PowerCompute — Q3 2026 Earnings Summary

Financial Performance:

• Reported Q3 2026 revenue of $1.9 million, down from $2.2 million in Q3 2025 and $2.1 million in Q2 2026, driven by a 37.5% decrease in the average Bitcoin price mined to approximately $71,400 despite a 35.8% increase in production volume to 23.9 Bitcoin.
• Achieved net income of $0.4 million ($0.20 per share) for Q3 2026, a significant turnaround from a net loss of $4.1 million in Q3 2025, primarily due to a $6.7 million fair value gain on Digital Assets Receivable offset by a $4.4 million loss on a loan derivative.
• Mining margin improved to 50.7% in Q3 2026 from 29.0% in Q2 2026 and 49.0% in Q3 2025, with energy costs to mine one Bitcoin falling to approximately $35,000 from $58,000 in Q3 2025.
• Total operating costs and expenses decreased to approximately $2.8 million in Q3 2026 from $5.7 million in Q3 2025, reflecting a $1.5 million reduction in staff costs and a $1.2 million reduction in depreciation and amortization.
• Core EBITDA was positive at approximately $2.3 million in Q3 2026, compared to Core EBITDA losses of $1.4 million in Q3 2025 and $2.8 million in Q2 2026.
• Total liquidity stood at approximately $6.0 million at September 30, 2026, comprising 63.8 Bitcoin valued at $5.3 million, $0.7 million in cash, and marketable securities.
• Total liabilities reduced significantly to approximately $3.7 million at September 30, 2026, from $21.6 million at June 30, 2026.

Guidance and Future Outlook:

• Anticipates the newly purchased 600 Bitmain Antminer S21++ miners to be in service by mid-December 2026, increasing active hashrate by approximately 80 to 85 PH/s (about 10%).
• Projects that at constant network difficulty and Bitcoin price, the 10% hashrate increase will result in approximately 10% more Bitcoin mined.
• Notes that the previous projection of 964 PH/s active hashrate has been replaced by the current estimate of approximately 880 PH/s, excluding a previously planned 3.5 megawatt expansion in Mississippi.

Business Segments and Product Lines:

• Bitcoin production increased 35.8% year-over-year in Q3 2026, reaching 23.9 Bitcoin.
• Installed approximately 900 Bitmain Antminer S19j XP miners in Oklahoma by September 30, 2026, replacing older units and increasing efficiency by approximately 39% per machine swap.
• Operates a professional-grade GPU at the Oklahoma site with Verified status on the Vast.ai compute marketplace to evaluate high-performance computing (HPC) and AI workloads.
• Secured 11 megawatts of power at the Columbus, Mississippi site under the Tennessee Valley Authority's new data center rate, avoiding a potential $9 million capacity commitment charge by moving to the Columbus Light and Water Large Data Service Rate effective October 1, 2026.
• Specialty finance business continues to provide funding to nonprofit community associations, primarily in Florida.

Market and Competitive Landscape:

• The average value of Bitcoin mined fell 37.5% compared to Q3 2025, impacting revenue despite higher production volumes.
• The company replaced older S19 and S19j Pro units with more efficient S21++ and S19j XP miners to maintain competitiveness without adding power capacity.
• Curtailment and energy sales generated approximately $304,000 in Q3 2026, up from $152,000 in Q3 2025, primarily from summer heat-related curtailment at the Oklahoma site.

Risks and Challenges:

• The press release highlights substantial doubt about the company's ability to continue as a going concern as described in its Q3 2026 Form 10-Q.
• Risks include the ability to maintain Nasdaq listing requirements, the availability and cost of mining equipment, and the ability to energize remaining power capacity on anticipated timelines.
• Potential dilution from equity financing and the ability to repay or refinance remaining indebtedness at maturity are cited as key risks.
• Future performance remains sensitive to changes in Bitcoin prices, network difficulty, total network hash rate, and energy pricing or rate classifications.

Management Commentary and Tone:

• Chairman and CEO Bruce M. Rodgers stated the company now uses Bitcoin as working capital rather than collateral following the repayment of its Bitcoin-backed debt, emphasizing a focus on earning returns on every megawatt of interconnected power.
• CFO Richard Russell noted that revenue decline was due to lower average Bitcoin values rather than lower production, and highlighted that net income was driven by lower operating costs and fair value gains.
• Management expressed confidence in the fleet refresh strategy, noting that replacing older machines with newer ones produces more hashrate on the same power.

Other Key Points:

• Repaid and terminated its Bitcoin-backed credit facility on September 24, 2026, reducing secured debt from approximately $19.4 million to $1.25 million, with no Bitcoin pledged.
• Annual secured interest expense on remaining debt is approximately $138,000, down significantly from previous levels, with the remaining $1.25 million note maturing on December 31, 2027.
• Purchased 600 Bitmain Antminer S21++ miners for approximately $1.0 million in cash in November 2026, paid in full.
• Approximately 39.6 Bitcoin, valued at $3.3 million, were returned to the company upon the repayment of the Arch facility.
• Active hashrate declined to 718 PH/s at September 30, 2026, from 771 PH/s at June 30, 2026, due to miner degradation, but recovered to approximately 800 PH/s by October 31, 2026.
• Held 65.7 Bitcoin valued at approximately $5.1 million as of October 31, 2026, representing approximately $2.00 of Bitcoin per share of common stock outstanding.