LMFA Q3 2026 earnings call transcript, November 13, 2026

Good day and thank you for standing by. Welcome to Power Compute's third quarter 2026 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I'd now like to turn the call over to Phil Carlson from KCSA. Please go ahead.

Thank you, operator, and thank you all for joining us on Power Compute's third quarter 2026 earnings conference call. Joining us today are Chairman and Chief Executive Officer Bruce Rogers and Chief Financial Officer Richard Russell. An accompanying supplemental investor presentation has been posted under the events section of our Investor Relations website. Before we begin, please note that today's remarks include forward-looking statements within the meeting of the Private Securities Litigation Reform Act of 1995. These statements are not guarantees of future results and are subject to risks and uncertainty. That could cause actual results to differ materially. Important factors include, among others, our ability to retain the listing of our securities on the NASDAQ capital market, our liquidity, our ability to continue as a going concern, and our ability to obtain additional financing on acceptable terms, our ability to repay or refinance our remaining secured note and maturity, the timing and costs of installing new miners, and our ability to achieve expected... ...the early stage of our AI infrastructure business and our lack of operating history in it, the volatility of Bitcoin prices, and our ability to secure customers and capital for any conversion of our power capacity. We will also reference certain non-GAAP financial measures. Please refer to the earnings release issued this morning and our Form 10-Q for full reconciliation to the most comparable GAAP measures.

And to our SEC filings and the investors section of our website at power-compute.com slash investors for a more comprehensive discussion of these and other risks. I will now turn the call over to Chairman and Chief Executive Officer Bruce Rogers. Bruce, please go ahead.

Thank you and good morning, everyone. Three numbers frame our third quarter. We mined 36% more Bitcoin than a year ago. In November 2026, we paid cash for $600. New S21++ miners that we expect to add about 10% to our hash rate by mid-December. And our secured debt is down 94% since June, with none of our Bitcoin pledged. Our job is doing the best return we can on every megawatt we own, and here's how the quarter moved forward for us. First, we're getting more Bitcoin out of power we already own. Power Compute owns or controls 26 megawatts of energy. Connected power, a 15 megawatt site in Calumet, Oklahoma and an 11 megawatt site in Columbus, Mississippi. We operated at a blended net cost of about 2.4 cents per kilowatt hour for the third quarter after curtailment and energy excels. Our power is priced at variable market rates and will fluctuate. We mined 23.9 Bitcoin in the quarter, up 36% from a year ago. And our mining margin after curtailment. Energy sales was 50.7%, up from 29% in the second quarter. Our energy cost to mine one Bitcoin after curtailment and energy sales was about $35,000, down from about $58,000 a year ago, against average revenue of about $71,000 for each Bitcoin we mined. It's worth repeating. Our average cost to mine a Bitcoin is down to $35,000 for each Bitcoin we mined. at an average price of $71,000. We're in the Bitcoin go up business, and we are mining coins for about $35,000 each. We are also replacing older miners with newer machines that produce more hash rate on the same power. Degradation in our older fleet pulled hash rate down from about 771 petahash per second at June 30 to about 718 at September 30. With the newer machines, it reached about 800.

13.3% decrease year-over-year. Digital mining revenue was approximately $1.7 million for the current quarter compared with $2 million a year ago. The year-over-year change was driven almost entirely by Bitcoin price, not by production. We mined 23.9 Bitcoin in the third quarter, an increase at 35.8% from 17.6 Bitcoin. In the third quarter of 2025. Over that same period, the average value of the Bitcoin we mined declined 37.5% from approximately $114,000 to $71,000. In other words, we produced a trillion more Bitcoin and we paid a trillion less for each one. On September 3, 2026, a 63.8 Bitcoin were valued at approximately $5.3 million. And Bitcoin was valued at $83,800. Our mining margin, after including curtailment in energy sales, was 50.7% in the third quarter of 2026 compared with 29% in the second quarter of 2026 and 49% in the third quarter of 2025. The sequential improvement reflects lower energy costs, higher energy sales, and the selective idly machines. Own peak hours all set in part by the lower average Bitcoin price. Fertilement in energy sales recognized as a reduction of cost of revenues for $304,000 in the quarter compared with $152,000 in the third quarter of 2025, roughly double year-over-year. Mining margin is calculated as digital mining revenue plus digital mining cost of revenues net. of curtailment and energy sales. Total operating costs and expenses were approximately $2.8 million for the current quarter, down $2.9 million from $5.7 million in the third quarter of 2025.

Without a capacity commitment charge. With interest expense down to about $138,000 a year, more of our capital can go into our miners and sites instead of debt service. Our priorities are to finish the miner refresh, keep our power costs low, and direct each megawatt to the use that earns the best return. We look forward to updating you with our progress.

Thank you for your continued support. Operator, please open the line for questions. As a reminder, if you'd like to ask a question at this time, please press star 1-1 on your touchtone phone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. We have a question from Matthew Galenko with Maxim Group.

Hi, thanks for taking my question. Maybe firstly, you might have missed this in the script, but do you know back in the envelope what your mining margin will look like? Follow SQL with the new machines and hashrate deployed? No, I don't think that we did any prospective disclosure in the script about the new machines deployed. We took the mining, our margin went above 50% from 29% in the second quarter is what's in the script. And also going forward, this is Rick, you know, it's going to be hard to... determine the margin because of the, what will Bitcoin price be, right? Yeah, sure, sure. Maybe, but the power draw, the power draw is about the same. Right. Okay. So, I mean, if you kind of back out the curtailment and then sort of give you the higher efficiency and utilization, you end up with, you know. Incrementally better, but maybe not quite as high as this quarter with the curtailment benefit. Right. Curtailment is high during this quarter. It'll, you know, slip down some in the fourth quarter. So, the rate per hour per kilowatt will probably increase slightly on the average from what we had the third quarter. But the newer minors will have. better production, right? At that same price. Yeah. Yeah. Okay. And then I think it's been, I think at least a quarter, maybe a quarter and a half that you've been operating the GPUs. Any, any learnings that you can share? Or, you know, just any additional color you could provide on how that's going?

No quantitative stuff, just anecdotally that it's amazed us the demand for our machines and the utilization rate is exceeding our expectations. And then there's a, there's an interesting component to it that when people use the machine for an instance, they leave their data behind and then they pay rent for, we charge them rent for leaving their data and we never kind of factored that into the revenue of it. So that's the.

So, I mean, as we look into 27, obviously, I think you have some planning to do and capital matter, but do you see, I think you mentioned that the higher value for megawatt is probably in that direction. So, you know, is there any, you know, preliminary thought toward. Allocating more in that direction. I guess the question is allocating more to GPU purchases or more power to GPUs.

Maybe to that end, given what we've seen in the, kind of in the election cycle, and I'm curious if you have any. New views on sites or, you know, access to new sites for adding power to your portfolio. Well, we have three and a half megawatts that is not energizing Bitcoin machines or GPUs in Mississippi, and so once the refresh is complete, that's where the low-hanging fruit is for us in terms of revenue. And once that's complete, then the, uh, the utilization of that three and a half megawatts in Mississippi kind of begs for the next dollars of capital and which type of use we use is still kind of open in the air.

All right. Uh, very good. Thank you. I'll turn back in the queue.

Thanks, Matt.

There being no further questions, this concludes Power Compute's third quarter 2026 earnings conference call.

Thank you for participating.