Thank you, Pascale. Hello, everyone, and welcome to Applied Digital's Fiscal First Quarter 2027 Conference Call.

Before management begins formal remarks, we would like to remind everyone that some statements we're making today may be considered forward-looking statements under securities laws and involve a number of risks and uncertainties. As a result, we caution you that there are a number of factors, many of which are beyond our control, which could cause actual results and events to differ materially from those described in the forward-looking statements.

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

We'll also discuss non-GAAP financial metrics and encourage you to read our disclosures and the reconciliation tables to the applicable GAAP measures in our earnings release carefully as you consider these metrics. Refer to our filings with the SEC for detailed disclosures and descriptions of our business, as well as uncertainties and other variable circumstances, including, but not limited to, risks and uncertainties identified under the caption Risk Factors in our annual report on Form 10-K and our quarterly reports on Form 10-Q.

You may access Applied Digital's SEC filings for free by visiting the SEC website at www.sec.gov. We'd also like to remind everyone that the call is being recorded and made available for replay via a link in the Investor Relations section of Applied Digital's website.

Now, I'll turn the call over to Applied Digital's Chairman and CEO, Wes Cummins. Wes?

Thanks, Matt, and good afternoon, everyone. Thank you for joining our Fiscal First Quarter 2027 Earnings Conference Call.

As we begin fiscal 2027, I'd like to provide an update on our vision, our strategy, and, most importantly, our execution. Today, we have approximately $36 billion in contracted revenue across 5 campuses, 3 states, and 2 very different geographic regions of the country.

Our focus is on converting our contracted portfolio into sustainable, profitable growth while continuing to selectively pursue new opportunities across our expansive land and power portfolios. During the past year, success was primarily measured by aggressively growing our portfolio of campuses and our total contracted value associated with those campuses.

Over the near to medium term, we expect to continue expanding our existing campuses and selectively adding new locations, with a strong focus on execution and bringing contracted capacity online for our customers. Over the next 12 months, we expect to place over 600 megawatts into service versus the 250 megawatts over the past 12 months.

Let me turn to our vision and strategy, which remains unchanged. Our goal is to become the category leader in design, build, deployment, and operation of our purpose-built AI factories.

Achieving that requires us to balance several things well: selecting the right customers, matching those customers with a funding strategy that optimizes our financial returns, and executing consistently on our builds. We believe we are well-positioned to do all three.

We have a proprietary and proven data center design that has gained acceptance by the leading, top-tier hyperscalers. We have a well-honed supply chain, deep energy partnerships, and a demonstrated ability to deliver on our lease commitments.

Importantly, our data center design is different from many of our competitors. Some competitors' facilities are designed primarily around the typical 5 to 6-year life cycle of a GPU.

We've taken a different approach and are building for the long term with 30-plus-year horizons. We believe our AI factories are designed to be substantially more adaptable as compute architectures, network configurations, and electrical and mechanical requirements evolve over time.

Our design and our investment strategy are based on a set of core principles intended to extend the useful life of our AI factories and campuses well beyond any single generation of compute architecture. That matters because we believe the customers signing long-term leases with us expect these facilities to continue serving their needs well beyond the initial lease term.

As a result, we believe our design and build strategy, together with our franchise model, are highly differentiated and will generate outsized returns for our stockholders over the long term. Our primary focus remains straightforward: build large, sustainable AI factory campuses and sign durable, high-quality, long-term contracts.

We target take-or-pay contracts of at least 15 years with proven Tier 1, investment-grade hyperscalers that are leaders in the AI industry and are well-positioned to convert their investments into sustainable and profitable growth. We view our customers' ability to convert their AI investments into durable and sustainable earnings as an important metric as we make decisions on who we will build for.

This is a relatively narrow group of customers who represent enormous demand and significant long-term spending potential. These customers have told us that they value our quality of design, the quality of our builds, and the strength of our world-class team.

In addition to signing new contracts, one of our priorities is to continue expanding our existing campuses. We also see opportunity to capture premium pricing as demand grows, and we realize the economies of scale inherent in large AI campus developments.

We have continued to make progress on expansion opportunities with our existing customers while also advancing discussions around additional campuses. We currently expect approximately 250 megawatts of expansion leases to be executed by calendar year-end at materially higher pricing compared to prior leases.

As we continue to expand our existing campuses and seek to lock in premium pricing, we believe these campuses contain significant and underappreciated embedded value. We expect that value to grow over time as we execute against our contract portfolio and focus on delivering outsized long-term returns to our stockholders.

I'd like now to turn to our execution in North Dakota, where we are currently building multiple AI factories across 3 campuses. North Dakota is our largest operating region and remains core to our strategy.

We have repeatedly said its low cost of power, abundant energy resources, low population density, and favorable climate make it one of the most compelling regions in North America for large-scale AI factory development. We expect additional Tier 1 hyperscalers to recognize those advantages over time.

This is also the place where we have made the majority of our investments to date, both in the campuses we are building and in the communities with which we have partnered. Power remains the single largest gating factor in our industry, and North Dakota is one of the few regions where we believe new generation can be added at meaningful scale.

Speaking to that scale, we recently took a significant step in expanding our power position in North Dakota by entering into a long-term power purchase agreement with Baseload Electron, an independent power producer in which we hold an approximate 10% equity stake. The agreement covers an approximately 1,200-megawatt natural gas facility that Baseload Electron is developing in Center, North Dakota, adjacent to our Polaris Forge 3 campus, with deliveries expected to begin in 2030.

This is exactly the kind of outcome our model is built to produce. While many operators are waiting in interconnection queues for capacity they do not control, we are contracting for dedicated generation at the scale of our campuses with an agreement that can follow our tenants and a timeline aligned with our future development needs.

We believe this dedicated supply substantially strengthens our ability to expand our North Dakota campus on our own timeline rather than the grid's and gives us greater visibility into the power resources that will support our future growth in the region. To put the pace of our execution in North Dakota in perspective, we signed our first lease with CoreWeave in May of 2025 for our first 2 buildings at Polaris Forge 1, the first of which was then under construction.

By the end of calendar year 2025, the first building was fully operational, capable of supporting more than 40,000 liquid-cooled NVIDIA GB300s. The second building, which broke ground in summer 2025, became operational approximately 1 year later.

As of today, we have achieved full ready-for-service, or RFS, across our first 2 buildings at our Polaris Forge 1 campus, with our third building progressing on schedule. The operational buildings encompass 10 data halls and are supported by 250 megawatts of critical IT load.

This represents 150% increase in delivered capacity. At Ellendale alone, we believe we are substantially ahead of our closest competitors in delivered capacity.

With the expected initial operation of our Harwood, North Dakota campus, we anticipate having 300 megawatts of the total critical IT online across North Dakota by the end of this calendar year. We believe this level of delivered capacity places us among the leading companies in our category regardless of geography.

In the United States, beyond North Dakota, we are developing campuses with substantial expansion potential in Louisiana and Alabama. These markets offer compelling characteristics, including access to power and strong state and local support for the build-out of national AI capacity.

We view the presence of other top-tier hyperscalers developing large-scale AI campuses in these regions as further reinforcing their strategic importance. Our development activity in Louisiana and Alabama continues to progress, and we remain encouraged by the scale of customer demand across the region.

We expect revenue contribution from this region of the country to begin in the first half of calendar year 2027. We recently took our first steps outside the United States.

While our focus remains firmly on executing our domestic projects, we believe select European markets may provide attractive opportunities to leverage our expertise and extend our platform over time as we continue to build Applied Digital into a category leader. As part of that early look, we signed an agreement for up to 1 gigawatt of potential power capacity in Finland.

We view this as a measured first step. The agreement provides meaningful long-term potential while limiting our initial exposure and protecting downside risk while our near-term execution priorities remain centered on the United States.

Turning to our data center hosting business. Our 286 megawatts of capacity for Bitcoin mining across our 2 North Dakota sites continues to operate efficiently and provides steady, high-margin revenue with minimal ongoing capital investment.

Now to ChronoScale, in which we have a 90 an approximately 96% ownership stake. Neoclouds continue to represent one of the fastest-growing segments in this market.

NVIDIA expects neoclouds to exit this year with 8 gigawatts of installed capacity, up from 3 gigawatts at the end of 2025. During the quarter, ChronoScale announced plans with Microsoft for a 50-megawatt AI compute deployment in North America featuring NVIDIA GB300 NVL72 systems.

This deployment is expected to significantly expand ChronoScale's existing business with a Tier 1 investment-grade customer and represents another important step in scaling the platform. With recent new contracts, ChronoScale is on track to reach $1 billion of ARR in 2027, and momentum for additional contracts continues to build.

With that, I'll turn the call over to our CFO, Saidal Mohmand, for a detailed review of the financials. Saidal?

Thank you, Wes, and good afternoon, everybody. This quarter, we completed the financing of our first campus.

Earlier this year, we had only 1 remaining tranche of debt to place for the final 150-megawatt building at Polaris Forge 1. In June, as we discussed on our last call, we closed that tranche: a $1.59 billion offering of 7% senior secured notes due 2031, issued at par.

With the proceeds of the offering, we have funded construction on the third HPC building at Polaris Forge 1 and have repaid the $300 million $300 million bridge facility we put in place in May. With that, the full 400 megawatts of the CoreWeave campus at Polaris Forge 1 and the 200 megawatts of contracted capacity of Polaris Forge 2 are now fully funded.

The pricing of that deal is worth pointing out. Our first Polaris Forge 1-related notes placed last year carry a 9.25% coupon.

This tranche priced at 7%. We believe the pricing reflects the credit enhancements we secured for CoreWeave earlier this year and growing investor confidence in our platform.

We are earning that confidence by executing and delivering our buildings on track and on budget, and we expect the first building at Polaris Forge 2 to similarly be on track and on budget. This success supports market confidence in our ability to execute.

It drives us to reach our previously stated goal to keep bringing our cost of capital down, first at the project level and over time by refinancing operating buildings into lower-cost markets such as ABS. We also added flexibility at the corporate level.

In June, we upsized our revolving credit facility to $430 million of commitments, with an additional $120 million accordion remaining available. Looking ahead, the next campuses we need to finance are Polaris Forge 3, Delta Forge 1, and Delta Forge 2.

All of these are leased to the same Tier 1 investment-grade hyperscaler under 15-year take-or-pay leases. We believe this fact changes the financing conversations with potential creditors.

Recall, Tier 1 investment-grade tenants open access to a deeper pool of capital, which we believe supports more attractive terms. We are following the same framework: preferred equity from Macquarie Asset Management, followed by project-level debt, which allows Applied Digital shareholders to retain a majority ownership stake in each site.

We are already in active discussions with leading lending institutions, and given the credit quality of this customer, we have a high level of confidence in our ability to fund these campuses at favorable rates and terms. Now, let's turn to the quarter.

As a reminder, ChronoScale is included in our GAAP consolidated results, but is excluded from our non-GAAP financial measures. We reported total revenue of $341.9 million, up 322% from $80.9 million in the prior-year quarter.

Our HPC hosting business generated $262.6 million in revenue, consisting of $65.8 million of base rent, $183.5 million of tenant fit-out services, and $13.3 million of tenant recoveries. Our data center hosting segment, which operates our 2 Bitcoin hosting sites, generated $37.8 million in revenue, in line with the prior-year quarter.

We continue to be very pleased with this business, which generated $13.3 million of operating profit in a single quarter on approximately $111.9 million of segment assets. Segment operating profit this quarter more than doubled from $6 million in the prior quarter, driven by favorable power pricing.

ChronoScale's revenue was $41.5 million this quarter, including approximately $23 million of GPU hardware sales. Services and other cost of revenues was $245.7 million, primarily consisting of $176.1 million in tenant fit-out services performed within our HPC hosting business, $22.4 million associated with ChronoScale's GPU hardware sales, $19.8 million in energy cost, and $17.6 million in depreciation and amortization.

Data center rental and other cost of revenues was $43.9 million, primarily due to $22.4 million in depreciation and amortization expense on our operational AI factories at our Polaris Forge 1 campus, $13.3 million in expenses which are reimbursable as tenant recoveries, and $7.8 million in personnel and other operating costs supporting our facilities. SG&A was $114.7 million this quarter.

This was primarily due to $65.4 million in stock-based comp, $16 million of professional services mainly related to transactions, $15.6 million of personnel expenses, and $4.8 million of lease expenses. One item worth calling out in the quarter: our stock-based compensation expense included $41.3 million tied to 1-time performance stock units.

We also recorded $67.5 million of a non-cash loss from the change in fair value of our Babcock & Wilcox warrants and the common stock investment. Both are marked to market every quarter as B&W's stock price changes.

Net loss from continuing operations attributable to common stockholders was $221 million or $0.76 per share. Adjusted net loss was $4.1 million or $0.01 per diluted share.

Adjusted EBITDA was $64.4 million, up from $500,000 in the prior-year quarter. Net operating income, or NOI, which is exclusive to our HPC hosting business, was $58.8 million, representing an 89% margin.

From a balance sheet perspective, we believe we remain well-positioned. We ended the quarter with approximately $2.9 billion in cash and cash equivalents, plus $0.7 billion of restricted cash and approximately six against approximately $6.4 billion of debt.

Note, more than 80% of that principal does not come due until fiscal 2031 or later. Stockholders' equity was approximately $1.6 billion.

Our goal remains to maintain 1 of the strongest balance sheets in the industry through the majority of the construction phase, and we'll execute as such. With that, I'll turn the call back over to Wes for closing remarks.

Thank you.

Thank you, Saidal. Before we open the call for questions, I want to close on something that comes up in nearly every investor conversation we have today: the growing scrutiny around data center development across the country.

We are seeing more local moratoriums, tighter zoning requirements, longer permitting timelines, and greater community resistance in certain markets. Some may view this as a risk to our industry; we see it differently.

We believe it actually increases the strategic value of our campuses that are already powered, operating, and supported by their communities. We think the reason is straightforward: at our campuses, once they are established, we believe much of the hardest work has already been done.

The land is controlled, power and interconnection are in place, permits have been secured, fiber, workforce, and local supply chains have been established, and perhaps most importantly to us, the community knows who we are and sees how we operate. This is why we think expanding at existing campuses is materially different than starting from scratch in a new market.

We are already seeing this dynamic across our portfolio. Customers tell us they want additional capacity in places where they have confidence it can actually be delivered.

As new data center development becomes more difficult in certain markets, we believe the scarcity value of established, powered, and community-supported campuses increases. We think that dynamic creates meaningful barriers to entry and can support stronger economics on expansions and renewals and, over the long term, higher terminal values for our assets.

Put simply, our view is that every new restriction elsewhere makes what we already own harder to replicate and more valuable. This is also important when we think about the long-term value of these assets.

Our leases have 15-year base terms, but the land, power, interconnection, and community support behind these campuses have the capacity to last far longer than any single lease. When a base term ends and we see that a tenant with 10,000 tens of thousands of GPUs deployed in a powered, liquid-cooled campus faces a simple choice: renew with us, or try finding comparable power and approval somewhere else in a market where new sites are becoming increasingly difficult to approve.

We believe that makes renewals more likely, supports stronger renewal pricing, and allows our tenants to continue refreshing their technology within the same facility for decades. This is why we believe in the durability of our leases and that the terminal value of these campuses is meaningfully higher than a traditional real estate model would assume.

We also believe that the value should continue to grow as new supply becomes harder to build. Local leaders have told us the reason our communities want us to expand is because we have worked hard to earn their trust.

Our approach has always been simple: do it the right way. In North Dakota, MDU's customers have saved about $45 million since our Ellendale project began because we use excess grid capacity and help spread fixed costs across more load.

In Harwood, we've paid for over $100 million of substation and grid upgrades ourselves, which benefit the entire community. Our model already meets the ratepayer protection pledge that Governor Armstrong joined alongside 21 other governors.

Local leaders have also shared with us that the positive economic impact on these communities has been significant, and it's drawing national attention, including coverage on Fox Business News and the All-In podcast. Ellendale is a great example.

Since we began our partnership with the community, local tax revenue has expanded roughly tenfold from approximately $400,000 a year to nearly $4 million. These tax dollars are helping fund schools, infrastructure, and emergency services.

Construction workers on our sites earn six-figure incomes on average, and many of those dollars stay in the local economy. We were honored that Mid-America Economic Development Council recently named Polaris Forge 1 its project of the year, recognizing the campus for its economic impact, community investment, partnerships, and technological innovation.

That award belongs as much to the Ellendale community as it does to us, and we are incredibly grateful to everyone who continues to make Polaris Forge 1 possible. We also invest directly in our local communities.

Through Applied Digital Cares, we recently committed $350,000 across 5 organizations in Oliver County, home to Polaris Forge 3. That includes funding the new sheriff's deputy, a new LIFEPAK for the county ambulance, repairs to 2 fire trucks, computers so every student in grades 7 through 12 at Center-Stanton has a device, and repairs to the community center and pool in Center.

As Governor Armstrong put it, 'North Dakota wins when companies like Applied Digital choose to be more than an employer.' We don't just build in communities; we build with them.

That is why they are welcoming us back to grow and why we believe each of our campuses has significant embedded value that will continue to build over time. In closing, we believe we are in the right place at the right time and doing this the right way.

More than ever, we are in control of our own destiny across the full stack. We own the land, we design, we build, and operate the AI factories.

Through ChronoScale, we reach all the way to GPU compute, and through partners like Baseload Electron, we have visibility into the power that feeds it all. If demand continues on its current path, and we continue to execute and deliver for our customers and our communities as we've been doing, we believe we have the ability to grow our operating portfolio to 3.5 to 4 gigawatts by the end of calendar year 2030.

With that, operator, we're happy to open the call for questions.

Hey, guys. Thank you.

Applied clearly has a first-mover advantage in North Dakota. Can you talk a little bit about the perception of North Dakota as a market and the receptivity you're seeing from hyperscalers?

Sure, Mike. Thanks for the question.

What we're seeing in North Dakota, obviously, we have 3 customers there ourselves already. We're aware of a self-build project, a roughly 1-gigawatt self-build project from 1 of the Tier 1 hyperscalers in the state as well, that is outside of the ones that we already have in the state.

We're having multiple conversations with other of the Tier 1 hyperscalers for additional capacity in the state of North Dakota. The answer is I think all of them will eventually be there.

One of the most attractive things about the state, beyond the power and the climate and the population density, is they have a framework for how data centers are treated in the state, and so everyone knows exactly what to expect as you go through a process in that state. As long as you do the development the right way, it's an extraordinarily attractive state to be in, and I think it's just going to become more so over the remainder of this year and in '27 and '28.

Got it. Then, maybe for Saidal, the bond market has been challenging, to say the least.

Can you talk about current options you're seeing for investment-grade hyperscaler debt funding?

Thanks for the question, Mike. It's a great question.

As you can recall, we completed the Polaris Forge 2 and the Polaris Forge 1 financings, which you could argue are not the same credit quality, but great customers, they execute, great, great tenants to have. When you think about the go-forward with Polaris Forge 3 and Delta Forge 1 and 2, given that it is in high investment-grade hyperscaler, there's multiple options beyond the high-yield bond market, which we have liked and we have been an issuer in for the past projects.

For instance, the project finance market is well-open for high investment-grade offtakes, as well as there's some new innovations within the investment-grade bond market. What we've seen, there's flexibility amongst various products that we can tap.

Obviously, we weigh those, and find a mix that works for our profile. What we are focused on in a rate environment that can move around 50 to 100 basis points, 1, we don't underwrite leases where a 100-basis-point move would impact our economics really.

Then 2, we focus then on terms where we can refinance in a year or 2 years with minimal penalties. Once that construction risk, which generally is anywhere from 25 to 100 basis points of construction risk premium on a debt instrument, once we go past the construction risk phase, we have the flexibility to lower our cost relatively quick into a more permanent financing.

That is our focus. We're nimble, and it's great thing having a high investment-grade hyperscaler with multiple options to run at.

That's good to hear. Hey, thanks, guys.

Thanks, Mike.

Thanks, operator. Hi, guys.

Congrats on the recent execution. I just wanted to ask about this Finland announcement.

I think in the release you highlighted limited initial exposure, and I was just hoping you could expand on that point, what kind of options are embedded in the current agreement, and how you kind of see the commercial side of that site progressing. Thanks.

Sure, Nick. Thanks.

For the site, we've purchased the site, and then we have the option. The initial power at that site comes in 2028, and then additional power, which is typical of almost any site that's going to scale to a gigawatt.

There's break points where they'll get approvals for additional power adds. There's pretty good line of sight to that.

Then there would be additional payments at that point, but there's an off-ramp for us prior to those additional payments. It's a pretty minimal amount for us to have this kind of exposure in a market that we think has become pretty attractive as far as the European market goes.

We've spent the last, I don't know, 12 months looking into that market, and we've looked at probably 30 to 40 different sites, and we landed on this one. We think it's a good site, and it's kind of coincided nicely to a point where our existing and the other potential customers that we talk to have started asking more in the last 4 months about European capacity.

Those things kind of go pretty well together, but it gives us a lot of optionality to the upside with pretty minimal financial risk.

Got it. No, thanks for that, Wes.

Maybe just switching gears. In your prepared remarks, I think you really highlighted the longevity of these data center campuses today, and I heard it as kind of a change in tone or maybe highlighting that more so than you have in the past.

I was just wondering, what were the genesis of those comments? Obviously, GPU refresh cycles continue to be part of the discussion here.

Anything that you'd highlight from that perspective, I'd appreciate.

Sure, Nick. It's a couple of things.

We've talked since we started the design that we use today, right, I call it our fourth-generation data center design. With this design, we made it extraordinarily flexible with all of the learnings we had gathered through the processes we've went through with all of the hyperscalers.

So, 1, it's flexible enough to work for any of the hyperscalers. But 2, we made it flexible to future-proof it as much as possible, and some of that comes into how we do the electrical, some of it into the cooling.

A big part of it is the amount of space that we put inside of the data hall so that the trend is for higher power densities. That's the foreseeable future.

If it goes to much lower power densities, we have the space inside of the facility to accommodate that as well. We just built maximum flexibility.

We've talked about this for a few years now. But [cough] what I'm seeing in the market is a lot of things happening that are just hyper-focused on how quickly something can come online, and doing close to unnatural acts, I would say, to just put capacity online as quickly as possible.

While I'm not saying that's a good or a bad business strategy, I just want to differentiate from what we're doing, which is a much more longer-term view of how we build the data center so that they're very long-term assets. You can never fully know what the future brings, but that's the view that we have as a company, that's how we design them, that's how we design them from a redundancy, from both a power and cooling perspective, because we could build a slightly cheaper product.

We do have to make sure that we can operate this product for at least 15 years on our current leases within the SLAs, but we want to operate them longer than that. It's just really more insight into kind of the thought process and the longer-term thinking behind our data center design and build and the operations, versus some of the other things that we're seeing just overall going on in the market.

Makes sense. Appreciate the update, guys.

Good afternoon, and congrats on your continued commercial and execution progress.

Thanks.

Wes, I wanted to start with the 1.3 gigawatts of US capacity that you're currently marketing. During the last call, you noted you're experiencing a healthy market at present and would expect base rates to improve on a risk-adjusted basis.

How would you characterize what you're seeing in the market today since really the last call, seemingly everything that's happening from a regulatory moratorium perspective is playing to your benefit? Would just love your perspective and color on that.

Sure. From a demand perspective in the market, we're seeing, I wouldn't say big change either way.

It feels like we're at max. I've thought of that for kind of the last 2 years, and it continues to notch up.

Demand remains extremely robust for right now. People are still pushing for things that they can get in 2027.

Really, almost everything in '27 should be fairly contracted at this point. We start moving into '28 and '29.

We have stuff that's contracted into '28. We're seeing a lot of demand for that as well.

Really, as these locations, like we keep pointing to North Dakota, but Louisiana is a great market for us as well, and so is Alabama. We've had a great experience there with the community.

The certainty of being able to continue to get the permits of existing power that we have at a campus, the supply chain for us to continue to execute, I would just reiterate those comments about we fully expect to do some lease expansion and new campuses at materially higher rates versus what we signed our last contracts for in the first half of 2026.

Very good. Then for my follow-up, I wanted to come back to Finland.

While I realize you're early in the process with the emerging European AI market, I wanted to ask if you have a feel on how build costs might compare versus the US as you think about the labor, building, and equipment supplies.

We've actually went through that exercise, and the build cost, we expect it to be very similar on a dollars basis, versus euro. By that, if we converted the euros back, it would be roughly the same dollars.

What I would expect there is a more elongated delivery timeline in Europe, just kind of how it works versus what we do here in the US. The goal is to replicate the same thing from the supply chain and design and build perspective in the markets when we enter Europe versus here.

We've done that work and expect a very similar cost.

Terrific. Great update, guys.

Thanks.

Good afternoon. Congratulations on all the progress.

I just want to follow up a little bit on North Dakota and the ability to expand there, and how Baseload Electron fits into that, given your PPA. How does that sort of start to enable the expansion there, and what years are most affected by that?

Sure. We start to think about 2030, Rob, primarily on Baseload Electron.

Baseload Electron's building the 1.2 gigawatts in Center, expect Baseload Electron to build a significant amount of capacity on the eastern side of the state as well. We'll help campus expansion over in the Harwood campus and then potentially in the middle part of the state around Jamestown.

There's a new WBI pipeline, the WBI is owned by MDU, that they approved and are moving forward with that pipeline. It's been in the works for years.

We will be an offtaker of gas at Center and at Harwood for certain and possibly in Jamestown. The way we have worked that with the gas pipeline is to have almost unlimited capacity for expansion at Center.

It's going to be the closest location to the beginning of the pipeline, and then these pipelines typically taper the further they go out. To have really big expansion capability at Center, this will all be front-of-the-meter, grid-connected, but also expand to different locations across the state.

From an equipment perspective, we're looking at procured equipment that's roughly 2.4 to 2.5 gigawatts of generation capacity there already. We expect it to go significantly larger given the demand that we're seeing in the future there in North Dakota.

Great. Thank you.

Then I just wanted to follow up on the supply chain work you've done. You've executed very well on plan.

How have you mitigated any supply chain constraints, what are you seeing in terms of supply chain [chuckle] issues?

Sure. The supply chain, I think, is tight across the industry and some components more so than others.

We've talked about this before, from a supply chain perspective, the biggest thing we did was almost 2 years ago, lock in key components in the supply chain with certain of our suppliers. In some of those instances, we actually purchased full factory capacity output from certain factories for, I believe, a 4-year time frame to make sure that we had those key components locked in.

That's been a big help to us. We're pushing to upsize that amount that we can take because we think, as we go out into '27 and '28 and '29, we're going to need more supply chain to continue to build to the demand that we're seeing in the marketplace.

That was the key piece for us, is putting those key relationships in place quite some time ago to make sure that we're locked into our places in the supply chain for key components. Great.

Thank you. I'll turn it over.

Thanks, Rob.

Thank you. Wes, you used the term selective when you were talking about the future build.

I want to make sure I understand the term selective you're referring to. I think you're referring to the quality of folks that you'll work with versus the amount of capacity that you'll ultimately be able to build.

Is that a fair conclusion?

That's right, George. The company today is in a different place versus what it was a year ago, and we have a limited amount of capacity to build, and so we're being more selective with the customers that we'll build for.

You're right on the credit quality aspect of that.

Relative to the 250 megawatts of expansion, you basically defined them as likely coming at premium pricing. Can you just give us a sense of how you're defining premium pricing?

How broad is that statement versus just the base rent, what might else be involved?

What we're pushing for on that, George, and we're not to get into too much detail, but we've talked about this before, which is potentially longer duration and significantly higher lease rates. Don't want to pin that, but, as you can think of, definitely north of 15% plus increases on the lease rate, but also could include longer duration on the leases.

That's how we're defining that.

All right. Perfect.

Thanks, guys.

Thanks, George.

Yeah. Thanks, guys, for taking my questions, and congrats on the progress.

Just on Finland, I just had a couple points of clarification I wanted to get answered. Is there any way, Wes, you can elaborate on how much power initially is going to be at the site?

Second point, what kind of community or governmental risk is there in that region, either kind of near term or longer term? Then lastly, was the site sort of procured on an absolute basis, or is this sort of procured with a specific customer or two in mind?

Thanks.

Sure. We view the location that we found in Finland, it felt a lot like the communities that we build in North Dakota.

There's a really positive receptivity from a local level, on the community level. The country as a whole has been fairly receptive to data center.

We've really focused on that to make this decision on the site, plus the land availability, the fiber. This site happens to be about 30 km from a self-build of one of the large hyperscalers.

Then as far as the staging of the power, the first 100 megawatts is available in 2028, and then it continues to ramp up through 2031 to the full gigawatt.

Hey, thanks for taking my question, and congrats. As we look out to the 4 gigawatts or so by year-end 2030, I guess just what steps do you need to take to ensure you kind of get there?

How much is reliant on Baseload Electron, and then also in Europe, too, it seems like some of that's going to come a little bit later, 2031, as you said. Is there other sites in Europe that you need to get to as well?

Thanks, John. I'll just clarify.

I saw you went right to the 4 gigawatts, it was 3 3.5 to 4 gigawatts that we talked about by the end of 2030. That's really, from a power perspective, we have power in the power pipeline.

Some of that includes the additional capacity from Baseload Electron that comes on in 2030. From a power perspective, we believe we have that in the pipeline.

This was really an exercise around how much more can we ramp up our build and delivery? If you kind of work through the math, for us internally, to get to the high end of that number, that really has us delivering about 1 gigawatt per year in '29 and '30, right?

That kind of, if you take a bridge to the end of 20 calendar year '28, getting to around 2 gigawatts, we as a company think that that's kind of the level we can ramp our construction and delivery up to. It's really those two things combined, but much more so on the ability and capacity to do construction and deliver for customers.

Understood. That's helpful.

Then, a follow-up, just on ChronoScale, signed a 50-megawatt. Obviously, it seems like it could start ramping quite a bit from here.

Just wondering kind of as we look out a few years, could we almost expect ChronoScale to be at 400 megawatts or so in applied sites, almost like what CoreWeave did, or less so? Just curious how ChronoScale's fits in as a customer down the line if they ramp.

Yeah. Thanks for that question.

That's a great question. When we look at that right now, and you'll see over the coming month or so, the strategy we're using to secure data center capacity for ChronoScale is outside of the large-scale Applied Digital sites.

Those sites we contract to what we have said, which is Tier 1, investment-grade hyperscalers. The ability to secure other capacity, we have found a nice strategy for securing more near-term grid capacity that isn't at that scale at a single location, but at multiple locations.

I think you could see ChronoScale moving up to multiple hundreds of megawatts in capacity online outside of the core Applied Digital data center builds over '27 and '28. I want to bifurcate this where it is two separate strategies where Applied Digital strategy remains the same: build for high-quality tenants at large scale.

Then, we're using our knowledge base to help ChronoScale secure capacity, at sites that are more as you see the first Microsoft site of 50 megawatts, that are kind of 50 to 100-megawatt sites that have been passed over because they don't scale to the gigawatt site or the multi-hundred-megawatt sites. There's a lot of those around the country that are grid-tied that we think we can help them bring online over the next 2 or 3 years.

A significant amount, actually, in 2027. I appreciate you letting me make that clarification around the strategy.

Sounds great. Thank you, Wes.

Appreciate it.

Thanks, John.

Hi, guys. Thanks for taking my question.

Is it fair to assume your existing Macquarie relationship would extend to Finland?

CoreWeave has been I couldn't have asked for a better

Macquarie. Macquarie.

I thought you said CoreWeave. I was going to talk about that partnership there.

No, Macquarie is North America. That partnership is in North America.

Not saying we couldn't have something similar, but the current agreement we have is just North America.

Appreciate that. If you had anything interesting on CoreWeave, I'll not stop you there.

[laughter] But

Good outcome.

[laughter]

Great relationship. That's all.

That's what I have for that.

Excellent. Then, to follow up on Nick's question, as inference becomes a larger share of customer workloads, are you seeing changes in the mix of GPUs, CPUs, storage requirements?

If so, are any of those changes contributing to the premium lease rates that you mentioned or expecting?

I'll tell you where we're seeing a change. We're seeing a change over the past 18 months on the tenant fit-out, or the technical fit-out, TFO.

What we're seeing, because we execute that almost, actually, every lease that we have, we execute that. The TFO is becoming much more flexible is what I would say.

If you rolled back a year ago or especially 18 months ago, the TFO we would know exactly what was going in to our data center based on the TFO. Now, we can't really tell, and the TFO's become a larger dollar amount for our customers, but I think they're building in a significant amount of flexibility inside the facilities to be able to accommodate whatever workloads they want to deploy.

We'd always talk about GPU, TPU, but I think it's also in the amount of CPU mix, the storage, all of those pieces, network topology, but that's really where we're seeing that.

Appreciate that. Then, 1 more, if I may.

You mentioned economies of scale for your current builds. Are there any circumstances where you would consider smaller, modular build-outs?

I think that's a great place for ChronoScale. Now, just to clarify on that, are you talking about the containerized solutions that people are talking about for edge compute or just a 20, 50, 100-megawatt containerized solution?

More in line with 20 or 50, not so much the containerized one, but more of smaller prefab.

Modular, we're looking at those. That's one of the ways we're securing data center capacity at ChronoScale is those types of modular builds on a smaller scale.

Appreciate that, and congrats on the execution.

Thank you.

Thanks, everyone, for joining our call, and we look forward to speaking to you again in January.