Cleanspark Q3 Earnings Call Highlights

Key Points

• CleanSpark reported $138 million in fiscal Q3 revenue, up 1% sequentially, while its GAAP net loss narrowed to $240 million from $378 million. Adjusted EBITDA was negative $113 million, but management said it would have been positive $20 million excluding non-cash Bitcoin mark-to-market losses.
• The company signed a 20-year, $6.6 billion triple-net lease for its Sandersville, Georgia data center campus with an unnamed investment-grade technology company. The lease could reach approximately $11.6 billion with extensions, and the first data hall is expected to be operational in late 2027.
• Sandersville’s build-out is estimated to require $1.75 billion to $2.1 billion, with most funding expected from project-based debt rather than equity. CleanSpark also said its Texas sites remain under exclusivity with the same counterparty, though final agreements and ERCOT approvals are still pending.

Cleanspark NASDAQ: CLSK reported fiscal third-quarter revenue of $138 million, up 1% from the preceding quarter, while outlining plans to expand from Bitcoin mining into digital infrastructure through a long-term data center lease in Georgia.

Chief Executive Officer Matthew Schultz said the company completed what he called its most significant transaction after the quarter ended: a 20-year triple-net lease for its Sandersville, Georgia campus with an unnamed high-investment-grade global technology company. The agreement covers nearly 250 megawatts of gross capacity and 175 megawatts of critical IT load.

The initial lease term represents approximately $6.6 billion in contracted revenue, according to the company. Two five-year extension options could bring the total to approximately $11.6 billion over 30 years. Schultz said CleanSpark expects average annual net operating income of about $330 million, with the triple-net structure placing taxes, insurance and maintenance capital expenditures with the tenant.

Sandersville Build-Out and Financing

CleanSpark expects the first Sandersville data hall to be ready for service in the fourth quarter of calendar 2027. Schultz said site preparation has been underway for months on a 122-acre greenfield parcel acquired earlier this year, separate from the company’s existing Bitcoin mining operation in the area.

The company has ordered and prepaid for long-lead items needed for the initial ready-for-service date. Harry Sudock, CleanSpark’s chief business officer, said the data center development should largely be viewed as a greenfield project, although the existing energized substation provides some benefit.

President and Chief Financial Officer Gary Vecchiarelli said estimated capital expenditures for Sandersville range from $10 million to $12 million per megawatt, implying total cash requirements of approximately $1.75 billion to $2.1 billion. The company plans to seek project-based debt financing for most of the build-out and said it has already funded the equity portion.

Vecchiarelli said CleanSpark would not raise capital through equity or equity-linked instruments for Sandersville. He added that the company had total liquidity of $917 million as of June 30, including about $200 million of cash and nearly 14,000 Bitcoin.

Quarterly Results

CleanSpark said its average revenue per Bitcoin mined was approximately $72,000 during the fiscal third quarter, down 5% from $76,000 in the prior quarter. Higher uptime and hash rate supported the revenue increase despite the lower average revenue per Bitcoin.

• Revenue was $138 million, up 1% sequentially.
• Gross margin was approximately 38%, compared with 40% in the prior quarter, as power prices increased modestly.
• GAAP net loss was $240 million, improving from a $378 million loss in the preceding quarter.
• The quarter included approximately $133 million in unfavorable mark-to-market adjustments on Bitcoin holdings, compared with $263 million in the prior quarter.
• Adjusted EBITDA was negative $113 million; Vecchiarelli said the measure did not exclude the Bitcoin mark-to-market adjustment and would have been positive $20 million when normalized for such non-cash items.

The company generated about $8.6 million in cash from digital asset management activities during the quarter, bringing its fiscal-year-to-date total to $25.8 million. Vecchiarelli said CleanSpark sold most of its quarterly Bitcoin production and achieved sales prices 7% above spot through its digital asset management efforts.

Texas Exclusivity and ERCOT Process

CleanSpark’s Sealy and Brazoria campuses in Texas, comprising 718 acres and up to 885 megawatts of secured and planned capacity, are under exclusivity with the same counterparty involved in the Sandersville lease. Schultz stressed that the Texas discussions remain in an exclusivity period and have not reached a final agreement.

The company said Texas regulators’ review of large-load interconnection projects has delayed final Batch Zero determinations. The next milestone identified by management is an August 20 Public Utility Commission of Texas hearing. Schultz said there is limited certainty about the process beyond that date, though CleanSpark does not anticipate a change to its energization timelines.

Sudock provided additional detail on the Texas portfolio. Sealy has received Batch Zero “go” status, but still requires a final ERCOT determination before interconnection. At Brazoria, an initial 300-megawatt phase has a similar status, while a second 300-megawatt segment remains subject to a final determination regarding base-load versus studied-load classification.

Management said it continues to invest in the Sealy and Brazoria sites and views the evolving Texas process as a potential source of acquisition opportunities involving projects that may lack capital or sufficient development support. CleanSpark reported 1.8 gigawatts of contracted capacity and said it has a high degree of confidence in expanding beyond 2.1 gigawatts through the ERCOT review process.

Bitcoin Mining’s Role in Expansion

Schultz said Bitcoin mining remains strategically useful as CleanSpark develops data center assets. Mining can allow the company to bring a paying load online quickly when utilities have interruptible or newly available power, he said, while the company develops a longer-term data center project.

At Sandersville, CleanSpark expects mining to continue until the data center cutover. Schultz said modular, immersion-cooled mining equipment can be deployed within roughly 90 days and potentially repurposed for future projects once data center capacity is ready.

Vecchiarelli said the company views its Bitcoin holdings as a strategic capital asset rather than a passive balance-sheet position. CleanSpark can use its holdings for derivative strategies, borrow against them or potentially deploy Bitcoin for what management considers highly accretive opportunities, he said.

About Cleanspark (NASDAQ:CLSK)

CleanSpark, Inc NASDAQ: CLSK is a leading energy software and services company specializing in advanced microgrid controls and distributed energy resource (DER) management. The firm develops proprietary software platforms designed to optimize power flows across on-grid and off-grid installations, integrating renewable generation, battery storage, and traditional generation assets. CleanSpark's technology is used by utilities, commercial and industrial enterprises, and remote facilities seeking to enhance energy resilience, reduce operating costs, and achieve sustainability goals.

In addition to its core software offerings, CleanSpark provides end-to-end engineering, procurement and construction (EPC) services.

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