Hut 8 Says No New Equity Needed for $27 Billion AI Lease Backlog as Beacon Point Faces December 10 Audit

Hut 8 Corp. told investors it does not expect to raise additional equity to finish its two flagship AI data center campuses, leaning on project-level investment-grade bonds and a newly expanded $1 billion share repurchase authorization as it navigates what management called a period of market volatility.

On the company's third-quarter 2026 earnings call, CEO Asher Genoot framed the quarter around "three disciplines" — origination, delivery, and financing — and delivered a direct answer to the question he said investors ask most: "We remain on schedule, and we do not expect to issue additional equity to support River Bend or Beacon Point."

The financial results themselves were transitional. Revenue declined year over year, dragged down by the February sale of the Far North power portfolio, lower average revenue per Bitcoin mined, and the planned runoff of legacy businesses. But Adjusted EBITDA rose, and the GAAP bottom line was dominated by a mark-to-market gain on digital assets.

The $189.5 million net income included a $413.8 million fair-value gain on digital assets. CFO Sean Glennan was careful to separate that from operating performance: "Adjusted EBITDA should be considered together with, and not a substitute for, GAAP net income."

Segment Mix: A Business in Transition

The quarter laid bare the shift from a Bitcoin-driven revenue base to one that will eventually be anchored by contracted AI leases. Compute revenue held broadly steady, while power and digital infrastructure shrank as legacy businesses were sold or wound down.

Geographically, the United States accounted for 96.89% of revenue in the quarter, with Canada at 3.11%, according to the company's filings.

Glennan stressed that the digital infrastructure line does not yet include the contracted lease revenue from River Bend or Beacon Point: "That revenue begins when the relevant capacity is delivered." In other words, the most valuable part of Hut 8's business is still on the drawing board and the construction schedule.

Compute cost of revenue rose to $28 million from $22 million, which Glennan attributed to operating more capacity rather than deteriorating efficiency: "The increase tracks the increase in production, not a deterioration in operating efficiency."

The $27 Billion Backlog — and the December 17 Test

Management's central message was scale. Hut 8 has contracted 949 MW of IT capacity under long-term AI data center leases with or backed by investment-grade companies, representing approximately $27 billion of contracted revenue. Both River Bend and Beacon Point Phase 1 are funded through completion with non-recourse project bonds — $3.25 billion and $4.25 billion, respectively.

At River Bend, more than 1,200 workers are on site. Structural steel, roof decking, and building foundations are complete across all four data halls, and equipment installation has begun in Data Hall 1 with Vertiv power skids and SmartRun overhead modulars. At Beacon Point Phase 1, ground improvements are roughly 95% complete, with steel erection scheduled to begin this month.

The immediate catalyst is regulatory. Hut 8 expects audit results for Beacon Point's baseload designation on December 10, with unconditional classification anticipated on December 17. That would clear a path to energize the full gigawatt at Beacon Point, with 700 MW targeted for the first quarter of 2027.

The timing lands just after a Texas gubernatorial election that produced a change in leadership. Genoot addressed it preemptively before Q&A: "We respect the election outcome and support the Governor-elect Hinojosa's call for legislative guardrails." He added that Hut 8 does not believe the results change the outlook for Beacon Point, describing it as a late-stage project that is "well-positioned."

Buyback, Balance Sheet, and a $1 Billion Shelf

Hut 8 repurchased approximately 3.3 million shares for about $250 million during and after the quarter, funded with roughly 3,100 Bitcoin. The board then raised the authorization from $250 million to $1 billion. Genoot was explicit that this is optionality, not an immediate spending plan.

"We don't expect to go and immediately go buy shares off the back of this increase, but rather just leave it on the shelf as an additional tool," he said, adding that Hut 8 will not use its revolver for buybacks and that "cash will be king" amid volatility.

The balance sheet requires careful reading. At September 30, Hut 8 held $156.9 million of unrestricted cash, $3.6 billion of restricted cash, and $2.8 billion of restricted short-term investments — the latter two tied to project construction and debt service. Consolidated loans and notes totaled about $7.6 billion, of which roughly $7.5 billion is non-recourse project financing. The company also closed a $1.07 billion senior secured revolver in September with no borrowings outstanding, and held about 1,361 unencumbered Bitcoin as of November 1. Management pegged total liquidity across parent and projects at more than $7.7 billion, with zero recourse debt at the parent.

Interest expense of $105.5 million reflected construction-period carry, partially offset by $61.8 million of interest income on restricted investments.

Q&A: Costs, Credit, and a Post-Election Texas

Analysts pressed on three themes: construction costs, the credit quality of future tenants, and whether the Texas election changes the regulatory calendar.

On build costs, Eric Luebchow of Wells Fargo asked whether costs per critical-load megawatt are moving into the low-to-mid teens and whether Hut 8 can hold development yields. Genoot split the answer into origination, EPC, and lease rates. Utilities are demanding more upfront collateral and CIAC payments, which he said Hut 8 supports and has already used at River Bend and Beacon Point. Development capital at risk, he stressed, remains "hundreds of thousands or single-digit millions upfront in these developments, and not tens of millions or hundreds of millions of dollars."

On construction, Genoot returned repeatedly to his "first principles" design philosophy, citing the in-house Vega Bitcoin facility built in under six months. "Many of today's data centers resemble NASA rocket programs, remarkable engineering, but complex, expensive, and slow to deliver," he said. Future builds, he argued, should be more like SpaceX — aligned upfront, built at speed, with fewer changes. He also said lease rates are set at the market midpoint, so if industry costs rise, rents should move proportionally, potentially lifting yield on cost if Hut 8 holds construction costs.

Richard Choe of J.P. Morgan asked how change orders flow through a project with many parties — Fluidstack as tenant, Anthropic as end user, Broadcom and Google in the credit profile, Jacobs as GC, and Vertiv as subcontractor. Genoot described challenging change orders from first principles and said one re-engineering of cable trays and SmartRuns reduced a cost impact by more than 90%.

On credit, Bryan Baratian of Roth asked about the River Bend expansion and whether Hut 8 would accept non-investment-grade counterparties. Genoot said there may be more than 1 GW of gas available on pipelines through the property and that Hut 8 is "open" to such tenants only if their credit supports project financing: "It is very hard for us to tell our shareholders and our board to go and build infrastructure for folks that do not have the credit that supports the ability to bring on the financing."

On Texas, John Todaro of Needham and Brett Knoblauch of Cantor Fitzgerald both probed whether the election could delay the December approvals. Genoot pointed to Hut 8's voluntary answers to PUC questions and argued the governor-elect's mindset is about responsible buildout rather than blocking investment. "This infrastructure is an American initiative. It is not right or left," he said.

Pipeline and the Quoin Acquisition

The development pipeline now exceeds 6.4 GW under diligence and exclusivity, with capacity under exclusivity up about 1.3 GW in the quarter. The largest shares are in MISO, PJM, and SERC, with less than 5% in ERCOT — a diversification Genoot said is increasingly important for navigating policy and market volatility.

Hut 8 also agreed to acquire two energized West Texas data center sites from affiliates of Quoin, with up to 230 MW of utility capacity upon full energization, subject to final power approvals. Genoot likened the bankruptcy-process purchase to Hut 8's 2022 crypto-downturn acquisitions: "It was a little bit of deja vu back then." The sites are within driving distance of the Salt Creek campus, have energized power but no miners after hosting clients left, and Hut 8 targets closing by year-end 2026.

The Takeaway

Hut 8's quarter was less about the $71.1 million of revenue it reported and more about the $27 billion it has contracted but not yet delivered. The company has bought itself time with non-recourse project bonds, a $1.07 billion revolver, and a $1 billion buyback shelf. The next several weeks are decisive: the December 10 audit and December 17 classification will determine whether Beacon Point can energize on schedule and whether Phase 2 financing follows. Until then, investors are being asked to value a construction site and a pipeline — and to accept management's argument that the shares trade below the value of agreements already signed.

Earnings Call Transcript

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