Keel Infrastructure Q3 2026 Earnings Call Transcript

Keel Infrastructure (NASDAQ:KEEL) reported third-quarter financial results on Thursday. The transcript from the company’s third-quarter earnings call has been provided below.

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Summary

Keel Infrastructure reported a decrease in Q3 2026 revenue to $28 million from $68 million in Q3 2025, primarily due to the decommissioning of U.S. bitcoin mining operations and a decline in bitcoin prices.

The company is progressing with construction at Moses Lake and advancing permit completions in Pennsylvania, though delays have affected the timeline for signing new leases.

Keel Infrastructure remains focused on securing leases with investment-grade tenants and is cautious about entering exclusivity agreements to maintain competitive tension.

The company has a liquidity position of approximately $780 million and plans to fund projects through balanced capital allocation without speculative building.

CEO Ben Gagnon emphasized the company’s strategic focus on securing power, advancing permitting, and engaging with communities, as well as the importance of maintaining flexibility in project financing amidst market volatility.

Full Transcript

OPERATOR

Good day and thank you for standing by. Welcome to the Keel Infrastructure third quarter 2026 earnings conference call and webcast. At this time all participants are in listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. To ask a question during the session, you need to press star 11 on your cell phone keypad. You will then hear an automatic message advising your hand is raised. To withdraw a question, please press star 11 again.

Please be advised that today’s conference is being recorded. I would now like to hand the conference over to our first speaker today, Lynn Yonker from Keel Investor Relations. Ma’am, please go ahead.

Lynn Yonker (Vice President, Investor Relations)

Thank you and welcome to Keel Infrastructure’s third quarter 2026 conference call. With me on the call today are Director and Chief Executive Officer Ben Gagnon and Chief Financial Officer Jonathan Meir. Before we begin, please note this call is being webcast with an accompanying slide presentation. Today’s press release and presentation can be accessed on our website under the Investor section. Turning to slide 2, I’d like to remind everyone that certain forward-looking statements will be made during this call and that future results could differ from those implied in these statements. The forward-looking information is based on certain assumptions and is subject to risks and uncertainties.

I invite you to consult Keel’s 10‑Q for a complete list which is available on our website and the SEC website. Please note that references will be made to certain non‑GAAP financial measures and therefore may not be comparable to similar measures presented by other companies. We invite listeners to refer to today’s press release and our 10‑Q for definitions of the non‑GAAP measures and their reconciliations to GAAP measures. Please note that all financial references are denominated in U.S. dollars unless otherwise noted.

And now turning to slide 3, it is my pleasure to turn the call over to Ben Gagnon, Director and Chief Executive Officer. Ben, please go ahead.

Benjamin Gagnon (Chief Executive Officer)

Thank you, Lynn and good morning everyone. I want to start today by addressing the macro elephant in the room. The last few months have been challenging for everyone. Rates are surging and the 10-year Treasury just hit its highest level in more than two decades. Debt markets that were wide open 90 days ago are still functioning, but they are more selective and more expensive today. Equity markets have also been unforgiving and many names in our space have fallen more than 50% from their highs earlier this year.

Data centers have become a political lightning rod even though nearly every American relies on them every single day. And geopolitical tensions have added another layer of uncertainty to global and domestic energy markets. None of this is news to anyone on this call, and none of this is unique to Keel Infrastructure. We have nothing to hide, so let’s face it directly. When we named this company Keel Infrastructure, we said a keel is the backbone of a ship, unseen but essential. Its main purpose is to keep the ship upright and moving forward, even in rough water. It’s the reason a vessel can hold its course when the wind is blowing hard in the wrong direction. This quarter, the wind blew hard, the seas were rough, yet we held our course. And holding our course means doing what we said we would do. So let me hold us to that.

Last quarter, we told you Moses Lake would finish permitting and start building. It did and is under construction today. We told you we were highly confident in our remaining Pennsylvania permits, and that hasn’t changed. At both sites, we have zoning and land development in place, and we’re down to our final state environmental permits. They’ve taken longer than we expected, but to date, not a single permit application has been denied at any of our sites.

We also told you to expect an update on our expansion load studies at Panther Creek and Scrubgrass as early as December or January. These applications continue progressing positively, albeit at a slightly slower speed, and we now expect to give you that update in Q1 2027. If this timeline changes, we will tell you directly. None of that is luck. It’s the strength of our team keeping us steady and moving us forward even while we’re sailing upwind. Where we haven’t delivered on what we told you is leasing. In May, we set a goal to sign three leases by year end. And while we no longer expect to sign three this year, demand has never been higher and we are not wavering on our strategy. All of the recent headlines have one key factor in common. They all further restrict supply of the primary bottleneck on growth across the power — a project blocked here, a moratorium there, a permit paused, a financing pulled, a power plant delayed.

In the first half of this year alone, it is estimated that roughly $200 billion of data center projects across the country were blocked or delayed. Every one of those headlines takes ’27 and ’28 power off the market and makes what is left, like our current projects, even more scarce and valuable. That’s the supply side. Now let me show you the demand side, in the words of the biggest buyers in the world, turning to Slide 4. While supply keeps shrinking, demand hasn’t blinked. In the last few weeks, the four largest buyers of data center capacity in the world — Microsoft, Alphabet, Meta and Amazon — all reported, and I’d encourage every investor on this call to read those filings because they reinforce the demand thesis better than we can.

Together, they are on track to spend more than $800 billion on capex this year, and all four have indicated that these investments aren’t slowing down anytime soon. Microsoft, Alphabet and Amazon combined contract backlog has grown by about two-thirds since January to roughly $1.8 trillion. That is demand. Customers have already signed, waiting on capacity, and all four have told their investors in their own words they don’t have enough capacity.

Amazon said, We will still not have enough capacity to meet all the demand we have in ’26, and I believe this demand will also be true in ’27. In fact, the demand we already have for ’28 is striking. Microsoft said customer demand continues to exceed available supply. Last quarter Microsoft actually spent less than it planned because third-party capacity showed up late. Meta said there’s just nowhere near enough compute for all the demand. And Alphabet has started renting third-party compute as what it calls a bridging strategy while it builds up more of its own.

Nvidia says it sees at least a trillion dollars of demand for its Blackwell and Rubin platforms through ’27, and Morgan Stanley estimates a 70-gigawatt shortfall in U.S. data center power through ’28. We are not afraid of this market. To the contrary, it is exactly the market we laid out in our thesis nearly two years ago and have been preparing for. Here’s what I think matters most. Between them, the hyperscalers have signed roughly a trillion dollars of data center leases that haven’t even started yet, with much of the power coming online in ’28 or later. We continue to see demand exceed supply for ready-for-service dates through the end of ’28 because hyperscalers, neo-clouds and many enterprises have already committed to the chips for ’27 and ’28, and what they are short of is power that is available on the same timeline.

So ask yourself this: if the biggest, best-capitalized builders in the world don’t have enough ’27 and ’28 power, who does? Keel Infrastructure. While the supply of near-term power is shrinking across the industry, at Keel Infrastructure our ’27 and ’28 power is further advanced, more secure and closer to delivery than it was 90 days ago. And our continuous inbound customer demand shows it. Now turning to Slide 5. On August 18th, one week after our last call, Governor Shapiro signed an executive order making Pennsylvania’s grid standards for data center development mandatory. The grid standards require data center developers in Pennsylvania to pay their own way for new power capacity and engage communities early and publicly, deliver community and workforce benefits beyond what the law requires, and commit to environmental protections with ongoing monitoring.

Put simply: pay your own way, be open with and give back to communities, hire locally where possible and protect the land, water and air. These standards benefit everyone and we fully endorse the Order and the need for responsible data center development. And this is an easy endorsement because the grid standards are largely in line with Keel Infrastructure standards and the work we’ve been doing since we established our presence in Pennsylvania, so we were able to adapt.

But the implementation of the Executive Order also still brought a lot of new real work for the team. It took a lot of engagement with every relevant regulator and numerous government offices and agencies to first fully understand the Executive Order and its impact, to cross-skill projects and then additional engineering by our team and by our potential customers’ teams to design solutions. While this took time, this is largely behind us and we now have clarity and engineered solutions that work for investors.

Here’s what the implementation of the order means in practice. 1. The permits we have in front of the DEP today are not subject to the Order’s new requirements, but the Order also took data centers out of the state’s Fast Track Permitting program. In plain English, data center permits are no longer eligible for priority review. They move through the DEP standard process. While this does not directly impact our sites, as the review of our remaining permits is not dependent on the Fast Track program, it does create a larger backlog for the DEP. 2. Backup power — every one of our Pennsylvania sites was always going to need a backup solution. This was always in the budget and this was always in the plan. What changed is the type of backup. Over the past three months we have engineered a solution, a component of which is centered on battery storage, that works for our customers, works for Keel Infrastructure, and complies with the order, and most importantly, we don’t expect it to meaningfully change the economics or the timing of these projects for tenants. 3. Our planned power delivery schedules under our ESAs have not changed. We expect both Sharon and Panther Creek substations to be energized in 2027. At this stage, RFS dates are directly linked to lease signings and will be a function of when we sign and break ground. Customers understand this and want to get megawatts online as soon as possible, with revenues beginning in early 2028 and each site’s capacity to ramp through 2028.

But this all misses the spirit of the Executive Order. The spirit of the Order was about communities and this is an area where Keel Infrastructure leads the pack. Community pushback against data centers comes down to three things: a lack of transparency, a lack of say for the people who live there, and no real commitments once the permits are in hand. Across our industry, most developers answer that with a benefits package, and that’s where they stop.

We call our answer the Keel Infrastructure Standard and we’re backing it with three concrete commitments. First, a Community Benefit Agreement, or CBA. We’re negotiating our first now with the Nesquehoning Borough Council for Panther Creek and we started that work before Pennsylvania required it. Sharon and Scrubgrass are up next. Our CBA is market-leading and is designed to scale with increasing power on site, which lets the community benefit alongside our success.

Second, a formal way for residents to raise concerns — building agreements process that gives every resident a local point of contact, defined response times and a route to appeal with oversight at the board level. It launches in Nesquehoning first, then at every one of our sites. This is not a hotline or generic email. This is opening all avenues of communication to the community to tell us what they’re seeing, what it is that they’re hearing and how they’re feeling, with a company mandate behind it to not simply be a good corporate citizen, but to be a good member of the community.

Third, measuring before we build. We’ve engaged third-party consultants to survey Nesquehoning’s residents through a community baseline assessment before Panther Creek is built, listening and documenting the community’s views on housing, employment, education, income, health, local services and a number of other areas. In November they’re sitting down with residents and in December every household in the borough will receive a confidential survey.

We’ll share the highlights with the Borough Council on ’27, repeat the assessment over time and do the same in Sharon and Scrubgrass. That way we can track what our projects actually change, how we’re impacting the community and ultimately make decisions based on evidence rather than assumptions. Across our industry, most community commitments stop at a benefits package. Few pair it with a formal way for residents to raise concerns. Fewer still measure conditions before and after they build. We’re doing all three. That is what staying accountable after approval looks like in practice. You can already see it on the ground in Nesquehoning through our investment in Panther Valley School District — we fund a full-time community school coordinator, support the after-school programs, fund the school bus system and fund and staff food pantries which together serve about 500 families and 2,000 individuals monthly.

Our team is out there in the community, showing up because they are people. We have also held more than 20 town halls or informational sessions across Nesquehoning, Sharon and Scrubgrass. These sessions have been publicized, socialized, and the towns have shown up. More than 500 people attended the events and they heard directly from our senior team as they explained data centers, explained Keel Infrastructure and walked through what our projects mean for them.

This isn’t charity and it isn’t public relations — it’s being a good neighbor. And being a good neighbor is good business. Infrastructure projects backed by strong community support get built and survive the test of time. And so, because of these standards, both Panther Creek and Sharon secured their zoning approvals before the Executive Order was even discussed. And when the order was signed, we didn’t actually have to change a single thing about how we engage with the community.

Frankly, this is one of the most rewarding parts of the job. And we did not need an executive order to tell us to do the right thing. We have been doing it since day one. And our team regularly receives feedback from all levels of government about our community engagement and the benefits of conducting ourselves the way we do. What we did have to do, though, was work through the new requirements with regulators, our engineers, and our customers. And that brings me into leasing, because I know it’s top of mind. In May, we set a goal to sign three leases by year end. The new regulatory framework in Pennsylvania has moved our permitting and commercial timelines back by months, and we no longer expect to sign three leases this year. Yet we have not wavered on our commercial strategy.

We’re seeing unprecedented demand for our sites. And in an industry where some of the largest developers are facing delays of a year or more, a delay measured in months is one our customers understand. To date, no potential customer has walked away for this, and new parties keep coming to the table. We strongly believe that securing strong leases is not a question of if, but when. And as I’ve said many times before, a lease is not a trophy for a press release.

It’s a 15-year commitment. And we will not sign the wrong lease at the wrong price just to hit a date. Conditions in the financial markets have been far more volatile than conditions on the ground. And because we haven’t signed a lease yet, every lease we sign will be priced at prevailing market terms and priced to the tenant-specific requirements. What matters is that these projects are priced and judged on a yield on cost. Costs for newer technology, materials and labor may rise or fall, and so may the cost of capital. When they do, we plan to reflect these in the lease economics so as to minimize the risk to our shareholders.

So here is our commitment going forward. We won’t give you a date for a lease. We will give you clear, transparent updates on every site as development progresses and when we sign it will be the right lease with the right customer at the right economics, including the cost of financing it. That is how we stay the course and maximize long-term value for shareholders. Turning to Slide 6 now, to the sites starting at Moses Lake. During Q3 we received every approval we needed to begin construction and we broke ground. Moses Lake remains on track to be our first site energized in 2027 and our first site to generate HPC revenues. It’s modular, it’s built-to-suit, and the path to energization is shorter than a traditional build. Everything critical was already bought, contracted or in manufacturing before we even broke ground.

And we have engineered a path for Moses Lake to move from GB300s to Vera Rubin at a marginal incremental cost, giving tenants more flexibility and making Keel Infrastructure an even more valuable solution. Moses Lake is the only site fully funded from our balance sheet. Our goal there, as everywhere, would be to announce the lease and its financing together. However, we don’t need a lease or project financing to finish Moses Lake, which means we are under no pressure to finance it on disadvantageous terms.

Near-term power in the Pacific Northwest is as scarce as ever and we have multiple parties engaged at Moses Lake that need megawatts now. Moses Lake is our smallest site, less than 4% of our near-term megawatts, and a site this size better fits a fast-growing AI or cloud company rather than a hyperscaler. We will hold it to the same standard as every other site: a structure that protects our returns, credit support that matches the customer and financing that matches the lease.

Small or not, we know a Moses Lake lease will be read as a signal of how we execute and we are treating it that way. Turning to Slide 7. As I just mentioned, commercial tension continues to build across our Pennsylvania sites. Over the past three months we have completed a significant amount of technical diligence with multiple prospective tenants, advanced LOI negotiations with multiple parties at both sites, and most importantly kept our power delivery schedules under the ESAs intact despite a new regulatory framework. Let me start with Sharon. Sharon is 110 megawatts of secured power with FirstEnergy.

It is our most advanced Pennsylvania site, down to its final state environmental permit which the DEP has already issued in draft. At 110 megawatts, Sharon’s scale fits a wide range of customers from hyperscalers to fast-growing AI companies. And that’s the mix we’re seeing at the table. It’s also why credit structure matters so much there. Pairing a fast-growing AI company with investment-grade credit support is what turns a strong customer into a financeable long-term lease.

Panther Creek is our flagship. It has 350 megawatts of secured power with PPL, with potential room to grow to 500 megawatts or more in one of the most sought-after AI corridors in the country. That scale is why the conversations at Panther Creek are with the very largest buyers of capacity. Zoning and land development are in place and we’re working through our final state environmental permits, one of the three is already in draft and the other two are in standard technical review with the DEP.

For a campus this size, the counterparty matters more than anything. The bigger the customer, the more they value certainty on power, permits and delivery. And with every permit that lands, Panther Creek becomes something only a handful of sites in America can offer: ’27 and ’28 power at scale in PJM with room to grow for years. Unlike Moses Lake, both Pennsylvania sites are large enough to require project financing and that is why at both Sharon and Panther Creek we have been disciplined and will continue to be selective in all of our potential tenant discussions.

We are focusing on signing with an investment-grade tenant or a counterparty backed by an investment grade wrap. Turning to Slide 8. Now I want to step back because I think this is the most important slide in the deck. There are a handful of things I believe this company should be judged by today. How many megawatts do we have? How secure are they? How confident are we in their timelines? How far along are they in permitting, design and construction and how much demand is there for them? By every one of those measures, Keel Infrastructure is better off today than it was 90 days ago.

Start with the near term. Our 478 megawatts at Moses Lake, Sharon and Panther Creek advance on every front. Moses Lake went from approved to under construction. Pennsylvania is down to its final environmental permits and our designs are updated for the new grid framework and we have advanced leasing discussions across all three, with new potential tenants still coming to the table. Then look at what’s coming behind them. Our expansion capacity represents the opportunity for us to quadruple our currently secured capacity.

At Panther Creek, we are working with PPL and Blackstone Infrastructure joint venture to support the buildout of natural gas generation and expand the campus beyond 350 megawatts towards 500 megawatts or more. This scale is a key selling point to the world’s most discerning tenants. At Scrubgrass, we are progressing well on securing our expansion capacity of up to 1.3 gigawatts. And we did it the Keel Infrastructure way: land secured, a detailed load study underway, horizontal lateral planning progressing with our development partner and five community sessions held before filing a single permit.

And in Quebec we have received the local approvals required in order to advance our 96-megawatt site and are now awaiting final ministerial approval. You may have also seen recent press reports about a site in Allentown, Pennsylvania. As we have previously discussed, we continue looking for opportunities to grow our portfolio and create value for shareholders and customers. This site in Allentown is a potential opportunity that we are exploring that would allow us to acquire a fully constructed power shell and 75 megawatts of ’27 PPL power.

We are conducting detailed diligence with the current owners and local and state regulators and will keep our investors updated as the process progresses. Capital discipline guides how we grow. We are pursuing this new site only as customer demand is clear and we understand the regulatory requirements and the timeline to ready for service. Not including Allentown, our expansion portfolio is about 2 gigawatts total. And here’s what excites me. Every quarter more of these megawatts climb the ladder from potential to secured, from secured to permitted, from permitted to designed, from design to under construction and next from leased to energized.

That is how real value gets built in this business — not by announcing megawatts, but by maturing them. And every project in our industry that slips takes more ’27 and ’28 power off the table. And that makes the power that does get delivered more valuable. While supply keeps shrinking, demand keeps climbing and we intend to be one of the companies that delivers. Turning to Slide 9, let me bring this all together. This was a tough quarter for our sector. I said it at the top and I’m not going to walk it back now. The water is rough and it’s rough for everyone. But here’s what actually happened inside Keel Infrastructure this quarter. We broke ground at Moses Lake. We got Pennsylvania down to its final environmental permits under what the governor calls the strictest guardrails in the nation without a single application denied.

We set the industry standard for how we engage with our communities as demonstrated by our Community Benefits Agreement. And we’ve kept every potential customer at the table while new ones keep coming and our pipeline is more secure and further along than it was 90 days ago. Things took longer, but nothing was canceled and demand is higher today than it has ever been, with increasingly fewer options for customers to grow in ’27 and ’28. The four largest buyers of compute in the world just told their investors they can’t get enough capacity and we are building exactly what they’re missing.

I’ll tell you this, the market is proving out the exact thesis our strategic pivot was built on. Two years ago we anticipated this supply-demand imbalance. We prepared for it. Now it is here. And when supply keeps getting scarcer and demand keeps climbing, the companies holding real near-term power in the right places and developing it in the right way are the ones that will win. That is Keel Infrastructure. We built this company for exactly this moment and we are not going to waste it.

And we have the balance sheet to see it through. Jonathan will now take us through it. Turning to Slide 10.

Jonathan Meir (Chief Financial Officer)

Thank you, Ben, and good morning everyone. Before talking about our capital allocation and financing strategy, I’ll review our third quarter financial results. Turning to Slide 11. For the third quarter of 2026, revenue was $28 million compared to $68 million in the third quarter of 2025. The decrease was largely due to the decommissioning of U.S. bitcoin mining in the second quarter of this year, as well as a decline in average bitcoin price. Operating loss for the quarter was $8 million compared to an operating loss of $18 million in the prior-year period and loss from continuing operations was 62 million, or $0.10 per share, compared to a loss from continuing operations of 11 million in the third quarter of 2025. This change in loss from continuing operations was driven primarily by a $55 million non-cash unrealized loss on the fair value of the company’s capped calls associated with the 2025 convertible notes offering. Adjusted EBITDA for the quarter was negative $27 million compared to 19 million in the prior-year period, reflecting the previously mentioned wind-down of Bitcoin mining operations as well as a decline in average Bitcoin price.

For the first three quarters of 2026, our cash SG&A has averaged $24 million per quarter on Bitcoin. We have met our commitments to both substantively exit Bitcoin mining and sell our Bitcoin holdings. During the third quarter, we sold 2,520 Bitcoin for $192 million in proceeds, executing the sales during periods of strength. As of September 30, our Bitcoin holdings were nominal. In Q2 2026, we decommissioned all of our U.S. mining operations. Only our Canadian Bitcoin mining operations remain active, generating a few Bitcoin a day.

We sell production on a regular basis to support our operations and investments. We continue to exclude our small remaining Bitcoin operations in Canada from any liquidity planning. As of November 4, 2026, our liquidity was approximately $780 million, comprised of unrestricted cash. We have an additional 53 million in restricted cash acting as collateral for various letters of credit that we have posted for expansion capacity. Turning to slide 12, as we discuss each quarter, the three pillars of our financial strategy are capital allocation, capital formation, and capital structure. This strategy informs important operating principles as we look to maximize long-term risk-adjusted shareholder value.

First, we do not build speculatively. Second, we value strong liquidity reserves. And third, we will use prudent amounts of leverage in financing our projects and lock in financing terms as closely as possible to lease signing in order to avoid basis risk from trying to time markets. These are first principles of infrastructure investing, and Keel Infrastructure is an infrastructure company. As detailed in our 10-Q, our current pre-lease capital commitments are $380 million in total through the end of 2028. This spending includes items such as engineering agreements, procurement and manufacturing, and site management. We will selectively invest to ensure we can move at the speed our customers want. As a reminder, these pre-lease investments taking place now will be part of our equity contribution in support of our eventual project financings.

The dollars we spend now represent avoided Holdco-level debt and/or equity needs at a later time. Additionally, proceeds from a project financing at Moses Lake will allow us to recycle capital into the equity required for Sharon and Panther Creek. Every dollar we raise at Moses Lake eliminates the need for a dollar of outside equity. This type of capital rotation is a core part of our strategy. We will continually look across our assets for opportunities to use their value to both reduce or avoid external equity financing and ensure balance sheet strength.

As has been the case, we have more than enough liquidity to fund all of our capital expenditures required before leasing and construction, as well as our cash SG&A through 2028. We will be selective in respect of all spending ahead of leasing and construction to ensure we maintain the benefits of a strong liquidity position. We currently do not see the need for any external debt or equity financing in advance of signing a lease in highly volatile markets.

It is incumbent on us to act prudently and raise capital when we see an alignment of attractive use of proceeds and reasonable financial terms, as was the case this summer, and then use that capital in a transparent manner for the benefit of shareholders. In this regard, one question we receive from shareholders is how we govern and prioritize our pre-lease spending. We do not fund projects based on speculation, without predefined plans and limits, and without confidence in value creation. We fund projects across what we call three stage gates. Each gate has a defined scope, a defined spend, and a defined set of conditions that must be met before we move to the next one. That structure is what allows us to advance and de-risk our sites at the pace our customers require without committing shareholder capital ahead of the information that justifies it.

Stage one is securing power and permits. It’s the smallest spend, and it creates the most value per dollar because it turns an energy position into a permitted, buildable asset. Stage two is locking in long lead-time equipment that sets the delivery date, such as transformers, substations, and fiber. As permitting and approvals near completion, these investments make our ready-for-service dates real to customers. Stage three is the full build, which is where the bulk of the capital is spent.

We only commit that capital against a signed lease when the economics are contracted and we have secured project financing that locks in an attractive return for our shareholders. We fund stages one and two from our balance sheet, and we fund stage three with project financing. When a lease is signed, capital goes in as risk comes out. In respect of project financing, we believe the best outcome is to lock in financing economics at the time of lease signing and minimize basis risk. We will not attempt to time the market. Our objective is to lock in a spread for our investors that delivers attractive returns. We are keenly aware of the sensitivities in the economic model of our business and the current financing environment. We speak almost daily with our financial advisors to ensure we understand, in real time, the likely financing terms associated with any specific customer’s potential lease, and this information is a key component of our evaluative process.

Moses Lake has been the one deliberate exception to the strategy. It’s small, it’s modular, and it puts our first megawatts on the grid earlier in 2027. Again, once the site is leased, proceeds from its project financing will be recycled into the equity requirements for Sharon and Panther Creek. Because of its small size, we expect that Moses Lake will be leased to a customer that is smaller than those we are discussing with Sharon and Panther Creek.

And again, because of size, we expect to raise financing via a private credit solution rather than via the high-yield bond market. We believe that our lease pricing at Moses Lake will provide reasonable risk-adjusted returns even in the current financing market. We reiterate the commitment made on every earnings call: whenever we raise external capital, we will be clear on the uses of that capital and why we believe the associated long-term risk-adjusted returns create value for shareholders. The stage gate structure is the process we use to hold ourselves to that commitment. Capital goes in as risk comes out and not before. We do not anticipate the need for any debt or equity financing before signing a lease, as we have demonstrated over hundreds of investor calls.

When investors ask for additional explanation or clarity on any aspect of our business, we’ll provide that in our discussions and continue our practice of having Ben and me readily accessible to our shareholders. I’ll leave you with the following thoughts. Keel Infrastructure has many paths to success. We have multiple sites. We have multiple potential customers. We have multiple ways to structure leases and financing. We are not dependent on any single project. We operate in geographies that are supportive of responsible data center development. We have kept our infrastructure-only business model simple and easy for investors to understand: secure power, advance it through permitting and construction, lease it to creditworthy customers, and finance it on the strength of those leases.

In a time of volatility, we’re focused on the fundamentals and those matters within our control, with the consistency of a strong balance sheet, a disciplined strategy, and plans that are easy for investors to understand. And with that, operator, let’s open the line for questions.

OPERATOR

Thank you. Dear participants, as a reminder, if you wish to ask a question, please press star 11 on your telephone keypad and wait for your name to be announced. To withdraw a question, please press star 11 again. Please stand by. We’ll compile the Q&A roster. This will take a few moments. And now we’re going to take our first question, and it comes from the line of Mike Grondal from Northland. Your line is open. Please ask your question.

Mike Grondal (Analyst at Northland)

Hey guys, thank you. In your discussions with tenants, can you talk about how you’re seeing lease structures and terms evolving over the last 90 or 180 days?

Benjamin Gagnon (Chief Executive Officer)

Hey Mike. Yeah, absolutely. It’s a great question. The terms that we’re looking at across the sites do vary quite a bit, based at Moses Lake, Sharon versus Panther Creek. I think generally speaking the tension tends to be building across all three sites because we continue to advance the sites and bring them closer and closer to the timeline. The sensitivities I think that people have right now are increasingly focused on permits, community, and financing.

Obviously, the permits and the community side of things, I think we’ve given our potential tenants great confidence in our path and our success and our continued path forward. And in terms of the financing, that’s something that we’re working through with all the various counterparties. And we’re quite selective in terms of the various counterparties that we are working with and speaking with because we’re only focused on good-quality counterparties that are going to be financeable.

But generally speaking, I think the terms are getting a little bit more competitive and a little bit more tense in the negotiations as we get closer and closer to our commissioning dates, and most of the market supply seems to be shrinking.

Mike Grondal (Analyst at Northland)

Got it. And then maybe just as a follow-up to that, on a relative basis, can you rank your three sites just in terms of demand at each one?

Benjamin Gagnon (Chief Executive Officer)

The way that you think about kind of relative demand amongst the customers per site, it really depends on the scale. And so what we spoke to in the earnings call a few months ago is that the counterparties at Moses Lake and Panther Creek are wholly different. At Moses Lake, it’s going to be more of, probably more of an emerging company. At Panther Creek, there’s only a few buyers in the world who could afford that scale and are really interested in that capacity.

And so when we’re speaking with the biggest developers in the world, the biggest buyers of compute, their focus is Panther and Sharon. And then when we’re looking at more of the neo-clouds or emerging companies, language labs, those sorts of things, their priority is either going to be on Moses or Sharon, depending on their scale and, secondarily, their time-to-energy requirements.

Mike Grondal (Analyst at Northland)

Got it. Well, hey, good luck this fall and winter.

Benjamin Gagnon (Chief Executive Officer)

Thank you, Mike.

OPERATOR

Thank you. Now we’re going to take our next question, and it comes to the line of Greg Lewis from BTIG. Your line is open. Please ask the question.

Greg Lewis (Analyst at BTIG)

Yeah, hi, thank you and good afternoon or morning, and thanks for taking my questions. It’s been a long week, guys. I did have a question. Really appreciated the way you laid out how you advance a project with some initial capex and then we kind of wait for the lease before we start spending. I guess as I think about other existing sites that we’re working through developing, any sense for what that capex to get it from to stage two is? Is there any way to think about what that capex is going to look like over the next 12 months?

Benjamin Gagnon (Chief Executive Officer)

Yeah. So between now and the end of 2028 we have capital commitments totaling about $380 million. About half of that is related to finishing Moses Lake and then most of the rest is related to substation work and fiber work at Sharon and Panther Creek. Both in terms of the stage one development costs, those are very modest. It tends to be people and folks in conference rooms. So by the time we get to the end of a Stage Gate 2, setting aside the decision to purchase long lead time equipment, it would take quite a bit of effort to spend a million dollars a megawatt to have a site ready to go. So the dollars in stages one and two are quite small compared to the overall project construction cost. And we are very careful in how we think about allocating those dollars across longer-term projects like Scrubgrass, for example.

Greg Lewis (Analyst at BTIG)

Okay, super helpful for that. And then just as I think about the— I mean, obviously we’re looking to expand power at all the site— well, not all the sites, a few of the sites. Could you walk us through the process? You know, obviously we’re doing the detailed load study that’s ongoing at Panther Creek, but kind of like, you know, post the detailed load study, then what does that process look like for final approval? That extra 150.

Benjamin Gagnon (Chief Executive Officer)

Yeah, happy to go through that. So once the detailed load study is complete, that basically confirms all the engineering requirements, the financial requirements, the timing for delivery of the power by, you know, what estimated kind of date. Then what happens is there’s going to be a negotiation period, usually around maybe three months to negotiate. And within the ESA, we’ll work through the final negotiations on power delivery schedule, upfront requirements in terms of initial deposits, letters of credit, and everything else that’s needed to fund the infrastructure.

And that’ll help— three months.

Greg Lewis (Analyst at BTIG)

Super helpful. Thank you for taking my questions.

Benjamin Gagnon (Chief Executive Officer)

Thanks, Greg.

OPERATOR

Thank you. Now we’re going to take our next question. And the next question comes to the line of Michael from H.C. Wainwright. Your line is open. Please ask your question.

Michael (Analyst at H.C. Wainwright)

Hi, good morning, guys. Thank you for taking my question. First one for me, I was hoping to get a little bit more color around the expected timing of securing the remaining permits at Sharon and Panther Creek. And is it safe to say that those milestones could be considered the closing conditions for you securing contracts with prospective tenants?

Benjamin Gagnon (Chief Executive Officer)

Hey, Mike. So in terms of the remaining schedule for the permits at Sharon, we are down to our last final environmental permit, as I said on the call, and that’s in draft form. And draft form effectively means that they’ve done extensive review, they effectively think that this is likely going to be approved and they intend to approve it. But there’s still a review process and a window that they need to work final before it’s actually done. And they could always revise and change and could extend that a little bit should they need to.

But we would expect that once things are progressing at this stage that they’re likely going to come. It’s just a matter of time. When it comes to Panther Creek, we have three remaining, one in draft and two in technical review. So everything’s been submitted, everything is being processed, everything is moving forward. We’ve given no red flags or indications that any permits are going to have issues or faults. But it’s a little hard to guide on the timeline now given the backlog at the DEP, and that’s kind of a changing condition in real time. I think that the positive thing here is that we were so far advanced on our permits.

Executive order came out that the impact on us is pretty minimal because we were down to our final permits already and most of those were already in process.

Michael (Analyst at H.C. Wainwright)

Very helpful color, Ben. Appreciate that. And just a quick one on the mining business. Just remind us where the hash rate stands today and an update around the expected wind down of mining from here.

Benjamin Gagnon (Chief Executive Officer)

It’s about five or six exahash, Mike. It’s not very meaningful. It’s all in Quebec and that generates a couple of bitcoins a day. It still generates positive free cash flow, but it’s pretty marginal and we don’t include it in our liquidity forecast planning. As Jonathan mentioned on the call, we would expect that that’s going to continue to get smaller as we get the approvals from Quebec that we’re hoping to get and work through over the coming months and quarters.

And until we have a clear path forward on the conversion of the Quebec assets, we intend to keep running the bitcoin mining, but we do not plan to invest further in it. No more dollars are going to be spent to buy more miners or upgrade. We’re just going to continue running it until we have confirmed the conversion or the convertibility of those sites.

Michael (Analyst at H.C. Wainwright)

Got it. Thanks, Ben, and best of luck as you progress these lease discussions.

Benjamin Gagnon (Chief Executive Officer)

Thanks, Mike.

OPERATOR

Thank you. Now we’re going to take our next question and it comes from Michael Donovan from Compass Point. Your line is open. Please ask your question.

Michael Donovan (Analyst at H.C. Wainwright)

Hi guys, thanks for taking my question. I see increased contracted power at Baie-Comeau to 30 megawatts from 22. How are you thinking about developing the site for HPC? What additional approvals would be needed, and how might its delivery timeline compare with Sherbrooke?

Benjamin Gagnon (Chief Executive Officer)

Yeah. So the path that we have in Quebec is we’re following our Sherbrooke playbook. So that was our lowest identified hanging fruit. It’s the community where we have the best relations, the most scale, and the best potential location for an HPC site. So that’s our first project that we’re moving forward with. And as we have communicated previously, we’ve gotten all the local approvals and we’re just waiting on the final ministerial sign-off— we’re waiting for that to happen.

And then what we do is we’d replicate the same playbook from Sherbrooke across Baie-Comeau. And we had an opportunity to effectively acquire a small expansion for no cost, and we could acquire the right to get an additional eight megawatts at the Baie-Comeau site for effectively no dollars out the door. So it was a very interesting option for us. Assuming that we get the Sherbrooke playbook done, we have a slightly more compelling site at Baie-Comeau to develop.

Michael Donovan (Analyst at H.C. Wainwright)

Appreciate that. And then to follow up on Mike’s question, as deal structures continue to evolve, would you consider a powered land lease at any of your sites, or are you focused on delivering the full facility?

Benjamin Gagnon (Chief Executive Officer)

Yeah, we’re open to doing a powered land lease. We have looked at powered land, powered shell, full colo, as well as, you know, the cloud model. And we think that there’s a fit for each one of these business models for different companies. We specifically have chosen not to pursue the highest rung of that ladder, which is the full compute, but going powered shell, powered land, or colo— all of those are interesting options that are on the table.

Michael Donovan (Analyst at H.C. Wainwright)

Appreciate that, Ben. That’s helpful.

Benjamin Gagnon (Chief Executive Officer)

Thank you, Mike.

OPERATOR

Thank you. Dear participants, as a reminder, if you wish to ask a question, please press 11 on your telephone keypad and wait for your name to be announced. And now we’re going to take our next question. And the question comes from the line of Brian Kinslinger from Alliance Global Partners. Your line is open. Please ask your question.

Brian Kinslinger (Analyst at Alliance Global Partners)

Great. Thanks for all the details and taking my question. As it relates to Moses Lake, with permitting done in September and unprecedented demand, what has held back moving forward with a lease there? And should we expect that before year end, or is that more of a first quarter 2027 event?

Benjamin Gagnon (Chief Executive Officer)

Brian, thanks for the question. As we said on the call, we’re not going to provide any sort of guidance on lease timings for any of the sites from here on out, but the site has a tremendous amount of interest and demand and there’s competitive tension there at that site. And one of the things that’s been very helpful for us at Moses Lake is that because we are funding this site off of our balance sheet, we’ve been able to continue moving forward with the site, continue to develop.

Every day we move forward, every beam of steel that goes up continues to de-risk the project and create more value for the end customers. And so that’s helping us to maintain a very high level of tension in Moses Lake. And we’re highly confident that we’re going to get a very good deal done there. But we are not going to be providing any sort of expectations as to the timing of that.

Brian Kinslinger (Analyst at Alliance Global Partners)

My follow-up, just to be clear, it’s lease-ready. There’s nothing you need to do to get it prepared for lease at this point, is that right?

Benjamin Gagnon (Chief Executive Officer)

We do not require any other permits or any other engineering work to get a lease done. And we’re under very extensive technical diligence and negotiations with multiple counterparties at this point during the commercial process.

Brian Kinslinger (Analyst at Alliance Global Partners)

Okay, thanks for taking my question.

Benjamin Gagnon (Chief Executive Officer)

Thank you, Brian.

OPERATOR

Thank you. Now we’re going to take our next question. And the question comes from the line of Bill Papanas from Chardan Capital Markets.

Bill Papanas (Analyst at Chardan Capital Markets)

Thank you. Good morning. Thanks for taking my questions. Apologies in advance, I was disconnected earlier when I raised my hand. First, maybe you can provide an update on how the team is navigating the supply chain environment for long lead time equipment, just given the level of demand for data centers and restricted supply. Thank you.

Benjamin Gagnon (Chief Executive Officer)

Hey Bill, it’s a great question. So what we’ve done is kind of a few things. First, we secured all the long lead time equipment that we need for the power connection, right. So everything that we need for the substation transformers and building out the actual powered land piece of it— we have all of those long lead time items secured across all three of our sites. At Moses Lake, we obviously have everything secured and contracted and on the way, a lot of it already received and in hand.

And then, for the longer lead time item equipment for building out the data center at Sharon and Panther Creek, what we don’t want to do is actually lock ourselves into long lead time item equipment purchases that may not ultimately be what the end tenant wants. If you think about timeline to RFS as a very simplified Gantt chart with three buckets, there’s obviously permitting and planning, there’s another bucket which would be the leasing, and then the third bucket would be the long lead time item equipment.

And given this stage in the permitting process across Panther Creek, the critical path is going to be leasing. And the way that we can keep the critical path on leasing is because instead of committing to long lead time item equipment, what we try and do is we try and commit to manufacturing slots, which help us to minimize the capex or minimize the capital that we commit in terms of deposits to secure timelines and also preserve the flexibility for us to modify the actual equipment that we’re purchasing for the tenant based on their ending needs.

So this is a way for us to try and be very capital efficient while we maintain our timelines and maintain our flexibility through the negotiations.

Bill Papanas (Analyst at Chardan Capital Markets)

Great, appreciate that. And then secondly, you know, we’ve heard that there have been a few major developments in the Canadian data center market, particularly with Anthropic entering the country and what is rumored to be a second major deployment. Curious if you’ve seen any uptick in demand in this geography and how you think frontier AI lab exposure in Canada will develop over time. Thanks.

Benjamin Gagnon (Chief Executive Officer)

So in Canada, it’s a very, very different market than the United States. I don’t think we’ve seen as many frontier labs in Canada just because it has been harder to develop new data center capacity in Canada. When you look at actually how many GPUs are plugged in around the country, you know there are numerous data centers in the United States that have more GPUs plugged in than the entirety of Canada for HPC and AI purposes. So it’s relatively small scale at this point. I think the really interesting opportunity with Canada, something we talked about a few different times, is that there is this legislative drive for data sovereignty and compute sovereignty in Canada, both nationally and provincially.

And because there is such a stricter bottleneck on growth and supply of data centers and GPUs in Canada, and you have the legislative capture to keep that compute demand local, there tends to be significantly higher premiums associated with compute in Canada than for the same compute in the United States and so many companies to be coming into Canada. I don’t think it’s necessarily limited to or maybe even focused on language labs. I think there’s probably some really interesting, maybe more interesting opportunities with the major Canadian corporations and the government than there may be with the language labs who have the flexibility to go anywhere.

OPERATOR

Dear participants, as a reminder, if you wish to ask a question, please press star 11 on your telephone keypad and wait for your name to be announced. And now we’re going to take our next question. And the question comes line of Nick Giles from B. Riley Securities. Your line is open. Please ask your question.

Nick Giles (Analyst at B. Riley Securities)

Thanks, operator. Good morning, guys. I just wanted to ask about your appetite to enter into exclusivity, if that’s something you’d consider. Or should we expect that you really would just want to sign a lease? And then if you prefer to just sign a lease and not go into exclusivity, would you consider some sort of expansion option or ROFR on additional capacity? Panther Creek comes to mind. Thank you.

Benjamin Gagnon (Chief Executive Officer)

Thanks, Nick. Yeah, it’s a great question. At the various sites we are best to maintain as much competitive tension in the process by not signing exclusivities, or by signing limited exclusivities that give us the ability to continue negotiations and marketing the site. That’s our preferred strategy because obviously it gives us the best probably adjusted outcome. It keeps as many people at the table, it keeps everyone focused and it keeps everyone kind of on their toes that if they don’t lock up the lease, then somebody else will.

This is something that, for example, at Moses Lake has really helped us to drive the progress forward with various tenants because they know that they’re in a competition to get that power and to get those timelines. So as much as possible, that’s going to be our intent. Now that’s not always going to be possible, Nick, especially with some of the biggest players. But we’re going to do our best to keep exclusivity limited, keep tension as high as possible, and to keep as many people at the table.

Nick Giles (Analyst at B. Riley Securities)

Makes a lot of sense. I appreciate that, Ben. And maybe just to follow up on electricity costs — you don’t hear as much about electricity costs as we did the bitcoin mining days — but I was wondering if you could just touch on kind of where your sites sit from an electricity cost perspective and to what extent tenants really have sensitivity to electricity costs in your discussions. Thanks.

Benjamin Gagnon (Chief Executive Officer)

Thanks, Nick. Frankly, it really does not come up very much. The electricity costs are really quite small relative to the operating margins of the GPUs themselves. And everyone is so focused on timeline to power that there’s way less sensitivity around the price of the electricity itself. It’s always around the timeline and the risk of deployment and the risk to deploy on time that everyone is focusing on first and foremost. We probably will see energy cost considerations come in in the future, but I would think that the bottleneck on growth would need to be alleviated. I would think that supply would need to overtake demand for those economic sensitivities to start being the prevailing thing that people are focusing on. I think if people are focused on costs, they are focused on the financing costs, not on the energy costs.

Nick Giles (Analyst at B. Riley Securities)

Makes perfect sense. I’ll check in again in a few quarters, but appreciate th