APLD - Earnings call transcript Q4 2022 | Applied Digital Corporation

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Operator

Good afternoon. And welcome to Applied Blockchain's Fiscal Fourth Quarter and Full Year Ended May 31, 2022 Conference Call. My name is Andria, and I'll be your operator today.

Before this call Applied Blockchain issued its financial results for their fiscal fourth quarter and full year ended May 31, 2022, in a press release. A copy of which will be furnished in a report on Form 8-K filed with the SEC, and will be available in the Investor Relations section of the company's website.

call CFO, Blockchain's David today's Wes and on and Cummins; Rench. us are Chairman Applied CEO, Joining

Following their remarks, questions. we will open the call for

we Grampp, from brief Grampp begin, will Before a make Gateway introductory proceed. please Group Mr. statement. Jeff

Jeff Grampp

Thank you. Good and everyone morning welcome.

formal law begins need we number uncertainties. risks and statements involve their that considered forward-looking to may and making a today Before be everyone statements some remarks, management remind we're under securities of

many of a and a factors As from we number which the control, that caution events in statements. forward-looking materially results are are there which could result, you differ those actual our described beyond of cause to

made assumptions see Commission. Exchange the disclaim For that more our reflect Securities any and in We and the to undertaking events are obligation or to law. our occur required filings made, forward-looking the release statements relating after the uncertainties, update date by with disclosures except circumstances statements as statements, forward-looking please detailed and earnings risks, or public to forward-looking a

uncertainties detailed IPO under financial We filings discuss the carefully other tables read reconciliation to our well disclosures will measures our and to as also you these you encourage of the limited variable the not metrics and disclosures Securities applicable uncertainties consider metrics. caption our you and factors earnings prospectus. in circumstances, as Commission identified and our Exchange GAAP for risks in to and descriptions with risk released and business, as refer our to We including but non-GAAP

website. remind a the @sec.gov. be recorded by Blockchain I Exchange made call is will Blockchain’s visiting website being SEC of investor for everyone available Applied filings this and free get may via Applied section in Securities that You would relations link like to and the Commission

like Cummins. CEO, turn Applied I Chairman please to Now apply Sir, over the Wes Blockchain’s call to proceed. would and

Wes Cummins

XXXX full fourth conference our And good for joining for us and you Jeff. quarter Thanks, Thank year fiscal call. afternoon, everyone.

While pleased we've progress been busy we I'm today. company, are and our share you to a young with

fourth revenue to as X.X highlight our $X to million want already reported million results $X.X quarter above our we was of First, million. range which million $X.X from I increased million fiscal X.X initial our guidance to of of

data Jamestown, overall quite XX over of our well North in late XXX center online had first Our and located the has control. things performed under energized capacity facility June. megawatt Dakota for The in nameplate January in megawatts

outage substation in mid-July, equipment the However, an there of about the at facility failure reported as a in we powering unexpected XX%. partial was resulting

power they mid-August. back by restore the to capacity great diligently September and responding full online capacity provider full early a getting and partner in expected us We have for been by

damaged are As of experience that that we they XXX a the have in Anecdotally, remains seen fully the career. operational was that and decades capacity. Jamestown reminder, hosting megawatts of issue provider handful times power entire of their facility only capable a employees from heard have and not this of

is type a this rare majeure So force event. truly

additional facilities. progress also co-hosting expected build of the and expanding We through our out make energization continue capabilities to

the City, have buildings plant is a been with with on XXX and second Garden late site. majority capacity facility electrical of Our farm the constructed co- began in Construction the located with wind first megawatts. already of equipment April in required Texas

calendar upside will currently some be we so there ahead case quarter City are we schedule XXXX. energizing the is start of begin fourth expectation base Our Garden But date. of in to the may

than a at located different Our Jamestown third is continuing facility Dakota in North site also existing facility which to move our is ahead.

design site. on agreement the and a we We raw the for to late pre- construction. stages letter-of-intent the Also have purchase land and the entered utility help in a with XX, executed August of are into

XXXX begin and of We expect early half calendar calendar the first in groundbreaking to energization occur of third to quarter in ‘XX. the

last expect weeks little this a I are online Jamestown. able Jamestown reference of earlier to were we where significantly to time than facility a more did this us with our facility For experienced ahead be with slightly a would earlier bring With year. we few start and we

Now this growth would customer possible strong not demand from quality a be base. without

some a a So industry most partner initiated on an power strategy. co-hosting best invested material remind I early the us cryptocurrency only aim These names from want business. component basis. with to We take provided and from everyone get have moment our contracted expertise which stages in company we of go, to not recognized for groups this to our of and multiyear in have resources our the with the as of that

megawatts In contracted XX of XXX committed a revenue second Jamestown out our facility, to risk providing have us forward. partners have stream and fact, at with entire megawatts thereby the looking low our site our

have avoids through us to capacity the speculative or which on capacity either a build is by hosting ground contract profile demand committed fully materialize. committed risk and will strategy basis, to needing Currently, Our breaking plant substantially option. reduces the on is customers all datacenters before facilities,

have need to you our names, thesis miners co-hosting with miners Bitcoin that in significant for In many with we definitively with our that for publicly the about talked also strong Bitcoin services. a agreement addition have July. we Marathon our Digital announced traded public In working of jumped past, will the Holdings into we

our XXX proud for us XXX contract five megawatts with are option date, have a us hosting a deal hosting leading to Specific we signed of their bitcoin expand miner capacity an and for megawatts. year the that Marathon to selected needs. contract with So to Marathon

portion a will host currently North remainder in hosted to under development in facility the expect Dakota. be and City discussed third of I Garden previously facility our at their contract We

to before of remarks. Rench, walk XXX David energizing megawatt call miners XXXX. to closing our the begin of in the expect the We our through middle the David? all for energized you calendar Marathon’s financials I'll to fourth now to calendar quarter miners associated contract with be XXXX. by over turn CFO, And providing

David Rench

afternoon, Wes. you, And everyone. Thank good

my year we period, I like begin Revenues would last will to operations providing did not to that be call note comparison. comparable I we quarter’s since ago remarks, Before any in year-over-year not in have similar range our from the mentioned above guidance which million, million, to already million of increased initial $X.X were our $X.X quarter $X.X to has of $X is Wes fiscal million. earlier, fourth which was the $X.X

payments, purchase was electricity were Dakota. our the $X.X primarily of associated continuing net $X.X million. continue include administrative working or of Adjusted during for costs fourth of and diluted of of hosting based of loss $X.X operations North $X $X.XX net from the in fiscal revenue. of weighted Our attributable and entirely quarter, costs equipment revenue a count generation fiscal directly revenue recorded employees diluted costs. diluted personnel operating the per $X.XX million. costs was to which a count average all deferred loss hosting Other loss diluted the is This fully for quarter facility share million gain Total revenues $X.X million. power $X.X operations service with Net quarter fourth a measure fourth of was based almost subsequent attributable Jamestown. and had than Cost million. was million, guidance excludes ramp on facility miners. fiscal Cost of $X.X quarter per quarter fourth are to as in were share million. general a fiscal to fourth first the gain in weighted as and million Jamestown, and to of deposits expenses loss quarter were non on $XX.X during better Adjusted the hosting for share our fourth consists million, In for or Hosting upfront our GAAP revenue resale mining and fully a at for facility. quarter $X.X and quarter the we attributable operations which average share the the selling, on a depreciation fiscal million hosting $XX.X discontinued EBITDA for for which to the expense we revenues from or was

equivalents million in $X.X in cash ended and XXXX Lastly, our the quarter fourth balance sheet, million with on we and $XX.X debt.

we stock our stock ended outstanding the Subsequent also with a million shares associated of a with with quarter our XX.X IPO converted fiscal in April common announced of we preferred outstanding. reminder, SparkPool share agreement. fully with associated obligation year as not We to concurrent service And approximately the reduction XXXX. count its leasing our to cryptocurrency past the fulfilling end operations and all

our As was XX-K towards of million. outstanding in a approximately result, share our as you will $XX.X the indicated August count notice end

provide we XX announced be for with facility to existing facility the remainder due debt a that the used that fund X.X% earlier that additional important rate Dakota proceeds we Additionally, our we to months to $XX interest to thing, will continued economic the our for million and note the agreed the buildup. datacenter from North incentives credit liquidity It's based repay based in to reverting before first that to X.X% expect term. to be August of state

XXXX. Now turning August for XX, fiscal quarter first ending guidance to our

guidance completes $X.X $X.X at generate revenue million at Note which loss at expect was the supplied or my midpoint. power in summary. to million million of the to of mid-point, in We million $X.X range expect $X.X to million $X.X we an or EBITDA impacted mid-August. are Jamestown the financial million the our That figures limited the alleviated negatively datacenter, $X by adjusted

Wes for closing the turn to Now I'll call remarks. over

Wes Cummins

Blockchain, remarks by our headlines mining update growing I for number break non-cryptocurrency growth from continues the continue providing David. our before position to Consistent partnering we We're miners customers. about you, to essentially to continuing rate Thank the with to we potential to prepared a around interest on cash with priced reasonably robust related we operators. have to can an we our putting contracted for active where business build original thesis demand our despite in enviable bottleneck robust Accordingly, out be infrastructure volatility. access the number us services and even Bitcoin power majority datacenters of cryptocurrency with one in also close want discussions and the have continue of see the Applied of with revenue ground. an

future. last potentially As first distant types in We to image our including too other contract on or forward with processing, intelligence, to learning look customers, we these networks discussed the future. not in applications we machine the expect hopefully call, of host for other graphics hardware reporting artificial in rendering, our blockchain

strategy the cover our many context I capital last is for of of in especially topic growth want these cryptocurrency. associated funding all companies opportunities, with markets Now the tight for to

this prepayment excellent not business, and XX first model of are our and financing and the requiring X.X of providing lower build options us of our have in venture has with continue company a of traditional use in then in lower is our on facilities mentioned states infrastructure the CapEx prepayment more gigawatts and XX% to that can that with differentiated our assets on the months, sites first existing we debt this we turn along with a secured with contracts. this amortize flow to prepayment million joint facility industry more months rate the business our the operations, positive XX X.X% have over for We recent by cash back These with debt risk with. hosting Bitmain for over as datacenters. generation last We for build our comfortable mind to Also, unheard options puts Case where almost to in. of favorable our and customers modest call required Bitmain along position are operational. to to contribution. in in our when keep rate fall an interest a us is that for of keeping lenders future months will to to capital We Something that balance our up cash cash the since that equity size, added attribute our $XX we're significant possessing non-dilutive to is an amounts pay new the of plans. a locating us growth cost interest cover in point David our credit majority we position

to your take We are questions. now happy Operator?

Operator

come And first from Instructions] Chris of Brendler question A. [Operator will D. Davidson. our -

Chris Brendler

gross that solid Hi, stand thanks, the just margin Congrats on we power just environment get where wonder is or we as good prices normal more as I the go sort expect give impacting in results. because improve And forward a afternoon. was and on should outlook of we if today. Wes, obviously normal, in it outage power, you the to well. gross probably can color margins

to on is an margin So apples-to-apples what's just the normalized basis gross it outlook ‘XX? going

Wes Cummins

drag But over before on it had in up a quarters, minimums few going on really Yes. August a more we power it should over that I the gross talked we what outage get definitely see the really some we our but over labor, it's can, see about to our we're to the David down this. correct the sure and on and impact before. much spend gross have to But weren't so future. rate. going a didn't we Thanks, had for. we this get high contracts in turn we'll I'm to where making our were much we hard power you quarter you'll get David, to in if see ending us as power kind the margin labor and little the and in provider, looking that a those hit that sign we to that. It'll pressure comments. was is quality utility doesn't side, direct on turn that quarter, But or us make for power can we to some the our to as about a we've not sites we months David somewhat lot Chris. And as business, the just electricity But meticulous May me if the in August to close on truly I'm turn where it as we in margin. lot about as this the so so but the can business. bit quarter, on us to shrink in current pay get using But of contracts let give talk seen But rates that, power it recall, ramping really even we still inflation. time that We of close be very you the to we we've as fixed really fixed

David Rench

in contracts. our escalators have We

the margin, XX% margin that a is help So forward. reasonable expectation protect will of kind I think going

Chris Brendler

your it follow great. has power It's of answers this been for already says just contracted. helpful, very both portion the That's up on a meaningful capacity Marathon,

including kind given to heard get is this agreement reluctant they morning a think Argo I we've from pricing that of into today. where were others, power

would So it do you that what And up? imagine how can of is -- as mean is much over XX%? that? portion, you contract I what talk about then percent on How power meaningful finish kind pricing a I you expect

Wes Cummins

where should deal, an NDA that about Sure. that of Garden for the announce Jamestown on to month. year-over-year. so the on what and talk lot of facilities. who's we we're a going But lot moving we prices there about locked a in our change power talk We'll We at weeks, more good under sheet asset is owner. that North few I then Dakota, a the through next in September, was our gives that. process like City changes that going able lot on before. for mean, we've doesn't looking facility In we're more are. we're that us. -- we sign in we're largely doing when Dakota a we're in into -- have Texas, price. it's of for We under we're adjuster right? five out more But a we don't exactly in $X.XX fixed ESA, what we're been that that, sign what's term a obviously And our that. most Texas, on talk have partner for of site has in our on in the generally, there, kind the North There's new hedged say month with month-to-month, year hopefully been where contract it contract pretty be kind depending power us slight contract. future. clearly to is that it really And some variability But predictability in Where But

rates extraordinarily go for us. that. to have through of well. terms approval flow forth we So signed all the our even the the the to But we to as the pricing in for attractive for we set current power then will have we'll, ESA. are And actually And in before environment PSC customers front

Chris Brendler

love one that in locked front One real and up just quick, early I just spread. – part this great. getting things late just collect a That's now. of model turn to It's get last on. September August right back

So are we still September? early on track for

Wes Cummins

ahead Oh, We turned week. the We we turned schedule. the on reenergized of sorry. catch this and facility I North last remarks in didn't Dakota. in on

Operator

of comes Our Securities. Pipes Riley next question Lucas from B.

Lucas Pipes

is few work. the in of much, In of something my market operator order you megawatts, everyone. of How understand last your turn weeks. you you hundreds very very wanted might applied, term. first you you of And and that opportunity would you announcement remarks. mining. we but good to terrific this afternoon, for That's initially? mentioned the huge a I non-Bitcoin to magnitude at, on term up longer XXs is Congrats prepared this short this of be I the big how up big frame much. size Thank opportunities the really question looking megawatts? Wes, in Thank in mentioned the

Wes Cummins

question. the Sure. Thanks for

our robust build. we So out a doing and it have new facility, buildings an it we're opportunities ranges inside been from multiple now on either as discussions we've or kind of infrastructure, with looking stands at alpha little anywhere parties, to when kind in of test non-crypto more at building a the

the uninterruptible more the go came similar Bitcoin in how but gotten out that one fact one to be really change Bitmain of kind that extremely applications, going I'm to actually potential of that's customer we're from of focused feeling have we're one one us anywhere tenet we us branching today to megawatts a for reflect lot really announced earlier Bitcoin traditional because Jamestown, power give but an that like we're it's on also other our into getting applications. can really asked of large talking additional we're In we've to would obviously actually us the anchor but name providers into reasons ones about us this the just for, to also to for And in is of HPC for mining that. to that XX maybe and the good that power springboard interest still fact, the laser on of where that point

Lucas Pipes

On question, on secured repeatable and second to with on that for financing Thank XX, is scalable facility source In you Dakota your Thank touch my that. out how the the is you, wanted color I Wes. North $XX on environment. from financing credit here August and bank, million you the based of

Wes Cummins

us. Sure. a But over really team network that I'll comments. it there on a the turn few I'll that. great to for David done job Then make has developing

really in some well we've We've attractive kind to building. is place initially the some as rate. at we're programs, community tapped what an few banks that for the North financing went Texas in But So of Dakota. next we'll weeks have into in areas in specifically

but standard are they've more done model. like a sides. of So to a banks. deal customers for both go at with a yet, it on next nowhere is more near money thing contracts scale to doing getting estate them, when we're looks that they of us The real we center to think much helpful and the that banks great come I these online, they we're level we're comfortable look job getting see trying really that's because the and see contracts have these, with they what banks kind just doing is we're And to

kind and turn kind So on around crypto the I'll for to the even that. it's colocation David over it though wrap real mind of to estate of it add the but just to easy, is opportunity, their anything them

David Rench

estate standard for Yes. as very what and business said, item getting a Wes is We model the repeatable. us. good reiterating a definitely It's appraisal, real model

working it's And well. very so

Lucas Pipes

out loan reasonable do And target that a capacity Is to follow Thank build capital Is When the model? quick is and be good for you. what the a business. I that? my of value would about think you ratio up. needs for XX%, XX% it the think there

Wes Cummins

XX%. But I And really this the XX% to is to to goal, to think that I matures, to I value. near as then term loan get up. move able we'll be get think goal think Lucas, the is to

now So Jamestown the bit closer a for a loan. new little to range XX% we're with

So we'd that to up. like keep marching

Operator

comes from Todaro Company. Needham question John Next of and

John Todaro

ahead of Thanks. Congrats here quarter. outage. just schedule on getting guys with the Two questions the first, on

So September were initially, like schedule expecting that. you we're on and it now looks ahead guys of

how weeks? long was five downtime, four the was So or

Wes Cummins

It it to close months. was Let's see. two

John Todaro

Close to –

Wes Cummins

so then was thought, when come was a we would that that when the when a it goes days. that in for lot and of there as us we come happened, back later was of back really It online. just And few could going certain we testing June. come on that. timeline kind weren't There on done had thought is happen it online in we And when AK a clarity back online to

John Todaro

it. got Okay,

the for we that an expansion there Okay, color those, color if move from on there model opportunity future which, how Whether margin towards just Bitcoin to when is anything guys those here. mining? do attractive gross think about And this guess, additional I more new but like as any on would set, helpful opportunities that economics based then the of you sounds Bitcoin the there's set change away miners? that’s compares

Wes Cummins

Oh, do talking about you you're HPC. general mean, The HPC? more the

John Todaro

Yes. Exactly.

Wes Cummins

gross more can versus margin, of higher guess, that I other margin. But sites at it you call base. would these I I I gross datacenter what you traditional this where are stable think, especially some look the puts customer should more guess, Yes, expect you and a maybe get a are big takes traditional players those higher expect

very doing be Bitcoin modify have so existing that some it locations. with new facilities the colocation side our you crypto. of other facilities latency this to are But is on the be really would on The Xx I do to or definitely from away or that, just to taken probably can these performance we're mean, CaPex John, though taking that for goal applications co-located what the these the the real on on away economics build expand is or high compute attractive. that either side for mining low

are ultra-low great we but video still have streaming, So be built HPC power locations, that just really can for all to places to really well, cost ultra-low that not latency. Bitcoin prices, the and think be just moving as like of for non, they'll it the kind for we those you want use mining, what used things high speed connections,

Operator

Next question Northland comes of Capital Grondahl from Market. Mike

Mike McHugh

Mike -- tax our for this the May is Hi, benefits that some credit. John there you, Grondahl. around passed do first any in. be there for financing you Is be sign I to see suppose McHugh. Thanks Mike like taking on for questions. and bill, just

Wes Cummins

which sorry, I'm specifically. bill

Mike McHugh

of Just some around energy. the green

enacted I think [Multiple inflation the Speakers]

Wes Cummins

understand. I

seek So lot get more the of that to, don't initially kind going the are we of I to renewable on people going likely with be there's now direct think that's not expect partner don't online going Mostly right I capacity benefit. partners, the to for beneficiaries to to of that. be to think we a that. the but Which any leads coming us

Mike McHugh

the next like, then And over and just versus headcount that headcount sitting for where you then internal it that's what today maybe to got last X-XX months? in see Got quarter.

David Rench

into we're I operation. we'll that continue right now. the to And employees centers as around right add Yes, think XX we grow

towards quarter probably next be or pushing up so. we'll So XXX

Wes Cummins

on these you should sites. and Yes, think

left part employees out, a for site, think we and XX time most XX we're, a to the I the a few add site going right corporate now. built open between So you're somewhere roughly. perspective, have new on But every open positions we from

Mike McHugh

spaces maybe one market notes it, in? quick locked a a anything up that hiring get little that just Got on follow or is better

Wes Cummins

you can repeat sorry, I'm that?

Mike McHugh

Just the – out those hiring market built for getting that

Wes Cummins

so success localized, it's to recently a we've new some going very much how half it's definitely we're an Jamestown had so far down and slow it town sites successful. in goes, about from Jamestown but in Garden more a site, but that success from City lot was Yes, the of hour a there Jamestown start people some the we've see but a been new so then and move is and to smaller there. It had very away we'll

I start a think on good City. really Garden we've got

manager have that in who the that really Jamestown We there employee the at was lead excelled place actually an there.

locations for department and has workforce together done getting us. put a So job going small HR good good a these our into

Operator

Next from question Capital. Lake Rob of comes Street Brown

Rob Brown

for question. Good my taking afternoon. Thanks

On it's the Garden in facility, transformers equipment place? said Are place. I you any much that most of getting the to chain City have think had or supply that pretty you completed? and in on is time facility you just dependencies get there the And this

Wes Cummins

site work line already. gotten that, that little update, that how buildings to for We, in the on switch we think together orders easier that'll Dakota one. chain have standing got do but the out really good about case have come we many. there and it pieces exactly placed call feeling I part us, new supply there'll on some a I place this there, North us is over as still But for I But multiple those we're should without actually have supply as for We've for Dakota chain really out And there. for six us in finish for I know getting we transformers I be well. well. North think the in don't months be well ago, the gear. an the basically held

Rob Brown

of business sort your to And contracts? think in pipeline. you terms are you fourth at a Okay, when new on facilities? about great. And Where expect of adding then and fifth

Wes Cummins

would type contract we sign our next others, sites building actually, end kind two plus get with we the site, we of and And it's the sites building matter have but still cash XXX the megawatt pipeline negotiating we we from build now. contracts And the XX think our fairly hands that, year. Yes, actually, sign demand. sites then I or one we're before staging out that evaluate, evaluating. need something a of out those to for could we online just But evaluated, so that see soon expect pretty have large and out, the start to we we're a so that couple of flow in now, that we've our development are like can to And the those those. full as right continue and definitely we're XX those that we honestly, as have I

Operator

Next question of comes from George Craig-Hallum Capital Group. Sutton

George Sutton

just on that you, up question. Thank Wes, follow last to

the side, So side, demand. infrastructure the robust you mentioned supply address you

this you most closely folks follow would that literally build come? anymore. as of Is it, demand isn't will you see side that if think just there Can scenario necessarily who walk through the I don't could demand it? they it assume equation the a you robust that

Wes Cummins

be don't here to I that plugged are know. the either think because But of in, limit equipment that I I of six dynamics don't amount demand, of need are to that plugged be already next the mining Yes interesting, over question. servers I here think or lot to are months significant It's that know the contracts that there's annual to machines need delivered it. already, a in. on great there's set they're still a a be

really is big So you the setup, which demand that driver. have

lot huge from would I guess cost more current out probably buy I As pricing further you really of have a of equipment. the breakeven Bitcoin, a is, you equipment, go and of on but to new kind appetite people don't the and the electricity go depends on and where pricing say with

So delivered to there's see months now drop you down, so. plugged a six or still in. lot from and that that being But maybe is needs be to might start

unless be enough a huge I will we XX out But And of can't so right pricing out see make fulfill. don't changes. a or now, still that demand see we what to that six now amount demand we guess like that right months want to build

George Sutton

Perfect really definition Dakota, facility this Is on give the and relatively meeting an us and the between all agreement? the PSE second it of effectively and that think, in in definitive Can you LOI just place. just clarity some North is approval? having a I that's

Wes Cummins

definitive couple the all approval LOI then negotiated. around, it's go out pretty just And work plate those there, point, facility said, to PSC we know be we are where the of that Like a might ahead this in and largely of definitive North and next not this up. terms left. Dakota, agreement, up we've you lot right then to the what were is few but hopefully point, before last it's well puts to Yes, want takes the navigate But we'll at able I to the weeks the get fire a pieces and we're months, on of in but there's on At front the of sets two a the get great state we experience and how in. had year, pricing.

I So that feel good site. really about

George Sutton

Marathon, you question, if Last megawatt you us exists for give facility an option take? detail terms if any XX would Great. timeframe that that option place that The had for would the and can could. they today of in likely I in be

Wes Cummins

online XXX they site in obviously I to of it Yes, more and they getting so And and and we open from and we get ended in other an provider big, North us execute doing well. open ended as got the have option Dakota. but getting timeliness contract our for so for we the is on them operate another they a think have a like if online, fulfill have we're them and big them already we is interest if there

with be on there'll pleased hope I would and think trigger would I the they the additional pull that megawatts.

Operator

Dede Kevin from of HC comes Wainwright. question Next

Kevin Dede

way But for and quantify megawatt Maybe built framework? your you you for to the sort of offer per Hi, be to can some a this. $X time cost? or Wes, of there thanks in could is quantification sort taking -- infrastructure

Wes Cummins

time. Hey, this you. talked long we've The, about. publicly hear a to from about absolutely. Good before been Kevin, yes, Hey,

think build. $XXX,XXX should per You to megawatt cost about

Kevin Dede

And then HPC. mentioned you the to Xx for that

Wes Cummins

Yes, more we're expensive. just getting at into it's But We're designs looking definitely for that. that.

AMD by very efficient, computing get, EBITDA doing that megawatt lot because power that of it's significantly GPUs a revenue and or of more CPUs running, of too, a but and do are they're still because a You the lot are power, processing. you're per way, Nvidia consume the higher, lot think equipment, running

Kevin Dede

considered Understood. City? immersion you Garden Have in

Wes Cummins

I containers first we going immersion we're we're three that weeks, two in that So but in are testing getting think so weeks or to we'll our that somewhere neighborhood, test. have the online, next,

or are our the built, that. something for facilities if So cool we're can, the future, way immersion, modify we or Kevin, into we in that. looking hydro some But great our is could there's facilities

Kevin Dede

then – Okay, and

Wes Cummins

But we definitely are looking at that.

Kevin Dede

Right.

to per sort then dollar of that what in is, your scenario? happens So megawatt infrastructure cost

Wes Cummins

that Yes, XXX,XXX now, high if right probably that's an doing, end I uplift at going what looks the you're think to to that. like. more per of somewhere we megawatt, And and look added middle XX,XXX towards immersion we're into between of what

really from We effective that versus we we haven't charge immersion. cost is Hopefully, a any what found perspective. price a get yet will,

we're but So, constantly looking.

Kevin Dede

partner the $X.XX to target but Garden story, you PPA I outlined to the Are behind the structure And power. your sell have place power meter? Is Given an you back? in in there opportunity being is the once City. new apologize with on for that

Wes Cummins

there. think had I earlier, under Yes, so our question NDA again, a but we're partner I with

talk that's about weeks. that And we the hopefully next so can in when we will and few

Operator

like question I'd our to Cummins. turn Wes call ahead. answer and concludes Please the to back go session. That over

Wes Cummins

It's joining Great. lot the of a want of and of hours who's plus, hard free year want work Thanks. a quarter. just and to of for you our of together work up in thanks say questions. employees. over next to Thanks, this lot everyone for thanks all say and put I but lot for we'll a been us everyone with to call putting to Feel fun, to last anything I the but talk just a thanks to and the all lot follow

Operator

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Applied Digital (APLD) 26 Aug 222022 Q4 Earnings call transcript