Hello and welcome to the BitDigital second quarter 2026 earnings conference call. We'll begin shortly. During the call, all participant lines will be in listen-only mode. Following management's remarks, we will open the line for questions. If you'd like to ask a question at this time, please press star 1 on your telephone keypad. As a reminder, today's call is being recorded. I'll now turn the call over to your host, Daniel Kennedy, head of investor relations at BitDigital. Daniel, please go ahead.

Thank you and good morning. Joining me today are Sam Tabar, Chief Executive Officer, and Erke Huang, Chief Financial Officer. Before we begin, I'd like to remind everyone that today's discussion contains forward-looking statements. These statements reflect management's current expectations and are subject to risks and uncertainties that could cause actual results to differ materially. For discussion of these risks, please refer to our annual report on Form 10-K and our quarterly reports. We assume no obligation to update these statements. Certain matters discussed today, including potential capital allocation initiatives, remain subject to board and shareholder approval in accordance with Cayman Island law, where applicable. Throughout the call, we may also refer to non-GAAP financial measures. Reconciliations to the most directly comparable gap measures can be found in our earnings materials available on our website. Unless otherwise indicated, figures discussed during these remarks are rounded for readability. With that, I'll turn the call over to Sam.

Thank you, Daniel, and good morning. This quarter was about capital allocation. Every decision started with the same question. How do we create the most long-term value from the assets already on our balance sheet? BitDigital is positioned to secure the infrastructure for what we believe are the two most important sectors in economic history, digital assets, which will settle on Ethereum, and artificial intelligence, which is powered by data centers. Ethereum is our position in the first. and White Fiber is our position in the second. Two distinct assets connected by one capital allocation model. Few companies offer meaningful exposure to both sides of that build-out and fewer even still actively allocate capital between them. Our conviction on Ethereum has not changed. The price did. Ethereum spent most of the quarter below $2,000 and I'm not going to pretend that was comfortable. BitDigital is one of the largest public corporate holders of Ethereum. That does not make us a digital asset treasury, and it is not what we are trying to be. The goal has never been to hold the most ETH. It is to get the most out of ETH that we hold. Neither purely AI infrastructure nor a digital asset treasury, neither, and yet, both. What we are building towards is the convergence of the two. Assets positioned for where the economy is going rather than where it is today. Our Ethereum treasury is managed the way a company manages cash-like reserves. It earns while we hold it and it becomes capital that can be put to work when the right opportunity appears. Unlike a traditional reserve, It generates a protocol-native return and also serves as a source of liquidity. That is exactly what happened early in the quarter. White Fiber sought additional capital to bridge its investment in its flagship facility in North Carolina to permanent project financing and to support broader growth initiatives. Together, the companies evaluated a range of financing alternatives. They ultimately pursued a related party bridge facility. This provided White Fiber with efficient access to capital while preserving strategic flexibility and avoiding near-term dilution. Against a portion of our Ethereum, we raised $50 million of liquidity and then used our own balance sheet to originate a delayed draw term facility for White Fiber. Commitments of up to $150 million guaranteed The transaction preserved our Ethereum position, avoided issuing equity at either company, and allowed us to maintain our ownership interest in WhiteFiber. Independent committees at both companies reviewed it, and Needham and Seaport delivered fairness opinions to their respective boards. We chose to provide the facility because it offered an efficient way to support our investments in WhiteFiber, while generating an attractive return above the staking yield available on Ethereum. The principal risk in a structure like this is, of course, margin call. That was considered as well, so an additional buffer of Ethereum is held against it, size to withstand market moves well beyond what we consider reasonable. The facility was designed as a temporary bridge to permanent financing for the initial 40 megawatt build out in our flagship facility in North Carolina. That facility is anchored by Nscale and its investment-grade off-taker. Upon permanent financing, our collateral is released and the guarantee terminates. The facility is repaid with interest more than the staking income that we gave up and without giving up any upside. One decision and one quarter. but it contains the essence of the strategy. We approach our assets differently than a buy and hold treasury because every dollar, every ETH, and every share should be maximally productive. And that is what we mean by a strategic asset company. The assets themselves are not the differentiator. It is how we deploy them.

Eric will now take you through the details of the quarter.

Thank you, Sam.

Good morning, everyone.

Our results consolidated white fiber in full, with a portion attributable to non-constituted interests. Second quarter revenue was $32.1 million, up 15% from $27.9 million in the first quarter. For the sixth month, revenue was $60 million, up 18% year over year. gross profit for second quarter was $18.6 million, a gross margin of 57.9%. Operating cash flow for six months was $46.8 million, up 33% from $35.1 million in the same period last year. Net loss attributable to BitDigital shareholders was $107.2 million, $0.31 per share. Taken together, the digital asset items, the derivative re-evaluation, and interest expense account for approximately $86 million of the loss.

I'll take each in turn.

Turning to our operating segments, cloud services revenue was $23.8 million up 42% sequentially driven by new contracts entering service and expansion of existing agreements. For the six months, college revenue increased 29% year over year at a gross margin of 58%. Collocation services revenue for the second quarter was $4.7 million, essentially fat sequentially, with a 63% gross margin. For the first half, collocation revenue increased 182% year-over-year. NC1 is not yet reflected in those results and expected to begin contributing in the third quarter. Ethereum stake-in revenue was $0.9 million compared to $2.3 million in the first quarter. Though for the six months stake-in revenue increased, 46% year over year. We earned 440 ETH in staking rewards during the quarter against 949 in the first. The sequential decline reflects a decision to unstake a portion of Ethereum to characterize the facility Sam described, as well as the decline in Ethereum price during this quarter. Digital assets mining revenue was $2.4 million on a 32.3 Bitcoin mined compared to 48.1 Bitcoin in the first quarter. For the six months, mining revenue declined 58% year-over-year as expected as we continue to wind down that business. It remains solidly gross margin positive and 26% for the second quarter. Turning to the items that do not reflect operating performance, We recorded $28.8 million of loss on digital assets carried at fair value, reflecting market-to-market movement on our Ethereum and Bitcoin holdings. We also recorded a $46 million non-cash impairment on liquid stake fees used in the Y-fiber financing transaction. That reflects the accounting treatment of the position and does not represent a realized loss. Separately, there was a $14 million loss from the change in fair value of the derivative liability associated with our convertible notes and an $8.1 million interest expense. Neither reflects operating performance. Turning to the balance sheet and treasury, on May 11th, we purchased 8,560 AEC for $20 million at an average cost of $2,334 per ETH, and sold out during the quarter. Never break down the positions as of June 30th. We held 75,757 ETH directly, carrying a fair value of $118.9 million. That includes a cumulative stake through our validator partner. In April, we liquid staked 73,235 Ethereum and received 66,192 LSETH tokens in exchange. We also sold Ethereum exposure through and hold Ethereum exposure through an externally managed fund carried at 47.9 million dollars within investment securities. Liquid Staked ETH is a separate asset from ETH for accounting purposes, which is why it sits on its own line under a different measurement basis. Our underlying economic exposure remains unchanged. Cash and cash equivalents were approximately $83.6 million on a consolidated basis, of which approximately $27.5 million was held at BitDigital and $56.1 million at Y-Fiber. Contract liabilities nearly doubled to $143.1 million from $79.6 million end-year end that represents revenue already contracted and cash already collected for services we have yet to deliver. Finally, remaining performance obligations were approximately $1 billion and further end. We expect to recognize approximately $57.7 million across the balance of 2026, 36.7 million in 2027 and 105.1 million in 2028, with the remainder thereafter. To put that in context, the 2027 figure alone is more than we earned in all of 2025. None of it appeared in revenue tonight today. With that, I'll turn the call back to Sam.

Thank you, Eric. We own Ethereum because we believe it will appreciate over time and generate attractive long-term returns for our shareholders. That has always been a part of our investment thesis. The second quarter was the third consecutive quarter Ethereum closed lower, but volatility is not new to us. We operated through multiple market cycles and our approach has remained consistent throughout all of them. We also share the belief that the market price of ETH has yet to reflect the value of the network. In our view, it is undervalued relative to what it is becoming. The fundamentals moved in one direction this quarter, the price moved in the other. That disconnect has not gone unnoticed. Across the Ethereum ecosystem there is growing recognition that the success of the network and the performance of the asset are closely linked. The bull case for ETH is not standing still. Robinhood launched its own Layer 2 on Ethereum, supporting a platform with roughly 28 million customers and $370 billion in assets, with fees paid in ETH. BlackRock launched two tokenized money market products this month, and JPMorgan continues to expand its own tokenization footprint. Tokenized real-world assets on public blockchains now surpass $31 billion, with roughly two-thirds settling on Ethereum. And the institutional layer around the network keeps building. Ethereum Institutional, which launched with more than 500 existing institutional relationships, alongside ETH Labs, ETH Systems, and Etherealize. These are not isolated announcements. Financial activity is migrating onto programmable settlement rails, and as that activity grows, so does the demand for Ethereum's block space, its security, and its native asset. We remain confident the value of the asset will ultimately converge with its growing utility and adoption. That conviction shaped one of our most important decisions this quarter. Rather than selling Ethereum or issuing equity, we used our balance sheet to finance White Fiber while preserving our long-term exposure to the ETH asset. The next phase is execution. We expect the third quarter to begin reflecting what we have been building. Turning briefly to White Fiber, our other major strategic asset, our conviction and its long-term potential remains very strong. And as previously stated, we do not intend to sell white-fiber shares this year. But the same standard applies here as everywhere else. We look for ways to make a position productive without reducing it. One approach under evaluation is writing out-of-the-money covered calls against a limited portion of our holdings to generate premium income. That would require registering those shares. Registration creates flexibility. It is not a step towards exiting. Any such program would be modest in scope and subject to board approval, and we would retain substantial long-term exposure. We have no interest in a transaction that impairs an asset that we own the majority of. We had White Fibers quarterly call yesterday, and I strongly recommend that you listen to it. It is posted on X. But I'll mention a few words here. Whitefiber is entering an important growth phase across both co-location and cloud services. At Whitefiber's flagship facility, initial capacity has been delivered, customer deployment and testing is underway, and billing has commenced. Whitefiber expects to reach the full contracted run rate billing later this month under its 10-year agreement with Enscale, representing approximately $865 million of contracted revenue. White Fiber is also expanding a substantial development pipeline and focusing its resources on the opportunities best for it to move, excuse me, best position to move forward. As NC1, our flagship facility, reaches full contracted operations, White Fiber is pursuing permanent project financing that, if completed, would allow us to recycle the capital that we invested in North Carolina into the next data center. That is how the flywheel begins to turn. Develop infrastructure, secure long-term customers, finance stabilized assets, and redeploy capital into the next opportunity. Momentum in cloud services has also accelerated. Since our last earnings call, White Fiber has signed new contracts representing more than $500 million of aggregate contract value, including the next generation GP deployment and the Capital Efficient Managed Services Agreement. So for BitDigital shareholders, that means an increasingly valuable operating asset with greater revenue visibility, stronger cash flow potential and the ability to fund its own growth. That is the model at both levels. Our strategy has never been to passively accumulate ETH. It is to build a productive balance sheet assets that earn while they appreciate, assets that finance operating businesses, businesses that generate recurring cash flow, and cash flow that gets reinvested into productive assets. That is our strategic asset flywheel, and we believe we are early, early to running a company where the treasury itself is productive capital rather than a static position. We expect that to become a more common model, We intend to be further along when it does. The transition in our business is already visible. Infrastructure and staking now represent 89% of our revenue against 70% a year ago. Capital is moving out of our mining business with limited terminal value and into assets that produce. Our operating results improved through the quarter. Our valuation did not. Today, the market is to value BitDigital primarily as a digital asset treasury. A treasury strategy is fundamentally passive. You buy the asset, you hold it, you wait for the next cycle. That's not what happened here. We allocated capital, we financed an asset we already own, we preserved our Ethereum position, and we avoided dilution at both companies. Those are growth company decisions, yet our valuation continue to reflect a passive treasury. That is a fundamental disconnect. Using observable market values for the assets that we own, we believe that digital continues to trade at a significant discount to its intrinsic value. We monitor that discount closely daily. It has been persistent, and at times it has exceeded 40% by our calculations. At this discount, buying our own equity is one of the highest return uses of capital available. And the wider the gap, the more creative it becomes. We intend to take an active role in closing that gap. The board is evaluating those opportunities in real time alongside our liquidity needs and other priorities. Addressing the discount also expands what we can do next. We continue to look for opportunities to deploy capital and revenue generating businesses. And based on our current analysis, one conclusion stands out. The best investment available to BitDigital may be ultimately BitDigital itself. To our long-term shareholders, the reason to own BitDigital is to gain exposure to the settlement layer of digital finance combined with the HPC infrastructure that will run on top of it. This is all supported by a productive balance sheet that allocates the capital it generates into additional strategic assets. That is the strategic asset company model. Markets can take time to recognize a differentiated model, but when the underlying assets begin producing visible cash flow and management demonstrates that it will actively defend value per share, that recognition can happen quickly. We believe that digital is soon approaching that point. And if the market will not close the gap between what we own and how it's valued, we are considering closing it ourselves. We'll now open the line for questions.

Thank you. As a reminder, if you'd like to ask a question, please signal by pressing star 1 on your telephone keypad. If you're using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Once again, star 1 for questions. We'll go first to Nick Giles with B Reilly Securities.

Hi, Nick. Thanks, operator. Hi, guys. Appreciate the update. Sam, it was really interesting to hear you just speak to the prospect of a buyback there. I was just hoping for more details on potential timing, you know, when the board would ultimately make a decision on something like that. And then should we assume that it would be using the wind down of the Wi-Fi stake? I heard you kind of recommit to maintaining that ownership position in 2026. So should we think about this as more of a 2027 type of event? Thanks.

Thanks, Nick. I can't give details on the exact timing of that. The board is still considering How and when to do that. But I can tell you that it is a very vigorous discussion that we're having. We think the 40% or sometimes even 43% discount to NAB is unacceptable and makes no sense. So the way to close that obviously is considering a buyback. You're right. We did today recommit to not selling our shares in white fiber. And the reason for that is, frankly, greed. We believe that white fiber is going to do extraordinarily well, and we just don't want to sell down that position prematurely. That would be shooting ourselves in the foot. So we're very excited by white fiber's progress. We believe that the market capital will continue to be favorable in terms of size. and growth. And we're very excited by White Fiber's future. And of course, as White Fiber becomes larger, when we start selling down that position, it'll be even more proceeds that come to BitDigital, which is a very positive thing for the BitDigital shareholder. So time is our friend there. And I can't give you the exact time, but we are talking about it quite often and and we look forward to future announcements once we get some clear visibility on how and when.

Well, that's very good to hear. I appreciate that perspective, Sam. I think just next question was, you spoke to the different ways you're using the balance sheet, kind of getting creative there. And I heard you mentioned the covered calls. Just was curious on potential timing around that opportunity and how you kind of would frame up returns on doing that. Thanks.

Yeah. Eric, do you want to take that question?

Sure. In terms of timing, I think we're coordinating with White Fiber for a Restrictions Statement potentially later this quarter. and we're working with a few banks for their execution. So currently, we do not have an exact pricing yet, but we should be able to talk about it when we have the registration done and more proposals in execution on our desk.

Understood. Okay. Well, guys, thanks again for the update. I'll turn it over.

Thank you. We'll take our next question from George Sutton with Craig Hallam.

Hi, George. Thank you. Hey, Sam. Hey, Eric. So I'm confident that you will soon have a facility on NC1. And can you just walk through the scenario of that happening? Let's hypothetically assume that has happened. You will then get an inflow of cash. I assume that would be part of the fuel for a significant buyback. Am I thinking about that the right way?

I'll let Eric talk about it, but just high level, the buyback can come, you know, there are multiple sources of liquidity for a potential buyback. Of course, there's that, but there's also selling down our white fiber shares in the future. So there are different sources of liquidity, not just this facility being paid back, but I'll hand it over to Eric so he can double click on that.

Yeah, for the bridge facility we had with Y-Fiber as Thank you very much. in this scenario. So not necessarily using to do a buyback, but this is generating additional yield or revenue for the digital in a meaningful way compared to native staking.

We're still trying to figure out what source of liquidity we'll do to consider a buyback. It hasn't been decided yet. But I do want to highlight that The return that we got on the bridge facility is higher than what we would have received on staking.

I understand. And sorry to get geeky on Ethereum, but a couple of things I'm just curious your thoughts on. EIP-80363, which would reduce the ETH issuance relative to staking. Just curious your thoughts on that. And then also on the Glamsterdam hard fork coming up later this year. What do you think that does for ETH and your stake?

I've been looking at the Ethereum ecosystem and what's happening on the moves that are being taken to promote the price of Ethereum. So as mentioned, there's been some companies that have launched recently, like ETH Institutional, Etherealize, and two other companies such as ETH Labs and ETH Systems. And those companies are focused on not the geeky part of Ethereum, but rather getting institutional adoption accelerated and protecting and promoting the price out there. So that's where my focus has been. And I haven't been really focused on the engineering aspect of Ethereum block space. So I'm not informed enough to give you a good answer on those questions.

Okay, thank you.

Thank you. We'll take our next question from Brian Dobson with Clear Street LLC.

Hi, Brian.

Hey, how are you doing? So in the press release, you mentioned, of course, that White Fiber is a core holding. Would you consider selling just a portion of it in order to finance a repo and take advantage of the valuation discrepancy between the two stocks? And I guess on that subject, is there anything in your, call it, portfolio of potential investments that, in your view, might generate a greater return than repurchasing BitDigital shares?

Well, we think that repurchasing BitDigital shares could be a pretty good investment. But again, that's a discussion happening at the board. And going back to your question about whether we would use the proceeds from selling down white fiber Thank you very much. We're just considering it. We're just talking about it. It's on our menu and it's a very attractive dish on our menu for obvious reasons. But in terms of whether we do it and the timing is still up in the air.

Yeah, very good. And then yesterday's white fiber call was very positive. The Tony Ford business, very encouraging. I suppose, you know, is that part of the business? As that company continues to gain traction, do you think that that will help to erode the NAV discount that BitDigital is experiencing?

Well, I think so. I mean, look, if you compare, I don't want to, this is kind of a tough thing to say, but if you compare BitDigital to its competitors, peers. Now, we're not a digital asset treasury company, so it's a bit apples to apples, but we're outperforming on a relative basis, and I think a lot of that has to do with the white fiber holding. So I think the white fiber holding very much helps the share price. I can't talk too much about the share price, but I think it's a positive thing towards the share price, but it does sometimes create Yeah, very good. Thanks a lot. Yeah.

Thank you. We'll take our next question from Raymond Eddings with Missouri Trust.

Hello.

Hi, guys. Thanks for the call today. If we can talk for a second about, I guess, the opposite of a buyback, it looks like share count went up about 25 million shares in the last quarter. And I know you said you didn't issue shares for the white fiber. Allocation, or to fund Ethereum purchases. Wondering if you can just talk a little bit about what were shares issued for this quarter?

Yeah, I mean, look, we would strongly hesitate to issue equity at these levels today. There would be some pretty strong hesitation. Our capital priorities changed as the discount widened through the quarter, and that change is exactly why the board is now evaluating a buyback program. The Ethereum purchase and equity issuance were separate decisions. We bought Ethereum to lower our average cost while the ATM provided cash for construction spending. Each decision made sense based on the circumstances at the time. I think what changed is the gap between our market value and the value of our assets. That is the allocation test working, and at that point, some were different than it did in spring.

Okay, what was the approximate at-the-money sales pricing?

Eric, are we... I'll leave that with Eric. I don't have that exact data point, and I'm unsure if we're... Yeah, could you repeat your question again?

I'm sorry.

Yeah, and I guess really my question is relative to the discount. So I know you've said... 40% or more is way out of line. I was wondering if we can expect you may issue shares for corporate purposes at a 10% or 20% discount, but buy them back in at a 30% or 40% discount.

I see. It's not a – I understand your question now. It's not a – there's no certain number in mind. It'll depend on what those purposes are and if the purpose is for a better return than what the discount is, then obviously we think about it, but there's no specific number in mind that we have. There's no like, oh, it's minus 20. It's like it's 20% disconnect now. We can use the ATM, but we don't think of it that way. It's not a quantifiable number.

Yeah, and of course, I just want to add, probably for technical reasons and legal reasons, we do not want to put in a position like we're sort of trading our own stock. So like Sam said, all the decisions are based on circumstances based on your working capital needs, capital allocation, et cetera. And we try to make decisions as long-term as possible. So thank you. Thank you.

With no additional questions in queue at this time, I'd like to turn the call back over to Sam for any additional or closing remarks.

Thank you for joining us today. We appreciate your continued interest and support. We look forward to speaking with you again next quarter. This officially concludes our call and have a great day.

Thank you. That will conclude today's call. We appreciate your participation.