Digi Power X Q3 Earnings Call Highlights

Key Points

• Q3 revenue rose 85% sequentially to $12.25 million, with AI contributing $5.66 million, or 46% of the total. GPU rental revenue increased 127% from Q2, while Bitcoin-related revenue fell to about 27% of the mix.
• The company expects Cerebras to access the first 15-megawatt phase of its Alabama data center on December 15, with billing expected to begin in January 2027. The 10-year take-or-pay agreement is valued at about $402 million for phase one and $1.07 billion across both phases; a proposed $200 million financing remains subject to closing conditions.
• Digi Power X is targeting a $250 million–$300 million annualized revenue run rate by Q3 2027 and expects about $350 million in 2027 capital expenditures, primarily for AI capacity and the Alabama project. It reported $119.6 million in cash, equivalents, and digital currencies as of September 30.

Digi Power X NASDAQ: DGXX reported an 85% sequential increase in third-quarter revenue as its artificial intelligence business grew, while outlining construction and financing milestones for its Alabama data center.

Revenue rose to $12.25 million, up 50% from a year earlier. AI revenue was $5.66 million, representing 46% of the total, compared with no AI revenue in the prior-year quarter, CEO Michel Amar said on the company’s earnings call.

Revenue from GPU rentals through NeoCloudz reached $2.46 million, up 127% from the second quarter. Power plant energy sales rose 68% sequentially to $3.29 million. Legacy Bitcoin activities accounted for approximately 27% of revenue, down from 63% a year earlier.

Net income was $1 million, compared with $100,000 a year earlier, with digital currency and warrant valuation gains providing material support, Amar said. EBITDA rose to $6.5 million from $1.7 million, while adjusted EBITDA was positive $600,000, compared with a loss of $1 million a year earlier.

Alabama Project Nears First Delivery

Digi Power X expects to give AI colocation tenant Cerebras access to the first phase of its Columbiana, Alabama, campus on December 15. Amar said the company would begin commissioning power and liquid-cooling systems at that point and expects billing to start in January 2027.

Construction of the second phase has begun, with tenant access targeted for March 2027, subject to conditions. Amar said he expects billing for the full contract to begin in April.

The 10-year take-or-pay agreement is expected to generate approximately $402 million in fees from the 15-megawatt first phase and approximately $1.07 billion across both phases, according to Amar. The second phase covers 25 megawatts. An extension option could bring potential total contract value to approximately $2.5 billion, he said.

Amar identified tenant access, the start of billing, progress on the second phase and the closing of proposed financing as milestones for investors to monitor over the next two quarters.

Financing and 2027 Spending Plans

The company received a commitment letter in October for $200 million in project-level debt financing syndicated by Goldman Sachs. The proposed financing would support completion of the 40-megawatt Columbiana project and related costs.

Amar said the company expects to close the financing in the fourth quarter of 2026. Closing remains subject to documentation, lender due diligence and other conditions. He said the proposed financing had a single-digit interest rate.

Digi Power X expects approximately $350 million in capital expenditures in 2027, primarily for AI inference capacity and completion of Columbiana’s second phase. Amar said the company intends to fund spending principally through customer deposits and prepayments, contract-backed debt financing and cash on hand.

The company reported $119.6 million in cash, cash equivalents and digital currencies as of September 30, including $24.5 million in digital currency holdings. Working capital was $103 million, up from $17.5 million a year earlier. Amar said the company had no outstanding borrowing as of the November 13 call and had deployed $168 million in year-to-date capital expenditures toward GPU equipment and the Alabama data center build-out.

Amar also said the company generated $4.7 million in positive cash flow during the third quarter, aided by a $12 million nonrefundable tenant infrastructure contribution. He expects positive cash flow in the following quarter with the help of a further contribution.

AI Growth Targets and Expansion

Digi Power X is targeting an annualized revenue run rate of $250 million to $300 million by the end of the third quarter of 2027. That is a rate at a point in time, rather than a forecast for full-year revenue, and depends on adequate financing, market conditions and other factors.

Approximately $143 million of the targeted run rate is supported by current operations and the Columbiana tenant agreement, Amar said. The remainder is expected from additional AI colocation and GPU capacity under development or in customer negotiations.

The company launched its NeoCloudz Token Factory during the quarter, selling AI inference directly to customers. Amar said the business was seeing margins of 85% to 90% and described it as a potential source of higher-margin revenue.

Digi Power X is also preparing its New York infrastructure assets for conversion to AI data center operations, targeting transitions beginning in the third and fourth quarters of 2027. In North Carolina, Amar said, development plans contemplate two 75-megawatt sites for 2029 and 2030.

Separately, the company owns approximately 48% of US Data Centers, which develops modular data center systems and robotics. Amar said US Data Centers is raising capital independently, a process that would dilute Digi Power X’s ownership stake without requiring it to contribute capital or issue its own shares.

About Digi Power X (NASDAQ:DGXX)

Digi Power X 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.

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