Aug 12, 2026 earnings call — NC1 active deployment and cloud contract growth
Company signed a transformational 10-year agreement representing approximately $865 million of contracted revenue for 40 megawatts at NC1.
Revenue $0.0B (est $0.0B) · EPS $-0.39 (est $-0.41)
Key quotes
"As of today, approximately 20 megawatts of IT capacity is available to support the installation and testing activities of Nscale and its investment-grade offtaker. Initial billing to our customer has now commenced for the initial tranches of capacity."
"Since our last earnings call, we've entered into new multiyear cloud services agreements representing more than $540 million in aggregate contract value over their initial terms."
"During the quarter, we successfully demonstrated 111.2 terabits per second of bandwidth with guaranteed sub-millisecond latency across 83 kilometers."
Analyst Q&A 9
Selling remaining capacity and new site work
Q (Nick Giles · B. Riley): Analyst asked about demand for remaining capacity at NC10, when the company would stop commercial discussions, and whether they'd consider other counterparties. He also asked what development work they'd do before signing to meet 2027 delivery.
A: Management said discussions are still early and timing is uncertain, but demand for Tranche 2 is strong. They plan to finish Phase 1, market Phase 2, and pursue similar quick retrofit buildings for new sites to enable fast client move-in.
"It is imminent. I mean we're fully focused on, like Sam said, completing that first turn of the flywheel and Phase 1 of North Carolina." — Billy Krassakopoulos (PRESIDENT)
Mixing colocation and cloud services
Q (Gregory Lewis · BTIG): Analyst asked how the company balances upfront prepayments and deal structures in the cloud business, and whether colocation and cloud could coexist at the same sites.
A: Management said they evaluate deals at the project level to ensure positive cash flow and limit capital deployment, using prepayments when helpful. They expect to move toward vertical integration so cloud and colocation can coexist opportunistically as development and customer pipelines align.
"Getting to the vertically integrated model has always been the goal. And so to make that happen, we have to have our development pipeline on the data center side align with our customer pipeline on the cloud services side." — Unknown Executive
Managed services margins and integration
Q (Raimo Lenschow · Barclays): Analyst asked how the business should think about the long-run mix between cloud services, colocation, and managed services, and specifically about managed services margin profile.
A: Management said colocation and cloud need different skills and are kept as separate teams, but integration can add value and is being considered. For managed services, they said it is capital-light, generates revenue from day 1, and has a margin profile more like software than hardware.
"In general, the margin profile would look more like a software offering than a hardware offering." — Unknown Executive
Contract lengths and site preference
Q (Brian Dobson · Clear Street): Analyst asked if clients prefer longer cloud contracts and whether NC1 execution affects those discussions. He also asked if new opportunities favor single-campus or multi-campus development.
A: Management said cloud customers are shifting to longer-term deals to secure GPU access and improve economics, which can help margins. For the next site, they are leaning toward a single-tenant opportunity and will follow the same due diligence and execution process used for North Carolina One.
"So it's leaned towards a single tenant opportunity. And again, think of the process that we went through for North Carolina One, kind of the same deal here, final stages of due diligence." — Billy Krassakopoulos (PRESIDENT)
Retrofits, community engagement, Krambu partnership
Q (George Sutton · Craig-Hallum): Analyst asked how retrofits and the cross data center approach help address local opposition, and requested details on the Krambu power access deal and its impact on the pipeline.
A: Management said retrofits and community engagement reduce opposition versus greenfield builds, and their modular approach and patented cross-data-center tech can virtualize small sites into larger clusters. On Krambu, the partnership aligns power and GPU timelines, making the pipeline more realistic and enabling clearer timelines for customers.
"The retrofit format really does solve a lot of the pushback related to data center build-out, particularly against Greenfields." — Samir Tabar (CEO)
Duke 200 MW study and GPU availability
Q (Paul Golding · Macie Capital): Analyst asked whether a potential 200-megawatt incremental capacity at MC1 would be phased, and how confident the company is in forward GPU supply given partnerships and new cloud agreements.
A: Management said it's too early to tell on the 200 megawatts and multiple sites may be enacted before approval. They said the Krambu partnership helps GPU availability, but they've structured the business to avoid overcommitting on near-term GPU demand and focus on deployments with about 12 months lead time.
"One of the things that we did when we went to restructure this business is to put a strategy in place that prevents us from chasing our tails around near-term GPU demand." — Billy Krassakopoulos (PRESIDENT)
Financing sources and margin expansion
Q (John Todaro · Needham & Company): Analyst wanted commentary on likely financiers for NC1 and future sites (chip makers, banks, hyperscalers) and whether cloud segment margins might expand sooner than expected.
A: Management said their priority is to secure the lowest cost of capital and they are open to structures backed by hyperscalers, chip makers, or others as long as they're financeable. On margins, they expect improvement over time driven by higher-quality deployments and customers willing to pay for reliability, but it will take time.
"I mean, overall, I mean, we're really just trying to solve for the lowest cost of capital." — Unknown Executive
Geographic expansion and Project Redwood use cases
Q (Michael Donovan · Compass Point): Analyst asked which geographies look attractive next for colocation and cloud, and whether the cross-data networking (Project Redwood) supports training or inference and how many sites could be aggregated.
A: Management said colocation expansion is driven by client demand and available power timing, mostly in the U.S. and some Canada. The cross-data networking is built to support both training and inference; they selected a customer doing intense training as R&D proof, and the hub-and-spoke model may allow many sites to be aggregated after further testing.
"On the data center colocation side, it's quite simple. It's a mix of client opportunity and where we can marry that and match that with available power in the time line required." — Billy Krassakopoulos (PRESIDENT)
Monetizing cross data center product
Q (Cantor Fitzgerald): Analyst asked about the long-term opportunity for the cross data center product and how the company plans to monetize it—internal use, licensing, or commercialization scale.
A: Management said the product could be used internally or licensed and has value by aggregating smaller sites into a single cluster and leveraging fragmented power. They will test the hub-and-spoke model next to determine scalability and will present data before quantifying expansion potential.
"So I think as power continues to become a challenge for folks, being able to aggregate multiple sites into a single cluster is going to be a value proposition." — Unknown Executive