Cleanspark Reports Q3 2026 Results: Full Earnings Call Transcript

Cleanspark (NASDAQ: CLSK ) held its third-quarter earnings conference call on Thursday. Below is the complete transcript from the call. This transcript is brought to you APIs. For real-time access to our entire catalog, please visit for a consultation.

Access the full call at Summary Cleanspark reported a 1% increase in revenue to $138 million for Q3 2026, with a gross margin of 38%. The company recorded a GAAP net loss of $240 million, primarily due to unfavorable mark-to-market adjustments on bitcoin balances. 6 billion with extensions. Cleanspark is focusing on expanding its digital infrastructure, with plans for 885 megawatts of commercial growth and a strategic shift towards AI data centers while maintaining its Bitcoin mining operations for additional flexibility and capital.

The Texas portfolio is under exclusivity with the same counterparty as Sandersville, showing confidence in future growth despite Governor Abbott's directive for project audits, which Cleanspark views positively. Management emphasized the strategic use of its Bitcoin holdings for liquidity and potential capital deployment, with a focus on maintaining high shareholder returns and strategic growth in the AI infrastructure space. Full Transcript Lacey, Operator Good afternoon, my name is Lacey and I will be your conference operator today. I would like to welcome everyone to the third quarter of fiscal year 2026 financial results conference call for Cleanspark.

All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again.

Thank you. I would now like to turn the floor over to Harry Sudock, Cleanspark's Chief Business Officer. Sir, you may begin. Harry Sudock, Chief Business Officer Thanks, Lacey.

Thank you for joining us today to review the third quarter 2026 financial results for Cleanspark. We encourage you to review our earnings results press release which was issued today and is available on our website. Our 10-Q will be filed shortly. A webcast replay and transcript of today's call will be added to our website.

Once available on the call today, I'm joined by Matt Schultz, our Chairman and Chief Executive Officer, and Gary Vecchiarelli, our President and Chief Financial Officer. Some of the statements we make today will be forward-looking based on our best view of the world and our business as we see them today. The statements and information provided remain subject to the risk factors disclosed in our 10-K. We will also discuss certain non-GAAP financial measures concerning our performance during today's call.

You can find the reconciliation of non-GAAP financial measures in the press release which is available on our website. And with that, take it away, Matt. S. Matthew Schultz, Cheif Executive Officer Chairman Thanks, Harry.

Good afternoon, everyone, and thank you for joining us. To begin, I'd like to discuss how we're putting our operations and balance sheet to work as we continue our evolution into a diversified digital infrastructure platform. Following the close of this quarter, we completed an agreement that is the most significant transaction in Cleanspark's history: a 20-year triple-net lease at our Sandersville, Georgia campus with a high investment-grade leading global technology company. That agreement marks the start of our evolution into a diversified digital infrastructure platform and begins the monetization of our power portfolio at an institutional scale.

6 billion with the execution of two five-year extensions. Being a true triple-net structure, we expect near 100% net operating income margin. We have also forged a partnership with a vertically integrated mechanical, electrical, and plumbing manufacturer and design builder and added 885 megawatts of commercial growth. Taken together, these developments bring our second-mover advantage fully to bear.

Many of you joined us for our investor update on July 14th, and today I would like to recap three things. First, I want to spend some time on why we believe this lease is not just a milestone but among the absolute best commercial outcomes in the sector. Second, I'll update you on execution at Sandersville, across our Texas portfolio under exclusivity, and across the broader platform. And third, I want to talk briefly about our legacy Bitcoin mining business and how the optionality it provides is a strategic advantage as we enter this next phase of evolution and growth.

Let me start with the market. The demand for compute continues to outpace the industry's ability to supply it. The constraint is not chips and it is not capital. It is energized grid-connected power at scale, sitting on land that can support a full AI campus build.

That combination is scarce today and we believe it will remain scarce for years to come. The agreement is a 20-year triple-net lease covering the entirety of our Sandersville campus, nearly 250 megawatts of gross capacity and 175 megawatts of critical IT load. 6 billion over 30 years. We expect an average annual NOI of approximately $330 million, and we project our cost per critical IT megawatt at the $10 to $12 million range, in line with the market for this generation of data center.

Here are two things I want everyone to take away from those numbers. First, we believe on a risk-adjusted basis the economics are among the best in the space. Headline comparisons across data center deals can be misleading, as different contract durations, different lease structures, different risk allocations, and different financing packages can obscure actual returns. Next, this is a triple-net lease.

Taxes, insurance, and, importantly, maintenance capex all sit with the tenant, which means our contracted revenue converts to net operating income at effectively 100%. But the benefit goes beyond that. The triple-net structure is a powerful risk mitigant. On the finance side, lenders underwriting this project are looking at two decades or more of clean, predictable, high-margin cash flows backed by a high investment-grade counterparty with no operating cost volatility sitting between the rent check and the debt service.

This is why we were able to structure this deal without credit wrappers and why we expect to finance most of this buildout with attractively priced project-based financing. Gary will speak to the capital markets backdrop, but the short version is this: The structure of this lease was engineered to make financing straightforward and support a high loan-to-cost, protecting our equity. We deliberately went after a longer-duration lease, we deliberately targeted a triple-net structure, and we deliberately chose a high investment-grade counterparty as our tenant. Each of these choices was made with a strategic intention to protect and enhance shareholder value.

As we sit here today, we have already fully funded the equity portion of the Sandersville project. On execution, the project is advancing according to plan. Site preparation work has been underway for months on a 122-acre greenfield parcel we acquired earlier this year, which allows us to build without disturbing our Bitcoin mining footprint. Just down the road, we're working with our tenant's preferred engineering, procurement and construction management firm and general contractor, a partner with a proven track record and domestic manufacturing capability across key mechanical, electrical, plumbing, and cooling components.

That familiarity meaningfully de-risks the supply chain and the long-lead equipment timeline. It's also another step in shifting construction out of the field and into the factory, reducing on-site labor and delivering a faster, more repeatable build. The first data hall remains on track to be Ready for Service in the fourth quarter of calendar 2027, and we've already ordered and prepaid for all data center long-lead items for RFS. Let's turn to Texas.

In conjunction with the Sandersville lease, our entire Texas portfolio—718 acres and up to 885 megawatts of secured and planned capacity across our Sealy and Brazoria campuses—is under exclusivity with the exact same counterparty. As I said on July 14, we are in an exclusivity window, not at the finish line. Still, the scope of this discussion reflects the portfolio dynamic we described to you last quarter. Sophisticated compute buyers are not looking for a single data hall.

They want a growth path measured in gigawatts and a developer they can trust across a multi-decade relationship. Sandersville is the first chapter. Exclusivity across 885 megawatts in Texas shows how our counterparty views the rest of our portfolio. Outside of Cleanspark's work in Texas, there's been a broader policy discussion this week.

As many of you have likely seen, Governor Abbott directed the Public Utility Commission of Texas and ERCOT to audit and verify all data center projects seeking a grid connection before they can move forward. While this may be seen as uncertainty or a short-term setback, we don't see it that way. We commend the Governor for his thoughtful attention to one of the nation's most important power markets and the broader impact of ERCOT's upcoming actions. The operational rigor and financial commitments required to progress through the next phases of development and energization in Texas align exactly with how Cleanspark already plans and operates.

While the formal batch process is now expected to extend beyond August 7, our campus-quality discipline, site selection, and project readiness remain unchanged. ERCOT has notified large-load applicants that final Batch 0 determinations will be delayed, with the next key milestone, the August 20th PUCT open hearing. In the meantime, the state agencies are mobilizing to address the Governor's directive, which underscores the critical role our sector plays in the Texas economy. Cleanspark's historical growth through countercyclical acquisitions provides a strong basis for us to run a similar playbook in the ERCOT market.

As an example, you may recall that we acquired the original Sandersville campus during challenging political and economic times for the prior owner. We anticipate similar opportunities might develop in Texas in the near term. It's critically important for everyone to know that our previously discussed exclusivity agreement with remains intact. We continue to invest in our Sealy and Brazoria sites, and there is no anticipated change to our energization timelines across our broader portfolio.

S. Our land and power engine has not slowed down because of this lease. If anything, this transaction sharpens our conviction. Powered land is the scarce asset of our era, and finding it, contracting it, and developing it is what our team does better than anyone else.

Before I hand it to Gary, I want to spend a moment on our legacy Bitcoin mining business and the role it plays as we evolve into something profoundly different. When speed to power matters to a utility, we have the ability to bring a paying load online faster than a traditional data center developer. That capability helped us build this portfolio and it will help us to expand it. At Sandersville, mining will continue to keep the site productive until the day of cutover.

Financially, mining and our Bitcoin treasury gives a set of levers that very few companies in this sector can match. Our HODL balance is not a passive position; it is a flexible source of capital that we can deploy in whichever way creates the most value. What that means in practice is that we are never forced sellers of anything—not our Bitcoin and, critically, not our equity. Gary will walk through the capital strategy in detail, but the principle is simple.

Mining funds a platform, the balance sheet protects our shareholders, and the AI business monetizes the portfolio for decades to come. I'll close where I always do, and that's with our people. The lease we signed in July reflects the grit, discipline, and talent of a team that I am privileged to work alongside. From the operators in Sandersville and all across Georgia, Texas, Mississippi, Tennessee, and Wyoming, to the deal team that completed this transaction, a heartfelt thank you.

Your tireless commitment to the mission we all share has paved the way for our future success. And with that, I'll turn it over to Gary to walk through the numbers. Gary. Gary A.

Vecchiarelli, CPA — President Thank you, Matt, and good afternoon, everyone. I will dive into the quarter's numbers and then talk about our new Sandersville lease and our capital strategy going forward. For the quarter, our revenue of 138 million reflected a modest increase of 1% compared to the preceding second quarter. The average revenue per bitcoin mined in Q3 was approximately 72,000, a 5% decrease from the prior quarter.

The average revenue per bitcoin mined was 76,000. However, we still managed to recognize an increase in revenue as our uptime and hash rate increased in the third quarter. Gross margin in the third quarter was approximately 38% compared to 40% in the second quarter, as power prices had a modest increase of 1/10 of a penny over the prior quarter. GAAP net loss for the third quarter was 240 million compared to a loss of 378 million in the preceding second quarter.

The primary driver in this quarter's net loss was unfavorable mark-to-market adjustments on bitcoin balances, approximately 133 million. Comparatively, we recognized a larger unfavorable mark-to-market adjustment of 263 million in the prior quarter. Our adjusted EBITDA in the third quarter was negative 113 million. It's important to note that this adjusted EBITDA number does not adjust out the 133 million mark-to-market adjustment.

When normalized for such non-cash items, we produced 20 million, a positive 20 million, for the quarter. In the third quarter, our digital asset management activities once again delivered net positive cash returns. 8 million. Additionally, we sold the majority of our quarterly bitcoin production and, through the efforts of our digital asset management team, we were able to recognize sales for bitcoin 7% greater than spot.

Before we open it to Q&A, I want to discuss our capital strategy. With the Sandersville lease announced and progress being made towards future lease announcements, we are quickly approaching a day with much more consistent, predictable, and durable cash flows. Our job between now and then is to unlock significant shareholder value by continuing to educate the market on the evolution our business is undergoing and the progress we are making towards that goal. Last quarter I mentioned our second-mover advantage in the AI infrastructure space.

As Matt discussed, we have seen this play out in the commercialization of Sandersville. The 20-year duration of our lease combined with its triple-net structure and the high investment-grade credit quality of our counterparty put us in rarefied air amongst our peers. We are positioned extremely well to execute on time and on budget with strong returns for our shareholders. With respect to the financing for the Sandersville project, I want to be explicitly clear.

Our plan is to seek project-based debt financing to cover the vast majority of the buildout. 1 billion. Recent financings have exceeded 90% loan-to-cost. However, we have the equity portion of the Sandersville project already funded and we will not be raising capital via equity or equity-linked instruments for Sandersville.

It is also important to note that we had total liquidity of 917 million as of June 30, including approximately 200 million of cash and almost 14,000 bitcoin. To follow up on Matt's remarks, we have a very positive view on the recent developments in ERCOT, as we expect further accretive opportunities to present themselves. Prior to Governor Abbott's directive, there were a number of opportunities that came to us on the eve of the SB6 attestation deadline requirement. This is quite telling, as we believe there are potential sites that either need capital or don't have access to capital.

We have significant dry powder with our bitcoin balance, which we would be willing to part with if and when the right opportunity presents itself. We will continue to be aggressive yet disciplined in pursuing opportunities that secure a pipeline which will deliver significant returns. With that, I'll hand it back over to Harry and lead us into Q&A. S.

Matthew Schultz, Cheif Executive Officer Chairman Thanks, Gary. We will now open the floor to questions from the analyst community. Operator, please provide instructions and manage the queue for the Q&A session. Thank you.

Lacey, Operator I would like to remind everyone, if you would like to ask a question, please press star, then the number one on your telephone keypad.