Hut 8 Corp. (HUT) Earnings Call Transcript & Summary

Good morning, and welcome to Hut 8's Third Quarter 2026 Financial Results Conference Call. Joining us today are our CEO, Asher Genoot; and our CFO, Sean Glennan. Following the presentation, we will open the line for questions. This event is being recorded and a transcript will be made available on our website. In addition to the press release issued earlier today, our full quarterly report on Form 10-Q is available at hd.com on our EDGAR profile at sec.gov and on our SEDAR profile at sedarplus.ca. Unless otherwise indicated, all figures discussed today are in U.S. dollars. Certain statements made during this call may constitute forward-looking statements within the meaning of applicable securities laws. These statements reflect current expectations and are subject to risks and uncertainties that could cause actual results to differ materially. Certain key risks are detailed in our Form 10-K for the year ended December 31, 2025, and our other continuous disclosure documents. Except as required by law, we assume no obligation to update or revise any forward-looking statements. During the call, management may reference non-GAAP measures such as adjusted EBITDA. A -- we believe these metrics alongside GAAP results provide valuable insight into our performance. Reconciliations of GAAP and non-GAAP results are included in the tables accompanying today's press release available on our website. I'll now turn the call over to Asher.

Thank you, Mark, and good morning, everyone. Over the past year, we have contracted 949 megawatts of IT capacity under long-term AI data center leases with our Pasta investment-grade companies, representing approximately $27 billion of contracted revenue, realizing that revenue and the returns that we underwrote against it requires 3 disciplines. First, the quality of the power and the contracts that we originate; second, our execution in delivering what we have contracted and third, our rigor in financing. Those are the 3 principles we outlined for investors in May. And my remarks this morning will address each in term origination, delivery and financing. Sean will then review the results in detail. Before I turn this quarter, I want to step back to the premise behind all 3 measures because it explains why we sequence them in that order. AI is delivered as software, but it is produced by physical infrastructure, power, land, transmission, buildings, cooling, equipment and the people who operate them. The next generation of compute will be constrained not only by chips, but also by that infrastructure. And of everything that infrastructure requires, powers a scarce input. That is why we are a power first company. the input that is hardest to secure is the 1 we secure first. We developed the discipline of building within that constraint in Bitcoin mining, which required us to operate power dense compute to manage cooling and uptime and to procure and build quickly. AI is the largest opportunity we have yet encountered to apply that same discipline. Securing power, however, only earns the right to build, converting it into contracted revenue depends on how efficiently we build, and that is the second part of what defines Hut 8. I'm convinced that the infrastructure behind AI can be built better than it is being built today. faster at a lower cost and without compromising on quality. Many of today's data centers resemble natural blocker programs, remarkable engineering, a complex, expensive slope to deliver. And frankly, this is the mold that Regabatin Beacon Point Phase I follow. This approach makes sense when the buildout is small, but will not work at the multi-gigawatt scale at which I expect honey to build. Our future builds before I start with a different question, what each system must do and how it should be designed and delivered a thinking bills from there with the aim of improving speed and cost efficiency with quality held as a constant, not the variable. We have done this before, Vega, a Vicor mining facility, we designed in-house with direct liquids a chip cooling was built in under 6 months. We believe we can apply the same approach to our future builds, and we believe that our ability to rethink builds to be more cost efficient in shortened delivery times while maintaining quality through innovation will differentiate HUD with customers. With that as context, I will turn to the quarter beginning with origination, which is where the power is secured. For investors origination is a measure of whether we control sufficient pallet on terms that support attractive commercialization opportunities to continue converting our pipeline into leases comparable to those at River Bend and Beacon Points. We originate through 3 channels, and we advanced each throughout the quarter. The first is front of the meter greenfield development. Our pipeline now includes more than 6.4 gigawatts under diligence and under equity. Capacity under exclusivity, the stage at which we have secured a defined path to ownership increased by approximately 1.3 gigawatts during the quarter as existing projects advance and new projects were originated. PL alone does not answer the question investors ask most often about that pipeline, which is how geographically diversified is it? This quarter, we are providing a breakdown of our front-end the meter greenfield pipeline by geography. The largest shares are in MISO, PJM and Sure. Less than 5% is in ERCOT. That distribution reduces our regulatory and price exposure in any single market. It does not, however, diminish the value of our existing Texas interconnect, which we believe has become more valuable as Arcos revised interconnection process has lengthened the time required to secure approvals for new interconnections. The second channel is behind the meter development. which allows us to unlock power and accelerate delivery where traditional grid time lines are constrained and which builds on years of experience developing and operating such projects. We are actively evaluating opportunities across our campuses. Consistent with our disciplined approach, however, we do not include that capacity in our reported development pipeline until a contract is executed. River Bend illustrates that point. Beyond the current phase under construction, we continue to develop the site. We have cleared 184 acres for campus expansion and are advancing site preparation now. So that construction can begin promptly once the next phase commercialize and approvals are secured. The third channel is corporate development in which we acquire powered assets. Our approach here is the 1 that produced Beacon point where we secured the power, underwrote the site on Bitcoin mining as its initial use and applied our greenfield development capabilities to advance the site and convert it into an AI data center campus. This quarter, corporate development yield another opportunity as we entered into a definitive agreement to acquire from affiliates of Poland to energized data center sites in West Texas with up to 230 megawatts of utility capacity upon full energization subject to final power approvals and infrastructure development. Second, delivery. Each lease we sign obligates us to deliver capacity by a contracted date and the lease revenue begins only on delivery. For investors, delivery is, therefore, the measure of whether the capacity we have contracted begins generating rent on the date to which we committed, and it is our central operating priority. Construction at Regabatin Beacon Point Phase 1 remains on track to meet our delivery targets and both projects are funded entirely at the project level. At River Bend, more than 1,200 people are on site. Structural steel, roof decking and building foundations are complete on all 4 data halls. The slab at Data Hall 1 is also complete, and the remaining 3 Data Halls will follow through year-end. Roofing and precast wall panels have also been installed at Data Hall with the remaining halls expected to follow through by mid-December, reducing the exposure of inferior electrical mechanical work to weather-related disruptions. We expect to energize a substation in phases and equipment installation has done in Data Hall 1, starting with Vertiv IT power skids and smart run overhead modulars. At Beacon Point Phase I ground improvements are approximately 95% complete, building foundation work and underground utilities installation are underway. The steel erection is scheduled to begin this month. We have also begun foundation work for the substation. For Beacon Point Phase 2 civil design in surveying are underway. We also amended the Beacon Point Phase 2 lease with our customer, extending its term from 15 to 17 years. The extension serves both parties. For our customer, it secures capacity over a longer horizon, which reflects the durability of demand for power. For Hut 8, it adds 2 years of contracted revenue for lenders to underwrite, which should help offset potentially higher financing costs as we look to finance Phase 2. The amendment applies to Phase 2 only. Phase 1 remains on its existing terms and the construction and financing framework for the campus is unchanged. Delivery also depends on the support of the communities in which we build, which we treat as a precondition of development rather than as an obstacle to be managed. River Bend demonstrates what is required to conserve power first approach into a real project, power, transmission, land, construction partners and community alignment would come together in the right order. That is what more than 300 investors, analysts, media, government stakeholders and community members saw when they visited River Bend last month. I joined Governor, Jeff Landry of Louisiana and leaders from Anthropic, Entergy Louisiana, Broadcom, Ferdman Jacobs to discuss the future of American AI infrastructure, and those discussions reach one conclusion, demand, supply, delivery and policy are inseparable. Sound technical plans matter, but durable products are built transparently in partnerships with the people who live and work nearby. In Louisiana, that partnership has taken specific form. We are investing approximately $60 million in a new water well and nearly 8 miles of water infrastructure. None of which will be used to cool a data center and which will be transferred to the parish at no cost for local taxpayers and can serve more than 4,000 households and 200 local employers. We also made a $10 million payment in Luitaxes, bringing tax revenue to West Bellician Parish 1 year earlier than it otherwise would have arrived, supporting local government, schools and law enforcement including $7,000 stipends for school employees in each of the next 2 school years and payments up to $8,000 per eligible share of office personnel. A beacon Point in Texas. The commitments differ in form, but not imputable. We are funding the electrical upgrades that our campus requires that those costs are not shifted to residential rate payers, and the campus users closed loop pooling design to minimize local water demand. Across both phases, we anticipate approximately 1,900 construction jobs and more than 200 permanent positions supported by partnerships with local educators and workforce organizations. We make these commitments because we believe a successful project must create lasting value, not only for our customers and shareholders, but also for communities that host it. We uphold this philosophy by investing in the infrastructure, workforce and partnerships that allow our projects and the communities around them to grow together. Third, financing. For investors, how we finance our projects is a measure of our ability to limit risk to the parent balance sheet and avoid dilution for existing shareholders. Two of the main questions we've been asked this quarter is directly to that point. How are our current builds progressing? And might we need to issue additional equity to support them? The answers are straightforward. We remain on schedule, and we do not expect to issue additional equity to support River Bend or Beacon Point. River Bend and Beacon Point Phase 1 are funded through completion with investment-grade project bonds of $3.25 billion for River Bend and $4.25 billion for Beacon Point Phase 1, each nonrecourse to Hut 8. We were able to raise investment-grade financing for both projects through a comprehensive approach to risk mitigation. Operating in Bitcoin mining taught us how quickly markets can change. and inflation and interest rate expansion are present realities. We cannot control the market, but we can control we secure in advance in how we contract. We work from first principles to understand what every component must do and what is your cost. At River Bend and Beacon Point Phase 1, all long lead equipment has been ordered and all major contracts have been signed. Locking in the largest components of costs ahead of further market movement. Risk mitigation extends beyond procurement. Our principal Equipment and Construction Partners, Verdan Jacobs are investment-grade counterparties. Comprehensive insurance coverage is in place at both sites, providing an additional layer of protection against covered losses that could affect the projects and in turn bondholders, and the triple net lease structure makes tenants responsible for operating expenses, taxes and insurance, which further supports this framework. A measure of the strength of our financings is that both bonds have traded well in the secondary market. That matters because capital has become scarcer across today's markets and we believe scarcity produces a flight to quality. Investor interest in future issuance remains strong. In a tighter market, we believe contract quality and the flexibility to access multiple debt capital markets gives us a competitive advantage. And as we evaluate financing for future projects, we will start from first principles with a clean slate, taking the lowest cost of capital and the highest free cash flow yield on a risk-adjusted basis. How we originate, how we deliver and how we finance also answers the most direct question investors ask. What will drive the stock. We believe execution is how we create long-term shareholder value. We do not manage to the daily share price, we managed the delivery of Reverend and Beacon Point into the conversion of our pipeline into contracted projects because those are the outcomes within our control. The same long-term focus governs how we allocate capital. Every decision is evaluated against a single criteria, whether it creates long-term shareholder value. Alongside investing in growth, that criteria allows us to opportunistically create shareholder by repurchasing our shares, and we believe the stock trade at a discount to intrinsic value. We have acted on that conviction since last quarter by repurchasing approximately 3.3 million shares for approximately $250 million funded with about 3,100 Bitcoin from our balance sheet. The repurchase met our criterion because we believe our shares do not fully reflect the value of the revenue we have contracted and the power capacity that we control. funding it with Bitcoin rather than with cash, preserve liquidity and continued the reduction in parent level Bitcoin exposure that we described in February. Underneath those measures is a simple proposition, we are builders, and we believe the AI era will award the company that bring power and compute online faster, more cost efficiently and without compromising on quality. That is the company we are building. The revenue we have contracted will be realized the way it was secured by starting with power, underwriting carefully, preserving flexibility and delivering. Those principles govern the 3 measures I have described and those measures are how we expect to be judged in the quarter's end. We believe they are the foundation of an enduring generational business at the intersection of Energy & Technology. With that, I will turn the call over to Sean.

Thanks, Asher. The financial story this quarter has 4 main components. First, the operating platform remains resilient. Revenue was $71.1 million for the third quarter compared with $83.5 million in the prior year period, while adjusted EBITDA increased to $33 million from $30.5 million. That result reflects the contribution from additional operating capacity and a disciplined approach to costs. Despite the sale of the Power North portfolio in February, a decline in average revenue per Bitcoin mined and the planned runoff of business are no longer central to our strategy. Second, the GAAP result was heavily affected by the fair value remeasurement of digital assets. We reported net income of $189.5 million of which $131.1 million was attributable to Hut 8. That result included a $413.8 million gain on digital assets, reflecting the increase in the price of Bitcoin during the quarter. Help investors assess operating performance alongside these price movements, which supplement our GAAP results of adjusted EBITDA, a non-GAAP measure and our segment results. Adjusted EBITDA should be considered together with and not a substitute for GAAP net income. Third, we continue to maintain cost discipline even as we scale the company. While we are making major investments to scale them to the company we want to become, we are doing so judiciously. The rigor around spend decisions has not changed since I started 2 years ago when the company was in more of a start-up phase. Compared with the prior year period, G&A, excluding stock-based compensation per megawatt of development pipeline has declined even as our development pipeline has nearly doubled. And last, but arguably most important, the balance sheet and capital position of the company remains strong. We have fully funded 2 construction stage projects. We have ample liquidity to meter obligations until our data centers begin generating cash flow and that liquidity is now further supported by the $1.07 billion revolving credit facility that we closed in September, which provides low-cost, flexible, nondilutive capital. And we have confidence in the availability of capital for strong projects underpinned by robust contracts and thoughtful risk mitigation. Let me walk through the operating business. Compute revenue was $68.4 million in the third quarter compared with $70 million in the prior year period. Headline revenue was broadly stable because the decline in average revenue per Bitcoin mine was largely offset by an increase in Bitcoin Mine, reflecting additional operating capacity at Vega and the reenergization of Thrum Hiller. That result demonstrates the enterprise's ability to scale revenue across a range of external environments. Compute cost of revenue increased to $28 million from $22 million primarily because we were operating more capacity and incurring the associated electricity costs. The increase track the increase in production, not a deterioration in operating efficiency. The important point is that we are producing more Bitcoin from a larger operating footprint, again, demonstrating the ability to scale in a cost-conscious manner. AI cloud revenue also increased during the quarter as new customer contracts came online. That growth was partially offset by the sale of the traditional cloud business in August. Power. Power revenue was $1.3 million in the third quarter compared with $8.4 million in the prior year period. The decline was primarily the result of the sale of the Far North portfolio in February. It is therefore a portfolio composition effect, not a deterioration in the remaining our business. which generates revenue primarily from managed services contracts, digital infrastructure. Digital Infrastructure revenue was $1.4 million in the third quarter compared with $5.1 million in the prior year period. The decline primarily reflects the termination of the Vega colocation agreement after American Bitcoin exercised its purchase option for the miners of website, together with the customer churn in the legacy GPU infrastructure business. The current digital infrastructure results do not yet reflect a contracted lease revenue from River Bend and Beacon Point. That revenue begins when the relevant capacity is delivered. The financial model is therefore moving through an intentional transition. The legacy revenue base is no longer the main growth driver. While the larger contracted infrastructure revenues remain tied to delivery milestones. Adjusted EBITDA was $33 million compared with $30.5 million in the prior year period. We use this measure to evaluate operating performance after excluding the effect of fair value remeasurement of digital assets and other onetime or noncash items. As always, adjusted EBITDA should be considered alongside GAAP results. not in place of them. Reported general and administrative expense was $99.6 million compared with $25.9 million in the prior year period. approximately $64.7 million of this quarter's G&A was stock-based compensation, including the effect of onetime long-term incentive awards. The quarter also included professional fees and approximately $6.2 million of incremental salaries and benefits as we added people to support energy origination, corporate development and other growth functions. Excluding noncash costs, the cash G&A was $34.8 million, which compares with $24.8 million last quarter and $19.5 million from a year ago. We do not view all of that spending as recurring corporate overhead. A meaningful portion reflects the cost of building the organization required to originate, finance, construct and operate multiple large campuses in parallel. At the same time, the cash component is real, and we are holding those investments to a clear standard. They must support one or more of the following outcomes over time, more high-quality power origination, faster project conversion a lower cost of capital, better execution or stronger operating leverage. The balance sheet requires an important distinction between corporate liquidity and project restricted capital. At September 30, 2023, we had approximately $156.9 million of cash, $3.6 billion of restricted cash and cash represents, and $2.8 billion of restricted short-term investments. The restricted balances are principally proceed from the River Bend and Beacon Point financings. Eldon project accounts for construction, debt service reserves and other specified project purposes. They are not excess corporate cash. Hut 8 also has about 1,361 unencumbered Bitcoin on the balance sheet as of November 1. The company had approximately $7.6 billion of consolidated loans, not cable and other financial liabilities. Approximately $7.5 billion of that amount relates to the River Bend and Beacon Point project financing. Those obligations to a project subsidiaries are secured by the applicable project assets and accounts and our nonrecourse to Hut 8's parent company. Each project is designed to service its own debt from its own contracted lease cash flows. The quarter also included $105.5 million of interest expense and $51.8 million of interest income. The interest expense reflects the construction period carried on the River Bend and Beacon Point financings. The interest income was generated by investing unused project pros and restricted short-term investments to partially offset that carry. We accepted that construction period interest cost because the projects are fully funded upfront. The parent level financing architecture is separate and quite simple. In September, we added a $1.07 billion senior secured revolving credit facility to support corporate liquidity, development need and letters of credit. No borrowings were outstanding under that facility as of September 30, 2026. This facility gives us committed capacity without requiring us to draw debt before we need it. We also simplified the parent capital structure during the year. The CO2 note converted into equity, a corn-based facility was refinanced with the Bitcoin collateralized Dalkon x term loan at a lower coupon and the remaining TCRC secured promissory note was repaid in October. We are also planning to retire a Falcone term loan edible to maturity in April 2027. The objective is straightforward, maintain parent level flexibility as financing to the asset that generates the cash flow and avoid using corporate equity where project-level capital is available on better terms. During the quarter, we sold approximately 954 Bitcoin or $74.8 million and used those proceeds to repurchase 953,802 shares for $74.7 million. Subsequent to quarter end, we repurchased additional shares under the $250 million program. In total, we repurchased approximately 3.3 million shares for approximately $250 million funded with approximately 3,100 Bitcoin. Those repurchases converted a portion of the strategic declines into equity head of price, we believe does not reflect the contracted revenue and power capacity controlled by the company. They also continue the reduction of the parent level exposure that we have described previously. Our Board has also authorized an increase in our share repurchase program from $250 million to $1 billion. We view this as a long-term program that gives us the flexibility to act when opportunities arise over the coming years. We will be patient and judicious in how we deploy it, that we maintain liquidity to run our business and pursue opportunistic growth. Stepping back and these should evaluate Hut 8 through 3 layers. The first is the solid footing of the current operating platform. For the quarter demonstrated increased bitcoin production, a growing AI cloud contribution and adjusted EBITDA above the prior year period despite lower revenue. The second is the contracted infrastructure platform, where River Bend and Beacon Point are being funded and delivered through project-level structures tied to long-duration customer commitments. The third is the development platform where we are advancing however, opportunities while preserving flexibility on the application, the customer and the financing structure. Our financial objective is not to maximize headline growth at any cost. It is to convert scarce power into financeable, contracted infrastructure while protecting parent level liquidity and limiting unnecessary dilution. If we execute against that standard, the financial profile should evolve from a business with Bitcoin driven volatility and construction period carry toward one with a larger base of contracted infrastructure cash flows.

Before we transition to Q&A, let me address what is likely to be the first question. The outcome of the governor's race in Texas and its implications for Beacon Point. We reset the election outcome and the support -- and support the governor elect in a hostess called for legislative guardrails. We also expect Texas to remain a business-friendly state and recognize the benefits that data centers bring to global communities through tax revenue and jobs. As we discussed earlier in the context of Beacon Point and River Bend, our focus is on building responsibly with local communities in mind, a commitment that we believe aligns with Governor hoses objectives. We do not believe the results change the outlook for Beacon Point, which as a late-stage project is well positioned. For Beacon Point Phase 1, our baseload designation remains subject to Governor Abbott audit. We believe we are well placed in that process and anticipate an unconditional classification on December 17. And which will provide a clear path to energizing the full gigawatt at Beacon Point with 700 megawatts expected in the first quarter of 2027. With that, happy to take questions.

[Operator Instructions] Your first question comes from the line of Ryan Gravett with UBS.

Ash, I did want to just follow up on your closing remarks there, just given the election outcome last night. Anything you can share in terms of various other permits required for both Phase 1 and Phase 2 at Beacon Point. And then maybe 1 for -- anything you can share in terms of expected timing for project financing at Phase II of Beacon Point? And if the election outcome changes that time line at all?

Thanks for the question, Ryan. In regards to the build, we're primarily focused on the December 17 time line. When we think about TCQ, when any permissive diesel generators, there are paths to be able to design around that use the best system as an alternative back source. And so those are the kind of the primary focuses for us as we continue to progress and develop the project. Sean, I'll pass it to you.

Yes. So we -- the sort of timing that's right in front of us doesn't really change the -- we expect to get back from the audit results on December 10th and then have those be finalized on December 17th. And those remove largely the sort of remaining items ahead of us to get going on the financing for Beacon Point 2. There are a lot of different ways that we can see to finance that. Obviously, we've addressed the -- and tapped the investment-grade bond market. And we think there are a number of other avenues around that exists too. So we feel really confident about the ability to get that done. In our minds, the path is the same as it was before. And so we look forward to executing on that.

Your next question comes from the line of Eric Luebchow with Wells Fargo.

I'm curious, given everything going on in terms of higher labor costs, more upfront investment in the site in terms of utility deposits. What are you seeing in terms of your build cost, not just for Beacon Point and River Bend. But as you look at your power pipeline today, are you seeing build costs move into the low to mid-teens on a dollar per critical load megawatt basis? And do you think that you have enough pricing power to kind of maintain or even improve your development yields as you build out the next phase of your pipeline?

Appreciate the question, Eric. I'll answer that in 3 parts. Part 1 is origination. Part 2 is the development in EPC and Part 3 is the commercialization and lease rates. For Part 1, in regards to origination, you're right, a lot of utilities now ask for more upfront collateral kayak payments to make sure that the infrastructure upgrades or energy supply that's committed to doesn't affect rate payers. And we've been supportive of that since day 1, and that's the same structure that we've had at River Bend and Beacon Point in paying for those QIAGupgrades and any collateral that's necessary. And so as we continue to develop our approach remains similar, which is we don't put large development capital at risk in the pursuit of commercialization. We stay disciplined in the origination process. which makes it difficult, more difficult to originate, but we found opportunities where we are able to do so, able to bring customers along for the process with us and be able to continue to develop the sites that have -- that we have conviction in. As our balance sheet continues to grow, we obviously will be working on more sites across our pipeline. As you see this quarter, we had another 1,300 megawatts of sites go from energy under diligence to energy under exclusivity, which means we're diving deeper into those sites. We're spending more resources in developing those projects. And so we really think about it as a percentage of overall development capital as we continue to scale that we can increase to develop those sites. But we are spending, call it, hundreds of thousands or single-digit millions up front in these developments and not tens of millions or hundreds of millions of dollars, really when the collateral requirements come, we're deeply engaged with the end user during those moments in time. In regards to everyone has heard labor rates have gone up, you have supply chain rates that have changed. And as we've continued to build over the larger of a decade here, the focus has been how can we control our destiny. Well, we can't control our macro conditions of overall capital markets of overall cost of labor equipment, et cetera. What we can control is how do we design the infrastructure to be able to drive additional efficiency to try to offset those changes and those increases that you had mentioned. And so if we can ruthlessly focus on learning from the build that we have today, designing from first principles driving efficiencies in the design, which ultimately drive efficiencies in the supply chain and equipment you need to purchase, which ultimately drives efficiencies in the construction and the amount of hours we need to construct a data center those are things that are in our control and that we have conviction and confidence that we continue to build towards. So that is our offset against these macro conditions that you mentioned, and I chatted about earlier in my prepared remarks on how want to build a scalable, repeatable model like the Raptor photos of the Tesla engine that I'm sure many people have seen during Iteration 1, 2 and 3 are SpaceX versus kind of a bespoke build every single time that is expensive and costly and time intensive. And then the last 1 is in terms of lease rates. We've always approached the market from a perspective of signing leases that we believe are fair and kind of middle of the fairway market from a lease rate perspective and our shareholders and our investors have been happy with the structuring and the returns on those deals. So the way that we think about it is if market costs on average across the industry go up, therefore, lease rates would move in proportionately with that because many folks work on a more yield on cost basis. And so we'll charge market-based rents, meanwhile, focus on driving ruthless efficiency within our execution EPC stack to construct and hold costs on construction, which could, in turn, actually increase the yield on products that we're developing, if revenues go up and we're able to maintain costs.

Your next question comes from the line of Bryan Baratian with ROTH Capital Partners.

I have to 2. One is as we -- in the face of the election and looking to what I think is one of the most interesting things is River Bend expansion, where you have a gap of IT capacity to expand there. How can we think about what the structure looks like with regard to ultimate counter party. I know the River Bend site Day, the Head of Computed Anthropic was there, and it all seemed very positive. But would we expect to see similar to your other leases the same level of investment-grade equity support that was both across River Bend and Beacon Point with different tenants? Or like how are you thinking about structuring that?

Is there a second one? Or you want me to...

Yes, you can start with the first, and then I'll do the second, it's separate.

Okay. Sounds great. We're very excited for and we have been for quite some time in her so with the market. There's been a good amount of work that has been done believe that there's actually more than a gigawatt of gas available on the pipelines that run through the property and have been working towards being able to actualize and realize the continued expansion of that campus. When we look at the commercialization, obviously, I can't speak to any deals that we haven't announced yet. But we continue to stay focused on the credit quality of our -- and offtake relative to the investment in CapEx and the capital we ultimately need to raise we're pretty open. I was on a call with a non-AI lab, non-investment-grade counterparty yesterday, someone we admire a lot in the business that they've created, we were open. We said, look, it's very hard for us to tell our shareholders and our Board to go and build infrastructure for folks that don't have the credit that supports the ability to bring on the financing that we brought on historically to be able to build and execute these projects at scale. And so I don't want to speak to any deals that aren't announced yet, Bryan, but overall, maintaining balance sheet, maintaining credit profile of our cash flows continues to be a core focus of the business and 1 that shareholders have asked us for as well.

Awesome. And the next 1 is, as we think about the existing footprint of opportunities that you have, I know American Bitcoin is running north of 400 megawatts of capacity. I guess in the face of the election that happened today, -- how are you? Or if you can provide any color on thinking about potential brownfield opportunities as it relates to the existing footprint there? Or is the focus just going to continue being on greenfield development?

When you look at our pipeline that we've announced the development pipeline is almost 8 gigawatts with a total of about 8.6 gigawatts in terms of our overall pipeline overview. That is 1 out of 4 buckets of the ability to commercialize and realize additional TCV. That bucket is our greenfield origination bucket. The second 1 we have is the behind-the-meter generation bucket, which I chatted about more so in your first question in River Bend and other sites that we have. The third 1 is M&A through our corporate development team. There continues to be very interesting opportunities and growing opportunities in a world where capital becomes more constrained and flows to proven operators. And then the fourth is brownfield opportunities as well on existing campuses. So we continue to look at all 4 of those, continue to originate across all 4 which gives us a strong conviction that outside of the publicly disclosed pipeline with 3 other pipelines with dedicated teams looking at opportunities there.

Your next question comes from the line of George Sutton with Craig-Hallum.

Asher, I found it interning that your energy capacity under diligence came down, but your capacity under exclusivity went up. Can you just give us a sense of -- that just sounds like a more focused way to go to market. Is that the way to read that?

That's exactly right. The way to think about our pipeline, it's a funnel. You start top of funnel more wide. And as you get deeper and deeper in more resources get allocated more time gets committed to sites. We closing the aperture. And so at every stage, the requirements get higher and higher as we continue developing those sites. And so we have kind of clear guardrails before projects pass from 1 stage to another, and we dedicated additional resources to it. So you see a transition from capacity and the diligence exclusivity through quarter-over-quarter.

Just 1 quick question on -- when we watched you bill Vega. That was just simply a better mousetrap at the time really shortening delivery times and lowering costs. When you look at the application of these kinds of principles to the AI development. Can you just give us a sense of how significant can those deltas be in your view and maybe looking out a couple of years?

Very significant we've done more than a couple of hours in recent months at Vega sharing our design lost in abilities. It's actually pretty interesting because before we started building a River Bend and Beacon Point, we had self-engineered designed a lot of our own infrastructure in GC all of it. So Vega that campus you not only see the first principle of design pathology, but you see the components in which we designed and contract manufactured everything from tight skids to the PDU, the switch gears and so forth. As we enter the AI space, the big thing that we were building was credibility for end-user tenants to trust that we can build this infrastructure stack. So we hired some of the largest GC equipment suppliers in the world to help build that credibility and help execute. As we've executed for these end users, we've built that credibility. And in those discussions, we started talking about our origination where we came from the capabilities that we really haven't been able to tap into on these projects because we haven't been able to use first principle, it's design from the ground up how this infrastructure stack would work. And so opened a slew of conversations as people think about this capacity as people think about this capacity on earth and space, how do you drive more efficiency, more speed, and so there is a next chapter there, George, that I alluded to in my prepared remarks, but we believe the skill sets and the philosophy that we built in a world where we were able to build infrastructure without constraints will be coming to light as well.

Next question comes from the line of Ben Sommers with BTIG.

I wanted to just ask a bit about the capacity that you guys moved under exclusivity, says that you're looking across multiple regions there. So anything you want to highlight in particular regions of interest as we expand the power portfolio?

Yes. So when you look at the overall pipeline, 1 big asset we've received from investors was the understanding the pipeline and the makeup of that pipeline, we share the megawatt numbers, but we didn't share how many sites those were. We didn't share what regions they were kind of made up of. And so as you look through the disclosure this quarter, we shared kind of the ag size per site. We also shared the makeup of what ISO those sites are. And I think for most people that will see that we're very diversified the thing that causes that diversification is we actually have teams dedicated to different regions to specialize in those regions and to dive deep within them as well. As we continue to scale, we have our greenfield origination team. We have our corporate development team. And so we're looking at projects across the board. And as we think through the election cycle yesterday as well, diversification, I think, is increasingly important to be able to navigate through any policy or market volatility that may come up, and we feel confident that, that diversification today.

Next question comes from the line of John Todaro with Needham & Company.

And congrats on a quarter down here. I guess just going back to Texas and the election in your comments around ERCOT in the December approval schedule. Just wondering if you could frame up the confidence in that Maimi would be -- maybe it gets pushed out and you get new directives from a governor but you guys are obviously closer in Texas and with those regulators. So just wondering on the framing of ERCOT confidence for the December approvals.

Going into the elections, we spoke to a lot of our consultants and lobbyists in regards to the different outcomes of the election how is effective. I think the thing that is really important is from day 1, we've focus on building responsibly. And so even when the audit process came out, we were confident there because we had already answered the questions from the PUC that came out that were voluntary. Similarly here, we believe the mindset is not don't build net new investments into the state, but more so, how do we build responsibly. And so based on the current progress and being a very mature project that's financed, and the ways in which we're building, we feel confident in working with the governor elect and anything that she needs in terms of continuing to progress and invest into the state.