WhiteFiber Q3 Earnings Call Highlights

Key Points

• NC-1 is fully operational and billing: All 40 megawatts of contracted capacity are online, completing an approximately $865 million, 10-year contract. WhiteFiber says development costs are expected to finish just below $9 million per gross megawatt.
• Cloud contracts provide a major growth target: Since its prior earnings call, WhiteFiber signed about $750 million in cloud services contracts covering roughly 13,000 GPUs. It expects the fully deployed signed cloud portfolio to produce about $365 million in annualized revenue by mid-2027, subject to deployment and financing conditions.
• Q3 revenue grew, but reported a large net loss: Revenue rose 19% year over year to $24 million, while the company recorded a $101.4 million net loss, including an $80.8 million expense tied to the induced conversion of convertible notes. Adjusted EBITDA was approximately break-even.

WhiteFiber NASDAQ: WYFI said all 40 megawatts of contracted IT capacity at its NC-1 data center are operational and billing, following equipment-related delays, as the company prepares for a larger expansion in North Carolina and the rollout of new cloud contracts.

Third-quarter revenue rose 19% from a year earlier to $24 million, driven by growth in colocation services, Chief Financial Officer Justin Zhu said. The company reported a $101.4 million net loss, including an $80.8 million expense related to the induced conversion of convertible notes, while adjusted EBITDA was approximately break-even.

NC-1 reaches full billing after delays

Chief Executive Officer Sam Tabar said the second 20-megawatt hall at NC-1 began full billing on Nov. 9, completing delivery of a contract valued at approximately $865 million over 10 years. The first hall began billing in mid-August, but a switchgear software issue interrupted service and billing until Sept. 23.

Tabar said shipping disruptions related to the Middle East conflict delayed the original switchgear. Replacement equipment required changes to the electrical design and presented integration and commissioning issues. The company does not expect late-delivery penalties, he said.

Development costs are expected to finish just below $9 million per gross megawatt, within the company’s original $7 million to $9 million range. The figure excludes site acquisition costs and is net of customer-funded nonrecurring costs.

WhiteFiber also signed a $300 million secured credit facility for NC-1. Zhu said initial funding is expected later in November or in December, subject to remaining conditions and any mutually agreed extension. Tabar said the funding would allow the company to recover part of its investment in NC-1 and deploy that capital into future projects.

North Carolina expansion and financing priorities

WhiteFiber completed its $60 million acquisition of the NC-2 and NC-3 sites in Yadkin County, North Carolina. The company expects at least 60 megawatts of initial gross utility capacity across the two sites and is targeting initial capacity in late 2027. Delivery remains dependent on power, customer commitments, financing and remaining approvals, Tabar said.

Across its North Carolina portfolio, the company is in advanced customer discussions for approximately 105 megawatts of gross capacity for 2027, including about 45 megawatts of expansion at NC-1. Tabar said interest in NC-2 and NC-3 is substantially stronger than it was for the initial NC-1 phase.

President Billy Krassakopoulos said the company is still budgeting for NC-2 and NC-3 and expects customers to cover customization or additional costs through payments, installation fees and prepayments. In response to an analyst’s question, he said revisions to designs and validation of delivery times for long-lead equipment are key steps before prospective customers execute service agreements.

Cameron Schnier, senior vice president of capital markets and corporate strategy, said WhiteFiber aims to secure investment-grade credit and confidence in committed debt financing before signing its next lease. He noted that the initial NC-1 lease was not directly with an investment-grade counterparty and did not have a full investment-grade credit wrap on a prevailing basis.

Cloud contracts and managed services

Tabar said WhiteFiber signed approximately $750 million in new cloud services contract value across five customers since its previous earnings call. New dedicated compute agreements cover roughly 13,000 GPUs and have an average term of about 4.2 years, bringing the company’s total signed dedicated compute contracts to approximately 20,000 GPUs.

The new deployments are scheduled to enter service between late in the fourth quarter and the second quarter of 2027. Once the signed cloud portfolio is fully deployed, WhiteFiber expects approximately $365 million in annualized revenue and is targeting that run rate by mid-2027. Tabar said timing depends on equipment and data center readiness, customer acceptance and financing.

The company expects fourth-quarter cloud revenue to be roughly in line with the third quarter’s $18.1 million, which included a $3.4 million customer termination fee. It then expects significant sequential growth in the first and second quarters of 2027 as contracted deployments enter service.

WhiteFiber has also signed four managed services agreements with approximately $58 million in total contract value. Tabar said they are expected to generate about $15 million in annual recurring revenue once fully deployed. The company expects managed services to exceed $50 million in annualized recurring revenue by the end of the first quarter of 2027, contingent on signing additional agreements and bringing them into service.

Under that model, customers fund hardware and data center capacity while WhiteFiber deploys and operates the infrastructure, Tabar said. For signed dedicated compute deployments not yet in service, contracted customer prepayments cover about 40% of estimated capital expenditure, he added.

Quarterly results and liquidity

Third-quarter colocation revenue more than tripled to $5.6 million, Zhu said, reflecting contributions from Montreal III and NC-1. Excluding the termination fee, cloud revenue declined approximately 18% year over year as the company transitioned to new deployments.

Gross profit excluding depreciation and amortization was $13.7 million, or approximately 57% of revenue. General and administrative expenses fell 15% from a year earlier to $18 million, including $3.8 million in share-based compensation.

WhiteFiber ended September with $138.5 million in cash and equivalents and $9 million in restricted cash. Deferred revenue, largely customer prepayments, rose to $306 million from $80 million at year-end. Remaining performance obligations were $729 million at quarter-end, excluding future payments under certain colocation agreements classified as leases. Those lease payments totaled approximately $421 million, excluding the second NC-1 hall, whose lease had not commenced by Sept. 30.

About WhiteFiber (NASDAQ:WYFI)

WhiteFiber, Inc. NASDAQ: WYFI is a digital infrastructure company focused on providing high-performance computing resources for artificial intelligence, machine learning and other data-intensive workloads. The company develops and operates infrastructure intended to support advanced computing, including data center capacity, power and connectivity solutions, and access to specialized computing resources. Its offerings are designed for customers that require scalable, reliable infrastructure for applications such as AI model development, cloud computing and high-performance computing.

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