Hello and welcome to the BIT Digital third quarter 2026 earnings conference call. We will begin shortly. During the call, all participant lines will be in listen-only mode. Following management's remarks, we'll open the line for questions. If you'd like to ask a question at that time, please press star 1 on your telephone keypad. As a reminder, today's call is being recorded. I'll now turn the call over to your host, Charlie Brady, Head of Investor Relations at BitDigital. Charlie, please go ahead.

Thank you and welcome everyone to BitDigital's third quarter of 2026 earnings call. Joining me today are Sam Tabar, our Chief Executive Officer, and Eric Young, our Chief Financial Officer. Before we begin, I'd like to remind everyone that some of the statements we make on this call are forward-looking in nature, and subject to risks and uncertainties that could cause actual results to differ materially. Such risks and uncertainties include but are not limited to those factors described in today's earnings press release, our form 10Q for the quarter ending September 30th, 2026 filed today, as well as other filings we may make with the SEC from time to time. Throughout the call, we all may also refer to non-GAAP financial measures, Reconciliations to most directly comparable gap measures can be found in our earnings materials available on our website. Following today's prepared remarks, we will open the call for questions. With that, I'll turn the call over to Sam. Sam?

Thank you, Charlie, and good morning, everyone. Charlie recently joined us to lead investor relations. It's really good to have him with us on his first BitDigital earnings call. The third quarter is a useful reminder of why we built BitDigital as a strategic asset company. Our goal is to own high conviction assets, actively manage and make them productive, and allocate capital in a way that compounds the value per share over time rather than passively waiting for the cycle to improve. The mix of our business is changing. Some of that is deliberate. particularly our continued exit from Bitcoin mining. Some reflect the timing and variability of cloud services revenue. At the same time, co-location continues to expand and Ethereum staking revenue has improved sequentially. Together, cloud, co-location and staking accounted for about 91% of consolidated revenue this quarter compared with about 74% That is a meaningful change in the composition of the business. Last quarter, we described how we were putting our balance sheet to work. This quarter, the focus was on turning that capital into operating assets and contracted revenue. In August, White Fiber's NC1 facility began contributing revenue on the first 20-megawatt data haul. and although some temporary issues related to switchgear slightly delayed the ramp, today the full 40 megawatts of contractor revenue is operational. That contractor revenue is connected to an $865 million contract over 10 years. In addition, Whitefiber recently closed a $300 million secured credit facility, which is expected to be funded later this month and will support repayment of the bridge loan We made to White Fiber. Following the end of the third quarter, White Fiber completed the acquisition of the NC2 and 3 sites in Yadkin County, North Carolina, with additional development opportunities. Turning to Ethereum. As of the end of September, we owned approximately 163,726 ETH and ETH equivalents. During the third quarter, Native staking generated approximately 474 ETH in rewards at an average annualized yield of about 3.4%. Through the first nine months of 2026, we earned 1,863 ETH through native staking. In September, following White Fiber's $30 million delayed draw facility repayment, that digital repaid $30 million of the loan from Galaxy, allowing us to reduce the amount of collateralized liquid ETH from $39,000 to $19,000. Subsequently, to the end of the third quarter, White Fiber received an additional $70 million drawdown bringing the total outstanding to under the facility to $100 million. As of October 21st, collateralized liquid ETH totaled $64,000 equating to 70,892 ETH. We remained focused on the simple test for every allocation decision. What does it do for value per share after considering the cost of capital and the risks we assume? We do not try to own the most ETH or announce the most transactions. We are trying to make the assets we already own work harder and protect the optionality to act when the economics justify it. With that, I'll turn the call over to Eric, our CFO, to review the financial details.

Thank you, Sam.

Good morning, everyone. Our results consolidated to what fiber in full with a portion attributable to non-controlling interests. Third quarter revenue was $27.1 million compared with $32.1 million in the second quarter. For the first nine months, revenue was 87.1 million, up 7% year over year. Cost of revenue was 11.9 million, excluding depreciation and amortization of 11.1 million, which is reported separately. Operating cash flow for nine months was 163 million dollars supported materially by customer advance payments. These payments relate to services we have not to deliver. Consolidated net income was $0.6 million after allocating $27.9 million of losses to non-controlling trusts. Net income attributable to BitDigital shareholders was $28.5 million or $0.08 per diluted share. Turning to our operating segments, cloud services revenue was 18.1 million compared with 23.8 million in the second quarter. This includes a 3.4 million of termination fee revenue for our initial customer. No recurring revenue following that customer's termination was partially offset by deployments for new customers. Collocation revenue was $5.4 million compared with a $4.7 million in the second quarter and $1.7 million a year ago. Growth reflected MTL3 and the initial contribution from NC1, which generated about $1.1 million of lease income during the quarter. Native staking revenue was $1 million compared with a $903,000 in the second quarter. We earned 474 Ethereum, up from 440 Ethereum. Rewards occurring within liquid staking tokens are counted for separately and are not included in the revenue figure. Digital asset mining revenue was $2 million on 28.4 Bitcoin mined, compared with 2.4 million on 32.3 Bitcoin in the second quarter. turning to valuation and financing items. We recorded $84 million of gains on digital assets, $5.4 million of gains associated with the transfers of liquid staking tokens into collateral arrangements, and a $3.2 million of impairment on liquid staking tokens. Separately, we recorded a $10.7 million gain from rate measurements of the relative liability associated with our convertible notes. Other income included $17.1 million of unrealized gains on digital assets held through a third-party fund. Y-fiber settlement of a portion of its 2031 convertible notes resulted in an $80.8 million induced conversion expense. The transaction involved both cash and Wi-Fi shares. Consolidated interest expense was $10.4 million. Turning to the balance sheet and treasury. On September 30th, we held 74,660 Ethereum directs with a fair value of approximately $200 million. Separately, we held 47,192 liquid staking tokens carried at approximately $98 million, and the digital asset collateral receivable carried at 37.1 million. We also maintained digital asset exposure through a third-party fund. Those positions were measured on different accounting bases. Consolidated cash and cash equivalents were $143.5 million on quarter end. We repaid $30 million of our Galaxy borrowing in September, leaving $30 million outstanding. But after quarter end, we borrowed an additional $70 million and advanced this additional $70 million to White Fiber in late October. In July, BitDigital raised $11.6 million net and others. Finally, remaining performance obligations under ASC 606 totaled $729 million and quarter end. will expect to recognize a $13.5 million in the remainder of 2026, approximately $235 million in 2027, and approximately $207 million in 2028, with the remaining balance thereafter. These figures exclude lease arrangements and certain other contracts and variable considerations. They're not a consolidated revenue forecast. With that, I'll turn the call back to Sam.

Thank you, Eric. I want to close with a few thoughts on Ethereum and where bid digital fits and the broader transition we see taking place. Eric's review covered substantial non-cash gains on digital assets, as well as changes in our operating revenue mix. Both matter. But when we assess our strategy, we look at the income our assets generate, and whether our capital decisions are increasing value per share over time. I've previously talked about developments in the Ethereum ecosystem that reinforce why we view the network as a foundation for programmable financial infrastructure. Stablecoins and tokenized funds are examples of how blockchain's infrastructure can be used to hold and transfer financial assets. Ethereum faces competition and more network activity does not automatically mean a higher ETH price. Even so, it's an established ecosystem, security, and developer base are important reasons why we continue to see value in this network. We're also closely watching the connection between Ethereum and AI. In October, the Ethereum Foundation highlighted ZKAPI, an application that uses Ethereum to support payments for AI and other software services while protecting the link between a payment and the user's identity. It's an early example, but what interests us is the potential for software and AI agents to pay for services directly, with payments that can be verified and processed automatically. That is one way Ethereum could become useful as these applications develop. We see it as part of a longer-term investment case rather than a near-term revenue assumption. We also recognize the risks. ETH remains volatile, Staking revenues vary, and borrowing against liquid-staked assets creates collateral and liquidity obligations. Our experience through different market cycles has reinforced the need to manage those exposures alongside our investment conviction. Our majority stake in white fiber is another important part of the investment case. It represents ownership of an operating AI infrastructure business. that is generating revenue today. All 40 megawatts of contracted capacity at NC1 are now operational and billing, and WhiteFiber's broader portfolio of signed customer contracts supports even further growth. Turning to BitDigital's valuation, our shares continue to trade at a substantial discount to our NAV. The NAV calculation we have disclosed starts with our ETH Treasury and WhiteFiber shares then subtracts the $150 million face amount of our convertible notes. I understand why shareholders want to see action on that discount. We have discussed repurchases before and I want to address where it stands. The board cannot authorize a program on its own. Our articles of association require shareholder approval before we can implement a repurchase program, including approval of how the purchases would be made. We recognize the appeal of buying back shares of the current discount to NAV which is currently about 39%. Before seeking shareholder approval though, we would need to identify how we would fund those purchases and whether that approach would improve value per share while preserving the liquidity the business needs. The purchase price and the source of funds both matter to that assessment. Selling ETH to fund repurchases, for example, would allow us to reduce the share count, but it would also mean giving up staking rewards and some exposure to any future increase in Ethereum's value. We need to determine whether the expected benefit of the repurchase justifies that trade-off, while retaining enough liquidity to meet our financing obligations. We view repurchases as a capital allocation decision that must be weighed against other uses of capital. That same standard applies to each opportunity, the expected benefit to value per share after considering financing costs, liquidity, and risks. We continue to see long-term opportunities in Ethereum and AI infrastructure through WhiteFiber. Our responsibility is to translate that opportunity into returns for big digital shareholders.

With that, let's open the call for questions.

Thank you. If you would like to ask a question, please signal by pressing star 1 on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow the signal to reach our equipment. Again, press star 1 to ask a question. We'll pause for just a moment to assemble the queue. We will take our first question from Nick Giles with B Reilly Securities.

Thank you, operator, and good morning, everyone. This is Henry Hurl on for Nick Giles. So, Sam, you highlighted the NAV discount and buybacks as a potential option through shareholder approval, but beyond repurchases, what other levers are you considering to help the market recognize the value of your underlying assets? Thanks.

Well, I think we're one of the only ones in, if you look at what some people might refer to as our peers, we have an actual real business with very significant revenue. So we have a controlling majority stake in white fiber, and that's a lever that no other peers of BitDigital has. And so I don't think the market has really recognized that. And as white fiber continues to show its execution ability, which it has, especially recently, we believe the markets will begin to provide shareholder value to white fiber, which will cascade to BitDigital. So that's one lever we have. Another lever we have is, of course, Ethereum going up. That should be helpful. Another lever that we have is white fiber at some point Potentially next year, we may sell down the shares and use that cash to buy BitDigital shares. So that's three levers that we have, and we're well positioned for that. But again, I understand the frustration. I own myself a lot of shares of BitDigital. but I do see sunnier skies ahead given the three levers that we just talked about.

Understood. Thank you for highlighting those three levers. And then you mentioned potentially selling down.

There is a fourth lever is that we are vigorously looking at an alpha-oriented business that we're developing in-house that will help us create some proper revenue under Bed Digital itself. So there's a number of levers there. So those are the four levers.

Got it. I was just going to ask, you mentioned selling down the potentially white fiber stake in 2027. At this time, could you say what your target stake in white fiber might be, or is this still something that

There's no math around that. There's no specific number. It really depends. We see the potential of white fiber. We see what's in the pipeline. So we're in no rush to sell down the white fiber shares. In fact, when we do so, if we do so next year, we will do that in a very measured manner in order to not put any selling pressure on white fiber. But BitDigital is in a good situation. It's a capital light business and currently we're in pretty good shape. So we don't have any liquidity concerns on the BitDigital side. However, should the markets begin to credit white fiber where credit is due and the market cap of white fiber goes to where we believe it should, Thank you so much.

We will take our next question from Kevin Deedy with Jones Trading.

Hi, Sam. The dog has some questions for you. Yeah, but he's sitting on the phone right now. Listen, I'm impressed with the way that you're managing your ETH and helping it finance white fiber. But I think the mechanics of it are a little over my head. And I was wondering if you and Eric could kind of walk through how you're looking at that. and what the timeline having that EIF back at BitDigital may be. And then a follow-up for you too, please.

Can you just rephrase the first question? I think that question is for Eric, but I just want to make sure we understand it. Can you just say it again? Sure. Or Eric, maybe if you already understand.

I think Kevin is asking about the mechanics of the digital bridge to our fiber.

Okay.

Is that right, Kevin?

Yes, absolutely right. Okay.

Yeah, so it's quite simple.

You know, we had converted our native staked yeast. We had taken it out and converted it to the liquid staking yeast, so LSETH. So by doing that, we're not giving up the Ethereum staking rewards appreciation. and we use the LSVTH as a collateral and borrow U.S. dollars from Galaxy with a reported rate of 5.5 percent analyzed. At the same time, we borrow that amount of U.S. dollars to white fiber through the bridge we have set a 1.1 MOIC mechanism for 180 days. So we're looking to get those funds repaid back the second quarter of next year. And right now the facility sits at $100 million. Outstanding.

Thank you, Eric. Appreciate it. The 5.5% that Galaxy is paid is paid by BitDigital. And then is the loan that WhiteFiber has paid through some intercompany arrangement back to BitDigital?

Yes, it's a bridge loan. Yeah, the interest is 9.5% analyzed. with a 1.1 mark.

Would you mind running through the balance of your ETH treasury strategy? How much do you intend to keep in native staking and what other alternatives might you consider in DeFi? Obviously, Sam, you alluded to alpha-oriented business. I'm wondering if if DeFi is on the table for that.

It is on the menu, absolutely. We can't get too much into it. Eric is leading a particularly interesting business under the digital umbrella, but it needs a little bit more development, but it is Thank you very much. You've overstepped your bounds.

Maybe, Eric, just please offer a little more detail on your overall ETH management strategy, just to refresh my memory, please.

The ethon balance sheet, we like to keep them 100% native staking, unless there are better opportunities, like the bridge opportunities we have with Y-Fiber is a good example. That's why we took some of that out of the native and turned to LS ETH and Boro against that for advancing the bridge. Other than that, less than 10% is matched through some third-party funds that's generating higher yields than native staking. As you probably know, native staking rewards had been decreased in the past few quarters. Now it's about 2.2% native staking while we're seeing those funds can generate, raise adjusted returns, three to 5% and above. But with that being said, we like to maintain small portion for the allocation, and the majority of that has been native-staked or more direct management by the pay digital.

Okay. Thanks, Erick. I was going to – I'll ask you some more things about the native-staking. You can remind me, but I'll hop back in the queue now.

Thank you, gentlemen.

We will take our next question from Mike Colonese with H.C. Wainwright.

Hi, good morning, guys. Thank you for taking my questions. First one for me, assuming you do move forward with the share repurchase program, I'm curious, what discount to NAV would compel you to sell a portion of your ETH holdings to fund potential buybacks as you balance the tradeoffs there?

Yeah, there's no actual formula. Eric, Charlie, and I are thinking about it constantly. Eric, do you want to weigh in a little bit?

Yeah. Like Sam said, we haven't, we're still re-evaluating the situation. So in terms of selling ETH to a repurchase, we're still evaluating.

Got it. How do you plan to allocate the capital from the bridge loan to YFI when it's fully repaid? Based on our sounds like that could be a 2Q27 event, so it'd be great to get some more color on that, you know, near-term capital injection if you plan to keep it in ETH or if you plan to reposition those assets.

Eric, do you want to take that?

Sorry, can you rephrase your question again?

Sure, sure. So based on your comments to another question earlier, you mentioned that in the second quarter of next year is when you plan to be repaid the bridge loan to White Fiber. So I was curious how you plan to allocate that capital or if you intend to keep that in ETH.

Yeah, I think it's still a work in progress. While, like Sam said, there are a number of alpha-driven opportunity businesses that we are developing and will provide more color when it's more mature. But as of now, the bridge strategy seems to be working well for us. with the risk being assessed.

Got it. And just last one for me. It would be helpful maybe to investors if you could provide a little bit more color on what that incubation or incubated business that you're potentially looking to launch, you know, what that could look like from a business model perspective would be great.

Repeat that? I'm so sorry.

There was a bit of Thank you so much for joining us. It's up to you if you want to provide some color since you're leading that work stream or we could just wait until our next call.

Yeah, I would reframe a comment on that into details. But it's some agendas and businesses that, you know, the digital and white fiber been working on and will provide more color, I believe, in Q1 next year.

Got it. Thank you, guys.

As a reminder, if you would like to ask a question, please press star one. We will take our next question from Brian Dodson with Clear Street.

Hey, good morning.

Thanks for the additional details on those four levers of creating shareholder value. I suppose since a repurchase seems more complicated, as you're thinking about allocating incremental dollars, what do you see as the best use for those marginal dollars? Is it that alpha generation business that you alluded to?

That's one of the levers, certainly. I just want to take a step back. It's complicated that we have many options, right? Of course, we could sell our ETH or we could sell down our stake in white fiber. So those are two levers to repurchase our shares. But the complication is really getting the shareholder authorization. And until we figure that out and decide where we're going to get the funds to repurchase. That is really the complication. And that's something we're currently discussing and working on in terms of activating that process.

Great. Thanks very much for the color. Thank you.

We will take a follow-up question from Kevin Deedy with Jones Trading.

Sorry to bug you, Eric, but can you remind me, is it Block Damon that's handling your native staking? And is there any thinking behind maybe taking that in-house? And then I have a follow-up from the dog.

It's a segment that we've been working for native staking for the past few years. and yeah, we had discussions about bringing that native stick in-house, but so far we're pretty happy with their services. As you probably know, there are like reporting requirements, controls requirements in place. As we've been providing this institutional level of service, we're quite happy, auditors happy as well. So, so far no change, but it's definitely in consideration.

Okay, so did you confirm Blocked Amen or did you say Figment? I wasn't sure. I missed that. Apologies. Figment. Yeah, Figment. Okay. Yeah, the dog wanted to know how much you have to pay for that service and how you'd recommend that we calculate it going forward.

The service is based off a percentage, if I'm not remembering incorrectly, 2.5% of the rewards and a certain dollar amount per nod that we operate on that.

I'm sure that we've disclosed in the financials.

Perfect. Okay. Thank you, gentlemen. Appreciate the time. Thank you.

There are no further questions at this time. I will turn the conference back to Mr. Tabar for any additional or closing remarks.

Thank you very much for your time today and your patience. We're working very hard towards increasing the share price. That is definitely our overriding concern as well. And we really do appreciate your patience. We'll get there. Thank you.

This concludes today's call. Thank you for your participation. You may now disconnect.