Hello, everyone. Thank you for joining us and welcome to the Cumulus AI Third Quarter 2026 Earnings Call. At this time, all participants are in listen-only mode. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. Today's call is being recorded. I will now hand the conference over to Zachary Graeve, Head of Investor Relations. Zachary, please go ahead.

Thank you. Good afternoon and welcome to Cumulus AI's third quarter 2026 earnings conference call. Joining me today to discuss our results are CEO Mike Maniscalco and CFO Scott Krosnowski. Before we get started, I would like to remind you that our remarks today will include forward-looking statements. These include statements about our strategy, capacity and deployment plans, customer agreement value and expectations, our market, and future financial and operational performance. Thank you for joining us. including our registration statement on Form S-1 as amended and our quarterly reports on Form 10-Q. Our statements speak as of today and we undertake no obligation to update them as a result of new information or future events. During this call, we may refer to non-gap financial measures. Reconciliations to the comparable gap measures are included in today's earnings press release. The press release and an accompanying investor presentation are available on our website at investors.cumulusai.com. A replay of this call will also be available there. With that, I would like to turn the call over to Mike.

Thanks, Zachary, and thank you all for joining us. I'm pleased to report that revenue more than doubled sequentially in the third quarter to $14.8 million. Adjusted EBITDA was positive for the first time, and signed customer contracts passed half a billion dollars. Here's the simplest way to read this quarter. We did $3.4 million of revenue in the first quarter. We doubled that in the second to 6.7 million and doubled it again in the third to 14.8 million. Additionally, the remaining performance obligations disclosed in our Q3 10Q already schedule another doubling into the fourth quarter. That's our business model, working and designed. We move quickly into smaller pockets of power and then bring them online In months, not years, allowing us to close the gap between signing and billing faster than most. Our most recent large deployment went from signed contract to full production in under three months. At any given moment, we are securing the next block, deploying the last one, and billing the ones before it, all at once and continuously. I'll cover three things today. What we do, where our capacity and demand stand, and how we're built for the market we're in. So we find pockets of existing power. typically 2 to 50 megawatts, mostly in co-location. And we bring the AI compute in those facilities online in months, not years. We're using today's capacity to meet today's demand while building the pipeline to power what's coming. Our current customers are AI inference platforms and the teams building on them. And they open every conversation with the same question. When can I be running? In a market that is compute-constrained, from the largest providers down to the startups, speed is the decision. And the next wave is AI agents doing real work, and an agent uses far more compute per task than a chat query. For example, Amazon said its customers deployed twice as many agents in the third quarter as in the prior three quarters combined, and physical AI is the wave behind that. So we are distributed for speed now and positioned for inference next, building what our customers need today on the way to the distributed platform the next generation of workloads will require. That is why we built this company around hyperspeed rather than hyperscale. Let me give you the capacity picture, the way we'll report it from here. Active, contracted, and powered land. Active capacity, which is energized and billing, is 8 megawatts across five co-location sites, with the final deployments we described in August now complete and billing. Contracted capacity, which is secured, not yet billing, is 5.45 megawatts, 3.75 megawatts in Metro Atlanta, expected to be ready for service in the second quarter of 2027, half a megawatt in Columbia, SC, Ready for Service in December, and 1.2 megawatts in Denver, Colorado, which we just signed Ready for Service in Q1. Our final takedowns for the year are in late stages of negotiation. And beyond that, we're already working towards the next generation expansions at a site we're in today. We have a right of first offer on 7 megawatts in Atlanta, which could take that site to 10.75 megawatts. Thank you for watching. Thank you for watching. More than double the second quarter, bringing our 2026 signings to $529 million, including a number of smaller agreements we don't announce individually. Contracts keep getting larger. Deposits keep arriving ahead of delivery. And pricing on new generation capacity is rising, not falling. Our most recent three-year contracts are generating around $19 to $21 million of annualized revenue per megawatt, up from the $18 to $20 we reported in August. The market is moving in the same direction. Rental rates on three-generation-old H-100s are up more than 40% since December. We continue to sell capacity faster than we can enterprise it. Demand is not our constraint. Capacity is. So let me turn to our sector, where two things stood out this earnings season. The first is the capacity we just spoke about. Two weeks ago, Microsoft, Amazon, and Google reported earnings. Together, they disclosed about $1.8 trillion in contracted backlog. Microsoft said, Google said, Google said, The Census Bureau counts about one in five U.S. businesses using AI today. That is the market we sell into, and it's why two of our customers came back this quarter for another $241 million in total contract value. The second is the question the market has been asking for the last several weeks, the question investors have asked us since the day we listed. How is the growth financed is now the question being asked of the entire sector in its largest names. Thank you. Eight megawatts completed and billing. Every deployment financed against its own contract. An adjusted EBITDA turned positive. Here's how we do it. A customer signs a term, take or pay contract, and puts down a deposit. That deposit covers the portion of the GPU cost that isn't financed, and equipment financing tied to that contract covers the rest. The contract revenue services the financing behind it. Thank you for joining us. Each financing is tied to a deployment and each deployment to a contract. We have no unsecured bonds. The customer's commitment funds to the hardware, and the hardware earns the customer's commitment back. That's the model. On the customers themselves, they're mostly AI-native inference platforms growing fast, and they pay ahead of delivery. We structure every contract for the credit we take. Take or pay terms, deposits up front, and remedies if a customer doesn't perform. We're deliberately building towards a mix where a meaningful share of our capacity is anchored by credit-worthy enterprise customers alongside of the AI natives. That work is underway and you'll hear more about it as it lands. Let me pull it all together. Three months ago, we told you we had eight megawatts sold with final deployments in process. Those deployments are done and they're billing. Revenue doubled. Adjusted EBITDA turned positive for the first time, and the remaining performance obligations disclosed in our Q3-10Q already schedule another doubling into the fourth quarter. Today, 8 megawatts are active in billing. Nearly 5.5 more are contracted. 7 megawatts of expansion rates sit a site we are already in, with 17 megawatts of power land in Oklahoma behind them. All three moved this quarter. Scott Carroll Krosnowski

Thanks, Mike. Good afternoon, everyone. I'll take revenue first, then walk down the income statement, then cash in the balance sheet, and finish with our outlook. First, revenue. Third quarter revenue was $14.8 million, up 376% compared to the prior year period and more than double the second quarter of 2026. The growth came from capacity we energized during the quarter, much of which billed for only part of the period. Compute accounted for 96% of revenue, up from 47% in the prior year period. Next, remaining performance obligations. RPO, Direct Customer Compute Contract signed as of quarter end, ended the third quarter at $515 million, nearly three times the $173.1 million at June 30th, with a weighted average term of about two and a half years. That is the contracted revenue in front of us. Under the terms of those contracts, 29.1 million is scheduled to be recognized in the fourth quarter and the remaining 486 million from 2027 through 2030. Down to the operating line. Operating loss was 41.6 million. That includes a 26.4 million non-cash charge for shares issued as a professional services fee in connection with our public listing, a one-time item that is added back in adjusted EBITDA. Thank you for watching. We'll see you next time. Adjusted EBITDA was $3.7 million, representing a 25% margin in our first positive quarter, compared to a loss of $0.8 million in the second quarter and a loss of $0.6 million a year ago. Depreciation and interest are expected to step up again in the fourth quarter, with a full period on the equipment placed in service during the quarter. And stock-based comp will normalize moving forward as the initial issuance of employee and director RSUs And below the operating line. 3rd quarter net loss was $14.4 million, or $0.43 per share. That includes $32.3 million of non-cash gains from marketing and convertible notes, the related option and our warrants to fair value, gains that move inversely with our share price, and the $26.4 million non-cash charge for shares issued as a professional services fee in connection with our public listing. Net interest expense was $5.4 million, up $3.3 million quarter over quarter Driven by Equipment Financing for deployments placed in service. Turning to cash. Customer prepayments are funding the build. Contracts signed in the third quarter carried $71 million of customer deposits, more than double the second quarter, and deferred revenue rose to $79 million from $30.5 million at June 30th. Thank you for joining us. Thank you for joining us. On the balance sheet, total assets with $394.1 million at September 30th up from $215 million at June 30th as equipment was placed in service. Debt and finance lease obligations totaled $248 million. The large majority is equipment financing tied to a specific deployment and amortizing against the underlying contract. In the quarter, we closed a $51.5 million loan and completed a third draw under a USD.AI facility. After quarter end, we expanded our lease financing with TFC to $123.6 million, all without new equity. Shareholder's equity was $25.3 million at September 30th, up from a deficit of $0.8 million at June 30th. Finally, turning to our outlook. Thank you for joining us. We now have 8 megawatts fully active in billing and 5.5 more under contract.

Thank you for watching. Thank you for joining us. We're just getting started. Moderator, we're ready to take questions.

We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Michael Donovan with Compass Point. Your line is open. Please go ahead.

Thank you, operator. Hi, guys. Congrats on the execution and thanks for taking my questions. For the two B300 agreements signed in September, how much capital is still needed? And then how much is covered by customer prepayments and committed financing? And how do you expect to fund the balance?

Thanks, Michael. Appreciate it. I'm going to let Scott chime in on that one.

Hi, Michael. One of the borders is fully paid for. and then the other, we did a 20% prepay.

Yeah, we have a 20% prepay and the balance is in process.

And on that one, as we noted, the RFS slipped slightly on that, so we're aligning the timing on that final financing to where the RFS actually lands in that data center capacity coming online.

Appreciate that. That's helpful. With the additional 1.2 megawatts in Denver expected to be ready in the first quarter, is that capacity tied to existing customer contracts or new demand?

The new capacity is that we just signed that's currently being marketed. It is not yet sold.

And I believe that all of the capacity with the exception of Columbia is being marketed right now.

Great. Columbia has already been sold and announced. Appreciate that. You mentioned Interest from potential customers beyond AI native platforms. Can you provide more color on the types of customers you're seeing and the workloads they're looking to run?

Yeah, and I think it's important to point the current pockets of power that we're growing into and how those fit the various customers that we're selling and marketing towards. As you know, some of the larger customers want some of the larger footprints. So as we look forward into our pipeline of larger sites, That starts to change the shape of those customers and what they look and feel like. But right now for the smaller pockets that we have been successfully finding and acquiring that capacity and then marketing it to our customer base, a lot of that is happening within the AI natives. Still a lot of healthy demand there, but at the same time, we are Working the pipeline of the enterprises, they tend to make decisions on different timelines. So we're trying to work and align those timelines appropriately. But to give you an example, the financial services sector is still a pretty hot one for us. As we announced the DRW announcement in the last few months here, I think that's a good example of those types of customers. General Enterprise, it runs the gamut as far as who we're targeting within those segments.

Thank you. Best of luck moving forward.

Thank you.

Your next question comes from the line of Fyodor Shabalin with B. Reilly. Your line is open. Please go ahead.

Thank you very much, operator, and good afternoon, everyone. Congrats with the quarter, solid and complete progress. And my third question is on probably kind of research nature. Since it's near cloud and just related infrastructure that followed Corviz several weeks ago, have you seen any change in the cadence or maybe even quality of inbound demand for new capacity Maybe just number of RFPs, deal size, or maybe like any differ in contract terms. And on pricing, our new B300 increase still clearing around the $4.30, something like per GPU hour level of your current recent contracts, or is the market softening? Thank you.

Yeah, I'll answer the first part of your question first, and thank you for the questions. So we are continuing to see a very healthy amount of demand and haven't really seen a big shift since last month, one way or the other. What we are seeing is, I think, trying to think of the right way to explain it, but a little higher sense of urgency of our existing customers and their desire to lock down capacity because I believe they know the scarcity of that capacity in the market. And I would also say that that's pointing towards the stability or even increasing of the GPU per hour pricing and GPU prepayment terms. So generally speaking, that's what we're seeing in the market right now, that the pricing on the B300s continues to to inch up as pricing of everything is continuing to increase slightly. The demand is remaining strong and the terms are improving in our favor currently.

Thank you for that. And just a little follow up on the Atlanta contract. What slipped out there from early 27 to the second quarter? Power Collocation Provider Hardware Delivery Customer Contract Start Date Move With It

I might have misunderstood the question, so feel free to ask it if I misspeak here. But I think that what we're seeing right now as far as scarcity is the data center capacity itself. So that is really the biggest driver of the early 2027 growth and potential from a supply chain perspective on the GPUs and associated equipment themselves. We've done a good job of logistics on pre-planning and getting that supply allocated and arranged ahead of time in those orders and ahead of time. So that side of things is a little faster right now. And that's how we're managing the placements. Did I answer your question?

Yeah, like partially. Yeah, but just maybe just like To frame it shortly, what was the reason of this timing shift?

Yeah, yeah, yeah. Yeah, I can speak to that. I mean, when the timing's shifting, it's usually a number of factors. And just speaking more generally about all of the capacity out in the market, sometimes it's the supply chain on the data center owner-operator side of things where they estimated a roll of cooling or electrical equipment, and maybe we're just a little too aggressive, so we're trying to do a better job of giving buffers there. As you have heard on these, we're also narrowing in a little more on quarters than months so that we have that flexibility given the supply chain is just so dynamic right now. And then we're also, as I think I've mentioned on some of these calls and on conversations with the market, the way we've been finding this data center capacity has been in Generally, going back to existing data centers, oftentimes those are legacy data centers. And oftentimes those legacy data centers have existing tenants. So a few things need to happen. The existing tenant needs to have a proper vacation date and move out on time. And then the data center owner operator needs enough time in between that window to retrofit and renovate to accommodate the GPU server's rather than some of the legacy equipment that was in there with the tenant that's vacating. And then they're also, they have to arrange the financing and move that through. So there are several different levers that have to move to hit these dates. And what you're seeing with some of these delays is just slight shifts in some of those levers.

Thank you very much for all this color. I turn it over for now and continue. Best of luck. Thank you.

Your next question comes from the line of Bill Papanestasio with Chardon Capital Markets. Your line is open. Please go ahead.

Good evening, gentlemen. Congrats on a strong quarter and thanks for taking my questions. For the first one, I was hoping you'd be able to share a boots on the ground perspective of the supply demand environment for and the data center colo capacity and how you expect it to evolve. I'm curious in particular if you're seeing the same level of availability for the sub five megawatt colo opportunities or are you seeing that dynamic shift at all given the continued regulatory headwinds that are putting pressures on larger sites? I guess long-winded question of do you expect to see new entrants seek out smaller scale deployments? given what we're seeing on the regulatory front. Thank you.

No, it's a great question, and thank you for the question, Bill. I would say that It's not necessarily getting more competitive for that space. And a lot of these smaller pockets that we have been moving into because they're existing haven't necessarily been impacted by some of the headwinds facing the data center market. I will say some of the bigger sites that we're eyeing into the future may be impacted a little more greatly by that. But that's factored into later into 28 and late half of 27 right now. and that's something we're thinking through as we're thinking through our options for growth. But I think there's a few different points I want to make here. We have found success looking for even smaller pockets of power. And I think that the Columbia, South Carolina site is a great example of that. So we're continuing to be very flexible and opportunistic of where we're finding pockets of power because a 500 KW site Thank you for joining us. The other side of things is the credit crunch has certainly put a crunch on the data center capacity in the smaller scale data centers. I think that's been more impactful than, say, a lack of supply. But right now, it feels like that was a broad stroke overreaction by some of those data center owner operators and investors. And we are watching closely to see if that loosens up and to give you a little more specificity there. Some of those smaller colocation pockets made a pretty fast adjustment to say that they do not want to sell to non-IG in those instances. And as you know, most of the IG customers are looking for much bigger pockets than a megawatt or two here or there. So I think they're going to see that problem pretty quickly. So that's been one thing that's impacted our ability to find some of the data center supply. But we've also been looking at creative ways to work through that through increased customer prepayments opportunities. on the upfront deposits on our contracts, and also looking at various instruments in the market for a credit wrapper, to give you a specific example. So that's how we're working through the current conditions.

Appreciate that. That's really good color. And then just as a follow-up, with respect to the 7 megawatts, under the right of first offer at Metro Atlanta. Can you just refresh the scenario there? When could that come online and be ready for service? Is there an expiry date attached to that ROFO? And is there enough demand today to sign that contract if it's possible to enter?

Yeah, I mean, the demand still is extremely strong. The pipeline the sales team has and the customers that are calling them consistently asking for updates in our capacity in 27 is certainly not a limitation to our growth right now. It really is aligning the right supply. As to the specifics of the Atlanta property, I'll answer it to... as much detail as I can give you top of mind. And then if we have follow-up information, we can certainly address that. But that one is a expansion that the owner of that data center is planning to do earmarked for 2027 delivery. That is at their discretion. So as we get more information from that owner and operator on their ability and timelines to expand that, I'll have more specifics on the actual timeline of RFS.

Great, appreciate it. Thanks for answering my questions and that's a lot to keep for.

Thank you.

Appreciate it.

We have reached the end of the Q&A session. I will pass the call back to Michael Maniscalco for closing remarks.

I think through my commentary on the Q&A and my parting comments coming out of the earnings report really highlighted the points. I think the demand in the market is still really strong. Supply is continuing to be constrained, a lot of that by external factors. And I think those factors are changing pretty consistently. We're, as I mentioned before, Looking at creative ways to work through those in the near term. So really the goal right now is to continue executing in the way we've been doing and bringing that capacity online and smaller packets of power, aligning that with customer demand and continue to grow because that's what the customers are asking for. So I appreciate everybody's time today. I appreciate all the questions and have a great evening.

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