Fermi Inc. Common Stock 2026 Q2 Earnings Call

Good morning, and thank you for joining Fermi America's second quarter 2026 earnings conference call. With me today are our Chairman of the Board, Marius Haas; our Chief Commercial Officer, Anna Boffa; our Chief Operating Officer, Jacobo Ortiz; and our Chief Financial Officer, Rob Masson. Before we begin, I'd like to remind you that today's call contains forward-looking statements within the meaning of the federal securities laws. These statements reflect management's current expectations and are subject to risks and uncertainties that could cause actual results to differ materially from those we anticipate. For a discussion of these risks, please refer to our most recent annual report on Form 10-K and our subsequent reports on Form 10-Q. Any non-GAAP measures we reference today are intended to provide a supplemental perspective on the company's ongoing operations. With that, I'll turn the call over to Marius.

Thank you, Barry, and good morning, everyone. Thank you for joining us. One quarter ago, on our first quarter call, I did something a chairman doesn't always do. I gave you a list, a focused 90-day plan built around five specific commitments, and I asked you to hold us to it. I told you the new leadership team would execute and that you should measure us not on our words, but by what we deliver. Several of you questioned why I established self-imposed aggressive deadlines on the team at a time when there was external distractions and internal transitions. Yes, it was a risk, but I have a very strong philosophy that an exceptionally talented team with a clear mission, with clear priorities, and well-understood timelines can achieve extraordinary things. With clarity comes alignment, passion, and focus. The focus eliminates the irrelevant noise.

The passion was always about doing what is right for our shareholders. Today, roughly 90 days later, I'm here to report to you on our progress, and I'll say it plainly: Fermi is in a much stronger place now than it was then. To date, we've delivered on all five commitments, including the one that matters most. Let me take you through our results. First, a quick reconnect to the macro backdrop because it frames the problem Fermi is working to solve. Power is the binding constraint on AI compute, not capital, not demand. Across hyperscalers, Neoclouds providers, and frontier model developers, the same bottleneck keeps surfacing: access to large-scale, reliable electricity on a timeline that matches the pace of AI and data center development. Delays are being reported across announced projects worldwide, driven by grid interconnection queues and equipment availability.

Fermi was created to relieve that constraint, and this past quarter shows you how we are doing it. Objective number one of our 90-day plan was to secure a binding customer agreement. I will say this was by far the most important objective, and the team delivered. We signed a binding agreement representing up to 650 megawatts of power. We are now in the process of finalizing the backstop agreement that sits behind it. Anna Boffa will walk you through the details in a moment. I will simply say this: The caliber of the counterparties now standing behind our advanced energy and AI ecosystem speaks directly to the value we have discussed with you since our IPO. Objective number two was to select the right CEO for the next stage of Fermi's growth. With this in mind, we have appointed Lee McIntire effective this Tuesday.

Lee has served on our board since September of 2025 and already has a detailed working knowledge of the company and the project. More than that, he has built his entire career delivering large-scale projects, and that is the most important task in front of us right now, getting power to the site. Lee has led some of the most demanding engineering and construction organizations in the world, including Bechtel, McDermott, and TerraPower, and he ran large-scale project delivery inside all of them. So when it comes to getting first power to the site in 2027, I cannot think of anyone more equipped than Lee. He will work alongside Anna, Jacobo, Rob, and me. We will keep running the business exactly as we ran it this quarter. Our strategy has not changed, and the pace will only accelerate. The third objective was to advance strategic partnerships. Again, we delivered. During the quarter, we announced EPC partnerships with Primoris for balance of plant on phase one and TSK for early works engineering on phase two.

These are two of the most capable and highly respected contractors in the industry. More recently, we also entered into a strategic alliance with Hilcorp, a premier and highly experienced infrastructure and power provider around the globe, which will accelerate our ability to deliver power at speed for large-scale customers. The alliance will bring an incremental 2.6 gigawatts to the Project Matador campus within the next three years. There is no site we know of that has equipment and the ability to deliver 4.8 gigawatts during this time period. The demand for the power delivery is already here, and we have the team and the equipment to deliver. Fourth, we have told you we would enhance our liquidity.

In July, we delivered an upsized $431 million convertible notes offering, which significantly strengthened our balance sheet. Importantly, we did it at a low coupon and with a capped call structure built to protect our shareholders from dilution. Rob Masson will take you through it. The fifth and final objective in our 90-day plan was to move the site closer to power. On this front, we have made substantial progress and we are still gaining momentum. Three Siemens Energy F-class turbines arrived at the Port of Houston in July and have cleared customs. We have also progressed site development. Jacobo Ortiz will give you full operational picture shortly. Now, let me put these five milestones into context. Any one of them, a binding customer agreement, a CEO, significant partnerships, a strengthened balance sheet, turbines on the ground, would have made for a notable quarter on their own.

We challenged the team to stretch, and they delivered, all of them in a single quarter. That is the story for this quarter. Our leadership team kept its focus on the plan and executed it with excellence. That was the institutional discipline Fermi 2.0 was built to deliver. The board and I are extremely proud of how the team came together and without doubt delivered an excellent quarter. With the site advancing and the commercial picture coming into focus, let me hand it to Anna.

Thanks, Marius, and good morning, everyone. I will start with the most important thing I can tell you about this quarter. The market did not just validate our project and concept, it signed up for it. This is only the beginning. Customers need large-scale, reliable power on accelerated timelines, and that is exactly what Fermi is built to deliver. Over recent months, we have been actively engaged with roughly a dozen prospective customers and strategic partners. These discussions have been specific and substantive around capacity planning, delivery sequencing, and the commercial frameworks required to move from interest to signature. Within that broader process, TensorWave stood out as a particularly strategic first customer for Fermi. For us, this was an ecosystem entry strategy. First, speed matters. TensorWave is a highly entrepreneurial organization operating in one of the fastest-growing parts of the AI infrastructure market. They have the ability to make decisions quickly and critically.

Their demand curve aligns with our power delivery curve. Second, we believe TensorWave gives Fermi a unique position inside the broader AI ecosystem. A direct relationship with a hyperscaler is incredibly valuable, and we are nurturing those, too. But it is fundamentally a relationship with one customer. TensorWave sits between the semiconductor ecosystem and the ultimate users of that compute, giving Fermi exposure across multiple layers of the market. Compute is the foundation of the AI stack, and TensorWave's proximity to that layer gives us earlier visibility into where demand is forming, what infrastructure those workloads require, and which customers are likely to need capacity next. Through one anchor relationship, we gain connectivity not only to TensorWave, but also to the chip ecosystem and to multiple hyperscalers, enterprises, and AI companies that may ultimately consume that capacity. For us, that is strategically important.

We want Fermi to become a place where the broader AI infrastructure ecosystem comes together, not simply a campus serving a single customer. Third, the multi-phase nature of the relationship reinforces that opportunity. The deal has the potential to bring multiple workloads and end users onto the campus over time, giving more customers and partners direct exposure to Fermi's capabilities. The phased approach also matters from an execution standpoint. By phasing the development, we can match capital deployment more closely with delivery timelines while reducing complexity and preserving our ability to move quickly towards first revenue. By pairing TensorWave with a highly capable data center partner, we gain direct visibility into who can design and construct these facilities quickly and efficiently, capabilities that can be reused across future Fermi customers. Fourth, this transaction validates the unique nature of what we are building.

Fermi combines large blocks of power, secured infrastructure, accelerated delivery, and permitted land. TensorWave gave us the opportunity to establish commercial terms that we believe solidly reflect the value of that offering while remaining competitive for the customer. Our decision to partner with TensorWave was deliberate. We were looking for an anchor customer that could move at our speed, consume power on our delivery timeline, support economics that appropriately reflect the value of this differentiated asset, and importantly, expand Fermi's connectivity across the broader AI ecosystem. Let me turn to the agreement itself. We have signed a binding agreement with TensorWave, representing up to 650 megawatts of capacity if all expansion options are exercised. The agreement is structured into three phases.

The initial phase is a 15-year commitment for 222 megawatts of gross power through a turnkey data center solution, and represents approximately $6.5 billion of revenue to Fermi over the initial term. We are finalizing the backstop agreement supporting certain obligations under the lease. We will identify the counterparty once the agreement is complete, which we anticipate in the coming days. A commitment of this scale follows extensive diligence across our power strategy, permitting, secured equipment, land control, construction plan, delivery schedule, and execution capabilities. When we talk about validation, we mean something very specific. A sophisticated customer and their partners have evaluated what we are building, agreed to commercial terms we believe are competitive and reflect the value of our offering, and made a long-term commitment to the campus.