Ladies and gentlemen, thank you for standing by, and welcome to Fermi America's Earnings Conference Call. Today's call will be conducted by Rodrigo Acuna, Fermi America's Director of Investor Relations. Before I turn the call over to Mr. Acuna, I'd like to read the company's abbreviated safe harbor statements. I'd like to remind you that statements made in this conference call concerning future revenues, results from operations, financial positions, markets, economic conditions, product releases, partnerships and any other statements that may be construed as predictions of future performance or events are forward-looking statements, which may involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those expressed or implied by such statements. Any non-GAAP measures that may be discussed on the call are supplemental to GAAP results and are intended to provide additional perspective on the company's ongoing operations. With that said, Mr. Acuna, the floor is yours.

Thank you, operator, and good morning, everyone. Welcome to Fermi America's Fourth Quarter and Full Year 2025 Earnings Call. Joining me today are Toby Neugebauer, our Co-Founder and CEO; and Miles Everson, our CFO. Before we begin, I want to remind you that this call will contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and are subject to risks and uncertainties that could cause actual results to differ materially. For a detailed discussion of these risks, please refer to our annual report on Form 10-K for the fiscal year ended December 31, 2025, which will be filed with the SEC later today. Today's call will be structured in 2 parts. First, Toby and Miles will walk you through an operational update on Project Matador. Then Miles will cover our financial results. We will open it for questions after that. And with that, I'll hand it over to Toby.

Good morning. Thank you for taking the time to join us. This past Saturday, we had our Board meeting where we reviewed all of the accomplishments of the team over the past 100 days. And it's the first time in 30 years of business that I witnessed multiple rounds of applause. In my opinion, the response to the team's accomplishments were well deserved. Obviously, Fermi heard loud and clear from the market, go get a tenant. Unfortunately, getting the tenant is the easy part. As our shareholders, what you need Fermi to do is to earn the trust of investment-grade counterparties and the investors that provide the financing to fund multibillion dollars per gigawatt construction projects. That requires excellence from engineering to accounting. At Fermi, we're creating a private community powered by a private grid to be the leader in powering artificial intelligence that will shape tomorrow. But it all starts and ends with our tenants trusting us with their business, but just as importantly, their balance sheet to execute on the enormous undertaking in an environment where many are failing. At Fermi, we believe the best way to earn this trust is to do, to execute. I invite and almost plead with you all to come to the site. When tenants come to our site, they are blown away with the scale and the speed of which we are executing, 450 million cubic feet of gas pipeline in, 10 million gallons of water pipeline in, grid connect in, substation for an 800-megawatt, 60% to 70% completed, foundations for our gensets either completed or on the verge of completions. But what really turned our shoppers into buyers was the air permit. When we got the air permit is when the C-suites of our customers got very, very serious about buying.…

Thanks, Toby. This is our first Form 10-K as a public company, covering the period from our inception on January 10, 2025, through December 31, 2025. It's approximately 11.5 months. In that time, we moved from formation to IPO and substantially completed the initial phase of Project Matador. I want to frame the financials the way we manage the business internally. A traditional income statement does not fully capture the economics of this company at this stage. We are pre-revenue and in full-scale construction. While our GAAP net loss is significant, it is overwhelmingly noncash. The more meaningful story is reflected in the balance sheet and cash flow statement, specifically how nearly $570 million of investor capital has been deployed into physical infrastructure at Matador. Let's talk about the balance sheet. As of December 31, 2025, total assets were approximately $1.4 billion. Property, plant and equipment totaled $935 million, nearly all of which is construction in progress as no assets have been yet placed into service. Cash and cash equivalents were $409 million at the end of the year. On the liability side, accounts payable and accrued liabilities were $177 million, reflecting the pace of construction and vendor activity. Total stockholders' equity was $1.1 billion. As of March 2026, we had approximately 630 million common shares outstanding. If we turn our eye to the income statement and operating activities, for the full year, the net loss was $486 million. Importantly, approximately $445 million of that was noncash. General and administrative expenses totaled $178 million, of which $133 million was noncash share-based compensation tied to equity incentive arrangements established at formation and in connection with the IPO. Cash used for G&A was approximately $45 million, including $12 million in personnel costs for a lean team of roughly 35 employees, $22 million…

Operator, we're ready for questions.

Our first question is coming from Paul Golding with Macquarie.

Congrats on all the progress on the site. I wanted to ask 2 near-term questions. One being what the key discussion points are with prospective tenants that are being negotiated as you try to work to a definitive agreement. And secondly, more specifically on the near-term energization milestones. As you look to the SGT-800 frames that you've received in Houston, now that you have the equipment on hand, how is the time line coming together for deployment of those assets and how that might relate to your negotiations with prospects?

Thanks, Paul. The #1 issue, the #2 issue and the #3 issue with our tenants is they want all of our power, and they want it all forever. But for our model to work, we need to have multiple tenants so that you deal with the differences in loads. So that really is the issue. And so from -- when they get out there to the site, they're blown away by the site and they realize this is a place you can generate a significant amount of power, and they want it all. In terms of the SGT-800s, we've had quite a bit of luck. So when -- and I'm going to come back to tenant. The units came, as you're aware of, to Houston. We kept them in a free trade zone in hoping maybe we could get a break while we were waiting for our environmental permit. And literally, the second, the Supreme Court had a ruling on the tariffs. We checked them into the country. We saved ourselves probably $27 million to $30 million. And we make -- I'll have them put the pictures. You can see the SGT-800 foundations are ready to pour. But on the tenant side, because I know that's what everybody is focused on. What we can share is that we're in the contracting phase with multiple new potential tenants. But everyone needs to understand these transactions are complex. They're multiparty. And Macquarie, as you know better than anybody, they involve billions of dollars.

Yes, hey Paul, it's Miles here. I would just add that -- and we've said this all along, the other thing is it's not a tension point, but it's one of our things we're holding firm on is we want investment-grade wraps. That's why Toby earlier referred to the fact that this is really companies saying, are they going to put their balance sheet up? And when we say companies, we're talking about investment-grade companies that wrap these things. So then the second thing I would add is that it's not just what we do and what we control, but the ultimate offtakers also or development partners need to look at this and say, can they get their side of the equation up? In other words, all their MEP and the racks, et cetera. And so we're doing more, I'll say, reverse due diligence than I expected we were going to have to do to make sure that they can have their stuff up in time to take our power because our power is ahead of most people's ability to get the other stuff in place. That has been one of the bigger surprises is if you'd say, bear me in the fall was worried whether, yes, convincing people that we could have the power. We now want to be convinced they have the MEP because we do have the power and we need to put it to work.

Miles, if I could just sneak one more in then on the back of the discussion seeming to be pretty robust around demand. Is pricing -- are you able to give any color on pricing directionally relative to where you expect it to be when you first started considering sort of the financial approach to the first gigawatt of power?

We're at the same. And we'll try to bid for more, but we're definitely ready to say we're at the same.

Our next question is coming from Vikram Malhotra with Mizuho.

Congrats on your full fiscal year. I guess I just want to dig deeper, if you can, on kind of the tenant discussions. And I'm wondering if there are different sticking points for sort of Fermi as a landlord versus your potential tenants and kind of how those sticking points may result in, I guess, delays in signings. I think you cited 12 months in your share -- over the next 12 months. And I just want to get a better understanding on the sticking points from either side. And from a time line perspective, should we think over 12 months? Or could it be sooner?

Again, I know it comes across [indiscernible]. Once they get to the site, it really is they want the power and they're trying to lock in all of our power at a price today because I think our tenants really appreciate the scarcity of the gensets and that the price of energy for them will be increasing. So they are rightfully focused on locking in as much power at today's prices as possible. That really is it. And it's -- like I said, we're in the contracting phase of this process. In terms of providing guidance on the time, the Board, the coaching, I've got a really great -- Fermi has a really great Board [indiscernible] look at it. Their point is we'll -- when we provide guidance on timing or expectations, that changes the dynamics of the negotiations to Fermi's disadvantage. And so the Board was pretty firm with me on Saturday that we're not going to discuss the timing because what we're doing is it changes the dynamics of -- these aren't $1 billion transactions. These are multibillion-dollar transactions, and I just want to keep the dynamics as flat as possible.

Okay. And then just 2 things to clarify. One, the -- I guess, the shareholder letter mentioned sort of term sheets and various agreements. I just want to clarify, one, is there an actual LOI in place with any of these 5, 6, 7 tenants that you're negotiating? Or is that sort of the next step? And number two, if you could just clarify any of the near-term financings like from MUFG. Is there a stipulation in any of these financings that you must have a lease signed by XYZ period? I think our comment on -- that we're comfortable with is signing new LOIs, it will be a normal course of our business, and we won't be commenting on them. Post that, I think it's kind of one of the lessons that we've learned so far is we do not want to change the negotiating dynamics. I'm -- each one of these financings is separate. And I'm sure we've disclosed it. Miles, I just don't want to comment on the...

Yes. We don't have any tenant signing covenants, if you will, Vikram, on our financing arrangements. And the other thing to remember that these financings are nonrecourse to parent which I think is really important when you think of the overall public company. And then the thing that hasn't changed is that we do have an agreement with Texas Tech that will have a tenant by the end of 2026. That remains the same, and we're working collaboratively with them to advance that. So that's probably what's most important right now is to understand that we're still full on, and we feel really good about where we're at, to be candid.

Yes, that's only a 200-megawatt tenant. I don't want to call that -- I don't want to demean it, but that should be [indiscernible]. That's not close to expectation. We look at it this way. We don't have a tenant that wants 200 megawatts. That's not our problem.

They want more.

Yes. If we had to have a call, you only could have a 200-megawatt tenant, we would -- that would be a problem for us. The problem is they want gigawatts.

Our next question is coming from Ryan Gravett with UBS.

Miles, you touched on this earlier, but what additional development at the site are you planning at this point before a first tenant lease is signed and you secure project financing? Is there anything you can share in terms of more precise CapEx spending or cash burn that you're expecting this year?

Yes. So we are going to be very diligent about matching our development with the signing of a project financing as well and our tenant leases. The -- but as far as we'll go -- and look, these things change. This is a long-term project, not a 30-day project. But what we'll do is have the site ready to receive our power generation equipment. It's largely there today. There's a little incremental work that needs to be done so that we can place those generation assets into service as soon as we see that we've got tenant agreements to line up with the timing of that installation.

Yes. I think what we were talking about, Fermi become not skeptical, but we definitely want to see that the timing of our development matches the MEP that our tenants can acquire. And if you say, is there a change in how we as a company have viewed it as we've become -- where I would say, last year, we were focused on people being able to do great due diligence on us. We have pivoted and actually made hires. We picked up a really great person from Meta that helps us do diligence on the pace of execution of our potential tenants.

Our next question is coming from Stephen Gengaro with Stifel.

I apologize if there's any noise, I'm in an airport. So when we think about like your tenants need for power and sort of the various tenants and the timing of kind of when their data centers are up and running and when they need power, what's -- like when you're talking to the customers, how far out are they thinking about securing power relative to when the data center becomes fully operational?

First of all, that differs between each tenant. And it's the #1 -- not the #1, but it's in the top 3 diligence items we have or how we prioritize tenants is obviously, are you financeable, i.e., are you investment grade is number one. But the #2 thing is we actually, unlike most companies in the world are sitting on a whole heck of a lot of power generation that we are very anxious to put to work. And so it is -- that is -- there's no one answer to it. But when you think about how we're running the business and prioritizing people that we would contract, that's probably our #2 thing. How fast we're not -- we can have the power because of all the work we did in at the site to date. We can have the power, what we now realize probably faster than some of them can have the MEP. So that becomes how we prioritize who we contract with.

And the follow-up is like -- just kind of going back to the first potential tenant and the negotiations that were terminated or at least maybe terminated but delayed at least, like when did they actually need power? Because I'm just sort of thinking if there's a lack of power, what are they doing for power if they're not doing it with you?

What I look back, and again, I don't believe that I hope that the first tenant is a tenant. So I just want to convey that. When we look at when they need power, it definitely brought to our attention is we have to really make sure that these tenants have the MEP. I think it's a bigger bottleneck than we originally anticipated.

Miles, I mean, you were involved in that...

Yes. Look, so they originally were looking at they would have power that they could deploy and make revenue themselves off of in 2027, okay? But I think there's 2 parts to your overall question, which is when do off-takers need power. And if you look at their planned portfolios, most of them are into '27, '28 where they need to consume the power. However, and this is an important point, -- you can read it in the newspapers. There's other sites that are not capable of delivering on the power that they've committed to these. So we do expect and we've seen some potential reallocations of where they're going to get their power that they thought they already had and they actually don't have.

We are in a special spot because we have a lot of power and the world recognizes it.

Our next question is coming from Nick Amicucci with Evercore ISI.

Just wanted to touch upon something. So I guess just given kind of multiple new LOIs in process in addition to the original one, I just wanted to kind of get some sense, has there been any kind of potential -- has the potential scope of those tenants increased, meaning like different types of tenants? Or is it still more or less those hyperscalers? Obviously, investment grade, but just kind of trying to see if those horizons broadened a little bit.

I think the only thing that I would say is significant engagement by chip makers, not some directly, not directly, I think they are getting really concerned that they -- those chips are only worth the power behind them. So in terms of scope, that would be the only change I would highlight. Miles?

That's how I would describe it as well. The chip makers are more directly engaged in where is the power going to come from? And frankly, where the whole consumption of their chips going to come from is really what they're focused on.

I think you all are off the markets where that the leading chip makers are now realizing they're getting behind a number of companies. And so that changes the dynamic so it does broaden it. For us, it's -- the key thing is, and you know this as well as anybody, we do need a diversity of load to maximize the efficiency of our gensets. So I think what you're seeing us do is a little more math, not a little more, a lot more math. We are better off with a more diversified load base to maximize the efficiency of this private grid that we're building.

Yes. Nick, the other thing I would just add in terms of market dynamics, what's happening is increasingly on the MEP side, the emergence, if you will, of modular MEP, which if you think of it as a chip maker, what you're really concerned about is speed to token. And so you look through the whole value chain and you say, where do I have places to speed up? There's opportunities to speed up the timing of MEP. And so you see more modular players coming in to help make that happen, which is a huge positive for us because we got the power.

Yes. That is another thing that we've become hyper focused on. And one of the great things that we've had exposure to from the oil and gas business is modularization. And again, in terms of hiring, we are bringing people in that can help us diligence and engage on our clients' supply chain for MEP. That have been a real focus for us the last month.

Great. And then, Miles, you had mentioned, obviously, today, kind of the locked -- IPO lockup expires and the intention is still to file as a REIT for 2025. Just want to see, are there any specific management sales that either need to occur that we should be on the lookout for to satisfy that status?

Yes. So there's not a management sale necessarily required for the -- at the time of this expiration of the lockup. However, to meet the REIT 550 rules, there will be, what I would say, an orderly sell-down that we're working to make that happen. And then that we have a few months to make that happen. And we're in -- we got an adviser we've retained to help with that. And so I fully expect that, that will be done in an orderly fashion, Nick. But that's been there from day 1. And now is the time that we're focusing on getting that executed.

Obviously, I'm the -- my family is the problem. Today, we own about 38% of the company. What I would hope to achieve, can't promise, that if our family has to sell down, it needs to be to an accretive buyer. And what I mean by that is I want 1 plus 1 on the sell-down to equal 3 or 4. And that's why we've hired an adviser to help us find which acquirer of a block. And frankly, I don't want to sell down hardly anything at all, especially at these levels. But if we're going to do it, I want it to be something that adds something to the brand of Fermi. So that is our goal there. And we did -- I don't know if that we signed it, but we definitely verbally agreed to hire an adviser to run a process that, again, becomes an accretive transaction that you all are all excited about versus a dilutive sell-down of my family's position.

Our next question is coming from Skye Landon with Rothschild & Company.

Coming back to the tenant questions. Clearly, a few months ago, we were talking about kind of one client taking the full first gigawatt. It now seems like you're potentially balancing trying to keep multiple parties happy. So just wondering if that first gigawatt maybe splits into multiple tenants taking smaller kind of megawatt numbers or not or kind of what you see the base case from here? And then secondly, you mentioned that pricing was remaining in the same ballpark as previously, but just wondering if the structure of rental revenues kind of ahead of operational shells is still going to be the same structure as previously or if various different conversations with new potential tenants is potentially changing this?

My strong -- first of all, there's no one that wants less than 200 megawatts. I mean we're trying to talk them down. We'd rather do 5 200-megawatt deals if you ask us when we run our calculations, that is the right -- that's great -- and the problem -- not problem, the opportunity we've got is we've got 2.3 gigawatts with the F-Class units on their way. Our team was in Germany the other day, and they were -- 2 of them were in the loading dock. So hey, our goal is -- I don't think we get away with 3 tenants for the first 2 would be victory, and I think we only get away with 2. But...

Yes. I would say -- Skye, it's Miles. I would just -- I would put it this way. We will likely only do deals 500 plus, and we can do that. So it's allocation -- if we can allocate the initial commitments, right, over that 2-plus gigawatts that Toby referred to. The real question for me in these discussions is -- they all want ROFRs on future quantum of energy. And you got to not just look at the initial allocation, but also how are you allocating the ROFR so that you comply with any ROFR that we will commit to.

And in terms of the pricing, it's the same as we said. I think we're getting more involved in the MEP -- I'm not saying we're getting into MEP business, but we are wanting to make sure we're solving all of our clients' problems. So not a change in strategy, but enhancing the services that we provide to our customer.

Our next question is coming from Eric Whitfield with Texas Capital.

Congrats on your progress to date. With respect to your prospective tenant list, could you -- could you perhaps add color on how this list has evolved since your air permit was finalized?

I didn't hear the last part. I heard airport permit. That's my favorite word. [ I didn't interest at all ].

Yes. No, just could you speak to how the tenant list has evolved since your air permit has been finalized?

The tenant list didn't change. The engagement changed dramatically. And basically, the best way I can describe it is shoppers became buyers. I mean it is one of the largest air permits ever. I think the largest gas gen project is in Florida. It's only 3.5 gigs. We're at 6. I think, as you all know, we filed for an additional 5. I mean we're looking at being the place where you can have the largest gas generation set on the planet. And I think the C-suites across all of our customers immediately got concerned is, hey, we better get while they're getting is good to use our West Texas freight.

Great. And then for my follow-up, with regard to the emergence of modular MEP development, what is the base unit in general on this modular operations? And to what degree can they accelerate time to power?

I went to the Schlumberger factory in Shreveport, gosh, Fermi. 6 weeks doesn't sound like that long ago, but at Fermi it's 6 weeks, it's 6 years at most companies. But I think it's game changing. And I think it's going to dramatically dramatic -- I don't believe we're going to be talking stick building MEP in a year. I really, really don't. It's just such a transformational way and a much more cost-effective way to build MEP. We're going to plug and play MEP into powered shells. That's what the business is going to go to. I encourage you all, I'm sure to let you go see their factory, and I know there's a couple of other companies. But I mean it took us 1 minute to realize, wow. We're trying to get Schlumberger to build a factory next to us.

Our next question is coming from Joe Brent with Liberum.

Two questions, if I may. Firstly, you talked earlier about cash burn, and I understand there are different scenarios. But can you just give us the parameters of what the cash burn might be in FY '26? And secondly, related to that, I think you've got $885 million of equipment financing facility, which I understand is currently nonrecourse. Could you indicate at what point, if ever, that comes on to the balance sheet? And then related to both those, remind us of the funding structure.

Well, first of all, on the cash burn, I like to tell people that I'm an aggressive personality but a financial [ CISI ]. And I -- we do have a standing call every day at 4:00 Eastern 3:00 Central where we review the cash position on a daily basis on the recourse. And I focus on it pre-tenant, meaning I'm, again, aggressive personality, financial [ CISI ]. Miles, I don't -- I'm not aware that any of it comes on to the balance sheet.

It doesn't come on to the holdco balance sheet. And then on the cash burn, we're running what does it look like cash burn from a pre-tenant signing perspective, and we got plenty of cash from that perspective. And then once we have the tenant, we'll do the project financing. And obviously, at that point, there's plenty of cash to finance the first tenant contract and finish out the deployment and commissioning of the gensets.

Our next question is coming from Rich Anderson with Cantor Fitzgerald.

So Miles, on the -- early on in the call, you addressed potential for asset relinquishment to preserve cash flow. Can you provide a little bit more color on how that might play out, assets that are sort of on that list? Anything more you can add to that topic?

Yes. Let's be clear, Rich. That is not our intention whatsoever, and we don't see that happening. But when you think through all potential scenarios, right, you say, well, what are the levers I have to pull, that would be one lever if we had to. But right now, we don't have any plans to do it. But it would -- if you had to do it, you would do it with a genset or 2 because there's plenty of demand. I mean we get lots of inbound calls as to whether or not we would move our equipment to somebody else. We have no interest in doing that. I only mentioned it because -- well, and it's only prudent to say what are the levers if you got to pull levers, what do I have? So I would not want anyone to think that, that's on our list of things to do at this juncture given what we see on the tenant front and the timing of everything. But I don't even like talking about it. These gensets are incredibly valuable. And I would auction off my 2 boys first before I would let one of these gensets go. And probably the dumbest thing I've ever done is even before we got the tech lease, my family basically committed to buy those SGT-800s. So I did basically auction off my children's future for that. So it's a worst thing -- like I said, my boys will be auctioned off first, and then we'll look at the gensets.

Well, that's love. Okay, and then...

Please check where they stand.

Okay. Second question is on the land lease -- ground lease. What must be in place by this date or that date from a power resource perspective or tenant or whatever it is that satisfies any sort of requirements around maintaining your position?

Is a notice to proceed to begin construction. So we don't have to have anything built, which means we're further ahead. But yes, we don't have to have an actual data center. We have to have a tenant and an agreement with that tenant, and it has to be 200 megawatts. And I'm not going to diminish that. It would be hard to get 200-megawatt deal because no one wants that little of power.

And to be clear, that's by 12/31/26.

Yes.

Our final question today is coming from Andrew Fisher with Berenberg.

A few has already been answered, but I just had one follow-up just on the sort of pre-tenant cash or investment requirements. Could you maybe just give a little bit more color of, let's say, the turbines that you already have in your possession where you've already got the foundation being installed. Could you give us a rough idea about what remaining CapEx is needed just to get those installed to sort of get you there ready for the first tenant? Or if you can't give an absolute number, maybe an idea of the sort of percentage of the overall capital cost of those projects? I assume most of the heavy lifting has already been done, but it would just be good to get an idea, please.

Okay. We're working on the actual calculations on the foundations for the F-Class units. Again, 2 of them is a wonderful picture. I hope -- let's put it on the website so people can see the F-Class units. I want to get those foundations installed. The site is cleared, the geotech is done. There are only 1,300 square feet per generator. I don't have the numbers for those. We have those out for bid literally right now. And if you're over here after this call, we're going to be debating how much money those -- the foundation we need to complete is the SGT-800s. And let me be clear, I don't think it should cost more than $10 million. But I would put that one in a source of consternation and debate at Fermi America. I'd like to get those SGT-800s instead of having them sitting in Houston, they need to come home to Amarillo, and it makes no sense to have those class units sitting in an expensive storage facility. I'm really zoned in on the foundations. We've got an additional extension on our deal with Excel that I think is kind of $8 million or $10 million-ish. I think it should cost $4 million. I think you're going to get a theme that the CEO says everything should cost half of what is currently being quoted.

Ladies and gentlemen, this does conclude today's Q&A session and will also conclude today's call. You may disconnect your lines at this time, and we thank you for your participation.