PowerCompute's 3Q 2026 Earnings Call - POWERCOMPUTE INC

Explicit Guidance:

• Hash Rate & Production: New S21++ miners (600 units) deployed mid-December 2026 expected to add 80–85 petahash/second (PH/s), increasing total hash rate by ~10% to approximately 880 PH/s. Under steady network difficulty and Bitcoin price, this yield equates to ~10% higher Bitcoin production volume in the period following deployment.
• Financial Costs: Annual interest expense on remaining secured debt projected at approximately $138,000.
• Pricing/Costs: Average cost to mine Bitcoin estimated at $35,000 per coin (against a referenced average revenue of $71,000).

Business-Segment Outlook:

• AI/HPC: Current GPU program is in an "early stage" with utilization and demand exceeding expectations. Management aims to build out proprietary HPC capacity using owned power when technology, customer availability, and economics justify investment.
• Power Allocation: Prioritization of 3.5 megawatts (MW) currently unenergized in Mississippi for immediate revenue generation; subsequent capital allocation decisions regarding further power usage (Bitcoin vs. HPC) remain "open in the air" pending completion of the current miner refresh.
• Operational Efficiency: Replacing older S19 fleet with S21++ miners to improve hash rate efficiency on existing power; curtailment benefits expected to decline in Q4 2026, potentially slightly increasing average cost per kWh.

Market and Competitive Outlook:

• Productivity: Hash rate degradation from older fleet (771 PH/s to 718 PH/s June-Sept 2026) has been reversed via hardware refresh (reaching 800 PH/s Oct 31, 2026).
• Competitive Advantage: Strategic positioning to leverage low blended net energy costs ($0.024/kWh) and high mining margins (>50%) in a volatile pricing environment.

Macro / Industry Outlook:

• Regulatory/Utility Costs: New Tennessee Valley Authority (TVA) data center rates (effective Oct 1, 2026) impose capacity commitment charges (~$1.5M/MW above first 5 MW); company secured 11 MW capacity before this rate took effect, avoiding ~$9M in charges that would have applied to new entrants.
• Bitcoin Volatility: Management acknowledges Bitcoin price as a primary driver of revenue variance; no specific price target given, but cost basis ($35k) remains stable regardless of price fluctuations.
• Interest Rates/Debt: Secured debt reduced 94% since June 2026; remaining note maturity extended to December 30, 2027.

Strategic Initiatives:

• Hardware Refresh: Acquisition of 600 S21++ miners (paid ~$1M cash) deployed mid-December 2026 in Columbus, Mississippi, replacing ~600 older units.
• Power Expansion: Increased contracted power demand in Mississippi from 8.5 MW to 11 MW without incurring new capacity commitment charges.
• Capital Allocation: Net proceeds from $1.5M share sales (approx. 2.5 million shares sold) utilized for new miners and working capital.

Risks and Headwinds to Outlook:

• Going Concern: Explicit disclosure of risks regarding ability to retain NASDAQ listing, liquidity, obtaining additional financing, and refinancing the remaining $1.25M secured note.
• Operational Risks: Volatility of Bitcoin prices, ability to secure customers/capital for HPC conversion, maintaining securities listing, and maintaining expected hash rate.
• External Factors: Potential increase in energy costs (curtailment benefits fading), Bitcoin price depreciation affecting cash flow, and inability to refinance the remaining secured note on acceptable terms.

Management Tone on the Future:

• Confidence: Optimistic regarding operational leverage, citing 36% YoY Bitcoin production increase and >50% mining margins despite lower Bitcoin prices.
• Cautious: Describes HPC business as "early stage" with "no operating history"; capital allocation for future growth remains undetermined ("still kind of open in the air").
• Strategic Focus: Emphasis on "earning the best return we can on every megawatt," prioritizing debt reduction and efficiency over aggressive expansion at this time.

Miscellaneous:

• Forward-Looking Statement Warnings: Disclaimer cites risks regarding going concern, SEC filing reconciliation for non-GAAP measures, and lack of operating history in AI infrastructure.
• Subsequent Updates: As of Oct 31, 2026, holdings increased to 65.7 Bitcoin (approx. $5.1M value); no forward guidance provided for FY2027 revenue or earnings.