QumulusAI, Inc. Common Stock 2026 Q2 Earnings Call

Zachary, please go ahead. Good afternoon, and welcome to QumulusAI's second quarter 2026 earnings call.

I'm Zachary Graeve, Head of Investor Relations, and with me today I have Mike Maniscalco, our Chief Executive Officer, and Scott Krosnowski, our Chief Financial Officer. This being our first earnings call as a public company, I'd like to spend a moment on a few items before we begin. Our earnings release crossed the wire this afternoon, and that release, along with supplemental materials, are posted on our investor relations website at investors.qumulusai.com. This call is being webcast live and a replay will be available on that site. I'd like to remind everyone that certain statements made on this call may constitute forward-looking statements. These statements include those about our strategy, capacity, and deployment plans, customer agreements, and future performance.

Please be advised that these forward-looking statements are covered under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, and that QumulusAI avails itself of the protections of the safe harbor for these statements. Forward-looking statements are based on management's current expectations and assumptions as of today and are subject to risks and uncertainties that could cause actual results to differ materially from those stated or implied. Those risks are described in our Risk Factors section of the registration statement on Form S-1 as amended, file number 333292514, filed with the Securities and Exchange Commission. Those factors may be updated in our subsequent filings, so please read these reports and future filings that QumulusAI will make with the SEC. QumulusAI disclaims any obligation to update or revise any forward-looking statement except as required by law.

Please note that we may refer to non-GAAP measures in today's call. Any non-GAAP measure will be paired with the most directly comparable GAAP measure, and reconciliations are included in today's release. Now with that, I'll turn the call over to Mike.

Thanks, Zachary, and thanks to all of you for joining us. This is our first call as a public company, so I will start the way I did on the Nasdaq stage in July with an expression of gratitude to our customers, employees, shareholders, board members, and partners. A number of them committed to this company well before there was much evidence to go on. We are thankful for that and excited about the future, which is the reason the rest of this call will focus on executing on the opportunity ahead. Let me tell you how I got here, because it explains a lot about what this company is. My background is software. Computer science by training, technology entrepreneur by trade, and much of that has been up the stack.

When I stepped out of the AI Infrastructure business in January of last year, I went back to what I knew. I started building things, leveraging the power of the emerging agentic coding tools, and I watched those tools get very good, very fast. What I experienced changed my mind. If software was going to become this easy to build, then software was not the constraint anymore. Whatever sat underneath it was. What sits underneath the AI tools are the models and the compute to power them. The heavy AI Infrastructure, power, data centers, and GPUs were the enabler of every good thing I was watching happen. Less than eight months after I left the infrastructure space, I came back, and I came back through Atlanta. I was in town visiting Georgia Tech, my alma mater, where I met the QumulusAI team.

QumulusAI's own story runs on a parallel track. Two companies, both founded in 2019. One built data center assets and power. The other built blockchain managed services. In December of 2022, they merged into what is now QumulusAI. In April of last year, we acquired The Cloud Minders, which brought GPU-as-a-service as a foundation. Two halves of an answer put together. Through the early buildup of our Bitcoin business, we also ended up holding power in our own right. We have long-term land leases on two sites, one in Oklahoma and one in Texas, totaling roughly 39 megawatts available today. That is in addition to our existing HPC data center lease footprint. We have 8 megawatts of compute completely sold today, with the final GPU deployments actively in progress. Last week, we announced a co-location agreement in Metro Atlanta, our home market, for up to an initial 3.75 megawatts.

That agreement also carries a right of first offer for up to 7 megawatts of additional capacity, which the provider may pursue at the same site and could bring the Atlanta location to 10.75 total megawatts. Looking back, the guidance we issued in July 14, 2026, contemplated 18 megawatts of HPC capacity by year-end. The 8 we had plus 10 more to develop. Atlanta is the first 3.75 of that 10. If you add the 39 megawatts under lease, that is roughly 57 megawatts in our combined footprint going into 2027. That is real opportunity ahead of us. To the quarter. On July 16, we began trading on the Nasdaq Global Market under the ticker QMLS. We did it as a direct listing.

Our registration statement was declared effective on July 14, and we rang the opening bell at the Nasdaq Global Market site on July 29. On July 17, the day after we began trading, we were approved as an NVIDIA Cloud Partner. Two things in the same week, and both are about access, one to the capital markets, the other to the supply chain that the capital buys from. However, neither one is the goal. They are both tools for the same job, turning signed demand into deployed GPUs. One funds it, the other sources it, and we do that faster than most companies in this market. For our customers, speed is everything. It is also why we have built our model around hyper-speed rather than hyper-scale. This was the quarter our model started proving itself. Our GPU fleet went from 952 to 3,088, a 224% increase from Q1.

It is worth highlighting that most of this was compute we had already sold coming online. Revenue more than doubled year-over-year. Additionally, gross margin expanded to 66% from 55.1%. Scott Krosnowski will talk about that later in today's call. Those three numbers tell one story. AI compute we had already sold came online, and whenever compute comes online, that is when the economics of this business show up. On the commercial side, we signed 21 new direct customer contracts totaling $169.7 million in the second quarter. That brings our total signed contract value to $282.5 million across 40 contracts with a weighted average term of 2.2 years, shorter than what you will see from the largest players, but that is deliberately so. I will come back to why later. Everything we sold this quarter was contracted before the hardware was energized, meaning customers are committing and paying ahead of delivery.

Scott Krosnowski will talk about that more a little later in this call. I also want to say something about that $282.5 million because it is the real number I would watch. It is not revenue. It is signed multi-year demand sitting in front of a company that recognized $6.7 million in the quarter. The distance between those two figures is the entire operating challenge of the business, and it is our job to close it. The only way you close it is by putting compute on the floor at hyper-speed. The customer base has changed too. Direct customer relationships now account for more than 96% of our recurring revenue, up from less than 10% a year ago. We have completed the transition away from dependence on a single marketplace to direct multi-year agreements with customers themselves.

Marketplaces used for what they are generally good at, tailored user experiences and filling short-term gaps between term customers as they roll on and off. Customer contracts are getting bigger. If you look at our recent announcements, the trend is clear. What we are signing now is materially larger than what we signed six months ago. As we secure more power, we expect that trend to continue. Now, I want to take a step back for a minute and talk about why we are built the way we are, because there is a lot of noise in this category. We are not a powered shell developer building sites to lease to the next hyper-scaler. We are not brokering powered land to data center developments, and we are not brokering GPU clusters. We deploy and operate GPU clusters for our customers at scale, and we made a deliberate choice about how.

The traditional way to build AI Infrastructure goes like this, and I think this is important to understand. You do an initial data center design and seek data center development approval for about a year. Then you engineer it, then you finance it. You spend 24 to 36 months in construction. You roll in the GPUs, you spend a few more months commissioning, and 3 to 4 years later, you have delivered a token-generating cluster. Look at the pace that AI is moving, then look at NVIDIA's chip roadmap. Neither of those paces line up with a 4-year build, so we do not lead with 4-year builds. We look for pockets of power, call it 2 to 50 megawatts, where the power or shell already exists or can be ready for service soon, and we deploy quickly.