BITDEER THIRD QUARTER 2026 EARNINGS CALL - BITDEER TECHNOLOGIES GROUP

Financial Performance:

• Third quarter 2026 revenue reached a record $320.7 million, a 89% year-over-year increase and 40% sequential growth.
• Gross profit turned positive at $10.8 million (3.4% margin), a $19.4 million improvement over the previous quarter, driven by higher Bitcoin production, co-mining growth, and AI cloud expansion.
• Adjusted EBITDA surged to $69.6 million, up 173% year-over-year and 124% sequentially, resulting in an adjusted EBITDA margin of 21.7%.
• Net loss was $125.5 million ($0.46 per share), primarily impacted by non-cash depreciation of $125.8 million and a $54.6 million fair value loss on Bitcoin-denominated borrowings.
• Operating cash flow was approximately $6 million; combined with Bitcoin sales, total cash generated from operations and asset sales was ~$227 million.
• Cash and cash equivalents ended the quarter at $163.7 million, down from $456.8 million in Q2 due to $478 million in capital expenditures.
• Total debt increased to $1.95 billion, driven by Bitcoin-denominated borrowings and higher Bitcoin prices; convertible notes totaled $1.2 billion with maturities post-December 2029.
• Deferred revenue rose to $342 million, largely comprised of AI cloud customer prepayments.

Guidance and Future Outlook:

• For 2026, crypto mining infrastructure capital expenditures are expected to be at or below $200 million (down from a prior range of $200–$280 million).
• 2027 capital expenditure and revenue guidance will be provided in the Q4 2026 earnings release; 2027 revenue ramp-up is anticipated as facilities energize, with A102 expected to generate revenue in Q1 2027 and A201 in Q2 2027.
• TETL Phase 1 delivery is on schedule for year-end, with customer installations planned for January 2027; Phase 2 deliveries expected in late Q1 2027.
• Management targets completing TETL project financing, closing GPU financings for A102 and A201, and delivering TETL Phase 1 as near-term priorities.
• Hash rate is expected to continue growing over time, subject to seasonal curtailment.

Business Segments and Product Lines:

• AI Cloud Services: Revenue was $20.4 million (up 46% sequentially); ARR reached ~$86 million with 4,328 GPUs deployed at ~95% utilization. Signed multi-year agreements for over $2.9 billion in backlog, including $800M for A102 and $1.7B for A201.
• HPC Infrastructure (TETL): Leased to Volta for 16 years with a base term value of ~$4.7 billion; 121 IT megawatts covered, yielding an expected NOI margin of ~90%.
• Crypto Self-Mining: Mined 3,855 Bitcoin (up 43% QoQ); hash rate reached 82.3 EH/s; fleet efficiency improved to 15.4 J/TH.
• Co-Mining: Revenue reached $59.9 million (up 140% QoQ); hash rate was 28.7 EH/s; average power cost was $36,000 per Bitcoin mined.
• ASIC Design: A4 ultra-hydro miner operates at 9.45 J/TH at the rig level; deployment continues across own sites and partner facilities.
• Capacity Expansion: Secured AI cloud data center capacity is ~332 IT MW (95% of 350 MW target for Q1 2028), with significant new sites in Malaysia (A102, A201, A202, 901, 103) and Norway (TETL).

Market and Competitive Landscape:

• AI compute demand significantly outpaces supply, leading to intensified competition for power and infrastructure.
• Management identifies AI startups and "AI neon" labs as the most underserved market segment, favoring high-prepayment contracts over hyperscalers with lower profitability terms.
• Bitcoin markets remain cyclical; management emphasizes diversification to avoid dependence on single market cycles.
• Global power capacity is ~3.1 GW with 1.75 GW online; Malaysia is emerging as a key footprint due to construction speed and availability compared to the U.S.
• Wafer availability for ASICs is tight due to AI demand; Zcash mining is being deprioritized in favor of higher revenue-per-megawatt algorithms like BSV.

Risks and Challenges:

• Regulatory and permitting uncertainties following U.S. midterm elections could increase operational costs, though existing energized sites hold a short-term advantage.
• Potential slowdown in Norwegian data center approvals due to new regulations, though existing contracted projects like TETL remain on track.
• Credit tightening in AI infrastructure financing requires disciplined structuring around contracted cash flows and customer prepayments.
• Legal challenges regarding the Clarington site continue, though the company plans to maintain Bitcoin mining operations there pending resolution.
• Bitcoin price volatility creates non-cash fair value adjustments on borrowings and digital assets.

Management Commentary and Tone:

• Management expressed confidence in their "power advantage" strategy, emphasizing the ability to monetize power via AI or crypto based on real-time demand.
• Tone was execution-focused, highlighting the successful transition to positive gross profit and the scaling of contracted AI revenue visibility (~$7.6 billion total expected).
• CFO emphasized disciplined growth, prioritizing non-dilutive project-level financing and limiting equity fundraising to early-stage investments.
• CEO Harris Bassett stressed building a platform with durable cash flows independent of single market cycles.

Analyst Questions and Answers:

• Prepayments & Customer Mix: Prepayments are expected to remain above 50%; strategy focuses on AI startups/neon labs seeking prepayment support due to tight capital markets, avoiding hyperscalers with less favorable terms.
• Rockdale & U.S. Expansion: Rockdale land acquisition is sufficient for AI transition; waiting for grid power expansion approvals. No immediate need for additional land at Wethersfield, Ohio, pending local community discussions.
• TETL Financing: Project financing is advancing, leveraging the existing power infrastructure and customer credit support (letters of credit) to secure funding for remaining ~$350M–$500M CapEx.
• CapEx Strategy: Equity financing is being minimized; growth is funded via customer prepayments, project financing, and Bitcoin sales. 2027 CapEx will include remaining TETL spend.
• Asset Dispositions: No plans to sell powered land despite rising values; preference to hold for long-term AI/Bitcoin utility.
• Clarington & Fox Creek: Clarington remains in Bitcoin mining mode during legal resolution; Fox Creek power plant expected online mid-to-late 2027 (100 MW).

Other Key Points:

• Bitdeer signed the White House Ratepayer Protection Pledge to demonstrate commitment to responsible infrastructure development.
• A4 ultra-hydro ASICs are being deployed to maintain cost leadership; Zcash mining is strategically reduced due to tight wafer supply.
• Malaysia operations saw breakout growth with A102 sold out and A201 >70% contracted, representing over $2.5 billion in 5-year expected revenue.
• The company transitioned to U.S. GAAP on January 1, 2026, with prior periods recast for comparability.