Detailed narrative
NC1 Operational Progress and Expansion
The flagship NC1 facility, representing $865 million in contracted revenue for 40 megawatts, has moved into active customer deployment with 20 megawatts available. Full run rate billing for the 40 megawatts is expected by the end of August 2026, following resolution of switchgear issues. The company is also evaluating potential for an additional 45 megawatts and a longer-term opportunity for 200 megawatts at the site, bringing total potential capacity to 300 megawatts.
Cloud Services Strategic Shift and Contract Wins
WhiteFiber is transforming its cloud services business to focus on larger, longer-duration customer engagements with a capital-efficient operating model. This quarter saw new multiyear agreements totaling over $540 million in aggregate contract value, including deals with Base 10 ($165M for 1,392 NVIDIA B300 GPUs) and Prime Intellect ($108M for 576 NVIDIA Ver Rubin 200 GPUs). These agreements are structured with customer prepayments and third-party financing to limit WhiteFiber's capital outlay.
Managed Services and Capital-Light Growth
The company is actively pursuing managed services engagements where customers fund underlying hardware and data center capacity. This model leverages WhiteFiber's technical and operating capabilities to generate revenue with attractive incremental margins and limited direct operating expense, creating a hyper capital-efficient path to growth. Management sees the margin profile for managed services looking more like a software offering than hardware.
Development Pipeline and Retrofit Advantage
WhiteFiber maintains a substantial development pipeline, prioritizing sites with existing infrastructure and clear power access to bring capacity to market faster than traditional greenfield development. This "retrofit-first" approach provides a speed-to-market advantage, particularly for the acute demand for 2027 deployments. A new site supporting approximately 60 megawatts in 2027, scaling to over 250 megawatts, is in late-stage diligence, with a focus on single-tenant opportunities.
Cross Data Center Networking Innovation
WhiteFiber is advancing its patent-pending cross data center networking technology, which demonstrated 111.2 terabits per second of bandwidth with sub-millisecond latency across 83 kilometers. This technology aims to aggregate smaller blocks of power and compute into virtual superclusters, expanding the commercial utility of disparate capacity. An initial commercial launch is targeted for September 2026, with potential for both internal utilization and external licensing.
Strategic Partnerships for Capacity
To support cloud growth, WhiteFiber partnered with Krambu, a data center developer, securing exclusive access to 100 megawatts of liquid-cooled colocation capacity starting in 2027. This partnership addresses the key industry constraint of deployable power and aligns sales and supply chain pipelines. The collaboration also involves technical work around cluster density and data center design to optimize GPU allocations.
NC1 Financing Progress
The permanent financing for NC1, crucial for recycling capital into future developments, has progressed to exclusivity with a consortium of lenders. While taking longer than anticipated, this represents meaningful progress towards completing the first "turn of the development flywheel" for the colocation business. The company's priority for future financing is to achieve the lowest cost of capital and a financeable structure from day one.