Greetings, and welcome to MARA 4Q '25 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Robert Samuels, VP Investor Relations. Thank you, Robert. You may begin.

Thank you, operator. Good afternoon, everyone, and welcome to MARA's Fourth Quarter and Fiscal Year 2025 Earnings Call. Thank you joining us today. With me on today's call are our Chairman and Chief Executive Officer, Fred Thiel; and our Chief Financial Officer, Salman Khan. Today's call includes forward-looking statements, including those about our growth plans, liquidity and financial performance. These involve risks and uncertainties, and actual results may differ materially. We disclaim any obligation to update these statements, except as required by law. For more details, see the Risk Factors section of our latest 10-K and other SEC filings. We'll also reference non-GAAP financial measures like adjusted EBITDA and return on capital employed, which we believe are important indicators of MARA's operating performance because they exclude certain items that we do not believe directly reflect our core operations. Please see our earnings release for reconciliations to the most comparable GAAP measures. We hope you've had the chance to read our shareholder letter and look forward to your feedback. We'll begin with some brief prepared remarks from Fred and Salman. After their comments, we will open the call to Q&A. I'm going to turn the call over to Fred to kick things off. Fred?

Good afternoon, everyone, and thank you for joining us. Before we get into the results for the quarter, we're excited to discuss our just announced strategic partnership with Starwood Digital Ventures, the data center development platform of Starwood Capital Group and one of the premier data center developers and operators in the world. This joint venture accelerates MARA's expansion into AI and high-performance compute and represents a meaningful step forward in the evolution of our platform from a pure-play Bitcoin miner into an energy and digital infrastructure company. Alongside other actions we have taken, including closing our investment in Exaion, we are strategically positioning our platform to support a broad range of AI deployment requirements from large-scale cloud environments to private enterprise and sovereign deployments, where AI inference operates closer to its contextual data with reduced latency constraints and enhanced operational control. Through our partnership, MARA and Starwood will jointly develop, finance and operate next-generation digital infrastructure capable of meeting growing demand from enterprise hyperscale and AI customers across MARA's existing power-rich portfolio. MARA will contribute dedicated energy, advanced data center sites, while Starwood Digital Ventures will lead, design developments, tenant sourcing, construction and facility operation with Starwood providing investment expertise to support enhanced project-level economics. We have the option to retain up to 50% ownership in the joint venture, positioning us to participate in future cash flows while capturing long-term value creation. The joint platform is expected to deliver more than 1 gigawatt of near-term IT capacity with a pathway to more than 2.5 gigawatts. This JV structure accomplishes several things at once. It accelerates speed to market and introduces institutional-grade development and tenant relationships. Importantly, it also allows us to leverage the wealth of power capacity embedded in our existing energized sites in the near term. These assets…

Thank you, Fred. I'd like to begin by highlighting the strategic and financial significance of our partnership with Starwood Digital Ventures, a global leader in data center development and operations, as Fred mentioned earlier. From a financial perspective, we expect this joint venture to generate meaningful net operating income, or NOI, and free cash flow over time by reducing earnings volatility relative to a pure Bitcoin mining model. Importantly, partnering with Starwood enhances our access to institutional investment-grade capital as we jointly develop and finance utility, scale, AI and HPC infrastructure across our power-advantaged portfolio. With a pathway to more than 2.5 gigawatts of potential capacity that could be allocated to AI, HPC over time, we believe this partnership will materially improve MARA's long-term NOI profile, cash flow visibility and overall valuation framework for our business. We are also pleased to have completed our acquisition of a majority stake in Exaion which we expect will further diversify revenue as it expands its sovereign cloud and enterprise AI compute offerings. Together, these initiatives reflect this strategy focused on expanding free cash flow generation and driving long-term shareholder returns. During the quarter, Bitcoin price volatility was the defining market force. Bitcoin began the period at roughly $111,000 and reached a new all-time high near $125,000 in early October. However, an overnight liquidation event compounded by broader negative market sentiment drove a sharp reversal with prices falling to roughly $87,000 by quarter end. This nearly $40,000 swing created one of the most challenging macro environments we have faced in recent periods and served as a significant headwind to our financial performance. Against this backdrop of falling Bitcoin price, global hashrate increased modestly as miners remain disciplined and cautious in deploying additional capacity amid the volatility. Now let me give an overview of our…

[Operator Instructions] The first question comes from the line of Paul Golding with Macquarie Capital.

Congrats on the partnership announcement. I wanted to ask, Fred, you noted that the partnership gives you the opportunity to retain a 50% stake in these projects. Could you give some more color around the financing dynamics around the 50%, whether there's an opportunity to contribute the powered site in exchange for other forms of consideration outside of the JV or what you meant by that comment in a bit more detail? And then as a follow-up, you also made a comment around -- it seems like load balancing across mining and HPC at certain sites that are part of this partnership going forward. Could you speak to the technical requirements of that and how we can think about mining versus HPC as you progress with this partnership?

Sure. So thank you for your question. When you look at the JV structure, essentially, our initial contribution to the JV to each specific -- for each specific site would be the asset itself. And then additionally, we would capitalize our share of the -- we would provide capital for our share of the development costs, where we could retain up to 50% of the JV. And hopefully, that clarifies that part of it. There are mechanisms within the agreement that allow us to essentially decide not to fund our portion, and there are methods within the agreement that allow us to essentially be liquidated, if you would, at an attractive prices or option or the -- if we don't fulfill our obligations, and we decide to drop out if you would. And I think we can provide more detail on that later. The key thing regarding load balancing is a combination of technologies that we've developed by leveraging special battery technology. We've announced previously a partnership with TAE Batteries, which is a very advanced battery technology that can switch at sub-millisecond rates such that we are able to essentially balance load within data centers. If you think about the data center development project, our ability to be able to retain Bitcoin mining at the site while the project is being developed and then even retain a portion of the power at the option of the tenant allows us to act as a load balancer. Depending on the type of compute load that's executed at the site, there may be, for example in the case of inference loads, a variation in that load over the course of a 24-hour period or even over a period of a week, where the inference demands on that site may decrease at night, for example, or over weekends. And having Bitcoin mining at the site allows us to, again, based on the arrangement with the tenant, mine whenever power is available that isn't being used at preferential prices. Hopefully, that answers your question.

It does. And maybe just as a quick follow-up. At those sites, would the partnership then benefit from any revenue generated from the Bitcoin mining that happens when the load balancing is occurring? Or is that something that would be retained entirely by MARA?

Yes, it's primarily by MARA.

Our next question comes from the line of Reginald Smith with JPMorgan.

Congrats on the announcement as well. I guess you guys are the last major Bitcoin miner to make the switch, so I guess, welcome to the party. A question, you mentioned Starwood and the fact that having a partner, you're not going at it alone. And obviously, we've seen other Bitcoin miners sign deals. So my question is should we expect the time to sign a deal to be shorter? Because you have Starwood along with you, does that alleviate some of the risk and maybe collapse the time line? And then I have one follow-up.

Yes. I think as I said in my opening remarks, this isn't a relationship that just starts with the signing of this agreement. It's been developing for quite some time. And we've been very actively working with prospective tenants. As I mentioned, the permits have been submitted already for some sites. And we are actively engaged with tenants. And the idea with working with Starwood was, again, manyfold. On the one hand, having a partner who has relationships with the tenants and that the tenants already trust, if you think about Starwood, they have built and operated sites for, I believe, 3 of the 4 Tier 1 hyperscalers. And having those relationships and the trust that exists because those relationships dramatically reduces, let's just say, the courtship period that a newcomer to the market like ourselves would have to do. And so because of that trust, it's easy for Starwood and prospective tenants to have a very accelerated time line on the process of evaluating a site, submitting permits, getting things going such that we can work towards getting leases done in a more accelerated fashion than if we had done it ourselves. Additionally, Starwood's captive EPC capabilities, again, dramatically facilitate the ability to build and execute these things in a very efficient and timely manner. The single biggest challenge today for hyperscalers is the ability to have certainty about power availability. And Bitcoin miners provide a lot of certainty because of the fact that we're currently consuming the power. One of the advantages with some of what we've done also is that we have been already operating inference on one of our sites in a containerized fashion. And if a tenant were to be interested in a modular approach versus a traditional box approach, if you would, of building a large building, especially for inference applications -- and just as a reminder, Jensen Huang, in his comments, said inference is where the revenue is in AI, and inference is becoming the most important part of AI deployments today. And we believe that we're going to see a lot of advancement in the side of how these sites are designed, how these sites are constructed, which will align very well with the experience that we've previously developed in this area.

That makes sense. We've historically told clients and investors that think 9 to 12 months for a deal to sign, but it sounds like you guys are on an accelerated time line. And second question, it sounds like you're putting the MPLX deal on the back burner for now. My question is are you still in the market for sites that are already powered or have been approved. Is that something that would also be more of a longer-term investment? Or how do we view those types of opportunities? So a site in some other city in Texas, like would that be something that you may pursue now? Or is that also something that would be viewed as less immediate and probably on the back burner?

No. So you have to look at what the market needs are today. If we're talking about power that will be available after 2030, there's not an aggressive demand for that capacity. The hyperscalers themselves have many efforts around developing sites, building their own energy generation for that time period. That is 4-plus years out from now. What they desperately need now is power that's available today where they can quickly get a site permitted, build and deploy and be turned on in a short time as possible. So we're prioritizing the ability to deploy capital where we can most readily convert it into those types of opportunities. So yes, we are still pursuing sites both domestically and internationally. As we mentioned in our prepared remarks, we have spent a lot of time working with large French energy majors who are global leaders in energy, especially in the U.S., Latin America and the Middle East. And we're actively engaged to develop sites over time with those partners in regions of the world where we believe it will be very attractive to develop sites that have the ability to be used maybe initially for Bitcoin mining and then converted over time into HPC, AI or other enterprise workloads.

Perfect. Sounds great. Congrats, guys.

Thank you.

Our next question comes from the line of Greg Lewis with BTIG.

Fred, I did want to touch a little on -- you've been kind of alluding to the fact that this has been ongoing, and we've been kind of building towards this for a while. I can appreciate it. That being said, there's definitely probably still some work to do to get the pen to the paper. But as we kind of look across your own portfolio, obviously, you have the nice presence in Texas or in Ohio. I mean you have nice presence across the midpart of the United States. Are there any areas that are kind of gaining more interest as you and Starwood continue to look out to do -- look to kind of onboard that first customer?

I think typically, what tenants are looking for is, as I said earlier, the power's turned on. It's easy and fast to build and there's access to Internet and if there's need for water, water, at the site. And a number of our sites fit that profile obviously. If you look at other locations across the country, it's a question of really triangulating high-speed Internet, always-on power and access to water. And all of our peers, ourselves, the neocloud providers and many others are all chasing opportunities around the country. And obviously, our focus is to initially monetize the sites that we have because the power is already on, if you would, and we don't have to do any building to any greater extent to convert those sites. There may be upgrades to substations, things like that, that have to happen before somebody comes in and starts converting the site, building buildings or doing whatever they're going to do for their specific needs. But the goal -- the fact of the matter is the power is the important thing, right?

Okay. Super helpful. And then just realizing I'm probably not as familiar with Starwood Digital Ventures as I'm probably going to become. But kind of curious, clearly, they have a presence already in Europe with data centers. You mentioned some of the things you're looking to do. As we think about this relationship going forward, could this be an opportunity for kind of clearly where Marathon already has owned infrastructure, that's an easy lift for getting MARA involved in some of these projects? But as we think about the next, I don't know, maybe not the next 12 months but the next 3, 4, 5 years, do you see an opportunity for MARA to kind of build with Starwood beyond just what you have as your owned infrastructure?

If you mean by our existing infrastructure, absolutely.

Our next question comes from the line of Chris Brendler with Rosenblatt.

Congrats on the progress here. I'd like to ask on -- sort of follow-up to Greg's question on the portfolio of data centers today and locations. And I noticed there was a comment in the deck that you have a gig of critical IT available today that seems to include some of the sites that you're currently in hosting mode. So I was just wondering if you think you can potentially either acquire or run AI data center loads at these other sites that you're currently in hosting arrangements? Or am I reading that wrong?

Yes. I think good question, Chris. I think you have to also not look at those sites, the hosted sites so much as while we operate a certain amount of load at existing sites, there is additional capacity available or expansion readily at hand. With some of these sites, the substations, for example, are ready for expansion. Additional load can be made available. And the nameplate capacity of the sites, in a number of cases, is greater than that, which we operate today.

Makes sense. Follow-up question would be just there wasn't a lot of numbers in this relationship presentation, and obviously, it's a huge pivot and exciting development. Just wondering like what kind of size projects are you thinking of in this sort of -- I don't think we're thinking about 200-, 300-, 400-megawatt sites like some of your competitors have. It sounds like it's going to be smaller, and I know there's already been some questions to the time line. But just thinking about sort of the numbers impact. How much do you expect -- I guess it depends on your ownership. But how much would you expect in the sort of back of the envelope, the economics on this joint venture compared to current Bitcoin mining operations at today's prices?

I'm not going to go into the economics today. I think more information about that will become more evident as we actually start speaking more about the specific sites and specific tenants because, obviously, who the tenant is and the economics will vary because of that. But to your question on size and scaling, you could look at a site, for example, like 1 we have in Texas, which currently operates over 200 megawatts of capacity, and that site can be converted directly to a hyperscaler site. So are we looking at doing 40- and 50-megawatt sites? No, we're looking at doing much bigger things.

Okay. Great. And I guess you said that you'd have more detail as you make progress. Is that going to be -- we have to wait for contracts to be signed? Or are you planning on disclosing and presenting more information even before then?

So think of it this way. You have to look at this almost like a real estate development project. It all depends on who the tenant is, what has to get built, what the economics of the development costs are going to be, what percentage of the JV we're going to have with that specific project. Again, we will retain up to 50% of projects or ownership in projects. So -- and then you have to look at, at the end of the day, what the lease rate's going to be. So every project will be different, so it's a little hard today to say, "Well, here's the number."

Our next question comes from the line of Kevin Dede with H.C. Wainwright.

Fred, could you offer a little color or deeper color maybe on time lines on these project enhancements with Starwood? I mean when do you think shovels start hitting the ground? And when do you think they might actually start running for customers?

So you don't turn a spade until you have a tenant typically signed because that tenant has a specific use for the site. So it's not -- we're not building on spec here, right? We're not doing what some of our peers have done. We're going to build a powered shell, and we're going to either fill it with somebody's compute or just build a powered shell and see who comes. Starwood's expertise is that they've worked with the top-tier hyperscalers, and they understand what they want. And a tenant looks at a site and looks at what can I do to that site to have what I want. They work with Starwood to design, get it permitted and built as opposed to building and hoping somebody will come like some of our peers have done. We are very focused on rapid execution with a lot of certainty. And one of the key reasons we chose Starwood is dramatically increasing certainty of execution and by partnering with somebody, as all the relationships that are required on the hyperscaler side has EPC capability in-house and it has the ability to have very good credit profile to be able to ensure these projects get funded and built. And I think if you'll look at -- a key signal will be we have signed a lease for the tenant. And at that point, there's a clock that starts ticking to ensure that permits have been approved and then spades can start digging in the ground. But as I said in my prepared remarks, we have had very fairly advanced conversations with tenants, permits have already been applied for at sites. And our expectation is that this will be an accelerated process and that we will see updates regarding leases in a time period that I think most people will think is pretty accelerated.

Would you mind taking a minute or 2 to sort through Exaion? It's not absolutely clear exactly how MARA intends to lever that. I did little digging. I understand it operates under MARA France, and I think you have 3 Board seats of the 8. And I'm kind of scratching my head on how you intend to leverage that deal.

Okay. So Exaion was developed within EDF, which is a French state-owned energy company that operates one of the largest fleets of nuclear reactors in the world as well as huge renewables. I believe they're one of the largest electrical energy producers in the world. Certainly, the greenest, with about 70% plus of their energy generation being green between hydroelectric capacity, other renewables and nuclear. France, especially EDF, has huge needs for AI. They have very large needs around private cloud because if you're operating nuclear reactors and you have the plethora of data that's coming off them and you're running AI models to ensure that they're operating not just safely but you're optimizing how they're running, they did not want that as an outsourced service to a third-party provider. And so they built that competency in-house. There came a point though where they believed it was better to take in external capital to advance the funding of that team and take what that team had built. And Exaion is, I think, today, about 90 people. They have built infrastructure, tech stack and systems and services to be able to operate the data centers on behalf of EDF. They also operate a quantum computer in their Montreal facility, for example. And they are a team that has built systems specifically for private sovereign cloud type operations of data centers where you're running inference loads, where data security is the absolute top priority, and they today operate 4 data centers, including Tier 4 data center capacity, with the mix of AI loads, traditional CPU load storage. They also have built infrastructure around blockchain. And for example, they provide, for a major French bank, the underlying infrastructure that manages stablecoin issuance for another French entity, also real-world token -- tokenization of financial…

[ Confident ] that you'll be allowed to take that technology to geographies outside of Europe.

Yes. So we own -- we have majority control of Exaion. You asked a question about the Board seats. There are 8 members of the Board, 3 from EDF. One seat is the CEO of Exaion. We have 3 seats and then a French technology entrepreneur, Xavier Niel, has 1 seat. And we're very excited to have him onboard because of his background. You guys can do your own research on who he is. He invested personally in MARA France, which is our holding company through which Exaion is owned.

There are no further questions at this time. I'd like to pass the call back over to Robert for any closing remarks.

Thanks, operator, and thank you, everyone, for joining us today. If you do have any questions that were not answered during today's call, please feel free to contact our Investor Relations team at ir.mara.com. Thanks very much, and enjoy the rest of the day.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.