Earnings Call Transcript - IREN Q2 2023

Operator, Operator

Greetings. Welcome to Iris Energy Second Quarter Results Conference Call. At this time, all participants are in a listen only mode. A question-and-answer session will follow the formal presentation. Please note, this conference is being recorded. I will now turn the conference over to your host, Lincoln Tan. You may begin.

Lincoln Tan, Senior Manager of Investor Relations

Thank you. Good afternoon for those of you in North America and good morning for those of you in Australia, and welcome to the Iris Energy second quarter FY 2023 results presentation. My name is Lincoln Tan, Senior Manager of Investor Relations. And with me on the call today are Daniel Roberts, Co-Founder and Co-CEO; and Belinda Nucifora, CFO. Before we begin, please note that this call is being webcast live with an accompanying presentation. For those who have dialed by phone, you can elect to ask a question by the moderator after our presentation. I would like to remind you that certain statements we make during the conference call may constitute forward-looking statements. And Iris Energy cautions listeners that forward-looking information and statements are based on certain assumptions and risk factors that could cause actual results to differ materially from the expectations of the company. Listeners should not place undue reliance on forward-looking information or statements. Please refer to the disclaimer on Slide 2 within the accompanying presentation. Thank you. And I will now turn the call over to Dan Roberts.

Daniel Roberts, Co-Founder and Co-CEO

Thanks Lincoln. Welcome everyone. Thanks for dialing in to our results presentation. I am very pleased to be speaking with you today. So, jumping right into it, we've just got a new technology, so I'm making sure the slides scroll correctly. So straight into the business update. Many of you would have seen our announcements on Monday; we have successfully increased our operating capacity from 2 exahash to 5.5 exahash as a result of a transaction that we made with a third party. This brings to a head a conclusion around the 10 exahash contract we have had on foot with Bitmain over the last 18 months or so. It is fair to say it was a good result. We are very pleased with the relationship and the partnership we have with Bitmain. That 5.5 exahash will be installed progressively. It will all be shipped, is our expectation, in February. Then it's a matter of getting it to site, managing the 44,000 odd machines, which the 4.5 exahash represents, and installing them from there. In terms of specific guidance on that ramp-up, we expect to start installing machines in March and then it will take however long it takes, but rest assured, we're all motivated to get them installed at full capacity in the very short term. In terms of the underlying transaction and how it came to happen, we spoke to you in December. We explained it had been a difficult year with a lot of challenges thrown at us. At that point, we felt like we were in a good position. We had the infrastructure, we had the prepayments with Bitmain, we had cash, we had some operating capacity, and we had a clean balance sheet as a result of wiping the debt facility. We urged people to be patient and let us work through the options. We had hosting there as a backstop, but we also had time. I think we've gone through the right process, which is the most important thing, and the outcome has been a good one for the business. In terms of what the transaction involved, there were 6.7 exahash of remaining units to acquire under that 10 exahash contract. Against which the $67 million of prepayments we had already made to Bitmain represented about $10 per terahash as a deposit. Simply put, we sold 2.3 of that 6.7 exahash. We got real cash in the process, directed that cash to Bitmain, which unlocked 4.4 exahash of units for ourselves, for zero cash outlay. It was a tripartite arrangement, locked up in parallel. We didn't take risks on any specific counterparty. It was a three-way agreement, and successfully concluded pursuant to the announcement on Monday. So it is a good result, and we are very pleased to have a substantial operating base and move forward from here. On to an update on Childress, which is our next site in Texas. It's a 600 megawatt total capacity site. From day one on energization, we will have access to 600 megawatts of electrons. This is important because it provides us with a growth pathway that is essentially locked in. As we've told you previously, the first 20 megawatts has been under construction for data centers, and that is now nearing completion. As part of the site energization, we built the full 600 megawatt substation, in addition to the AEP switchyard, and we're also commissioning a 100 megawatt substation, of which the first 20 megawatt data center will draw from. This gives us an even shorter runway to the next 80 megawatts of data centers, which we've now started working on. Now, this means that we have 160 megawatts of data centers already built and commissioned in British Columbia, into which the majority of those Bitmain machines will be plugged in over the next month or two. We have 20 megawatts at Childress almost completed, which will round out the first 5.5 exahash. We are now working on the next 80 megawatts at Childress, utilizing that 100 megawatt substation that is in the process of being energized, which will support roughly another 2.5 exahash, assuming the high efficiency miners we have today in the S19j Pro's. This is the culmination of a couple of years of work on this site. These high voltage, large-scale infrastructure energy projects take time. They take time to negotiate with the utilities, connection agreements and integration into the energy market, and they also require capital. We've had to invest a substantial amount of capital to get the site to this point. But what that has allowed us to do is now scale rapidly, efficiently, and in a relatively short timeframe just given the investment we've made in that site. Our focus is absolutely there, as well as plugging in the 5.5 exahash over the next couple of months and continuing the momentum we've seen at the start of 2023. That's it from me for now. I'll pass you back to Lincoln to give you a further update.

Lincoln Tan, Senior Manager of Investor Relations

Thanks very much, Dan. This slide just steps through the illustrative economics across a range of different scenarios and Bitcoin prices at the current global hash rate. There are a couple of key takeaways from our perspective. Firstly, in terms of profitability and cash flow generation associated with the infrastructure we've built, you can really see the step-up in mining profitability as we step up from 2 exahash to 5.5 exahash of operating capacity. At a $25,000 Bitcoin price, this represents an almost three times increase in mining profits with annualized mining profits stepping up from $33 million to $94 million, and we expect this to support strong operating cash flow going forward. Secondly, concerning how we will monetize our available infrastructure, we believe the economics validate our strategy of adopting a patient approach and fully assessing all available options, ultimately optimizing decision-making around self-mining versus a blended self-mining and hosting model. We see from the economics that 5.5 exahash of self-mining delivers a far superior mining profit versus a blended self-mining and hosting model. At a $25,000 Bitcoin price, self-mining the full 5.5 exahash is expected to generate more than $40 million of additional mining profit on an annualized basis. Turning now to the next slide, and this is the peer comparison slide here. We thought it would be helpful to share some perspectives on the sector and why we view Iris Energy as a differentiated exposure. From a scale perspective, 5.5 exahash of self-mining capacity positions us as a leading Bitcoin miner in the space and certainly among the top five US-listed Bitcoin miners by exahash. We wanted to highlight the disciplined and risk-focused approach we always take towards capital allocation and our balance sheet. 2022 presented the sector with significant headwinds. We observed many public miners raising significant equity capital and diluting shareholders in the process. We want to reiterate that we have not sold a single share since our IPO in 2021. Notwithstanding these challenging market conditions, we fought tooth and nail to optimize operations, our funding position, liquidity, and ultimately respect our use of shareholder funds, not just to weather the bear market but also to grow our infrastructure platform significantly and maximize our assets' potential. Regarding our balance sheet, we are starting this year off with a clean balance sheet, no debt, and $38 million cash as of 31 January. The final takeaway here is in terms of efficiency; one metric we look at is how many Bitcoin we are mining for exahash of installed capacity. Over the course of 2022, we are pleased to have led the sector on this metric. We believe this reflects the quality of the facilities we've built, the long-term view we take towards our investments, and the importance of the team we have on the ground. Finally, I want to highlight again that our management team remains highly aligned and committed to the business. Our founders, board, and management own about a quarter of the register, and to reiterate, we have not sold a single share. We're still very early on this journey and see huge growth opportunities to come. We appreciate the support received along the way. We were the first Bitcoin mining IPO led by bulge bracket banks, and continue to enjoy broad sell-side research coverage. We're looking to build a multi-decade institutional-grade infrastructure platform, and we're very much here for the long term. On that note, I'm just going to hand over to Belinda, who's going to take us through a summary of the Q2 financial results.

Belinda Nucifora, CFO

Well, thank you, Lincoln. Just moving the slides forward. Good morning from sunny Sydney. It's a beautiful day here. Hopefully, it's just as lovely in North America. We start looking at our Bitcoin mining revenue; it's certainly been an exciting and challenging year for the business in these first six months. During Q1, we energized both our Mackenzie and Prince George sites. As illustrated by the top chart on this slide, we achieved a record of 780 Bitcoin mined during the period, realizing an average Bitcoin price of around $21,000 resulting in Bitcoin mining revenue of $16.2 million. While our operating average hash rate increased by 0.2 million from 2 to 2.2 in the second quarter, the number of Bitcoin mined decreased to 722 as the global hash rate increased, resulting in an implied difficulty increase that reflected 58 Bitcoin lower in the quarter. We achieved a Bitcoin price of $19,000, resulting in revenue of $13.8 million. Additionally, during the second quarter, we decommissioned the miners associated with the non-recourse SPVs two and three on 5 November 2022. Moving on to look at our operating costs, in Q1, we spent operating costs of $14.6 million, which increased to $16.7 million in Q2. The main increase is primarily due to electricity costs, which rose from $6.6 million to $7.4 million as we energized the Mackenzie and PG sites, along with the growth in our average operating hash rate. Looking at the average electricity cost per Bitcoin mined, this increased from $8.4 million in Q1 to $10.2 million in Q2. This rise resulted from excess demand charges attributable to our average unutilized power capacity, as well as the increase in the average global hash rate during the period. Our normalized electricity cost of $9.5 million per Bitcoin mined was achieved by adjusting for these excess demand charges. Site and other costs increased from $8 million in Q1 to $9.3 million in Q2 due to a full quarter of operational costs from the Mackenzie and Prince George sites and our build-out of corporate platforms to support a 5.5 exahash business and beyond. Now let's turn our attention to the balance sheet. As of 31 December 2022, we had total assets of $412 million and total liabilities of $142 million. As Lincoln mentioned, we have a strong cash balance at the end of January. At the end of December, it was a similar number of $39 million, which excludes limited recourse financing SPVs. Dan mentioned in our opening slide that we utilized Bitmain Mining hardware prepayments, with an accounting value of $59 million, fully utilized post-balance sheet, resulting in our average operating exahash increasing to 5.5 over the coming months. During Q2, we recorded a primarily non-cash impairment charge of $105 million, of which $67 million relates to the limited recourse financing SPVs. We also evaluated the carrying value of our remaining miners, which were approximately 2 exahash, and impaired those to the market value of the miners. The group’s goodwill of $600,000 has also been impaired, meaning there's no longer a requirement to test for impairment annually but only when there are indicators of impairment. In terms of the SPVs, a receiver was appointed on February 3. The last column of the balance sheet reflects what the derecognition of the SPVs would look like from the group as of 31 December 2022, reducing our assets to approximately $300 million and liabilities to $29 million as the debt technically comes off from an accounting perspective. Overall, a very strong balance sheet at the end of December. Now we will move to the Q&A session of the presentation. I think the facilitator will handle those questions.

Operator, Operator

Thank you. Next question comes from Mike Colonnese with HCW. Please proceed.

Mike Colonnese, Analyst

Hi. Good morning, guys, and thank you for taking my questions. Congratulations on working out the Bitmain equipment contract. It's great to see that; really great work there. First, can you speak to your ability to secure power contracts at the Childress site? How are those conversations going? And what potential power costs do you expect to lock in as you near energization there?

Daniel Roberts, Co-Founder and Co-CEO

Thanks, Mike. A lot of our focus is at the moment on refining those arrangements and negotiating final terms. We're not looking to sign a long-term PPA at this point in time. Many of you may have noticed that the market price for power in Texas has plummeted lately; I was just reading a report showing a 60% drop month on month. The commodity is now sub $0.03 per kilowatt hour. So it is good timing for us. In due course, we may look at longer-term contractual arrangements, but we have an initial 20 megawatts worth of capacity. It's an opportunity to hedge more on a short-term basis, maybe month to month, and really optimize our operations. Importantly, contracting experience when you’re dealing with volatile and variable-priced power markets is risk-first, which won’t surprise you to hear us say that. We will take our time, start with some short-term hedging, and really move into the process as we build confidence over time. I think getting longer-term security around that power price makes sense, but we’re going to take our time and do it properly, particularly recognizing the relatively small operating capacity as a percentage of our operating portfolio in the short term.

Mike Colonnese, Analyst

Got it. Appreciate the color there, Dan. You guys obviously have a lot of runway at Childress with regards to total power capacity. How should we think about the capital requirements to build out the site on a cost-per-megawatt basis? And roughly, what is the total time it takes to develop these incremental data centers you plan to roll out?

Daniel Roberts, Co-Founder and Co-CEO

Look, the largest component of the cost, first of all, stepping back, we've invested a lot of fixed cost required to get this site, to get this capacity, build out a full high voltage substation for 600 megawatts, and build out the first 100 megawatt medium voltage substation. We've ordered the second 100 megawatt transformer already. We have layered into that programming schedule to ensure that we're cutting down lead times and preserving optionality, giving ourselves the opportunity to optimize the timeframe and how we build out that site. In terms of capital, we haven't stopped talking to capital providers since our IPO. We haven't sold a share and we haven't taken on corporate-level debt, but it doesn't stop us having conversations and continuing discussions around that. With 5.5 exahash of operating capacity, the substantial operating cash flow it will deliver—a reference point would be the transaction we did with Bitmain, where we effectively acquired the 4.4 exahash at an average price of $15.20 per terahash. If you extrapolated that out to the next 80 megawatts beyond the first 20 at Childress to fill up the first 100 megawatts of medium voltage power we are building, you look at about $50 million for the hardware, plus a small amount of infrastructure and data center capacity on top of that. We will keep working through it. First things first is getting these miners installed over the coming weeks and month or two, finishing that energization of Childress. We'll get another $18 million back as a refundable deposit in Childress from AEP as part of that process. That adds cash onto our balance sheet, and then we can optimize our capital structure and growth. We've always said this market is dynamic, and we need to be flexible and nimble to preserve optionality and minimize exposure to the downside as the upside will come. We will maintain that mentality going through the next few months.

Mike Colonnese, Analyst

Very helpful. Thank you for taking my questions.

Operator, Operator

Our next question comes from Pallav Saini with Canaccord. Please proceed.

Joseph Vafi, Analyst

Hey, guys. It's actually Joe Vafi here, not Pallav. Nice to see the nice progress in the business. Just wondering if in your BC facilities, is there any incremental potential from here to increase power at those facilities? It feels like with everything up and running there, that would be money well spent if possible, especially given the attractive power prices, and it’s all green? And then I have a quick follow-up.

Daniel Roberts, Co-Founder and Co-CEO

Absolutely. That's important. We've been using 100% renewable energy since day one, and it's our intent to stay that way. We have 160 megawatts commissioned in BC, and we then add the 20 megawatts at Childress; we've got another 580 megawatts to go at Childress. That's not to say that we build all of that out before returning to BC. But we have continued to develop those sites, look at paying connection deposits in due course. We've got rights over land and are negotiating connection conditions with the utilities. In the near term, we have the 580 megawatts, which gives us a clear growth pathway. We're focused on developing and incubating additional sites outside of North America.

Joseph Vafi, Analyst

Sure. Thanks, Dan. In terms of bitcoin spot price, we see it moving up, but I'd like to get your view on ASIC spot prices. Do you think there may be a window here where ASICs may not react in sync with the rising bitcoin price? What may that mean for your capital strategy?

Daniel Roberts, Co-Founder and Co-CEO

Thanks, Joe. Historically, you tend to get a window between one to four months where Bitcoin starts increasing, hardware prices don't necessarily respond immediately, and opportunities arise. We’ve capitalized on that in the past to benefit shareholders. However, you can try and get too cute with this. There's a natural investment profile for deploying more capacity in this sector; historically, average hardware prices are priced to deliver about a 124% return. If you amortize the costs, it results in approximately 50% to 80% year-on-year returns. It’s essential to maintain our discipline around capital allocation, but we feel good about investing additional capital in this sector.

Joseph Vafi, Analyst

Great. Thanks, Dan.

Operator, Operator

Our next question comes from Josh Siegler with Cantor Fitzgerald. Please proceed.

Josh Siegler, Analyst

Yes. Hi, guys. Congratulations on getting the 4.4 secured. I was wondering if you could give a brief update on the timing of when you expect those rates to be delivered? Are they currently in transit? When do you expect to get plugged in?

Daniel Roberts, Co-Founder and Co-CEO

As of this morning, I don't think any have been shipped, but I believe the first batch is not far away, and there might be another batch next week. More formally, we expect them all to be shipped this month. By the end of February, we then need to allow some time for them to travel from Asia to North America. They will land at the port, make it through logistics, and will ultimately get to our site where our team will install them. I don't want to promise anything regarding the time frame, as we're still working through the logistics. We're highly motivated to get them in as soon as possible. I think the ramp up may begin early to mid-next month, but how long it takes from there to fulfill the ramp-up to 5.5 exahash is uncertain; it might take another month or so.

Josh Siegler, Analyst

Understood. That's helpful. In the meantime, as you're getting these rigs up to speed and plugged in, how are you thinking about your current cash burn and current cash level?

Daniel Roberts, Co-Founder and Co-CEO

Lincoln or Belinda, would either of you like to handle this, or I'm happy to.

Lincoln Tan, Senior Manager of Investor Relations

Sure, I can address that. From a cash perspective, we disclosed at the end of January a $38 million cash balance. In terms of the runway from an OpEx perspective, we've already provided the numbers in this result, but we are targeting approximately $2 million per month for site and other OpEx. We believe there’s significant runway versus the current cash balance. We're commercially incentivized to plug in these new miners ASAP to start generating more operating cash flow.

Josh Siegler, Analyst

Got it. Thank you very much.

Operator, Operator

The next question comes from Chase White with Compass Point Trading and Research. Please proceed.

Chase White, Analyst

Thanks for taking the question. I have a couple of inquiries. First, I may have missed it, but I noticed in the presentation that Childress is expected to launch in the second calendar quarter of this year. Can you give me an update on when you anticipate going live? Are we looking at early April or more towards the middle or end of the quarter? I’m trying to get a better understanding of what that timeline looks like.

Daniel Roberts, Co-Founder and Co-CEO

We're always cautious around guidance, and we never want to underperform. We’re comfortable with Q2, and it should be viewed through the lens of us often performing ahead of schedule. We are targeting more towards the start of Q2 rather than the end, but remember that we’re dealing with 600 megawatts of high voltage power, which involves safety and technical considerations beyond our control. If it takes an extra few weeks or an extra month, that's fine; we want to get it right.

Chase White, Analyst

Got it. That's helpful. In British Columbia, what power consumption level do you expect the cost to normalize on a per Bitcoin basis? How much do you have to start consuming before you've optimized your power consumption?

Daniel Roberts, Co-Founder and Co-CEO

We have no issues now with the 5.5 exahash. In about four to six weeks, that issue will disappear entirely. More thoroughly, the excess demand charges are expected to normalize at around the 90 megawatt range, which is approximately 2.8 exahash. As I mentioned, we're laser-focused on getting these new miners energized ASAP.

Chase White, Analyst

Got it. That's very helpful. Makes sense. Appreciate it. Thank you, guys.

Operator, Operator

The next question comes from Reggie Smith with JPM. Please proceed, Reggie, your line is live.

Reggie Smith, Analyst

Thanks for taking the question. My question is more big picture. Thinking about Bitcoin, which is obviously off its lows, hash rates are still at all-time highs, and companies are cleaning up their balance sheets. What’s next for the Bitcoin mining space? What is the next story here?

Daniel Roberts, Co-Founder and Co-CEO

That is a high-level question, Reggie. Whatever we say, it could be different as time in this sector has shown. Clearly, margins have improved since Bitcoin's rally from recent lows. We’re prepared for Bitcoin to head back to those lows; it doesn’t pay to be overly optimistic. That said, it's looking constructive. The upcoming halving is an exciting event; typically, within three to six months of that, we see another parabolic run due to the supply shock. Whether it happens again remains uncertain. The reality is there are only $21 million of these coins, and they're not making more. With adoption increasing and even the regulatory scrutiny on the sector; it’s hard to see things going any direction other than positive— Bitcoin is clearly just a digital commodity and should benefit from that. Regarding the mining specifically, having some level of scale is critical in covering those expenses and driving growth. We are pleased to be among the top five listed miners, providing a step change for scaling and growing sustainably through the cycle in a disciplined manner. Energy prices have seen some relief, which is beneficial for miners.

Reggie Smith, Analyst

No, that makes sense. You mentioned scale, leading to my next question. How do you view mergers and acquisitions? Under what conditions does it make sense? How should investors interpret that? Would synergies primarily come at the corporate level or operationally? How does that work?

Daniel Roberts, Co-Founder and Co-CEO

Funny enough, we've heard this for the last year; everyone keeps saying this is the time for sector M&A, mergers, acquisitions—and it's become a sexy term that generates banking fees. I’m still trying to figure out why it would make sense. We've had many discussions and can see certain circumstances where it could lead to wins for both parties. One business may have a strong project development background, while another is well-capitalized, combining their strengths. Others might be doing hosting and recognize that long-term success requires vertical integration through M&A, rather than building that organically. For us, having done what we have, owning the land, infrastructure, and high-efficient proprietary data center design, plus a clean balance sheet, I think just signing up for issues from another company while we can grow organically makes more sense.

Reggie Smith, Analyst

That makes sense. I appreciate your perspective. Last question from me: I understand that you sent one final payment to Bitmain, but that payment was actually from someone else. Have you disclosed what that amount was? I'm just trying to back into the total cost for those 6.7 exahash?

Daniel Roberts, Co-Founder and Co-CEO

We haven't disclosed that detail; I'm cautious about confidentiality in the commercial terms of our agreements. However, it wouldn't be unreasonable to extrapolate our effective economics across the deal and assume it's within the ballpark.

Operator, Operator

We have no further questions from the phone lines at the moment.

Lincoln Tan, Senior Manager of Investor Relations

Thank you. We'll now move to Q&A coming through on the webcast. One question from a financial perspective for Belinda: what's included in other costs on adjusted EBITDA?

Belinda Nucifora, CFO

Thank you, Lincoln. In this quarter, there was a salary adjustment made, which accounts for approximately 90% of the costs, along with some small one-off expenses related to transactional deals and potential debt raisings.

Lincoln Tan, Senior Manager of Investor Relations

Thanks, Belinda. Another question: will we consider further debt financing at this time?

Daniel Roberts, Co-Founder and Co-CEO

All options remain on the table; we've consistently said that we're always in discussions with potential funders around capital. However, we've never sold a share, and we are large owners of the business. We aim to be laser-focused on risk management and only take on the right capital at the right time when it makes sense.

Lincoln Tan, Senior Manager of Investor Relations

Another question: just a point of clarity around the cash balance that doesn't include the $18 million refund. That’s correct. The cash balance we quoted of $38 million in January and $39 million in December is exclusive of the Childress refund we expect following the site's energization. Another question for Dan: what's the minimum cash position we want to see before we commit to further CapEx around building new data centers?

Daniel Roberts, Co-Founder and Co-CEO

It depends. It's not a simple answer. We don't have a target working capital; it’s tens of millions of dollars. It really depends on factors including debt status, operational cash flow, and our commitment level. We will continue to be prudent and ensure we're managing for the downside, planning under the assumption that the market can always turn for the worse, even as we’re going vertical—because if Bitcoin goes on a run, we still need to model out our scenarios. We're prudent in maintaining plenty of headroom; we have demonstrated our ability to manage the balance sheet.

Lincoln Tan, Senior Manager of Investor Relations

Thanks, Dan. Another question about uptime assumptions across our sites, including Texas?

Daniel Roberts, Co-Founder and Co-CEO

We take uptime and efficiency very seriously. We build and operate all of our data centers ourselves, targeting 100% uptime. If it's not at that level, we're looking at ways to optimize. We'll continue this focus moving forward, taking lessons from our operations, particularly with Texas coming online. Now, addressing why we are differentiated: we don’t use shipping containers or old abandoned warehouses. One wouldn’t expect your local capital city data center to be down 10% of the year. Our approach is to build proper multi-decade infrastructure that allows machines to operate through various weather conditions since downtime directly impacts our bottom line. It’s worth the initial investment. For example, we have implemented an automatic recirculation function to maintain optimal temperatures around chip boards to help mitigate cracking during subzero winters. In summer, we employ variable speed exhaust fans to optimize airflow and power consumption. These adaptations translate to operational efficiency, asset integrity, and the longevity of our equipment.

Lincoln Tan, Senior Manager of Investor Relations

A couple of questions were asked about whether we would consider next-generation miners beyond the pros that we have, including hydro-cooled miners.

Daniel Roberts, Co-Founder and Co-CEO

Hydro cooling is not necessarily a next-generation mining chip; it’s a method of cooling chips using fluid rather than air. It's not something of primary interest to us. We believe that air cooling can be highly efficient if done right. The physics around a closed-loop system for recycling fluid poses challenges. We've been happy with our 29.5 joules per terahash efficiency, which is among the best in market. If future models prove more efficient, we will absolutely evaluate them and assess costs against our normal capital allocation decision processes.

Reggie Smith, Analyst

Thanks, Dan.

Lincoln Tan, Senior Manager of Investor Relations

I think we've addressed all the questions coming in. Dan, can you wrap us up with some concluding comments?

Daniel Roberts, Co-Founder and Co-CEO

Sure, thanks Lincoln. Thanks everyone for dialing in. 2022 was obviously a challenging year for the industry and our team. A special thanks to our team who have worked so hard over the last 12 months. The rewards in the last week have been enormous and are pleasing. At the end of the day, we’re here to enjoy ourselves, so seeing lifted spirits is fantastic. We are excited to build from this point; we see it as another milestone. We’re focused on the next 80 megawatts at Childress and look forward to engaging with investors about why we believe we’re here for the long term. Our proposition is truly differentiated: 100% renewable energy and proprietary data centers, doing everything in an institutional grade fashion. We'll be patient as we've demonstrated and proceed through the right processes. Thank you for your support as investors since the IPO; it's been a bumpy ride, but your encouragement validates that we’re doing things right. Thank you again for your participation. We look forward to speaking with you soon.

Operator, Operator

This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.