Good morning, and welcome to the Galaxy Digital Fourth Quarter 2024 Earnings Call. Today's call is being recorded. Later, you have the opportunity to ask questions. [Operator Instructions] At this time, I would like to turn the conference over to Jonathan Goldowsky, Head of Investor Relations. Please go ahead.

Good morning, and welcome to Galaxy's fourth quarter and full year 2024 earnings call. Before we begin, please note that our remarks today may include forward-looking statements. Actual results may differ materially from those indicated or implied by our forward looking statements as a result of various factors, including those identified in our filings with the Canadian Securities Regulatory Authority on SEDAR + and available on our website or in future filings we make with other securities regulators. Forward-looking statements speak only as of today and will not be updated. In addition, none of the information on this call constitutes a recommendation, solicitation or offer by Galaxy or its affiliates to buy or sell any securities, including Galaxy securities. With that, I'll turn it over to Mike Novogratz, Founder and CEO of Galaxy.

Good morning. Listen, we've got a lot to unpack today. I'm going to dive right in, but not before I tell you it's a beautiful day in New York City. I'm very pleased with our full year 2024 results. I certainly wish they were indented by our settlement with the Attorney General. Our team thought long and hard about settling. But when we weighed being tied up for two to three years in a lawsuit with the New York AG versus the opportunity ahead of us. It was pretty clear that the right thing for Galaxy to do was to put this behind us and move on. What I'm most pleased with in 2024 is that our operating business had both positive EBITDA and over $400 million of revenue. In 2018 when we started Galaxy, the idea was to build an institutional crypto business and I really feel like 2024, we hit the first major milestone in accomplishing that. With the Trump administration's new really welcome approach to crypto, we're seeing nothing but new opportunities with institutions getting in the space. So I couldn't be more excited for the forward trajectory. Our balance sheet had a fine 2024, which should have been expected, given crypto's excellent performance. Unfortunately, 2025 has not been kind to many of the crypto assets we hold, and our balance sheet has suffered some. I point this out because up until now, Galaxy's results really have been driven by balance sheet management and the balance sheet in general. I firmly believe that we're at the cusp of transitioning from a balance sheet company to a company with two great operating businesses, one in crypto and one in data centers. And over time, the balance sheet will have less impact on results. That probably doesn't happen for…

Thanks, Mike, and thank you everyone for joining the call today. I'll start with a quick review of 2024, then talk about the details for Q4 and lastly, provide an update on Q1 2025 preliminary results and an update on our U.S. listing process. First, 2024 was a milestone year for Galaxy, as Mike mentioned, marked by record operating business performance and the decision to strategically expand into building and operating AI infrastructure. Throughout the year, we developed and deepened partnerships with leading institutions globally, expanded our trading capabilities and investment offerings to meet the evolving needs of our clients and played a pivotal role in executing the largest bankruptcy mandate in the history of crypto, while ensuring maximum value recovery for creditors. In 2024, we delivered $365 million in net income or $1.02 per diluted share, which includes the $166 million charge from the legal settlement with the New York Attorney General, which is the discounted value of the $200 million in total that will be paid out over three years. Excluding this settlement charge, in 2024, we generated $532 million in net income or $1.49 per share on operating revenues of more than $400 million surpassing the generated the total generated over the previous two years combined. And importantly, this marked the first year of our combined operating businesses achieving profitability, as Mike mentioned. Turning to expenses. Excluding the 1x settlement charge, operating expenses totaled $782 million in 2024. Notably, this includes roughly $240 million in staking costs and interest expenses within our global markets business, which are directly tied to increased operating activity and higher revenue throughout the year. Looking ahead, we expect certain operating expenses to decline in 2025, driven by the absence of 1x items and a meaningful reduction in mining related expenses as we…

Thanks, Tony. All right, let's talk data centers. Across our data center footprint, our mission has always been very clear to monetize our electrical capacity and infrastructure in the most profitable way possible for shareholders. At the heart of this strategy is Helios, Galaxy's flagship data center campus in the Panhandle region of West Texas, where we have spent the past two years developing and operating industrial scale Bitcoin mining infrastructure and providing turnkey colocation services to other Bitcoin mining companies. Today, I'm excited to share the next phase of our digital infrastructure evolution, a strategic expansion into AI and high performance computing to meet the increasing demand for highly reliable power and data center infrastructure to support accelerated AI growth within the United States. Galaxy has entered into a transformative 15 year lease agreement with CoreWeave to power the next wave of artificial intelligence innovation. As part of this agreement, Galaxy will initially deliver 133 megawatts of critical IT capacity to host CoreWeave's AI and high performance computing infrastructure at our Helios campus. Under peak design day conditions, we expect the facility to operate with a PUE of 1.5, utilizing roughly 200 megawatts of gross power capacity at our private substation. Upon energization of the full 133 megawatts of critical IT, we expect to generate approximately $240 million in revenue in the first 12 months. Over the 15 year initial term of the agreement, taking into account annual escalators, we expect to generate approximately $4.5 billion of total revenue or $300 million of average annual revenue. Note, this all excludes two five year extension options that exist in the lease. Operating expenses, apart from expenses associated with Galaxy on-site personnel, will be passed completely through to our tenant. We therefore expect EBITDA margins for the duration of the contract…

[Operator Instructions] We'll go first to Patrick Moley with Piper Sandler.

Congrats on the deal announcement. So on the last call, you said that the hyperscaler or the term sheet that you signed which we now know is the CoreWeave included the option to develop all 800 megawatts of the approved powered Helios. So just wondering how we should think about the remaining 600 megawatts. Is that still exclusive to CoreWeave or can you kind of shop that to other folks? And how confident are you? Or what are your thoughts on that additional 600 being added to your agreement with CoreWeave over time, which is somewhat similar to the deal I think they struck with Core Scientific?

Yes. Patrick, I appreciate you joining the question. Yes, in the term sheet and currently, the remaining capacity at Helios remains under option with CoreWeave with a couple of different tranches over various time frames. And so we are -- between CoreWeave's expansion plans, which we know are very significant, given the demand that they see on the client side as well as continuing conversations with other market participants, which we are allowed to have and continue to have, we're highly confident that, that space as it gets delivered is going to be contracted.

Okay. Great. And then just looking at the deal specs of the deal announced today, like how would you expect -- I mean those next to kind of change in terms of revenue, EBITDA margins on that additional 600 megawatts, if CoreWeave does in fact exercise the option to add that to their contract?

Yes. So I think a couple of things, right? The actual development CapEx side, let's start there. At our site, Phase 1, which was the first contracted lease of CoreWeave was a retrofit of our existing shell for Bitcoin mining. And so there -- whereas the rest of the campus development is a greenfield development. So there's some extra civil work and structural work and design planning that has to go in at a baseline for the rest of the campus. All very doable, all not significant in the grand scheme of things, but would add to a development budget for the rest of the phases. The other thing that at play is as technology develops, the design specs for what future data halls for various customers would be is likely to change, higher rack density, et cetera. And so that part is still unknown. The thing I would point to, though, is the arrangement that we have with CoreWeave in Phase 1 as well as for under the options, provides for Galaxy to earn a fixed deal based CapEx costs. And so it's really a collaborative partnership with these potential large customers quarterly most significantly to spec out what they ultimately need from a design requirement perspective. And then whatever that resulting cost is creates a function of like of what Galaxy is going to earn from a yield perspective.

And we'll take our next question from Brett Knoblauch with Cantor Fitzgerald.

This is Thomas Shinske on for Brett Knoblauch. Congrats on the quarter and deal announcement. I guess maybe to start on the 90% EBITDA margins. I know you highlighted that a lot of the operational and maintenance expenses will be passed through there. Is there any additional expenses to highlight maybe pass through there, maybe power costs? I know that's something that's been brought up in deals across the space. And then how confident you are in reaching those 90% EBITDA margins on a go-forward basis?

Thank you, Tom. Thanks for joining. So the vast majority of all expenses are passed through to the tenant, in this case, quarterly. So that includes electricity, power costs, it includes other utility costs. It includes operations and maintenance. The only costs in addition to the CapEx, which we are funding and financing and the ensuing ongoing carry cost of that financing. The only cost that Galaxy incurs are Galaxy personnel who are going to remain on site. And so that -- given that, we have pretty high visibility and pretty high confidence in the operating model, and therefore, the ability to achieve 90% plus EBITDA margins. It's -- I hesitate to call it a full triple net lease, but it's triple net-ish in structure.

Perfect. Very helpful color. And then on the additional 600-megawatt options, I guess, I know you highlighted CoreWeave as often there. Are those on a ROFR basis? Or is the shopping pretty free for other potential hyperscaler tenants?

So I would say that we only have so much time and a team that's so large and so we are spending a lot of our focus and time working with the great team at CoreWeave. Those agreements are not on a ROFR basis. However, we are not restricted from talking to folks in the market and understanding what their forward needs are going to be, particularly as we think about expansion beyond just our existing approved 800 megawatts. And so when you look at our expectation for what our actual full campus availability is going to be, you start talking about power delivery not just in 2026 and 2027, but '28, '29, '30 and beyond through the whole additional 1.7 gigawatts. And that -- those conversations many people in the marketplace with very large aspirations and very large balance sheets are very interested in thinking about their forward planning for those out years. And so our business now, in addition to executing on near-term power and data center delivery is also about business development and building a smart pipeline with great customers for like that very long-term build for the entire campus.

Perfect. And then if I could just sneak in one more. On the $11 million to $13 million per megawatt CapEx guide, are there any upfront investments that will need to be rated for future deals, potentially lowering the per megawatt CapEx for the remaining 600 megawatts?

Yes. So there's going to be a there's going to be a good mix and balance there. Like, for example, the fiber investment we're making is a long-haul fiber investment to deliver data streams back and forth to Dallas at 10 millisecond sub. That, for example, is a project that is going to serve the entire site, not just the first quarter that we have contracted today that we're building. The other element that's going to be at by in the CapEx on the go-forward is also speed to delivery, right? And so Phase 1, what we committed to in concert with CoreWeave was a pretty aggressive delivery schedule to meet their demand needs in 2026 capacity. And so with that includes expediting equipment acquisition, which comes at a price. And so as we plan out forward, late '26, '27, '28 delivery of data center halls, we have a lot more flexibility in terms of capital equipment acquisition from a price negotiating perspective, offset by the fact that, like I said, there's going to be technical design requirements that are going to change in terms of data center design for rack density as technology involves. So there's a lot that goes into there. But yes, there are components of what we're building here that are leverageable across the whole site.

We'll go next to the line of Mark Palmer with the Benchmark Company.

Yes. And I'll add my congratulations on the deal. Can you talk a bit about the process that led to the signing of the term sheet how many other counterparties beyond CoreWeave were involved? Are those counterparties potentially in the mix for the remaining 600 million of -- or 600 megawatts that would represent the next phase in the deal?

Sure. So the process prior to -- and we signed the term sheet with CoreWeave. I don't recall back when in October of '24 now. The process leading up to that, I think was pretty robust. We hired an adviser, Newmark Financial who not only worked on us on the term sheet in Middle East, but also helped us tap the market and talk to other market participants. It was a pretty robust process. All things considered given that the large buyer base for scale power infrastructure when you're talking hundreds of megawatts, is not in the hundreds of potential buyers just in terms of actual size. All of those players, we are currently in contact with. And again, like I said before, we're very focused short and medium term on working with CoreWeave because we think they're awesome. And we think they have a -- they're very smart about these, they're fast moving. They're very diligent and they have a pretty big pipeline of demand. And -- but as I said, sort of as we think about unlocking the incremental capacity for the Helios campus that could make us a 2.5-gigawatt mega data center campus over the long run, the conversations with folks who would take up that size of power over a longer term period, '28, '29, '30, '31, those are the conversations that we are also having today.

And just one more. If you could shed some light on what the time frames are for CoreWeave’s options with regard to the remaining 600 megawatts, I think you said that, that would be in different chunks.

Yes. So we're -- that's not something we're going to disclose right now, but I would say that demand for locking up our capacity is pretty high. And the -- it's important to us to have clarity on the time lines that we're going to develop the sites because we have a lot of work on our end, not just planning and building but raising financing and staging out our own balance sheet appropriately so that we can responsibly develop the site. And so the -- we're very -- like there's not very -- there's not long-term options past 2025 to have the capacity locked up. Like we will be pursuing it diligently and working with CoreWeave and if not other people in the marketplace to know that we have what the forward plan is for the existing capacity.

We will go next to the line of Joseph Vafi with Canaccord.

And nice to see the Helios announcement and strong performance across the business. Just maybe one for Mike, real quick. Spot prices are down a little bit, but the medium-term outlook is looking pretty bright, I think given maybe a better regulatory backdrop and other things. Just wondering how you're looking at the M&A market now for Galaxy? Is an interesting time to be looking at things? And is there any -- are there any areas of the business that you think that would benefit from some additions? And then I have a quick follow-up.

Yes, let's say, it's a great question. I would tell you that for us, what has stopped us from M&A in the past is that our stock always felt very undervalued to us. I'm still of that belief. When I do a sum of the parts balance sheet plus what I think the value of our crypto company is plus the value of what our data center company is becoming, I just think our stock is too cheap to use it at this point to buy crypto companies. I'm hoping that once we get public in the United States and once this data center build-out has more clarity to the market, we trade at a value that will allow us to gobble up some really talented groups of people out there. I would tell you, a lot of private crypto companies probably want to sell because they see trade by companies coming in with big balance sheets. And most crypto businesses fortunately or unfortunately, are tied to the overall index of crypto prices. And so if you're a staking company when the price of Solana and Ethereum goes down, your revenue goes down. And so I think there's probably a lot of sellers in the private company space. We're not a buyer at this point of anything significant because of our -- the level of our currency, IR equity. But that doesn't mean we're not looking and turning over a lot of stones and coming up with plans for when our currency gets to a level that we think it's worth trading.

Sure. And then we just kind of drilled down a little bit on funding the CapEx for Helios. It sounds like it's coming along pretty nicely, but any other details there, kind of what the cost of capital might be? And are those kind of baked up financing arrangements yet or you're still shopping it?

Yes. So we've had the benefit and luxury of a pretty robust financing market, in particular, focused on this space, which is great. We have spent a lot of time running a pretty robust process with dozens of lending groups who we know very well from past lives and current. We are already past the phase of sorting through them. We've selected a very strong lending group who were have great reputations who were highly confident in they understand the asset, they understand us. And we're moving forward together on finalizing the financing. I think we talked about this a little bit in the past, the financing market for these assets, is pretty well-known and pretty straightforward on the project side. We'll see where it lands, but you should think about it as like 80-20 debt-to-equity financing roughly. And the cost of capital for project financing is sort of 10% to 11% yield. Now that's really for the construction phase, which for us in Phase 1, really is a 12-month expected process or less. And so the way we think about how Galaxy is going to finance this asset on a go-forward basis is think about an 80-20 debt to equity and is what we've currently circled for the project financing part. And then once we reach CoD, commercial operating date, and rent starts flowing, then there's a whole new market open to companies like us that have stabilized assets that are paying rent, which our expectation is going to allow us to refinance the project debt for lower cost, likely higher quantum debt, which should unlock a lot of equity for Galaxy and then reinvest in building the campus. And so matching up timing and having capital markets be open and vibrant for all that to happen is what we're looking at and like what we do really well and what we're focused on nailing. But that's how I would think about the evolution over time of Phase 1, Phase 2, Phase 3 and sort of debt equity mixes and how we're going to finance it. Is that helpful?

Yes, that's great.

And we will take our next question from Mike Colonnese with H.C. Wainwright.

Congrats on the CoreWeave deal today. As we look across the crypto ecosystem and the regulatory tailwinds that are expected to come from legislation in the U.S. this year based on my comments, what major themes do you see playing out as we progress rest of the crypto cycle? And where will Galaxy be focusing its resources in 2025 to best capitalize on some of these things?

Yes, it's a great question. I think the first obvious answer is stablecoins, right, both here and abroad, stablecoins for payments, stablecoins for Internet of Things. Stablecoins for cross-border transactions and remittances are only going to accelerate. And so there is a lot of activity in D.C. right now on the stablecoin bill that is being worked on. On our venture side, we're investing -- and Chris could go into some of the companies in plenty of businesses that operate in and around that area. The second kind of obvious one is and what everyone is kind of waiting for. Stablecoin is really the first real-world asset that's been tokenized, if you want to think about RWA. But the tokenization of other stuff, if it's mortgages or the collectibles, equities is coming. And I keep saying it's going to be like bankruptcy, it happens real slow, then real fast. It hasn't happened fast yet, but every single [TradeFi] participant is gearing up for that. And I think the crypto world is working on that. And so what's interesting is it's really an infrastructure play. And one of the early promises of crypto was it was going to make things more efficient, more equitable and more transparent. And a lot of that was held back by the lack of regulatory clarity that we had for the last 4 years, certainly, but really 8 years. And as that's changing, I think you're going to see the acceleration there. Like we are close with our euro stablecoin called AllUnity, which we're doing with DWS, the Deutsche Bank subsidiary and Flow Traders, which is going to be open, approved and regulated. And so that will be our first actual stablecoin play. But in every other stablecoin, we are market-making in them, we are promoting. And so we're very much from our trading business in the heart of the stablecoin ecosystem.

Yes. The thing I'll add to that for a little bit of color is the -- I agree with Mike wholly on the focus for 2025 in the U.S. from a regulatory perspective on stablecoins and other tokenized assets and market structure. Rather than us just being an investor market participant as a trader, may be an issuer and rather than us just do that, I'll highlight the GK8 investment we made back in late 2022, it was actually early 2023 when it closed, was a way for us to not just be a participant but actually be an infrastructure technology provider underneath what we thought was going to be this wave coming. Now it's been a couple of years since it's actually come here to the U.S., luckily, that business has been able to make real inroads. I think we have 30 clients now in the book, mostly internationally. But the U.S. is going to be a shift change in terms of customer size and adoption for the technologies, both on the custody side as well as the tokenization side, that we've been able to build enhanced since we bought GK8 here. So I think the -- while it's taken a while for it to really catch on, I wouldn't underplay how excited we are about the opportunity set for our actual infrastructure technology to be a real part of the financial infrastructure as it changes here in the U. S. Going forward. So we’re pretty excited about that.

Really, really interesting color. Thanks for that. And just curious to get your guys' views on U.S. strategic Bitcoin reserve? What's really the probability you see in the U.S. to start to actively acquire more Bitcoin this year and what the implications could be if that were to happen with other nation states adopting similar strategies?

Yes. Listen, I think it's higher than you might think solely based on the spectacular enthusiasm of many people around that Trump cabinet, right, Howard Lutnick, who is one of the major voices in that cabinet has been a vocal proponent of both stablecoins and bitcoin. And he already has the ability, given the executive order within his perch on a revenue neutral basis buy more Bitcoin. And so I think there's a shot higher than like I would have thought 6 months ago that the government actually ends up buying some bitcoin. And that's really significant statement if it happens because it certainly will force other governments to think, "Hey, we should do that, too". I mean I think I said this on the last earnings call, I had direct conversations with one of the larger sovereign wealth funds who said, now that the U.S. is buying, we're buying. And I think you're going to continue to see some of that. I don't think that happens until the third quarter, if it happens because just getting the plumbing set up and the buy-in. But I'd tell you there's a lot of people in D.C. focused on it. And so it's quite frankly, why even in a world where crypto assets are heavy, it's dangerous to be short. And this gap between crypto price action and all the exciting things we're seeing is somewhat explainable in that a lot of the exciting things are around infrastructure. And connecting that infrastructure back to building on blockchains and using those blockchains so they start getting more activity and then hence and more support from the market is just going to take time. And so we're in this gap between the promise of what could happen and people's enthusiasm and a risk-off environment for Ethereum or any of the other L1 or L2 blockchains. In time, they will be used a lot more than they're being used today. And so that's just the gap in figuring out fair valuation versus future use is going to be the calculus and the science maybe it's hard, maybe it's science to getting the markets right.

And we'll go next to the line of Joe Flynn with Compass Point Research.

I was wondering in relation to the construction CapEx and time lines, it's expected to roll out in stages of 2026. Can you maybe walk us through what that ultimately looks like? And then from the -- measuring the fixed cost on CapEx. Is that more a function of the initial deal? Or should we -- is that kind of the level, call it, 50% and 70% we should expect on a go-forward basis for the additional capacity?

Yes, so let me hit time line first. So the -- we're already underway a number of different subprojects in the development and spending CapEx and building. The -- right now, the anticipated delivery date for the individual data halls for Phase 1 begins in early 2026 and should be completed into Q2 2026. And so think of 2025 as construction development and very quickly in 2026, delivering operating data halls and then slowing rent for the next 15 to 25 years, depending on how -- on options. That's -- and from an actual use of proceeds and CapEx perspective, it's fairly straight lined over the year. Like if you think about equipment procurement, they tend to be 10% to 20% down deposits and then delivery over a number of weeks and then final payment schedules and once you take delivery and installation. Same thing with the EPC contractor. And so that's really timing for Phase 1. Phase 2 and Phase 3, just to be specific about that. Electrification of Phase 2 is expected late this summer. So that means Phase 2 will be able to flow power late this summer. But when we think about development time for the actual data center that will be Phase 2, you should think about that sort of layering in towards the later stage of Phase 1 project and then for 2026, basically having like rolling delivery of data halls all the way up through basically 600 megawatts of gross capacity as currently planned. And then Phase 3, which is the final 200 megawatts of gross capacity currently approved today, that's an early 27 electronification of the substation. And so you should think about a similarly overlaid project time line from a CapEx and delivery standpoint, knowing that you can actually flow power until early 2027, anyway for the last phase. Your second question, can you just clarify what you meant on the CapEx side, so I can answer appropriately? I might have lost you. I'm not sure what the second question was on CapEx. I'm happy to hit it if you -- if you want to clarify.

Yes. Sorry, it was more so related to the lease. So the percentage of yield on CapEx structure. Is that something we should expect going forward? Is that more of a function of the first deal? And like what -- like is there any escalator or anything over time? Or is it you expect it to be largely fixed?

Yes. So yes, I think these deals historically in data center world have gotten done in 2 different ways, either sort of an open book percentage yield on CapEx, where you're working in concert with an end tenant to purpose build a data center design spec with the CapEx that kind of falls out of it and then you haven't agreed upon gross yield based on that. That's the construct that we've used largely here with CoreWeave. I would expect, given that these end use cases are relatively new, to be -- that to be the construct going forward for our business because these really have -- these aren't -- these have not been replicated multiple times before, such that a developer like ourselves would or probably should on spec say, we'll agree to a rent number with an unknown CapEx budget and unknown design stack. And so where the market is today for developing these new data centers, they really need to be a collaborative design process with a resulting sort of agreed economic yield as a result. So I would expect that to be very similar at least for the foreseeable future as we develop the site.

That's good color. And then real quick, maybe digging in a little bit on that. I guess, going back to the initial term sheet and then ultimately, the signing, where CoreWeave end customers involved in the overall design of the project? Was it something that they had to sign off on and ultimately kind of how the deal came about? Or is there like a bit of separation between your guys' agreements with CoreWeave and whatever they sign.

Yes. So our client is CoreWeave. CoreWeave is our main partner in all things, economic, developing the site, specs, et cetera. Obviously, like on the other end of side of that, one of CoreWeave's expertise is knowing who their clients are and what their clients want tomorrow. And so the design spec that we ultimately land on for Phase 1, Phase 2, Phase 3 is -- it's a direct collaboration with us in CoreWeave, but it is definitely the result of demand both from CoreWeave to the extent that they're running their own proprietary cloud as well as what they know evolving spec needs are for other large hyperscalers in the world.

And we'll go next to the line of Bill Papanastasiou with KBW.

Congrats on a strong quarter to close off the year. For my first question, with the repeal of SAB 121 following the election, can you provide an update on how the team is progressing with the GK8 custody software licensing? What's the reception been? It seems like that's a bit of a low-hanging given the tech. Curious how you guys are looking at this.

Yes. Bill, very excited about the opportunity set in front of us on that front. I would characterize SAB 121 repeal rescission as a major step but not the only step necessary to allow trade institutions to custody and touch crypto. So SAB 121 was a surprising and hurdle that was put in place that has now come down. But the -- there are other things being worked through on the market structure side, on capital charges with a number of other government organizations that the biggest financial institutions in the world are actively working to today in Washington to sort out and figure out, but need to get started out first. So there's more work that has to get done throughout 2025 on market structure and on stable coins from a regulatory perspective than just SAB 121, but that would -- that is a major hurdle that came down. So the time line is still elongated in terms of figuring out when these institutions are coming in and how and what they're going to offer. But all of that is fair game for GK8. Outside the U.S., I'll keep pointing back to as we think about getting approval this year, which we're very confident given our partner, Deutsche Bank and DWS, BaFin approval for the first regulated Euro stablecoin that company, even though we're a minority owner, ran a pretty robust process and ultimately selected GK8 from a technology perspective to be the technology backbone for issuing and maintaining smart contracts around stablecoin issuance [indiscernible] burn, et cetera. And so that's a thing I would point to as a tangible example of once the regulatory window gets clear, and there's opportunity like GK8 provides a technological infrastructure solution that is a clear product market fit.

There's still a little work to be done in the U.S.

Appreciate that color. And then curious, was there any revenue prepayment attached to the announced lease agreement? And in addition to that, how quickly do you think it would take CoreWeave to execute on the remaining 600-megawatt option?

So for Phase 1, there was no prepayment for Phase 1. I'll say that much. And if I know the CoreWeave team, which I think we do really well at this point, they have a very large pipeline and are growing very fast. And one of the key chokepoints for them is ensuring that they have the adequate forward data center capacity to fulfill the demand that they have on the other side. And so I -- my expectation is that we are going to continue to move pretty quickly at figuring out forward partnership and development of the campus.

And just one last question, if I may. How would you benchmark the latency specs between the Helios sites in West Texas to the municipality of Dallas?

So I would say we purposefully expect the fiber project to ensure that we have between 10 and 15 milliseconds travel path back to Dallas. And we have 2 redundant paths that to maintain N+1 connectivity and that benchmarking was meant to be speed that can service both not just training but also inference loads. And so the idea there was to ensure that even though Helios is in a relatively remote area that it actually can service and is a good fit for what we think the forward on actually AI load use cases are going to be so that it's in play for many years to come.

And we'll go next to the line of Martin Toner with ATB Capital Markets.

Congrats on this deal. How much -- like what type of redundant power will you use at site? And how did that figure into the CapEx number, if you can give us some detail there.

Yes. So I think the short answer is we're building Phase 1 and future phases to a true Tier 3 N+1 redundancy across really all systems. And so that is a big component of why the CapEx estimated between $11 million and $13 million per critical IT megawatt, it's because every system from cooling to key critical IT even down to the substation and fiber has redundancy. And so that -- this is the big difference from going from Bitcoin mining to AI data center capacity. So yes, that is the major driver.

Great. And I think at the beginning call, you mentioned that the 1.5 PUE was like a peak PUE. Just wondering if you can kind of talk us through any dynamics there? And hopefully, I didn't mishear that.

Yes. So no, no, you didn't mishear that. I think the idea is just that we need to ensure that there is enough gross power available at peak times. And so whether that's at extremely hot days in the peak of the summer in Texas or not that we have -- and depending on expected workloads of the underlying critical IT, which is a function of an expectation of CoreWeave's usage and their ultimate end client usage. The design takes all that work into consideration to ensure that we can effectively power 133 megawatts of critical IT with N+1 redundancy without having any doubt time. And so that's -- the net output is we expect to have up to 200 megawatts of gross power effectively ring-fenced and dedicated to power the 133 at peak workload peak time a day, et cetera.

And we would like to turn the call back over to Mike Novogratz. Please go ahead for closing remarks.

Guys, thanks for all the questions. As you can see, we're very excited about the opportunities, both in the data center world and in the crypto world. We're happy to have the AG thing put behind us. Listen, I think the next couple of earnings calls, you're going to start seeing a company that feels more mature with 2 strong business lines, and we look forward to it. That's all I got. Have a great day.

We would like to thank everybody for their participation on today's conference. Please feel free to disconnect your line at any time, and have a wonderful day.