Bitfarms Ltd. Q2 FY2026 earnings call

• Strategic Transition Completion

  • Management has delivered on all 18-month-old transition commitments: exited Latin America and Bitcoin mining, rebuilt the balance sheet to support AI data center development, and positioned the company to monetize assets amid growing power scarcity
  • Added Ganesh Iyer, former Chief Business Officer of Digital Realty, as President to lead commercial efforts
  • Current management focus remains on three core priorities: advancing permitting/leasing across priority sites, securing expansion capacity, and delivering energized megawatts to customers on schedule

• Site Development Updates

  • Moses Lake (Washington): Expected to be the first fully permitted, online site generating HPC/AI revenues in 2027. Bitcoin infrastructure is fully removed, first Vertiv modules have arrived on site, all long-lead critical equipment is secured. The site targets faster-moving AI, GPU cloud, and enterprise customers, with possible modified gross lease structures to accommodate faster tenant timelines. Management has given up the option for additional 10 megawatts, focusing on the 18 megawatt core development
  • Sharon (Pennsylvania): Full zoning secured in April, land development approved, final environmental permits are submitted and on track. Management is evaluating consolidating planned phases into a single 110 megawatt build to simplify construction and improve the product. The site holds rare uncontracted 2027 power in the PJM market, with active commercial discussions focused on triple-net leases with credit-supported AI companies
  • Panther Creek (Pennsylvania): Secured zoning and conditional land development approval, refined design for higher density deployments, with 350 megawatts of secured utility capacity and expansion potential to 500+ megawatts. Final environmental permitting is taking a few months longer than originally expected, but this does not change the 2027 power delivery schedule, project economics, or commercial progress. Conditions attached to conditional approval are standard, minor adjustments that are easily complied with
  • Sherbrooke (Quebec, Canada): Secured all local approvals, with only provincial approval remaining. If approved, three legacy Bitcoin power purchase agreements will be consolidated into a single 96 megawatt HPC/AI power purchase agreement, leveraging strong demand for data sovereignty-constrained capacity in a market with extremely limited new power availability
  • Scrubgrass (Pennsylvania): Pipeline stage, currently in energy application for 750 megawatts of utility power, with detailed load studies ongoing. No permitting or data center construction planning has started yet, with an update expected as early as December 2026 or January 2027

• Capital and Liquidity

  • Closed an upsized $458 million convertible senior notes offering (up from $400 million initial target) driven by strong investor demand. Total liquidity as of August 7, 2026 is $819 million, enough to fully fund site development through lease signing, expansion opportunities, and cash SG&A through 2028. Proceeds are earmarked for incremental power capacity expansion at the existing Panther Creek and Scrubgrass sites, not new greenfield development
  • Management reports that project-level high yield debt markets have adequate capacity for Keele's needs, even with wider spreads, and that liquidity allows waiting for post-lease financing when cost of capital will be lower

Keele Infrastructure has fully exited its legacy Bitcoin mining segment to focus on HPC and AI data center development. For Q2 2026, total company revenue was $30 million, down from $61 million in Q2 2025, driven by the wind-down of Bitcoin mining operations and lower average Bitcoin prices. Operating loss was $141 million, compared to operating income of $11 million in the prior year period, including $63 million in accelerated depreciation for decommissioned mining rigs. Adjusted EBITDA was negative $24 million, compared to positive $7 million in Q2 2025, reflecting lower Bitcoin-related revenue and higher G&A from senior hiring for the new data center business. The legacy Bitcoin business is nearly fully decommissioned: all U.S. Bitcoin mining operations have been decommissioned, with only a small remaining operation in Canada producing roughly 2-3 Bitcoin per day. For 2026 full-year guidance, cash SG&A is tracking at $100 million, with no revenue contribution from Bitcoin assumed in liquidity forecasts.

• The company still targets first energized and commissioned data center operations in 2027, with no change to the 2027 RFS date for any core Pennsylvania sites; Moses Lake is delayed by a few months from original guidance but remains on track to be the first site online in 2027
• Full-year 2026 cash SG&A is tracking at $100 million, consistent with prior guidance
• Liquidity is sufficient to fully fund all planned activities through 2028, with no Bitcoin revenue contribution assumed in forecasts
• Management expects to provide a full update on Pennsylvania expansion capacity and the Scrubgrass site as early as December 2026 or January 2027
• Moses Lake is expected to be the first site to generate durable free cash flow and return significant equity capital to the balance sheet after commissioning
• Management maintained its prior approach of not rushing lease signings to hit near-term headlines, instead prioritizing long-term value maximization for shareholders

• Broader macroeconomic and capital market conditions are cited as the biggest current risk, including evolving capital market access, changing financing availability, interest rate volatility, and shifts in risk sentiment that could impact project financing costs
• Permitting backlogs in Eastern Pennsylvania's Department of Environmental Protection (DEP) have caused minor delays to Panther Creek's final environmental permitting, though this has not impacted core project timelines or economics
• New regulatory actions and data center moratoriums in other U.S. markets could create broader policy uncertainty, though management notes these actions increase the value of Keele's already-permitted sites in Pennsylvania
• Expansion capacity (nearly 2 gigawatts across Pennsylvania) could be impacted by future regulatory or policy changes, though all applications are currently progressing well
• The Canadian data center market has structural barriers to large-scale organic growth, making large capacity additions in Quebec very challenging, though the smaller 96 megawatt Sherbrooke project is seen as low-risk with attractive returns
• Supply chain risks for long-lead equipment have been mitigated by early ordering and delivery of core critical equipment across all three priority sites

Q: How does the growing regulatory and political scrutiny of data centers in other U.S. markets impact Keele's sites and tenant demand? / A: Regulatory restrictions in other markets increase the value of Keele's already-progressing permitted sites in Pennsylvania. Pennsylvania benefits from a second-mover advantage, with an existing clear regulatory framework for large industrial energy users that avoids the disruption seen in faster-growing unregulated markets. Secured capacity still needs to be located within the U.S., so policy headwinds elsewhere create incremental opportunity for Keele's portfolio. All of Keele's currently secured power capacity is unimpacted by new regulatory changes to date.

Q: Can you update the 2026 target of three lease announcements, and describe demand evolution over the last 90 days? / A: All three priority sites remain in active due diligence and negotiation with multiple high-intent potential tenants. While management declined to give a formal update on hitting the 2026 target, it noted that 2027 power grows more valuable as delivery approaches, which keeps tenant engagement high and the commercial process progressing well. Permitting, supply chain, and pre-construction work continues to move forward across all sites regardless of negotiation timelines.

Q: What is the opportunity for the Sherbrooke, Quebec project tied to Canadian data sovereignty requirements? / A: Quebec has strong national and provincial policies requiring data sovereignty, creating captive demand for HPC/AI capacity that cannot be served by U.S.-based sites. New power capacity for data centers is extremely scarce in Quebec, so repurposing existing approved Bitcoin mining power for AI use creates a unique, high-value asset. Management expects to be able to charge a premium for this capacity, and the project provides geographic diversification for Keele, insulated from some U.S. regulatory and tariff changes.

Q: What are Keele's top current risks, and what mitigation has been done on supply chain risk? / A: The biggest risk is broader macro and capital market conditions, including interest rate volatility and shifting financing availability that impact the entire industry equally. Supply chain risk has already been heavily mitigated: all core long-lead equipment for the three priority sites has been ordered, with many units already delivered to site. The strong demand for 2027 available power keeps tenant engagement very high, offsetting broader macro risk for Keele's specific portfolio.