Fermi Q2 2026 Earnings Report

Fermi EPS Results

• Actual EPS: -$0.04
• Consensus EPS: -$0.06
• Beat/Miss: Beat by +$0.02
• One Year Ago EPS: -$0.02

Fermi Revenue Results

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

Fermi Announcement Details

• Quarter: Q2 2026
• Date: 8/13/2026
• Time: Before Market Opens
• Conference Call Date: Thursday, August 13, 2026
• Conference Call Time: 9:00AM ET

Fermi (NASDAQ:FRMI) is an energy and digital infrastructure company developing large-scale power-generation and data-center facilities to support energy-intensive computing, including artificial intelligence applications. Its business focuses on integrating electricity generation, transmission infrastructure and data-center capacity within dedicated campuses.

The company’s primary development effort is the Fermi America project near Amarillo, Texas, also referred to as Project Matador. The planned campus is intended to use a diversified energy portfolio that may include natural gas, nuclear power, solar generation and battery storage, with the goal of providing reliable electricity for data centers and other high-demand technology users.

Fermi’s operations are currently centered on the United States, particularly Texas. The company is focused primarily on developing its infrastructure platform and associated power and computing projects. Additional historical or leadership information was not included because sufficiently reliable details were not available.

Fermi Q2 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Anchor customer secured: Fermi signed a binding agreement with TensorWave for an initial 222 MW, 15-year commitment representing approximately $6.5 billion in revenue, with expansion options up to 650 MW. A backstop agreement covering the full initial term is expected to be finalized shortly.
• Positive Sentiment: Power capacity could more than double: The Hilcorp alliance is expected to add approximately 2.6 GW under a build-own-operate-transfer structure, taking Project Matador’s potential capacity to 4.8 GW without upfront capital outlay from Fermi. Power purchases will be matched to signed tenant leases, with fuel costs passed through to customers.
• Positive Sentiment: Execution milestones advanced: Fermi appointed project-delivery veteran Lee McIntire as CEO, announced EPC partnerships with Primoris and TSK, and received three Siemens F-class turbines. The company targets first power of 210 MW by July 1, 2027, and 640 MW of nameplate capacity by the fourth quarter of 2027.
• Positive Sentiment: Liquidity strengthened: Fermi raised more than $430 million through 5% convertible senior notes due 2031, generating approximately $382 million in net proceeds after the capped call. Management said the structure provides additional runway and is intended to limit dilution until the share price more than doubles.
• Negative Sentiment: Significant funding and execution requirements remain: Management is not disclosing total project costs, but cited typical costs of $3 million–$4 million per MW for power infrastructure and $10 million–$12 million per MW for turnkey data centers. Project financing and the TensorWave backstop must still be completed before full construction spending begins, leaving timing and delivery risk ahead of 2027 revenue commencement.

Presentation

[Operator]

Good day, everyone, and welcome to Fermi America's second quarter 2026 earnings call. At this time, all participants are placed on a listen-only mode, and we will open the floor for your questions and comments after the presentation. It is now my pleasure to hand the floor over to your host, Barry Sievert. Sir, the floor is yours.

[Barry Sievert, Head of Investor Relations at Fermi America]

Good morning, and thank you for joining Fermi America's second quarter 2026 earnings conference call. With me today are our Chairman of the Board, Marius Haas; our Chief Commercial Officer, Anna Bofa; our Chief Operating Officer, Jacobo Ortiz; and our Chief Financial Officer, Rob Masson. Before we begin, I'd like to remind you that today's call contains forward-looking statements within the meaning of the federal securities laws. These statements reflect management's current expectations and are subject to risks and uncertainties that could cause actual results to differ materially from those we anticipate. For a discussion of these risks, please refer to our most recent annual report on Form 10-K and our subsequent reports on Form 10-Q. Any non-GAAP measures we reference today are intended to provide a supplemental perspective on the company's ongoing operations. With that, I'll turn the call over to Marius.

[Marius Haas, Chairman of the Board at Fermi America]

Thank you, Barry, and good morning, everyone. Thank you for joining us. One quarter ago, on our first quarter call, I did something a chairman doesn't always do. I gave you a list, a focused 90-day plan built around five specific commitments, and I asked you to hold us to it. I told you the new leadership team would execute and that you should measure us not on our words, but by what we deliver. Several of you questioned why I established self-imposed aggressive deadlines on the team at a time when there was external distractions and internal transitions. Yes, it was a risk, but I have a very strong philosophy that an exceptionally talented team with a clear mission, with clear priorities, and well-understood timelines can achieve extraordinary things. With clarity comes alignment, passion, and focus. The focus eliminates the irrelevant noise.

[Marius Haas, Chairman of the Board at Fermi America]

The passion was always about doing what is right for our shareholders. Today, roughly 90 days later, I'm here to report to you on our progress, and I'll say it plainly: Fermi is in a much stronger place now than it was then. To date, we've delivered on all five commitments, including the one that matters most. Let me take you through our results. First, a quick reconnect to the macro backdrop because it frames the problem Fermi is working to solve. Power is the binding constraint on AI compute, not capital, not demand. Across hyperscalers, neocloud providers, and frontier model developers, the same bottleneck keeps surfacing: access to large-scale, reliable electricity on a timeline that matches the pace of AI and data center development. Delays are being reported across announced projects worldwide, driven by grid interconnection queues and equipment availability.

[Marius Haas, Chairman of the Board at Fermi America]

Fermi was created to relieve that constraint, and this past quarter shows you how we are doing it. Objective number one of our 90-day plan was to secure a binding customer agreement. I will say this was by far the most important objective, and the team delivered. We signed a binding agreement representing up to 650 MW of power. We are now in the process of finalizing the backstop agreement that sits behind it. Anna will walk you through the details in a moment. I will simply say this: The caliber of the counterparties now standing behind our advanced energy and AI ecosystem speaks directly to the value we have discussed with you since our IPO. Objective number two was to select the right CEO for the next stage of Fermi's growth. With this in mind, we have appointed Lee McIntire effective this Tuesday.

[Marius Haas, Chairman of the Board at Fermi America]

Lee has served on our board since September of 2025 and already has a detailed working knowledge of the company and the project. More than that, he has built his entire career delivering large-scale projects, and that is the most important task in front of us right now, getting power to the site. Lee has led some of the most demanding engineering and construction organizations in the world, including Bechtel, McDermott, and TerraPower, and he ran large-scale project delivery inside all of them. So when it comes to getting first power to the site in 2027, I cannot think of anyone more equipped than Lee. He will work alongside Anna, Jacobo, Rob, and me. We will keep running the business exactly as we ran it this quarter. Our strategy has not changed, and the pace will only accelerate. The third objective was to advance strategic partnerships. Again, we delivered.

[Marius Haas, Chairman of the Board at Fermi America]

During the quarter, we announced EPC partnerships with Primoris for balance of plant on phase one and TSK for early works engineering on phase two. These are two of the most capable and highly respected contractors in the industry. More recently, we also entered into a strategic alliance with Hillcore, a premier and highly experienced infrastructure and power provider around the globe, which will accelerate our ability to deliver power at speed for large-scale customers. The alliance will bring an incremental 2.6 GW to the Project Matador campus within the next three years. There is no site we know of that has equipment and the ability to deliver 4.8 GW during this time period. The demand for the power delivery is already here, and we have the team and the equipment to deliver. Fourth, we have told you we would enhance our liquidity.

[Marius Haas, Chairman of the Board at Fermi America]

In July, we delivered an upsized $431 million convertible notes offering, which significantly strengthened our balance sheet. Importantly, we did it at a low coupon and with a capped call structure built to protect our shareholders from dilution. Rob will take you through it. The fifth and final objective in our 90-day plan was to move the site closer to power. On this front, we have made substantial progress and we are still gaining momentum. Three Siemens Energy F-class turbines arrived at the Port of Houston in July and have cleared customs. We have also progressed site development. Jacobo will give you full operational picture shortly. Now, let me put these five milestones into context. Any one of them, a binding customer agreement, a CEO, significant partnerships, a strengthened balance sheet, turbines on the ground, would have made for a notable quarter on their own.

[Marius Haas, Chairman of the Board at Fermi America]

We challenged the team to stretch, and they delivered, all of them in a single quarter. That is the story for this quarter. Our leadership team kept its focus on the plan and executed it with excellence. That was the institutional discipline Fermi 2.0 was built to deliver. The board and I are extremely proud of how the team came together and without doubt delivered an excellent quarter. With the site advancing and the commercial picture coming into focus, let me hand it to Anna.

[Anna Bofa, Chief Commercial Officer at Fermi America]

Thanks, Marius, and good morning, everyone. I will start with the most important thing I can tell you about this quarter. The market did not just validate our project and concept, it signed up for it. This is only the beginning. Customers need large-scale, reliable power on accelerated timelines, and that is exactly what Fermi is built to deliver. Over recent months, we have been actively engaged with roughly a dozen prospective customers and strategic partners. These discussions have been specific and substantive around capacity planning, delivery sequencing, and the commercial frameworks required to move from interest to signature. Within that broader process, TensorWave stood out as a particularly strategic first customer for Fermi. For us, this was an ecosystem entry strategy. First, speed matters. TensorWave is a highly entrepreneurial organization operating in one of the fastest-growing parts of the AI infrastructure market. They have the ability to make decisions quickly and critically.

[Anna Bofa, Chief Commercial Officer at Fermi America]

Their demand curve aligns with our power delivery curve. Second, we believe TensorWave gives Fermi a unique position inside the broader AI ecosystem. A direct relationship with a hyperscaler is incredibly valuable, and we are nurturing those, too. But it is fundamentally a relationship with one customer. TensorWave sits between the semiconductor ecosystem and the ultimate users of that compute, giving Fermi exposure across multiple layers of the market. Compute is the foundation of the AI stack, and TensorWave's proximity to that layer gives us earlier visibility into where demand is forming, what infrastructure those workloads require, and which customers are likely to need capacity next. Through one anchor relationship, we gain connectivity not only to TensorWave, but also to the chip ecosystem and to multiple hyperscalers, enterprises, and AI companies that may ultimately consume that capacity. For us, that is strategically important.

[Anna Bofa, Chief Commercial Officer at Fermi America]

We want Fermi to become a place where the broader AI infrastructure ecosystem comes together, not simply a campus serving a single customer. Third, the multi-phase nature of the relationship reinforces that opportunity. The deal has the potential to bring multiple workloads and end users onto the campus over time, giving more customers and partners direct exposure to Fermi's capabilities. The phased approach also matters from an execution standpoint. By phasing the development, we can match capital deployment more closely with delivery timelines while reducing complexity and preserving our ability to move quickly towards first revenue. By pairing TensorWave with a highly capable data center partner, we gain direct visibility into who can design and construct these facilities quickly and efficiently, capabilities that can be reused across future Fermi customers. Fourth, this transaction validates the unique nature of what we are building.

[Anna Bofa, Chief Commercial Officer at Fermi America]

Fermi combines large blocks of power, secured infrastructure, accelerated delivery, and permitted land. TensorWave gave us the opportunity to establish commercial terms that we believe solidly reflect the value of that offering while remaining competitive for the customer. Our decision to partner with TensorWave was deliberate. We were looking for an anchor customer that could move at our speed, consume power on our delivery timeline, support economics that appropriately reflect the value of this differentiated asset, and importantly, expand Fermi's connectivity across the broader AI ecosystem. Let me turn to the agreement itself. We have signed a binding agreement with TensorWave, representing up to 650 MW of capacity if all expansion options are exercised. The agreement is structured into three phases.

[Anna Bofa, Chief Commercial Officer at Fermi America]

The initial phase is a 15-year commitment for 222 MW of gross power through a turnkey data center solution, and represents approximately $6.5 billion of revenue to Fermi over the initial term. We are finalizing the backstop agreement supporting certain obligations under the lease. We will identify the counterparty once the agreement is complete, which we anticipate in the coming days. A commitment of this scale follows extensive diligence across our power strategy, permitting, secured equipment, land control, construction plan, delivery schedule, and execution capabilities. When we talk about validation, we mean something very specific. A sophisticated customer and their partners have evaluated what we are building, agreed to commercial terms we believe are competitive and reflect the value of our offering, and made a long-term commitment to the campus.

[Anna Bofa, Chief Commercial Officer at Fermi America]

Importantly, we believe this first commitment strengthens the ecosystem around Fermi and creates a stronger foundation from which to scale as we continue discussions with multiple other customers. With that, I'll turn it over to Jacobo to walk through what this looks like on the ground.

[Jacobo Ortiz, COO at Fermi America]

Thank you, Anna, and good morning. My focus this morning is simple: Everything Marius and Anna just described is backed by real steel in the ground and by an experienced team that is ready to execute. Over the last 12 weeks, we have refined our execution plan and strengthened our EPC relationships with world-class contractors, and our team is ready to start construction as soon as project finance is in place. We remain committed to speed to power as customers sign leases while maintaining the capital discipline that matches major expenditures to commercial progress. Our execution team has been working with TensorWave to deliver its turnkey project on time. To minimize execution risk, Fermi is partnering with a well-known data center contractor with access to critical components and deep multi-project experience executing these kind of projects reliably. We will announce this partnership shortly.

[Jacobo Ortiz, COO at Fermi America]

First, let me take you through power delivery and then our strategic alliance with Hillcore. Fermi plans to deliver 640 MW of nameplate capacity by the fourth quarter of 2027, with the first 210 MW available July 1st, 2027. Additionally, phase one includes six Siemens SGT-800 turbines led by Primoris, plus three GE 6B units and seven TM2500s led by Relevant Power Solutions, all in simple cycle, along with 200 MW of utility power from Xcel. We continue to make progress on our 2028, 2029 power delivery objectives. Three Siemens F-class units rated up to 728 MW in simple cycle mode, each more than 242 MW, arrived at the Port of Houston a few weeks ago. TSK, Spain's largest power-focused EPC firm, is delivering the fast start engineering for those turbines. The F-class units are among the most widely used heavy-duty turbines in the market.

[Jacobo Ortiz, COO at Fermi America]

They ramp up to 40 MW/minute, reach full speed in about five minutes, and carry a global fleet reliability nearly 99%. That combination of high output, fast start, and reliability is exactly what AI and advanced computing require. Our project has them, and we are ready to execute. Now switching gears. Because speed to power is central to our strategy, I am excited to walk you through our strategic alliance with Hillcore Energy Partners in more detail. Hillcore and its affiliates, including JV Driver, bring more than 35 years of heavy industrial and power generation experience, spanning natural gas, steam, biomass, and power boiler facilities from project development and construction through commissioning and operations. The alliance between our two companies brings approximately 2.6 GW of additional power to the site under a build, own, operate, transfer structure, doubling Project Matador's total power output to 4.8 GW.

[Jacobo Ortiz, COO at Fermi America]

Think of Hillcore as a tenant that pays rent and delivers incremental power to the Fermi private grid. This accelerates and grows our revenue stream by expanding our total power supply to meet customers' growing demand faster than a self-build strategy only. Fermi keeps 100% of the income it generates from base rent. Under the agreement, Hillcore finances, builds, owns, and operates their facility. So Fermi adds dedicated behind-the-meter power with no upfront capital outlay. Fermi will be the anchor off-taker, but we only commit as tenant leases are signed, and each block of power is triggered by contracted demand from a tenant. Each power purchase agreement is matched to the term of the lease that triggers it, and fuel costs are passed through to the tenant as well. That matching takes stranded capacity risk off the table, and construction, operating, and performance risk sits with Hillcore.

[Jacobo Ortiz, COO at Fermi America]

Importantly, we hold an option to acquire the facility at fair market value after year 10. First power is targeted within 24 months of the notice to proceed, and the Hillcore build-out importantly runs in parallel with our own, doubling our capacity to 4.8 GW of total power available. We have an amazing site, a 6 GW Air Permit, power equipment, an experienced construction team, and trusted strategic partners ready to deliver Project Matador's mission. Power is the gating asset for AI, and Fermi is ready to deliver what our customer needs: more power now. Fermi is where AI gets power. With that, Rob will take you through our strengthened financial position. Thank you.

[Rob Masson, CFO at Fermi America]

Thank you, Jacobo. The headline for me since our last earnings call is a significantly stronger balance sheet, and it centers on the convertible notes we issued last month. We closed an upsized offering of more than $430 million of a 5% convertible senior notes due 2031. That figure includes the full exercise of the initial purchaser's option for an additional $56 million, a clear signal of the demand for this paper. Net proceeds after the cap call were approximately $382 million. I will walk you through the rationale in four parts. First, timing. We are focused on our operations and not on timing the market. We raised capital with prudence in mind to provide the operational flexibility and financial runway to focus on strategic objectives. Second, negotiating position. A stronger balance sheet lets us advance customer and partnership discussions from a position of strength, not under financing pressure. Third, structure.

[Rob Masson, CFO at Fermi America]

We deliberately designed the structure with our shareholders in mind. We believe the convertible note paired with a cap call protects our current shareholders from dilution ahead of catalysts until the stock price more than doubles. Fourth, cost of capital. A 5% coupon over a five-year term is an attractive rate and a timeline that fits our development and power delivery plan. Tied back to the 90-day plan, this checks the liquidity objective, and it is one source among several. As we move into the next phase, our message on funding the project and capital is consistent. Thoughtful sourcing, disciplined deployment, matched to commercial progress. With that, I will turn it back to Marius for closing remarks.

[Marius Haas, Chairman of the Board at Fermi America]

Thank you, Rob. Fermi 2.0 has always been about the convergence of two things: a tangible asset base of over $1.5 billion that we have already built into the ground, and the institutional capability now deployed to realize its full value. This quarter, you watched those two things come together. In a single quarter, we delivered a binding customer agreement with one of the leading names in AI compute, a new strategic alliance and premier contractors, enhanced liquidity on shareholder-friendly terms, hired the right CEO to lead the next stage of Fermi's growth, and delivered major on-the-ground project milestones that protect our speed to power advantage. I want to end where I began: with the team. Because the most important thing about this quarter is not a single milestone. It is that we set ambitious goals and made tremendous progress. That is the entire point of Fermi 2.0.

[Marius Haas, Chairman of the Board at Fermi America]

This is a business that does not wobble when the headlines do. The engineers pouring the foundations, the teams managing our supply chain and permitting, the commercial teams signing agreements, they showed you this quarter what institutional discipline and excellent execution looks like. We believe we have the single most valuable power and compute site in the market. As a team, we are aligned around one overarching objective: maximizing long-term value for our shareholders. The road ahead is demanding. We have to scale this amazing business, complete the current customer agreement, add new ones that are already far along in the process, and focus on flawless power delivery to the site. We begin the second half of this year with a signed anchor customer, a further strengthened leadership team that has proven it can execute

[Marius Haas, Chairman of the Board at Fermi America]

Better liquidity, power moving toward the site, and we begin with momentum. We are pleased with where we are, but never fully satisfied. We can always do better, and we will. We look forward to updating you on our continued progress as we execute the Fermi 2.0 vision. Operator, we are now ready to take questions.

[Operator]

Certainly. Everyone at this time will be conducting a question and answer session. If you have any questions or comments, please press star one on your phone at this time. We do ask that while posing your question, please pick up your handset if you are listening on speakerphone to provide optimum sound quality. Once again, if you have any questions or comments, please press star one on your phone. Your first question is coming from Paul Golding from Macquarie. Your line is live.

[Paul Golding, Analyst at Macquarie]

Thanks so much for taking the question, and congrats on all the progress. I wanted to ask initially just on TensorWave and the lease agreement there, how should we think about the power pass-through component of that? What is the $6.5 billion comprised of, and maybe how you are thinking of hedging power that you would be delivering directly from your private grid perspective, given that that is a unique aspect of your project. Thank you so much.

[Operator]

All lines are still connected. Your speaker lines are still connected.

[Barry Sievert, Head of Investor Relations at Fermi America]

Operator, we can hear you. Operator, are you there?

[Operator]

Yes, your line is live.

[Barry Sievert, Head of Investor Relations at Fermi America]

I think we are ready for the next question.

[Operator]

Thank you. Your next question is coming from Nick Amicucci from Evercore ISI. Your line is live.

[Nick Amicucci, Analyst at Evercore ISI]

Hey, good morning, everyone. Just wanted to kind of drill in on, as you guys had outlined with the announcement of the TensorWave deal, $1.5 billion already spent. As we think about the spending ramp towards the initial 222 MW, as well as the incremental, like the 640 MW. If we could just kind of frame how much spend is left to occur.

[Rob Masson, CFO at Fermi America]

Yeah, I'd be happy to take that. If we think about cash for the quarter, we decreased by about 50%, just in line with what we talked about on the general preparation. When we think about the deal we just signed, there's specific cash flows that'll be associated with that, and we talked before about disciplined capital deployment. We're going to match our outflows to real signed deals and inflows. You heard Jacobo talk about the same thing. We have the site, as we talked about, through phase zero complete into phase one, and that'll match up well with the new TensorWave deal.

[Nick Amicucci, Analyst at Evercore ISI]

Great.

[Rob Masson, CFO at Fermi America]

Does that answer your question, or do you have a follow-up on that? Want to make sure I hit it all.

[Nick Amicucci, Analyst at Evercore ISI]

No, that's fair enough. I think that covers it. Thanks, Rob. Great. As we think about too, I guess just obviously now the full management team's seemingly in place. As we think about kind of this somewhat of a shift towards a turnkey solution on the data center side, as opposed to kind of just renting access to the power. As we kind of think about that, I guess, what gives you guys confidence in the ability to kind of execute on that further, more all-embracing kind of build-out, if you would?

[Operator]

Thank you. Your next question is coming from John Hodulik from UBS. Your line is live.

[Nick Amicucci, Analyst at Evercore ISI]

Great. Thank you.

[Anna Bofa, Chief Commercial Officer at Fermi America]

Our plan is to work with a world-class data center partner to deliver that aspect of the commitment. We have already been in talks to contract that opportunity. We feel fully confident that we are working with the right partner to deliver that data center.

[Marius Haas, Chairman of the Board at Fermi America]

Nick, this is Marius. I will add a little bit more to it from a context perspective, as you had mentioned about the team. There is no doubt that what we are going to continue to do is add and scale the critical key components of the organization to ensure the flawless delivery of what we have committed to our tenants and our customers. We have deployed our executive compensation for officers, as you saw. We have deployed our long-term incentive program for our employees, as well as our short-term incentive program. We have everything in place in order to be able to scale this organization and clearly understand that we will need to scale functions in order to deliver the full scope of what we are talking about.

[Marius Haas, Chairman of the Board at Fermi America]

Having doing a turnkey solution as our first offering clearly puts us in a position of putting our arms around what a total offering could look like, and will give us the experience, and will give us the opportunity to be able to do this on an ongoing basis. Although, as Anna indicated, that's not going to be the pervasive model going forward. Does that make sense?

[Nick Amicucci, Analyst at Evercore ISI]

Perfect. That's very clear. Thanks, Marius.

[Operator]

Thank you. Your next question is coming from John Hodulik from UBS. Your line is live.

[John Hodulik, Analyst at UBS]

Great. Thanks. Good morning everyone, and congrats on all the milestones. First, a couple follow-ups on the TensorWave deal. Can you guys give us a total CapEx number you think required to fulfill the first phase of that contract, and maybe if there's been any spending already to fulfill that deal? Also, is there a way that you guys could give us a sense for what the margins are expected on the $6.5 billion? Then lastly, just when do you expect sort of full commencement of the first sort of 200 MW? Then, if I could follow up, maybe a question for Anna. You talked about some discussions with other tenants. Any other color you can provide in terms of how far along you might be with a second tenant?

[John Hodulik, Analyst at UBS]

I guess following up on that last question, is neoclouds the category that we could expect going forward, potential tenants? Or just any other color on what we could expect down the road or timing or quality of potential tenants you may be talking to. Thanks.

[Rob Masson, CFO at Fermi America]

Yeah, I would be happy to start. We will talk overall about the market. Generally, if you think about it in two phases, a typical battery CapEx project runs in the range, or the power side, runs in the range of $3 million/MW-$4 million/MW of gross power capacity. And you can think about this one in that range. And the data center itself, typical CapEx, when you are talking about a turnkey solution, you will find in the market is about $10 million/MW-$12 million/MW. And again, this project is going to be in that range. We are not disclosing overall total cost figure for the project. And we are sharing precise number now, not to set expectations, but I think if you think of those market comps, that is what we are looking at in this project. So kind of right in the middle of what you would expect.

[Anna Bofa, Chief Commercial Officer at Fermi America]

Yeah, and I can take the second part of your question. In terms of the commencement, we anticipate the builds and the revenue commencement to start in phases. We anticipate that somewhere to be around the end of Q3, early Q4 of 2027. And again, it is a phased delivery, so once the first part of the build is ready, the customer will then start paying rent all the way up until the full 220-megawatt build is complete. In terms of your other question around just color on other customers, we are absolutely engaged with additional customers and have conversations that are very far along. In terms of neocloud, we are absolutely focused on working with customers that are ready and available to take the capacity that we have, but we are absolutely also speaking with hyperscalers.

[Anna Bofa, Chief Commercial Officer at Fermi America]

One of the things that was interesting about this deal for us is, as we have been discussing opportunities with the hyperscalers, there is an interesting path on this deal where they could potentially get capacity sooner by partnering with TensorWave, and the fact that they have these three potential buildings. We are both having conversations where hyperscalers could work directly with us, to come to the site, and they are very interested in that. And potentially take the opportunity with the multi buildings that TensorWave now has available to them, that could potentially move them to site a little bit faster. But again, one of the things that is really clear is that there is tremendous demand. There are very few opportunities like Fermi. There are very few sites that have no permitting issues that do have capacity.

[Anna Bofa, Chief Commercial Officer at Fermi America]

That has really attracted all of the hyperscalers to engage with us, and we are very pleased with how those conversations are moving forward.

[John Hodulik, Analyst at UBS]

Great. Thank you.

[Operator]

Thank you. Your next question is coming from Stephen Gengaro from Stifel. Your line is live.

[Stephen Gengaro, Analyst at Stifel]

Thank you, and good morning, everybody, and congrats on a busy 90 days. I think two for me, and maybe a follow-up on the prior question. The expectations, I think, that we had a while back were that you do kind of $700 million/GW-$900 millio/GW of EBITDA deployed on an annual basis. I am just curious if that is still kind of a reasonable expectation going forward. The other question I had was, when you think about the TensorWave contract and others, can you talk about sort of the risk parameters around it and sort of the key hurdles we should be watching as far as time to power and what you could be liable for based on timing?

[Anna Bofa, Chief Commercial Officer at Fermi America]

I can start with the risk and then sort of discuss the first part of the question. In terms of the risk parameters, one of the things that you do when you are engaged in the process of driving towards an agreement, is you look and see how do you reduce your risks. Part of our ability to bring in a data center partner is absolutely a reduction in risk on the deal construct. That's why we did the diligence to identify who we thought was the best potential partner. Most crucially, we identified the partner who could meet the timeline. What you do is you ensure that you line up the delivery of the power, the delivery of the data center, and ultimately where you land in terms of the agreement of when those two pieces come together to reduce that risk.

[Anna Bofa, Chief Commercial Officer at Fermi America]

That's the approach that we took on the TensorWave deal to ensure that we had the ability to have line of sight into making sure that what we signed up for, that we could deliver. We're absolutely confident in our ability to do that alongside the data center partner.

[Rob Masson, CFO at Fermi America]

I can just talk about the EBITDA side. While we're not really in a position or going to talk about that specifically, I think you'll see from the overall contract value and the type of contract this is. It's very similar to other market deals that have been announced out there, and the expectations on the profit side are the same. We have a modified net structure here. It's a very good structure, and we're pleased with this as our first contract out of the gate.

[Stephen Gengaro, Analyst at Stifel]

Thank you.

[Marius Haas, Chairman of the Board at Fermi America]

It's Marius. Just to add to it, just a couple of things that you should be looking forward to, and this is around the corner here, is obviously the announcement of the backstop with a leading IT infrastructure provider. Obviously, project financing would be step number two. That then triggers our ability to go move everything to the site and get ready to deliver on the power. A number of those key deliverables are clearly what the team will be focused on, but those are all well in motion and around the corner.

[Anna Bofa, Chief Commercial Officer at Fermi America]

Yeah, we'll add to that further. Again, we just want to be really clear of how we've reduced the risk. Of course, on a deal like this, having an investment-grade backstop is a key part of that, particularly as you go into project finance. We have done a lot of work to ensure that that is lined up and ready to go. As mentioned earlier, we hope to be able to announce that partner here in the coming days.

[Stephen Gengaro, Analyst at Stifel]

Thanks. If I could just add one quick one. You implied earlier, I thought, as far as the CapEx, that you were going to match outflows and inflows. Does that mean there's not a lot of Fermi cash needed to build this out? That the customer's going to be providing some of the working capital? How do we think about that?

[Rob Masson, CFO at Fermi America]

Yeah, I think what we meant by that is, we've been staging, and we talked about waiting to do the next phase of development until we had a contract and we were going to execute. Fermi marched ahead early on. We secured assets, which has given us the competitive advantage for speed to power. We developed the site in such a way that our timelines could match up well, meaning power would no longer be the timing factor in being able to stand up and deliver to the customers. That's what we're talking about. I think each project itself then has capital deployment required with it. We'll look at various funding sources to do that, the normal ones. We're just talking about as we commence projects, we will then put all the capital behind to build out that specific project and keep Project Matador on track.

[Stephen Gengaro, Analyst at Stifel]

Great. Thank you for all the details.

[Rob Masson, CFO at Fermi America]

You're welcome.

[Operator]

Your next question's coming from Paul Golding from Macquarie. Your line is live.

[Paul Golding, Analyst at Macquarie]

Thanks. Just wanted to provide another opportunity to pose that question again on power pass-through from the top of the queue, how that's being treated in the TensorWave arrangement, and how you're hedging fuel given the private grid component of the site. Thanks so much.

[Anna Bofa, Chief Commercial Officer at Fermi America]

Yes, and sorry for the technical difficulty earlier. To be clear, the way that the kind of deal is structured is that we take a base rent, we take a fixed power charge, and then that variable energy charge that does carry risk because it can go up, is a full pass-through onto the customer. That is something that we plan to carry forward throughout all of our deals. We will always take that variable energy charge and have it be a full pass-through onto the customer to reduce that risk.

[Rob Masson, CFO at Fermi America]

Yeah. There's no reason to hedge. We're not in that business, and as we said, no commodity risk for us on that piece.

[Paul Golding, Analyst at Macquarie]

Great. Maybe if I could just add a follow-up while I have you. Just thinking about other components of the project, like cooling infrastructure, anything relating to more developed tier three infrastructure for the site itself. I think initially the project concept for some of these shells was to sort of be more of a basic shell. This is obviously a turnkey project. Do you see opportunity or demand in the marketplace for some of those more basic shells, or is the demand really leaning towards the turnkey solution heavily? Thanks.

[Rob Masson, CFO at Fermi America]

We talked last time about the different models, and that in Fermi 2.0, we're changing our approach. We talked before about the different options. You have powered land, and we see some demand for that. You've got the powered shell, which is sort of in the middle, and then you have this turnkey solution. Our real perspective is that each customer has their own desires. These are large customers, and we're there, Fermi, to meet them as a good partner and deliver on that. So you'll expect us to be available across the spectrum of these things, and just happens the first deal is the full turnkey. If you think about it, in this case, we're going to build all the way up to the chips. So electrical, mechanical infrastructure, including the switch gear, battery, energy storage, and chilled water and liquid cooling systems, all on this.

[Rob Masson, CFO at Fermi America]

But that's that one spectrum. Again, we have the other two options as well, if you think about the buckets.

[Anna Bofa, Chief Commercial Officer at Fermi America]

Yeah. Just to add to that a little bit. To be clear, we are engaging and working with a leading data center partner on this piece. So we, as Fermi, will of course partner to deliver this. The other thing to give you a little bit more color is, as Rob said, we are just matching the customer need and the customer demand. As you look out in the market, what's been interesting is, of course, you have hyperscalers who often can do the powered shell and do it themselves. But what you're seeing is there are data center partners that are just able to deliver things more quickly, or they just have those long lead items that are required already lined up. So it's been interesting to just see where things are landing where hyperscalers are more open to a turnkey option.

[Anna Bofa, Chief Commercial Officer at Fermi America]

But in some cases, they, again, can do it themselves, and we fully plan to be able to do both of those. We're just, again, trying to meet the customer where they're at and see what they need and deliver on that.

[Jacobo Ortiz, COO at Fermi America]

Hi. Jacobo here. I want to add something. With our Hillcore alliance, we're doubling the amount of power that is available for us to lease to our tenants. We can't stress how transformational that is for the industry and for our project. Again, we're going from 2.2 GW to 4.8 GW available faster than we could self-perform it. That is transformational.

[Paul Golding, Analyst at Macquarie]

Great. Thanks all.

[Operator]

Thank you. Your next question is coming from Nicholas Lawson from Ocean Wall. Your line is live.

[Nicholas Lawson, Analyst at Ocean Wall]

Hi. Thank you, guys. Hi, Jacobo, question for you. Really just to come back to that point on the uniqueness of the Hillcore structure. Can you get us an idea of just how unusual that BOOT structure is and also its repeatability as well, going forward for Fermi?

[Jacobo Ortiz, COO at Fermi America]

Thank you, Nick. We are very excited. This is truly a one-of-a-kind transaction. As we were thinking, how can we accelerate our development of total power at the site so that we could serve our customers faster, it became evident that partnering with a power developer on-site, leveraging the land, the gas, the permit, so that they could stand up power concurrently with our own program on-site, was just a very efficient way of having more power online to meet the demand that is out there, which is phenomenal. So we like it. We are moving in that direction. With 17 GW of runway, we are going to keep exploring it. Again, think about the fact that they are bringing their turbines, their capital, and their people. We are doing the same thing. So again, being able to bring all that power online faster accelerates our speed to power.

[Jacobo Ortiz, COO at Fermi America]

It also accelerates and grows our revenue faster. Think about the net present value of bringing that online. It is phenomenal.

[Nicholas Lawson, Analyst at Ocean Wall]

Okay. Thank you. Just one last question. There is a great comment from Marius about not wobbling when the headlines do. This has been an extraordinary week for Fermi. How should we now think about sequencing? Was this always the plan, or did everything come together a lot faster than had been expected?

[Jacobo Ortiz, COO at Fermi America]

Marius, you were in the middle of answering.

[Marius Haas, Chairman of the Board at Fermi America]

Yes, Nick. No, thank you. The only thing I was going to add to Jacobo's piece, which is critically important on the Hillcore component, is yes, we are doubling our power capacity in the near term, which is by far what almost every tenant and potential tenant is asking for. The core question now is how fast can you deliver power in 2027? That is literally the question we are getting from virtually every tenant right now, especially with projects around the globe, as we indicated, not going forward at the pace that was expected or not getting the regulatory approvals as was expected or could not get equipment as expected. So they are now all knocking on the door, coming and having the conversations with the team. Look, Nick, as you know, this was a Herculean task by the organization to go get all these done.

[Marius Haas, Chairman of the Board at Fermi America]

But we were very convinced that these were the levers that would drive the maximum shareholder value for our shareholders. Hence, we knew we needed to do this, and we needed to do it quick. Again, I am proud as can be as to how the team has come together and executed on these. I do not think I am going to put out another list of 90-day priorities, just because we do need a little bit of a breather. But the clear focus right now is how do we deliver power, and how do we ensure that every commitment we are making to TensorWave, but also the tenants that literally are around the corner, that we will deliver flawlessly, the power that they need.

[Nicholas Lawson, Analyst at Ocean Wall]

Brilliant. Thank you.

[Operator]

Thank you. Your next question is coming from Jyoti Yadav from Mizuho. Your line is live.

[Jyoti Yadav, Analyst at Mizuho]

Hi, this is Jyoti on for Vikram. Congratulations on the quarter here. Just on the TensorWave IG backstop that you talked about, will it be for the full 15 years? Also on the same lease, the optionality for 650 MW, when does it expire?

[Anna Bofa, Chief Commercial Officer at Fermi America]

Yes. So that backstop will be for the full 15 years. What was the second part of the question?

[Rob Masson, CFO at Fermi America]

Does it expire?

[Anna Bofa, Chief Commercial Officer at Fermi America]

Does it expire? No, it does not expire. Part of the negotiation is that backstop fully guarantees that full 15 years, and that ensures that, again, we reduce any sort of risk, and it is exactly what we need to take to the next part of the process, which is the project finance piece, so that we can start executing on the project.

[Rob Masson, CFO at Fermi America]

Yes. As you recall.

[Jyoti Yadav, Analyst at Mizuho]

And.

[Rob Masson, CFO at Fermi America]

As you recall, it is a 330-acre campus that TensorWave is signed up for. It will be three phases. Obviously, we are talking about the first phase, but I know that Anna is already accelerating the conversations on phase two and three. It will truly be driven by our ability to deliver power. It is really the power schedule delivery that will dictate when two and three come up in production.

[Anna Bofa, Chief Commercial Officer at Fermi America]

Yeah, that is exactly right. To be clear, there is demand already for that kind of phase two and phase three. We are actually actively collaborating with both the backstop provider, TensorWave, and potential hyperscalers to see how we can move that along very quickly.

[Jyoti Yadav, Analyst at Mizuho]

Understood. Thank you. On the Hillcore deal that you released recently, could you give us details on the equipment contracts they have? What do they own in terms of turbines, ancillary equipment to get to that 2.6 GW incremental by 2028? Also on the same point, whatever the land fees dollar per square foot that you guys will be getting from them, when does that start?

[Jacobo Ortiz, COO at Fermi America]

Yes. Good morning. Thank you for the question. They have a GE set of power equipment. They are going to be bringing online in different phases. Phase one could be between 360 MW and 720 MW within that 24-month window. We are being conservative. From that perspective, they have the equipment, the capital, the experience, and the manpower to stand up that equipment at the same time that we are standing up ours. I wanted to also add, something that Nick asked, which is important as for our strategy. Our strategy will continue to be that Fermi will continue buying equipment, standing it up to meet customers' demand. If there is a way to accelerate that like we are, it is revenue, as well, faster that we are getting. We are going to do that as well.

[Jyoti Yadav, Analyst at Mizuho]

Understood. If I could just throw in a last one here. In considering the CEO, could you talk about the external interest that is involved? I believe Lee has been on the board since 2025 here.

[Marius Haas, Chairman of the Board at Fermi America]

Yes. No, happy to. Yes, obviously Lee has a phenomenal background, perfect experience for what this next phase of Fermi 2.0 needs. We have had good response from the external search. We just think that this is such an important part of our future that we are not going to race to announce a long-term CEO, if it is not the perfect candidate. Then again, when we looked at what do we need to do right now, there was no better person than Lee than to drive that agenda for Fermi. So our search with Heidrick will continue. We expect that now it is clear. We have clear demand. We have tenants. The stabilization of the organization is clear. That we will actually have a broader pool of candidates that will be interested in helping us and joining us in this journey. But we are not going to put a timeline on it.

[Marius Haas, Chairman of the Board at Fermi America]

We think Lee is going to be a great and phenomenal leader. When we find the right person long-term, we will make that announcement.

[Jyoti Yadav, Analyst at Mizuho]

Understood. Thank you for taking the questions.

[Operator]

Thank you. Your next question is coming from Derrick Whitfield from Texas Capital. Your line is live.

[Derrick Whitfield, Analyst at Texas Capital]

Good morning, and congrats on meeting your 90-day initiatives. I wanted to start with the customer mix. With respect to the prospective tenant backlog, Anna, could you speak to or characterize how that list has changed over the last 90 days?

[Anna Bofa, Chief Commercial Officer at Fermi America]

Yeah, I would say that we've been in a fortunate position where there is, again, so much demand across the market that we've had to prioritize who we want to focus on. We are absolutely still engaged with the top hyperscalers. TensorWave, as I outlined earlier, really stood out to us because we believe it gives us access to the full ecosystem. Because of the structure of the deal, it gives us the ability to point one of these hyperscalers to that first phase, second phase, third phase, that potentially could get them capacity sooner.

[Anna Bofa, Chief Commercial Officer at Fermi America]

In terms of kind of line of sight and what you can expect, we do anticipate to have other deals that we'll be able to announce in the coming months, just given the kind of stage of those conversations, the need for capacity and the limited options that those partners have. We're really excited about the progress. Again, we've been able to really prioritize the partners that we think are a great fit for us, and hope to be able to bring more information as those deals move forward.

[Derrick Whitfield, Analyst at Texas Capital]

Terrific. As my follow-up, I wanted to just focus on the regulatory environment. While you guys are directionally the model citizen under the bring your own generation mantra, do you expect any regulatory hurdles associated with the initial slug of grid power based on Governor Abbott's data center audit?

[Anna Bofa, Chief Commercial Officer at Fermi America]

What we've been seeing in the last couple of weeks, and particularly since that announcement, is just a validation of Fermi's initial thesis and hypothesis. From the customer perspective, they recognize that too. We had tremendous outreach when that announcement came up, with people asking if they could speed things up, because folks have realized that Fermi's behind the meter solution is the future. We are very fortunate to have that behind the meter solution, and we're very fortunate to also have a partnership with Xcel, with our grid connection that is not impacted by that announcement. We are sitting in a really unique position to be one of the few players in the United States that has the ability to continue to move projects forward in a timely fashion and deliver the capacity that we have.

[Jacobo Ortiz, COO at Fermi America]

Yep. If I could add to that, Anna. Fermi's grid connection is through Xcel because we sit on SPS. We're not in ERCOT. The governor's directive is squarely aimed at protecting Texas ratepayers from the cost of new grid-dependent demand. Fermi does not create and is not dependent on the grid. We're actually, as you stated in your question, we're islanded off the grid from that perspective. We sold power without putting any of it on the public grid or the average Texan's bill. We believe that our offer, and what's happening in the environment only strengthens our thesis on our business case, and it makes our site even more attractive. It's another reason to come to our site. Thank you.

[Derrick Whitfield, Analyst at Texas Capital]

Understood. Thank you.

[Operator]

Thank you. That concludes our Q&A session. I will now hand the conference back to Marius Haas for closing remarks. Please go ahead.

[Marius Haas, Chairman of the Board at Fermi America]

Thank you all for your questions, and thank you again for joining us. Before we close, I want to say one more thing about our people. Everything you heard this morning, the binding agreement, the alliance, the turbines on the ground, was delivered by the Fermi employees and the contracting teams. We are grateful for their dedication and focus. I am looking forward to working with Lee as he steps in as CEO. This will include setting a date for our annual shareholder meeting later this year. Finally, we will keep you updated as we continue to advance toward a first power and finalize additional customer agreements. Thank you, and have a great day.

[Operator]

Thank you. Everyone, this concludes today's event. You may disconnect at this time, and have a wonderful day. Thank you for your participation.

Participants

Executives

• Barry Sievert, Head of Investor Relations
• Marius Haas, Chairman of the Board
• Anna Bofa, Chief Commercial Officer
• Jacobo Ortiz, COO
• Rob Masson, CFO

Analysts

• Paul Golding, Analyst at Macquarie
• Nick Amicucci, Analyst at Evercore ISI
• John Hodulik, Analyst at UBS
• Stephen Gengaro, Analyst at Stifel
• Nicholas Lawson, Analyst at Ocean Wall
• Jyoti Yadav, Analyst at Mizuho
• Derrick Whitfield, Analyst at Texas Capital