underway. The upcoming milestones investors can expect are completion of preconstruction activities like permitting, progress in customer engagement and ultimately lease execution, which we are confident we can achieve this year and will be major catalysts. 2026 is also the year where we expect to leave Bitcoin and Bitcoin mining behind. While we were probably one of the first miners to commence wind down of our Bitcoin mining exposure to reinvest that capital into infrastructure for HPC and AI, we will be accelerating those efforts in 2026 as site developments progress. 2027 is all about delivery. This is the year when we anticipate that sites would come online, we'd begin delivering megawatts to customers, HPC and AI revenue really begins and we complete our transition to a premier North American HPC and AI infrastructure company. By the end of 2027, we expect Keel will be a proven infrastructure developer and a regional leader across Pennsylvania, Washington and Quebec, and we will just continue to grow and scale from there in 2028 and beyond to over 2 gigawatts as we execute against our expansion capacity. Turning to Slide 5. In HPC infrastructure, power, location and time lines are everything. We hold something scarce and valuable secured power, land and expansion capacity in Pennsylvania, Washington State and Quebec. Some of the most in-demand markets with some of the biggest barriers to entry. We know it and so do our potential tenants. Our campuses offer solutions to hyperscalers and neocloud's greatest scaling problems, location, proximity and fiber connectivity to major metro areas and data center clusters solving for latency issues and giving our tenants proximity to their own customers and other data centers. Time lines. Our robust secured power for '26, '27 and with expansion capacity in 2028 is highly coveted in an environment where energy capacity is hard to find and multiyear waitlists are the norms. We create value for tenants by enabling them to deploy years earlier by leasing from us rather than to invest in growing organically. An energy-efficient cool climate, the lower the PUE, the more critical megawatts. Panther Creek is a great example of seeing the hyperscaler and neocloud's appetite at play. While there is a lot of interest in the site last year, inbound customer activity surged after we secured zoning in February. This is not a coincidence. It is the proof point and one that we've been making for the last year, but may still be confusing to some investors. So we'd like to be clear that investment-grade tenants value derisk sites where they can move from lease to revenue fast. The more we advance, the better our leverage. The better our leverage, the better the leases, and the more long-term value we create for shareholders. Turning to Slide 6. It is indisputable that power is the binding constraint for AI infrastructure deployment and will remain so for the coming years. Leading investment banks, Goldman Sachs, JPMorgan, Wells Fargo, Guggenheim, Moelis, they've all published extensively on this. And the consensus is clear. New power generation cannot come online fast enough to meet AI demand today, tomorrow or in the next 5 years. This bottleneck is structural, not cyclical. Hyperscalers and neoclouds that used to plan on 12-month horizons are now locking in 24- to 36-month supply chain commitments. Not tied to specific projects, but as platform level agreements and are now actively competing for the power and land to deploy it. While you are probably familiar with this information, here you can see a summary of the five development sites. The power we have secured and in some cases, the incremental power opportunities that make up our 2.2 gigawatt pipeline. Turning to Slide 7. I want to take a moment to put our current valuation context because there is a meaningful disconnect between where we trade today and the value we are positioned to capture as a company. When we analyze our current valuation against our peers, the picture becomes clear, at approximately $1.9 million per available megawatt of secure 2027 capacity, we're trading in the middle of a Bitcoin miner Group, valued at roughly $1.7 million to $2.1 million for 2027 megawatt meaning we are being valued based on having power but not what we are doing with it. For shareholders and bondholders, we see three distinct catalysts, each capable of driving meaningful reratings. The first is obviously lease execution. Across our sector, companies that have signed leases trade at $4 million to $6 million per 27 megawatts, a 2 to 3x premium to where we are today. This is the market's consistent signal driven entirely by lease execution, not facility delivery, not revenue generation, just signed leases. A signed lease secures revenue and financing derisking the developments. The market pays for that with nearly 500 megawatts actively being commercialized today and visibility on permitting across Panther Creek, Sharon and Moses lake, this catalyst is well within reach. The second catalyst and arguably the most powerful for long-term holders is securing our expansion capacity. 2/3 of our 2.2 gigawatt portfolio or approximately 1.5 gigawatts is expansion capacity, which we believe the market is assigning little to no value. While securing these megawatts is a process that will take more time, we believe additional megawatts can be secured in the second half of 2026 requiring very little CapEx while representing significant embedded value as powered land even before a lease is signed or there is a shovel in the ground. The third catalyst is delivering in 2027. Once facilities are derisked through commissioning and begin generating revenue under long-term contracts, the development risk should drop dramatically and the operator valuation numbers become transformational yet again. We are not taking a leap of faith on technology, our ability to see our power or market demand. The tech is here. The power is secured, the sites are advancing, the inbound demand is real, but the market has not yet priced in is the transformation that happens when a developer becomes a counterparty when we move from site advancing to lease executing. This is the main opportunity ahead of us to accelerate permitting, execute leases, secure our expansion capacity and ultimately deliver to our customers. This is how we will create value for our shareholders and bondholders. Turning to Slide 8. Our execution plan is defined by six areas, each supporting our ability to deliver at the pace and scale our future customers require. First, we've secured our deep bench of talent by adding over 60 years of infrastructure and development in over 50 years of data center construction experience combined in just the past few months. People have delivered at scale for the most demanding customers in the world. Jonathan Mir joined as CFO, bringing 25 years of energy infrastructure strategy and project finance expertise. We have also added an SVP of construction and of power, a VP of HPC Operations and Head of permitting to oversee the execution of these critical functions. We've assembled the right team to execute on our vision. Second, we are engaging the right industry leaders as partners, T5, Turner Construction, Corgan, [ WWT ], Vertiv. These firms have built data centers for the world's largest hyperscalers not once but hundreds of times. When customers look at our project partners, which will be available on the new website when it launches tomorrow, they will see that we have also assembled the right partners to ensure better outcomes. Third, we have the capital required to bring our sites to market. As of March 27, 2026, our liquidity stands at $520 million in cash and Bitcoin, which we expect is much more than the CapEx budgeted to get us to a lease at Panther Creek, Sharon and Washington. Jonathan will go into more detail on our capital position and financing strategy shortly, but the headline is simple. We're well funded and can move fast. Fourth, a disciplined Bitcoin exit. It is clear we are no longer a Bitcoin miner. However, with strong, robust liquidity, we can have a disciplined approach to our exit strategy. We will continue to operate up until the time sites need to be prepared for construction maximizing free cash flow before selling the miners. We will also opportunistically sell Bitcoin into strength to capture and reinvest every dollar we can into HPC and AI infrastructure. Fifth, power assets that cannot be replicated. Our megawatts sit in regions with large barriers to entry, Pennsylvania, Washington State and Quebec, all have multiple year waitlists. No one is cutting the line. Our 350 megawatts at Panther Creek, 110 megawatts at Sharon and 18 megawatts in Washington were secured before the AI demand wave made these markets highly coveted. This isn't power others can easily replicate giving us competitive edge with high-quality tenants to understand these markets and are hungry for assets like ours, which leads us to our sixth point. In this market, speed to power is what drives value. For our customers, the opportunity cost of delayed deployment is huge. So the priority is getting capacity online as quickly as possible. Every day of delay is lost revenue. As a result, power availability and certainty of delivery are the primary drivers of lease economics. This dynamic has pushed lease rates higher since our Q3 call, exactly as we said it would. The opportunity in front of Keel infrastructure is real. We now have the assets and the team is ready. I'm so proud of what we built in 2025, and I'm confident in what we'll deliver in 2026 and 2027. With that, I'll turn the call over to Jonathan. Jonathan Mir: Thanks, Ben. Turning to Slide 9. I joined the team 5 months ago. My focus has been on sharpening our approach to capital allocation, strengthening our balance sheet and capital structure and ensuring the financing actions support long-term shareholder value creation. I've had a front row of the depth of talent, the operational discipline and the strategic momentum across Bitfarms. I work closely with our operations and development teams both to understand the current trajectory of our assets and to ensure our capital plans are aligned with the opportunities ahead. What stood out to me is the extraordinary potential we have driven by the quality and potential of our sites, a strong balance sheet, the best liquidity position in the company's history and a broad team that's both deeply engaged and committed to excellence. We're moving quickly and with purpose. I'm pleased to be here with you today and discuss the progress we're making. I'll use this time to walk through our performance for fiscal year 2025 and outline our current capital strategy that we believe supports the accretive growth we're targeting for 2026 and beyond. Turning to Slide 10. Before discussing our financials for the quarter, I want to briefly frame the results are presented this quarter. As of Q3 2025, the Paso Pe facility in Paraguay has been classified as held for sale. As a result, all revenues, operating costs and asset balances associated with Paso Pe are treated as discontinued operations in our fiscal year 2025 financials. So when I refer to continuing operations, I am speaking exclusively about our North American platform, the foundation of our transition into HPC and AI infrastructure. With that, revenue for fiscal year 2025 was $229 million, up 72% year-over-year. Operating loss for fiscal year 2025 was $150 million including noncash depreciation of $98 million and $28 million of impairment charges. This compares to an operating loss of $28 million in 2024, which included $102 million of noncash depreciation and $4 million of impairment charges. Net loss for 2025 was $209 million or a $0.38 loss per basic and diluted share compared to a 2024 net loss of $7 million or $0.02 loss per basic and diluted share. The differences between 2024 and 2025 were driven by a number of factors, including change in fair market value of digital assets, primarily due to the decline of Bitcoin prices and realization of gains on disposal of Bitcoin during the year. Two additional items also impacted year-over-year comparability. First, we saw a loss of $68 million, reflecting changes in our derivative assets and liabilities. Second, 2025 impairment charges were $25 million higher than in 2024. For the year, our adjusted EBITDA was $29 million compared to $31 million in 2024. Turning to Slide 11. 2025 was a deliberate year of balance sheet optimization and improvement, providing the foundation for our next phase of growth. We successfully issued an oversubscribed $588 million convertible offering, significantly expanding our liquidity. And in February, we repaid the Macquarie debt facility eliminating legacy debt, simplifying our capital structure and freeing the company from covenants. Each of these supports the pursuit of our HPC infrastructure strategy. The Macquarie facility had been originally used to accelerate development at Panther Creek, funding critical project activities, including long lead time item procurement and substation work. Retiring the facility was a strategic decision, strengthens the balance sheet and gives us the flexibility to secure a more cost-effective financing at either the parent or project level. Our current cash position of $520 million provides the runway to advance Panther Creek, Sharon and Moses Lake through lease execution without accessing capital markets. Though we may do so if attractive opportunities arise that improve our ability to deliver the best possible long-term risk-adjusted shareholder returns. Macquarie was an excellent partner, and we appreciate their support so early in our pivot to HPC AI infrastructure. Turning to Slide 12. As we pivot to commercialization of our development sites, we have a clear financial strategy based on three principles. Capital allocation, capital formation and capital structure. Taken together, they are designed to deliver the best possible long-term risk-adjusted shareholder returns. First, capital allocation. We deploy capital into projects where the earnings potential exceeds their weighted average cost of capital. We rotate capital from businesses that are noncore or earning less than optimal returns and deploy the capital into higher return investments. Second, capital formation. Our financing strategy is designed to fund our very large growth opportunities while maintaining the liquidity needed for a stable base of operations. We will be opportunistic in our financing execution. We will fund construction of our data center projects using project or parent level bet and project or parent level equity or equity-linked offerings. We're taking a disciplined approach and at this time, are well capitalized to actively commercialize and execute leases across Panther Creek, Sharon and Washington. Third, capital structure. Our capital structure is designed to capture the best possible long-term risk-adjusted shareholder returns while also retaining overall corporate flexibility and support growth. Our objective is to operate with a deliberate liquidity strategy in order to enable clear-headed commercial decisions and capital allocation decisions rather than having liquidity drive time lines. Stepping back, our road map is clear. We are building a regionally focused high-growth HPC AI infrastructure platform, grounded in disciplined capital allocation, a strengthened balance sheet and a development cadence that maximizes returns and minimizes risk. We're funded through the key derisking stages, permitting and leasing across Moses Lake, Sharon and Panther Creek and we're entering 2026 with momentum, optionality and a balance sheet engineered for growth. We have the right people, assets, liquidity and strategy and we're well positioned to capture for our shareholders the long-term value potential we have today. With that, I'd like to return the call to Ben for closing remarks. Ben Gagnon: Thanks, Jonathan. A little over a year ago, as our team began actively integrating AI into both our business and our daily lives, we came to a realization. This isn't just another technology cycle. It's a paradigm shift. More comparable to the industrial revolution than the Internet revolution. The fundamental measure, productivity capacity is no longer calories or joules, but tokens. This became strikingly clear 2 weeks ago at NVIDIA GTC, where I witnessed hundreds of companies applying AI to everything from straightforward tasks by cleaning and image generation to extraordinary complex applications, including protein folding, cystic simulations and even brain surgery. Walking the conference floor, speaking to the attendees, one thing was unmistakable. We've only begun to scratch the surface of AI's potential. Yet even in these early days, AI is already empowering individuals, communities and companies to accomplish exponentially more. We're witnessing Jevons Paradox unfold simultaneously across every industry, thanks to AI, where improved efficiency can paradoxically drive higher, not lower demand. It is literally never cost less to transform an idea into an action, a product, an image, a refined concept, a service or countless other outlets. The possibilities are truly limitless, and while no one can predict exactly how AI will reshape our future, uncertainty remains. It will require enormous amounts of power. Our 2.2 gigawatts of capacity and strategically position land across Pennsylvania, Washington and Quebec sit directly in the path of this transformation, and we intend to capitalize on that opportunity for our shareholders. We look forward to the opportunities ahead. With that, I would like to open the call to Q&A. Operator, please go ahead. Operator: [Operator Instructions] And our first question comes from Mike Grondahl with Northland. Mike Grondahl: First question, Ben, you talked about your decision not to go the GPU rental route at Moses Creek. And just the colocation route, could you talk a little about what a couple of the major drivers were that got you to that decision? Ben Gagnon: Yes, it's a great question, Mike. When we first started talking about in Q3, we were always evaluating this alongside with the colocation. We're trying to maximize the value for shareholders. So we're always going to evaluate multiple different business models at our sites. And because they have the lowest cost energy and all these other benefits, we thought it would make a lot of sense. But as we've continued to have increasing amounts of customer conversations for Washington and other sites. It was just really clear to us that the best opportunity for us is to just remain a pure-play infrastructure developer and owner and let these customers who really want these megawatts lease these megawatts. Mike Grondahl: Got it. Got it. And then maybe secondly, you articulated, I'll say, a philosophy a quarter or 2 ago about waiting and waiting on signing a lease as terms were continuing to improve kind of implying you're going to be really patient and wait on a lease. Could you kind of update how you're thinking about that lease execution strategy and the potential timing around it? Ben Gagnon: Yes. Our strategy on lease execution has been consistent. It remains consistent today. Our view is that the best way to maximize value for shareholders is to get the best terms in a lease because that's going to be what is going to be driving our NOI and our multiple. And so when we're looking to sign 10- to 15-year agreements, it's really important for us to take the -- maybe a little bit more time than investors may want us to in order to get better terms for longer. When it looks at what is really driving the value in these lease economics, one of the biggest elements is risk, and we've spoken to this multiple times over the last couple of months. And the biggest risk for most of the people -- to go out there and have conversations and get a lot of interest. And in some cases, you could even sign a lease prior to getting permits. But all of that risk is going to be priced into the agreement, you're going to be locked into it for 10 to 15 years, and that's going to negatively impact the long-term value that we're creating for shareholders. So our strategy has been incredibly consistent. And the benefit for us is that we are operating in high demand markets with high barrier to entry. So it takes a little bit longer to get permits going in Pennsylvania or in Washington than it does in Texas, which is the easiest market in the United States for that. But we believe that drives a lot of extra value because it's way more scarce, it's way harder to acquire and there's just not as much optionality. Operator: Our next question comes from Brett Knoblauch with Cantor Fitzgerald. Brett Knoblauch: Maybe to start, could you maybe just go into detail on what permits at what sites you guys are waiting to receive? Ben Gagnon: So permits is a complicated process, and we are develop -- we're getting permits across multiple sites in multiple jurisdictions. So they all have different rules, different regulations, different time lines, different reviews, different authorities. So it's far too much detail to get into exactly what permits are remaining on all the different sites. But we are continuing to make good progress and kind of -- we're looking at the visibility over the next couple of months. And with what we've had so far with the community engagement success that we've had so far, we think that in the coming months, sometime around the mid- to late summer time. we should be achieving the full permitted status across at least one, if not all of the sites. Brett Knoblauch: And then maybe just on the leasing environment across the different sites that you guys have. I guess we were under the impression that maybe Sharon would be first to go given it's relatively further along. Is that still how you guys are thinking about it? And then in the presentation when you guys kind of list the power pipeline and road map. How much of that is from generation on site that you guys are looking into? And do you have any update on where you guys are with respect to sourcing that generation? Ben Gagnon: Yes, sure. So the -- to answer the second part of your question first, all the power that we're talking about developing for our HPC and AI data centers right now is grid connected. So the two operating power plants that we have at Scrubgrass and Panther Creek. Currently, that math is not in those charts for the secured capacity or the site development plans. But in Scrubgrass particular, we are working to expand the generation capacity there with natural gas. So we've been working to tap into the Tennessee Natural Gas Pipeline. We're achieving pretty good results there with the engineering firms. There's still probably another month or two to go before we're getting a clear path forward on the engineering plans. But Scrubgrass is our more of our pipeline site. And so those -- that power generation opportunity is more of a 2028 and 2029 time line. Everything else is grid connected, it's secure today or it's currently active. And sorry, Brett, I'm blanking on the first part of your question, would you mind repeating it? Brett Knoblauch: Yes. Just on maybe the cadence of which sites are -- quicker to go? Ben Gagnon: Yes. So really, that's going to be driven by success on permitting time lines in the customers. So all three of the sites, Moses Lake, Sharon and Panther Creek are all actively in our go-to market right now. Every single one of those has customers engaged under NDA, and they have for quite some time. And so we're continuing to push forward on those conversations and those negotiations. Really, I think what investors should think about with regards to permits, permits are more of a closing condition to a lease, right? They're really not a starting condition to a negotiation. So we have these conversations and these negotiations simultaneously while we're working towards permitting. As permitting gets closer and closer, the negotiations will also get closer and closer in tandem and the first site to get leased is likely to be the first site to be permitted. Operator: Our next question comes from Stephen Glagola with KBW. Stephen Glagola: Just on that last point, if you could clarify the sequencing here between like notice to proceed and lease execution. So in other words, like can you pre-sign leases contingent on notice to proceed? Or is like notice to proceed required before any major customer would commit to a lease? Ben Gagnon: For a customer commit to binding in our view, they're going to want NTP, and that's based on the number of conversations that we are continuing to have and there probably are some customers who would be interested to sign prior to NTP, but those aren't the investment-grade counterparties that we're really seeking to engage with. Stephen Glagola: Okay. And then just one more. How are you thinking about like Vera Rubin hardware availability in '26 and like early '27? And to what extent could that variability in supply influence the timing of lease discussions at your sites? Ben Gagnon: Yes. That's a good question, Stephen. We've been talking about Vera Rubin, I think, since Q3 call because all of our sites are basically coming online in 2027. So we're trying to make sure that they are designed for the highest level of equipment that's coming out in '27 and '28, which is the Vera Rubin. In terms of supply, we haven't seen any impact so far. I understand there's always geopolitical uncertainty in the world that may impact those supply chains. But given that energy is such a huge bottleneck, and it's always been a huge bottleneck on the growth. I don't think that there is going to be a geopolitical situation that's going to make the bottleneck change from energy over to GPUs. So we don't have any expectation right now that, that's going to have any impact on leasing or demand for sites because power is still such an extreme bottleneck. It's hard to imagine what's going to overshadow that geopolitically. Operator: Our next question comes from Michael Donovan with Compass Point. Michael Donovan: Congrats on the progress. Can you provide an update on ESA progress, specifically Panther Creek's ISA to ESA conversion? Ben Gagnon: Yes. So that's a great question, Mike. As investors probably know, we have 350 megawatts secured ESA with PPL. But in addition to that, we also have an ISA that enables us to draw down approximately 60 megawatts from the grid, and that's associated with the existing transmission line and substation for the power plant that we currently have operating. In order to get that converted over, it's really more of a regulatory matter. And so it's hard to put an exact time line as to when those stamps are going to be received, but there's no infrastructure that needs to be built. There's no CapEx that needs to be spent. Really, it's just a matter of getting the regulatory approval to convert a nonfirm service into a firm service, and that would enable us to increase our capacity beyond 350 megawatts to what we probably expect is going to be maybe 400 megawatts or possibly slightly more. We expect this is going to happen this year, but it's hard to put an exact time line on it, given it's a regulatory matter. Operator: Our next question comes from Brian Kinstlinger with AGP. Brian Kinstlinger: Last quarter, Ben, you communicated, you expected the GPU as a service and Moses Lake site would be targeted for, I believe, the first quarter for go-live. How are you shifting to co-location change the timing if at all? And my second question is, can you talk about also how the global memory shortage is impacting your site development or changing your near-term needs or planning for lead times? Ben Gagnon: Yes. So two parts to that question. In terms of switching from a GPU as a service to co-location just changing the business model doesn't really impact the development time line. So we don't really see any delay there associated with changing from GPU as a service, just to co-location. Really, it's just a matter of how we want to allocate our capital and how we want to focus the business. When it comes to the memory shortage. As a pure-play infrastructure developer and owner that really is not coming into our calculus very much, mostly that's a customer situation for them to resolve with their own supply chain because we're not the ones investing in the GPUs and the compute and the servers. Operator: Our next question comes from Martin Toner with ATB Cormark Capital Markets. Martin Toner: Good morning. Can you guys elaborate or [indiscernible] can you kind of give us some time line thoughts there? Ben Gagnon: So I'm going to repeat the question because it was a little quiet, just in case nobody else or other people had difficulty hearing. I believe the question was, can you give some time lines as to how we might be able to expand Panther Creek to 500 megawatts and beyond? So in order for us to move beyond the 350-megawatt ESA that we have secured, there's really two sources for expansion. The first is converting over that ISA from non-firm service to firm service that I just spoke to a minute ago. And that's really a regulatory matter that we expect to be resolved sometime this year. It could be tomorrow, it could be a few months from now. And then when it comes to expanding beyond that, what we have to do with that is we have to actually have new power applications. The good thing here is that the utilities are actually looking to invest in new generation in the area. So in this particular instance, and we weren't actually applying for new power. We actually have the utility call us and ask us how much more power we could take on site. Given the bottleneck constraint on power, that was obviously a very welcome call over here at Bitfarms to receive. And it's a pretty unusual one in the industry, but they're looking to scale up generation capacity in the area, specifically to service our site at greater capacity. So this is probably going to be 2 to 3 years time line because there's a lot of process involved with spinning up new generation and building those new transmission lines. But for a lot of our customers, what they really want is the fastest pathway to energization and a clear path to scale over multiple years. And so this really lines up with what the hyperscalers and what the neoclouds are searching for. Martin Toner: That's great. Hopefully, you can hear me better. Can you clarify when you expect to sign your first lease? Ben Gagnon: So I can't get into a specific time line. But in terms of milestones, as I spoke to earlier, it's really about clearing NTP as kind of the last closing condition or last milestone for us to sign a lease. So I think for the investors and the analysts on the call, the important thing to keep track of, especially over the next coming months is the continued progress that we have towards NTP because once NTP is clear, that's basically the last thing standing between us and a signed agreement. Martin Toner: Got it. Great. And last one from me. Can you talk a little bit about why mining exahash in Q4 was at the level that it was at? Ben Gagnon: So we continue to scale back our mining exposure as we continue to focus on our U.S. HPC infrastructure investments. So we haven't made any investments into Bitcoin mining. We're not spending any money on upgrades or new miners, and we're actively working to scale down the fleet and actively working to spin off assets like we have in Paraguay that are not suitable for conversion. So investors should continue to expect our hash rate to continue to trickle down over 2026 as we continue to execute on this transition to HPC and AI. Operator: Our next question comes from Mike Colonnese with H.C. Wainwright & Company. Michael Colonnese: So, Ben, I'm just curious, after securing the remaining permits across the three sites, which sounds like likely to take place in the coming months here, what does the time line look like from a data center construction and delivery standpoint? It sounds like you're pretty optimistic that revenue generation could commence as soon as next year, but any additional color there would be helpful. Ben Gagnon: Yes. I mean, really, this is the year of execution in 2027 is the year of delivery. And so at all three of our projects that we talked about today, Panther Creek, Sharon and Washington, we all expect them to come online and start delivering megawatts and start generating revenue to customers in 2027. We'll continue to provide updates as we go along. And I think once we have cleared NTP and we have signed leases, there's going to be a lot clear visibility that we can provide to investors for each specific project and their specific time lines. Michael Colonnese: Got it. And then back to Bitcoin mining operations, it sounds like you're progressively going to be scaling back hash rate as you bring some of the HPC AI data centers online. I guess what's the best way to think about hash coming offline and kind of flowing through your operating results over the near term here? Ben Gagnon: I'll speak to it at a high level and then maybe I'll pass it off to Jonathan for some further clarity. But right now, the Bitcoin mining remains profitable, but it's not it's not very -- it's marginal. So it's still contributing to the business. But really, it's not the focus of the business. It's not where we're investing our time, it's not where we're investing our efforts. And given that we have been so successful last year in raising capital and strengthening our balance sheet. It's really not super impactful for the developments that we have this year, the operations or the CapEx. So we'll just continue to scale that down, trying to maximize value in the disciplined exit. If it makes more sense to maybe sell some miners a little bit earlier then we might need to in order to begin instruction, we'll evaluate that as we will always do to maximize value for our shareholders. But really, we kind of see this as a pretty minor element of our balance sheet and a minor element of the financial plan for this year. Jonathan, do you want to add anything further? Jonathan Mir: Only that when we think about our liquidity going forward, the strategic objective is to ensure we are well capitalized through the lease process and beyond without the need to raise any new capital in the markets and that takes into account the current state of Bitcoin mining operations. It's not assuming any improvement in the economics there. So our plan is built on conservative assumptions around the status of the Bitcoin market. Operator: Our next question comes from Nick Giles with B. Riley Securities. Nick Giles: Good morning, Keel team. In the interim period where Bitcoin mining operations are wound down, but kind of pre-revenue generation on the HPC side, could the generating assets at Panther Creek and Scrubgrass be utilized in any way such as the PJM capacity auction? Ben Gagnon: So those power plants do actually participate in PJM capacity auctions. We've done that for quite some time. And so we do benefit from the capacity payments that we received there. Nick Giles: Got it. Okay. And any order of magnitude of what those could be kind of in the 2026 planning year? Ben Gagnon: So I mean, really, it's -- we've kind of maxed out on the capacity auction payments. They set a ceiling, and that's where the capacity auction payments closed. Nick Giles: Got it. Understood. Maybe one for Jonathan. You've made some progress on the capital structure, but just was hoping for any additional comments you might have on what you're looking for in an initial debt package, how you're seeing term shift and kind of what tools you have at your disposal during construction and kind of post energization. Jonathan Mir: Good question. Thanks, Nick. So our basic approach is to compare and contrast our financing options down at the asset level and upstairs at the parent level. And certainly, one of the things that we've seen in the market that has caught our attention like everyone else, is the tightening of spreads between folks issuing high-yield debt in the market that would seem like quite attractive levels for strong investment-grade counterparties or credit wraps. And those converging towards the levels seen in bank-originated classic construction of project financing. So we'll be -- each of those has its own advantages in terms of simplicity of managing the actual capital once it's raised versus negative carry costs. And as we get closer to a funding point, we'll make the decision as to what seems best for our shareholders in terms of how we decide to finance. I'm sorry, Nick, I was just going to say that the markets for our space and for infrastructure generally seem calm right now. Operator: Our next question comes from Brian Dobson with Clear Street. Gregory Pendy: It's Greg Pendy in for Brian Dobson. Just I guess one final one. Just I guess, one final one. Just on the redomiciling to the U.S., are there any implications to costs or structural implications in terms of ownership that we should be aware of as you enter this over the next couple of days? Ben Gagnon: One of the benefits and reasons for the redom is that we will now be eligible for inclusion in indices that require -- want to be a U.S. domiciled company. So for example, we'll be eligible for inclusion in the Russell 1000 and the Russell 3000 as well as for ownership in any other fund who was otherwise limited to the purchase of U.S. securities. We view that as being quite helpful in terms of moving our shareholder base to one that is institutional and long term. There are no other -- there are no cost or flexibility implications in our end. We simply see this as a nice path forward with a lot of benefits for our shareholders. Operator: Our next question comes from Bill Papanastasiou with Chardan Capital Markets. Bill Papanastasiou: Just wanted to touch on the Washington side and decision to shift towards colo. Can you confirm that this won't have any material impact on the purchase commitment that was entered into November? Or is the team considering the shift in development allocation to other sites? Ben Gagnon: Thanks, Bill. No impact on the capital commitments and the equipment we've already purchased for the Washington site by changing business models. In fact, actually, it just helps to reduce the CapEx because we're no longer paying for the compute. Bill Papanastasiou: Understood. And then how should we generally be thinking about maintenance CapEx on existing Bitcoin mining sites as you gradually shift over to AI HPC here? Ben Gagnon: We're not making any investments into the Bitcoin mining sites. Basically, we're just continuing to keep them up and running. And so no further investments are being made in the sites into new sites or into new miners. Operator: Thank you. This concludes the question-and-answer session. I'd like to turn the call back over to Ben Gagnon for closing remarks. Ben Gagnon: Thank you very much, everyone, for joining our call today and really look forward to speaking to you next time as Keel Infrastructure. Have a great day. Operator: Thank you for your participation. This does conclude the program. You may now disconnect.
Operator: Good day, and welcome to the Bitfarms Fiscal 2025 Conference Call. [Operator Instructions] Please note, this call is being recorded. I would like to turn the call over to Jennifer Drew-Bear from Bitfarms Investor Relations. Please go ahead. Jennifer Drew-Bear: Thank you, and welcome to Bitfarms Fiscal Year 2025 Conference Call. With me on the call today are Ben Gagnon, Chief Executive Officer and Director; and Jonathan Mir, Chief Financial Officer. Before we begin, please note this call is being webcast with an accompanying slide presentation. Today's press release and our presentation can be accessed on our website under the Investors section. Turning to Slide 2. I'd like to remind everyone that certain forward-looking statements will be made during the call, and that future results could differ from those implied in this statement. The forward-looking information is based on certain assumptions and is subject to risks and uncertainties. And I invite you to consult Bitfarms 10-K for a complete list. Also, please note that references will be made to certain non-GAAP financial measures, and therefore, may not be comparable to similar measures presented by other companies. We invite listeners to refer to today's press release and our 10-K for definitions of the aforementioned non-GAAP measures and their reconciliations to GAAP measures. Please note that all financial references are denominated in U.S. dollars, unless always noted. And now turning to Slide 3. It is my pleasure to turn over the call to Ben Gagnon, Director and Chief Executive Officer. Ben, the floor is yours. Ben Gagnon: Good morning, everyone, and welcome to our fiscal year 2025 earnings call. In 2025, we made a bold decision to walk away from our legacy business, Bitcoin, and build the infrastructure in North America for what comes next, HPC and AI. It was a year of deliberate and consequential transformation with a clear mandate. Secure North American pipeline, strengthen our balance sheet, accelerate site development, and position ourselves to engage customers from a place of operational momentum at the peak of the energy bottleneck constraining the growth of AI. I can say with confidence and pride that we accomplished exactly what we set out to do. The foundation you see today, the capital structure, the sites, the team, the strategy was engineered through deliberate choices, developed with discipline and built to propel us forward. We made foundational changes to reposition the business and made 100% of our focus on North American HPC infrastructure development. No half measures, no compromises and in time, no Bitcoin. We built a new company. And while we are presenting as Bitfarms today, tomorrow marks our beginning as Keel infrastructure. The name says it all. A Keel is the bottom of structural component of a vessel. It's what keeps it stable and moving forward in the right direction regardless of the condition above the water line. It is structural, it is essential, and it is exactly how we see our role in the HPC and infrastructure landscape. We are not here to compete with hyperscalers or neoclouds. We are here to enable them. Our focus is providing the critical and largely invisible foundation that will allow the world's most advanced AI platform to deploy on time and scale without interruption. We expect to close the re-domiciliation and finalize our rebranding efforts tomorrow, April 1, and we'll begin trading under the ticker KEEL, 2 business days after completion of the transaction on the Nasdaq and the TSX. We are entering this new phase from a position of strength. With over 2 gigawatts in our pipeline, Keel is a regional leader with some of the largest power land portfolios in some of the highest demand markets in North America and with robust financial strength to execute against our plan. Our current liquidity is far in excess of the CapEx budgeted to get us through permitting and ultimately to start signing leases, giving the company significant financial flexibility to execute on our strategy. And our strategy is equally as clear. We are designing all of our site and campus developments as either powered shell or co-location facilities. We believe this is where we can deliver the most value to shareholders and serve our potential customers at the speed and to the specifications they need. We were originally exploring in parallel to co-location the potential benefits of pursuing a small amount of GPU as a service at our Washington site, Moses Lake, where due to the lowest cost power for data centers in the country and a relatively smaller footprint, we believe it could be an avenue to drive additional shareholder value. Since our last quarterly call, we have spoken with an increased volume of potential customers. And it's clear from those conversations, the most accretive business model for the site is one of co-location. This is not specific to Moses Lake and applies to all of our other sites as well, where demand is even higher. So we will focus on what we do best, being an infrastructure developer and owner. This plays directly to our core competencies. We are a team of developers united by disciplined action, building cost-effective institutional-grade infrastructure at the pace our customers require. The same capabilities have built our energy platform, speed to market, capital discipline, operational rigor precisely what HPC and AI deployments demand today. This is just the natural extension of what we do best. So with all the pieces in place and with the overwhelming support of our shareholders who voted over 99% in favor of the HPC and AI pivot, the U.S. redomicile and the rebrand. Starting tomorrow, we are Keel infrastructure. Turning to Slide 4. When we sat on our pivot, we developed a 3-year transformation plan, one that as of today, we are nearly halfway through completing. In 2025, we did the intensive foundational work for our transformation, including the Stronghold acquisition, securing more power in Pennsylvania, rebalancing the portfolio to North America, a $588 million raise fully institutional and oversubscribed, our U.S. GAAP transition, New York headquarters and establishing a new executive team. This work is done. With power and land secured in some of the power markets that matter most, a team of internal experts and strategic partners that have built data centers for the largest companies in the world and a balance sheet engineered to see us through 2026, we are well positioned to continue our site development and deliver against the time lines, our prospective hyperscalers and neocloud customers need. 2026 is all about execution. Effective tomorrow, we will have completed our redomiciliation to the United States and officially rebranded as Keel infrastructure. Two major milestones that position the company for the next phase of growth. With that complete, we expect the next significant milestones to come from executing against our development at Panther Creek, Sharon and Moses Lake, where we are moving full steam ahead and working diligently across three simultaneous and active work streams. One, finalizing permits, which we expect to be done in the coming months. Two, continued work on architecture and engineering in line with ongoing customer conversations and requirements. And of course, three, our go-to-market to secure highly financeable leases with investment-grade tenants. Commercialization is well underway. The upcoming milestones investors can expect are completion of preconstruction activities like permitting, progress in customer engagement and ultimately lease execution, which we are confident we can achieve this year and will be major catalysts. 2026 is also the year where we expect to leave Bitcoin and Bitcoin mining behind. While we were probably one of the first miners to commence wind down of our Bitcoin mining exposure to reinvest that capital into infrastructure for HPC and AI, we will be accelerating those efforts in 2026 as site developments progress. 2027 is all about delivery. This is the year when we anticipate that sites would come online, we'd begin delivering megawatts to customers, HPC and AI revenue really begins and we complete our transition to a premier North American HPC and AI infrastructure company. By the end of 2027, we expect Keel will be a proven infrastructure developer and a regional leader across Pennsylvania, Washington and Quebec, and we will just continue to grow and scale from there in 2028 and beyond to over 2 gigawatts as we execute against our expansion capacity. Turning to Slide 5. In HPC infrastructure, power, location and time lines are everything. We hold something scarce and valuable secured power, land and expansion capacity in Pennsylvania, Washington State and Quebec. Some of the most in-demand markets with some of the biggest barriers to entry. We know it and so do our potential tenants. Our campuses offer solutions to hyperscalers and neocloud's greatest scaling problems, location, proximity and fiber connectivity to major metro areas and data center clusters solving for latency issues and giving our tenants proximity to their own customers and other data centers. Time lines. Our robust secured power for '26, '27 and with expansion capacity in 2028 is highly coveted in an environment where energy capacity is hard to find and multiyear waitlists are the norms. We create value for tenants by enabling them to deploy years earlier by leasing from us rather than to invest in growing organically. An energy-efficient cool climate, the lower the PUE, the more critical megawatts. Panther Creek is a great example of seeing the hyperscaler and neocloud's appetite at play. While there is a lot of interest in the site last year, inbound customer activity surged after we secured zoning in February. This is not a coincidence. It is the proof point and one that we've been making for the last year, but may still be confusing to some investors. So we'd like to be clear that investment-grade tenants value derisk sites where they can move from lease to revenue fast. The more we advance, the better our leverage. The better our leverage, the better the leases, and the more long-term value we create for shareholders. Turning to Slide 6. It is indisputable that power is the binding constraint for AI infrastructure deployment and will remain so for the coming years. Leading investment banks, Goldman Sachs, JPMorgan, Wells Fargo, Guggenheim, Moelis, they've all published extensively on this. And the consensus is clear. New power generation cannot come online fast enough to meet AI demand today, tomorrow or in the next 5 years. This bottleneck is structural, not cyclical. Hyperscalers and neoclouds that used to plan on 12-month horizons are now locking in 24- to 36-month supply chain commitments. Not tied to specific projects, but as platform level agreements and are now actively competing for the power and land to deploy it. While you are probably familiar with this information, here you can see a summary of the five development sites. The power we have secured and in some cases, the incremental power opportunities that make up our 2.2 gigawatt pipeline. Turning to Slide 7. I want to take a moment to put our current valuation context because there is a meaningful disconnect between where we trade today and the value we are positioned to capture as a company. When we analyze our current valuation against our peers, the picture becomes clear, at approximately $1.9 million per available megawatt of secure 2027 capacity, we're trading in the middle of a Bitcoin miner Group, valued at roughly $1.7 million to $2.1 million for 2027 megawatt meaning we are being valued based on having power but not what we are doing with it. For shareholders and bondholders, we see three distinct catalysts, each capable of driving meaningful reratings. The first is obviously lease execution. Across our sector, companies that have signed leases trade at $4 million to $6 million per 27 megawatts, a 2 to 3x premium to where we are today. This is the market's consistent signal driven entirely by lease execution, not facility delivery, not revenue generation, just signed leases. A signed lease secures revenue and financing derisking the developments. The market pays for that with nearly 500 megawatts actively being commercialized today and visibility on permitting across Panther Creek, Sharon and Moses lake, this catalyst is well within reach. The second catalyst and arguably the most powerful for long-term holders is securing our expansion capacity. 2/3 of our 2.2 gigawatt portfolio or approximately 1.5 gigawatts is expansion capacity, which we believe the market is assigning little to no value. While securing these megawatts is a process that will take more time, we believe additional megawatts can be secured in the second half of 2026 requiring very little CapEx while representing significant embedded value as powered land even before a lease is signed or there is a shovel in the ground. The third catalyst is delivering in 2027. Once facilities are derisked through commissioning and begin generating revenue under long-term contracts, the development risk should drop dramatically and the operator valuation numbers become transformational yet again. We are not taking a leap of faith on technology, our ability to see our power or market demand. The tech is here. The power is secured, the sites are advancing, the inbound demand is real, but the market has not yet priced in is the transformation that happens when a developer becomes a counterparty when we move from site advancing to lease executing. This is the main opportunity ahead of us to accelerate permitting, execute leases, secure our expansion capacity and ultimately deliver to our customers. This is how we will create value for our shareholders and bondholders. Turning to Slide 8. Our execution plan is defined by six areas, each supporting our ability to deliver at the pace and scale our future customers require. First, we've secured our deep bench of talent by adding over 60 years of infrastructure and development in over 50 years of data center construction experience combined in just the past few months. People have delivered at scale for the most demanding customers in the world. Jonathan Mir joined as CFO, bringing 25 years of energy infrastructure strategy and project finance expertise. We have also added an SVP of construction and of power, a VP of HPC Operations and Head of permitting to oversee the execution of these critical functions. We've assembled the right team to execute on our vision. Second, we are engaging the right industry leaders as partners, T5, Turner Construction, Corgan, [ WWT ], Vertiv. These firms have built data centers for the world's largest hyperscalers not once but hundreds of times. When customers look at our project partners, which will be available on the new website when it launches tomorrow, they will see that we have also assembled the right partners to ensure better outcomes. Third, we have the capital required to bring our sites to market. As of March 27, 2026, our liquidity stands at $520 million in cash and Bitcoin, which we expect is much more than the CapEx budgeted to get us to a lease at Panther Creek, Sharon and Washington. Jonathan will go into more detail on our capital position and financing strategy shortly, but the headline is simple. We're well funded and can move fast. Fourth, a disciplined Bitcoin exit. It is clear we are no longer a Bitcoin miner. However, with strong, robust liquidity, we can have a disciplined approach to our exit strategy. We will continue to operate up until the time sites need to be prepared for construction maximizing free cash flow before selling the miners. We will also opportunistically sell Bitcoin into strength to capture and reinvest every dollar we can into HPC and AI infrastructure. Fifth, power assets that cannot be replicated. Our megawatts sit in regions with large barriers to entry, Pennsylvania, Washington State and Quebec, all have multiple year waitlists. No one is cutting the line. Our 350 megawatts at Panther Creek, 110 megawatts at Sharon and 18 megawatts in Washington were secured before the AI demand wave made these markets highly coveted. This isn't power others can easily replicate giving us competitive edge with high-quality tenants to understand these markets and are hungry for assets like ours, which leads us to our sixth point. In this market, speed to power is what drives value. For our customers, the opportunity cost of delayed deployment is huge. So the priority is getting capacity online as quickly as possible. Every day of delay is lost revenue. As a result, power availability and certainty of delivery are the primary drivers of lease economics. This dynamic has pushed lease rates higher since our Q3 call, exactly as we said it would. The opportunity in front of Keel infrastructure is real. We now have the assets and the team is ready. I'm so proud of what we built in 2025, and I'm confident in what we'll deliver in 2026 and 2027. With that, I'll turn the call over to Jonathan. Jonathan Mir: Thanks, Ben. Turning to Slide 9. I joined the team 5 months ago. My focus has been on sharpening our approach to capital allocation, strengthening our balance sheet and capital structure and ensuring the financing actions support long-term shareholder value creation. I've had a front row of the depth of talent, the operational discipline and the strategic momentum across Bitfarms. I work closely with our operations and development teams both to understand the current trajectory of our assets and to ensure our capital plans are aligned with the opportunities ahead. What stood out to me is the extraordinary potential we have driven by the quality and potential of our sites, a strong balance sheet, the best liquidity position in the company's history and a broad team that's both deeply engaged and committed to excellence. We're moving quickly and with purpose. I'm pleased to be here with you today and discuss the progress we're making. I'll use this time to walk through our performance for fiscal year 2025 and outline our current capital strategy that we believe supports the accretive growth we're targeting for 2026 and beyond. Turning to Slide 10. Before discussing our financials for the quarter, I want to briefly frame the results are presented this quarter. As of Q3 2025, the Paso Pe facility in Paraguay has been classified as held for sale. As a result, all revenues, operating costs and asset balances associated with Paso Pe are treated as discontinued operations in our fiscal year 2025 financials. So when I refer to continuing operations, I am speaking exclusively about our North American platform, the foundation of our transition into HPC and AI infrastructure. With that, revenue for fiscal year 2025 was $229 million, up 72% year-over-year. Operating loss for fiscal year 2025 was $150 million including noncash depreciation of $98 million and $28 million of impairment charges. This compares to an operating loss of $28 million in 2024, which included $102 million of noncash depreciation and $4 million of impairment charges. Net loss for 2025 was $209 million or a $0.38 loss per basic and diluted share compared to a 2024 net loss of $7 million or $0.02 loss per basic and diluted share. The differences between 2024 and 2025 were driven by a number of factors, including change in fair market value of digital assets, primarily due to the decline of Bitcoin prices and realization of gains on disposal of Bitcoin during the year. Two additional items also impacted year-over-year comparability. First, we saw a loss of $68 million, reflecting changes in our derivative assets and liabilities. Second, 2025 impairment charges were $25 million higher than in 2024. For the year, our adjusted EBITDA was $29 million compared to $31 million in 2024. Turning to Slide 11. 2025 was a deliberate year of balance sheet optimization and improvement, providing the foundation for our next phase of growth. We successfully issued an oversubscribed $588 million convertible offering, significantly expanding our liquidity. And in February, we repaid the Macquarie debt facility eliminating legacy debt, simplifying our capital structure and freeing the company from covenants. Each of these supports the pursuit of our HPC infrastructure strategy. The Macquarie facility had been originally used to accelerate development at Panther Creek, funding critical project activities, including long lead time item procurement and substation work. Retiring the facility was a strategic decision, strengthens the balance sheet and gives us the flexibility to secure a more cost-effective financing at either the parent or project level. Our current cash position of $520 million provides the runway to advance Panther Creek, Sharon and Moses Lake through lease execution without accessing capital markets. Though we may do so if attractive opportunities arise that improve our ability to deliver the best possible long-term risk-adjusted shareholder returns. Macquarie was an excellent partner, and we appreciate their support so early in our pivot to HPC AI infrastructure. Turning to Slide 12. As we pivot to commercialization of our development sites, we have a clear financial strategy based on three principles. Capital allocation, capital formation and capital structure. Taken together, they are designed to deliver the best possible long-term risk-adjusted shareholder returns. First, capital allocation. We deploy capital into projects where the earnings potential exceeds their weighted average cost of capital. We rotate capital from businesses that are noncore or earning less than optimal returns and deploy the capital into higher return investments. Second, capital formation. Our financing strategy is designed to fund our very large growth opportunities while maintaining the liquidity needed for a stable base of operations. We will be opportunistic in our financing execution. We will fund construction of our data center projects using project or parent level bet and project or parent level equity or equity-linked offerings. We're taking a disciplined approach and at this time, are well capitalized to actively commercialize and execute leases across Panther Creek, Sharon and Washington. Third, capital structure. Our capital structure is designed to capture the best possible long-term risk-adjusted shareholder returns while also retaining overall corporate flexibility and support growth. Our objective is to operate with a deliberate liquidity strategy in order to enable clear-headed commercial decisions and capital allocation decisions rather than having liquidity drive time lines. Stepping back, our road map is clear. We are building a regionally focused high-growth HPC AI infrastructure platform, grounded in disciplined capital allocation, a strengthened balance sheet and a development cadence that maximizes returns and minimizes risk. We're funded through the key derisking stages, permitting and leasing across Moses Lake, Sharon and Panther Creek and we're entering 2026 with momentum, optionality and a balance sheet engineered for growth. We have the right people, assets, liquidity and strategy and we're well positioned to capture for our shareholders the long-term value potential we have today. With that, I'd like to return the call to Ben for closing remarks. Ben Gagnon: Thanks, Jonathan. A little over a year ago, as our team began actively integrating AI into both our business and our daily lives, we came to a realization. This isn't just another technology cycle. It's a paradigm shift. More comparable to the industrial revolution than the Internet revolution. The fundamental measure, productivity capacity is no longer calories or joules, but tokens. This became strikingly clear 2 weeks ago at NVIDIA GTC, where I witnessed hundreds of companies applying AI to everything from straightforward tasks by cleaning and image generation to extraordinary complex applications, including protein folding, cystic simulations and even brain surgery. Walking the conference floor, speaking to the attendees, one thing was unmistakable. We've only begun to scratch the surface of AI's potential. Yet even in these early days, AI is already empowering individuals, communities and companies to accomplish exponentially more. We're witnessing Jevons Paradox unfold simultaneously across every industry, thanks to AI, where improved efficiency can paradoxically drive higher, not lower demand. It is literally never cost less to transform an idea into an action, a product, an image, a refined concept, a service or countless other outlets. The possibilities are truly limitless, and while no one can predict exactly how AI will reshape our future, uncertainty remains. It will require enormous amounts of power. Our 2.2 gigawatts of capacity and strategically position land across Pennsylvania, Washington and Quebec sit directly in the path of this transformation, and we intend to capitalize on that opportunity for our shareholders. We look forward to the opportunities ahead. With that, I would like to open the call to Q&A. Operator, please go ahead. Operator: [Operator Instructions] And our first question comes from Mike Grondahl with Northland. Mike Grondahl: First question, Ben, you talked about your decision not to go the GPU rental route at Moses Creek. And just the colocation route, could you talk a little about what a couple of the major drivers were that got you to that decision? Ben Gagnon: Yes, it's a great question, Mike. When we first started talking about in Q3, we were always evaluating this alongside with the colocation. We're trying to maximize the value for shareholders. So we're always going to evaluate multiple different business models at our sites. And because they have the lowest cost energy and all these other benefits, we thought it would make a lot of sense. But as we've continued to have increasing amounts of customer conversations for Washington and other sites. It was just really clear to us that the best opportunity for us is to just remain a pure-play infrastructure developer and owner and let these customers who really want these megawatts lease these megawatts. Mike Grondahl: Got it. Got it. And then maybe secondly, you articulated, I'll say, a philosophy a quarter or 2 ago about waiting and waiting on signing a lease as terms were continuing to improve kind of implying you're going to be really patient and wait on a lease. Could you kind of update how you're thinking about that lease execution strategy and the potential timing around it? Ben Gagnon: Yes. Our strategy on lease execution has been consistent. It remains consistent today. Our view is that the best way to maximize value for shareholders is to get the best terms in a lease because that's going to be what is going to be driving our NOI and our multiple. And so when we're looking to sign 10- to 15-year agreements, it's really important for us to take the -- maybe a little bit more time than investors may want us to in order to get better terms for longer. When it looks at what is really driving the value in these lease economics, one of the biggest elements is risk, and we've spoken to this multiple times over the last couple of months. And the biggest risk for most of the people -- to go out there and have conversations and get a lot of interest. And in some cases, you could even sign a lease prior to getting permits. But all of that risk is going to be priced into the agreement, you're going to be locked into it for 10 to 15 years, and that's going to negatively impact the long-term value that we're creating for shareholders. So our strategy has been incredibly consistent. And the benefit for us is that we are operating in high demand markets with high barrier to entry. So it takes a little bit longer to get permits going in Pennsylvania or in Washington than it does in Texas, which is the easiest market in the United States for that. But we believe that drives a lot of extra value because it's way more scarce, it's way harder to acquire and there's just not as much optionality. Operator: Our next question comes from Brett Knoblauch with Cantor Fitzgerald. Brett Knoblauch: Maybe to start, could you maybe just go into detail on what permits at what sites you guys are waiting to receive? Ben Gagnon: So permits is a complicated process, and we are develop -- we're getting permits across multiple sites in multiple jurisdictions. So they all have different rules, different regulations, different time lines, different reviews, different authorities. So it's far too much detail to get into exactly what permits are remaining on all the different sites. But we are continuing to make good progress and kind of -- we're looking at the visibility over the next couple of months. And with what we've had so far with the community engagement success that we've had so far, we think that in the coming months, sometime around the mid- to late summer time. we should be achieving the full permitted status across at least one, if not all of the sites. Brett Knoblauch: And then maybe just on the leasing environment across the different sites that you guys have. I guess we were under the impression that maybe Sharon would be first to go given it's relatively further along. Is that still how you guys are thinking about it? And then in the presentation when you guys kind of list the power pipeline and road map. How much of that is from generation on site that you guys are looking into? And do you have any update on where you guys are with respect to sourcing that generation? Ben Gagnon: Yes, sure. So the -- to answer the second part of your question first, all the power that we're talking about developing for our HPC and AI data centers right now is grid connected. So the two operating power plants that we have at Scrubgrass and Panther Creek. Currently, that math is not in those charts for the secured capacity or the site development plans. But in Scrubgrass particular, we are working to expand the generation capacity there with natural gas. So we've been working to tap into the Tennessee Natural Gas Pipeline. We're achieving pretty good results there with the engineering firms. There's still probably another month or two to go before we're getting a clear path forward on the engineering plans. But Scrubgrass is our more of our pipeline site. And so those -- that power generation opportunity is more of a 2028 and 2029 time line. Everything else is grid connected, it's secure today or it's currently active. And sorry, Brett, I'm blanking on the first part of your question, would you mind repeating it? Brett Knoblauch: Yes. Just on maybe the cadence of which sites are -- quicker to go? Ben Gagnon: Yes. So really, that's going to be driven by success on permitting time lines in the customers. So all three of the sites, Moses Lake, Sharon and Panther Creek are all actively in our go-to market right now. Every single one of those has customers engaged under NDA, and they have for quite some time. And so we're continuing to push forward on those conversations and those negotiations. Really, I think what investors should think about with regards to permits, permits are more of a closing condition to a lease, right? They're really not a starting condition to a negotiation. So we have these conversations and these negotiations simultaneously while we're working towards permitting. As permitting gets closer and closer, the negotiations will also get closer and closer in tandem and the first site to get leased is likely to be the first site to be permitted. Operator: Our next question comes from Stephen Glagola with KBW. Stephen Glagola: Just on that last point, if you could clarify the sequencing here between like notice to proceed and lease execution. So in other words, like can you pre-sign leases contingent on notice to proceed? Or is like notice to proceed required before any major customer would commit to a lease? Ben Gagnon: For a customer commit to binding in our view, they're going to want NTP, and that's based on the number of conversations that we are continuing to have and there probably are some customers who would be interested to sign prior to NTP, but those aren't the investment-grade counterparties that we're really seeking to engage with. Stephen Glagola: Okay. And then just one more. How are you thinking about like Vera Rubin hardware availability in '26 and like early '27? And to what extent could that variability in supply influence the timing of lease discussions at your sites? Ben Gagnon: Yes. That's a good question, Stephen. We've been talking about Vera Rubin, I think, since Q3 call because all of our sites are basically coming online in 2027. So we're trying to make sure that they are designed for the highest level of equipment that's coming out in '27 and '28, which is the Vera Rubin. In terms of supply, we haven't seen any impact so far. I understand there's always geopolitical uncertainty in the world that may impact those supply chains. But given that energy is such a huge bottleneck, and it's always been a huge bottleneck on the growth. I don't think that there is going to be a geopolitical situation that's going to make the bottleneck change from energy over to GPUs. So we don't have any expectation right now that, that's going to have any impact on leasing or demand for sites because power is still such an extreme bottleneck. It's hard to imagine what's going to overshadow that geopolitically. Operator: Our next question comes from Michael Donovan with Compass Point. Michael Donovan: Congrats on the progress. Can you provide an update on ESA progress, specifically Panther Creek's ISA to ESA conversion? Ben Gagnon: Yes. So that's a great question, Mike. As investors probably know, we have 350 megawatts secured ESA with PPL. But in addition to that, we also have an ISA that enables us to draw down approximately 60 megawatts from the grid, and that's associated with the existing transmission line and substation for the power plant that we currently have operating. In order to get that converted over, it's really more of a regulatory matter. And so it's hard to put an exact time line as to when those stamps are going to be received, but there's no infrastructure that needs to be built. There's no CapEx that needs to be spent. Really, it's just a matter of getting the regulatory approval to convert a nonfirm service into a firm service, and that would enable us to increase our capacity beyond 350 megawatts to what we probably expect is going to be maybe 400 megawatts or possibly slightly more. We expect this is going to happen this year, but it's hard to put an exact time line on it, given it's a regulatory matter. Operator: Our next question comes from Brian Kinstlinger with AGP. Brian Kinstlinger: Last quarter, Ben, you communicated, you expected the GPU as a service and Moses Lake site would be targeted for, I believe, the first quarter for go-live. How are you shifting to co-location change the timing if at all? And my second question is, can you talk about also how the global memory shortage is impacting your site development or changing your near-term needs or planning for lead times? Ben Gagnon: Yes. So two parts to that question. In terms of switching from a GPU as a service to co-location just changing the business model doesn't really impact the development time line. So we don't really see any delay there associated with changing from GPU as a service, just to co-location. Really, it's just a matter of how we want to allocate our capital and how we want to focus the business. When it comes to the memory shortage. As a pure-play infrastructure developer and owner that really is not coming into our calculus very much, mostly that's a customer situation for them to resolve with their own supply chain because we're not the ones investing in the GPUs and the compute and the servers. Operator: Our next question comes from Martin Toner with ATB Cormark Capital Markets. Martin Toner: Good morning. Can you guys elaborate or [indiscernible] can you kind of give us some time line thoughts there? Ben Gagnon: So I'm going to repeat the question because it was a little quiet, just in case nobody else or other people had difficulty hearing. I believe the question was, can you give some time lines as to how we might be able to expand Panther Creek to 500 megawatts and beyond? So in order for us to move beyond the 350-megawatt ESA that we have secured, there's really two sources for expansion. The first is converting over that ISA from non-firm service to firm service that I just spoke to a minute ago. And that's really a regulatory matter that we expect to be resolved sometime this year. It could be tomorrow, it could be a few months from now. And then when it comes to expanding beyond that, what we have to do with that is we have to actually have new power applications. The good thing here is that the utilities are actually looking to invest in new generation in the area. So in this particular instance, and we weren't actually applying for new power. We actually have the utility call us and ask us how much more power we could take on site. Given the bottleneck constraint on power, that was obviously a very welcome call over here at Bitfarms to receive. And it's a pretty unusual one in the industry, but they're looking to scale up generation capacity in the area, specifically to service our site at greater capacity. So this is probably going to be 2 to 3 years time line because there's a lot of process involved with spinning up new generation and building those new transmission lines. But for a lot of our customers, what they really want is the fastest pathway to energization and a clear path to scale over multiple years. And so this really lines up with what the hyperscalers and what the neoclouds are searching for. Martin Toner: That's great. Hopefully, you can hear me better. Can you clarify when you expect to sign your first lease? Ben Gagnon: So I can't get into a specific time line. But in terms of milestones, as I spoke to earlier, it's really about clearing NTP as kind of the last closing condition or last milestone for us to sign a lease. So I think for the investors and the analysts on the call, the important thing to keep track of, especially over the next coming months is the continued progress that we have towards NTP because once NTP is clear, that's basically the last thing standing between us and a signed agreement. Martin Toner: Got it. Great. And last one from me. Can you talk a little bit about why mining exahash in Q4 was at the level that it was at? Ben Gagnon: So we continue to scale back our mining exposure as we continue to focus on our U.S. HPC infrastructure investments. So we haven't made any investments into Bitcoin mining. We're not spending any money on upgrades or new miners, and we're actively working to scale down the fleet and actively working to spin off assets like we have in Paraguay that are not suitable for conversion. So investors should continue to expect our hash rate to continue to trickle down over 2026 as we continue to execute on this transition to HPC and AI. Operator: Our next question comes from Mike Colonnese with H.C. Wainwright & Company. Michael Colonnese: So, Ben, I'm just curious, after securing the remaining permits across the three sites, which sounds like likely to take place in the coming months here, what does the time line look like from a data center construction and delivery standpoint? It sounds like you're pretty optimistic that revenue generation could commence as soon as next year, but any additional color there would be helpful. Ben Gagnon: Yes. I mean, really, this is the year of execution in 2027 is the year of delivery. And so at all three of our projects that we talked about today, Panther Creek, Sharon and Washington, we all expect them to come online and start delivering megawatts and start generating revenue to customers in 2027. We'll continue to provide updates as we go along. And I think once we have cleared NTP and we have signed leases, there's going to be a lot clear visibility that we can provide to investors for each specific project and their specific time lines. Michael Colonnese: Got it. And then back to Bitcoin mining operations, it sounds like you're progressively going to be scaling back hash rate as you bring some of the HPC AI data centers online. I guess what's the best way to think about hash coming offline and kind of flowing through your operating results over the near term here? Ben Gagnon: I'll speak to it at a high level and then maybe I'll pass it off to Jonathan for some further clarity. But right now, the Bitcoin mining remains profitable, but it's not it's not very -- it's marginal. So it's still contributing to the business. But really, it's not the focus of the business. It's not where we're investing our time, it's not where we're investing our efforts. And given that we have been so successful last year in raising capital and strengthening our balance sheet. It's really not super impactful for the developments that we have this year, the operations or the CapEx. So we'll just continue to scale that down, trying to maximize value in the disciplined exit. If it makes more sense to maybe sell some miners a little bit earlier then we might need to in order to begin instruction, we'll evaluate that as we will always do to maximize value for our shareholders. But really, we kind of see this as a pretty minor element of our balance sheet and a minor element of the financial plan for this year. Jonathan, do you want to add anything further? Jonathan Mir: Only that when we think about our liquidity going forward, the strategic objective is to ensure we are well capitalized through the lease process and beyond without the need to raise any new capital in the markets and that takes into account the current state of Bitcoin mining operations. It's not assuming any improvement in the economics there. So our plan is built on conservative assumptions around the status of the Bitcoin market. Operator: Our next question comes from Nick Giles with B. Riley Securities. Nick Giles: Good morning, Keel team. In the interim period where Bitcoin mining operations are wound down, but kind of pre-revenue generation on the HPC side, could the generating assets at Panther Creek and Scrubgrass be utilized in any way such as the PJM capacity auction? Ben Gagnon: So those power plants do actually participate in PJM capacity auctions. We've done that for quite some time. And so we do benefit from the capacity payments that we received there. Nick Giles: Got it. Okay. And any order of magnitude of what those could be kind of in the 2026 planning year? Ben Gagnon: So I mean, really, it's -- we've kind of maxed out on the capacity auction payments. They set a ceiling, and that's where the capacity auction payments closed. Nick Giles: Got it. Understood. Maybe one for Jonathan. You've made some progress on the capital structure, but just was hoping for any additional comments you might have on what you're looking for in an initial debt package, how you're seeing term shift and kind of what tools you have at your disposal during construction and kind of post energization. Jonathan Mir: Good question. Thanks, Nick. So our basic approach is to compare and contrast our financing options down at the asset level and upstairs at the parent level. And certainly, one of the things that we've seen in the market that has caught our attention like everyone else, is the tightening of spreads between folks issuing high-yield debt in the market that would seem like quite attractive levels for strong investment-grade counterparties or credit wraps. And those converging towards the levels seen in bank-originated classic construction of project financing. So we'll be -- each of those has its own advantages in terms of simplicity of managing the actual capital once it's raised versus negative carry costs. And as we get closer to a funding point, we'll make the decision as to what seems best for our shareholders in terms of how we decide to finance. I'm sorry, Nick, I was just going to say that the markets for our space and for infrastructure generally seem calm right now. Operator: Our next question comes from Brian Dobson with Clear Street. Gregory Pendy: It's Greg Pendy in for Brian Dobson. Just I guess one final one. Just I guess, one final one. Just on the redomiciling to the U.S., are there any implications to costs or structural implications in terms of ownership that we should be aware of as you enter this over the next couple of days? Ben Gagnon: One of the benefits and reasons for the redom is that we will now be eligible for inclusion in indices that require -- want to be a U.S. domiciled company. So for example, we'll be eligible for inclusion in the Russell 1000 and the Russell 3000 as well as for ownership in any other fund who was otherwise limited to the purchase of U.S. securities. We view that as being quite helpful in terms of moving our shareholder base to one that is institutional and long term. There are no other -- there are no cost or flexibility implications in our end. We simply see this as a nice path forward with a lot of benefits for our shareholders. Operator: Our next question comes from Bill Papanastasiou with Chardan Capital Markets. Bill Papanastasiou: Just wanted to touch on the Washington side and decision to shift towards colo. Can you confirm that this won't have any material impact on the purchase commitment that was entered into November? Or is the team considering the shift in development allocation to other sites? Ben Gagnon: Thanks, Bill. No impact on the capital commitments and the equipment we've already purchased for the Washington site by changing business models. In fact, actually, it just helps to reduce the CapEx because we're no longer paying for the compute. Bill Papanastasiou: Understood. And then how should we generally be thinking about maintenance CapEx on existing Bitcoin mining sites as you gradually shift over to AI HPC here? Ben Gagnon: We're not making any investments into the Bitcoin mining sites. Basically, we're just continuing to keep them up and running. And so no further investments are being made in the sites into new sites or into new miners. Operator: Thank you. This concludes the question-and-answer session. I'd like to turn the call back over to Ben Gagnon for closing remarks. Ben Gagnon: Thank you very much, everyone, for joining our call today and really look forward to speaking to you next time as Keel Infrastructure. Have a great day. Operator: Thank you for your participation. This does conclude the program. You may now disconnect.
At least 5%. That is how much the major indexes have fallen in the past month of trading, tumbling for weeks after the U.S. and Israel launched strikes against Iran at the end of February.
Brandon Pizzurro believes there's more risk in a risk-off attitude. He offers his reasoning behind staying investing in equities during times of geopolitical stress.
The Strait of Hormuz risk creates a compelling setup for agriculture and fertilizer equities like CF, NTR, and IPI. I see the most attractive risk/reward in downstream sectors—fertilizer producers, broad agriculture exposure (via DBA), and SOYB October calls.
Wall Street is set to conclude the first quarter of 2026 with an explosive exclamation point, as investors ignited a massive relief rally on hopes of a geopolitical de-escalation. In a stunning display of market resilience, the Nasdaq Composite surged by 3.6%, while the Dow Jones Industrial Average popped 2.2%, marking a significant turning point for investor sentiment.
U.S. equity markets experienced broad-based weakness this week, with growth-oriented and technology-heavy segments leading the decline, as reflected in notable pullbacks across major ETFs such as QQQM, XLK, and XLC. The divergence in sector performance highlights an ongoing rotation beneath the surface, as investors selectively reposition toward inflation-sensitive and resource-linked assets while trimming exposure to high-multiple growth sectors.
US stock benchmarks are now attempting a more significant bounce from recent lows as the war narrative eases. Taking a step back to daily charts for stock indexes to determine if today's rebound is a bull trap or an actual opportunity.
Despite inflation fears, U.S.-Iran uncertainty, and private credit concerns mounting a bearish narrative, Samuel Diarbakerly says "the bull is sleeping, not dead." Even if markets fall another 5% to 10%, he expects an economic "coiled spring" to push equities back toward all-time highs.
Stock markets were up sharply Tuesday afternoon on hopes the conflict in Iran could be coming to an end.
The Fed hasn't been able to achieve its 2% inflation target in more than five years.
The Fed president said the central bank should be prepared to address elevated inflation proactively so that it doesn't get stuck near 3% in the long run.
Renewable energy stocks are certainly worth taking seriously for investors.
Subscribers to Chart of the Week received this commentary on Sunday, March 29.
Subscribers to Chart of the Week received this commentary on Sunday, March 29.
The dollar's role as a safe haven triggered the rally after the Iran conflict broke out on Feb. 28.
It's been one year since “Liberation Day” rewrote the Wall Street playbook. Investors are being put to a different test in 2026.