Earnings Call: Q3 2025

Nov 28, 2025

Hi everyone, and welcome. Thanks for joining us today. I'm Romain Nouzareth, the co-founder and CEO of SATO Technologies. For the past eight years, we've been one of the most efficient providers of high-performance computing power in North America. As a public company listed on the TSX Venture Exchange, we've done it with transparency and discipline. Today, before Kyle walks you through the financial results, I want to take a few minutes to frame the big picture. What is happening in our industry, how the market has evolved, and why SATO is now uniquely positioned to expand from Bitcoin mining into the next major growth era, AI compute infrastructure. As always, our presentation includes forward-looking statements. These documents reflect our expectation and assumption from future events, and of course, they involve risk and uncertainties. We encourage everyone to review our full filings on SEDAR+ and nothing here should be taken as a guarantee of future performance. SATO has been operating in Quebec since 2017, and today we run a fully built, permitted, and grid-connected 20 MW hydropower data center. Over the years, we've become one of the most efficient public miners in the world, constantly ranking near the top in industry PUE and Bitcoin produced per unit of power. We've built deep expertise in uptime, in cooling, and power management, the same skills required today for high-density GPU computing. This infrastructure gives us a unique advantage as we expand into AI compute. Our vision is simple. We want to deliver scalable, ultra-efficient digital infrastructure built on renewable energy. The world now runs on compute, and the most energy-intensive workloads, from AI to cryptography to HPC, require exactly what we have mastered: reliable power, cooling, and operational excellence. At the same time, our digital asset treasury strategy aligns us with long-term value creation in both Bitcoin and AI. This combination, hard infrastructure plus a strategic digital treasury, is what positions SATO for the next decade. Before we get into the numbers, I want to highlight the work the team has done this year. First, we maintain positive mining profit, even in one of the toughest post-halving environments ever recorded. Network difficulty hits new time highs, and our cost structure and efficiency allowed us to stay profitable. Second, we continued disciplined cost reduction, lower OpEx, lower repairs, and lower depreciation. Third, we continued to execute efficiently. Downtime remained around 1% in Q3, consistent with the strong performance we delivered in Q2. Let's talk about the transition. Our AI initiative is well underway. We've completed the early design work for AI Factory 1, a high-density GPU facility that repurposes up to 20 MW of hydropower. Subject to the financing we are actually working on, our first step will be to deploy 8 GPU nodes, the segment where demand is exploded for inference, fine-tuning, and enterprise AI workloads. It's fast to deploy, capital efficient, and revenue generating from day 1. At the same time, we continue building our digital asset treasury, a strategy centered on Bitcoin and AI narrative networks like Bittensor, which further strengths our long-term positioning. Finally, we secured a 3-month grace period on our loan, giving us the runway needed to advance this entire plan. To understand why this transition makes sense, you have to look at what's happening in Canada and especially in Quebec. We have some of the cleanest, cheapest electricity on Earth. 99% renewable hydro and all-in energy prices around CAD 0.04 per kWh. That is unmatched in North America. We also have high-speed fiber, political stability, and one of the strongest AI ecosystem in the world anchored in Montreal. Now, as announced by the Premier, Quebec is actively pushing for the development of AI data centers. This is a clear signal. The province wants to attract the next wave of computer infrastructure. We are already here, we are already built, and we are ready. SATO is one of the very few public companies globally that already controls large-scale operational MW that are fully energized today. We have 20 MW of secured hydropower, with a clear path to expand toward more MW, probably 45, and longer term, even more with Hydro-Québec. We have a fully permitted, grid-connected facility. No construction timelines, no delays, no waiting for approvals. We run on 100% renewable energy in a province that is pro-infrastructure and actively supporting AI. Our all-in power cost, around CAD 0.04, gives us a structural advantage against almost every data center operator in North America. This is why we can move fast and why we shift into GPU compute is not theoretical. It is real, and it is happening. I'm now going to leave the floor to Kyle, and he will go through the Q3 number we have released yesterday. Thanks, Romain. As mentioned, I'm gonna go through with you the Q3 results, which are the 3 months ended September 30th and the 9 months ended September 30th for 2025 compared to 2024. These are all in Canadian dollars and in accordance with IFRS, except for 3 performance indicators, which we'll talk about, compute power, EBITDA, and adjusted EBITDA. Those are non-IFRS measures. Also, as Romain mentioned, we'd encourage you to read our full financial statement and MD&As on SEDAR+ for full details and narratives. We're gonna just go through some of the highlights here. Start with for revenues for the 3 months ended September 30th, we had CAD 3.3 million compared to CAD 2.6 million in 2024. For the nine months, ended September 30th, we had CAD 9.3 million compared to CAD 12.8 million in the same period in 2024. For the three months, we earned 21 Bitcoin compared to 31 in 2024. For the nine months, we earned 65 Bitcoin compared to 161 in the same period in 2024. The major impacts on the Bitcoin mining operations for the periods are, one, as Romain mentioned, in April of 2024, the halving event occurred, basically cutting the rewards in half. Throughout 2025, network hash rate continued to reach all-time highs, that also reduced the number of Bitcoin earned per unit of computing power. Both those obviously impacted the entire industry negatively, not just us, just including us and our peers. In June 2024, we had a fire at our facility, which resulted in approximately damaging some of our equipment. There was a loss of 5.4% in operating capacity, which has not been replaced yet. Those all negatively impacted the Bitcoin in revenue. Now the price of Bitcoin did increase, although it's been very volatile, and subsequent to September 30th it's decreased. Throughout 2025, it was a lot higher than in 2024. The reduction in Bitcoin earned was offset by the increase in the price of Bitcoin. You can see for the third quarter, our revenues increased. Cost of revenue, the main items in there, the biggest item is electricity, which we have a good low cost there. The reduction you can see in both the three months and the nine months are mainly due to a decrease in depreciation, a non-cash item. Our gross profit for Q3, a positive gross profit of CAD 381,000, compared to a negative gross profit or gross loss of CAD 544,000 in the third quarter of 2024. Looking at our operating income, we're always continuing to monitor our costs and reduce costs where we can without impacting operations. You can see for the third quarter, we had a small loss of CAD 60,000, significantly reducing our loss from the Q3 in 2024 of CAD 1 million. The net loss for the period, we had CAD 284,000 loss. Reduction from operating income is basically our interest on our loans as well as some unrealized foreign exchange and realized foreign exchange losses on conversion from USD to Canadian dollar. You can see again in Q3, we significantly reduced our loss from 2024 in Q3 of CAD 1.7 million to a marginal loss of CAD 284,000 in Q3 2025. We ended up with a positive EBITDA, which we'll look at here. You can see this slide represents our key performance indicators. Compute power profit, which mainly takes our gross profit, and then removes depreciation, EBITDA and adjusted EBITDA. Adjusted EBITDA adjusts EBITDA for any non-cash items like share-based payments and unrealized gains or losses. If we look at 25 quarter-to-quarter, from Q1 to Q3 in each of our key performance indicators, we have a positive trend. We're very encouraged by that up until Q3. Again, the crypto environment and Bitcoin environment has been extremely volatile with the price of Bitcoin increasing and decreasing, as well as the increase in the hash rate. This slide shows our cash and digital asset position at the end of Q3, totaling CAD 2.1 million, split between our digital assets is about 70% and cash 30% split. Our slide here is just showing our capital structure at September 30th. Our share price was about CAD 0.155. Basic shares outstanding, we continue to have a low share count of CAD 73.3 million. Fully diluted, CAD 80.4 million. Then you can see our tickers on the TSXV, S-A-T-O, SATO, and on the OTCQB, CCPU.F. Thank you, Kyle. As we close, I want to take a moment to look at the journeys we've taken over the past 8 years. We built a 20-megawatt renewable powered compute center from scratch. We operated it efficiently through multiple Bitcoin cycles. We listed the company publicly and proved our ability to deliver reliable computing power at scale. Now we are entering the next phase, a phase where Bitcoin, AI, and identity compute converge, and where SATO is positioned to play a meaningful role. Our strategy is simple: keep operating efficiently, keep transforming power into value, and expand into AI in a disciplined, focused way. Thank you for being here today, and thank you for your continued support as we build the next chapter of SATO Technologies.