MARA Holdings, Inc. Common Stock 2026 Q2 Earnings Call

Thank you, operator. Good afternoon, everyone. Welcome to MARA's second quarter fiscal year 2026 earnings call. Thanks so much for joining us today. With me on today's call are our Chairman and Chief Executive Officer, Fred Thiel, and our Chief Financial Officer, Salman Khan. Today's call includes forward-looking statements, including those about our growth plans, liquidity, and financial performance. These involve risks and uncertainties. Actual results may differ materially. We disclaim any obligation to update these statements except as required by law. For more details, see the risk factors section of our latest 10-K and other SEC filings. We will also reference non-GAAP financial measures, like adjusted EBITDA, which we believe are important indicators of MARA's operating performance because they exclude certain items that we do not believe directly reflect our core operations. Please see our earnings release for reconciliations to the most comparable GAAP measures.

We hope you've had the chance to read our shareholder letter and look forward to your feedback. We will begin with some prepared remarks from Fred and Salman. After their comments, we will open the call to Q&A. I am going to turn the call over to Fred to get things started.

Fred? Thank you, Rob. Good afternoon, everybody.

Thank you for joining us. For much of the past two years, the AI conversation has focused on models, chips, and capital. Underneath all of that is a more basic requirement: power. That is becoming the central infrastructure challenge of the AI era. The market has no shortage of ambition or investment. What it lacks is enough energized, permitted capacity in the right places, available on a timeline customers can use. The question is no longer who can fund the next wave of compute, it is who has the power. That question goes directly to MARA's strengths. We did not arrive at this opportunity by chasing a new trend. We arrived here after more than a decade of solving the same operating problem at global scale: securing power, deploying compute, and running infrastructure efficiently around the clock.

Through Bitcoin mining, we built one of the world's largest distributed compute platforms, spanning 19 data centers across four continents. Along the way, we accumulated strategic land and power assets, deep technical expertise, and a disciplined framework for deciding where each megawatt can create the most value. Today, MARA is applying that foundation more broadly. We own, develop, and operate digital infrastructure across power, land, and compute. Depending on the opportunity, we can convert electricity into higher value compute ourselves or provide infrastructure to customers who need it. That flexibility matters. Many companies entering this market are still searching for sites, power, and operating capabilities we have spent years assembling. Our move into AI infrastructure is therefore not a break from MARA's history. It is the next use of the platform we created. The second quarter marks another important step in that evolution.

We advanced the Long Ridge transaction towards closing. After quarter end, we announced that we acquired the rights to a strategically located power site in Matagorda County, Texas, with the potential to support approximately two gigawatts of future capacity upon ERCOT and interconnection approval. On completion of the pending transactions and required approvals, we expect our power portfolio to reach approximately 4.8 gigawatts, which would more than double our current capacity. We believe that would establish one of the largest powered land portfolios in the industry and create a significant platform for long-term shareholder value. As the opportunity becomes clearer, so has our focus. MARA operates one integrated digital infrastructure platform built around power, land, and compute. Digital infrastructure is our primary growth focus. That is where we are developing campuses and pursuing long-term customer relationships at scale.

Exaion and our technology initiatives add targeted capabilities around that core. They help us address specialized customer needs, improve the utilization of our infrastructure, and extend the value of the assets we own. We manage all of these capabilities as one platform. We allocate capital across them using the same filters: expected returns, customer demand, execution risk, and contribution to long-term shareholder value. Let me spend a few minutes on digital infrastructure, our primary growth focus. The demand picture is straightforward. AI infrastructure investment is accelerating, while the supply of power-ready sites is not keeping up. Industry estimates suggest that the four largest hyperscalers alone could invest approximately $725 billion in AI infrastructure during 2026, and that annual capital spending could exceed $1 trillion by 2027. The power requirement is rising just as quickly.

U.S. data center electricity demand is expected to grow from about 31 gigawatts in 2025 to 41 gigawatts in 2026 and 66 gigawatts in 2027. New generation and transmission are not coming online at the same pace. That imbalance is increasing the value of infrastructure that's already energized or can be delivered with greater certainty. Our strategy is designed for that environment. Own scarce powered assets and create as much long-term value from them as possible. The Matagorda County site is expected to add approximately two gigawatts in one of the country's largest power markets. Just as important, it's expected to provide enough wholly owned capacity to support our transition away from hosted mining as existing agreements expire. That should increase our operational control, improve unit economics, and give us greater flexibility in allocating capital. The pending Long Ridge acquisition is equally important.

We believe it will transform our existing Hannibal campus by adding adjacent land while contributing positive EBITDA at closing. With more than 70% of Long Ridge's power output contracted under long-term agreements, we expect the transaction to enhance earnings while significantly expanding our AI infrastructure opportunity. Together, these transactions reflect our infrastructure investment model. We acquire scarce powered assets, enhance their strategic value, develop high-quality digital infrastructure, and secure long-term customers. As those assets are developed, they can become durable cash flow generators that remain in our portfolio or can be monetized, allowing us to recycle capital into future opportunities. Speed, certainty, and reliability are principles that define how we invest, how we build, and how we aim to serve customers. Speed matters because customers cannot wait years for power.

Our portfolio of energized sites can support earlier in-service dates than many competing developments, giving customers access to capacity when they need it. Certainty matters because infrastructure must be delivered on time, on budget, and to specification. We believe our development strategy, our relationships with utilities and equipment providers, and our partnership with Starwood will give customers greater confidence in execution. The Starwood partnership also gives us the ability to scale with proportional capital support. Reliability matters because mission-critical AI workloads require experienced operators. MARA brings years of experience designing, owning, and operating large-scale compute infrastructure. Starwood adds engineering, procurement, construction, and development capabilities backed by more than 7 gigawatts of delivered infrastructure for many of the world's leading hyperscalers and frontier AI companies. Together, we offer a combination of operating experience, development expertise, and capital discipline that we believe few competitors can match. Commercial momentum continues to build.

Our goal is a diversified customer base across hyperscalers, AI-native cloud providers, silicon vendors, and enterprises with the right balance of credit quality, returns, and long-term portfolio value. Working alongside Starwood, we are progressing lease discussions across multiple sites, and we remain confident in our ability to sign at least 2 leases before year-end. The objective is not merely to sign tenants. It's to establish durable customer relationships that maximize the value of our infrastructure over decades. Within that integrated platform, Exaion gives us a targeted capability in sovereign AI infrastructure. The customer need is becoming clearer as AI moves from experimentation into day-to-day operations. Once AI becomes mission-critical, enterprises care much more than raw compute. They also care about where their data sits, which rules govern the infrastructure, how resilient the service is, and how much control they retain. That is the market Exaion was built to serve.

As a European company, Exaion can provide private cloud infrastructure governed under a European jurisdiction. For enterprises and public sector organizations operating within the EU regulatory framework, that is a meaningful advantage. Customers can deploy advanced AI workloads while keeping control of their infrastructure, data, and operations. For critical infrastructure, regulated industries, and government-adjacent services, that level of sovereignty is moving from a preference to a requirement. The addressable market is also much larger than new AI applications alone. Roughly 80% of enterprise data still sits outside the public cloud. As organizations modernize that data and infrastructure for AI, they will need providers that can meet demanding standards for security, compliance, and operational resilience. Exaion already has credibility in those environments. It operates critical infrastructure supporting EDF's nuclear reactor operations, where reliability is simply non-negotiable.

For those who are not aware, EDF is one of the largest operators of nuclear power in the world. Its selection for the EON consortium, an EU-backed initiative targeting approximately 3 gigawatts of AI-ready data center capacity, provides further validation. We are also advancing opportunities outside Europe, which supports our view that sovereign AI infrastructure is becoming a global requirement, not just a regional trend. Our technology initiatives are another targeted capability within our digital infrastructure platform. It takes operating knowledge developed inside MARA and turns it into technology that can improve our assets and serve outside customers. Running a large distributed compute platform has taught us a great deal about power management, infrastructure optimization, and digital asset management. Some of the tools we built for ourselves now have clear applications beyond our own fleet. Vertebra AI is one example.