Bitdeer Technologies Group Class A Ordinary Shares 2026 Q2 Earnings Call

Please go ahead. Thank you, operator, and good morning, everyone.

Welcome to Bitdeer Technologies Group's second quarter 2026 earnings conference call. Joining me today are Jihan Wu, founder, chairman, and chief executive officer, Haris Basit, chief strategy officer, and Michael Potter, chief financial officer. Today's call will begin with Haris providing a review of our recently announced Tydal, Norway colocation lease agreement, followed by Michael with a review of our business segments and second quarter financial results. Before management begins their formal remarks, I would like to remind everyone that during today's call, we may make certain forward-looking statements. These statements are based on management's current expectations and are subject to risks and uncertainties, which may cause actual results to differ materially.

For a more complete discussion of forward-looking statements and the risks and uncertainties related to Bitdeer's business and industry, please refer to the company's filings with the U.S. Securities and Exchange Commission. I also want to note that we will be discussing certain non-GAAP financial measures and operating metrics today. A reconciliation of these measures to the most directly comparable GAAP measures is included in our earnings release issued earlier today. These non-GAAP measures should not be considered in isolation from or as a substitute for the most directly comparable measures prepared in accordance with GAAP. As a reminder, changes to the fair value of our digital assets are reflected in GAAP net income and may introduce non-cash volatility into our reported results. With that, I will now turn the call over to Haris.

Thank you, Tesh, and good morning, everyone. This is our first earnings call since we announced the execution of our $4.7 billion colocation lease at Tydal, Norway, and I would like to begin by putting that agreement in context. Over the past several years, we have worked to build a power infrastructure portfolio that we believe is well-positioned to support both our Bitcoin mining operations and our expansion into AI infrastructure. Tydal represents an important step in converting that portfolio into long-duration contracted revenue, and it establishes AI infrastructure colocation as an additional pillar of our business, alongside our AI Cloud, Bitcoin mining, and ASIC development and manufacturing operations. We are pleased with the terms of this agreement and with the caliber of Volta as our counterparty.

We view Tydal as an important proof point for this strategy. We intend to pursue additional opportunities of this kind as they arise. Agreements of this scale and complexity reflect the work of our team over the past several years. I want to thank everyone involved for their efforts in reaching this milestone. With that, let me walk through the terms of the Tydal transaction in more detail. On August fourth, we announced that our subsidiary, Tydal Data Center AS, has executed a 16-year colocation lease and services agreement with Volta at our Tydal campus in Norway. Under the agreement, we are delivering 121 IT megawatts supported by approximately 133 gross megawatts. This will be spread across four existing data halls and will be configured to run NVIDIA GPUs. The lease is expected to generate approximately $4.7 billion in contracted base term revenue over the initial 16-year term.

An eight-year renewal option, if exercised, would increase the potential contract value to approximately $8 billion over 24 years, with the tenant termination right at the end of year 10. The lease is structured as a modified gross arrangement. Volta pays a combined base rent and service fee with a 3% annual escalator. Electricity costs are fully reimbursed on a pass-through basis, which protects our margin from energy price volatility and provides a highly predictable cash flow. Over the 16-year base term, we expect this agreement to generate average annual revenue of approximately $2.4 million per IT megawatt. Importantly, Volta's obligations are anticipated to be backed by an institutional-grade credit structure. This anticipated credit enhancement meaningfully reduces our counterparty risk and improves the financiable quality of these contracted cash flows, which supports our plan to access attractive debt financing terms to fund the remaining development at Tydal.

Our remaining capital expenditure is approximately $500 million, which we believe is significantly more capital efficient than a typical greenfield data center build. We expect to raise project-level financing to fully fund our remaining Tydal capital needs and to provide significant additional capital. Delivery is structured across two equal-sized phases, targeting December 31st, 2026 for the first phase, and March 31st, 2027 for the second. A word on our tenant. Volta is a compute infrastructure developer focused on large-scale AI and data center deployments in power-advantaged markets. Volta has announced a $10 billion strategic partnership with an AI lab and a broader development pipeline exceeding one gigawatt. In selecting Volta as our partner at Tydal, we evaluated their technical ability to execute a large-scale GPU deployment, the quality and enforceability of their anticipated credit support, and their ability to move rapidly to match the anticipated Tydal construction timeline.

It is important to note that Tydal will incorporate leading-edge NVIDIA GPUs, has one of the highest reliability grid connections in Europe, is 100% powered by renewable energy, and has an extremely high energy efficiency with a PUE of approximately 1.1. Our broader power and infrastructure portfolio stands at approximately 3 gigawatts of total global electrical capacity at the end of the second quarter, up approximately 12% year-over-year. We continue to evaluate opportunities for additional grid-connected and behind-the-meter expansion sites globally across both new and existing sites. Our objective is straightforward: continue acquiring, building, and converting powered infrastructure. We will share updates on our progress here when appropriate. I will now turn the call over to Michael to walk through our business segment updates and second quarter financial results.

Thank you, Haris, and good morning. I'm happy to join everyone for the first time as Bitdeer CFO. Execution remains our top priority. While the Tydal lease that Haris described has now been executed, there is significant work ahead to prepare for the first RFS date. We will update as appropriate as those milestones are achieved. The focus in our view is on the quality of altered demand, robustness of the financing structure, and contractual protections. We believe this transaction compares very favorably on these dimensions, and we look forward to demonstrating that through continued execution. Looking ahead, we see plenty of interest in various sites within our portfolio that could potentially be used as AI/HPC data centers. A key advantage of our model is the ability to utilize capacity for crypto mining until an AI data center is ready, ensuring our power assets remain productive and secured.

Turning to our Bitcoin mining business. Self-mining hash rate reached approximately 73 exahash per second at the end of the second quarter, up approximately 342% year-over-year, supported by approximately 243,000 active self-mining rigs. This is an increase of approximately 113% year-over-year. We mined 783 Bitcoin in April, 921 Bitcoin in May, and 990 Bitcoin in June. Total second quarter production was approximately 2,694 Bitcoin, an increase of approximately 377% year-over-year. Our co-mining hash rate also continued to accelerate meaningfully during the quarter. This reflects our continued deployment of SEALMINERs into third-party facilities. It grew over 260% sequentially. We believe our combination of self-mining, co-mining, and hosting gives us multiple channels to monetize our growing SEALMINER production. We have the flexibility to allocate hardware to the channel that offers the best returns as market conditions evolve.

Our SEALMINER platform continues to reinforce our structural cost advantage. The commercial launch of our SEALMINER A4 Ultra Hydro unit, operating at 9.45 joules per terahash at the chip level, continues to lower our internal cost per exahash. During the quarter, we also launched the SEALMINER DL1 Hydro, our first machine designed for Scrypt algorithm mining. This broadens our product line beyond Bitcoin-focused hardware. Our internal manufacturing capability means that we're not subject to third-party markups when deploying SEALMINER rigs into our own fleet. This remains a structural cost advantage relative to other mining operators. In July, we broke ground on our first U.S.-based manufacturing site, a 187,000-square-foot SEALMINER manufacturing facility in Sparks, Nevada. This is expected to be completed by the end of 2026 and will be capable of producing 10,000 units per month. It is expected to create approximately 70 high-quality local jobs.

At the Massillon, Ohio site, we have 174 MW of capacity currently online for mining, with reconstruction of two previously fire-damaged buildings underway. A significant portion of that cost has been recovered through supplier insurance coverage. We believe the associated capacity to be energized in phases during the third quarter. In June, we broke ground on our Fox Creek, Alberta site, a $155 million investment. It includes a fully permitted 101 MW on-site natural gas power plant with grid interconnection. The site uses a closed-loop dry cooling system. Alberta's bring-your-own generation framework gives us the flexibility to curtail compute workloads and sell power back to the grid. Our AI business continued to scale during the quarter. AI Cloud annual recurring revenue reached approximately $76 million at the end of June, an increase of approximately 77% quarter-over-quarter. Utilization was approximately 95% across 4,248 deployed GPUs.

We also signed a new 10-year lease for 21.7 IT megawatts of capacity in Malaysia, with handover expected in the first quarter of 2027. It is designed to support 128 NVIDIA GB300 NVL72 systems. On the product side, we deployed NVIDIA's Nemotron-3 model onto our Bitdeer AI Model Studio on the first day of its launch. Turning to our financial results. Second quarter revenue was approximately $228.8 million, an increase of approximately 47% year-over-year, and approximately 21% sequentially. The year-over-year growth was driven primarily by the continued expansion of our self-mining hash rate and the associated increase in Bitcoin production, along with accelerating contribution from our AI Cloud business, which contributed $14 million, an increase of approximately 284% sequentially. Total gross profit was negative $8.5 million, with a gross margin of approximately negative 3.7%.