Keel Infrastructure (KEEL) Q1 2026 Earnings Call Transcript

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Date

May 11, 2026, at 8 a.m. ET

Call participants

• Chief Executive Officer — Benjamin Gagnon
• President — Jonathan Mir

Takeaways

• Revenue -- $37 million, representing a 23% decrease year over year due to the shift away from digital asset operations and the classification of Paso Pe as a discontinued operation.
• Operating loss -- $98 million, with noncash depreciation of $28 million, a significant increase versus $35 million operating loss and $18 million noncash depreciation in the prior-year period.
• Loss from continuing operations -- $128 million, or $0.21 loss per share, compared to $38 million, or $0.08 loss per share, in the prior-year first quarter, reflecting increased operating loss and a $22 million loss from extinguishment of the Macquarie credit facility.
• Adjusted EBITDA -- Negative $17 million, down from positive $7 million year over year, mainly reflecting a $15 million increase in energy and infrastructure expenses, and a $7 million unfavorable shift in digital asset sale gains/losses.
• Current liquidity -- Approximately $533 million in cash and Bitcoin as of May 8, 2026, which fully funds Panther Creek, Sharon, and Moses Lake through lease execution and construction commencement at Moses Lake, as well as general and administrative expenses through 2028.
• Sale of Paso Pe site -- Closed in the quarter, providing upfront cash equivalent to 2-3 years of forward cash flow under prior market conditions.
• Bitcoin holdings monetization -- 269 Bitcoin sold for $20 million in proceeds between Jan. 1 and May 8, 2026, as part of the 2026 planned sell-down.
• Flagship project (Panther Creek) -- 350 megawatts of secured gross capacity under an Energy Service Agreement (ESA) with PPL, with potential to increase to 400-430 megawatts through conversion of a 60-megawatt Interconnection Service Agreement (ISA), and long-term campus expansion supported by a recent load study for more than 500 megawatts.
• Sharon campus update -- 110 megawatts secured with First Energy (30 megawatts operational, 80 megawatts under development); zoning and preliminary land development approved, environmental permits in progress; site on track for 2027 readiness.
• Moses Lake site -- 18 megawatt project in Washington with option to add 10 megawatts; all core modular data center equipment and backup generators secured; site is decommissioning Bitcoin mining and targeting rapid deployment through advance equipment purchases.
• Permitting milestones -- Zoning approvals completed at all three near-term sites; land development and environmental permits in progress and tracking to a mid- to late summer completion, with permitting and lease negotiations running in parallel.
• Lease execution priority -- Company aims to sign three leases by year-end, one for each of Panther Creek, Sharon, and Moses Lake, targeting investment-grade tenants with significant focus on near-term value inflection.
• SG&A expectations -- President Jonathan Mir stated, "we'd expect our run rate cash SG&A to run about $25 million a quarter or $100 million a year, plus or minus," with increases attributed to winding down Bitcoin and hiring HPC/AI development talent.
• Future campus expansion -- Scrubgrass load study underway for 750 megawatts of capacity; timeline for results expected near year-end, which could more than double currently secured capacity upon power contract execution.

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Risks

• Operating loss increased from $35 million to $98 million, driven in part by a $41 million fair value loss on digital assets.
• Loss from continuing operations rose to $128 million, in part due to a $22 million loss from extinguishment of the Macquarie credit facility and a $7 million unfavorable swing in digital asset sale gains/losses.

Summary

Keel Infrastructure (KEEL +8.31%) completed its strategic pivot to a U.S.-focused digital infrastructure platform, finalizing its rebranding, redomiciling, and exit from Latin America, with 100% of assets now concentrated in high-demand North American markets. Management designated signing three major leases by year-end as the key driver for value creation, citing current liquidity of $533 million to fully fund all near-term project milestones without requiring additional external financing. New data center campuses in Pennsylvania and Washington advanced across all permitting and contracting fronts, and have secured both power and prime locations, increasing confidence in the company’s ability to convert its development pipeline into contracted cash flows.

• The decommissioning of Bitcoin mining operations and redeployment of all megawatts toward AI and HPC infrastructure further distances the company from its legacy digital asset business model.
• Management drew attention to a tightening market for data center power, with secured and expandable capacity at Panther Creek, Sharon, and Moses Lake providing a strategic advantage when negotiating with hyperscaler, neocloud, and enterprise tenants.
• Commercial discussions revealed tenant profile economics vary by segment, as CEO Gagnon clarified, "hyperscaler client is probably a little bit tighter on the economics, but that's largely offset by the quality of the credit," while neoclouds tend to pay more but present a higher cost of capital.
• Designs are being tailored to support next-generation GPU deployments such as Nvidia’s Vera Rubin, and Gagnon said, "we see more demand for Vera Rubin with our time lines of '27," positioning new campuses for technically demanding client requirements.
• Management confirmed expenditures on equipment and personnel are increasing in line with the company's transition, but the capital plan remains unchanged, and construction at Moses Lake is set to begin as leases are secured.

Industry glossary

• Energy Service Agreement (ESA): A contract granting access to a specific amount of power capacity from a utility provider for a particular site.
• Interconnection Service Agreement (ISA): An agreement that secures the right to connect a facility to the electrical grid for a defined amount of power.
• Hyperscaler: Large-scale cloud service provider operating hundreds of thousands of servers, typically referenced as tenants for major data centers.
• Neocloud: Emerging or nontraditional cloud service companies requiring significant computing infrastructure.
• Exahash: A measure of computational power equal to one quintillion hashes per second, used to quantify Bitcoin mining capability.
• Vera Rubin: Codename for Nvidia’s projected next-generation GPU platform requiring advanced data center engineering solutions.
• PJM: A regional transmission organization that coordinates wholesale electricity movement and reliability in parts of the eastern United States.

Full Conference Call Transcript

Benjamin Gagnon: Good morning, everyone, and welcome to our first quarter 2026 earnings call. Today is a meaningful day for us. This is our first earnings call presenting as Keel Infrastructure. And for those tracking the story closely, I want to take a moment to acknowledge what that represents. Two years ago, we outlined a deliberate multiyear plan to transform this company, wind down Bitcoin, build out our team and repositioned every megawatt we control towards the most significant infrastructure opportunity of our generation. That plan is now fully in motion.

And since our last call just over a month ago, we have also completed our redomiciliation to the United States, officially rebranded as Keel Infrastructure and closed the sale of our Paso Pe site. For those of you joining us for the first time, let me give you a clear picture of who Keel Infrastructure is and what we are building. Keel Infrastructure is a North American digital infrastructure company. We own large-scale powered land sites across Pennsylvania, Quebec and Washington that we are actively developing into over 2 gigawatts of high-performance computing campuses for leased to investment-grade hyperscalers, neocloud, enterprise and government clients. The Keel name captures who and what we are.

The Keel is the structural backbone of a ship, unseen but essential converting energy into forward motion. That is exactly what we do for our tenants. We enable and accelerate the data center growth that makes tomorrow's economy possible. Turning to Slide 4. Let me take a step back now and talk about why we are attracting so much attention from potential tenants and why we're set up to create tremendous value for customers. The conversation in HPC and AI infrastructure has shifted fundamentally over the past 12 months. Customers are not asking, can you build data centers?

They are asking when can you deliver power in the right location on a time line that actually matters to my deployment schedule? And how are you ensuring you can deliver? The answer to those questions is what separates sites that get leased from sites that sit empty. Our strategy is customer-centric and is structured around solving their highest value constraints. One, short time lines to power. Our sites have secured power available starting in 2027, enabling customers to accelerate deployment relative to building out interconnections organically. In PJM, Quebec and Washington, a new large load interconnection can take between 4 to 10 years. We have already done that work. That time line advantage is not incremental.

It is transformational for customers trying to deploy compute at scale. Two, prime locations. Panther Creek, our flagship campus is a great example of the value our locations bring. The site sits 2 hours away from Philadelphia and New York in the PJM energy market, surrounded by established hyperscaler and neocloud data center infrastructure. Our other campuses follow the same principle, proximity to metro areas and surrounded by our customers' established infrastructure. These are not secondary energy markets. These are primary markets where our customers are actively trying to expand and finding that supply at this time does not exist. Three, a proven permitting strategy built on transparent stakeholder relations.

While strong community engagement and support has always been a pillar of our culture at Keel, recent headlines are reinforcing just how critical this is. Our permitting team has decades of regional experience, and we proactively build genuine relationships with the communities around our sites. That approach produces results. Zoning is now complete at all 3 near-term sites. Land development and environmental permits are on track, including our preliminary land development approval at Sharon. Customers who have watched other developers miss permit milestones appreciate what this means for Keel's execution certainty. Four, proven delivery partners with hyperscaler grade track records. With power, land and community support, we have the foundation in place for success.

However, customer confidence ultimately comes from execution, which is why we've built a partner ecosystem designed to deliver that certainty. Working with Turner Construction, Corgan, Vertiv and T5, our customers do not need to take development execution risk on an untested team. Potential customers are looking at our construction and engineering partner roster and seeing our collaboration with best-in-class infrastructure and construction partners that have demonstrated experience delivering for hyperscalers. And five, future-proof designs. We are advancing architecture and engineering in parallel with customer conversations, which means that when a customer is ready to commit, we will be ready to easily adapt to their final specifications.

We are also thinking ahead with rapidly evolving technology, it has never been more critical to future-proof our data center development. We are thinking about our customer needs in 2027 and beyond, not just what they need now. Customers value that. Turning to Slide 5. Our portfolio is focused on high barrier to entry markets in Pennsylvania, Washington and Quebec. In these markets, our ability to accelerate time lines and enable regional growth creates real value for customers. Our 2026 priority is clear: sign 3 leases by year-end, one at Panther Creek, one at Sharon and one at Moses Lake. We have the right power in the right places with the right time lines.

And as Jonathan will walk through, we are better capitalized than at any point in this company's history with more than enough liquidity to advance all 3 sites through permitting and lease execution. Across all 3 of our near-term development sites, we are running 3 work streams simultaneously, finalizing permits, advancing architecture and engineering aligned with customer specifications and actively commercializing to secure highly financeable leases with investment-grade tenants. That parallel execution model is intentional. In this market, customers are making site decisions now. They are looking for partners who can show them a clear credible path to power, and we create that visibility by working with great partners and advancing all 3 work streams together.

So when customer is ready to commit, we are ready to build. Now let me take you through each of our 3 near-term sites. Turning to Slide 6. Starting with Panther Creek, our flagship campus in Eastern Pennsylvania and the centerpiece of our near-term development plan. We have 350 megawatts of secured gross capacity with PPL under an ESA. Development is structured in phases with an expected ready-for-service date in 2027 and additional expansion capacity beyond that. Permitting is a subject I know investors track closely. So let me walk through our approach with precision. Permits fall into 3 broad categories: zoning, development and environmental. Full permitting requires completion across all 3.

Our execution strategy is built around local expertise and proactive engagement, planning and transparency. We have assembled a team with deep regional knowledge anchored by a head of permitting with decades of Pennsylvania experience, and that local presence allows us to move efficiently through jurisdictional requirements and just as importantly, to engage productively with the communities around these sites who are always key partners in Keel developments. On the permitting progress, zoning approvals were completed in February, including the data center ordinance approval by the Nesquehoning Borough, a meaningful community milestone. Land development and environmental permits remain in process and are on track.

With zoning secured and a clear line of sight on development time lines, we are active in commercialization. To be clear, we do not need to wait nor are we waiting for every permit to negotiate leases. We give customers the visibility they need to make decisions and the certainty that they need to commit. In terms of the customer profile for the site, the scale and location of Panther Creek positions its squarely for hyperscalers and the largest neocloud operators. 2 hours from New York City with 8 fiber metro networks within 10 miles and direct proximity to established data center clusters, this is the kind of site that gets on a short list quickly.

We are in active conversations with multiple potential customers and the engagement quality has been strong. Finally, beyond the 350 megawatts of secured power at this campus, we are currently evaluating the conversion of our existing 60-megawatt ISA to firm service, which could bring total gross capacity upwards of 400 or 430 megawatts. In addition, a new load study conducted in 2025 supports potential expansion beyond 500 megawatts for the overall campus over the longer term. We will provide updates as that conversion evaluation progresses. The point is Panther Creek is a unique asset. It has the proximity and scale to service East Coast inference and training markets for years to come. Turning to Slide 7.

Moving to Sharon and Western PA. We have 110 megawatts secured by an ESA with First Energy. A 30-megawatt substation is operational today with an additional 80-megawatt substation under development. Sharon received full zoning permits last month. That is a significant milestone, and it gives customers increasing confidence in our delivery time line. Land development has been preliminarily approved and environmental permits are in progress and on track. This site is actively being commercialized with an expected ready for service date as early as 2027. Sharon sits within the PJM market with strong fiber infrastructure across 9 metro networks within 10 miles in proximity to Pittsburgh and Cleveland, 2 markets that are underserved relative to the East Coast.

In terms of customer profile, the capacity and location makes Sharon a strong fit for a hyperscaler, neocloud operator or large enterprise customers looking to establish a position in Western PJM. We are in active conversations with multiple potential customers and the response to our permitting progress has been positive. Turning to Slide 8. Finally, Moses Lake, our 18-megawatt site in Washington State. Small but mighty, Moses Lake is located adjacent to one of the most proven data center markets in the United States, the Quincy, Washington corridor, which has been home to hyperscaler infrastructure for nearly 2 decades. Power availability in this region has become one of the most constrained in the country.

The combination of existing cluster density and tightening power supply means that operators who need megawatts here have very limited options to grow organically. We are one of those options to establish a footprint or expand an already established operation. Moses is the only site where we made a deliberate capital decision ahead of commercialization. We purchased critical modular data center equipment in advance. That decision enables us to offer customers an accelerated deployment time line that is not available through a traditional stick build approach. Speed matters to our customers, and we engineered our deployment model to deliver it. Zoning in Moses is complete.

Land development and environmental permits are in progress and on track, and the Bitcoin mining operations are actively being decommissioned. Like our Pennsylvania sites, Moses Lake is actively being commercialized with strong inbound interest and ongoing engagement with multiple counterparties. In terms of customer profile, the scale of the site positions it as an ideal fit for emerging neoclouds, enterprise and government customers who need fast, reliable access to the Pacific Northwest market and do not require a campus scale commitment to do so. Faster time line, smaller megawatt commitment, right market, that is a compelling combination. Across all 3 sites, we have clear line of sight to full permitting, active commercialization and tangible momentum towards signed leases in 2026.

We look forward to keeping everyone updated on our progress. Turning to Slide 9. From a value creation standpoint, a signed lease is the single most important inflection point for our business. As signed lease does 3 things: it converts our development assets into long-term contracted cash flows. It unlocks access to low-cost nondilutive project financing, and it significantly reduces execution risk for every stakeholder in our capital structure. There is a reason we are intensely focused on getting 3 leases signed this year, where we expect each lease to be an event that reshapes how this company is valued. We are executing against all 3 simultaneously right now.

The second value driver we are executing this year is to increase our secured capacity from both expansion capacity and new organic growth opportunities. The third value driver will be delivering on megawatts in 2027. We believe that these 3 inflection points are key drivers of value creation for our shareholders in the near term and long term. And with that, I'll turn it over to Jonathan to walk through our financial position and strategy.

Jonathan Mir: Thanks, Ben. Turning to Slide 10. I want to open with a simple message. We are better capitalized today than at any point in this company's history, and our liquidity position gives us something invaluable in this market, the ability to both advance and derisk our sites at the pace our customers require and to make commercial decisions from a position of strength, not necessity. As discussed during our last call, our financial strategy rests on 3 principles: capital allocation, capital formation and capital structure, each directly supports our ability to execute our goal of signing 3 leases this year. Before I walk you through our strategy in more detail, I'll briefly go over our results for the quarter.

Turning to Slide 11. As a reminder, as of Q3 2025, the Paso Pe facility in Paraguay has been classified as held for sale. As a result, all revenues, operating costs and asset balances associated with Paso Pe are treated as discontinued operations in our Q1 2026 financials. So when I refer to continuing operations, I'm speaking exclusively about our North American platform, which is the foundation of all our transition into HPC and AI infrastructure. With that, revenue for first quarter 2026 was $37 million, down 23% year-over-year.

Operating loss for the quarter was $98 million, including noncash depreciation of $28 million compared to an operating loss of $35 million in Q1 2025, which included $18 million of noncash depreciation. The year-over-year change primarily reflects a $41 million loss related to change in fair value of digital assets in Q1 2026 compared to a loss of $23 million in Q1 2025. Loss from continuing operations was $128 million or $0.21 loss per basic and diluted share compared to a loss of $38 million or an $0.08 loss per basic and diluted share in Q1 2025.

The changes reflect the increase in operating loss and a $22 million loss from the extinguishment of the Macquarie credit facility in Q1 2026. For the first quarter of 2026, our adjusted EBITDA up was negative $17 million, down from $7 million in 2025. The difference was largely due to an increase in energy and infrastructure expenses of $15 million and an unfavorable change of $7 million in the gain or loss from the sale of digital assets. Turning to Slide 12. Now let me turn to our capital position. Since our last call, we have taken 2 actions that further strengthened our balance sheet.

First, we closed the sale of our Paso Pe site, which brought forward roughly 2 to 3 years of estimated cash flow under current market conditions in cash and upfront. Second, we have continued to actively manage our Bitcoin holdings, selling into strength and methodically converting a volatile asset into the stable capital our development business requires. During the period beginning January 1, 2026, and ending May 8, 2026, we sold 269 Bitcoin for $20 million in proceeds as part of our previously communicated plans to sell our Bitcoin holdings in 2026. Current liquidity as of May 8, 2026, stood at approximately $533 million in cash and Bitcoin. Let me put that number into context.

This fully funds the capital required to advance Panther Creek, Sharon and Moses Lake through lease execution as well as the start of construction at Moses Lake and covers our G&A through 2028. We believe this liquidity is a strategic advantage. We can continue developing at the speed our customers require while maintaining discipline and deploying capital where the returns are most compelling. Let me now walk through the 3 principles that guide our financial strategy. First, capital allocation. Every dollar we are deploying today is advancing our 3 priority sites toward lease execution. We believe it is the highest return use of capital available to us at this stage of the company's development. Second, capital formation.

As I noted, we have the liquidity to reach lease execution across all 3 sites without the need to tap into debt or equity capital markets. That said, we will remain opportunistic if attractive opportunities arise. Once we execute leases, we would expect to transition to project level financing model supported by long-term contracted cash flows, enabling us to fund construction with a high proportion of nonrecourse capital while preserving flexibility at the corporate level. The institutional financing market for HPC/AI infrastructure continues to strengthen, and we believe we're well positioned to access it on favorable terms at the appropriate time.

And third, capital structure. we operate with a disciplined liquidity strategy so that we can remain flexible when making commercial decisions. As I mentioned a few moments ago, we have more than adequate liquidity today to execute against our strategy without the need to tap into capital markets. That said, we'll always take the necessary steps to ensure a strong balance sheet, and we would envision having a credit line and/or an ATM in place at some point this year as we believe these are prudent tools for any public company to have available. Again, liquidity and capital strength are directly supportive of our commercial strategy.

Benjamin Gagnon: Thanks, Jonathan. Before we open for questions, I want to drive home a few things. This company has done what it said it would do. We said we would build a North American infrastructure platform. We built it. We said we would exit Latin American megawatts, done. We said we would redomicile to the United States and rebrand, complete. We said we would position our megawatts in the most capacity-constrained high-demand markets in North America, and this is exactly where 100% of our portfolio sits today. The case for Keel Infrastructure is direct. Power availability is the single biggest bottleneck constraining the growth of the AI economy.

We control scarce deliverable power in 3 of the most supply-constrained markets in North America, allowing us to work alongside our customers to solve that challenge together. We have the sites, the team, the permits in progress, the partners and the balance sheet to execute, and we are executing now. 3 leases signed by year-end, revenue commencing in 2027. That is the plan, and that is what we are focused on delivering. I want to close by acknowledging our fantastic team. The pace and the precision with which we have executed this transformation, the transactions, the hires, the permitting progress, the commercialization is not the result of any one decision.

It is the result of hundreds of well-made decisions by a team that is fully committed to this mission. I've never had more confidence in our team and our ability to deliver. I look forward to continuing to update you on our progress. And with that, I would like to open the call to Q&A. Operator, please go ahead.

Operator: [Operator Instructions] Our first question comes from Mike Grondahl with Northland.

Mike Grondahl: Ben, maybe specifically on Sharon, you had kind of talked about hyperscaler customers, neoclouds and large enterprises. Can you talk a little bit about the pros and cons or the terms from each category and kind of how -- what metrics you're going to use to decide on a lease?

Benjamin Gagnon: Thanks, Mike, and it's a great question. When you're looking at all the different available potential tenants for these sites, there's obviously going to be a pros and cons across the various categories. I think broadly speaking, what you see from a hyperscaler client is probably a little bit tighter on the economics, but that's largely offset by the quality of the credit and the confidence in the long-term contract there. Neoclouds are generally paying a bit of a higher price, but they also come with a higher cost of capital. And so there's a balancing act.

For us, really, it's about finding the right balancing act between the counterparty, the economics of the contract and the cost of capital, but not specifically trying to get a hyperscaler over a neocloud, but really trying to optimize across those 3 variables.

Mike Grondahl: And any sense where you're leaning today?

Benjamin Gagnon: I don't want to get into exactly where we're going to go. But on the slides, what we did indicate for each site was the potential kind of a tenant profiles. So that should give you an indication of kind of where we're leaning for each site because most of the sites scale is determining the kind of customer demand that we're receiving.

Mike Grondahl: Got it. Then just lastly, how has demand changed over the last 90 days?

Benjamin Gagnon: I don't think it has changed, Mike. It's still present. It's still incredibly strong. There is some emerging questions around kind of global investments in HPC and AI versus the U.S. given what's happened in the Middle East and given the geopolitical uncertainty of investing everywhere else. But I don't think we've seen a real change in demand. It's more or less a reinforcement of what was already there before the conflict, a preference to invest in the United States. Now we're seeing just a much stronger reinforcement of that. But I think demand is as strong as it was 90 days ago or 120 days ago.

Operator: Our next question comes from Brett Knoblauch with Cantor Fitzgerald.

Brett Knoblauch: On Panther Creek, which seems to kind of be like the largest initial site for you guys or the flagship site. And I know the slide deck we're kind of waiting on environmental and land. Could you maybe just help with the time line on that? Is that still a 3Q event? Could it happen sooner? And is that absolutely necessary, call it, to happen pre-lease execution?

Benjamin Gagnon: So it's great question, Brett. We're still tracking on the exact same time line that we indicated on the last Q4 call a couple of weeks ago, which is kind of a mid-late summer time frame. This is what we're lining up for right now. What we want to make clear in terms of the process is lease negotiations and permitting are a parallel process. It's not as if you need those in hand to begin a successful lease negotiation, but you have to be able to show a very confident and credible pathway with a high confidence that you'll achieve it on the time lines you're going to achieve it to be successful in those lease negotiations.

And we achieved that earlier this year, which is why we've been active in the commercialization strategy across all 3 of those different sites. So we shouldn't expect that the timing of the permits is going to have a slowdown in terms of the lease execution. Those are simultaneous, and we would be looking to complete the permits before executing the final lease, but the negotiation and the permit applications continue in parallel.

Brett Knoblauch: Awesome. And then maybe just as a follow-up, I think what we're hearing across most of the space is that kind of capacity for 2026 is sold out. So anything with an RFS date in 2027 should be relatively attractive. And then you guys are also designing -- at least sharing for Vera Rubin. Are you seeing any change in conversation given it's a Vera Rubin kind of design relative to maybe other sites that might be maybe Blackwell? I'm just curious if you're seeing like an uptick in demand for what would be a Vera Rubin site?

Benjamin Gagnon: So the Vera Rubin technology is very different than Blackwells. The engineering requirements are a magnitude of order more complex and sophisticated than the Blackwells. So the conversations are relatively different. I think the -- in terms of Blackwells, nobody has actually received their first allotment -- or sorry, in terms of Vera Rubin, nobody has actually received their first deliveries of Vera Rubin. So the conversation with Vera Rubin is much more about planning for the future and trying to accommodate for the equipment that is really just kind of coming off the first lines of the production run right now, whereas Blackwell is more of a known technology and a known engineering standpoint.

I would say from a demand perspective, we see more demand for Vera Rubin with our time lines of '27. But the biggest difference in the conversation is really just the changing in real-time engineering requirements from NVIDIA for the Vera Rubin technology stack because this is just starting to emerge in the market now.

Operator: Our next question comes from Bill Papanastasiou with Chardan Capital Markets.

Bill Papanastasiou: Previously, I believe management mentioned that time lines for clearing permitting would be mid- to late summer. I'm not sure if this was mentioned on the call, but how is that trending? And has that time line shifted at all now that you have zoning at all 3 sites?

Benjamin Gagnon: Bill, thanks for the question. Yes, we mentioned that on the Q4 call. And since we've had the Q4 call, we've cleared out on a few more permits, including zoning and preliminary land development at Sharon. So everything is tracking according to our plan. We still have high confidence on a mid- to late summer time frame across those 3 sites. It's permitting, obviously, things can go a little bit faster, a little bit slower, but we've got high confidence on those time lines.

Bill Papanastasiou: And then can you just speak to your Bitcoin mining operations, where steady state today? I believe in Q4, it was around 14 exahash. How should we think about that throughout the remainder of the year?

Benjamin Gagnon: Yes, it's still around 14 exahash, and it should continue to trickle downward over time. Right now, the Washington site is being decommissioned. So that's our first U.S. site where we've actively decommissioned Bitcoin mining before it was all coming out of Latin America. As we break ground and work on development across Panther Creek and Sharon, we will also be decommissioning Bitcoin mining at those sites. But we're going to try and line up the Bitcoin mining decommissioning as best as possible with the construction schedule and mining economics so that we can try and optimize and maximize the capture of the value and the cash flows there.

But we'll continue to provide an update to the market as we move forward throughout the year, Bill. But you should expect it to trickle down from 14 to probably somewhere around, I think, 5 exahash around the end of the year.

Operator: Our next question comes from Michael Donovan with Compass Point.

Michael Donovan: On Moses Lake, the slide deck states there is a secured option to acquire neighboring property with additional capacity. Can you size the potential expansion opportunity beyond the current 18 megawatts? And what needs to happen for that option to move forward?

Benjamin Gagnon: So we have a secured option for an additional 10 megawatts in the area. Nothing really needs to happen other than our desire to exercise the option. The power is there, it's secure, the land is there, the due diligence is done. Really, it's just about us wanting to exercise the option. When you go out and you do market for these sites, one of the strategic features to have in these conversations is not only to have secured power today, but to have the ability to expand that infrastructure and expand that capacity over time.

And so securing the option as of right now is a great marketing benefit for us when we're going through the commercialization strategy that gives us and the customers a potential to continue to scale up in that region.

Michael Donovan: Also on Washington, can you unpack the scope of the May 3 purchase commitment and clarify whether all major long lead equipment has been acquired?

Benjamin Gagnon: We've secured basically everything that we need to do for the site with regards to the modular infrastructure from Vertiv, the transformers and the backup gens. Last thing that we really needed was the backup gens, which is the last thing that we had secured. So Moses Lake has got all of its equipment that it needs for its development. There's a few odds and ends, but all of the key critical pieces have been secured.

Operator: Our next question comes from Martin Toner with ATB Cormark.

Martin Toner: Congrats on your progress. SG&A picked up this quarter. Can you maybe talk to what we can expect for the rest of the year? And just in general, maybe...

Jonathan Mir: Martin, it's Jonathan. How are you? Could you repeat the back half of your question? I did hear you ask about expectations for SG&A for the remainder of the year. I missed a bit at the end.

Martin Toner: Yes. Just talk a little bit about what investment that increase in SG&A represents?

Jonathan Mir: Thank you. That's very clear. So we'd expect our run rate cash SG&A to run about $25 million a quarter or $100 million a year, plus or minus. At the SG&A level, we've got a number of offsetting factors related on the one hand to the wind down of elements of the Bitcoin business and then on the other hand, adding specialized expertise in respect of the HPC/AI data center build-out.

Martin Toner: Perfect. Can you talk a little bit about Quebec...

Benjamin Gagnon: It was a little hard to hear that, Martin, but I believe the question was just an update on Quebec site and Sherbrooke. Is that correct?

Martin Toner: Yes, please.

Benjamin Gagnon: So we continue to make good progress with our 96-megawatt campus in Sherbrooke. We're hoping to have an update on today's call, but we should have an update on the Q2 call, which would include our plans for consolidating our 3 Bitcoin mining sites in Sherbrooke, our 48-megawatt bunker site as well as our 30 and our 18-megawatt sites Leisure and Garlock to a single 96-megawatt site in the same town. We're continuing to progress those conversations with the city of Sherbrooke and Hydro-Sherbrooke, have high confidence that we're going to be able to get all of those -- i's dotted and t's crossed to wrap this up and to be able to provide our plans to the public.

But we're getting quite excited about our plans in Sherbrooke. We think that it represents one of the few permitted HPC/AI campuses in Quebec that will be under construction in the near term.

Operator: [Operator Instructions] Our next question comes from Brian Dobson with Clear Street.

Brian Dobson: So thanks for the positive commentary on the demand environment. But do you think you could maybe give us a little bit of color on what you see as the biggest gating factors for your growth over the next few years? And if there are any long lead time obstacles that you're trying to overcome?

Benjamin Gagnon: So I think the biggest gating factor, Brian, is just bandwidth, to be honest with you. We've built a great team. We're continuing to build a great team, but we have 2 gigawatts worth of development pipeline to execute against. And there's a tremendous amount of technical details and complexity associated with these projects. We've done a great job in terms of increasing our bandwidth with adding more people, selling off noncore assets, completing these structural things, which really help to simplify the business and the administration of the business like redoming off to the United States and completing our pivot out of Canada and LatAm. So all of that stuff is adding into that.

We've also had a lot of success with early integrations of AI into people's workflows and to people's work streams, which is helping productivity as well. But I think that's probably just the biggest constraint is bandwidth. And that's something that we're continuing to improve upon as we continue to add people to the team, continue to add great partners like Turner Construction and Corgan on A&E and all these other different areas. I think we've got a very good pathway to address those and to execute across all of our different campuses.

Operator: Our next question comes from Mike Colonnese with H.C. Wainwright & Company.

Michael Colonnese: Just one for me today. If you could just talk about the pricing dynamics that you're seeing for negotiations with prospective tenants here. Is it fair to assume that Keel could secure better economics on a lease than what we've seen in the marketplace recently, specifically given the location of your sites in PJM and Washington and paired with your data center design, which sounds like it's aiming to support the Vera Rubin deployments?

Benjamin Gagnon: Thanks, Mike. It's one of the questions that we're paying very, very close attention to, and it's one of the things that we've been talking about for some time now that we believe that the economics are continuing to improve as the scarcity continues to get worse and demand continues to accelerate. I don't want to get locked in on any sort of fixed numbers with lease economics, but I think the broad trend is quite clear. I don't think it's changed or slowed down at all. The market demand for this growth is very, very high.

We're seeing hyperscalers reconfirm their commitments, in some cases, increase their commitments, in some cases, making pretty loud statements on quarterly calls around the opportunity cost of the missed revenue for not having that compute in place. So we do think that this is probably going to be a trend that continues to play out for years to come. And we look forward to taking advantage of our energy position in an increasingly energy-constrained market.

Michael Colonnese: Very helpful, Ben. If I could just squeeze one more in, actually. On the CapEx side, as you've gotten further along in your basis of design with your various campuses, has your capital requirements or CapEx deployment needs changed at all since your initial framework when it comes to deploying these data centers?

Jonathan Mir: It's Jonathan, Mike. Generally speaking, no, our views on CapEx deployment have not changed since our initial framework. And so we're comfortable with our current plans and people always ask about guidance on this topic, and we'd say the figure is generally used as a rule of thumb throughout the industry. should be fine for -- as a practical matter.

Operator: Our next question comes from Nick Giles with B. Riley Securities.

Nick Giles: Today's discussion has centered on your first 3 sites, but I wanted to ask about Scrubgrass. Can you just give us a sense for progress there specifically? And what do you see as the key milestones for that site over the next 6 to 12 months?

Benjamin Gagnon: Thanks, Nick, and I appreciate your enthusiasm for Scrubgrass, which is an enthusiasm that I share. I find Scrubgrass to be a really exciting project for us. It's likely going to be the crown jewel of the company in the coming years, but there's still a lot of work for us to execute against before it can achieve that kind of status. The reality is that this is going to be one of the largest data center campuses in Pennsylvania, but we've got to get power secured from a couple of different angles and it's just going to take some more time to do that. So on the grid connection side, the detailed load study is continuing forward.

We should expect to have an indication as to what the results of that are sometime around the very end of the year in Q4. And then we're working on securing the energy pipeline lateral construction and the energy contracts as well as the agreements with either an IPP or a similar firm to come out and deploy nat gas turbines on site, even evaluating options for us to do it ourselves. So it's a little too early to really say exactly what's going to happen or when it's going to happen, but we do share your enthusiasm for that site and its potential.

We do think it's going to be one of the more transformative value creation opportunities for the business and for shareholders. So it is one of our big focuses for the company and for management this year is to secure the megawatts at Scrubgrass and pull them out of that expansion bucket into the secured bucket. That would more than double our secured capacity by doing so and would give us a real, real powerful giga campus in Pennsylvania.

And if I could just build on that for one brief moment, what we've seen in the market is that the giga campuses are fiercely contested, especially if you have a giga campus outside of Texas, which are increasingly rare, those sites have a more competitive tension-filled process when they're going through the commercialization stage. And we would look forward to taking full advantage of that in a capacity-constrained market.

Nick Giles: That's super helpful. Just to clarify, how much power does the detailed load study cover?

Benjamin Gagnon: The detailed load study is for 750 megawatts.

Operator: I'm showing no further questions at this time. I'd like to turn the call over to Ben Gagnon, CEO, for closing remarks.

Benjamin Gagnon: Thank you, everyone, for attending our Q1 call. At this time, we'll go ahead and end the call, but we'll continue to provide updates for you on our website and through the normal investor channels. Thank you.

Operator: Thank you for your participation. You may now disconnect. Everyone, have a great day.