Whitefiber (NASDAQ:WYFI) held its first-quarter earnings conference call on Thursday. Below is the complete transcript from the call.
This content is powered by Benzinga APIs. For comprehensive financial data and transcripts, visit https://www.benzinga.com/apis/.
Access the full call at https://event.webcasts.com/starthere.jsp?ei=1762880&tp_key=ad313011e4
Summary
Whitefiber reported a solid first quarter of 2026 with a 31% year-over-year increase in revenue, reaching $21.9 million, primarily driven by growth in colocation services.
The company’s strategic focus remains on data center development, specifically through its retrofit strategy, which was demonstrated by the swift conversion of Montreal 3 into a Tier 3 data center.
NC1 in North Carolina is progressing well, with Duke Energy delivering initial utility power, and the company expects to start delivering capacity soon, despite minor supply chain delays.
Whitefiber completed the purchase of Montreal 3, reducing lease payments and planning to significantly increase the site’s available power.
The cloud segment is undergoing a strategic pivot to focus on longer-term enterprise deployments, with a significant nine-figure opportunity in the final stages of negotiation.
Management emphasized the importance of execution in the current high-demand environment, highlighting the company’s ability to quickly bring sites online and manage complex operations.
The company ended the quarter with $80.1 million in total cash and cash equivalents, supported by a $230 million private placement of convertible notes.
Full Transcript
Cameron Schneer (Vice President of Capital Markets and Corporate Strategy)
Thank you and welcome to the White Fiber first quarter 2026 earnings call. Joining me today are Sam Tabar, our Chief Executive Officer, and Eric Huang, 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 10-Q for the quarter ended March 31, 2026 filed today, as well as our other filings we make with the SEC from time to time. Our remarks today may also include non-GAAP financial measures. Reconciliations to the most directly comparable GAAP measures can be found in our form 10Q and in the earnings press release posted on our website. Following our prepared remarks, we will open the call for questions. With that, I’ll turn the call over to Sam to discuss our performance.
Sam Tabar (Chief Executive Officer)
Sam thank you Cam. And thank you everyone for joining us. The first quarter was another important quarter for Whitefiber. We delivered a solid first quarter with year over year revenue growth, strong gross margins and positive adjusted EBITDA while continuing to invest in the AI infrastructure platform we are building. More importantly, we continue to make progress across the four areas that matter most in creating long term value creation, data center development, customer demand financing and cloud capacity deployment. The market backdrop remains very strong. Demand for AI infrastructure continues to exceed available supply. Customers need power, they need high density capacity, they need speed and they need partners who can actually execute. That last point is important. In this market. Demand is not the main constraint. Access to potential sites is not the main constraint. The real constraint is execution. Power has to be secured, equipment has to arrive, capital has to be available, customer requirements have to be finalized, construction has to be managed and the facility has to be delivered and operated at a high standard. That is where we believe Whitefiber is differentiated. Our retrofit first strategy is designed to reduce development risk and shorten the path from site acquisition to revenue. Montreal 3 is a good example. We converted an existing industrial facility into a Tier 3 data center in approximately six months. Who else does that? And now the site is supporting Cerebras. At the same time, the current market environment is challenging. Equipment lead times are longer, supply chains are tighter, utility and commissioning timelines are complex. That is why we are disciplined about how we commit to new projects and why execution remains the central focus of the business. With that context, I’ll start with NC1, our site in North Carolina. NC1 continued to make substantial progress during the quarter and after quarter end. Duke Energy has completed delivery of the initial 54 gross megawatts of utility power to the site, supporting the first 40 megawatts of IT load. Under our agreement with nScale, construction and commissioning activity remains highly active with approximately 600 personnel on site last week. As the facility moves through final commissioning stages, the major equipment packages needed for the deployment including generators, ups, systems and chillers are all on site. The remaining supply chain item we are managing relates to certain medium voltage switchgear components. That is not a broad equipment availability issue across the project. We expect to begin delivering initial capacity within the next couple of weeks. In connection with the supply chain related timing item similar to what we are seeing across the broader sector, delivery may begin slightly later than June 1st. Based on our current discussions, we do not expect a material delay, a material impact to our customers commissioning process or a change to the overall project economics. The core commercial rationale for NC1 remains unchanged. The project is backed by a long term agreement with nScale and the deployment is supported by nScale’s investment grade hyperscaler offtake. As a reminder, construction started in January. We are moving this project from construction to initial capacity delivery on a timeline unmatched by any of our peers for a 40 megawatt AI infrastructure deployment. We believe NC1 validates the strength and speed to market of our retrofit model, especially in an environment where utility timelines and electrical equipment constraints are impacting projects across the broader data center industry. Importantly, NC1 remains a strategic platform asset beyond the initial deployment. We continue advancing plans for additional capacity at the site and expect to begin marketing the next 45 megawatts tranche of capacity this summer. We are also working with the utility on longer term power expansion opportunities with the potential to scale the site up to approximately 300 gross megawatts over time. That is why we remain excited about NC1. The initial nScale deployment is important, but it is not the Full opportunity. We believe NC1 can become a larger platform asset over time as we bring the first 40 megawatts online, advance the next tranche of capacity and continue working on the broader power expansion path. In short, NC1 is nearing the point where it could begin converting contracted demand into revenue. We believe this will be an important milestone for. Excuse me, we believe that this will be an important milestone for Whitefiber and a major proof point that our retrofit model can create large scale, high value AI infrastructure. Turning to Montreal 3 the first quarter was the first full quarter of operations for that facility. Montreal 3 is supporting our colocation agreement with Cerebras. Cerebras is an important innovator in AI infrastructure and we are proud to support their growth. We congratulate their team on this exciting milestone as they become a public company and we look forward to continuing to support them as their infrastructure needs grow over time. After quarter end, we completed the purchase of Montreal 3 through the exercise of our previously disclosed purchase option. The purchase was supported by our amended credit facility from the Royal bank of Canada. We believe owning Montreal 3 is strategically beneficial. It reduces our lease payments by approximately 3.1 million Canadian or 2.3 million US annually over the remaining term. It also gives us greater control over a strategic asset that is already generating revenue and we believe it allows us to capture more of the upside if the site can be expanded. On that note, we have submitted an application with the local utility to more than triple the available power of that site over time. This remains subject to utility review and approval, but it is an important part of of why we believe ownership of that specific site is valuable. If approved, the incremental power would increase the strategic value of Montreal 3 well beyond the current deployment. This is a good example of how we think about our platform. We are not only bringing sites online quickly, we are also looking for ways to own, optimize and expand assets once they are operational. Turning to Montreal 2, we continue to advance discussions around the best customer solution for that site. We have quality customer interest in the facility and we believe the location can support valuable enterprise and AI infrastructure use cases. The site is smaller than NC1, but it has strategic value because of its location, connectivity and potential fit for customers seeking more targeted deployments. We are focused on matching the site with the right customer and the right commercial structure. As with the rest of our pipeline, we will remain disciplined and move forward only when there is customer demand. Economics and capital plans are all aligned. More broadly, our pipeline remains active and continues to improve in both quality and scale. We are not constrained by customer demand and we are not constrained by access to potential sites. We have both. The gating item is making sure each project has the right combination of power, customer alignment, capital availability, equipment, visibility and execution certainty before we commit that discipline is important, but it should not be mistaken for a lack of opportunity. We are seeing more customer interest than we can currently serve and we are evaluating sites that are larger and more scalable than our initial Montreal deployments. The opportunities we are most advanced on today are not small follow on projects. Several are comparable to or even larger than NC1 in potential scale. Importantly, we believe these opportunities also offer meaningful near term power availability along with significant expansion paths over time. We are not disclosing specific locations or counterparties before transactions are finalized because that protects our negotiating position, but we do want shareholders to understand that the quality and scale of the pipeline has continued to improve. Our goal is to demonstrate in the coming months that this pipeline can translate into actionable customer backed projects. We are focused on opportunities where we can align customer demand, site control, power availability and financing from the outset. That is important in this market. Equipment lead times are increasing, utility timelines are complex and customers are demanding more certainty before committing to large deployments. We do not want to announce capacity just to announce capacity. We want to build a pipeline that can be contracted, financed, delivered and operated reliably. We are advancing several opportunities and expect to close at least one additional site in the coming months subject to final diligence documentation, customer alignment and capital availability. That is the standard we are holding ourselves to. We believe this approach gives us the best chance to turn a strong pipeline into durable financed revenue generating assets. Turning to our cloud business we discussed last quarter we made the decision to strategically pivot this business in Q1. This shift positions us to deliver a longer duration enterprise deployment, managed infrastructure services and next generation GPU capacity. While we implement this strategy, it has created near term revenue pressure and we continue to expect the second quarter to be the low point for cloud revenue. However, we are seeing positive outcomes faster than we expected As a result of this change. The cloud business today is in a much stronger strategic position than it was only a few months ago. We remain focused on improving our customer mix, extending contract duration, sharpening our return thresholds and moving away from shorter term commodity bare metal leasing. At the same time we are seeing accelerating momentum and high quality pipeline growth and deal velocity. Notably, we are in the final stages of a long duration nine figure cloud opportunity with a high quality enterprise customer in a new market. We expect to provide more detail if and when the agreement is executed and customer disclosure approvals are in place. We view opportunities like this as important validation of our revised cloud strategy. They combine long duration customer contracts, next generation GPU infrastructure, customer supporting funding and attractive project level financing. They also diversify our cloud footprint geographically and reinforce that demand for high performance AI infrastructure is global. In addition, we signed a two year agreement with Hyperbolic for approximately $17 million of total contract value supporting Moto Labs as the end customer. This deployment uses H200 GPUs from our existing owned fleet as part of our cross data center R and D project, so it does not require incremental GPU capex. The deployment is expected to begin contributing revenue in the coming months. This was a competitive process with multiple customers interested in acting as a design partner for the ongoing R and D. We selected a customer who saw value in the novel infrastructure and how they can apply it to their environments. As a design partner, Moto Labs will support ongoing R and D through input on design, development and testing. We expect that they will scale with this cluster as they move through later phases of R and D. This structure allows us to monetize existing capacity while continuing to develop technology that we believe can differentiate our platform and contribute meaningfully to our revenue growth. We plan to announce the outcomes of this first phase of R and D in late Q2. More broadly, we are seeing strong interest in current and next generation GPU capacity. Our current prospects and customers are increasingly looking for reserved high performance infrastructure as well as vendors who can reliably support their scaling requirements. That is where we believe Whitefiber can compete …
This post was originally published here
