Prepared remarks
Greetings, and welcome to Mara's Second Quarter 26 Earnings Conference Call. At this time, all participants are in a listen-only mode. Please note this conference is being recorded. I will turn the conference over to your host today, Robert Samuels, VP of Investor Relations.
Thank you.
You may begin.
Thank you, operator. Good afternoon, and welcome to Mara's Second Quarter Fiscal Year 26 Earnings Call. Thank you for joining us today. With me on today's call are our Chairman and Chief Executive Officer, Frederick G. Thiel, and our Chief Financial Officer, Salman H. Khan. Today's call includes forward-looking statements, including those about our growth plans, liquidity and financial performance. These involve risks and uncertainties, and actual results may differ materially. We disclaim any obligation to update these statements except as required by law. For more details, see the Risk Factors section of our latest 10-K and other SEC filings. We will also reference non-GAAP financial measures like adjusted EBITDA, which we believe are important indicators of Mara's operating performance because they exclude certain items that we do not believe directly reflect our core operations. Please see our earnings release for reconciliations to the most comparable GAAP measures. We hope you have had the chance to read our shareholder letter and look forward to your feedback. We will begin with some prepared remarks from Fred and Salman. After their comments, we will open the call to Q&A. I am going to turn the call over to Frederick to get things started. Frederick?
Thank you, Robert. Good afternoon, everybody. Thank you for joining us. For much of the past two years, the AI conversation has focused on models, chips, and capital. But underneath all of that is a more basic requirement: power. That is becoming the central infrastructure challenge of the AI era. The market has no shortage of ambition or investment. What it lacks is enough energized, permitted capacity in the right places available on the timeline customers can use. So the question is no longer who can fund the next wave of compute; it is who has the power. That question goes directly to Mara's strengths. We did not arrive at this opportunity by chasing a new trend. We arrived here after more than a decade of the same operating problem at global scale: securing power, deploying compute, and running infrastructure efficiently around the clock. Through Bitcoin mining, we built one of the world's largest distributed compute platforms spanning 19 data centers across four continents.
Along the way, we accumulated strategic lands and power assets, deep technical expertise, and a disciplined framework for deciding where each megawatt can create the most value. Today, Mara is applying that foundation more broadly. We own, develop, and operate digital infrastructure across power, land, and compute. Depending on the opportunity, we can convert electricity into higher-value compute ourselves, or provide infrastructure to customers who need it. That flexibility matters. Many companies entering this market are still searching for sites, power, and operating capabilities. We have spent years assembling those. Our move into AI infrastructure is therefore not a break from Mara's history; it is the next use of the platform we created. The second quarter marks another important step in that evolution. We advanced the Long Ridge transaction towards closing. And after quarter end, we announced that we acquired the rights to a strategically located power site in Matagorda County, Texas, with the potential to support approximately 2 gigawatts of future capacity upon ERCOT and interconnection approval.
On completion of the pending transactions and required approvals, we expect our power portfolio to reach approximately 4.8 gigawatts, which would more than double our current capacity. We believe that would establish one of the largest powered land portfolios in the industry and create a significant platform for long-term shareholder value. As the opportunities become clearer, so has our focus. Mara operates one integrated digital infrastructure platform built around power, land, and compute. Digital infrastructure is our primary growth focus. It is where we are developing campuses and pursuing long-term customer relationships at scale. Exaion and our technology initiatives add targeted capabilities around that core. They help us address specialized customer needs, improve the utilization of our infrastructure, and extend the value of the assets we own. We manage all of these capabilities as one platform and we allocate capital across them using the same filters: expected returns, customer demand, execution risk, and contribution to long-term shareholder value.
Let me spend a few minutes on digital infrastructure, our primary growth focus. The demand picture is straightforward. AI infrastructure investment is accelerating while the supply of power-ready sites is not keeping up. Industry estimates suggest that the four largest hyperscalers alone could invest approximately $725 billion in AI infrastructure during 2026, and that annual capital spending could exceed $1 trillion by 2027. The power requirement is rising just as quickly. U.S. data center electricity demand is expected to grow from about 31 gigawatts in 2025 to 41 gigawatts in 2026 and 66 gigawatts in 2027. New generation and transmission are not coming online at the same pace. That imbalance is increasing the value of infrastructure that is already energized or can be delivered with greater certainty. Our strategy is designed for that environment: own scarce powered assets, and create as much long-term value from them as possible.
The Matagorda County site is expected to add approximately two gigawatts in one of the country's largest power markets. Just as important, it is expected to provide enough wholly owned capacity to support our transition away from hosted mining as existing agreements expire. That should increase our operational control, improve unit economics, and give us greater flexibility in allocating capital. The pending Long Ridge acquisition is equally important. We believe it will transform our existing Hannibal campus by adding adjacent land while contributing positive EBITDA at closing. With more than 70% of Long Ridge's power output contracted under long-term agreements, we expect the transaction to enhance earnings while significantly expanding our AI infrastructure opportunity. Together, these transactions reflect our infrastructure investment model. We acquire scarce powered assets, enhance their strategic value, develop high-quality digital infrastructure, and secure long-term customers.
As those assets are developed, they can become durable cash-flow generators that remain in our portfolio or can be monetized, allowing us to recycle capital into future opportunities. Speed, certainty, and reliability are principles that define how we invest, how we build, and how we aim to serve customers. Speed matters because customers cannot wait years for power. Our portfolio of energized sites can support earlier in-service dates than many competing developments, giving customers access to capacity when they need it. Certainty matters because infrastructure must be delivered on time, on budget, and to specification. We believe our development strategy, our relationships with utilities and equipment providers, and our partnership with Starwood will give customers greater confidence in execution. The Starwood partnership also gives us the ability to scale with proportional capital support.
Reliability matters because mission-critical AI workloads require experienced operators. Mara brings years of experience designing, owning, and operating large-scale compute infrastructure. Starwood adds engineering, procurement, construction, and development capabilities backed by more than seven gigawatts of delivered infrastructure for many of the world's leading hyperscalers and frontier AI companies. Together, we offer a combination of operating experience, development expertise, and capital discipline that we believe few competitors can match. Commercial momentum continues to build. Our goal is a diversified customer base across hyperscalers, AI-native cloud providers, silicon vendors, and enterprises with the right balance of credit quality, returns, and long-term portfolio value. Working alongside Starwood, we are progressing lease discussions across multiple sites, and we remain confident in our ability to sign at least two leases before year end.
The objective is not merely to sign tenants; it is to establish durable customer relationships and maximize the value of our infrastructure over decades. Within that integrated platform, Exaion gives us a targeted capability in sovereign AI infrastructure. The customer need is becoming clearer as AI moves from experimentation into day-to-day operations. Once AI becomes mission critical, enterprises care much more than raw compute. They also care about where their data sits, which rules govern the infrastructure, how resilient the service is, and how much control they retain. That is the market Exaion was built to serve. As a European company, Exaion can provide private cloud infrastructure governed under European jurisdiction. For enterprises and public-sector organizations operating within the EU regulatory framework, that is a meaningful advantage. Customers can deploy advanced AI workloads while keeping control of their infrastructure, data, and operations.
For critical infrastructure, regulated industries, and government-adjacent services, that level of sovereignty is moving from a preference to a requirement. The addressable market is also much larger than new AI applications alone. Roughly 80% of enterprise data still sits outside the public cloud. As organizations modernize that data and infrastructure for AI, they will need providers that can meet demanding standards for security, compliance, and operational resilience. Exaion already has credibility in those environments. It operates critical infrastructure supporting EDF and nuclear reactor operations, where reliability is simply nonnegotiable. EDF is one of the largest operators of nuclear power in the world. Its selection for the NGON consortium, an EU-backed initiative targeting approximately three gigawatts of AI-ready data center capacity, provides further validation. We are also advancing opportunities outside Europe which supports our view that sovereign AI infrastructure is becoming a global requirement, not just a regional trend.
Our technology initiatives are another targeted capability within our digital infrastructure platform. It takes the operating knowledge developed inside Mara and turns it into technology that can improve our assets and serve outside customers. Running a large distributed compute platform has taught us a great deal about power management, infrastructure optimization, and digital asset management. Some of the tools we built for ourselves now have clear applications beyond our own fleet. Vertebra AI is one example. The platform manages power allocation and infrastructure performance in real time. In our mining operations, it has helped us add computing capacity with the same electrical footprint. In other words, more output without needing more power. As power becomes more valuable, that capability should matter well beyond mining. AI data centers, independent power producers, and other energy-intensive businesses face the same need to improve utilization, operate more efficiently, and lower cost.
The second platform is Hashrate Under Management, or HUM, our blockchain financial infrastructure platform. This is the first time we are discussing HUM publicly. We are doing so from a position of demonstrating commercial traction, not simply future potential. Both Vertebra AI and HUM reflect the same principle: innovation should increase the value of the infrastructure we own and create value for customers at the same time. That brings me to Bitcoin mining. It remains an important part of Mara. Not because it defines the limits of our future, but because it continues to strengthen the broader platform. Mining gave us the foundation: strategic power assets, experience operating large-scale compute, and the capital allocation discipline we use today. In that sense, mining was never the final destination; it was the platform we could build from. It still plays three important goals. First, it generates cash flow that supports investment across the business while we continue to operate with one of the industry's lowest cost structures.
Second, it gives us flexibility. We can deploy mining equipment quickly at a newly energized site and begin monetizing the power while an AI facility is being designed, permitted, and built. When customer demand is ready, that same site can transition toward AI or high-performance computing without leaving the infrastructure idle in the meantime. Third, mining is still one of our best sources of operating insights. The work of optimizing power use, improving compute efficiency, and managing mission-critical systems at scale directly informs how we approach AI infrastructure. We will keep improving the mining business through disciplined fleet modernization and intelligent power management. As more efficient machines replace older equipment, we can increase compute within the same electrical footprint and improve the economics of the operation. So we do not see Bitcoin mining and AI infrastructure as competing businesses.
They are different applications of the same underlying asset: power. The capital allocation question is therefore simple: where can each megawatt create the most value? In one market, the answer may be Bitcoin mining, and in another, it may be AI infrastructure, sovereign cloud, or enterprise computing. Our advantage is that we have the assets, expertise, and flexibility to make that decision dynamically as market conditions change. We believe that flexibility is a meaningful competitive strength and an important driver of long-term shareholder value. The first half of 2026 was about expanding and transforming the platform. We grew our portfolio of powered infrastructure, advanced transformational transactions, strengthened the commercial pipeline, and continued investing in the technology that can drive Mara's next phase of growth. The second half of the year is about execution. Our focus is clear: convert infrastructure into long-term shareholder value by signing customers, bringing assets online, and demonstrating the earnings power of the platform we have spent years assembling.
Over the coming months, we expect to complete the Long Ridge acquisition, advance lease discussions across the digital infrastructure portfolio, expand Exaion's international presence, and continue commercializing our technology initiatives. Most importantly, we expect the investments we have made over the past decade to become increasingly visible in our financial results. The foundation has been built. Our focus now is monetizing it. Later this year, we look forward to hosting our Investor Day. We plan to provide a deeper look at our strategy, showcase our infrastructure portfolio, and demonstrate how the pieces of our business work together to maximize the value of every megawatt we own. So let me come back to the question raised at the start: who can power, build, and operate the next wave of compute? Mara has spent more than a decade building an answer. We have assembled one of the industry's largest portfolios of power, digital infrastructure, and developed an operating experience to put those assets to work.
The opportunity in front of us is to turn that foundation into a broader platform for next-generation compute and to do it with the same discipline that built the company. Bitcoin mining provided the foundation; digital infrastructure, Exaion, and our technology initiatives expand the value we can create from that foundation. Together, they position Mara across multiple layers of the AI infrastructure value chain while maintaining discipline in how we allocate capital. Ultimately, our shareholders should judge us not by our vision, but by our execution. The AI infrastructure market is moving quickly; credibility will be earned by consistently delivering results. Power is becoming the defining resource of the AI infrastructure market. Our objective is to convert the power, assets, and expertise we have assembled into durable value and to establish Mara among the leaders of that market. Thank you for your continued support and confidence in Mara. With that, I will turn the call over to Salman.
Thank you, Frederick. Good afternoon, everyone. Two things defined Q2 for Mara: Bitcoin prices created a challenging revenue environment, and we used the quarter to fundamentally transform our power portfolio and capital structure. That context matters as I walk through the numbers. During Q2, we made meaningful progress in building Mara's digital infrastructure platform, taking actions that we expect will expand our total power portfolio to 4.8 gigawatts, nearly 2.5 times its size at the beginning of the year, and secure our position as one of the industry's largest holders of digital infrastructure power capacity. After quarter end, we acquired rights to 1,200 acres at a strategically located powered land site in Matagorda County, Texas, representing up to two gigawatts of potential capacity subject to ERCOT and interconnection approvals. Our confidence continues to be reinforced by encouraging interest from prospective tenants.
We have also advanced the Long Ridge acquisition by securing approval from holders of Long Ridge's senior secured notes to assume the notes at closing. The transactions will close after FERC approval, which we expect to occur soon as guided previously. Subsequent to quarter end, we further advanced the Long Ridge acquisition by entering into two Bitcoin-backed credit facilities, with Coinbase and 2PIC, at a weighted average cost of debt of 7.56% for incremental borrowings under these facilities of $600 million. In addition, we refinanced our existing $150 million facility with Coinbase and consolidated it into the new Coinbase facility. This borrowing, originally due in Q1 of 2027, will now mature in two years along with the incremental $600 million. These financings strategically activate a portion of Mara's Bitcoin reserves as a non-dilutive funding source while preserving our exposure to Bitcoin's potential long-term appreciation.
The facilities will be used toward funding the cash consideration for the acquisition and, together with the assumption of certain of Long Ridge's existing indebtedness, provide funding toward completing the transaction. To be direct, we are funding a $1.5 billion enterprise-value acquisition through Bitcoin-backed debt and assumption of Long Ridge's balance sheet, all non-dilutive financings. This is the capital discipline we committed to. Once completed, the Long Ridge acquisition is expected to contribute approximately $144 million in annualized EBITDA and durable free cash flow with roughly 70% of its output secured under long-term contracts. These contracted cash flows will diversify our revenue base beyond Bitcoin mining, while our capital-light partnership with Starwood will preserve balance sheet flexibility as we develop AI and high-performance computing opportunities across our own power portfolio.
Together, these attributes strengthen our financial position and reinforce our disciplined approach to capital allocation. None of this happened overnight. It is the result of deliberate work across the organization, and that work continued to gain momentum this quarter. With that context, I will turn to Q2 financial performance, capital allocation, and balance sheet activity. The Bitcoin price environment remained challenging, reflecting broader pressure across risk assets driven by macro uncertainty, tighter risk appetite, and continued pressure on mining economics. It is important to view this alongside the substantial progress we are making to build a more diversified digital infrastructure platform. Revenues during the second quarter of 2026 were $175 million compared to $239 million in the prior-year period. Bitcoin production contributed a $7.2 million increase year over year, though this was offset by a 28% decrease in Bitcoin's average price, which reduced revenue by $65.9 million.
Other revenues declined approximately $4.9 million, primarily reflecting lower revenue from other digital assets and elimination of our hosting services compared to the same period. During the quarter, we mined 2.42 thousand Bitcoin, or 26.6 Bitcoin per day, approximately 64 more Bitcoin than the prior-year period. We won 700 blocks, up 1% year over year and up 8% from Q1 of 2026. We held a total of 35.6 thousand Bitcoin at the end of the quarter, valued at approximately $2.1 billion at a $58.5 thousand spot price, down from 50 thousand Bitcoin held a year ago. Of the total Bitcoin held, approximately 26% or 9.27 thousand Bitcoin were loaned or pledged as collateral. Of that, 4.74 thousand Bitcoin were loaned under our digital asset management strategy, generating approximately $4.3 million of interest income during the quarter. We delivered energized hash rate of 70.3 exahash per second, increasing 22% from 57.4 in Q2 of 2025.
Sequentially, hash rate was down modestly from 72.2 exahash as we phased out legacy miners. This reflects continued fleet optimization and opportunistically upgrading our infrastructure by phasing out legacy miners to boost our total hash rate. Our share of available mining rewards reached 5.9%, up from 5.5% in Q1 of 2026. Approximately $343 million of our net loss this quarter was driven by unrealized mark-to-market fair value adjustment for digital assets, a direct reflection of the drop in Bitcoin price during the quarter. In total, we reported a net loss of $611 million, or negative $1.60 per diluted share, compared to net income of $808 million, or $1.84 per diluted share, in the second quarter of 2025. As a reminder, every $10,000 change in Bitcoin price results in an approximate $350 million impact on the fair value of digital assets on our income statement, which is an unrealized non-cash adjustment.
Accordingly, adjusted EBITDA for the quarter was negative $361 million, similarly dominated by Bitcoin mark-to-market change, compared to $1 billion in the prior-year period. We use adjusted EBITDA as a supplemental measure of operational performance and a full reconciliation to net losses is included in our shareholder letter and earnings deck. Our daily cost per petahash per day improved 4% year over year to $27.70 from $28.70 in Q2 of 2025, and over the past nine quarters it has improved by 27%, which we believe remains among the lowest at scale in our sector. That is the cost structure behind the efficiency Frederick referenced earlier and it is the cost structure we expect to bring to every megawatt we convert to AI infrastructure. Our cost per kilowatt hour was four cents for our own sites in Q2 2026. Purchased energy cost per Bitcoin for our own mining sites was $38.7 thousand, up from $33.7 thousand in Q2 of 2025, primarily due to higher network difficulty driven by growth in global hash rate.
Our own efficiency metrics improved; the per-Bitcoin cost increase is entirely a function of rising global difficulty, a market dynamic outside our control. Despite increased difficulty levels, Bitcoin production at our own mining sites increased two percent over the same period. Looking ahead, our most significant third-party hosting arrangements are set to expire beginning in the third quarter of 2027, with all arrangements concluding by the first quarter of 2028. At that point, we expect to eliminate third-party hosting costs and improve our cost per megawatt hour. General and administrative expenses, excluding stock-based compensation, were $69.5 million for the quarter compared to $40.1 million in the prior-year period. The increase reflects the scaling of our operations, higher personnel costs associated with headcount growth from the prior-year period, and administrative fees in support of our expanded global footprint.
Acquisition and integration costs burdened our G&A by $15.4 million and we also incurred a $10.2 million litigation settlement representing the amount paid in connection with the final resolution of a patent dispute. Excluding both items, underlying G&A was approximately $43.9 million and more comparable to the prior year. Compared to Q1 of 2026, G&A benefited from lower headcount costs related to the previously announced reduction in force. We expect our quarterly G&A run rate, excluding stock-based compensation and acquisition and integration costs, to continue to trend lower as these savings are realized over time. Now let me turn to the balance sheet and liquidity. We ended the quarter with $1.21 billion in cash and cash equivalents, and approximately $2.5 billion in combined cash and Bitcoin. Our capital allocation strategy remains disciplined and focused on supporting long-term shareholder value.
Following the expected close of the Long Ridge acquisition, we anticipate assuming approximately $900 million of Long Ridge's debt. In addition, as I mentioned previously, Mara has recently added $600 million in borrowings which are secured by our Bitcoin holdings. As a result, 54% of our Bitcoin holdings have been pledged as collateral under our borrowings. These financings strategically activate a portion of Mara's Bitcoin reserves as a non-dilutive funding source while preserving our exposure to Bitcoin's potential long-term appreciation.
Questions and answers
Thank you. At this time, we will conduct a question and answer session. If you would like to ask a question, please press 1 on your telephone keypad. You may press 2 if you would like to remove your question from the queue. For participants using speaker equipment, once again, that is 1 at this time. The first question comes from Gregory Lewis with BTIG. Please proceed.
Yes. Hi, thank you and good afternoon and thanks for taking my question. I did want to touch a little bit on Long Ridge. A couple things about Long Ridge. First is around the potential timing. Has there been any feedback from the federal, local, or state levels about the potential closing? Are there hurdles that need to be done? That is my first question.
We have not received any feedback yet, and we do not think there is anything at this stage that is going to block the approval. If you look recently, Wolf just got approval for one of their acquisitions, and we expect FERC to respond to us definitely before year end, and much sooner than that.
Okay. Super helpful. And then just as we think about the opportunity set in Hannibal, as you are negotiating with potential HPC customers, is it a little bit of chicken and egg where until the deal goes through and the land that is required to build this out is in place, you are kind of in a holding pattern? Is that a fair way to think about it?
We are in a holding pattern from signing a lease. That being said, we are very actively engaged with prospective tenants in evaluating exactly what they are going to build, how they are going to do it, how the fiber is going to be laid, and so forth. We are moving along at about the same pace as if the deal was already closed. If you are familiar with how these lease discussions go, from when you have a letter of intent from a prospective tenant, it can be 60 days sometimes plus just talking about design and permits. There is nothing holding us back now other than closing the transaction, but things are moving along at a very good pace with the team. It is super helpful. Thank you very much.
The next question comes from Paul Golding with Macquarie. Please proceed.
Thanks so much and congrats on the announcement of the new site in Texas. I wanted to ask with the recent developments around the Texas audit process, tied onto the batch study process, are you getting any additional interest? Or is there a market repricing on your existing energized sites that are available? And then I have a follow-up. Thank you.
There is broad demand across a number of sites, with multiple tenants and discussions on multiple sites. The Matagorda site itself is a hugely attractive site for tenants. Everybody assumes that this will eventually go through the batch zero and batch one processes that the governor has delayed. If you look at the requests and the queues for a number of years, many people have submitted requests and because they have not had to put down huge deposits, there are a lot of phantom requests in the system. By going through the audit process that the governor has requested, this will flush out a lot of those. We were very pleased that for our particular site, there are no infrastructure improvements that the utilities have to do to bring power to the site. We already have multiple transmission lines coming into the site and we are very close to the power generating source in one of the biggest power markets in Texas. So we feel very confident that as this audit process progresses, we will progress through the queue as well. It is just a question of things happening in the right way.
Thanks, Frederick. And then maybe just a follow-up on the Matagorda County site itself. It seems that the purchase structure is potentially favorably set up in terms of milestone payments relative to approval. Could you give some more color around how that was struck and some of those details, working off of the presentation? Thank you.
I think the way to look at it is this: because when we did the transaction there was not 100% certainty about that batch zero approval, there are contingencies that drive the deal. From our perspective, we have the ability to wait until batch zero, but there is a terminal point in time where we either have to close or step away. It is structured in order to benefit us.
Paul, to add to what Frederick mentioned, the structure is attractive for us and our shareholders as it aligns our and the counterparty's interests together with the development of the project. As we progress, everyone progresses.
Salman, maybe just I will try to sneak a third one in. Does this fall within the Starwood partnership if you were to do a deal and have a capital partner through them for development of that site?
Any deal has the opportunity to fall within the partnership. The deals that were already allocated to the partnership were those that were in the portfolio at the time we signed the deal.
Understood. Thank you, both.
The next question comes from Christopher Brendler with Rosenblatt. Please proceed.
Hi, good afternoon. Thanks for taking my questions. I would love to hear more about how we should think about the revenue opportunity from Exaion and EDF, as well as how the revenue base will diversify with these initiatives.
HUM now has contractual revenues; they are not going to be material to the overall total revenues in the near term. HUM is essentially an instrument that allows Bitcoin mining pools to gain a little more certainty in how they are paying out their fees. You could think of it as a way to leverage our hash rate and take part of our Bitcoin and use it to provide more stability to pools. There is a certain limit to where it can grow, but it is definitely an eight-digit a year business on an annualized basis, so it will contribute nicely. Exaion is just coming out of the fold. Exaion's revenues this year will be in the low eight digits most likely, and we expect them to continue to grow as Exaion diversifies its customer base. Having been captive with EDF, it takes a little while to go from building interest with new customers to closing contracts, but we are already seeing good traction and we are very bullish long term on Exaion.
When you think about the continuum from powered shells, which is essentially what we are doing together with Starwood, to campuses where you move from a powered shell to potentially colocation-type contracts, to platform-as-a-service or GPU rental, to fully managed, Exaion has a role across that continuum. Frontier models are great for certain work, but they are hugely expensive to use for routine tasks like analyzing emails, writing materials, and coding. You are seeing a growing interest in open-source and open-weight models that people want to deploy. Many forecasts show these models growing as a percentage of overall compute deployed, and this is Exaion's forte. Historically, one of the things Exaion has done for EDF is manage a portfolio of models where someone who runs a particular task can choose the model they want, and it runs on their infrastructure. With the needs for sovereign compute, keeping data within your own firewalls, and the desire to lower token costs substantially, we believe open-source models will gain significant traction, which is very additive from Exaion's perspective. If you think of the market, we are addressing it from two ends and they will merge toward the middle.
That is great color, Fred. Thanks so much for that. Second question was on Starwood and just thinking back to the meeting in Las Vegas where you provided a lot of color on the timeline and the numbers. As you are getting closer to executing on one of these transactions, any changes in your view? Any more confidence on pricing, demand, and timelines? Are they all as expected or any changes over the last three months?
We have been surprised by demand being greater than what we initially expected, at least the response from tenants, which is obvious given the lack of available power and the fact that we have a substantial portfolio. The expectations regarding the quality of discussions that Starwood would bring us into have been exceeded. The professionalism of the team and how they drive conversations regarding build and design, because we are at that stage with a handful of these opportunities, has been very good. Financially, there is no difference in the calculus. We are very pleased with how things are going with Starwood; the team has been great to work with and they are quite pleased with how things are shaping up. We look forward to that first transaction.
The next question comes from Michael Donovan with Pointe. Please proceed.
Hi, thanks for taking my question. On the hybrid energy storage prototype system with TAE Power Solutions: what performance and economic thresholds does it need to meet before it merits broader development?
We are currently running Vertebra, which is where that partnership fits within our solution set. We developed Vertebra originally to operate at our wind farm because we needed to be able to follow the amount of energy generated by the wind farm and operate our compute to maximize every electron the wind farm is generating, rather than running at a substantially lower threshold. We then adapted the technology so it can now do the same thing regarding load following. If you have a system with varying supply or demand, we can take the other side of the power equation, charge batteries, and create a load that uses that excess energy. Another important use case is start-up data centers: you have to use load banks to simulate load, and Vertebra, together with mining, is a perfect load-bank solution for start-up data centers. We expect to see strong utilization in those cases. The TAE relationship is their technology that we have integrated into Vertebra to allow us to do this effectively.
Appreciate that, Frederick. And then just to switch over to more on the blockchain side: this past week there has been a lot of discussion with Slipstream and the Coldcard wallet. How do you think about monetizing Slipstream further?
Slipstream was a platform we developed originally when ordinals and nonstandard payloads were very attractive and transaction fees were high. Over time, demand for ordinals has declined. When the Coldcard incident happened, we decided to make Slipstream available as a way for people to move their coins in a way that the hackers could not exploit. Longer term, Slipstream is a tool that the Mara Foundation controls. The Foundation's efforts are around supporting Bitcoin and ensuring its continued development and safety. We are active in quantum resilience work in the Bitcoin market. Slipstream is viewed as a utility for the community. Over time, if Bitcoin sees increases in demand for payloads that are not just traditional transactions, Slipstream could be a product and service that generates revenue. Currently, we do not see significant demand in that area, so I would not allocate significant revenues to it at this time.
Appreciate that, Fred. I will hop back in the queue.
At this time, I would like to turn the call back over to Mr. Robert Samuels for closing comments.
Thanks, operator, and thank you, everyone, for joining us today. If you do have any questions that were not answered during today's call, please feel free to contact our Investor Relations team at ir@mara.com. Thank you very much, and enjoy the rest of your day.
Thank you. This does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a great day.