Iris Energy (US:IREN)2025-02-12 23:00Financial Data and Key Metrics Changes - The company reported a record net profit after tax (NPAT) of $18.9 million for Q2 FY 2025, with adjusted EBITDA increasing by $60 million to $62.6 million [5][41] - Bitcoin mining revenue reached $113.5 million, with operating cash flows of $53.7 million [41] - The average operating hash rate increased from 12.2 exahash to 22.6 exahash [41] - Net electricity costs remained flat at $28.9 million, with the average net electricity cost per Bitcoin mined decreasing from $35.4k to $21.4k [42] Business Line Data and Key Metrics Changes - The company is expanding its Bitcoin mining capacity from 31 exahash to a target of 50 exahash by mid-2025, with a revised target of 52 exahash due to the allocation of resources to the HorizonOne project [6][13][26] - The new HorizonOne project will be a 75 megawatt liquid cooled AI data center, expected to support a 50 megawatt IT load [7][15] - The Sweetwater 2 project is in late-stage development, aiming for a 600 megawatt capacity, which will create a two gigawatt data center hub alongside Sweetwater 1 [10][20] Market Data and Key Metrics Changes - The company noted a significant power scarcity in the U.S. data center market, with a projected 36 gigawatt shortage in data center capacity [30] - There is increasing demand from hyperscalers for large-scale data center campuses, with many expressing interest in one gigawatt plus capacities [52] Company Strategy and Development Direction - The company is focusing on capitalizing on the growing demand for liquid cooled data center capacity, particularly in light of the upcoming NVIDIA Blackwell GPUs [9][17] - The strategic focus includes leveraging existing infrastructure for both Bitcoin mining and AI cloud services, with a clear path for future growth in these areas [32][34] - The company aims to maintain long-term ownership of its sites while exploring various partnership opportunities for financing and development [39] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing demand for AI and cloud services, noting an uptick in interest following recent market developments [28][29] - The management team acknowledged the challenges in securing grid connections but remains optimistic about the potential for future projects [60] - The company is committed to optimizing its capital structure and exploring alternative funding options to support growth initiatives [14] Other Important Information - The company has secured over 500 acres of land for the Sweetwater 2 project and is finalizing a grid connection agreement [10][20] - The balance sheet remains robust, with total assets increasing to approximately $1.9 billion [43][44] Q&A Session Summary Question: Update on HorizonOne project and CapEx - Management confirmed that they are utilizing existing data center architecture to deliver liquid cooled capacity at effective costs, with long lead items already ordered [47][48] Question: Demand for Sweetwater 2 and market interest - Management indicated that the demand for large data center capacities is realistic and that they are in active discussions with multiple hyperscalers [51][52] Question: Challenges in securing grid connections - Management highlighted the increasing difficulty in getting projects approved and the long timelines involved in the process [59][60] Question: Concerns about HPC monetization of Sweetwater 1 - Management addressed investor concerns, stating that the suitability of West Texas for AI applications is no longer in question and that they have been purposefully building data centers for multi-tenancy [86][88] Question: Financing options for remaining capacity at Childress - Management confirmed that they are exploring multiple financing avenues, including project debt financing once customer contracts are secured [95][96]