Hello, everyone. Welcome to today's webcast on HIVE Digital Technologies Financial Results for the Quarter Ended September 30, 2024. My name is Nathan Fast, Director of Marketing and Branding at HIVE, and I'll be your moderator for today's call. Before we get started, on Slide #2, I would like to briefly note the disclosures for today's presentation. Except for statement of historical fact, this presentation contains forward-looking information within the meaning of the applicable Canadian and U.S. securities regulations. These forward-looking statements are based on expectations, estimates and assumptions as of the date of this presentation. Further, in addition to discussing results that are calculated in accordance with International Financial Reporting Standards, or IFRS, we will also make references to certain non-IFRS financial measures such as adjusted EBITDA. For more detailed information on our non-IFRS financial measures, please refer to our management's discussion and analysis of our financial results that was published earlier today, which can be found on our Investor Relations website. On the next slide, I'm pleased to introduce today's presenters: Frank Holmes, Executive Chairman; Aydin Kilic, President and CEO; and Darcy Daubaras, Chief Financial Officer. I would now like to hand the presentation over to Mr. Frank Holmes for a macro recap of the quarter. Frank?

Thank you, Nathan, and thank you to shareholders. I'm going to try to give a macro and then turn over the more granular material information to the HIVE team, Darcy and our CEO, Aydin. Next, please. I always like to start this off because it's been a heck of week since the elections. I think our stock has surged about 56%, but it's a nonevent for the DNA of our volatility over a 10-day period to be up or down 17%, which is significantly higher than the S&P 500, like a 5x. And the same thing on the down corrections, the volatility is much greater. And this changes over time. MicroStrategy used to have less volatility and now it has more volatility than what we have for shareholders. Next, please. Well, one of the big factors driving all this besides the enthusiasm of President Trump winning has, as you've seen this for many alternative asset classes like Bitcoin, it's the all-time rising global debt. And as the all-time global debt rises, more and more countries are greatly concerned. In particular, you see the Central Banks are buying gold. The U.S. government maybe now as a policy will start buying Bitcoin. All that enthusiasm relates to the alternative assets, global debt climbing. And I don't see anything changing this for this century because too many of the G20 countries are still practicing what's called MMT, Modern Monetary Theory, which believes that you can use monetary policies to rightsize an economy. You can throw any type of socialistic policies, just print more money. And that really is a process and a stepping stone for devaluing the country's currency. So this is what makes Bitcoin, in particular, HIVE position so well in the rising debt levels. Next, please. One of my favorite books…

All right, Frank. Thank you for that excellent macro and strategy overview. Now I'm going to kick off an executive summary for this quarter, period end September 30. We ended this quarter with $22.6 million of total revenue, of which $20.8 million was from our Bitcoin mining business unit and $1.9 million came from our HPC business unit, where AI compute is run on our fleet of NVIDIA GPUs. We generated an overall gross operating margin this quarter of $1.1 million, which I think is commendable considering the very bearish mining economics of this last quarter, which have been the toughest on record where hash price has been between $40 to $50 a petahash per day on average. This is the first full cost-halving quarter that the Bitcoin mining sector has navigated as the previous quarter period end June part of April was still pre-halving economics. This quarter, July, August, September, all post halving. And even still, we generated a very respectable $5.6 million of adjusted EBITDA and moreover, ended the quarter with over 2,600 Bitcoin mined with green and clean energy on our balance sheet. Furthermore, we've realized an annualized ROIC of 15% this quarter. And as of November 11, our share price includes $2 of net cash and Bitcoin value per share, which is very, very attractive, I would say. And we're going to dive into that a little bit more. Next slide. So overview of the Bitcoin mining business. Again, we are a pioneer in using green energy for Bitcoin mining. We lead the sector with best-in-class uptime and efficiency. We reached 5.6 exahash in October, and we have very exciting plans to expand to 12.5 exahash by summer of next year. Again, we do this all with our very disciplined capital allocation strategy. We strive for…

Great. Thank you, Aydin. At this point of the presentation, I will take you through a snapshot of the period, looking at the most recently completed quarter and some financial indicators. We are providing certain non-IFRS measures in the presentation today, as was mentioned earlier. The company believes that these measures while not a substitute for measures of performance prepared in accordance with IFRS, provides our investors an improved ability to evaluate the underlying performance of the company. These measures do not have any standardized meaning prescribed under IFRS and therefore, may not be comparable to other issuers. Further details are found in the management discussion and analysis for the 3 and 6 months ended September 30, 2024. Moving on to the next slide; the theme of this quarter's result is reflecting the full impact of the halving event that occurred earlier this year, along with the continuously rising Bitcoin difficulty rates that we're all experiencing. During this most recently completed quarter of September 30, 2024, we recorded $22.6 million of revenue and $5.6 million profit in adjusted EBITDA. This was driven by production of 340 Bitcoin equivalent mined. On the next slide, we continue to have a very healthy balance sheet. We take pride in maintaining this healthy balance sheet and our cash position was $7.2 million at September 30, 2024, in addition to $165.2 million in digital currencies, primarily consisting of Bitcoin. We also had $6.6 million in amounts receivable and prepaid, a slight increase from the prior period. The total market value of our strategic investments increased by 60.5% from the prior period to where it was at September 30 of $24.4 million. We have a strong net cash position and healthy working capital to support our operations and growth objectives with a current ratio of 5.6,…

Thank you, Darcy. That concludes the presentation for today. We will now begin the question-and-answer portion of our call. [Operator Instructions] I see we have a few hands raised. I will ask to unmute Bill from Stifel.

Congrats on breaking ground in Paraguay. For my first question, I was hoping you could share an updated capital allocation strategy as it pertains to HPC initiatives. And curious to hear how that's weighing on the back of management's mind on -- with the recent rise in mining economics?

Hey Bill, it's Aydin here. Thanks for that question. So we've been focusing on the infrastructure side of the HPC business earlier this year, a couple of months ago, we noted a pipeline of conversion of existing crypto mining assets, data centers that we own. And so we've kept it high level, and we've been focusing on cash flow. So right now, we are working on a few things that we haven't specifically commented on yet. So that's about as much as I could say right now. But the economics for both business units are both very attractive. And that's -- as far as HPC, that's sort of the extent of what I could say right now. And just stay tuned for more announcements. But we are gearing up for next-generation compute as the data center requirements to power NVIDIA's next generation of GPUs will be a cut above what exists today on the market.

And just as a follow-up to that, can you offer more color in terms of what the outlook could be for gross margins on the HPC side? Has your targeted margin profile changed at all?

No. So I think what's going to happen is the latest hardware -- like everybody knows that the H200 is out, and that's the next version of the H100. It has twice the amount of vRAM. So really, we see the indicative pricing for H100s and H200s in the $2 to $2.50 per hour range. And so when Blackwell comes out next year, how will that affect the existing H100, H200 pricing and what will Blackwell rent out at. And so if you look back to when the H100 came out and the A100, the A100 had really good staying power even to this day. And so if you think of the Melting Ice Cube analogy of dollar per GPU per hour pricing, it decreases a lot slower than in crypto mining. So I think for the most part, you could keep your margins as an analyst similar as new gear comes online. If you wanted to be more bullish, you could project perhaps upwards of $3 an hour for Blackwell, but that's just narrative and commentary. I think because Blackwell has substantively better performance than the H200, a lot quicker flop speed, even more memory, et cetera. So it will -- I think the market will determine what they'll pay as a premium for that improved compute performance. I hope that's helpful.

Yeah. I appreciate the color there, Aydin. I just wanted to touch on Paraguay as well. Given the election of pro-crypto President Donald J. Trump, curious to hear whether you're hearing anything with respect to the government's approach to Bitcoin mining. Has their approach shifted at all? I recall that there was a tariff increase that had capped expansion plans there to 100 megawatts. Is there a potential to grow that out after the first site is completed?

We think that Paraguay is a very exciting jurisdiction to be doing business in. As Frank mentioned, he had met with the President. I plan on traveling there in December. And as mentioned, we've just broken ground, which is very exciting. So our first 30 megawatts will be completed in calendar Q2. So we are very mindful. We've done business in numerous jurisdictions globally. We've done -- we're very weathered in Sweden, all throughout Canada and Iceland. And crypto mining globally, I think regulatory headwinds, it's just part of the game, and you have to know how to navigate them, right? So in Quebec, right, back in the day, that was the first province in Canada to issue a moratorium. Guess what, we're still happily hashing in Quebec. Same thing with New Brunswick. And in fact, we even have a Demand Response Program in New Brunswick, which is the first of its kind. So I'm trying to just indicate at a very high level by having the right strategy, embracing authorities, be it the utility companies, the federal or regional governments, there's always a strategy. If there's a will, there's a way. And that's all I'll really comment on that. But I have a positive outlook on Paraguay, and I'm really excited to be going down there next month.

Thank you for that question, Bill. I will next ask Lucas from B. Riley to unmute [Operator Instructions].

This is Nick Giles asking questions on behalf of Lucas. Frank, Aydin, thanks for the comprehensive presentation here. My first question is just curious for an update on how you're thinking about organic versus inorganic growth. Any updated view on M&A in the space? And does the transition of several of your peers to HPC make it more or less likely that we'll see consolidation in your opinion?

I think that M&A has been an ongoing topic of discussion since the beginning of the sector, really in the capital markets in 2017. What the trend appears to have been is people are more interested in assets rather than acquiring the adjacent teams because usually, you're paying a premium for those teams. And unless it's a real rock star team, chances are people are really just going to be interested in the assets. So of course, we saw the whole Bitfarms Riot saga unfold. I think where you see a really rock star team with solid assets, you might see M&A. But then at the same time, I think it's just the commercial factors that really drive those discussions. So if it's accretive and I think the culture of both teams align then it makes sense. And that's about as much as I could say for M&A.

Next, we'll go to Darren from ROTH.

Just if I could, a two-part question here. So maybe Frank and Aydin, just how have your strategic thoughts changed as it pertains to your Bitcoin and digital infrastructure business as it relates to the election sort of pre-election, post-election? Second part of the question, I know you guys are breaking ground in Paraguay, but how are you thinking about adding power -- usable power to your portfolio?

So I think the Trump administration has been very, very pro- Bitcoin. If you go back to some of the speeches that he gave in Nashville, even Cynthia Lummis, it was very, very pro- Bitcoin. So we're excited. We welcome it. He's got Vivek Ramaswamy and Elon joining the Department of Governmental Efficiency, DOGE, which obviously is a cheeky nod towards crypto. So we think it's great. And as far as growing our power elsewhere, I can only comment on what we've publicly press released, but we're constantly evaluating opportunities to accretively scale the business. Again, we really want to have effective allocation of capital for our shareholders. And that's really what I could tell you, Darren, standby for more press releases.

Thanks for that question, Darren. Next, we will go to Brett from Cantor.

Your goal kind of being 2% of the Bitcoin mining network, is that like a firm percentage? I guess I'm looking at your target of 12.5%, that's less than the 2% of the current network hash and I would assume network hash will be a bit higher this time next year. So I guess how should we think of your long-term targets as a percentage of total network hash?

Hey Brett, yeah, it's Aydin here. So that's a great question. I'm a very mathematical guy, and I could open Excel sheets and we could look at the time variant nature of Bitcoin mining network. But what we really try to do and what I've trained myself to do is just to provide simple run rate metrics that are easy to walk away. I'm very much aware that 2% could represent much more than 12.5 exahash, but 2% is our target. And so what we've got secured, construction has broken ground, ASICs allocated, etcetera, we have a clear path to 12.5 exahash. So that's what we are putting in the presentation and in our projections. So for all the analysts, it's really easy for them to have concrete numbers of where we'll be. But of course, there's always more opportunity to expand beyond the 12. And our target really is to be at 2% of the network, right? So yes, I'm aware that, that would constitute more than 12.5, and we certainly have plans to grow beyond the 12.5. 12.5 is a concrete number. Again, the site has broken ground. We're building 100 megawatts. We've just ordered 6,500 Canaan to upgrade our existing fleet. So I hope that answers your question.

We have time for one more question. We will give the floor to Mike from Northland.

Your 30-megawatt HPC site, can you kind of comment on the demand you're seeing for that and the type of customers you're talking to and maybe when you could break ground?

Yes. So I'll -- and just one more thing on the 2% of the Bitcoin network. Effectively, for modeling purposes for all the analysts, that would be producing 9 Bitcoin a day, right, based on current [indiscernible] yeah. So just for Brett. Now my good question. So the amount of GPUs to fill up, like if you have 30 megawatts of utility load, a 1.3 PUE, you're looking about 24 megawatts of IT load. That is a lot of GPUs. So I think I commented in some previous conversations, the intent, like a reference architecture cluster for Blackwell's 8 racks, right? So that's 8x 72. If you do an NVL72, that's 576 GPUs. If you do it with, say, for example, an H200 cluster, it's 32 nodes, 32 x 8 is 256. So what you're doing is you're building multiples of reference architecture clusters based on NVIDIA's design. And the goal is to find 24-month contracts for -- 12- to 24-month contracts for a reference architecture cluster. Again, that will be 256 GPUs if you're doing an H200 cluster or 576 if you're doing a GP200 cluster. And so you would be seeking client demand in multiples of that. So again, we haven't press released anything specifically, but I'm giving you the kind of tech backdrop and how the sensible way to scale that business is. So one would not go by 24 megawatts of GPUs, which would be hundreds and hundreds of millions of dollars. What you would do is you would buy a cluster, deploy it, pre-lease that and scale from there. And with the surplus capacity, you could always do colo. So I hope that answers your -- and when I say colo, you're renting out rack space for whatever it is, $0.30 a kilowatt hour sort of and rent it to other users downstream. We do, of course, want to build our own and we have built our own GPU clouds and rent because the GPUs rent for, again, as the numbers I cited earlier, $2.50 an hour per GPU, which, again, for an H100, H200, because one GPU is approximately 1 kilowatt. That translates to $2.50 a kilowatt hour, right? Or if you rent the card for $2 an hour, it's $2.50 a kilowatt hour as well. So I'm just distinguishing between dollar per GPU per hour and then dollar per kilowatt hour, right? So we underwrite everything in dollar per kilowatt hour. So I hope that was helpful for you.

Just following up, any comment on the demand you're seeing or when you might break ground?

So we haven't press released that. So standby. Although I'd love to provide you more color, I just have to say stay tuned.

All right. Thank you again to all of our analysts for the thoughtful questions. That concludes our Q&A session and HIVE's Q2 2025 earnings call. Thank you again to our attendees and analysts for joining. We look forward to speaking to you again soon.