Digi Power X Q3 2026 Earnings Results & Report

Digi Power X EPS Results

• Actual EPS: $0.01
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A
• EPS Beat Rate: 4 of last 5 quarters

Digi Power X Revenue Results

• Actual Revenue: $12.25 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Digi Power X (NASDAQ:DGXX) is a digital infrastructure company focused on developing and operating data centers and energy assets. Its facilities support Bitcoin mining and, as the company expands its strategy, high-performance computing and artificial intelligence workloads.

The company was formerly known as Digihost Technology Inc. and has operated data center and power-generation assets in the United States, including in New York and Alabama. Its integrated approach combines computing facilities with energy infrastructure to support its operations.

Digi Power X is led by CEO Michel Amar. The company’s business continues to evolve as it pursues opportunities beyond cryptocurrency mining in digital infrastructure and computing.

Digi Power X Q3 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Revenue rose 85% sequentially to $12.25 million, with AI contributing $5.66 million, or 46% of the total; legacy Bitcoin revenue fell to 27% of revenue from 63% a year earlier. Management reported $0.6 million of adjusted EBITDA and $1 million of net income, though net income was materially supported by digital-currency and warrant valuation gains.
• Positive Sentiment: Digi Power X expects to give Cerebras access to Columbiana phase one on December 15, with billing expected to begin in January 2027; phase two access is targeted for March, with billing in April. Management says the 10-year take-or-pay agreement represents about $402 million in phase-one fees and approximately $1.07 billion across both phases.
• Positive Sentiment: NeoCloudz GPU rental revenue reached $2.46 million, up 127% sequentially, and the company launched its Token Factory, which management says could deliver 85%–90% margins. Those margins and the projected growth of the new business remain management estimates rather than demonstrated results on the call.
• Neutral Sentiment: Management is targeting a $250 million–$300 million annualized revenue run rate by the end of Q3 2027, but said only about $143 million is supported by current operations and the Columbiana contract; the balance depends on additional customers and capacity. Its approximately $350 million 2027 capital plan is expected to rely on customer deposits, financing, and cash on hand.
• Negative Sentiment: The proposed $200 million project-level financing had a commitment letter and loan documents, but remained subject to due diligence, documentation, and other conditions, with closing expected in Q4 2026. The company also reported $4.7 million of positive Q3 cash flow with help from a $12 million non-refundable tenant contribution, so the figure was not solely generated by ongoing operations.

Presentation

[Moderator]

Good morning, and welcome to the Digi Power X Inc.'s Third Quarter 2026 Financial Results Conference Call. Please note that this event is being recorded, and a transcript will be available on Digi Power X Inc.'s website. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. Unless noted otherwise, all amounts referred to during this call are denominated in U.S. dollars. Certain comments made during this call may include forward-looking statements or forward-looking information within the meaning of applicable U.S. and Canadian securities laws, including statements regarding the company's 2027 outlook, capital plan, and anticipated financing. Such statements and information reflect current expectations and are, as such, are subject to a variety of risks and uncertainties that could cause actual results to differ materially from current expectations.

[Moderator]

Those risks and uncertainties include, but are not limited to, factors discussed in Digi Power X Inc.'s report on Form 10-Q for the three and nine months ended September 30th, 2026, and the annual report for the year ended December 31st, 2025, as well as the company's other disclosure documents. Except to the extent required by applicable law, Digi Power X undertakes no obligation to publicly update or review any forward-looking statements. During the call, management may make reference to certain Non-GAAP financial measures that are not separately defined under GAAP, such as EBITDA and adjusted EBITDA. Management believes that those Non-GAAP measures, when considered in conjunction with GAAP financial measures, provide useful information for both management and investors.

[Moderator]

Reconciliations between GAAP and Non-GAAP measures are presented in tables accompanying the press release highlighting Digi Power X financial results for the quarter ended September 30th, 2026, which has been filed and made accessible under the company's continuous disclosure profile on SEDAR+ at www.sedarplus.ca, and is also available on the SEC's EDGAR website at www.sec.gov/edgar. I'd now like to turn the call over to Michel Amar, CEO of Digi Power X. Please go ahead, sir.

[Michel Amar, CEO at Digi Power X]

Good morning, everyone, and thank you for joining us today as we share our results for the third quarter of 2026 for Digi Power X. Our third quarter results show that Digi Power X transformation into AI infrastructure company is beginning to take hold. Third quarter 2026 highlights. Our revenue went up 85% to $12.25 million from the second quarter of 2026, and up 50% from the third quarter of 2025. AI revenue of $5.66 million, up more than 400% from the second quarter, and representing now 46% of total revenue, compared with no AI revenue in the third quarter of 2025. GPU rental bare metal through NeoCloudz of $2.46 million, up 127% from the second quarter, compared with no GPU rental revenue in the third quarter of 2025. Energy sales through our power plant of $3.29 million, up 68% from the second quarter, and 9% year-over-year.

[Michel Amar, CEO at Digi Power X]

Legacy Bitcoin activities fell to approximately 27% of revenue from 63% a year ago. AI revenue more than offset that decline. EBITDA of positive EBITDA of $6.5 million and positive adjusted EBITDA of $600,000 compared with $1.7 million and $-1 million respectively in the third quarter of 2025. Positive net income of $1 million, materially supported by digital currency and warrant valuation gains, compared with net income of $100,000 in the third quarter of 2025. Let's talk about the balance sheet and liquidity as of September 30, 2026. Cash and cash equivalents and digital currencies of $119.6 million. Working capital of $103 million, compared with $17.5 million at September 30, 2025. Digital currency holding of $24.5 million, up 66% year-over-year. Net fixed assets of $145.6 million, up 646% year-over-year, reflecting infrastructure investment primarily at the Columbiana, Alabama facility.

[Michel Amar, CEO at Digi Power X]

No outstanding borrowing as of today. Balance sheet and liquidity as of today, November 13. The company's cash equivalents is approximately a little bit above $100 million cash. $168 million year-to-date capital expenditure deployed towards GPU equipment and data center build-out at the Columbiana, Alabama facility. Operational highlights and outlook. Columbiana, Alabama AI campus. Construction of phase I remain on schedule. We expect to give our tenant access to the phase I facility on December 15, 2026. Basically, in 4.5 weeks from now. We'll start conditioning all the liquid cooling and power system at that time. With phase I billing expected to begin in January 2027. Work on phase II has started already for a few months, and subject to various conditions, we are targeting tenant access for phase II in March 2027.

[Michel Amar, CEO at Digi Power X]

We are on schedule to be also on time to give access. A lot of the investment has been towards phase II already. Our 10-year take-or-pay colocation agreement with our tenant, Cerebras, our AI colocation tenant at Columbiana is expected to provide phase I fees averaging approximately $40 million per year over the 10-year term, or approximately $402 million in total. Phase II would add approximately $58.5 million in annual fees, bringing combined average annual fees to approximately $107 million per year, and a total contract value to approximately $1.07 billion for both phases. The agreement also includes an option to extend the relationship for an additional term, which could increase the total potential contract value to approximately $2.5 billion. NeoCloudz Token Factory is live.

[Michel Amar, CEO at Digi Power X]

We launched this quarter from Berlin, our Token Factory, taking Digi Power X from AI infrastructure provider to direct seller of AI tokens. Running on our own power, data centers, and GPUs, the platform sells AI inference straight to customers. The huge advantage of that are the margins. We see margins anywhere from 85% to 90%, actual margins. So it's a business that will create a lot of positive cash flow as we invest in it. Because we own the full stack, we keep the value of every token we serve instead of renting out compute at wholesale prices. We expect the Token Factory to unlock a new fast-growing revenue stream with meaningful higher margins, a major step in turning our infrastructure into full-scale AI business. Let's talk about the $200 million project-level debt financing.

[Michel Amar, CEO at Digi Power X]

As announced on October 13, 2026, we received a commitment letter from a major lending institution for $200 million in debt financing, syndicated by Goldman Sachs to support the development of our 40 MW AI data center in Columbiana, Alabama, and to strengthen our balance sheet. The financing is expected to be structured at the project special purpose vehicle level, with an unsecured company guarantee through project completion and other limited matters. The proceeds are intended to support completion of the Columbiana project and related project costs. Closing is currently expected to close in the fourth quarter of 2026, subject to related documentation and the satisfaction of various conditions, including the lender's completion of its due diligence. 2027 outlook and capital plan.

[Michel Amar, CEO at Digi Power X]

We expect to reach an annualized revenue run rate of approximately $250 million-$300 million, or approximately $21 million-$25 million per month by the end of third quarter 2027, subject to adequate financing, market condition, and various other conditions. Approximately $143 million of that run rate is supported by current operation and the Columbiana tenant agreement. The balance is expected to come from additional AI colocation and GPU capacity currently in development and in customer negotiations. CapEx. We expect 2027 CapEx of approximately $350 million. Primarily for approximately 10 MW of AI inference or Token Factory at 85%-90% margins, capacity and the completion of our phase II Columbiana. We intend to fund this principally through customer deposits and prepayment and contract debt financing, including the proposed $200 million facility together with cash on hand.

[Michel Amar, CEO at Digi Power X]

This approach ties capital deployment to contracted revenue and is designed to minimize shareholder dilution. I want to remind every shareholder that in 2016, I invested from my personal cash $8 million, and I never sold one share. Just to tell you that I have a long-term vision of a huge return on my investment. US Data Centers update. Digi Power X owns approximately 48% of US Data Centers Inc., which design and deploys the ARMS modular AI data center system and is developing URP-1, a robotic platform for automated deployment and maintenance. USDC is raising capital independently, which will further dilute our ownership interest without capital contribution from Digi Power X, without the issuance of Digi Power X shares.

[Michel Amar, CEO at Digi Power X]

In order to fund our growth, which is very promising on US Data Center, we're going to raise capital without diluting Digi Power X or without getting any allocation on Digi Power X. I think that's very important for everyone to understand that Digi Power X today is very focused on power, on GPU bare metal, on colocation deal, and cannot afford to allocate extra dollars to expand robotics or modular systems. That's the reason why we have a different setup to raise capital. What are the opportunity for growth and expansion? We continue to prepare our New York infrastructure assets for conversion to AI data center operation, and we are targeting the transition of these sites beginning of third quarter and fourth quarter 2027. These sites are powered.

[Michel Amar, CEO at Digi Power X]

One is powered for the last 10 years, 18.7 MW, and another one where we have a total of 120 MW, including our generation of power, is being powered for 30 years in terms of generation. We got an allocation from the utility, which is great because it's all green power, hydropower, and we got an allocation of 63 MW there. Because of our financial discipline, we haven't rushed to develop it simultaneously with the Columbiana, Alabama AI Center in order to control our CapEx. We don't want to rush and be out of cash. As we transition from a project to execution, which we have been sharing videos of our progress, and I was there actually a few days ago, and it's really, we are very close to finalize phase I, few weeks.

[Michel Amar, CEO at Digi Power X]

As we transition from project to execution to live, then we can keep on going with our other assets. In North Carolina, we own now two sites, about 40 acres adjacent to one of the state's largest electrical switchyard. Our current development plans contemplate 2x 75 MW, about 150 MW for 2029 and 2030. That will secure our growth for the future years. Between New York and North Carolina, we can expand to over 400 MW worth of capacity, which depending how we optimize each megawatt, is huge revenues. We definitely have currently, we own the assets to grow 2x, 3x every year for the next few years. Revenue increased 85% over the previous quarter, and AI now accounts for nearly half of our business, all before the expected start of Columbiana colocation billing in January 2027.

[Michel Amar, CEO at Digi Power X]

Our priority now is execution, financial discipline, and then we expand our compute capacity and convert our power assets into long-term contracted revenues. We ended our quarter with approximately $120 million in cash and cash equivalents that give us a strong foundation for this next phase. We are building this business with a clear focus on value per share. Our approach is to secure bankable customer commitments, deploy capital against attractive returns, and fund expansion through customer contribution and contract-backed financing. Our ambition is substantial, and our discipline is equally clear: grow recurring revenue and cash generation while minimizing shareholder dilution. Thank you for joining us today. We will now take questions.

[Moderator]

Thank you. Our first question is, what do Q3 results demonstrate about Digi Power X's AI transformation?

[Michel Amar, CEO at Digi Power X]

It is really an incredible quarter for us. If you think that last year we were a basically dying Bitcoin company, and we had very little cash, January 2025, I think $1.7 million, very little assets, net fixed assets were like $30 million. And in a year, we went from no cash, little assets, a Bitcoin dying business, to cash, $130 million, $140 million of net fixed assets, CapEx this year already invested of $160 million, and AI revenues that represent almost half of our total revenue. We believe that it was a transformative year and quarter as we are growing accordingly to our pace. We started to process data bare metal rental in May very successfully, and a lot of companies came to our site to see our execution, and everybody is very impressed.

[Moderator]

Thank you.

[Michel Amar, CEO at Digi Power X]

Next, yeah.

[Moderator]

How much revenue is recurring or contracted?

[Michel Amar, CEO at Digi Power X]

Columbiana, Alabama, provides our strongest long-term contractual revenue visibility with a 10-year take-or-pay agreement. phase I represents approximately $402 million in contractual fees, increasing to approximately $1.07 billion with phase II. NeoCloudz and our other operating business also generate ongoing revenue, although contract duration and utilization vary anywhere from two to five years. We are focused on increasing the share supported by long-term commitments, five years for NeoCloudz and 10-15 years for colocation.

[Moderator]

Thank you. What does the December 15 Columbiana milestone represent?

[Michel Amar, CEO at Digi Power X]

December 15 is a key number, and considering that we signed the deal with our tenant, Cerebras, early May, which is really few months ago, it is really incredible that we managed to design and finance and set up phase I in basically seven months. I believe we are one of a kind to be able to execute on such a short period of time. December 15, tenants will have access to the data hall, and we will start commissioning the power and all the liquid cooling systems that are basically done. It is a very important delivery milestone for us, as a landlord, after the commissioning, we can start billing.

[Moderator]

Thank you. What is the financial value of the Columbiana agreement over 10 years?

[Michel Amar, CEO at Digi Power X]

As stated a few minutes ago, the 15 MW first phase represents about $402 million over 10 years, and the second phase of 25 MW represents an additional, a little bit over $600 million, for a total of $1.07 billion, averaging about $107 million annually.

[Moderator]

Thank you. Is phase II on track for March 2027 tenant access?

[Michel Amar, CEO at Digi Power X]

Construction of phase II has already started. There's a lot of common denominators between phase I and phase II. The data hall has both phases in the data hall, so it's there. All the fire suppressing requirements, all the chillers are already there for both phases, phase I, phase II. All the equipment has been purchased for both phases, phase I, phase II. We designed that contract to be able to do two phases so we can financially support it no matter what. And we are very advanced in the phase II as well. We don't see any issues to be giving access to phase II in March 2027. The commissioning will be easier because all the liquid cooling commissioning will be done, this month and early December.

[Michel Amar, CEO at Digi Power X]

We believe that the type of commissioning will be shorter in March, and we expect to bill in April the full total monthly contract.

[Moderator]

Thank you. What additional value could the renewal options under the Cerebras contract provide?

[Michel Amar, CEO at Digi Power X]

It's a little bit under $1.1 billion for the initial term, and we can go to a total of $2.5 billion as an option. We believe that the investment of a tenant is so huge, they're going to locate in that data hall billions of U.S. dollars of equipment, of servers and GPUs, and it's very costly for a tenant to move out. Not only it's costly, it's their economic interest to stay as much as they can, as the power shells are very scarce these days. The value in our opinion will be much greater in 10 years from now.

[Moderator]

Thank you. Where does the proposed $200 million financing stand?

[Michel Amar, CEO at Digi Power X]

It's interesting because earlier, we had an approved financing that I denied in July from one of the biggest world institutions, because I didn't like the terms. Then we decided to deny an approved financing to move and syndicate it through Goldman Sachs, which saved us on this financing about 2 points, which is incredible. As the interest rate went up, we managed to save 2 points on the financing. We are pretty close to close the financing. We got the loan documents, so we expect to close in the near future, definitely in Q4 2026, but we are pushing to close earlier. I think we are one of the best candidates for a lender, as we invested our own capital, we have cash, and we are executing on time. We're a pretty good candidate for a lender.

[Michel Amar, CEO at Digi Power X]

But we managed to be in single-digit interest, which is rare these days.

[Moderator]

Thank you. How will the approximately $350 million 2027 capital plan be funded while minimizing dilution?

[Michel Amar, CEO at Digi Power X]

Our funding strategy combines customer deposits and prepayments. With the crisis that happened in the last four, five weeks, which was torture for our stock price, but [inaudible] company, the entire market went down. It also gave us an opportunity to ask for bigger deposits on new contracts. Now the few discussions that we have, and we're finalizing to set up new contracts, we are getting much more than we used to six months ago. If six months ago, a tenant or a bare metal renter was willing to give you 15%, now they are willing to give you 30%, and sometimes up to 50%, and sometimes, as we are negotiating now, up to 70%. Then, financing from the customer perspective becomes so easy for us to grow because we achieved something incredible. We are credible.

[Michel Amar, CEO at Digi Power X]

We are not a company that talks about power and may have a connected power with a grid in 2028, 2029. We are executing, and a lot of very big companies came to our sites, very large companies came to our sites and understand that we are for real, that we are credible. Now they are willing to support us and give us bigger deposits and help us finance our growth. That's the major accomplishment that we are realizing by execution.

[Moderator]

Thank you. What supports the $250 million-$300 million annualized revenue target?

[Michel Amar, CEO at Digi Power X]

We already have about $143 million on the contract, and the remaining $107 million-$150 million are expected from our development of the other sites through colocation or GPU capacity. If we had an open bank checkbook, we could have done it for Q1 or Q2, but considering the market condition and our financial discipline, if we want to go fast, we have to walk slowly. We have to be careful. We survived all the Bitcoin cycle years since 2016. We always survived. We do not want to be exposed to a financial issue by growing too fast. We have time. There is plenty of market share for us to get, and we believe that Q3 will be in the run rate of what we announced.

[Moderator]

Thank you. Can operations generate sustained positive cash flow?

[Michel Amar, CEO at Digi Power X]

Let us talk about Q3. We generated $4.7 million of positive cash flow in Q3. True, with the help of a $12 million non-refundable tenant infrastructure contribution, and we believe that next quarter, we will also be cash flow positive between the business and additional non-refundable contribution, a bigger one this time because of the relationship from 15 MW-25 MW. Then we are live, then we have cash flow coming in. We believe we are in a good position today to create positive cash flow.

[Moderator]

Thank you. What drove NeoCloudz growth, and are its margins sustainable?

[Michel Amar, CEO at Digi Power X]

We started with bare metal GPU rental, and you saw the increase of 127% sequentially to $2.46 million as NeoCloudz scaled. The opportunity of bare metal and GPU as a service and Token Factory is to increase your revenue per megawatt and your margins per megawatt. Considering the environment, the political environment, and by the way, we are very lucky to be in Alabama. I was at the election night last Tuesday with the governor-elect, the coach, Tommy Tuberville, which I have a great relationship, and he reiterated directly to me that he's welcoming data centers in Alabama, and he's welcoming our contribution, he's welcoming our job creation, he's welcoming the incredible science and technology of AI that will save lives, cure cancer, and cure most of incurable diseases. So he's very pro-technology and is welcoming growth in Alabama.

[Michel Amar, CEO at Digi Power X]

We're very excited because we definitely can expand in Alabama and contribute to the communities and create value to these communities by creating a lot of jobs. Now, in our campus, in a very small city, we have about 250 construction workers.

[Michel Amar, CEO at Digi Power X]

Highly paid jobs that are going to restaurants, that are going to hotels, that are creating an economic boom locally. So, it's really interesting, and we're really excited to be in Alabama there. And to go back to this business of maximizing and optimizing per megawatt, considering the scarcity of power and the upcoming regulations of power, where they're going to start to basically state-to-state limit powers below 50 MW, I don't think that you're going to see 500 MW campus or 1 GW campus. I think the strategy is more into the 50 MW, 25 MW campuses, which is very big if you do GPU bare metal. Very big revenues.

[Michel Amar, CEO at Digi Power X]

Today, bare metal, we can book short-term B300 at $775 per hour, bare metal. If we do tokens, it's $15-$20 per hour equivalent, per token. So, the pricing is booming on the GPU as a service. And it makes sense because the bottleneck, the struggle, the constraint is permitted available power. And why it creates an opportunity for a small company like ours is that we do own the power. We understand all stacks from power generation to Token Factory, which is very rare. Not a lot of companies generate power and are able to sell tokens. And every megawatt now, we know how to maximize the revenue and the value. We can get easily $2 million-$3 million a month per megawatt. So, if I just convert 50 MW, that's $100 million a month. Okay?

[Michel Amar, CEO at Digi Power X]

At very, by the way, very high margins, 85%-90% margins. Our catalyst is execution, which we are 95% there, and financial discipline, and we are an incredible company.

[Moderator]

Thank you. What is the path to securing an AI customer for New York?

[Michel Amar, CEO at Digi Power X]

The market is such that there is so much demand, and there is much more demand today than six months ago. As we shifted from training to inference, it is exploding. The demand is exploding. We have many potential contracts now that we could sign, and we are being very, very cautious and making sure that we leverage the scarcity of our powered assets. Like New York is permitted and running Bitcoin still, legacy business, as a data center. It is there, so we just have to shift it to a redundant data center. And we want to make the right deal for the company. We were not in a rush because of the financial discipline, and we want to close our debt financing, and then we are going to develop our New York asset, which is going to be an incredible revenue asset. And there is plenty of demand.

[Michel Amar, CEO at Digi Power X]

There is no issue of finding a customer. Plenty of demand, and including few IG, investment-grade customers. We are very excited about New York.

[Moderator]

Thank you. How does the 48% USDC ownership create value for DGXX shareholders?

[Michel Amar, CEO at Digi Power X]

The value and the protection of Digi Power capital. Of course, Digi Power would want to produce everything, transformers, switchgear, and will be without any capital left for the focus business. By being a major shareholder, the biggest shareholder of US Data Centers Inc., that is now planning to produce pod system, which are very adequate, by the way. The timing is incredible because you are going to see, we are getting on the US Data Centers Inc. a lot of action on smaller sites, because that is what is available and that is what is under the radar politically. A lot of action for us for 2027 and 2028. It is going to be an incredible company, by the way.

[Michel Amar, CEO at Digi Power X]

Related to this modular system that are housing all the different brands of GPUs, not only NVIDIA, but the B300, the Vera Rubin, the Vera, NVL4, NVL8, the Cerebras CS-4, CS-5, the AMD, the Helios, the GB300. We have everything set up. Under the US Data Centers Inc., we are also getting deposits from customers to finance the growth along with debt financing in the future. The slight dilution to get capital does not affect whatsoever Digi Power X. Now, on US Data Centers Inc., we are looking to create a nice size value for that company as we are developing as well robotics. We actually have industrial robots that will be live this quarter, 2026, and they are going to be related to industrial sites for maintenance, variation of temperature or humidity, or all the different basic data that is needed in a data center.

[Michel Amar, CEO at Digi Power X]

We are going to start to lease these robots to different industrial sites. By creating value there, Digi Power has a free take on a big piece of the value of the growth of US Data Centers Inc. without any risks that, by the way, cannot afford to take. We do not have a money allocation to go and invest in new ventures. We have to focus on our core business, on the Digi Power X, and execute. We have a three to five-year plan that take us to a very high level, and that is what we should do.

[Moderator]

Thank you. What milestones should shareholders use to judge execution over the next two quarters?

[Michel Amar, CEO at Digi Power X]

It is very simple. It is purely execution. phase I, tenant access in basically five weeks, four to five weeks. Commissioning starting December 15 or earlier. Billing starting January. Closing of a proposed financing in the next few weeks, but in quarter 2026. Progress of a phase II and access in March 2027. Commissioning and live and billing in April 2027. Adding few AI customers with huge deposits so we do not have to, A, dilute, and we can negotiate the best financing, debt financing, if necessary. This milestone will show how effectively we are converting our investment into recurring revenue.

[Moderator]

Thank you. Do you anticipate continued growth in the NeoCloudz sector going forward?

[Michel Amar, CEO at Digi Power X]

We believe that this is the best use and the best ROI of our investment. Because when you work at 85%-90% margins and you have scarce power connected, this is the best use of your dollars. We do not see any slowdown in the next three to five years. We are actually negotiating contracts now, five-year contracts that are huge and with very little power, so we can execute. We see a continued growth in that sector. We just have to make sure we figure out the financing properly.

[Moderator]

Thank you. Our final question. How do Cerebras' Q3 results impact Digi Power X?

[Michel Amar, CEO at Digi Power X]

A lot of shareholders call me and say, "But are you sure about Cerebras? Their stock was $360, it went down to $100. Aren't you worried?" I said, "How can I be worried about one alternative of NVIDIA?" Their result yesterday showed that they are doing great. They are up 55% year-over-year. Their cloud services revenue, 255%. They have close to $8 billion in cash. We have an incredible relationship with Cerebras, from management, CEO, to everyone. They are very, very happy with us. We are very happy with them. We can grow further with them. The only reason that we did not grow are for the same reasons I mentioned earlier. We need to go step by step and be disciplined financially.

[Michel Amar, CEO at Digi Power X]

As you know, they announced that they have 700 MW contracted, and 700 MW is hard to find today. They will definitely take more colocation from us, 100%. We just want to make sure that we have a diversified base of customers so we can be more valued. You have to understand one important factor. In March, when our data center is done, state-of-the-art, by the way, designed by one of the best designers in the U.S., when our data center is done, our value for liquid cooling data center today is about, in my opinion, $30 million-$35 million a megawatt of IT. I will tell you how I base my valuation. Blackstone paid, before the election, $27 million a megawatt for a data center in West Virginia.

[Michel Amar, CEO at Digi Power X]

After the election, it is worth easily 20%-30% more because of the scarcity and potential regulation in Texas and so on. A finished data center alone, the value of it, excluding the contract value, is $30 million-$35 million a megawatt. Multiply by 40, and you get an idea of what it is worth. Deduct the $200 million debt financing out of $1.2 billion or $1.4 billion, then we have a net equity there of $1.2 billion. That is what it is worth. Add now the contracted value that brings monthly EBITDA, recurring revenues, guaranteed, and you add another $200 million there. We are very confident that our relationship with Cerebras has detonated our credibility. I believe that Cerebras GPUs are very powerful in token per second, TPS, inference.

[Michel Amar, CEO at Digi Power X]

With all the trouble in NVIDIA, Cerebras is very well positioned to grow and take market share. Considering NVIDIA has 90% of market share, I would not be surprised that NVIDIA start to go down in market share and Cerebras start to grow in market share. They are going to need good partners that they trust, and we are one of them. We are very excited about our relationship with Cerebras. Any more questions?

[Moderator]

No, that was our final question.

[Michel Amar, CEO at Digi Power X]

Okay. Thank you, guys. Thank you, shareholders, for your patience and your support. I know it gets very frustrating to go through the cycles of ups and downs on the stock price, but we are very committed. We have an incredible team. I really want to thank my team, Alec specifically, who is not a big talker, but he does a lot of work. He is the one who triggered that Cerebras deal and negotiated that Cerebras deal since last year. He has a lot of incredible deals on lap now that we are going to convert in the short term. We have a great team in West Coast. We acquired a building, 18,000 sq ft in Sunnyvale, very close to Cerebras, very close to Supermicro, Google.

[Michel Amar, CEO at Digi Power X]

Beautiful building that we are renovating and making beautiful state-of-the-art offices, where we are going to have our racks of B300, Vera, and we are going to be able to use it as a showroom and demonstration of our capabilities. We are going to have a small Token Factory there, and we are building an incredible team with Jag and his different engineers. Of course, again, we make sure to grow related to our revenue growth, as a ratio of revenues. I forgot to mention also, and I will close the statement, we lower our SG&A expenses 30% from Q2 to Q3. We are trying to be very disciplined in how we allocate dollars. Everybody knows that we have an entrepreneurial approach to business, not a very corporate approach.

[Michel Amar, CEO at Digi Power X]

I let the lawyers be corporate, the accountant be corporate, but as far as speed of execution, we are a very small team that can communicate and execute and make decisions very, very quickly, so we can compete. But we have a good shot of getting market share here. Thank you so much, everyone, and let's hope we get a great day today. Thank you, guys.

[Moderator]

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

Participants

Executives

• Michel Amar, CEO

Analysts

• Moderator