Latest news with #B.RileySecurities

Malaysian Reserve

19-05-2025

Business
Malaysian Reserve

B. Riley Securities Provides Business and Financial Update Following Carve-Out Transaction

LOS ANGELES, May 19, 2025 /PRNewswire/ — B. Riley Securities Holdings, Inc. ('B. Riley Securities,' 'BRS' or the 'Company'), a leading middle market investment bank, today provided a business and financial update following its previously announced carve-out transaction with B. Riley Financial, Inc. ('BRF'), and in anticipation of BRS' future filings of financial statements and quotation on the OTC Markets. Andy Moore, Chairman and Co-CEO, B. Riley Securities, stated:'We remain relentlessly focused on delivering for our clients. With our previously announced carve-out from BRF, we are able to provide greater financial transparency and a clearer view into the underlying strength of our business. We are committed to providing our stakeholders with increased visibility into our strategy and vision for value creation. Although transactional activity has been tempered by macro uncertainty, volatility has often presented compelling opportunities for us to gain market share with differentiated, client-focused execution. As a trusted partner to middle market companies and those who invest in them, we take a long-term view in positioning BRS for sustainable growth and maximizing shareholder value.' Jimmy Baker, Co-CEO & Head of Capital Markets at B. Riley Securities, commented:'We are proud of how our team navigated a challenging 2024. Over the course of last year, we raised $16.5 billion in debt and equity on behalf of our clients and expanded our capabilities in key areas including Convertibles and Liability Management. In addition, our advisory practice is now more closely aligned with our core clients' interests with a sharpened strategic focus on Capital Markets. We have also continued to invest in talent across Equity Research, Sales & Trading, and Investment Banking. It will take time for the full impact of our previously announced carve-out and the contribution of our new team members to materialize in our financial results. Our focus remains firmly on long-term value creation and making BRS a destination for top middle market talent while creating opportunities for growth and leadership within our firm.' Adjusted Year 2024 Financial HighlightsOn an adjusted basis, BRS delivered total revenue of $217.7 million, adjusted net revenue of $211.0 million, a net loss of $14.5 million, and adjusted net income of $33.1 million. The adjusted basis referred to gives effect to the March 2025 contributions of Cascadia Investments Inc. (OTCMKTS: CDIV) and other subsidiaries to BRS as part of the carve-out, as if those contributions had been completed on January 1, 2024. For a reconciliation of non-GAAP measures to their corresponding GAAP measures and additional disclosures, see 'Note Regarding Use of Non-GAAP Financial Measures' and the tables below. In January 2025, the Company repaid all $12.4 million of its outstanding debt. Reflecting primarily the impact of pre-carve out distributions to BRF, losses pertaining to a legacy investment, cash use in connection with year-end compensation and repayment of debt as discussed above, BRS stands completely debt-free with $68 million in cash and securities owned as of the carve-out effective date. About B. Riley Securities (BRS)BRS provides a full suite of investment banking and capital markets services to corporations, financial sponsors, and institutional investors across all industry verticals. Investment banking services include initial, secondary, and follow-on offerings, institutional private placements, merger and acquisition (M&A) advisory, SPACs, corporate restructuring and liability management. Widely recognized for its thematic proprietary equity research, clients benefit from BRS' extensive network, industry expertise, and proven execution capabilities of its end-to-end financial services platform. For more information, visit Note Regarding Use of Non-GAAP Financial MeasuresCertain information set forth herein, including adjusted net revenue and adjusted net income (loss), may be considered non-GAAP financial measures. B. Riley Securities believes this information is useful to investors because it provides a basis for measuring the operating performance of the Company's business and its revenues and cash flow, (i) excluding in the case of adjusted net revenue, trading gains (losses) on legacy investment positions (net of 'regular way' fixed income trading revenue) and fair value adjustments on loans, and including Securities Lending interest expense and (ii) excluding in the case of adjusted net income, fair value adjustments, stock-based compensation, trading gains (losses) on legacy investment positions (net of 'regular way' fixed income trading revenue), fair value adjustments on loans and other investment-related expenses, and including the estimated related tax expense or benefit on the aforementioned adjustments, that would normally be included in the most directly comparable measures calculated and presented in accordance with Generally Accepted Accounting Principles ('GAAP'). In addition, the Company's management uses these non-GAAP financial measures along with the most directly comparable GAAP financial measures in evaluating the Company's operating performance, management compensation, capital resources, and cash flow. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP, and non-financial measures as reported by the Company may not be comparable to similarly titled amounts reported by other companies. B. RILEY SECURITIES HOLDINGS, INC. Condensed Consolidated Balance Sheet as of December 31, 2024 (Unaudited) (in thousands) B. Riley Securities,Inc. (1) Other wholly owned unaudited subsidiaries (2) As AdjustedB. Riley Securities Holdings, Inc. Assets: Cash and cash equivalents $ 40,926 $ 1,213 $ 42,139 Receivables 70,006 (36,298) 33,708 Securities borrowed 43,022 – 43,022 Securities owned, at fair value 77,758 938 78,696 Operating lease right of use asset 6,884 1,721 8,605 Goodwill and intangibles 113,914 24,990 138,904 Property and equipment, net 2,049 – 2,049 Prepaid expenses and other assets 2,387 – 2,387 Total assets $ 356,946 $ (7,436) $ 349,510 Liabilities: Securities loaned $ 27,942 $ – $ 27,942 Financial instruments sold, not yet purchased, at fair value 5,675 – 5,675 Note payable 12,379 – 12,379 Accrued compensation and benefits 26,822 253 27,075 Accounts payable and accrued expenses 16,021 (1,279) 14,742 Operating lease liabilities 8,293 2,288 10,581 Total liabilities 97,132 1,262 98,394 Equity 259,814 (8,698) 251,116 Total liabilities & equity $ 356,946 $ (7,436) $ 349,510 1) Focus report audit of B. Riley Securities as of and for the year ended December 31, 2024. 2) Reflects the contribution of Cascadia Investments Inc. and other immaterial subsidiaries contributed to B. Riley Securities Holdings, Inc. as if the March 2025 contribution was made on December 31, 2024. B. RILEY SECURITIES HOLDINGS, INC. Condensed Consolidated Statements of Operations Year Ended December 31, 2024 (Unaudited) (in thousands) B. Riley Securities, Inc. (1) Other wholly owned unaudited subsidiaries (2) As AdjustedB. Riley Securities Holdings, Inc. Revenues Investment banking: $ 146,887 $ 7,045 $ 153,932 Institutional brokerage (18,824) (556) (19,380) Interest 78,229 76 78,305 Other income 3,866 945 4,811 Total revenues $ 210,158 $ 7,510 $ 217,668 Expenses Compensation and benefits $ 117,745 $ 1,363 $ 119,108 Interest 66,518 – 66,518 Other operating expenses 47,947 3,456 51,403 Total expenses 232,210 4,819 237,029 Operating net income (loss) (22,052) 2,691 (19,361) Other income/expense – (515) (515) Net income (loss) before income taxes (22,052) 2,176 (19,876) Income tax (benefit) expense (5,954) 587 (5,367) Net income (loss) $ (16,098) $ 1,589 $ (14,509) 1) Focus report audit of B. Riley Securities as of and for the year ended December 31, 2024. 2) Reflects the contribution of Cascadia Investments Inc. and other immaterial subsidiaries contributed to the group subsequent to December 31, 2024. B. RILEY SECURITIES HOLDINGS, INC. Reconciliation of GAAP to Adjusted Full Year 2024 Results (Unaudited) (in thousands) B. Riley Securities, Inc. (1) Other wholly owned unaudited subsidiaries (2) As AdjustedB. Riley Securities Holdings, Inc. Reconciliation of GAAP to adjusted financials: GAAP revenue $ 210,158 $ 7,510 $ 217,668 Adjustments: Legacy positions losses (gains) (3) 59,182 556 59,738 Loans at fair value 63 – 63 Committed equity facility gains (losses) – (515) (515) Total adjustments 59,245 41 59,286 Adjusted revenue 269,403 7,551 276,954 Securities lending interest expense (65,939) – (65,939) Adjusted net revenue (a non-GAAP figure) $ 203,464 $ 7,551 $ 211,015 Net income $ (16,098) $ 1,589 $ (14,509) Adjustments: Fair value adjustment of contingent acquisition consideration (379) – (379) Share based compensation 5,757 – 5,757 Legacy positions losses (gains) (3) 59,182 556 59,738 Loans at fair value 63 – 63 Income tax-effect of above non-GAAP adjustments and certain discrete tax items (17,448) (150) (17,598) Adjusted net income $ 31,077 $ 1,995 $ 33,072 1) Focus report audit of B. Riley Securities as of and for the year ended December 31, 2024. 2) Reflects the contribution of Cascadia Investments Inc. and other immaterial subsidiaries contributed to the group subsequent to December 31, 2024. 3) Legacy investment positions held at BRS that are not, following the carve-out, part of BRS' go-forward strategy. Contact:Jo Anne McCuskerB. Riley Securitiespress@

Yahoo

19-05-2025

Business
Yahoo

B. Riley Securities Provides Business and Financial Update Following Carve-Out Transaction

LOS ANGELES, May 19, 2025 /PRNewswire/ -- B. Riley Securities Holdings, Inc. ("B. Riley Securities," "BRS" or the "Company"), a leading middle market investment bank, today provided a business and financial update following its previously announced carve-out transaction with B. Riley Financial, Inc. ("BRF"), and in anticipation of BRS' future filings of financial statements and quotation on the OTC Markets. Andy Moore, Chairman and Co-CEO, B. Riley Securities, stated:"We remain relentlessly focused on delivering for our clients. With our previously announced carve-out from BRF, we are able to provide greater financial transparency and a clearer view into the underlying strength of our business. We are committed to providing our stakeholders with increased visibility into our strategy and vision for value creation. Although transactional activity has been tempered by macro uncertainty, volatility has often presented compelling opportunities for us to gain market share with differentiated, client-focused execution. As a trusted partner to middle market companies and those who invest in them, we take a long-term view in positioning BRS for sustainable growth and maximizing shareholder value." Jimmy Baker, Co-CEO & Head of Capital Markets at B. Riley Securities, commented:"We are proud of how our team navigated a challenging 2024. Over the course of last year, we raised $16.5 billion in debt and equity on behalf of our clients and expanded our capabilities in key areas including Convertibles and Liability Management. In addition, our advisory practice is now more closely aligned with our core clients' interests with a sharpened strategic focus on Capital Markets. We have also continued to invest in talent across Equity Research, Sales & Trading, and Investment Banking. It will take time for the full impact of our previously announced carve-out and the contribution of our new team members to materialize in our financial results. Our focus remains firmly on long-term value creation and making BRS a destination for top middle market talent while creating opportunities for growth and leadership within our firm." Adjusted Year 2024 Financial HighlightsOn an adjusted basis, BRS delivered total revenue of $217.7 million, adjusted net revenue of $211.0 million, a net loss of $14.5 million, and adjusted net income of $33.1 million. The adjusted basis referred to gives effect to the March 2025 contributions of Cascadia Investments Inc. (OTCMKTS: CDIV) and other subsidiaries to BRS as part of the carve-out, as if those contributions had been completed on January 1, 2024. For a reconciliation of non-GAAP measures to their corresponding GAAP measures and additional disclosures, see "Note Regarding Use of Non-GAAP Financial Measures" and the tables below. In January 2025, the Company repaid all $12.4 million of its outstanding debt. Reflecting primarily the impact of pre-carve out distributions to BRF, losses pertaining to a legacy investment, cash use in connection with year-end compensation and repayment of debt as discussed above, BRS stands completely debt-free with $68 million in cash and securities owned as of the carve-out effective date. About B. Riley Securities (BRS)BRS provides a full suite of investment banking and capital markets services to corporations, financial sponsors, and institutional investors across all industry verticals. Investment banking services include initial, secondary, and follow-on offerings, institutional private placements, merger and acquisition (M&A) advisory, SPACs, corporate restructuring and liability management. Widely recognized for its thematic proprietary equity research, clients benefit from BRS' extensive network, industry expertise, and proven execution capabilities of its end-to-end financial services platform. For more information, visit Note Regarding Use of Non-GAAP Financial MeasuresCertain information set forth herein, including adjusted net revenue and adjusted net income (loss), may be considered non-GAAP financial measures. B. Riley Securities believes this information is useful to investors because it provides a basis for measuring the operating performance of the Company's business and its revenues and cash flow, (i) excluding in the case of adjusted net revenue, trading gains (losses) on legacy investment positions (net of "regular way" fixed income trading revenue) and fair value adjustments on loans, and including Securities Lending interest expense and (ii) excluding in the case of adjusted net income, fair value adjustments, stock-based compensation, trading gains (losses) on legacy investment positions (net of "regular way" fixed income trading revenue), fair value adjustments on loans and other investment-related expenses, and including the estimated related tax expense or benefit on the aforementioned adjustments, that would normally be included in the most directly comparable measures calculated and presented in accordance with Generally Accepted Accounting Principles ("GAAP"). In addition, the Company's management uses these non-GAAP financial measures along with the most directly comparable GAAP financial measures in evaluating the Company's operating performance, management compensation, capital resources, and cash flow. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP, and non-financial measures as reported by the Company may not be comparable to similarly titled amounts reported by other companies. B. RILEY SECURITIES HOLDINGS, INC. Condensed Consolidated Balance Sheet as of December 31, 2024 (Unaudited) (in thousands) B. Riley Securities,Inc. (1)Other wholly owned unaudited subsidiaries (2)As AdjustedB. Riley Securities Holdings, Cash and cash equivalents$ 40,926$ 1,213$ 42,139 Receivables70,006(36,298)33,708 Securities borrowed43,022-43,022 Securities owned, at fair value77,75893878,696 Operating lease right of use asset6,8841,7218,605 Goodwill and intangibles113,91424,990138,904 Property and equipment, net2,049-2,049 Prepaid expenses and other assets2,387-2,387 Total assets$ 356,946$ (7,436)$ 349,510 Liabilities: Securities loaned$ 27,942$ -$ 27,942 Financial instruments sold, not yet purchased, at fair value5,675-5,675 Note payable12,379-12,379 Accrued compensation and benefits26,82225327,075 Accounts payable and accrued expenses16,021(1,279)14,742 Operating lease liabilities8,2932,28810,581 Total liabilities97,1321,26298,394Equity259,814(8,698)251,116Total liabilities & equity$ 356,946$ (7,436)$ 349,5101) Focus report audit of B. Riley Securities as of and for the year ended December 31, 2024. 2) Reflects the contribution of Cascadia Investments Inc. and other immaterial subsidiaries contributed to B. Riley Securities Holdings, Inc. as if the March 2025 contribution was made on December 31, 2024. B. RILEY SECURITIES HOLDINGS, INC. Condensed Consolidated Statements of Operations Year Ended December 31, 2024 (Unaudited) (in thousands) B. Riley Securities, Inc. (1)Other wholly owned unaudited subsidiaries (2)As AdjustedB. Riley Securities Holdings, Inc. Revenues Investment banking:$ 146,887$ 7,045$ 153,932 Institutional brokerage(18,824)(556)(19,380) Interest78,2297678,305 Other income3,8669454,811 Total revenues$ 210,158$ 7,510$ 217,668Expenses Compensation and benefits$ 117,745$ 1,363$ 119,108 Interest66,518-66,518 Other operating expenses47,9473,45651,403 Total expenses232,2104,819237,029 Operating net income (loss)(22,052)2,691(19,361)Other income/expense-(515)(515) Net income (loss) before income taxes(22,052)2,176(19,876) Income tax (benefit) expense(5,954)587(5,367) Net income (loss)$ (16,098)$ 1,589$ (14,509)1) Focus report audit of B. Riley Securities as of and for the year ended December 31, 2024. 2) Reflects the contribution of Cascadia Investments Inc. and other immaterial subsidiaries contributed to the group subsequent to December 31, 2024. B. RILEY SECURITIES HOLDINGS, INC. Reconciliation of GAAP to Adjusted Full Year 2024 Results (Unaudited) (in thousands) B. Riley Securities, Inc. (1)Other wholly owned unaudited subsidiaries (2)As AdjustedB. Riley Securities Holdings, Inc. Reconciliation of GAAP to adjusted financials: GAAP revenue$ 210,158$ 7,510$ 217,668Adjustments: Legacy positions losses (gains) (3)59,18255659,738 Loans at fair value63-63 Committed equity facility gains (losses)-(515)(515) Total adjustments59,2454159,286 Adjusted revenue269,4037,551276,954 Securities lending interest expense(65,939)-(65,939) Adjusted net revenue (a non-GAAP figure)$ 203,464$ 7,551$ 211,015Net income$ (16,098)$ 1,589$ (14,509)Adjustments: Fair value adjustment of contingent acquisition consideration(379)-(379) Share based compensation5,757-5,757 Legacy positions losses (gains) (3)59,18255659,738 Loans at fair value63-63 Income tax-effect of above non-GAAP adjustments and certain discrete tax items(17,448)(150)(17,598) Adjusted net income$ 31,077$ 1,995$ 33,0721) Focus report audit of B. Riley Securities as of and for the year ended December 31, 2024. 2) Reflects the contribution of Cascadia Investments Inc. and other immaterial subsidiaries contributed to the group subsequent to December 31, 2024. 3) Legacy investment positions held at BRS that are not, following the carve-out, part of BRS' go-forward strategy. Contact:Jo Anne McCuskerB. Riley Securitiespress@ View original content to download multimedia: SOURCE B. Riley Securities Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data

Yahoo

16-05-2025

Business
Yahoo

Q1 2025 Beam Global Earnings Call

Lisa Potok; Chief Financial Officer; Beam Global Desmond Wheatley; Chairman of the Board, President, Chief Executive Officer; Beam Global Ryan Pfingst; Analyst; B. Riley Securities Noel Parks; Analyst; Tuohy Brothers Investment Research Inc Operator Good day and welcome to the Beam Global first-quarter 2025 operating results conference call. (Operator Instructions) Please note this event is being recorded.I would now like to turn the conference over to Lisa Potok, Chief Financial Officer. Please go ahead. Lisa Potok Hi, good afternoon and thank you for participating in Beam Global's first-quarter 2025 operating results conference call. We appreciate you joining us today and hear an update on our business. Joining me is Desmond Wheatley, President and CEO and Chairman of Beam. Desmond will be providing an update on recent activities at Beam, followed by a question-and-answer first, I'd like to communicate to you that during this call, management will be making forward-looking statements, including statements that address Beam's expectations for future performance or operational results. Forward-looking statements involve risk and other factors that may cause actual results to differ materially from those statements. For more information about these risks, please refer to the risk factors described in Beam's most recently filed Form 10-K and other periodic reports filed with the content of this call contains time-sensitive information that is accurate only as of today, May 15, 2025. Except as required by law, being disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur after this I would like to provide an overview of our financial results for Beam's Q1 of '25. For the first quarter of '25, our revenues were $6.3 million. Our revenues were diverse across commercial entities and state and local governments, with a significant rebalancing towards enterprise customers, whereas 53% of our revenues were derived from commercial customers compared to only 16% in the same period in our international customers comprise 25% of all revenue in Q1 of 25% versus 11% in Q1 of 24%. We believe that this decrease in revenue is mainly a result of the uncertainty in the US government's Zero-Emission-Vehicle strategy related to the Presidential election. Our backlog as of the end of Q1 of '25 is $6.3 million. Our gross profits for Q1 of '25 was $0.5 million or an 8% gross margin versus our gross profit of $1.5 million or 10% gross margin in Q1 of '24. The gross profit included a non-cash negative impact of $1 million for depreciation and amortization of intangible assets resulting from the all-sale acquisition and our gross margin net of these non-cash items, which of course is non-GAAP, was 21% for Q1 of '25 versus 12% in Q1 of ' have continued to recognize the synergies and the positive gross margin contributions from our acquisitions. And we expect the company's revenue to grow in the future and our fixed overhead absorption to continue to improve, resulting in even higher gross Q1 of '25, our operating expenses of $16 million included $10.8 million of goodwill impairment. This impairment was recognized because our market capitalization no longer exceeded our net assets at the end of Q1 of '25 due to the decrease in our stock price since December of '24. Our operating expenses net of the non-cash items for Q1 '25 are $4.1 million compared to the Q1 of '24 of $3.8 million, a variance of $200,000 or 6%. The company believes the goodwill impairment reported in Q1 '25 is not a negative indicator of our historic or current operating results and not a negative indicator of future performance, as the company has taken significant steps to diversify its geographical reach and product offerings while focusing on our strategic Q1 '25 net loss of $15.5 million also included the $12.5 million non-cash expense items such as the goodwill impairment that we just discussed, our depreciation and amortization, stock-based comp, and provisions for credit losses in '25 compared to a net loss of $3 million with non-cash expenses of $1.1 million in '24. So the Q1 '25 net loss excluding the non-cash items, which is non-GAAP, was $2.8 million compared to $2.1 million for Q1 of ' cash balance at the end of March was $2.5 million compared to the $4.6 million at the end of '24. And our net cash used for operating activities was $1.8 million for Q1 of '25 compared to $3 million for Q1 of 24. We have historically met our cash needs through a combination of debt and equity financing, and more recently through our increasing gross profit contributions.I will turn the call over to Desmond to provide a business update. Desmond Wheatley Thank you, Lisa, and thanks as always to the rest of you who've dialed in to listen to this call or who are joining us through the webinar me start off by making a couple of important statements. Sales of our flagship product EV ARC increased in the first quarter. We're navigating our way through a series of uncertainties in the US market, and while we're hitting speed bumps along the way, we now believe that we have the pieces in place to return to growth in this quarter and in future Battery business is doing some of the most interesting and promising work it's ever done. Our international expansion strategy is gaining momentum and bearing fruit. We have sufficient cash and working capital to continue to operate the business into the future. We have no debt and no going concern. We're generating gross profits which, net of non-cash items, are still north of 20%. We have proposals out and items in our pipeline which would simply not have been possible this time last year before we introduced our fantastic new product lineup and expanded beyond the US the immediate benefits of US federal government sales has been tough on us, but we are managing through that, and we've created a foundation for growth which is resistant to those sorts of upheavals and which I believe will create opportunities for growth which far outstrip anything that we've ever done I go any further, I'd like to apologize for the late notice that we gave for this earnings call. We usually like to give at least a week's notice prior to these calls. But in this instance, we had some last-minute items clear up with our auditors, and as a result, we did not have certainty that we were going to be filing until closer to this date than we would normally like.I'm going to start off by talking about the item in particular which made us late for the call because it's somewhat confusing and while it has no impact on the operations of the company, it involves a large number which if you don't know how it was derived, could appear to be very negative. We have elected in this quarter to take an impairment charge against the goodwill which we've had on our books as a result of the very excellent acquisitions that we've done over the last couple of to remind you, those acquisitions are the acquisition of the battery company in 2022, the acquisition of our new European headquarters and factory in 2023, and the acquisition of our power electronics group in 2024. Now each of these acquisitions has been excellent for us. The deal structures are good. Beam Global and our shareholders got excellent value, and our long-term strategy, as well as the short-term benefits we're receiving from those companies have been vastly improved as a result of us making those as a management team are of the opinion that those companies are worth a good deal more today than they were when we acquired them. We're also of the opinion that the whole is far greater than the sum of the parts, and the contribution that these acquisitions have made to our global presence and growth is hard to overstate, especially given the uncertainties in the North American yet we're going to take an impairment charge against the goodwill that came along with them. Why would we do that? Well, the simple answer to that question is that GAAP accounting requires it. And the reason that GAAP accounting requires it is that because our share prices declined since 12/31/24. We are now in the incredible position of trading not just at a fraction of our revenues, but actually at less than the value of our assets. That's to say our market cap is now lower than the value of the assets that the company accounting does not allow for that condition to exist, and in order to balance those two numbers, we have to take an impairment charge against our goodwill. It is of course very frustrating because we believe, and the data certainly backs this up, that as I've already said, the value of the companies that we bought and the goodwill that came with them is worth more today than it was when we bought it's not for us to question the wisdom of GAAP accounting, so we've taken the impairment. This impairment has two significant impacts to our financials. The first one is that you'll see a significant reduction in the value of the assets that we hold on to our books. And the second is that when we take the impairment, it actually hits our P&L in the quarter in which we take it. The impairment's about $11 million and so you'll see an $11 million reduction in our assets and also an $11 million negative impact to our I stress, and I stress again that these are non-cash items that do not impact the operations of the company at all. We do not actually believe that there are any negative impacts to the real value of our assets or the business. And as I've already stated, we actually think that the value of our acquisitions is greater today than it was when we made not a simple process, and it's certainly not a trivial matter to put these impairments together. And so our accounting team, which is Lean, and our auditors have been working together to make sure that we've done it in exactly the right way. That explains why we're later than we wanted to be in having certainty on the timing of our filings and, hence, later than we wanted to be on giving you notice for the call. So you have my apologies for the tardiness, and you also have an explanation for these entirely GAAP-accounting-driven adjustments to our financials which I stress again are non-cash and have no impact on the operational viability of the company or in my opinion it's true value.I'm going to keep the rest of this earnings call pretty brief because we of course just four weeks ago went through a comprehensive discussion around our full-year 2024 results and subsequent events which covered much of the first quarter. I also talked a lot in that call about our new products and our activities and further plans for been working very hard at Beam Global, and I'm happy about the advances we continue to make, but I'm not going to take a whole lot of your time talking about things that have happened during the last four weeks. If you're looking for more information about our new product portfolio and about our international expansion plans and activities and you didn't get to hear the earnings call we did four weeks ago, you can still find a transcript of it online, and I'm pretty sure there's actually still a recording of it somewhere too. Give Luke Higgins, our internal IR Manager, a call or drop him a note if you want some help finding of the things I told you during the last call was that I expected to see a couple of tough quarters. The fourth quarter of 2024 was one of those, and so was the first quarter of 2025. Our revenues of $6.3 million were about half what they were during the same period the prior year. That's disappointing, but it's not the first quarter of 2024, more than half of our revenues came from federal government orders, and as I explained to you during the last earnings call, the current administration has instructed the GSA, or the General Services Administration, to make no further acquisitions of electric vehicles or electric-vehicle-charging infrastructure for the time been working hard to create new opportunities for the company which are immune to any variations in federal government order cadence, but that's a process, not an event. And while we've seen good results from our efforts in terms of an increase in our first-quarter orders, those orders have not yet resulted in an increase in reported revenue or even a replacement of the revenues which we lost due to the cessation of the US Federal government's investment in electric vehicle charging may hear the US Marine Corps flying over our officers at the moment. Nothing I can do about that. fact, the fact is that our diversification strategies are starting to deliver fruit. Sales orders in the first quarter were up 23% over the fourth quarter of 2025, even though they did not materially include any Federal government orders. We now believe that we have the pieces in place to return to growth in this and future quarters. We've adjusted our sales efforts to concentrate on non-Federal prospects, and we've taken advantage of the moves that we've been making over the last couple of years to grow our geographic footprint through our expansion into fact, international revenues contributed over 25% of our first-quarter numbers, and Q1 is typically the slowest quarter of the year for the legacy businesses which we've acquired in Europe. As I say, even during the worst quarter, our European operations contributed significantly to our overall revenues and gross profit. We generated 41% year-over-year growth in non-government sales, which is a testament to the efficacy of our strategy to grow and expand our commercial business, which, as I've always mentioned before, I believe in the future will be the largest contributor to Beam Global's revenue the same time, we did still get significant revenue generation from government customers, just not the Federal government. I think this is positive, and it demonstrates that while the Federal government is not proceeding for the moment with the electrification of transportation, state governments and municipal municipalities still are, and they have historically contributed fairly large percentages of our are even indications that several of our state and municipal customers will actually increase their activities in light of the Federal government hesitance. Notably, California's government has committed to replacing federal activity and maintaining the pace of growth in EV charging infrastructure. California continues to be one of our most important customers. Similarly, we have good reason to believe that activity with one or more of our significant municipal customers may actually increase for us this further demonstrate that our diversification strategy is working, in Q1 of 2025, we shipped EV ARC units, ARC mobility trailers, energy storage systems, lighting poles, and smart city infrastructure solutions to locations across California, Arizona, Colorado, Florida, Michigan, Oregon, and internationally in Croatia, Serbia, Romania, and Spain. We're continuing our strategy of expanding our sales team through the leveraging of outside sales resources. We have a full-time manager of resellers at our European operations, and in the US, our Vice President of Sales spends a great deal of time recruiting and training resellers to expand our market here as well.A great example of the sorts of things that the distributors are pulling off is that EV ARC is today on full view at the Feria Internacional de Defensa y Seguridad, which is one of the largest defense and security trade shows in Europe. EV ARC is on prominent display at the center of the show and has been visited by various public institutions, the Department of Defense, the Guardia Civil, who incidentally are already big user of zero-electric motorcycles and the charging infrastructure, the Army, the Navy, the Air Force, and several large industry corporations, as well as about 40,000 visitors, in fact, 44,000 is the latest number I just actually have zero-electric motorcycles liveried for law enforcement present with EV ARC and our partner in the electric motorcycle industry, Zero Motorcycles, an American company, is with us there as we demonstrate our BeamPatrol solution to law enforcement and the partner in Spain, Geci, made the investment in attending this trade show and transporting an EV ARC there. This is a fantastic example of how our force multiplication strategy with external sales resources is getting Beam Global's products tremendous exposure in a greatly expanded theater without us having to invest operational dollars to make it happen. I love working with Geci, and they love us and our products.I'll do everything I can to support them, but the great thing is they don't need a lot of my support. They're a well-established aerospace engineering organization that's been in business for many years and has fantastic relationships across the globe. I feel lucky to have them as a partner, and they feel lucky to be representing our products to their tremendous portfolio of relationships. By the way, tomorrow, Geci will deploy EV ARC prominently at the Valencia Grand Prix Circuit, another first of us which will come with tremendous we're making growth in our commercial sector happening. We're continuing to see sales to government entities outside of the Federal government, and perhaps most importantly, we're laying the groundwork for what we believe will be significant growth in Europe, the Middle East, and Africa. All of this is to say that while our first-quarter results are not what we'd like them to be, we still feel good about 2025. We believe that we will see a return to growth in this in future quarters, and we remain confident about our trajectory towards positive cash gross margins are inevitably impacted by reduced volumes because of the fixed overhead allocations which have to be absorbed by the smaller number of unit sales. Nevertheless, we continued to produce positive gross margins in the first quarter, which net and non-cash items were still north of 20%. While we're seeing some inflationary impacts directly from tariffs and also indirectly from the impact of tariffs on domestic producers, we're still managing to make consistent improvements in our gross profitability at the unit economics of course, none of us know where these tariffs will be at the end of next quarter, or for that matter at the end of next week, but it certainly seems at the moment, as though the indications are that we will continue to see a reversal of the worst impacts of tariffs as the administration finds reasons to reduce them. We certainly hope so. We make our products in the United States and we are BABA compliant, meaning that we are Build America, Buy American compliant. So we're doing all the right things in terms of supporting manufacturing in the United States. That's something we care a great deal about and always if you make a complex product as we do, and if you rely on raw materials like steel and animal -- aluminum, which are fungible, even if you buy those from US producers like we do, the tariffs can still have an inflationary impact. Thankfully, because we've always positioned ourselves to have a US manufactured product, those tariffs should be less impactful to us than to many course our European operations, when selling into Europe or into the Middle East or Africa, are not affected by these tariffs. This is another reason that we are focusing on growth in these very large and very promising markets. Just next week I will be returning to the Middle East. We're spending time in Jordan, where our new BeamWell products will be demonstrated to the Royal Jordanian Armed Forces as a precursor, we hope, to its first deployment in arrived in Jordan about a week ago and is in the process of being transported to a Royal Jordanian Armed Forces facility in Amman, the capital of Jordan. I'll be there to take meetings with military and other government officials and dignitaries and to demonstrate the efficacy of the product by showing them how it can convert saltwater into fresh water, provide electricity for cooking and the refrigeration of medical supplies, as well as showing off the highly ruggedized electric scooters bundled with it, which will provide mobility to the people whose job it is to deliver aid in that highly distressed is of course a fluid and constantly changing environment, but we're confident that whether aid is delivered by NGOs or by US contractors working with the Israelis, our products can provide essential support to their mission. They will need rapidly deployed electricity, fresh water, and mobility, and they're going to want to be able to provide that without relying on centralized grid infrastructure which no longer have a long and successful history of deploying infrastructure for military and civilian applications which solve for those needs. We have an American made product and we have excellent relationships in the region. Deploying Beam Global's projects in that region will provide a great deal of benefit to everybody involved in the crisis, as well as also providing a highly visible demonstration to assist in the growth of the more commercial aspects of our business I leave Jordan, I'll go to the United Emirates. We're working to create opportunities which we believe will result in significant sales of our products in that market. Many of you will be aware that there are some very large projects underway in the Gulf states which are ideally suited to benefit from Beam Global products. Masdar City in Abu Dhabi is one example. NEOM in Saudi Arabia is another. If you spend five minutes googling those projects, I'm certain you'll come away with the impression that they create fantastic opportunities for Beam Global and everything that we produce. That's why I'll be returning there again directly after my trip to I mentioned earlier, we continue to be very happy with the contributions that we're getting from the acquisitions that we've made. Let's spend a couple of minutes now talking about our Battery business. We continue to advance our Battery programs with a strong focus on high-performance, safety-critical team is actively delivering next-generation-battery systems to defense customers while simultaneously developing and quoting additional phases and new programs that push the boundaries of power and performance. These efforts are driving innovation and thermal management where our proprietary phase change composite, or PCC, now paired with active cooling, is delivering levels of performance and longevity we believe are unmatched in the parallel, we're seeing strong momentum across multiple markets. We're working with two major automotive companies on next-generation-battery solutions for their recreational power sports and micro mobility segments. In marine-defense applications we're exploring underwater energy storage opportunities where our proprietary PCC technologies offer significant advantages over -- and particularly for potentially eliminating the need for traditional active cooling systems, we can reduce system complexity while enhancing reliability and energy density, critical factors in demanding submerged environments. This innovative approach positions us to deliver high-performance solutions that meet the unique challenges of marine defense the commercial sector, our Battery systems are a natural fit for the growing ETRU market, where the shift away from diesel engines aligns closely with our ESS business. We also continue to support industrial customers with solutions for automated mobile robots, guided vehicles, and electrified machinery. All of this reflects our growing reach and the versatility of our core technology across multiple high-tech and high-growth fantastic advantages came about as a result of the acquisition that we made in 2022. In fact, we have nothing but good results coming from all three acquisitions that we made. Going back to the comments I made at the beginning of the call, you can see why the Beam Global management team, rather than thinking that there's some reduction in the value of the acquisitions that we've made, in fact, believes that they're worth far more today than they were when we first acquired them, and particularly when looking at the contribution that they make to the whole up, I'll just say again, our sales are growing. We believe that we have the right pieces in place to return to growth in this quarter and in future quarters. We have no debt, sufficient cash and working capital, and opportunities created by our new products and international expansion which are greater than anything that we've ever confronted in the public markets continue to be very challenging for all companies involved in the electrification of transportation and sustainability industries in the United States. I do not believe that the situation will continue forever, and in the meantime, I and the entire Beam team are going to continue to execute on our plan so that when the market does turn around, as we believe it will, we're well-positioned to take advantage of the discipline and enthusiasm that we've always had for our competitive edge and growth in industries which are both fundamental and concludes my prepared remarks. I'll now turn the call back over to the operator and take your questions. Operator. Operator We will now begin the question-and-answer session. (Operator Instructions)Ryan Pfingst, B. Riley Securities. Ryan Pfingst Hey, Desmond, thanks for taking my questions. Desmond Wheatley Yeah, Ryan, how are you? Ryan Pfingst Good, thank you. Curious how you're thinking about product mix between EV ARC and new products in 2025 or maybe over the next couple of years. Desmond Wheatley Yeah, so I'm quite enthusiastic about the adoption of some of our new products. I've had firsthand discussions with people in law enforcement about BeamPatrol, which is our police motorcycle and charging infrastructure solution. I've had similar conversations with people about BeamBike, which is our electric bicycle and charging infrastructure solution. And frankly the same thing goes for BeamSpot, which is our new curb side-charging every instance, people are very enthusiastic about these products, and you know for BeamBike is concerned, sometimes it's resorts that want to offer electric bicycles to their customers. Sometimes it's large bike-sharing organizations that are transitioning from pedal bikes to electric and discovering how difficult it is to deliver an electrical circuit to some location in the middle of a city to charge those bikes. So I'm really enthusiastic about that.I certainly think that the remainder of this year we're going to start to see the orders come in for those products and then moving into 2026 and onwards. I actually expect to see the mixture really even out. There's still a huge market opportunity for EV ARC. We haven't even begun to scratch the tip of that iceberg, particularly once we start getting into Middle East and Africa and other places. But I do think we're going to see an awful lot coming from these other new then beyond that, we are still seeing growth in the legacy businesses that we've acquired. So our street lighting and smart cities infrastructure products through our European markets, we saw growth in that through 2024. We're seeing growth in orders for those products this year, and again, we'll be taking those out of that kind of Balkan market, although we're in 18 nations with those types of products, but we will be expanding the selling of those into the Middle East as of this to say, Ryan, is that we're going to get a lot more diverse. We have pretty much been a one-product, one-country, one-customer company for a while, that being EV ARC United States Federal government. And of course it wasn't just one customer, but they certainly have been the lion's share of it last couple of years. We're now you know producing a couple of dozen products. Our Battery business is really showing tremendous promise and doing exactly what I want it to do right now, which is creating highly technical, highly bespoke, and as a result, highly marginable solutions for really fantastic customers, military and civilian applications we're going to have a lot more diversity. With that diversity will come a reduction in the risk from impacts from large customers, fluctuations in their orders as we've seen with the Federal government this time. But also with that diversity will come a lot more opportunity for growth, and that's part of the reason I feel so bullish about the remainder of this year and particularly moving into '26 and '27. Ryan Pfingst Appreciate that. And as a follow up understanding there's a lot of puts and takes here, but how should we think about your margin progression as your ex-EV ARC products and international sales grow in terms of mix. Desmond Wheatley Yeah, so we're getting, again, we're getting positive contributions from our portfolio of acquisitions, so that's good. Our EV ARC gross margins right now, the unit -- well, actually not at the unit economics level, they're still up in the 40% and 50% range. Our gross margins net of non-cash, so non-GAAP gross margins, taking out the non-cash contributions from amortization of intangible assets, that sort of stuff, still north of 20%.I've always said that we will get to a 50% gross profit with the EV ARC, and again, we're pretty much there at the unit economics already. We just need enough volume to solve for that. Now the good news is BeamPatrol, BeamBike, BeamScoot, those are all based on the EV ARC platform. So the more of those we sell, the more volume that we get of all the major components and manufacturing processes for EV ARCs. So in other words, if we do 1,000 BeamBikes, it's like doing 1,000 EV ARCs, except we get more revenue and more margin for BeamBikes and even more revenue and margin for I think, we're -- what we've seen in this quarter is because we had a reduction in revenues because we missed out on half of our expectations because we didn't get the orders that we thought we were getting from the Feds. We've seen the fixed-overhead allocations eat into our GAAP gross profit. What we haven't seen is any lessening of the gross profit that we're getting at the unit and even at the non-cash that's -- what's interesting about that is if you look back historically, in previous quarters when we've had $6 million, $6.5 million worth of revenue, we've had negative gross margins because the overhead allocations were so significant on that number of units is to take away -- take us into negative territory. In this instance, we did that much revenue and we had 8% GAAP and 20% net of non-cash gross profits, which shows you that we have retained the improvements to gross margins that we've worked so hard to we get back to volume, then you'll see us dramatically increase. Those gross margins at a GAAP level. And as I say, my goal is still to get to 50%. It really is a volume game. And it's not just a volume game because of fixed overhead allocations. It is also anybody that runs manufacturing facility will know, also due to the fact that the more stuff we buy, the more buying power we have, the more power we have to get cost reductions and other concessions from our vendors. So I'm sanguine. I'm feeling good about our gross margin, particularly in light of the fact that we've had this low volume quarter and still maintained 8% GAAP gross profit, 20%-plus net of non-cash items. Ryan Pfingst Right, I appreciate all that detail. I'll turn it back. Desmond Wheatley Thank you. Operator (Operator Instructions)Noel Parks, Tuohy Brothers. Desmond Wheatley Hey, Noel, how are you? Noel Parks Oh good thanks. Just had a couple, and I was wondering, could you talk about where manufacturing capacity stands in Europe at this point? Desmond Wheatley Yes. So you didn't ask me but let me start off in the United States. I've always maintained and I still maintain we can get up to about 4,000 units a year if we maximize our -- the facility we have in the US, which is 50,000 square feet under the roof. In Europe we have 250,000 square feet under [Europe] 5 times more under roof right now and then 6 acres of land that we can build on inexpensively and with a great deal of assistance and help from the local authorities. So in other words, we won't have to deal with permitting and all that sort of stuff that takes a long time in California and the US in just based on that metric alone, we could do about 5 times as many units in Europe. Now of course that that doesn't happen overnight. We're quite busy in Europe right now already with the legacy business. Again, that grew in 2024 and it appears to be continuing to grow this year. But we do have a tremendous amount of opportunity to expand it. So at the moment, we're getting this question a lot, which is a good thing because of some of the opportunities that we're looking at, could we produce several 100 units or get up into four digits in that European chain will be the biggest hurdle for us where that's concerned. There are certain items that we have to acquire. Some of them come from Asia. As I said in my comments, although we're in the US, a BABA-compliant product, which is still a complex product. There's still supply chain to overcome. And some of that, by the way, is in power electronics. And that is another reason I made the acquisition of the power electronics firm last year, was because I want to start -- in the same thing that we did with had supply chain concerns with batteries back in 2021, so I acquired a battery company in 2022, and we haven't suffered that concern since. Similarly with power electronics, we've acquired a power electronics company now they will start to produce power electronics bespoke for our equipment, which will make the equipment better, less expensive to produce, but also defend us against these supply chain concerns, and they're in Europe. All of that to say, we can quickly get to a point where we can match US capabilities, and then beyond that expand very we're -- when we talk internally about this, we're consistently having these conversations. What will happen when somebody comes to us and says, we want 1,000 units, and we want them very quickly. Just like when the US Army came to us and said we want 370 units and we want very quickly. Frankly, we were a little bit late delivering that, but we got them all. We got the US Army all those units before they could get permitting to do a construction site for the grid-type stuff. And that's my response where these 1,000-unit orders are concerned, we will ramp up very quickly. Noel Parks Okay, great, thanks. And I hate to get in the business of predicting bad things, but I'm just thinking this time, this year we're headed into summer in the northern hemisphere again and potential for climate-related problems. With your broadened product line, I'm just wondering are there going to be sort of new examples or new parts of the resiliency thesis that you think might come to the fore this year? Desmond Wheatley Resiliency is a very significant piece of our business. People often refer to us as an EV-charging company. We're not an EV-charging company. We have to make products which enable EV-charging companies to deploy their chargers without construction or electrical work, and very importantly, in a way that doesn't require extra capacity on the grid and also continues to operate during blackouts and brownouts. That's a big part of the resiliency play.I mean, the largest single order we ever received in the state of California was from the Office of Emergency Services. It wasn't from an EV group or something like that. It was OES that gave us our largest ever everything, and they're responsible for making sure there's infrastructure in place for wildfires, earthquakes, whatever bloody disasters come down the pipe. US Army, New York City, Marine Corps, all of these entities buying our products because we provide a source of electricity which is immune to blackouts and brownouts or any other kind of centralized failure to do with the year, during Hurricane Helene, we received a photograph from our customer down there, the US Army, I think it was sent us a photograph of our units operating in 8 feet of storm surge. That's to say that our units were actually in a location where the seawater was 8 feet above the ground, and our units were continuing to operate. We were floodproof to 9.5 feet, and we have survived hurricane force Category 585 mile an hour those, all of those things are very important resiliency aspects. And by the way, it's one of the ways that we're endeavoring to make inroads with the new Trump administration is to point out to them that we're not tree-hugging, EV-driving hippies over here. We're making disaster preparedness tools that enhance American energy security and using our own resources. So the resiliency part is going to be a very important part of our business. It is in the Middle might be surprised. I know that when I was in recently in Dubai and Abu Dhabi, I spent a great deal of time talking about the fact that our products are floodproof, and people listening to this call I think it's crazy that I'm talking to a place that they picture is nothing but burning desert having flooding problems. But in fact, during the last 24 months, both Abu Dhabi and Dubai have had very, very severe flooding events where massive amounts of infrastructure were destroyed and it was very expensive and very disruptive and cost human lives. Our products are a perfect hedge against those sorts of yes, you should continue to see us heavily emphasizing the resiliency of our existing product set. BeamWell is, of course, the ultimate example of this. Here's a product that we developed to go into Gaza because it will provide them with fresh water, electricity, and mobility in that crisis environment. But it's equally valuable in a post-hurricane environment in Florida, where again, groundwater supplies, electricity, and other utility-type infrastructure been destroyed. We can deploy BeamWell in less than an hour and provide a community with drinking not going to be running a car wash or something like that, but we'll provide them with clean, fresh drinking water and electricity and mobility without relying on any supply chains at all. BeamWell is the ultimate expression of our resiliency products right now. And again, while it was it was designed as a -- to assist humanitarian efforts. And by the way, we're not giving that way, we're selling it, but it was designed for humanitarian efforts and war also have now understood from the various offices of emergency services and others that we've talked to that has a great deal of appeal in places where natural disasters and all sorts of things like that take place. So in short, yes, resiliency will be a major part of what we're doing, and you'll see us continue to invest in making hardened products for these types of environments. And that's also true in our Battery business. Noel Parks Great. Thanks a lot. Desmond Wheatley Thank you. Operator This concludes our question-and-answer session. I would like to turn the conference back over to Desmond Wheatley for closing remarks. Desmond Wheatley Thank you again all of you who have joined. Thanks for continuing to follow and support this fantastic had a rocky couple of quarters, and as I said, that's disappointing but not surprising. It is in no way an indication of where we're going though. On the contrary, the good news is I did get a bit a little ahead of this, although I must say I didn't see it coming, but I did get ahead of this with our European expansion. Making sure that we had diversification in product offering and geographic markets to approach. That turns out to have been quite a good defensive play for us, and I think we'll really see the fruits of that in the coming quarters. So it's still a great time to be tough. We've just got to stick to this and not panic, frankly, and we aren't. We're going to continue to work very hard. The whole team is we're just going to execute. We're paying attention to things that we can impact and not so much things that we can't impact like the broader market conditions or some of the top-level government decisions that are being made. But we're still executing and we're shipping product and as I say, our sales have grown and we are looking forward to returning to growth in in this and future quarters, and that's where all our focus again, thanks for your attention. Thanks for your time, thanks for your questions, and we look forward to keep doing what we're doing. Never hesitate to get in touch. If you've got questions, call us, email us. I like to make myself available, particularly to our shareholders and our analysts. So be in touch any time you want to, and we'll try to remember, I spent a lot of time in traveling and at the end of next week, I'll be spending Memorial Day 12 hours ahead of you. So it'll be the middle of the night when it's the middle of your day. Just bear that in mind, but otherwise I'm always willing to talk. Thank you. Operator The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

Yahoo

15-05-2025

Business
Yahoo

Q3 2025 IREN Ltd Earnings Call

Mike Power; Director of Investor Relations; IREN Ltd Dan Roberts; Co-Founder and Co-CEO; IREN Ltd Kent Draper; Chief Commercial Officer; IREN Ltd Belinda Nucifora; Chief Financial Officer; IREN Ltd Nick Giles; Analyst; B. Riley Securities Reginald Smith; Analyst; JPMorgan Darren Aftahi; Managing Director, Senior Research Analyst; Roth Capital Partners LLC Operator Good day and thank you for standing by. Welcome to the IREN Q3 FY25 results conference call. At this time, all participants are in a listen-only mode. Please be advised that today's conference is being recorded. (Operator Instructions)I would now like to hand the conference over to your speaker today, Mike Power, Director of Investor Relations. Mike Power Thank you, Josh. Good afternoon and welcome to IREN's third-quarter FY25 results presentation. My name is Mike Power, Director of Investor Relations, and with me on the call today are Daniel Roberts, Co-Founder and Co-CEO; Belinda Nucifora, CFO; and Kent Draper, Chief Commercial we begin, please note this call is being webcast live with an accompanying presentation. For those that have dialed in via phone, you can like to ask a question via the moderator after our presentation. I would like to remind you that certain statements that we make during the conference call may constitute forward-looking statements, and IREN cautions listeners that forward-looking information and statements are based on certain assumptions and risk factors that could cause actual results to differ materially from the expectations of the company. Listeners should not place undue reliance on forward-looking information or statements. Please refer to the disclaimer on slide 2 of the accompanying presentation for more you and I will turn the call over to Dan Roberts. Dan Roberts Thanks, Mike. Good afternoon, everyone, and thank you for joining IREN's third quarter FY25 earnings call. I'm Daniel Roberts, Co-Founder, Co-CEO of IREN and today we will provide an update on our financial results for the quarter end of March 31, 2025, along with some operational highlights and some strategic updates from both our Bitcoin Mining business and our AI Infrastructure vertical. We'll then end the call with Q& starting with the highlights. Q3 was another strong quarter, operationally and financially. We delivered our second consecutive quarter of profits after tax, where we posted $24 million in net profit. This reflects a 28% growth quarter on quarter. Revenue then hit a record $148 million for the quarter, driven by growth in both our Bitcoin Mining and our AI Cloud came in at just under $83 million also a record for us. Operationally, we continued our cadence of delivering 50 megawatts every month of data centers with the energization of Childress phase four. And during the quarter, we averaged 29.4 exa hash of operating mining capacity, which represents a nearly 5x uplift year on these results reinforce both the earnings power of our growing data center platform, along with the strength of our procurement, engineering, construction, mining, and AI teams who simply continue to execute. We anticipate this earnings momentum to continue into fiscal Q4 as we further progress on our key growth initiatives, which I'll now come on looking forward, our strategy is anchored across value-accretive investments in both Bitcoin Mining and AI Infrastructure. On Bitcoin Mining, we're on track to reach 50x a hash of installed capacity by June 30. That milestone represents a 4x increase from only 10x a hash in June last year and cements us as one of the world's largest and importantly, lowest cost Bitcoin producers globally. But we're pausing further mining expansion at that point. That decision is deliberate, while mining remains highly profitable, we see more compelling shareholder value creation in AI Infrastructure, and we want to be disciplined in capital AI Cloud, momentum continues, revenues are increasing, underpinned by new contracts and customer attention. Our GPU fleet has been running at or near full utilization with hardware level margins north of 95%. Kent will speak to this more our AI Data Centers vertical, we're advancing two significant buildouts Horizon 1. A 50-megawatt liquid-cooled data center targeting Q4 2025 delivery. It's been designed and built for next generation AI workloads, supporting 200-kilowatt racks, which is around 20 times the rack density of traditional data centers. Again, we'll talk a little bit more to rack density later in the second significant build out is Sweetwater, our 2-gigawatt flagship data center hub in West Texas. 1,400 megawatts at Sweetwater 1 is on track for energization in less than a year now, April 2026. The power is contracted, long-lead equipment is secured, and site preparation and construction is a few notes on funding and structure. So first, we continue to practice disciplined capital allocation, particularly in the face of broader market volatility like we've seen over the past few months. Our decision to pause on further Mining CapEx is a good example of this discipline inaction. We've also engaged advisors across multiple debt financing work streams. Discussions are active and we expect execution in the coming months as markets continue to stabilize. And finally, as previously noted, we will be transitioning to a US-domestic-issuer status from July 1 this year that will align our reporting with US GAAP and reflect our increased US asset footprint along with the increased US investor in summary, record performance this quarter, consecutive profitability, near-term milestones all on track, and clearly a capital discipline lens as we focus on high-return-infrastructure growth and value creation for shareholders in the AI space going to talk a little bit about Bitcoin Mining. This slide speaks to the performance both in absolute financial terms and inefficiency, especially in our Mining segment. What we're showing here is not just growth, but how we're executing well across many multiple key operating and financial metrics. Despite macro headwinds, we're maintaining margins, we're scaling, and we're using operating cash flow to help fund our growth in the AI let's start with the headline figures. We averaged 29.4 exa hash in operating hash rate this quarter. That's up 30% from the second quarter and is driven by the continued build out at our Childress site and the deployment of new generation hardware. What we've also seen is 326% year-on-year hash rate growth against only a 40% increase in network difficulty. Reinforcing that we're not just growing, we're outpacing the industry, and we're growing our market share. All of this feeds directly into revenue and earnings continue to lead the sector on efficiency. Our fleet level efficiency remains best-in-class at 15 joules per tera hash. Our power costs average $0.033 per kilowatt hour at Childress last quarter and are among the lowest of any scaled miner globally. They're assisted by our energy market intelligence and software-driven optimization during price spikes or curtailment events. So all of this translates to strong operational leverage. And as you can see, as we continue to add scale, our unit economics hold up and even improve in some perhaps just as important as this margin is how we fund growth from this point. So as many of you will know on this call, we've made a deliberate choice to support our growth, including the growth in AI, using cash flows from daily Bitcoin liquidation, rather than raising dilutive equity the top right you can see what all of this efficiency, all of this profitability looks like in different metrics. So our all-in hash cost was $23 per peta hash per day versus an average cash price or a revenue of 54%, representing over a 50% gross margin, even on a fully loaded cost basis, which includes all indirect, direct OpEx, all look at it a different way on a per Bitcoin basis, our all in cash cost, direct, indirect costs all in was $41,000. As compared to $93,000 in realized revenue per Bitcoin mined this quarter, and again realized, we liquidated, we achieved an actual price of $93,000 against an actual all-in cost of $41,000. So that's gross profit per Bitcoin of roughly $52,000 for the quarter locked in margins are top tier clearly in the industry and also include all the cash costs for our AI business vertical. So they give us a strong buffer in the face of network or price volatility and give us a great platform to scale further from this point onwards, particularly noting that we had an average of 29.4 exa hash last quarter, and we are within weeks of hitting 50 exa hash. So exciting if we turn our mind to the financials along the bottom, revenue grew from roughly $120 million in Q2 to $148 million in Q3, up 24%. Adjusted EBITDA from $62 million to $83 million. And on a statutory basis, EBITDA also rose 32% to $82.7 million. Finally, profit after tax, we saw an increase of 28% from a profit after tax last quarter of $18.9 million to a profit after tax this quarter of $24.2 these results, they're not just about growth, they're about quality of earnings. We're expanding while keeping costs maintained and margins pretty resilient. So we're excited about the expansion ahead as we round out from what you've seen here as an average of 29.4 exa hash has to hitting 50 exa hash in the next few weeks. So in summary, we're operating efficiently, profitably, we're utilizing operating cash flows to support funding our next phase of growth as we scale AI infrastructure on the 50 exa now to talk about our progress towards that key near-term milestone, which I've mentioned a couple of times, achieving 50 exa hash of installed Bitcoin mining capacity by the end of June. It also highlights how this sets us up, again, as I mentioned earlier, it's one of the largest- and lowest-cost miners globally, with substantial free cash flow available to support our AI strategy going as of April 16, 2025, we reached 40 exa hash of installed capacity. What's really interesting is that's up from just 1 exa hash in December 2022, representing a 40x growth in less than 2.5 years. So the right-hand chart shows this visually with our installed hash rate tracking a 361% cumulative average growth rate since December 2022. Simply a testament to our team's execution we're now on the final leg towards this 50 exa hash has target. The data center's phase five of our Childress campus, an additional 150 megawatts of capacity is nearing completion. The primary substation is already on site and nearing energization, so that's the 138 kV to 34.5 kV transformation. And then the bulk substation we've completed the key upgrades and the second 345 kV to 138 kV, so this is the high-voltage substation, is scheduled for delivery imminently. So this is important because not only does it support the full 750-megawatt deployment. But it also creates and provides some additional redundancy as we head into alternate applications for this site, which we'll come on to later in the terms of miners, all the hardware is procured, it's been secured for a little while. It's now scheduled for shipping from Southeast Asia and is scheduled to land well within the 90-day tariff pause for reciprocal duties. So that's a bit of a full 50 exa hash deployment, The current market conditions, as you can see in that table, based on a $95,000 Bitcoin price at least, supports $588 million in illustrative adjusted EBITDA. The table at the bottom right walks through this. So at 40 exa hash is where we are today, we estimate adjusted EBITDA of around $450 million already delivering a 60% margin. At 50 exa hash, given the unit economics driven by scale efficiencies that fixed cost leverage, that rises to $588 million and a 62% these aren't projections, clearly we don't know where Bitcoin price will be, but they do illustrate the underlying profitability of our mining business and some of the resilience going forward. So at this point, yes, we have made a deliberate decision, despite all this, to pause expansion beyond 50 exa hash even though we had originally contemplated the 52 exa reason for this decision, firstly, it saves us around $43 million of near-term hardware CapEx. Secondly, it allows us to reallocate capital and internal resources, importantly, towards liquid-cool AI Data Centers. And finally, we still preserve that strategic flexibility depending on the Bitcoin price, depending on network difficulty, depending on unit economics to resume this growth in the future. But for right now, we've built out scale and we're now switching our focus to maximizing return on invested capital and we see the best opportunity to do that in the AI vertical in the near we're now one of the largest- and lowest-cost Bitcoin miners globally that positions us with meaningful and consistent cash flows, which is particularly valuable in capital intensive sectors like AI Infrastructure. So our ability to generate that cash allows us to self-fund some of the high-margin, high-growth verticals, such as AI Cloud, such as AI liquid-cool data centers, and allow us to minimize dilution for shareholders going forward. So we're delivering scale, we're controlling costs, and we're using this platform to drive the next phase of our growth in AI Infrastructure. So this is what makes 50 exa hash clearly not a stopping point or an end point, but a great place for us to pause and really drive growth in a new over to Kent to talk about one of those verticals. Kent Draper Thanks, Dan. As Dan alluded to, our AI Cloud Service is one of two AI verticals that we're scaling today and demonstrates our ability to develop and scale AI Infrastructure quickly, which is critical to our success in such an agile market. For context, we launched our AI Cloud Service or IREN Cloud as it's now known as a proof of concept back in August 2023, to support our broader AI Infrastructure initial deployment began with 248 NVIDIA H100 GPUs in early 2024 and scaled to 1,896 H100 and H200 GPUs all within less than 12 months. Today the platform is supporting both training and inference workloads for a range of AI-native customers on both a reserved and on-demand basis. All of this was enabled by the versatility of our proprietary data center design and delivery GPUs for IREN Cloud were installed in our 50-megawatt data center in Prince George, British Columbia, which had solely been operating Bitcoin mining workloads up to that point. The transition from ASICs to GPUs took just 6 to 8 weeks with minimal incremental CapEx. This flexibility to easily pivot between Bitcoin and AI workloads with speed is one of the major factors giving us a competitive edge in the industry. We're able to respond extremely rapidly to shifts in market demand and rapid GPU while the Prince George site is supporting AI-cooled GPUs today, it also has flexibility to accommodate liquid-cooled configurations in the future, giving us versatility for both current-gen and next-gen GPUs should we ex expand deployments further. In terms of our expertise, scaling infrastructure is one thing, doing it reliably and repeatedly is another. And that's why we've invested and continuing to invest in a growing in-house AI Infrastructure team across North network architects, InfiniBand engineers, cybersecurity specialists, dev ops and cloud go-to-market teams, we've assembled a team with significant depth and range. These aren't third-party contractors; this is all internal talent that we're scaling along with the platform. Additionally, we built strong direct relationships with key ecosystem partners. NVIDIA for GPUs and networking, Dell, Lenovo, and Supermicro for servers and hardware, Intel for CPUs, and WEKA for high-performance storage solutions. These relationships are foundational to how we scale, not just through procurement, but through roadmap alignment and image that you can see on the right here shows our Prince George facility in action. It's one of the few real-world deployments where Bitcoin and AI workloads are operating side by side, connected using shared infrastructure, but independently optimized. So IREN Cloud gives us a unique edge. It gives us a proven ability to deliver real AI Infrastructure, not just plan it. It provides internal expertise for deploying, operating and optimizing this infrastructure. And it's these capabilities that we're now scaling up at Horizon 1 and to the next slide. We saw increased customer engagement during the quarter within our AI Cloud Services business, and today our GPU fleet is running out on year full utilization with new contract wins post quarter end. We're seeing a mix of on-demand and multi-year terms ranging from short-term flexibility up to three-year commitments. Perhaps most exciting for us, we're now supplying white label compute to leading US AI-cloud providers, supporting both training and inference workloads. This validates both the technical quality of our infrastructure and the depth of our engineering and operations team's experience and is also proving to help strengthen our AI co-location Prince George, we still have an additional 47 megawatts of air-cooled capacity. That's enough to support over 20,000 NVIDIA B200s, which are currently in high demand for infrared-scale workloads. We're in active dialogue with customers around these deployments and continue to evaluate opportunities, including by deploying small clusters of latest generation GPUs for internal and customer testing. All of this activity sits within an investment framework focused on risk adjusted returns. We're optimizing the sources and uses of capital and view debt and GPU financing as a very realistic path to the right-hand side here you can see 33% quarter-on-quarter revenue growth in our AI Cloud segment, building on the foundation that we established with IREN Cloud last year. Our 97% hardware profit margins, which reflects revenue less electricity costs, highlight the strong margins that we're able to achieve via our vertical integration and ownership of our data centers. The photo below from Prince George, where our GPU and ASIC halls operate side by side, shows the modularity and flexibility of our infrastructure we're not just building this infrastructure, we're actively monetizing it, and we're doing it efficiently with our own data centers and reinvestment of cash flows from Bitcoin mining. This is what sets us apart in the current market and provides a solid foundation for our entry into the AI Data Center market, and I'll pass back to Dan for more detail. Dan Roberts Thanks, Kent. So that talks about AI Cloud. Now I'm going to talk a little bit about the Infrastructure and the co-location opportunities specifically behind that. So what we're showing on this slide is the fundamental, I guess, why behind. Our pursuit and our focus of AI Infrastructure. So I think it's clear that the demand profile for AI compute is unlike anything that we've seen before across broader I don't think it's exactly speculative anymore, particularly given what we're seeing in the market. And what we're seeing is this shift is happening fast, and it's really becoming at scale. And what we're seeing is the markets are simply not ready to serve it. So I'll come on to that a little bit more, but if we look at the left-hand side, forecast global AI with the demand side, it's projected to triple from 346 million to over 950 million in the next five years. And this growth is not driven just by consumers, like it's all on chat GPT, but also by enterprises embedding LLMs and other AI tools into everyday use. And everything from medical imaging to call centers to software developments, the expansion of this user base ultimately leads directly to compute growth. And as we see inference workloads scale in production environments, they require persistent infrastructure, not just burst compute for trading, which brings us to what's on the right-hand side of the here we show that user growth translates to global AI Data Center demand. Expected to grow 3.5 times in the next 5 years. So that sounds like a big number, but what's even bigger if you understand the energy market and the scale of what this really represents in terms of real-world infrastructure, 44 gigawatts today to 156 gigawatts in 2030. So that's more than 100 gigawatts of new infrastructure required globally. And today's traditional data center players simply aren't set up to deliver that at the required scale, speed, or our 2.9 gigawatts that we've secured that we've worked really hard over the last six years to secure, it's a big number. We all know it's a really, really big number, but in the context of 100 gigawatts, it's still small. So it sets us up for a really interesting few years ahead. So meeting this demand requires a fundamentally new class of infrastructure, so new designs, rack densities for AI have jumped 225% year on year. And continue to look like they're going to data center designs simply do not work anymore. They're faster construction cycles, so customers want sites built in 9 to 12 months, not 2 to 3 years. So that's really forcing a rethink of how infrastructure is designed and delivered in this sector. And we're seeing scale. The industry is now talking about 50 to 11,000 megawatt clusters. With customers asking for 250 megawatts or more across multi-year of this is happening live time and the scale and the intensity just continues to climb month on month. So grid connectivity, this is really a gating factor. A greenfield hyperscale site can take up to five to seven years just to secure that transmission access and energization. So that is the critical bottleneck, and it's where we clearly believe IREN has a competitive advantage along with a few other points which we'll get we are clearly well-positioned to meet this demand. We've got 2.9 megawatts of secured power capacity already contracted, including those large-scale grid connections at Childress and Sweetwater. We own our own land, which means we're not reliant on M&A. We're not reliant on third-party developers, and we can move quickly when customer demand materializes and is contracted. And importantly retain the upside on the infrastructure I guess my message here is the demand is real. It's growing more and more real week by week, and it's infrastructure constrained. We've got the land, we've got the power, and importantly, we've got the engineering and the execution capabilities to capture a good share of this growth. And we're making it happen right now. So if we zoom out briefly and look at how we are positioned to address one of the biggest barriers to adoption. So it's not just about the GPUs, it's about the ability to deploy those GPUs with power, cooling, permitting, and speed, and that's where most of the market is getting stuck today. So we've spent years assembling the fundamental and foundational ingredients for secured those large-scale sites that I mentioned. They're very quickly becoming strategic emerging AI hubs, particularly in West Texas. We've got a track record in high density data center delivery going back to 2018. This is not our first rodeo. We have been doing power dense data centers for seven of you who have followed us for that time understand that yes, we had oranges and our roots in Bitcoin mining, but we never went down the path of sea cans, old abandoned warehouses, shipping containers. We built multifunctional data centers from day one. And a testament to that, again, I'll repeat it, in Prince George, in the same data center we originally built, we have Bitcoin mining racks operating right next to latest-generation NVIDIA GPU's servicing AI customers, the exact same data this experience in engineering, designing, deploying, and then operating power dense data centers is what our business was set up to do and it's part of our foundation and we're continuing to do it. The only difference is we're continuing to iterate on that power dense designed to service these future workloads. So that in-house development and procurement team is critical. It gives us a direct control over the project pacing. It reduces reliance on third parties, we don't need to sign big contracts with third parties and outsource all of this. It de-risks those execution timelines, but critically we still work with tier one engineering, tier one OEM, tier one EPCM partners where it makes sense, and they're already engaged on horizon and the Sweetwater all of this is what allows us to move with certainty, compress timelines, and meet the most demanding specs, whether it's 200-kilowatt racks, whether it's liquid-cooling or multi-100-megawatt campuses, and today we've got 2.9 gigawatts of aggregate power capacity across those sites to service I guess my message here is simple. We're not just a site developer. We haven't just signed simply options on land and gotten lucky around this power. We're a builder, we're an operator, we've been doing this for seven years. We've structured the company to scale infrastructure in the power-dense HPC space, simply as fast as customers can commit. So while the demand is clearly global supply is constrained and we've got the power, we've got the partners, we've got the execution track record to meet that demand at the next major milestone in our infrastructure rollout is Horizon 1, 50 megawatts of liquid-cooled AI data centers in Childress, which is currently under development and due for delivery in quarter four this year. So as we've mentioned, there's a growing scarcity of sites capable of supporting liquid called GPUs at scale. So this is specifically designed to cater to NVIDIA's Blackwell platform, but also beyond, with rack density of 200 kilowatts per rack. So this aligns with the next generation of model customer interest has well exceeded the initial 50-megawatt data center. We've got multiple customers actively engaged in due diligence, actively engaged in commercial negotiations. So it is clear that there is a clear gap in the market, and we're looking to fill in terms of the specs, just to recap, it's 50 megawatts approximately of IT load for phase one. We're designing it for 200 kilowatts of rack density and to put that in perspective, that's compared to only 130 kilowatt for the new generation Blackwells that have been released over the course of this year. We've got 4 UPS and diesel backup systems, sub-6 millisecond round trip latency to Dallas, which supports both AI training along with latency-sensitive inference workloads. And finally, forecast CapEx unchanged $6 million to $7 million per megawatt of IT load, which we continue to gain conviction is very competitive for liquid-cooled data center deployments in the current clearly securing an anchor customer for Horizon 1 is a top priority. It catalyzes our formal entry into the AI Data Center co-location market and importantly builds confidence for the broader site development opportunity across the full 750 megawatts available at Childress. It also further differentiates us in the market as we prepare to bring Sweetwater online in April 2026, and the 1.4 gigawatts immediately available at that terms of financing, we're actively exploring pathways that optimize for capital efficiency. So that includes customer prepayments, project level debt, corporate level debt, equipment leasing, and convertibles. So we're also open to joint ventures, particularly with infrastructure capital providers, as long as they're aligned with our long-term control in terms of milestones, the project's progressing along a well-defined delivery schedule, it's on track. So we're looking to start earthworks and grading in the coming weeks. In the third quarter, we'll start preparing structure, cooling, and the electrical system, and then in Q4, we expect final delivery and readiness for occupancy. So long-lead items already ordered, procurement teams very active, we remain on track to deliver Horizon 1, on the original schedule that we outlined. So Horizon 1's our first at-scale AI Data Center, and it's also the model for how we can potentially develop and scale across our broader platform, including Sweetwater. So we've locked it all in, now it's a matter of executing over the coming this slide brings the focus back to the 750 megawatts at Childress and our roadmap for potentially transforming this entire site into a world-class liquid-cooled AI campus. So there are three main things to take away. Firstly, customer interest, as I mentioned, already exceeds the Horizon 1's initial 50-megawatt capacity. This just validates and reinforces our decision to invest ahead of the curve and make the commitment to build out this capacity. And also reinforces why we've already begun work on expanding capacity across the broader design is now underway for a full 750-megawatt transformation. So this is not just additional racks, it's a complete reconfiguration of the site for liquid-cooled AI workloads. Associated upgrades to power redundancy, cooling infrastructure, network architecture. Thirdly, we're futureproofing, as I mentioned before, 200-kilowatt rack densities as compared to the 130 kilowatts required for Blackwells. Well above what we're expected to require for the next generation, setting this apart from traditional data centers even further that are really struggling to handle this basic level of I think the quote here captures the design philosophy. So the project's not being engineered just for what we need now and what we need over the next 6 to 12 months, both based on the roadmap we're seeing on the GPU side, but what we think AI will demand next. So we're not just catching up, we're building ahead of the curve, and this is a real step change in capability and what we're offering the right you can see a real photo of the Childress site as of April, clearly very active, nearing completion of multiple new-build buildings, and below that is a rendering of the 750-megawatt Horizon concept, illustrating how the site might be evolved to accommodate 750 megawatts of liquid-cooling, high-rack density, and AI specific workloads. So in context, we own the land, we own the substation, the infrastructure, we're built into rack-level specifications required by future workloads, not just what fits today, and it positions us, Horizon, and Childress to be one of the few potential large-scale liquid-cooled AI campuses in North this is a blueprint, not just for Childress, but also for Sweetwater and how we can potentially scale our broader platform to meet this rise in demand. So Sweetwater is our flagship AI site, which we've mentioned for the last year or so now, and it's a very rare combination of secured land, grid scale power and site readiness that is well in motion. So to recap some of the fundamentals. 1800 acres with up to 2 gigawatts of high-voltage-power capacity already secured through binding contractual agreements. That's enough capacity to support over 700,000 next-generation GPUs, including those liquid-cooled Blackwell GB site level civil works are already well underway, so we're not waiting on paperwork, we're not waiting on anything else. We're actively building this at the moment and preparing the site for it does feel like we might be entering a super cycle of AI Infrastructure build out, particularly when you look at these forecasts of 125 gigawatts, not megawatts, of AI Data Center capacity over the next five years, over $5 trillion of capital, compute, energy, land, cooling, networking, and this is where Sweetwater stands out. Most of that demand is bottlenecked by land use, zoning, grid connection, politics, and at Sweetwater, we've solved those the site has the potential to support up to $70 billion in end-user AI Infrastructure investment. $70 billion. That's the development site that we've been actively incubating and are preparing. So the initial energization is targeted for April next year. All long lead substation equipment is on order. The looped fiber connection between Sweetwater 1 of 1.4 gigawatts and Sweetwater 2 of 600 megawatts is already designed, and the flexibility to scale in 1 to 500 megawatt increments gives us a lot of agility to align CapEx with customer commitments and the discussions that we're there are very few sites in North America or even globally, with this unique combination of scale, power, land, control, and readiness. We own the land, we've secured the interconnect, and we've started the site Readiness. We believe Sweetwater is one of the most-advanced and actionable AI clampers in development today. So with Horizon leading our first delivery. And Sweetwater anchoring our medium-term growth pipeline, we really believe we're well-positioned to meet this market momentum in to Kent now to touch on CapEx and funding. Kent Draper Thanks. This next slide outlines how we're funding growth, and in particular how our business model provides a unique combination of the internal cash flow and external funding flexibility. As of April 30, we had $160 million in cash on the balance sheet. This, combined with strong cash flows from Bitcoin Mining and our AI Cloud, provides significant funding support for our next phase of estimate a net funding requirement of up to $250 million over the remainder of 2025, primarily to support the expansion to 50 exa hash, which is already nearly complete. The delivery of Horizon 1, our first liquid-cooled AI Data Center, targeting energization in Q4 2025. And substation development and site preparation at Sweetwater, to prepare for energization in April terms of capital markets, we've engaged advisors across multiple debt financing work streams, and we expect execution in the coming months as markets continue to stabilize. The important point here is we're not reliant on equity issuance to grow. We have a strong balance sheet, significant tangible assets, cash-generating operations, and access to diversified capital channels. This capital strategy gives us flexibility to continue scaling AI Infrastructure and maximize returns from the platform that we've terms of illustrative cash flows, the table below shows illustrative annualized adjusted EBITDA outputs under various Bitcoin price assumptions, holding other inputs constant. At the current total network hash rate and the $95,000 Bitcoin price, we show $942 million in Mining revenue. After subtracting power, OpEx, Rex, and layering in our AI Cloud contribution of $28 million, we arrive at a $616 million adjusted EBITDA figure. You can also see that even at lower prices, for example, $60,000 Bitcoin, we still deliver nearly $270 million in adjusted EBTIDA. This is thanks to our low-cost power, lean cost structure, and best-in-class hardware efficiency to help smooth that exposure.I'll now pass over to Belinda to walk through the financial results. Belinda Nucifora Good morning to those in Sydney and good afternoon to those in North America. Thank you for joining us for our Q3 FY25 earnings Dan mentioned at the start of the presentation, during the quarter, we reported consecutive quarters of profit after tax of $24.2 million for Q3 and $18.9 million for Q2. We delivered record mining revenue of $141.2 million and recorded record adjusted EBITDA of $83.3 million and EBITDA of $82.7 million. The average operating hash rate increased by 30% from 22.6 exa hash to 29.4 exa hash, and we mined 1,514 Bitcoin at an average realized price of $93 k. During the quarter, the total net electricity cost increased by 30% from $28.9 million to $36.5 million in line with the increased megawatt usage at the quarter, the power prices remained relatively flat at $0.036 cents per kilowatt hour. The average net electricity cost per bitcoin mine was $24 k. Other costs of $25.3 million remained relatively flat despite a business today that continues to deliver significant growth and continues to support the projected continued expansion across our AI vertical, as well as the costs associated with regulatory and compliance to our cash flows, I wanted to note that our consolidated cash flow statements are now presented in line with IFRS. Requiring the proceeds from the sale of Bitcoin mines to be classified as cash flow from investing activities. As such, IREN filed a 20-F(a) on March 20 of this year for the period ended June 30, 2024, along with a 6-K(a) for the previous two quarters of this financial year, resting its cash flows to reflect closing cash at bank on March 31, 2025, was $184.3 million with receipts from Bitcoin mining activities of $141.2 million and AI Cloud Services of $3.8 million. We had a decrease in cash flow used in operating activities of $11.6 million, which was primarily due to a decrease in our annual ins insurance payments of $9 million that was made in Q2. We had an increase in net cash used in investing activities of $234.8 million, primarily due to significant milestone payments made on mining had a decrease in net cash from financing activities of $349.9 million, primarily due to the net proceeds from the convertible notes that received in Q2. During the second quarter, by the ATM, the company issued 10 million shares for gross proceeds of $110.9 million. And since the balance sheet, we've issued a further $17.4 million for gross proceeds of $107.6 to the balance sheet. As of March 31, 2025, the total assets recognized the $2 billion including property, plant and equipment of $1.6 billion, which provides a strong balance sheet to support future growth. In relation to the $440 million convertible note issued on December 6, 2024, in accordance with IFRS, we reported a current liability of $346.2 million, including in an embedded derivative of $23.7 million and a current asset of $11.7 million for the Capped Call and a non-current asset of $34.7 million in relation to the Prepaid Forward that would entered into concurrently with the convertible IREN transitions to US GAAP reporting from July 1, 2025, the accounting for the convertible notes, Capped Call, And Prepaid Forward will be reassessed in line with applicable accounting standards. Total equity increased to $1.4 billion with 10 million shares sold under the ATM during the I'll now hand back over to Mike to commence the Q&A. Operator (Operator Instructions)Nick Giles, B. R Riley Securities. Nick Giles Thanks, operator and good afternoon, everyone. Thanks for the comprehensive presentation first question, Dan, you used the words ahead of the curve and it made me think of Dennis and his team were really ahead of the curve on building out an ecosystem required in AI Cloud Services. So my question is, ultimately, how should we think about your appetite to fill out the available capacity of Prince George and growth beyond that. When I look at slide 16 on the CapEx site, I see the 50 exa hash, Horizon 1 and Sweetwater, but I don't see anything, explicit on the GPU side. So thank you very much. Dan Roberts No, thanks, Nick. Yes, you're right, those facilities were designed from day one to accommodate rack densities of 70-to-80-kilowatt air cool and have been successfully operating NVIDIA H100s and H200s there over the last 12, 15 months. The opportunity to scale there is clear. In terms of scaling our AI Cloud, we're very focused on Capital and risk adjusted returns. So it's all about matching sources and uses, quite frankly. The demand is there on a spot we want to incur GPU financing to finance revenues that are short-term? You know that there's a risk profile attached to that. Do we want to use equity to finance further growth in our AI Cloud? Never say never, but given the tools we've got, given the scale, given the access to GPU financing, I think our strong preference is to try and match debt with customer contracts as a way of growing that AI Cloud vertical out. And we're looking at that, in parallel, both the GPU financing, as well as multiple contract conversations with customers, particularly around Blackwell's, in the 100,000 GPU-plus clusters. So we're looking at all that in parallel with customer conversations on Horizon and Sweetwater. Nick Giles Great, I appreciate that. My second question is, you noted being open to JVs, and so I was curious at what stage it could make sense to bring a partner in. Is this something that could accelerate a definitive agreement at Horizon 1, for instance, or would it be more related to additional scaling later on? Dan Roberts It could be anything, but clearly when you've got a $70 billion-development project at Sweetwater, we can't deliver all that capital in our current state and with our current market capitalization. So we would need to bring in further partners, absolutely on the project financing and debt side, but also potentially on the equity side. And like all of this, it's all about options and running through the scenarios in front of how do you finance this? We've got equity in IREN, given our current market cap and cost of equity. Clearly there's a cost to that, which we've got to be very sensitive to. When you're dealing with private infrastructure players, the cost of capital if you can get the risk profile right, is substantially lower. I mean that's a lot of our backgrounds in private infrastructure. So being able to bring that in where it may make sense to complement what we've built in a listed environment may deliver a better value accretion to also a control aspect, so we just need to be careful around whether we want to engage with third-party equity and enter into those joint ventures. But given where we're at with those customer conversations, given the prospects we're seeing in debt financing instruments and multiple different types, we're pretty optimistic about financing the capital associated with these developments, and really it's about the customer side, in the short term. Nick Giles Good to hear and appreciate all the details, so keep up the good work. Dan Roberts Thanks, Nick. Operator Reggie Smith, JP your line is now open. Reginald Smith Sorry, I was on mute. Congrats on the quarter. It's pretty remarkable that you guys have been able to scale your Bitcoin hash rate while still pursuing HBC, so I wanted to give you guys kudos for two quick questions. One, I noticed that I thought you guys called out the growth in your AI Cloud business I was curious if you could provide some details on how you guys are performing there from an up time and a utilization perspective like what APIs do you track and how that performance kind of benchmarks against, I guess industry norms and expectations. I think that's probably a very important selling point as you as you engage the customer. Kent Draper Yeah, I'm happy to take that one. Yeah, we track a full range of metrics across the operations of that AI Cloud Services business. We have focused a lot within the operations on automation as well as telemetry and being able to record a huge amount of data that we're continually feeding back into the way we operate and maintain these systems to make sure that we're improving and maintaining performance levels over terms of how we've been performing, we get continual feedback from our customers that we are among the best of their cloud providers. And in some instances there's very clear feedback that both the up time and our response to any issues that they have is extremely favorable compared to other providers that they're using and ultimately, the proof is in the pudding, with these operations and as I mentioned, while I was presenting earlier, we are seeing in particular this uptake of white labeling our GPUs for other cloud service they obviously have extremely good insight into technical capabilities and performance levels, and the fact that they are contracting with us for capacity I think provides a very good sign that our performance and operating levels are extremely good. Reginald Smith No that's good to hear. If I could sneak one more you guys are having discussions with potential tenants at Horizon 1. What milestones or signals are you looking for in the coming months to indicate that you're moving closer to a formal agreement, and then maybe talk a little bit about how the conversations have changed, more recently versus which you may have been discussing a few months the texture of the conversations or whatever, any insights you could provide there to give us a sense of how things are progressing and what that looks like as you as you move through the discussions. Thank you. Dan Roberts Yeah, I'm happy to handle this, Kent, and then you can add in anything there's conversations with multiple customers on ongoing, and I appreciate that's a bit of a hand wavy statement. So to add a little bit more detail, there's been multiple site visits, like several, lots of detailed due diligence, contractual negotiations, discussions of exclusivities and [roafers], in the advanced stage of negotiation with several at the moment, and we're just working through it. So we're highly confident of contracting ahead of commissioning in Q4. Clearly, we're not going to earn revenue before then anyway. So a lot of it is just making sure that we do the right deal with the right counter party on the right terms. We get all the technical detail right. We get the contracting structure right. And importantly, there's a lot of conversation with these customers around pathway to scale. So most of these customers, if not all, are not interested in 50 megawatts. They're interested in the fact that this site can around to that 200- to 250-megawatt mark, over the coming period. But equally, some of them, are looking beyond that. So that's where we spoke about the 750 megawatts, potentially all becoming liquid-cooled AI Data Center capacity, looking at what we're hearing from the customers. I mean, there's a bookend, we might be sitting here two years and there's no more Bitcoin. But that's just the reality of what we're doing. We're not religious, we're not wedded to anything other than driving the highest creation of value for ourselves and shareholders, and that's driving the decision making. So if we can track the full 750 megawatts on better risk adjusted terms, then Bitcoin mining will do it. Kent Draper Yeah, the one thing I'd add to that, is in addition to those ongoing conversations that Dan mentioned and site visits and technical D-Day, we continue to see good levels of demand from new, potential customers. So we continue to see a lot of, inquiries from customers that we haven't previously interacted with, so it does seem clear to us that that the level of demand, particularly in the near term for liquid called data centers, is driving a lot of those interactions. Reginald Smith Got it, that makes sense. If you decided to transform, would you be able to kind of continue to run Bitcoin mining until a full cutover occurred or like how would that work? Kent Draper Yeah, so it's a bit of a combination. So at the Childress site, Dan had the rendering up earlier as to what a potential full-site build out for liquid-cooled capacity could look like, and there is ample space at that site to be able to build, additional phases of horizon. On areas that currently haven't been built out as well as in the future then retrofitting the existing buildings for further obviously the approach that you're taking there, if it is new build phases, from the ground up, obviously there's no interruption to your Bitcoin mining activities until -- right near the end, when you switch the power across and power up the new liquid cooled data centers, where you are undertaking retrofits of existing capacity, then yes, you do need to take that capacity offline at some point prior to the new liquid-cooled capacity coming online. Reginald Smith Understood. Thank you so much. Operator Darren Aftahi, ROTH. Darren Aftahi Hi, guys. Thanks for the questions and congrats on the kind of a clarification on the CapEx spend per megawatt. You mentioned it includes UPS and diesel gen. I guess, how are you able to kind of reach that CapEx span when it seems like it's kind of below market? And then I guess, in the conversation you're having with potential parties at Horizon 1 and maybe beyond, can you characterize kind of maybe what those clients might look like? Is it hyperscalers, neo clouds, large enterprise, all of the above, any color would be great. Thanks. Kent Draper Yeah, happy to touch on the cost element there. So in terms of the buildout, as Dan mentioned, we've been doing power dense data centers for over seven years now. So we are extremely experienced in building out these facilities. We've spent a lot of time optimizing our data center design. And importantly, in the build out for Horizon 1, we're doing it in a way that utilizes a lot of the existing data center design, so the same building shells, a lot of the electrical infrastructure is very similar, and then we're just layering in the redundancies that these AI customers ultimately are looking for in terms of what you mentioned around gensets, UPS, what that enables is that we're able to do it in an extremely cost-efficient manner versus a traditional new AI Data Center build out where people may be using, for example, concrete building shells. Which require a significant amount of additional CapEx versus our design. So everything that we're delivering is consistent with, what customers expect, and we know that because we've been going through these detailed, technical due diligence conversations with them over the past number of months. So that's really the key elements as to how we're able to achieve better cost. Dan Roberts I think just to add to that, like this isn't a small team of finance guys just trying to sign a contract and then outsource everything on the technical side. Like as Kent said, we've been doing this for seven years. It's a founder-led business where every single element of every data center and everything we do goes back to first principles. But whether people want to acknowledge it or not, this is an entirely new asset class, power dense data centers are fundamentally different in terms of how they've developed, how they've been engineered, how they've been operated, and we've had the benefit of seven years from the ground up optimizing everything. Like no one believed that we could build air cool data centers for $650,000 a megawatt that run next-generation AI workloads, H100s, H200s, we've been doing it for 15 it's the same thing with all this. It's just a bottom-up analysis, how much does the raw materials cost? What's the most efficient way to assemble everything, not signing layers upon layers of contractors, designers, builders, etc. It's all controlled in-house. And I think you're right, like it's going to be a competitive advantage, the ability to deliver cost at this level. Darren Aftahi Thank you. Operator Thank you. I would now like to turn the call back over to Dan Roberts for any closing remarks. Dan Roberts Thank you. Thanks again to everyone for the questions and also for joining us today. As you've heard throughout this call, IREN continues to deliver consecutive quarters of profitability, substantial free cash flow, and really strong execution across both Bitcoin and AI. So we've built a business that performs through the cycle. You can see those scenarios all the way down to a $33,000 Bitcoin price all the way up to wherever your minds would like to not just when Bitcoin is running, but through disciplined operations, efficient infrastructure, and capital allocation that stacks up in any market. So we lead on fundamentals and that's what sets us apart. It's what allows us to fund growth from cash flows that we're generating, while still scaling into one of simply the most exciting infrastructure opportunities of our time. So we're incredibly excited about what lies ahead in AI, and really confident in our ability to capture that upside but capture it in the right thanks again. We look forward to updating you all next quarter. Thank you. Sign in to access your portfolio

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14-05-2025

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Q1 2025 Oklo Inc Earnings Call

Sam Doane; Director of Investor Relations; Oklo Inc. Jacob DeWitte; Co-Founder, Chief Executive Officer; Oklo Inc. R. Craig Bealmear; Chief Financial Officer; Oklo Inc Ryan James Pfingst; Senior Research Analyst; B. Riley Securities Sherif Elmaghrabi; Analyst; BTIG Eric Stine; Analyst; Craig-Hallum Capital Jeffrey Leon Campbell; Senior Analyst; Seaport Global Securities LLC Sameer Joshi; Analyst; H.C. Wainwright & Co., LLC Craig Shere; Analyst; Tuohy Brothers Operator Thank you for standing by. My name is Jael, and I will be your conference operator today. At this time, I would like to welcome everyone to the Oklo first-quarter 2025 financial results and business update call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (Operator Instructions) I would now like to turn the conference over to Sam Doane, Director of Investor Relations. You may begin. Sam Doane Thank you, operator. Good afternoon, and welcome everyone to Oklo's first quarter 2025 earnings and company update call. I'm Sam Doane, Oklo's Director of Investor Relations. Joining me today are Jake DeWitte, Oklo's Co-Founder and Chief Executive Officer, and Craig Bealmear, Oklo's Chief Financial Officer. Before we begin, I'd like to remind everyone that today's discussion, including our prepared remarks and the Q&A session that follows, will include forward-looking statements. These statements reflect our current views regarding trends, assumptions, risks, uncertainties, and other factors that could cause actual results to differ materially from those discussed today. We encourage you to review the forward-looking statements disclosure included in our supplemental slides, which are available on the investor relations section of our website. Additional details on relevant risk factors can also be found in our most recent filings with the SEC. Please note that Oklo assumes no obligation to update any forward-looking statements as a result of new information, future events, or otherwise, except as required by law. With that, I'll now turn the call over to Jake DeWitte, Oklo's Co-Founder and Chief Executive Officer. Jake? Jacob DeWitte Thanks, Sam. And thanks to all for joining us today. We're looking forward to sharing our first quarter update and highlighting the progress we've made since our last update just seven weeks ago on March 24th this year. We continue to see strong momentum across both the industry and the political landscape in support of nuclear energy, and that momentum is accelerating in 2025. The current administration has made it abundantly clear that nuclear is a strategic priority. In a recent letter to the Director of the White House Office of Science and Technology Policy, the President named nuclear energy, AI, and quantum technologies as central pillars in what he called the golden age of American innovation. That message reinforces what we're seeing across policy and regulatory activity. A series of recent executive orders underscores the administration's commitment to nuclear energy, ranging from regulatory reform and streamlined permitting to the creation of a federal task force dedicated to next-generation nuclear deployment. This includes actions to revoke outdated regulatory barriers, declare a national energy emergency to fast track projects, and establish an energy-dominance council focused on accelerating technologies like small modular reactors. Other orders reinforce federal oversight to reduce state-level interference and direct agencies to conduct cost benefit reviews of existing rules. And now, we're seeing signs that the administration may take its support even further. According to recent reporting, several new executive orders are being considered that would aim to quadruple the size of the U.S. nuclear fleet by 2050, declare certain data centers as defense-critical infrastructure, and direct the Department of Defense to take a more active role in nuclear procurement. These drafts also call for a wholesale revision of NRC regulations to streamline reactor approvals and rebuild domestic nuclear fuel supply chains. While still in development, the scope of these proposals signals just how serious the administration is about reestablishing U.S. leadership in nuclear and how aligned that ambition is with Oklo's mission and model. Secretary Wright, a former Oklo Board member, has been one of the most vocal champions of the administration's commitment to expanding and accelerating nuclear deployment. He's made it clear that the U.S. must lead the global push to commercialize advanced nuclear technologies and that the federal government is prepared to support that leadership with urgency and action. We're encouraged to see that level of alignment at the highest levels, especially from someone who knows Oklo's mission and model firsthand. At Oklo, our foundation is built on the belief that advanced nuclear technology can and should play a transformative role in the global energy landscape. When we started this company, we saw an industry that had gone dormant, and we set out to reimagine what the nuclear energy industry could be. That vision continues to guide us, delivering clean, reliable, and affordable energy at scale. As a reminder, our competitive advantage is built on the intersection of three key strategies: our business model, our sizing philosophy, and our technology. First, our build, own, operate business model sets us apart. We sell power, not power plants, under long-term contracts. This structure provides predictable recurring revenue and enables a more efficient regulatory path. Second, our small-scale modern design allows us to deploy quickly and scale flexibly. By leveraging existing supply chains and their factory fabrication, we can meet demand efficiently, reduce on-site complexity, and scale in lockstep with our customers' evolving needs. Third, our proven and demonstrated technology is backed by over 400 reactor-years of operational experience with liquid-metal-cooled fast reactors. This gives us a robust technical foundation with distinct performance and safety advantages. Importantly, it enables us to move directly into commercialization without the need for a costly and time-consuming demonstration plan. Together, these pillars reinforce Oklo's position as a leading next-generation nuclear provider and will enable us to execute with speed, efficiency and confidence. The key differentiator for Oklo is our ability to go straight to commercial deployment. We're not building a demonstration plant. Our Aurora powerhouse is built on mature technology derived from the reactors such as the Fast Flux Test Facility, or FFTF, and the Experimental Breeder Reactor-II, or EBR-II, which operated successfully for over 30 years at Idaho National Laboratory. This isn't theoretical. We're leveraging real validated operating data that's already recognized by the NRC. Importantly, members of our team work directly on both FFTF and EBR-II, bringing deep first-hand experience to the design and deployment of the Aurora. We believe this operational legacy allows us to move with greater speed and confidence through the licensing process and positions us to bring our first commercial unit online in late '27 to early '28. While many advanced nuclear companies are still building one-off demonstrations to validate new fuels or designs, Oklo is already focused on delivering a commercial powerhouse. These early-stage efforts are useful to the ecosystem, but they aren't market-ready. We're taking a fundamentally different path, one that's grounded in experience and optimized for near-term deployment. As we continue to execute on our strategy, we remain committed to keeping the market informed with clear and consistent updates on our progress. Our company updates will continue to be structured around six key areas: project execution, licensing progress, fuel recycling and feedstock, customer pipeline development, strategic partnerships for corporate and business development, and financial updates. Since our last company update just seven weeks ago in March, we have continued progress across key areas of our business, from project execution and licensing to fuel strategy, customer positioning, and strategic partnerships. We advanced field work at key sites, made progress in our NRC engagement, and were selected as a qualified vendor through the Department of Defense's procurement process, strengthening our position to pursue future opportunities with military installation. We are in the process of formalizing new partnerships to support technology development and deployment of powerhouse and radioisotope assets at INL. On the financial front, we remain disciplined and transparent with updates on cash burn, operating expenses, and governance included in today's materials. At Oklo, we're executing against our plan and advancing steadily toward commercial deployment. We have completed a major milestone in preparing our INL site for the Aurora powerhouse. Our team wrapped up a comprehensive drilling campaign involving seismic and geophysical studies at our proposed site at Idaho National Laboratory. The data we gathered will directly support our combined license application to the NRC and represents the final technical siting step ahead of submitting Phase 1 of our application. We also finalized a memorandum of agreement with the Department of Energy and an interface agreement with INL. These agreements ensure that our site development efforts are aligned with environmental standards and DOE coordination. With this complete, we're well-positioned to move into the next phase of licensing and infrastructure development with plans aiming for the plant to begin operations in late '27 to early '28. We recently initiated Phase 1 of the pre-application readiness assessment for our Aurora INL powerhouse, reaching an important milestone in our licensing efforts with the NRC. This process, essentially, addressed rehearsal, enables the NRC and Oklo teams to align on scope and expectations ahead of our formal combined license application submission. The goal is to surface and address feedback early, reduce challenges later, and build confidence and momentum as we move toward our formal COLA submittal. We expect we will soon receive an audit report from the NRC summarizing their feedback and recommendations, which we'll incorporate into Phase 1 of the application. The NRC's feedback will be categorized as follows: Category A, Final Safety Analysis Report, or FSAR, gaps, where information required by regulation may be missing; Category B, items requiring additional information or further clarification or justification is needed; Category C, other observations, suggestions, or potential issues that could affect the efficiency of review if left unaddressed. We have worked diligently with the NRC to ensure a robust and complete application that should reduce Category A observations. However, every observation offers important insight into areas we can further develop to allow for an efficient and timely review of our Phase 1 COLA. We do anticipate some Category A, B, and C items, which is entirely expected and consistent with what other reactor developers have seen. These are clarifications and refinements, not fundamental application content flaws. This is exactly what the readiness assessment is designed to identify, and it helps both Oklo and the NRC get ahead of potential considerations and areas for alignment. Notably, Oklo is using this audit as an opportunity to test several key repeatable licensing pathways and expects valuable NRC guidance on how these novel approaches will best support rapid and cost effective deployment. We're also encouraged by broader efforts at the NRC in modernizing its approach to advance nuclear. For example, the NRC finalized the construction exemption for TerraPower's Natrium plant, allowing construction of its energy island to begin while licensing continues. That decision shows the NRC's increasing embrace of flexible, modern, and risk-informed approaches, setting a precedent that will also benefit a closed deployment strategy. It supports strong alignment with the NRC and will increase predictability and reduce downstream challenges as we move forward. We also continue to make progress on other regulatory funds by nearing the submission of the licensing project plan for our Oklo Fuel Foundry, a key step in the broader fuel strategy and our licensed operator topical report, which has now been submitted to the NRC. The licensed operator topical report outlines a new licensing approach designed specifically for Oklo's Aurora powerhouses. Today, most U.S. nuclear plant operators are licensed for a single plant and must be on-site to perform safety-related actions, a model developed for the traditional light water reactor fleet. Oklo is proposing a different approach. Instead of licensing operators for individual sites, operators would be licensed for the Aurora powerhouse technology itself. This should enable them to monitor multiple powerhouses from a central location and travel between sites as needed. Because Oklo builds, owns, and operates its powerhouses, this licensing strategy is well aligned with its business model and emphasizes efficiency and repeatability. Once approved, the licensed operator topical report can be referenced in future applications, significantly reducing the need to re-review previously approved material. This regulatory efficiency is central to Oklo's plan for scalable deployment across its fleet. By strategically submitting topical reports like this one, Oklo is laying the regulatory foundation for faster licensing pathways that support its broader commercialization goals. Each of these regulatory touchpoints reflects Oklo's proactive approach to licensing and our ability to execute efficiently. Fuel strategy is a key differentiator in advanced nuclear and Oklo is setting a new standard for flexibility and readiness. We're the only advanced nuclear company that has secured and is actively working with HALEU for our first commercial plant. On the commercial side, we've signed an MOU with Centrus, currently the only domestic producer of HALEU, to support our powerhouse deployments with a reliable supply source. And looking ahead, our technology is designed to take full advantage of recycled fuel, and we're actively developing that capability through our in-house fuel recycling program. This three-pronged approach, government awarded material, commercial HALEU access, and future recycled fuel, positions Oklo with one of the most comprehensive and durable fuel strategies in the advanced nuclear sector. It not only strengthens our long-term supply chain, but will also give us a significant cost and commercialization advantage. We were recently selected as one of eight qualified vendors for the Department of Defense's Advanced Nuclear Power for Installations program, or ANPI. This is a significant milestone, not just because it opens near-term opportunities for deployment on military installations, but because it reinforces Oklo's position as a credible go-to solution for energy resilience in high security environments. The program is led by the Defense Innovation Unit, or DIU, which is focused on fast-tracking commercial technologies for national security applications. That means streamlined contracting, faster timelines, and a clear path to scalable deployment. Unlike traditional procurement pathways, ANPI uses a contracting mechanism called Other Transaction Authority, or OTA. This allows for a faster milestone-based approach from early design through prototyping and ultimately can even end with a power purchase agreement. OTA contracts can also draw funding from DIU, any branch of the military, or other federal agencies, giving Oklo a versatile and well-supported path to deployment. For Oklo, this selection validates our technology, aligns with our commercial roadmap, and gives us added momentum with both federal and commercial partners. It's an endorsement that strengthens our position across the board. We acquired Atomic Alchemy earlier this year to expand Oklo's reach into the high-growth radioisotope market, and this company is already delivering. Founded in 2018, Atomic Alchemy is building a domestic and vertically-integrated supply chain for high-value isotopes used in everything from cancer treatments and medical diagnostics to national security and advanced manufacturing. Their proprietary technology, including their Versatile Isotope Production Reactor, or VIPR reactor, is designed specifically for isotope production with a focus on efficiency, scalability, and simplicity. They've already hit key engineering and regulatory milestones and are working closely with Idaho National Laboratory to advance deployment. With strong early customer interest and a proven team in place, Atomic Alchemy gives Oklo a capital-light opportunity to drive near-term revenue and long-term market leadership in an essential and underserved space. Today's radioisotope supply chain is outdated, fragmented, and increasingly unreliable, stretching across multiple facilities, geographies, and transport modes, making it risky, expensive, and slow. Atomic Alchemy flips this model with a vertically-integrated system. The VIPR facility will consolidate reactor operations, processing, and manufacturing at a single site, dramatically increasing efficiency and reliability. This model is not only better suited to meet modern demand, but also allows for global distribution with faster lead times and lower costs. As demand for isotopes accelerates, this supply chain advantage will be a major competitive differentiator. The Atomic Alchemy VIPR platform is designed to support broad radioisotope production as well as radiation capabilities across medical, industrial, defense, and emerging tech sectors. From life-saving cancer therapies and diagnostic imaging to industrial sensors, aerospace applications, and advanced semiconductor manufacturing, these isotopes and radiation capabilities are essential to critical systems in our economy. What makes this solution so compelling is not just the diversity of isotopes and radiation capabilities we can produce, but the scale and reliability our integrated model offers. This is a broad and growing market with unmet demand, and Atomic Alchemy is built to serve it efficiently and at commercial scale. We believe that Atomic Alchemy is executing a smart, multi-project approach to market entry. The first step is a lab-based demonstration project designed to validate the process and generate revenue quickly, potentially as early as 2026. This will involve a low-cost processing infrastructure and customer-ready material using third-party irradiation. The second project is the launch of a fully commercial VIPR facility, a four-reactor site dedicated to direct isotope production. Licensing is expected to begin in 2025 with operations targeted for 2028. That project is expected to be potentially funded off-balance sheet and supported by long-term supply agreements that are already under negotiation. With this roadmap, Atomic Alchemy brings near-term upside, long-term scalability, and significant value to the [indiscernible] platform. Shifting to leadership and governance, we're thrilled to welcome Pat Schweiger as our Chief Technology Officer. Pat brings deep technical expertise across advanced reactor design, plant systems, and regulatory strategy, and a track record of scaling both fusion and fission programs from concept through deployment, including his comprehensive experience working at FFTF while it was operating, which was one of the fast reactors that Oklo builds its design from. He's joining at a pivotal moment to help drive our commercial rollout, bringing the kind of strategic and operational leadership that will accelerate Oklo's next stage of growth. We're excited to have him on the team. We recently announced that Sam Altman has stepped down from Oklo's Board of Directors. Caroline and I first met Sam at a dinner in Cambridge, Massachusetts in April 2013. Since that first chance meeting, Sam has played an instrumental role in guiding Oklo, Caroline, myself, and our vision over the years. Sam has been a mentor, a leader, a supporter, a champion, and a friend since that meeting. Sam invested in the company and joined our Board in 2015, and he helped us grow through challenges and into the incredible opportunities that lay before us. We are deeply grateful for his early conviction, vision, leadership, and support. As we move closer to commercialization, this transition reflects a natural evolution from the company's early stage development into where it is today. We are excited about the growth this represents. And I will now turn it over to Craig. R. Craig Bealmear Thank you, Jake. As we move closer to commercialization, this transition reflects a natural evolution from the company's early-stage development into execution. Sam's departure also supports a shift of his role from that of an insider to a potential future commercial partner, removing a possible conflict of interest as we advance potential commercial discussions with OpenAI. Importantly, this change does not affect day-to-day operations. In conjunction with this transition, Oklo's Chief Executive Officer, Jake DeWitte, has assumed the role of Chairman of the Board, providing continuity and clear leadership as we enter this next phase of growth. At our last update just seven weeks ago, we discussed the additions of Dan Poneman and Michael Thompson to the Board. After now Secretary of Energy Wright's confirmation and departure from the Board, we are pleased with how we have grown the Board. The experience and expertise in NRC licensing, fuel supply chains, strategic finance, and technology commercialization that Dan and Michael bring to the Board are great additions to our team. I will now provide a summary of our financials. Oklo's first quarter operating loss was $17.9 million, inclusive of non-cash stock-based compensation expense of $2.3 million. Oklo's loss before income taxes was $14.2 million, which reflects our operating loss adjusted for net interest income of $3.6 million. When adding back non-cash stock-based compensation charges and considering non-cash income tax benefit recorded for the quarter, you get cash used in operating activities of $12.2 million. We believe this puts us on track to deliver on our guided range of $65 million to $80 million for total cash used in operations for full year 2025. At the end of the quarter, cash and marketable securities were $260.7 million. Lastly, we have filed our proxy statement and will be holding our Annual General Meeting on Wednesday, June 04, 2025. To close, I'll briefly highlight why we believe Oklo stands out in the advanced nuclear and energy landscape. We are deploying proven fast reactor technology in a compact, scalable form, reducing cost, complexity, and time to market. Our business model is built around long-term power sales, delivering recurring revenue and strong margins. We look to drive superior economics through repeatable deployment of a common design asset that can be further enhanced with recycled fuel to drive capital efficiency and a competitive levelized cost of energy. Our customer pipeline totals over 14 gigawatts and spans sectors like data centers and defense, proof of strong and growing demand. We've developed a streamlined regulatory strategy backed by years of licensing expertise and a repeatable COLA process aligned to our business model. And finally, we're not just building powerhouses, we're building a platform that integrates generation, fuel recycling, and radioisotope production, unlocking multiple high-value markets. Thank you for joining us today. Operator, we're now ready for questions. Thank you. Operator Thank you. The floor is now open for questions. (Operator Instructions) Ryan Pfingst, B. Riley. Ryan James Pfingst Hey, guys. Thanks for taking my questions. Jake, you mentioned the recent reports about additional executive actions expected to support nuclear power. It sounds like these could include the DOD taking on a greater role in ordering reactors and installing them on military bases. Can you talk about the regulatory authority for nuclear power that the DOD has today and your thoughts on the Department's ability to potentially accelerate reactor deployments whether through programs like the ANPI or otherwise? Jacob DeWitte Yeah. Thanks for the question, Ryan. I mean, I think, DOD does have authority to regulate nuclear plants on sort of for their use cases and for different opportunities around that. So, we see some interesting angles there. There's been kind of a mixed approach taken in the department, and I think what we've heard about some interest is looking at ways to make sure that they are not going to be held up or held back at all by any kind of -- from their needs sets, from any kind of regulatory permitting issues that could happen outside of sort of their control. Obviously, they have the ability to control it all. So, I think there's some appetite and some potential interest in doing that. That said, their active infrastructure and their capabilities that hasn't been exercised a ton for these kinds of use cases in a while to put it somewhat, I guess, simplistically. So, I think there's some significant opportunities for them to step up and perhaps provide sort of an alternate pathway for some of those use cases, which is I think pretty exciting. Additionally, I think it creates a pretty good dynamic to look at efficiencies where if you are [siting] (ph) these at military installations or other government installations, if you see the broad activities across the government today just trying to find ways to streamline and make the regulatory processes much more efficient and modern and quick and timely, I think you see opportunity for how these activities, these potential activities around sort of expanding DOD roles here could be done. But DOD does have that capability set. They do have that authority. And so, I think it's a matter of looking at how they can sort of best use it to sort of push and accelerate these things. Ryan James Pfingst Great. Appreciate that, Jake. And then, the fuel slide was a helpful reminder of the actions you're taking on that front. Can you give us an update on other parts of the supply chain and your confidence in commencing a fairly near-term construction effort? Jacob DeWitte Yeah. I mean, this is a feature set for -- we've designed two supply chain capabilities and information heavily since the beginning. There's a lot of ways you can design a reactor, a lot of different materials, fuel types, coolants, all sorts of things you can do. Some of which obviously are technologies need a lot more R&D and development before they're ready to go. Some others just need a lot more supply chain development before you can procure the various parts needed in them. In our case, we've designed heavily to leverage what's out there as much as we possibly can. Fuel is obviously the big watch point because that's kind of the biggest, I would say, sort of challenge and opportunity, if you will, that we see. But everything else, we try to leverage existing supply chains from in and also outside of nuclear as much as we can. And that's a real feature to sodium technologies, right? You can use common stainless materials. You can source those from many other industries, from the process side of things. When you look at, like, the steam generation side, that's partly why we partnered up with Siemens, to help drive that last year and kind of accelerate that for them to be able to deliver. And they do that very well, obviously. So, generally speaking, this is a thing that we're going to be sort of pushing forward as we try to accelerate what we can do to actually break ground and start building as quickly as we can. And I think that's something that we see on the supply chain side. Most of the limitations are really centered around fuel, and the other long lead items are looking at 18-month kind of windows. And our ability to then also bring in sort of the order book and backlog that we have behind it helps us sort of be able to actually scale more of that as well. So, when we talk to suppliers, it's not just about one, it's about more, and that kind of motivates the right kind of partnerships, if that makes sense. So that's how we're looking at this and thinking of it. But this avoids some of the challenges you see in the light water space where you need large pressure vessels or forgings that way. Obviously, there's some capacity for that, but there's a lot less of that. So, work done there needs to be done to sort of show that to get in front of that bottleneck and that constraint, given there's only a few places in the Western world that we'll be able to source that from, we as a -- not Oklo, we as America frankly. And so, for us, at Oklo, being able to not require those needs helps us actually diversify away from that, which is super, super helpful. Similarly, on the turbine set, actually something that's a little bit underappreciated. You think about nuclear steam turbine systems, most of those are gigawatt scale systems for light water -- well, most -- all of those are hundreds of megawatts to gigawatt scale systems for light water reactors. And light water reactors operate at a relatively low steam temperature set compared to other power generation technologies. And as a result, like scaling that turbine down to sort of small reactors and smaller for water cooled conditions, not technically challenging, but requires some reasonable non-recurring engineering and sort of tooling costs to set up the infrastructure to actually make those. Whereas our systems operate at those temperature ranges and pressure ranges that look a lot more similar to where a lot of fossil fire plants operate. And that's kind of another feature about non light water systems is you tap directly into some of those supply chains, which is super helpful. And just to kind of, like, emphasize the recent news of what the NRC did with their power is just an extraordinarily important validation of that model that applies also to us, right? Similar technology set shows that you can decouple the steam system, the power side from the reactor side, that opens up so much more flexibility in terms of how you can source, procure, and construct and install. Ryan James Pfingst Great. Appreciate all that detail. I'll turn it back. Operator Sherif Elmaghrabi, BTIG. Sherif Elmaghrabi (inaudible) the fuel MOU with Centrus, can you tell us when you might start taking delivery of that fuel? And is there a date by which you need to firm up that agreement? Jacob DeWitte Yeah. I think just to clarify, right, the first fuel we're getting for our first plant, that was awarded to us through a competitive process by Idaho National Laboratory and the Department of Energy. So that material is all from there. That's for our first plant. Everything with, like, commercial procurement happens for our second and beyond plans, and that's where we're looking at obviously working with Centrus and others. What we see is we're in the process of kind of figuring out the right structures to supply for what we need and kind of the growth and scale. So, I think the idea is, as we look at partnering with different folks on the enrichment side, it's really working to sort of what's the sort of right ramp rates for them and for us given the customer offtakes and how customers might be engaging or not engaging on this is something that we're kind of watching as this develops, and we're helping develop and shape as we speak [life time]. So, we want to start receiving that fuel as soon as reasonably possible, but some of those pieces are going to be the things that we want to put in place to make sure we set the stage for kind of a long-term growth curve up and out. When you look at what our fuel needs are, they're pretty exciting and pretty heavy. But that's great for this enrichers on the supply side, but just structuring the right kind of early deals and then also coupling that with some of these customer bases where we have started customer partnerships where their ability is to sort of come in and help actually potentially, right, support some of the fuel offtake, that's how we're kind of looking at shaping some things right now. A lot of that's still developing, but generally speaking, that's how we're structured on that sense. But it's super, super helpful and important, right? We have fuel. It's actually at Idaho. It's being we're setting up the fuel fabrication capabilities to actually be able to take that fuel and fabricate, put that in our first plant. But that material has all been -- it's all out there. It's all been produced from government reserves and inventories. And that's kind of another key watch point for us is some of the actions that are potentially coming from the government. Ideally, there's a lot that moves forward on the fuel side, and we're really well positioned to be able to benefit from a lot of that beyond just what we already have. Sherif Elmaghrabi Got it. That's helpful. And sticking with those, I guess, second and later plants, when we talk about the timeline for subsequent COLAs, I think in the past, you said six to 18 months, would that apply to reactors in different sizes, let's say, customer wants to do 75 megawatt design, or is the timeline the same as the first custom COLA that we're doing about to do? Jacob DeWitte Yeah. So, they'll be for the same general plant. What we see is -- the timing is going to depend a little bit, but, I mean, I think it'll be a staggered parallel fashion with the INL plant. The INL plant is a full commercial plant, right? We're building it on a national lab site because there's a lot of benefits of doing it, but it's a full commercial plant. And then, there'll be all these things that happen after that with respect to follow-on plants and follow-on sites that we're excited about how those are progressing and developing. That said, like, I think the timing of those is sort of we see a couple major sites that we've obviously talked about, and we see the different customers that we've announced. And there's the very dynamic market in that sense. So, what we expect is that there'll be some COLA activity that we anticipate submitting additional applications in parallel to all the first ones under review that will see some acceleration benefits, but then the real benefits will really happen on the acceleration of the COLAs after that. We're doing a lot of, like, kind of cutting-edge, leading-edge work with the NRC on doing some of the subsequent licensing at high volume, kind of high rates of deployment. They've been developing activity -- I'm sorry, capabilities and plan [that aligns with] (ph) sort of action around how they're going to review those things going forward. So that we're going to be one of the initial movers and one of the early kind of beneficiaries of those approaches, which is pretty exciting for what that looks like. But kind of that's how we see these things kind of playing out from there. But I think it's entirely likely that by sort of a year from now, we have additional COLAs under review on top of the INL one. Sherif Elmaghrabi Got it. Thanks, Jacob. I'll turn it over. Operator Vikram Bagri, Citi. Hi, it's Ted on for Vik. Thanks for taking the questions. I wanted to ask about the funding needs for the business, just given the larger reactor size that was mentioned last quarter, the growth needed for Atomic Alchemy, potential costs from tariffs, and then also potentially higher HALEU prices than the initial plan. Just wondering whether given all those factors, additional capital will be needed. And if so, when we could expect roughly that might be raised? R. Craig Bealmear Jake, I can take -- Jacob DeWitte I'll just start with -- I'll just start really quickly. I think, again, an important point is on the fuel, right? We have the fuel allocated and awarded to us. So that helps a lot with the first plant. And then, as we've looked at things, I'll turn it over to Craig here, but I think that's a big help with respect to how you sort of manage some of the HALEU pricing. But with that, I'll turn it over to Craig for kind of the dynamics on that. R. Craig Bealmear Yeah. And just to reemphasize the point the balance sheet got adequate capital on it for the deployment of INL. Now, it was almost two years ago since we announced the leaseback in a year since we closed. And since that time HALEU prices have gone up, as you mentioned, Ted. We've also dramatically grown the order book, and we've now got customers wanting a much higher size powerhouse offering that is more capital efficient, but it is going to cost more capital per unit. And then, we're two years on from the dispatch, which means we're two years on towards [indiscernible] to bring recycling forward. So, we'll want to be positioned such that capital does not become a constraint as we look to progress those growth plans. And we'll make sure that if there is a need to raise capital, we'll do that when the time and circumstances are right so that we can do it in a strategic manner, not a reactive manner. Got it. Thank you. And I had just one follow-up. On the VIPR facility that was mentioned, could you just elaborate on what the NRC process looks like for that? So, it looks like there'll be a construction permit submitted this year. How does that process differ from the process for the Aurora powerhouse? And then, also just in terms of intensity required with the NRC? And are there any additional costs for that over and above what's provided in the guidance? Jacob DeWitte Yeah. I think, I mean, the licensing process in progress is really centered around a Part 50 license application, which is a bit different. This is a non -- this sounds funny. This is a non-electric power producing reactor. So, it benefits from a different regulatory approach that looks a lot more similar to what university and research reactors look like. So, good news there is there's some benefits that happen from that from an efficiency side, but it is inherently built to a two-step process where you get a construction license and then an operating license. However, given kind of the nature of the review of those systems and that we expect that the construction permit review will happen at first. You'll build significant amounts of the plant and you'll apply for the operating license thereafter. This is similar to the process taken by Kairos, which received their construction permit, and then a couple other active groups that are doing work in the space on that. So that's what the application, like, review process looks like. Again, that's quite different than a Part 52, which is for power reactors, so electric power producing reactors, and doesn't have the repeatability functionality built into it because typically these kind of test reactors or these non-power producing reactors are built around kind of that not needing that repeatability. So, what's kind of neat about it from the Oklo side is we're going to have a lot of experience and expertise around both those processes, and there's some efficiencies that we're looking at seeing as possible benefits to inform sort of future activities around either continued sort of regulatory modernization efforts, as well as potential legislative efforts around applying some of the best practices between the two to each other. And we'll obviously be kind of at the center of that experience set, which is kind of neat actually, but that's how we see those things going. Generally speaking, there's it's considerable -- it's considered to be a simpler, more straightforward process to get a non-power license, right, than a power reactor license just given the relevant hazards around a non -- a low power reactor operating in that kind of environment. So, typically speaking, the regulatory process kind of reflects that. Got it. Thank you. Operator Eric Stine, Craig-Hallum Eric Stine Hi, Jake. Hi, Craig. Hello? Jacob DeWitte Hey. How's it going? R. Craig Bealmear Hey, Eric. Eric Stine Good. I'm glad. I wasn't sure what was going on there. Hey. So, just curious I know you've done the readiness assessment. You've had quite a bit of interaction with the NRC, but also know the NRC is known for that being a pretty onerous process on the licensing side. So, as you get closer to submitting the COLA, I mean, is your confidence higher, or what has maybe changed in your view, if at all, as to your prospects to move, as you said, into a commercial facility and not having to go through kind of the typical demonstration plant that might have to operate for three, four, five years? Jacob DeWitte Yeah. I mean, I think, generally speaking, so just to be clear, this is a full commercial plant, right? Like, this is a full commercial plant that will operate commercially, produce full power, do all of that. Obviously, it's the first plant, so there's some learnings you both design for and engineer around to be able to accommodate and be able to iterate through. But this is not kind of like a, "Oh, build it, see how it works." No. We're building off of technology that's done that already, right? There's been two noticeable -- notable examples on top of 20-plus reactors from before that around the world built around sodium fast reactor technology showing what works and what doesn't work. And the successes at EBR-II and FFTF are very significant sort of enablers for us to actually be able to take those technologies forward, apply those, right, take those lessons learned, apply them, and basically replicate what was done in many ways because they were so successful. So that's really important, right? I think sometimes the facts and the realities of sort of the history around non-light water reactor technology development is often very underappreciated even in the nuclear industry. And a lot of that's just because a lot of that pioneering work happened between the '60s, '70s, '80s, and '90s, pre-digitization. Actually, I think there's a big part of the story to this, which is a lot of those lessons learned, a lot of the records, all that stuff were written in paper, and put in books, put in binders, put in reports that were literally printed and filed on shelves, like literally. I used to say left on the shelves of history, literally because they were. And that as a result had meant that like accessing all of the wonderful nuggets of information that had been out there about these things, well, it wasn't exactly easy to do unless maybe you're an academia or in the research and development communities, which Caroline and I were. So, we had the benefits of having a lot of the opportunity to see a lot of the amazing things about this technology set and how mature it really was, something that again is vastly underappreciated by and large. And so, that's a fantastic spot to be. Now, one of the things we leaned into very early in the company's history was even starting with our first regulatory interactions, including getting the Department of Energy to help with this and the national labs to help with this -- working with the NRC back in 2016, was actually getting that old information, digitizing it, modernizing it, being able to use it in the regulatory space. And that we set off a bunch of activity and work in 2016 that really is continuing through today that pays significant dividends, right? So that kind of dovetails into your question of, yeah, I mean, generally speaking, as we've seen our engagement with the NRC, we've had 600-plus meetings with them. I mean, we have a huge amount of interactions in history leading up to submitting an application, and being in a position that we feel pretty happy about. So, obviously, we're doing a readiness assessment to make sure that we understand where there might be gaps so that we can work to address those. We've seen that had a lot of success with what TerraPower did. They also did a readiness assessment before they submitted their construction permit and -- or the construction permit application and they've seen that their review has been moving pretty well on pace. I think it's slightly ahead of schedule even. So, that's fantastic. We expect there to be some similar benefits for us. Obviously, each case is a little bit different, but generally speaking, that's why we've been at this for so long. Of all the non-light water companies active today with the NRC, we've had the longest engagement, right, dating back to 2016. And that's a very important thing for us for having sort of that history and that maturity and that kind of credibility and capability accordingly with the regulator. I think the thing that's important is also how we take an approach isn't just about whether or not you get the license, but doing so efficiently and effectively. And I think that's that next level of depth and nuance that I think people are starting to fully understand the importance of, which is not just getting a license. That, I would say is something that's quite doable. It's also doing it efficiently and effectively, so it's scalable. And that's where we spend a lot of time trying to optimize for that. Back in 2019 -- or 2018, when we first piloted an application with the NRC, they said they could review something like that. They thought that that made a lot of sense that we proposed all these novel things. Something they then built a novel review plan based heavily on -- based on doing things, I mean, heavily in-person in 2019. Obviously, when we submit an application for all this in-person review dynamics in 2020, that didn't work out so great given that the pandemic blew a lot of that stuff out. We couldn't have those in-person meetings and dynamics. We had to obviously change course and that became somewhat challenging. But since '22, when we started re-engaging with them in-person and pre-application on this, we've been able to kind of structure around addressing some of these open items and some of these items that we've tried to push the NRC to be forward leaning on. Frankly, we found that there's been a lot of things that they've been pretty receptive to. Still a lot of work. It's not a like, hey, this is going to be a walk in the park. It's a lot of work. There's still a lot of existing inefficiencies, frankly, in the regulatory process, but we couldn't ask for a better setup right now amidst the drive and demand on the AI side, as well as bipartisan level of support coupled with a very -- an administration that's very focused on driving regulatory efficiency throughout the entire ecosystem. So, all in all, it creates a pretty favorable dynamic, I think, for where we sit and how we're seeing this come together. So, I guess, I would say like the pre-application engagement is a way to -- that we've done continually more or less since 2016 and sort of re-upped in '22, if you will, into what we're doing now, like, has been quite, I think, constructive to preparing both parties to be ready for an application. I think some of the feedback we've had from the NRC has largely been around, "Okay, we're really getting ready for you guys to have an application now. We've done all this work, but I think we're getting ready for it." So, we see that. We expect to see how that plays out with the Phase 1 readiness, and then we'll kind of move that to the next steps of the review, hopefully, with some of those efficiencies gained. That doesn't take care of all the bumps and problems. There's still going to be things that come up, of course, but at the end of the day, it gives us a great shot on a lot of those angles. Yeah. Eric Stine Yeah, no, it's a great color. Thank you. And then just for my follow up, I mean, should we still think about timing of the actual cola submission to be, I think in in the past you'd said kind of coincide with the advanced act and in the October time frame. Jacob DeWitte Yeah, that's how we're looking at it. I will say that with all the pending activity around like executive orders and all these other things, there's, I would call it, good uncertainty, because it could motivate some reasons that things might move somewhat faster. But at the end of the day, like, that's how we're seeing kind of the timing evolve here. So, we expect to transition out of the readiness assessment with the feedback we get from that to be able to support us submitting for actually a Phase 1 application in a few months after kind of the feedback from that. And then that would position us to then do readiness on the Phase 2 part. And then, also with the feedback from that position us to be able to submit that sort of in the Q4 timeframe is what we're expecting. Eric Stine Okay, excellent. Thanks a lot. Jacob DeWitte And that would mean full applications then at that point, yeah. Operator Jeffrey Campbell, Seaport Research Partners. Jeffrey Leon Campbell Good evening, Jake, on Slides 9 -- Jacob DeWitte Hey, Jeff. Jeffrey Leon Campbell Hey. On Slides 9 and 11, the fuel recycling and the feedstock preparing the submission to the licensing project plan for the Oklo Fuel Foundry, I like that name. Can you add some color on how this licensing effort might be different than that for Aurora? What the primary hurdles might be? And what the timing might be like? Jacob DeWitte Yeah, it's a good question. We've been engaged at the NRC on the pre-application activities to submit for large-scale fuel fabrication work that is outside, right? Just to kind of recap, we have fuel from the INL and the Department of Energy for fuel for our first plant. We'll fabricate that fuel at the Idaho National Laboratory. We're building a pilot fabrication facility there. By that I mean we're installing the equipment and existing building. But then, as we grow and we look at sort of this backlog that we've been accumulating, we're working to set up a full-scale fuel fabrication facility on a -- not full-scale, but I call it large commercial scale to help us kind of start to meet that demand set. That follows a different regulatory path than the typical like Part 50, Part 52, because it's just materials handling, it's not reactors. And so, it depends a little bit on the specifics of the site and the infrastructure that we're taking advantage of, but that's something where as we've been engaging with them, you can expect a full sort of application review to be done potentially in the 24- to 30-month time period, possibly as long as 36. It depends on how much infrastructure you need to install. Given the nature of kind of the regulatory environment today, there's some benefits that those timelines might be reduced. I do think there's a general view that this should definitely be done faster than reactors. So, everything that moves those timelines is probably going to help with this. So, that's kind of how we're seeing that progress. But we're going through evaluating different site opportunities accordingly for that. And as those things continue to progress, we'll have good updates for the market and for investors as those come together. But generally speaking, that's how we expect that to go to sort of unlock our ability to scale into the very exciting numbers and customer bases we have. Jeffrey Leon Campbell Right. And that's very helpful. And the point about being faster than a reactor license certainly makes sense. And my follow up is, is this essentially somewhat similar to the way you've talked about your COLA licenses and having multiple applications, even as you're waiting for INL? Is this already an effort to create a blueprint for potential fuel founders in a variety of locations? And in other words, already thinking about scalability in the fuel foundry in the same way that you're thinking about (inaudible)? Jacob DeWitte Yeah, it's a great question. It's definitely something we think about here. We aren't baking in necessarily the same scalability, but the lessons learned to apply forward will be helpful. The reason I say that is because, like, we kind of expect this facility to be pretty large to meet a lot of our need sets for a while. And then, beyond that, well, we kind of are looking at how this can be built and done in different places potentially as needed. But generally speaking, like, this is all happening, which is like -- that's a really silly thing to say. This is all kind of progressing in a way to expect to build one, but understand that there might be like scalability for beyond that. So, it's kind of a weird non-answer, but we're saying, yes, there's ability to have a scalability from it, but the infrastructure of the regulations themselves, the actual structure doesn't really allow for that same translatability for repeatability the way the reactors do, because it's not anticipated you'd build many of these. But there's going to definitely be lessons learned and there's things we're trying to do to allow for that where it makes sense to do. But generally speaking, that's kind of a thing that we'll keep watching as we kind of think through and get into the actual licensing process here. But if -- as we think about the opportunity space for the business, it does make sense to think about having multiple locations most likely. But kind of not do all those at once, obviously, but that's stuff that kind of lags by probably by five to 10-year increments as we think about the long-scale growth and potential here. R. Craig Bealmear And Jake, I think the other trade-off is size of the facility and the scale economies you may get on one end, but logistics of having -- the difference between having one plant and -- one foundry in one location versus multiple locations, and what it could do around logistics. Operator Sameer Joshi, H.C. Wainwright. Sameer Joshi Hey, good afternoon Jake, Craig. Thanks for taking my questions. First, congrats on all the progress. My question is about the borehole drilling campaign that you just announced this morning. Does this -- I think the press release says that it will inform your detailed engineering design. I'm assuming this engineering design pertains to the building and building stability as against the balance of plant, like the steam generators and the power conversion system that may need any modifications. Will you confirm that? Jacob DeWitte Yeah, the way I understood that was really if we expect to see like what the data does or sort of the insights from the site characterization due to impact sort of the detailed design. Yeah, I mean, generally speaking it's really just to make sure that the site characteristics and where we're exactly going to be building, like we just engineer all the right like structural mechanical pieces in the right ways to support that, that are kind of bounded by how we take that sort of bounded kind of standardized approach as is. That's really how we kind of angle to incorporate that feedback. But it's important to have that information to support then also in the regulatory process, which is kind of why we do it, if that makes sense. Sameer Joshi Yeah. No, understood. And then, the second question I have is, and maybe this has been discussed in the past, but just I want to make sure I understand. Now that you are in the Phase 1 -- or initiated the Phase 1 of the pre-application readiness assessment, has this phase also included the specific size of the reactor in terms of whether it is 50 megawatts or 75 megawatts, or will this be needed to be included in Phase 2 or the next stage? Just wanted to understand that. Mainly in context of one of the previous questioners who asked if the subsequent COLAs can be of different sizes. So, just wanted to understand the Phase 1, Phase 2, and when you have to specify what the COLA is for, whether it is for 75 or 50 megawatt. Jacob DeWitte Yeah. So, most every -- so pretty much everything we're really doing is at a 75 megawatt size range. That kind of is the generalized design. And then, if we flex down from that, it's just because there's a customer need or specific need to do so, which would then, generally speaking, bound against largely speaking the same analysis and everything else that we do to support the 75. So, really just think of it as a kind of a consolidated single platform that we build off of from the licensing side. Each site, then, if it does change a little bit, it's going to -- obviously each site has to get its own license, but the benefits of sort of the repeatability and scalability because of that approach should hold pretty heavily. Obviously, if we make significant departures by introducing major design changes, that changes some of that, but that's not exactly like in terms of the near-term deployment, that's not what we're intending or planning to do. And that's part of why we made that decision to kind of just centralize and focus around the size range. What that means then is if a customer wants it to be a 60 megawatt variant, then it's the same plant that we're building. We're just basically, as we use the term kind of underrating it and running it at a lower power level and then maybe low then have the ability to potentially increase that power level with more fuel going forward. So that's really how we're trying to approach that. With the Idaho plant, specifically, like that's the same approach we're taking. However, we have a fuel constraint, right? We've been awarded fuel and to sort of best use that fuel, we would be running that plant at less than 75 megawatts, but we're also pursuing options to perhaps get more fuel to run that up at a higher power level. That just depends a little bit on sort of how kind of some of these activities are going to play out with respect to the fuel supplies, especially given the fact that there's another 5 tons of that material that we requested that's available potentially. So, like, some of that material we could use to help us run all the way for a full cycle at the full power level, but that's kind of how we're approaching this right now. But yeah, everything really centralizes around kind of that 75 megawatt level. Sameer Joshi Understood. May I squeeze in one more for the Oklo Fuel Foundry? Will this facility be also able to handle recycled fuel for the fabrication facility? Jacob DeWitte It's an interesting question. So, what we're talking about with the fuel foundry piece here is specific to fresh fuel fabrication. However, next to, like -- not next to physically, but in terms of in addition to that, we've been ongoing on the regulatory front for, I think, dating back to at this point, 2021 and pre-application preparing for the fuel recycling facility, that fuel recycling facility would also include -- that would include the actual recycling, as well as the fuel fabrication facility for recycled fuel. The fuel foundry we talked about here, that's really specific to fresh fuel. The same techniques and approaches in terms of facility design and process design, generally speaking, will be used to handle recycled fuel. It's still metal, it's still casting based, but it has to be done obviously in a different environment given the nature of the recycled material it's casting. In other words, the transuranic bearing kind of feedstock that we're fabricating the fuel out of. So that's a really important thing here, right? The recycling means you don't need HALEU. You're not using HALEU. You're instead using the transuranics and the uranium from recycling itself. And as a result, the material is more radioactive. It's also thermally hotter. So, you need to fabricate that in a different way or in a different kind of set of constraints, but it sets a really good stage for how we can like apply some of the technologies for it. So, to answer your question, the activities going on the regulatory side for recycling are different than the fuel foundry side, but of course, there's some relations. Sameer Joshi Got it. Thanks for that color. Have a good one. Operator Craig Shere, Tuohy Brothers. Craig Shere Good afternoon. Thanks for fitting me in. So, let me jump on that same line of questioning. So, what exactly is the CapEx delta between a commercial scale fuel foundry versus recycling facility? And while the licensing for fuel may be quicker than for the plants, the Aurora powerhouses, how long are we talking about constructing a foundry or recycling facility or constructing? Jacob DeWitte Yeah, just a couple of things. So, basically you've got -- if you think about this, right, you have basically two major centers for fuel for Oklo plants going forward. You have one center which is around fresh HALEU. We procure that material and then we fabricate it in our fuel foundries to make fuel to go into our reactors. Then, you'll also have the recycling side that comes in and we'll start to be able to recycle fuel from existing plants that are producing power today as well as Oklo plants, as well as other advanced reactors actually. We can take all that material and recycle it, produce a new feedstock, we can make fuel out of that actual recycling facility and then have that material go fuel some Oklo plants as well. So, generally speaking, like we see those, like, the fuel foundry will most likely come into existence in terms of being operational before the recycling facility, just given the nature of kind of licensing and the technology development and everything else needed for that. And then, from there, we kind of see that staged approach of you get the fuel foundry going, fabricating fuel for our plants, you get recycling, it comes in later, produces fuel. All the benefits kind of play forward in those areas. But generally speaking -- and I'm not saying they're staggered on purpose, it's just kind of the nature of sort of how we think about the infrastructure build out and the planning on that. So, a lot of exciting stuff coming, but generally speaking, it sets the foundation for like things that then allow us to kind of grow and scale. Now, important thing to come from this too. Fuel fabrication is great, allows us to make fuel. Also opens the door for us to look at potential partnerships with others, to make fuel with or for others. Additionally, on recycling, similar kind of thing. So, good nice opportunities to touch in and tie into different pieces there, which is pretty important. If you have a licensed facility to actually fabricate fuel, of which currently in the United States, there's really like -- there's just not -- it's pretty significantly under supplies for advanced reactors. There's just not that much out there. A big opportunity obviously for us to be able to have that facility and perhaps support some other activity that others are doing in addition to what we're doing. So, some cool things all kind of come together on that. And one illusion just points you between both obviously stuff we did earlier in the year, but a couple months ago we obviously announced a partnership with Lightbridge, just kind of an example of how these things kind of can tie together now with the infrastructure facility work we're doing. But generally speaking kind of the focus we have is, okay, we know we're going to -- like, those things support us for after what we have going on right now with Idaho, with the pilot fuel fabrication facility we have there as well as with the first plant we're building there. So that's kind of how we think about sort of the staging and order of operations. Craig, I'm not sure if you want to add anything specific to the commentary around kind of the incremental CapEx, but that's kind of how we're thinking of the phasing and the structure of this. R. Craig Bealmear Well, I'd say, Jake, there will be incredible CapEx there, but really, we'll have more to say as we've kind of completed some of this appraised work on both the foundry and the recycling. And so, I think it'd be too early at this point for us to talk about what that could look like. Craig Shere That's fair. Could we just presume that the recycling takes more capital and longer to construct versus just the foundry? Jacob DeWitte The recycling facility? Craig Shere Yes. Jacob DeWitte Yeah. I mean, generally speaking, because you're putting in fuel fabrication as well, yeah, it's going to be -- it's going to take longer to build and take more capital, generally speaking, than the fuel foundry will, is how we think about it. Now, the thing with the recycling, though, is you also open up all these massive opportunities for additional potential revenues, right, from additional radioisotope co-product sales, additional uranium sales, additional actual true-bearing fuel feed sales. So, there's a lot of things that kind of come from that too. So, it kind of diversifies that piece, which is something that we're particularly excited about, not to mention the massive savings it gives us compared to fresh fuel, which is pretty huge. But yeah, we expect that to be something that takes longer and will cost more than the fresh fuel foundry. Craig Shere Great. And my last one, you touched on this a bit in Sherif's questioning, but it kind of feels like the foreshadow new executive orders and Department of Defense involvement to grease the rails on U.S. nuclear could by far be the most meaningful on the fuel side, not government property and other things. Would you agree with that? And if so, what tangible perspective federal steps would you want to see on that front? Jacob DeWitte Yeah, I'll kind of -- I'll give you a long-winded answer to this. But I think it's -- there's a huge amount of like, I'll call it, greenfield opportunity right now in terms of the policy landscape and in terms of the appetite to use, I'll call it, the national resources and assets we have as a country with respect to deployment between significant federal land, like at the Department of Energy, requesting information about how they might be able to support building data centers at existing DOE sites. That could also tie over potentially to benefits of them being able to actually be the regulator on some of those sites potentially. I mean, some of this depends on a lot of moving parts, but that could provide a significant accelerated benefit. At the very least, it provides an interesting competitive alternative dynamic to the NRC, which I think is good, right? Competitive dynamics are kind of good for everybody. So, it's pretty cool. And just for us, one benefit we have, right, like we kind of -- we often have -- we haven't actually talked about this as much as maybe there's some interesting opportunities to do so, but the Department of Energy was going through the process of designing and building out and therefore included their having to prove they're having to go through a regulatory process of their internal regulatory authority and authorization of the sodium-cooled fast reactor for neutron radiation testing purposes. A lot of the work that they did in that process and for that project, the safety evaluations and all those pieces have significant carryover and benefit to us. And as a result, we've seen some of that actually place forward some benefits on the NRC side, because I think generally speaking, it's safe to say that regulators in general, like -- well, I think all of us, it's not just them. It's all nice when you can build off of work that others have done as well, and you don't have to do it all kind of from scratch yourself. So, if that's the case, then as we've seen there, there's some benefits. So, if some of that activity and some of these potential ideas that we've heard kind of circle around and we know there's been appetite in Capitol Hill from conversations and also in different NGOs and think tanks and activities around how to best leverage the regulatory authorities that the Department of Defense, the Department of Energy and the NRC have kind of in a cooperative but also maybe somewhat competitive dynamic, that's pretty favorable. If you think about what we're doing too, at Idaho, we have a great head start on some of these activities given we have a site use permit. We're deep in the process of deploying and developing there. It's also there's an opportunity to perhaps bring in folks like hyperscale partners to there and maybe build more plants there and then have some benefits because we're doing that, whether it be the Department of Energy as a regulating body or some piece like that. Like there's some significant benefits that can kind of come from all those pieces together. Another side of this, look at the work we're doing out that we've -- we announced some time ago, but part of our partnership with Centrus was looking at building two plants, right, to build two plants in Ohio to help support sort of what they're doing. And that has some carry over from Department of Energy, environment management, kind of legacy land that they've been turning over for development. So, a lot of cool opportunities between the different things we've been doing on the DOE and DOD sites. Obviously, our selection and the DIU process is part of the ANPI program. It is also helpful for unlocking some opportunities to provide power direct there, given that AI and energy are considered pretty important things for the national security perspective. There's also opportunities to do stuff at defense land that could be constructive here as well. So, I'm kind of giving you this wraparound answer to say, right now there's a lot of the art of the possible on the table that could be really, really attractive and pretty exciting in an accelerative manner. But we'll see, like all this stuff is actively evolving and it's going to be iterative and dynamic, I think over the next couple of years, frankly, but especially over the next couple of months. So, we're excited to see what might be there and what might happen with this. And we're trying to kind of thread the needle and push where things make the most sense to sort of accelerate getting plants built and scaling accordingly and bringing the right resources to the table, but that would be pretty constructive and helpful. And then, I think another dynamic that ties to that, we talked -- I just talked a lot about siting and regulatory side, but the government also owns a lot of material that could be used as fuel. And ideally, there's some opportunities to sort of accelerate that and build off of what they've already done with us, what they just did in the next round of those things for other companies building kind of small-scale test plants. We're excited about hopefully these things continuing to scale and ramp up for more opportunities there as well. Operator Thank you. I'd now like to pass the call back over to Sam Doane for a question from Oklo's retail investors. Please go ahead. Sam Doane Thank you. Yeah, we had one question come through. The question is, can you elaborate on the current stage of your discussions or agreements with data center operators or hyperscale customers? And how these conversations are shaping Oklo's deployment timeline and reactor siding strategy? R. Craig Bealmear Yes, I can take that one. So, as we said at our last call that we continue to have active discussions with all of our customers, especially those in the data center space. We are exchanging term sheets, and we're talking about commercial terms. And I think it's really about how do we optimize what we do commercially around, as I hold it three factors, there's power purchase pricing itself, but there's also trying to structure deals with customers that could include some form of investment in Oklo, either kind of a prepayment like what Equinix did, or potentially some sort of like asset level investment, and also just trying to work with customers that can help us share and manage risk better. In addition to one of our new hires that Jake talked about earlier, Patrick, we've also had Mike Donohue join Oklo as the person leading our business development activities focused specifically on our data center solution customers. And I think -- and Mike has been with the company a couple of months, and I think he's kind of reinforced that think about this strategically and do it in a thoughtful manner approach that we've been taking. Now, Jake did talk earlier about the ability for us to file and have more permits on file as the first permit for Idaho site is being reviewed. One thing we do need to have in order to file a permit is to kind of know which -- where we would be locating that site beyond Idaho. So that does kind of become an important step in terms of our contracting strategy, linking into our permitting strategy. But we're making a lot of progress. And I think it's fair to say that our business development team is one of the busier teams in Oklo. Operator Thank you. That concludes our Q&A session. I'll now turn the conference back over to CEO Jake DeWitte for closing remarks. Jacob DeWitte Great. Thank you all, and thank you for the time as always. I think it's only been about seven weeks since the last call. A lot of different things kind of transpiring in the broader sort of macro environment. And since then, and what we see though is kind of a consistent steady drumbeat on the AI kind of theme around energy need and sort of on the hyperscalers coming to the table and seeing a massive set of opportunities for growth for compute, but massively constrained by power. At a congressional testimony just a few days ago, I guess last week, our former Chairman Sam Altman made it pretty clear that energy is probably one of the best things, and most important things the government can invest in. And I think -- and just generally speaking, be invested into. And so, pretty exciting opportunity space to see all of those come together, and couple that with a broad policy backdrop and an administration that has a heavy focus on driving infrastructure development, growth, investment, and driving the regulatory process to be conducive to that. Also it's a stage for, I think, a lot of things to actually exceed expectations in some ways with the potential of ideas out there, but a lot of challenges obviously against that. However, we're in a different world today than I think nuclear's ever seen before. And coupling our sort of distinction with the business model we afford, our approach in technology, and kind of the integrated model we have, we're starting to see some of the clarity of kind of the alignment of what those things unfold and enable, as well as just generally speaking, the ability to move technology development and deployment more quickly and significantly change the paradigm that has in some ways challenged nuclear, which had a lot of misaligned incentives, had a lot of different parties and transactional dynamics that made nuclear really hard to scale and build. These things are all a different world today. You have some of the biggest companies in the world needing power in almost insatiable amounts, having deep pocketbooks and the ability to support paying prices needed to get early plans built with a clear sort of angle on cost declination beyond that down the road, and then be able to also couple that with best practices from other industries and supply chains to really kind of be able to deliver what nuclear long has in terms of its potential and promise. So, we remain, I think -- the mission here is one that transcends even just kind of the quarterly basis or the yearly basis, but something that we're working to unlock is the actual capabilities afforded by splitting atoms, which when you think about heavy metal reserves that we have in the planet, a couple of the fast reactors and recycling, you can talk about billion-plus year energy reserves available to us with technologies that have quite a bit of maturity behind them. So, we're excited to be working on that and leading the charge on a lot of those fronts and looking forward to the next update here in a few months. Operator This concludes today's conference call. You may now disconnect. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data

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