Good day, and thank you for standing by. Welcome to the IREN Q3 FY2025 Results Conference Call. At this time, all participants are in a listen-only-mode. Please be advised that today's conference is being recorded. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] I'd now like to hand the conference over to your speaker today, Mike Power, Director, Investor Relations.

Thank you, Josh. Good afternoon and welcome to IREN's third quarter FY2025 results presentation. My name is Mike Power, Director of Investor Relations and with me on the call today are Daniel Roberts, Co-Founder and Co-CEO; Belinda Nucifora, CFO; and Kent Draper, Chief Commercial Officer. Before we begin, please note this call is being webcast live within accompanying presentation. For those that have dialed in via phone, you can elect to ask a question via the moderator after our presentation. I'd like to remind you that certain statements that we make during the conference call may constitute forward-looking statements. And IREN cautions listeners, that forward-looking information and statements are based on certain assumptions and risk factors that could cause actual results to differ materially from the expectations of the Company. Listeners should not place undue reliance on forward-looking information or statements. Please refer to the disclaimer on Slide 2 of the accompanying presentation for more information. Thank you, and I will turn the call over to Dan Roberts.

Thanks, Mike. Good afternoon, everyone, and thank you for joining IREN's third quarter FY2025 earnings call. I'm Daniel Roberts, Co-Founder and Co-CEO of IREN. And today, we will provide an update on our financial results for the quarter ended March 31, 2025, along with some operational highlights and some strategic updates from both our Bitcoin mining business and our AI infrastructure vertical. We will then end the call with Q&A. So starting with the highlights. Q3 was another strong quarter operationally and financially. We delivered our second consecutive quarter of profit after-tax where we posted $24 million in net profit. This reflects a 28% growth quarter-on-quarter. Revenue then hit a record $148 million for the quarter driven by growth in both our Bitcoin mining and our AI Cloud segments. EBITDA came in at just under $83 million also a record for us. Operationally, we continued our cadence of delivering 50-megawatts every month of data centers with energization of Childress Phase 4. And during the quarter, we averaged 29.4 exahash of operating mining capacity, which represents a nearly 5x uplift year-on-year. So these results reinforce both the earnings power of our growing data center platform, along with the strength of our procurement engineering, construction, mining and AI teams who simply continue to execute. We anticipate this earnings momentum to continue into fiscal Q4 as we further progress on our key growth initiatives, which I'll now come on to. So looking forward, our strategy is anchored across value accretive investments in both Bitcoin mining and AI infrastructure. On Bitcoin mining, we are on track to reach 50 exahash of installed capacity by June 30. That milestone represents a 4x increase from only 10 exahash in June last year and cements us as one of the world's largest and importantly lowest cost Bitcoin…

Thanks, Dan. As Dan alluded to, our AI Cloud service is one of two AI verticals that we are scaling today and demonstrates our ability to develop and scale AI infrastructure quickly, which is critical to our success in such an agile market. For context, we launched our AI Cloud service or IREN Cloud, as it's now known, as a proof-of-concept back in August 2023 to support our broader AI infrastructure ambitions. Our initial deployment began with 248 NVIDIA H100 GPUs in early 2024 and scaled to 1,896 H100 and H200 GPUs, all within less than 12 months. Today, the platform is supporting both training and inference workloads for a range of AI native customers on both a reserved and on-demand basis. All of this was enabled by the versatility of our proprietary data center design and delivery capabilities. The GPUs for IREN Cloud were installed in our 50-megawatt data center in Prince George, British Columbia, which had solely been operating Bitcoin mining workloads up to that point. The transition from ASICs to GPUs took just six to eight weeks with minimal incremental CapEx. This flexibility to easily pivot between Bitcoin and AI workloads with speed is one of the major factors giving us a competitive edge in the industry. We are able to respond extremely rapidly to shifts in market demand and rapid GPU cycles. Importantly, while the Prince George site is supporting AI cooled GPUs today, it also has flexibility to accommodate liquid-cooled configurations in the future, giving us versatility for both current gen and next-gen GPUs should we expand deployments further. In terms of our expertise, scaling infrastructure is one thing, doing it reliably and repeatedly is another. And that's why we've invested and continuing to invest in a growing in-house AI infrastructure team across North America.…

Thanks, Kent. So that talked about AI Cloud. Now I'm going to talk a little bit about the infrastructure and the colocation opportunity, specifically behind that. So what we are showing on this slide is the fundamental, I guess, why behind our pursuit and our focus of AI infrastructure. So I think it's clear that the demand profile for AI compute is unlike anything that we've seen before across broader infrastructure. And I don't think it's exactly speculative anymore, particularly given what we are seeing in the market. And what we are seeing is this shift is happening fast and it's really becoming at scale. And what we are seeing is the markets are simply not ready to serve it. So I'll come on to that a little bit more. But if we look at the left-hand side, forecast global AI users, starting with the demand side, it's projected to triple from $346 million to over $950 million in the next five years. And this growth is not driven just by consumers like it's all on ChatGPT, but also by enterprises embedding LLMs and other AI tools into everyday use. And everything from medical imaging to call centers to software development, the expansion of this user base ultimately leads directly to compute growth. And as we see inference workloads scale in production environments, they require persistent infrastructure, not just burst compute for trading, which what brings us to what's on the right-hand side of the slide. So here, we show that user growth translates to global AI data center demand expected to grow 3.5x in the next five years. So that sounds like a big number, but what's even bigger if you understand energy market and the scale of what this really represents in terms of real-world infrastructure, 44 gigawatts…

Thanks. This next slide outlines how we are funding growth and in particular, how our business model provides a unique combination of internal cash flow and external funding flexibility. As of April 30, we had $160 million in cash on the balance sheet. This combined with strong cash flows from Bitcoin mining and our AI cloud provides significant funding support for our next phase of growth. We estimate a net funding requirement of up to $250 million over the remainder of 2025, primarily to support the expansion to 50 exahash, which is already nearly complete, delivery of Horizon 1, our first liquid-cooled AI data center targeting energization in Q4 2025 and substation development and site preparation at Sweetwater to prepare for energization in April 2026. In terms of capital markets, we've engaged advisers across multiple debt financing work streams, and we expect execution in the coming months as markets continue to stabilize. The important point here is we are not reliant on equity issuance to grow. We have a strong balance sheet, significant tangible assets, cash-generating operations and access to diversified capital channels. This capital strategy gives us flexibility to continue scaling AI infrastructure and maximize returns from the platform that we've built. In terms of illustrative cash flows, the table below shows illustrative annualized adjusted EBITDA outputs under various Bitcoin price assumptions, holding other inputs constant. At the current total network hashrate and the $95,000 Bitcoin price, we show $942 million in mining revenue. After subtracting power, OpEx, REX and layering in our AI cloud contribution of $28 million, we arrive at a $616 million adjusted EBITDA figure. You can also see that even at lower prices, for example, $60,000 Bitcoin, we still deliver nearly $270 million in adjusted EBITDA. This is thanks to our low-cost power, lean cost structure and best-in-class hardware efficiency to help smooth that exposure. I'll now pass over to Belinda to walk through the financial results.

Good morning to those in Sydney, and good afternoon to those in North America. Thank you for joining us for our Q3 FY2025 earnings update. As Dan mentioned at the start of the presentation, during the quarter, we reported consecutive quarters of profit after-tax of $24.2 million for Q3 and $18.9 million for Q2. We delivered record mining revenue of $141.2 million and recorded record adjusted EBITDA of $83.3 million and EBITDA of $82.7 million. The average operating hashrate increased by 30% from 22.6 exahash to 29.4 exahash, and we mined 1,514 Bitcoin at an average realized price of $93,300. During the quarter, the total net electricity cost increased by 30% from $28.9 million to $36.5 million, in line with the increased megawatt usage at Childress. During the quarter, the power prices remained relatively flat at $0.036 per kilowatt hour. The average net electricity cost per Bitcoin mined was $24,000. Other costs of $25.3 million remained relatively flat despite a business today that continues to deliver significant growth and continues to support the projected continued expansion across our AI vertical as well as the costs associated with regulatory and compliance obligations. Moving to our cash flows. I wanted to note that our consolidated cash flow statements are now presented in line with IFRS requiring the proceeds from the sale of Bitcoin mine to be classified as cash flow from investing activities. As such, IREN filed a 20-FA on March 20 of this year for the period ended 30 June 2024, along with the 6-K/A for the previous two quarters of this financial year, restating its cash flows to reflect this. The closing cash at bank at 31st of March 2025 was $184.3 million with receipts from Bitcoin mining activities of $141.2 million and AI cloud services of $3.8 million. We…

Thank you. [Operator Instructions] Our first question comes from Nick Giles with B. Riley Securities. You may proceed.

Thanks, operator, and good afternoon everyone. Thanks for the comprehensive presentation today. My first question, Dan, you used the words ahead of the curve, and it made me think of Dennis and his team were really ahead of the curve on building out an ecosystem required in AI cloud services. And so my question is, ultimately, how should we think about your appetite to fill out the available capacity at Prince George and growth beyond that? When I look at Slide 16 on the CapEx side, I see the 50 exahash Horizon 1 and Sweetwater, but I don't see anything explicit on the GPU side? So thank you very much.

Thanks, Nick. Yes, you're right. Those facilities were designed from day one to accommodate rack densities of 70 to 80-kilowatt air-cooled and have been successfully operating NVIDIA H100s and H200s there over the last 12, 15 months. The opportunity to scale there is clear. In terms of scaling our AI cloud, we're very focused on capital and risk-adjusted returns. So it's all about matching sources and uses, quite frankly. The demand is there on a spot basis. Do we want to incur GPU financing to finance revenues that are short-term? There's a risk profile attached to that. Do we want to use equity to finance further growth in our AI cloud? Never say never, but given the tools we've got, given the scale, given the access to GPU financing, I think our strong preference is to try and match debt with customer contracts as a way of growing that AI cloud vertical out. And we're looking at that in parallel, both the GPU financing as well as multiple contract conversations with customers, particularly around Blackwells in the 1,000 GPU plus clusters. So we're looking at all that in parallel with customer conversations on Horizon and Sweetwater.

Great. I appreciate that. My second question is, you noted being open to JVs. And so I was curious at what stage it could make sense to bring a partner in – is this something that could accelerate a definitive agreement at Horizon 1, for instance? Or would it be more related to additional scaling later on?

It could be anything. But clearly, when you've got a $70 billion development project at Sweetwater, we can't deliver all of that capital in our current state and with our current market capitalization. So we would need to bring in further partners, absolutely on the project financing and debt side, but also potentially on the equity side. And like all of this, it's all about options and running through the scenarios in front of you. So how do you finance this? We've got equity in IREN, given our current market cap and cost of equity. Clearly, there's a cost to that, which we've got to be very sensitive to. When you're dealing with private infrastructure players, their cost of capital, if you can get the risk profile right, is substantially lower. I mean, that's a lot of our backgrounds in private infrastructure. So being able to bring that in where it may make sense to complement what we've built in a listed environment may deliver better value accretion to shareholders. There's also a control aspect. So we just need to be careful around whether we want to engage with third-party equity and enter into those joint ventures. But given where we're at with those customer conversations, given the prospects we're seeing in debt financing instruments and multiple different types, we're pretty optimistic about financing the capital associated with these developments. And really, it's about the customer side in the short-term.

Good to hear and appreciate all the details. So keep up the good work.

Thanks, Nick.

Thank you. Our next question comes from Reggie Smith with JPMorgan. You may proceed. Reggie, your line is now open.

Sorry, I was on mute. Congrats on the quarter. It's pretty remarkable that you guys have been able to scale your Bitcoin hashrate while still pursuing HPC. So I wanted to give you guys kudos for that. I had two quick questions. One, I noticed I think you guys called out the growth in your AI cloud business. I was curious if you could provide some details on how you guys are performing there from an uptime and utilization perspective? Like what KPIs do you track and how that performance kind of benchmarks against, I guess, industry norms and expectations. I think that's probably a very important selling point as you engage the customer.

Yes, I'm happy to take that one. Yes, we track a full range of metrics across the operations of that AI Cloud Services business. We have focused a lot within the operations on automation as well as telemetry and being able to record a huge amount of data that we're continually feeding back into the way we operate and maintain these systems to make sure that we're improving and maintaining performance levels over time. In terms of how we've been performing, we get continual feedback from our customers that we are among the best of their cloud providers. And in some instances, very clear feedback that both the uptime and our response to any issues that they have is extremely favorable compared to other providers that they're using. And ultimately, the proof is in the pudding with these operations. And as I mentioned, while I was presenting earlier, we are seeing, in particular, this uptake of white labeling our GPUs for other cloud service providers. Now they obviously have extremely good insight into technical capabilities and performance levels and the fact that they are contracting with us for capacity, I think, provides a very good sign that our performance and operating levels are extremely good.

That's good to hear. If I could sneak one more in. Obviously, you guys are having discussions with potential tenants at Horizon 1. What milestones or signals are you looking for in the coming months to indicate that you're moving closer to a formal agreement? And then maybe talk a little bit about how the conversations have changed more recently versus what you may have been discussing a few months ago, how to texture the conversations or whatever. Any insights you could provide there to give us a sense of how things are progressing and what that looks like as you move through the discussions? Thank you.

Yes, I'm happy to handle this, Kent, and then you can add in anything in. So there's conversations with multiple customers ongoing, and I appreciate that's a bit of a hand way statement. So to add a little bit more detail, there's been multiple site visits, like several, lots of detailed due diligence, contractual negotiations, discussions of exclusivities and ROFAS, et cetera. We're in the advanced stage of negotiation with several at the moment, and we're just working through it. So we're highly confident of contracting ahead of commissioning in Q4. Clearly, we're not going to earn revenue before then anyway. So a lot of it is just making sure that we do the right deal with the right counterparty on the right terms. We get all the technical detail right. We get the contracting structure right. And importantly, there's a lot of conversation with these customers around pathway to scale. So most of these customers, if not all, are not interested in 50 megawatts. They're interested in the fact that this site can scale generally around to that 200 to 250-megawatt mark over the coming period. But equally, some of them are looking beyond that. So that's where we spoke about the 750 megawatts potentially all becoming liquid-cooled AI data center capacity, looking at what we're hearing from the customers. I mean, there's a bookend, we might be sitting here two years and there's no more Bitcoin. But that's just the reality of what we're doing. We're not religious. We're not wedded to anything other than driving the highest creation of value for ourselves and shareholders. And that's driving the decision-making. So if we contract full 750 megawatts on better risk-adjusted terms, then Bitcoin mining will do it.

Yes. The one thing I'd add is in addition to those ongoing conversations that Dan mentioned and site visits and technical DD, we continue to see good levels of demand from new potential customers. So we continue to see a lot of inquiries from customers that we haven't previously interacted with. So it does seem, yes, clear to us that the level of demand, particularly in the near term for liquid-cooled data centers is driving a lot of those interactions.

Got it. That makes sense. If you decided to transform, would you be able to kind of continue to run Bitcoin mining until full cutover occurred? Or like how would that work?

Yes. So it's a bit of a combination. So at the Childress site, Dan had the rendering up earlier as to what a potential full site build-out for liquid-cooled capacity could look like. And there is ample space at that site to be able to build additional phases of Horizon on areas that currently haven't been built out as well as in the future then retrofitting the existing buildings for further development. So obviously, the approach that you're taking there, if it is new build phases from the ground up, obviously, there's no interruption to your Bitcoin mining activities until right near the end when you switch the power across and power up the new liquid-cooled data centers where you are undertaking retrofits of existing capacity, then yes, you do need to take that capacity offline at some point prior to the new liquid-cooled capacity coming online.

Got it. Understood. Thank you so much.

Thank you. Darren Aftahi with ROTH. You may proceed.

Hi guys. Thanks for taking my questions and congrats on the progress. Just kind of a clarification on the CapEx spend per megawatt. You mentioned it includes UPS and diesel gen. I guess, how are you able to kind of reach that CapEx spend when it seems like it's kind of below market? And then I guess in the conversations you're having with potential parties at Horizon 1 and maybe beyond, can you characterize kind of maybe what those clients might look like? Is it hyperscalers, neoclouds, large enterprise, all of the above? Any color would be great? Thanks.

Yes. Happy to touch on the cost element there. So in terms of the build-out, as Dan mentioned, we've been doing power-dense data centers for over seven years now. So we are extremely experienced in building out these facilities. We've spent a lot of time optimizing our data center design. And importantly, in the build-out for Horizon 1, we're doing it in a way that utilizes a lot of the existing data center design. So the same building shells, a lot of the electrical infrastructure is very similar, and then we're just layering in the redundancies that these AI customers ultimately are looking for in terms of what you mentioned around gensets, UPS, et cetera. So what that enables is that we're able to do it in an extremely cost-efficient manner versus a traditional new AI data center build-out where people may be using, for example, concrete building shells, which require a significant amount of additional CapEx versus our design. So everything that we're delivering is consistent with what customers expect, and we know that because we've been going through these detailed technical due diligence conversations with them over the past number of months. So that's really the key elements as to how we're able to achieve better cost.

I think just to add to that, like this isn't a small team of finance guys just trying to sign a contract and then outsource everything on the technical side. Like as Kent said, we've been doing this for seven years. It's a founder-led business where every single element of every data center and everything we do goes back to first principles. But whether people want to acknowledge it or not, this is an entirely new asset class, power-dense computing. Legacy data centers are fundamentally different in terms of how they've developed, how they've been engineered, how they've been operated. And we've had the benefit of seven years from the ground up optimizing everything. Like no one believed that we could build air-cooled data centers for $650,000 a megawatt that run next-generation AI workloads, H100s, H200s, we've been doing it for 15 months. And it's the same thing with all this. It's just a bottom-up analysis, how much does the raw materials cost, what's the most efficient way to assemble everything, not signing layers upon layers of contractors, designers, builders, et cetera. It's all controlled in-house. And I think you're right, like it's going to be a competitive advantage, the ability to deliver cost at this level.

Thank you.

Thank you. I would now like to turn the call back over to Dan Roberts for any closing remarks.

Thank you. Thanks again to everyone for the questions and also for joining us today. As you've heard throughout this call, IREN continues to deliver consecutive quarters of profitability, substantial free cash flow and really strong execution across both Bitcoin and AI. So we've built a business that performs through the cycle. You can see those scenarios all the way down to a $33,000 Bitcoin price all the way up to wherever your minds would like to imagine. So, not just when Bitcoin is running, but through disciplined operations, efficient infrastructure and capital allocation that stacks up in any market. So we lead on fundamentals, and that's what sets us apart. It's what allows us to fund growth from cash flows that we're generating, while still scaling into one of simply the most exciting infrastructure opportunities of our time. So we're incredibly excited about what lies ahead in AI and really confident in our ability to capture that upside, but capture it in the right way. So thanks again. We look forward to updating you all next quarter. Thank you.