Ionic Digital Inc.

What they do

Ionic Digital was formed in January 2024 to acquire the cryptocurrency mining assets of Celsius Mining. It operates powered digital infrastructure at Ward County, West Texas and Midland, leasing capacity to hyperscalers and other customers for high-performance computing and AI, and mining bitcoin with remaining capacity. The Ward County campus has 234 MW contracted to Nscale under a 126-month triple net lease.

Revenue drivers

• Digital infrastructure leasing — Leasing powered data center capacity under long-term contracts, primarily the Nscale lease at Ward County; represented 90% of second quarter 2026 revenue.
• Bitcoin mining — Mining bitcoin at the Midland sites and other locations; the remaining approximately 10% of second quarter 2026 revenue and historically the core business.
• Contracted lease escalations — Monthly fixed lease payments began in August 2026 under the Nscale Agreement, with estimated total contracted revenues of approximately $1.9 billion, potentially $2.6 billion under the amended terms.

Recent performance

Second quarter 2026 revenue was $48.6 million, up 31% year over year, with digital infrastructure leasing at 90% of revenue versus none a year earlier. Gross profit was $40.5 million and Adjusted Gross Profit was $45.4 million, compared with $14.9 million in the prior-year period. Net loss was $35.3 million, including a $28.2 million non-cash loss on fair value of cryptocurrency and a $27.2 million income tax provision. Adjusted EBITDA was $37.6 million versus $3.8 million a year earlier, driven by revenue recognition on the Ward County lease. Capital expenditures were $5.8 million, mainly for substation expansion equipment.

Strategy

Management intends to prioritize stable, contracted cash flows from digital infrastructure while continuing bitcoin mining only while profitable. At Ward County, it is expanding capacity from 234 MW toward 700 MW by the end of 2027, subject to ERCOT approval and two utility infrastructure projects. At Midland, it plans to convert 112 MW of existing capacity into data centers purpose-built for AI workloads while those sites continue mining bitcoin. It is also targeting metro-scale sites closer to enterprise customers for inference and agentic demand.

Risks

• Power capacity expansion — Expansion of the Ward County campus to 700 MW is subject to ERCOT approval and completion of two utility infrastructure projects, and the additional 89 MW Nscale is contractually obligated to lease may not become available.
• Bitcoin price and network volatility — The company remains exposed to bitcoin price and network hashrate, and reported a $28.2 million non-cash fair value loss on cryptocurrency in the second quarter of 2026.
• Energy cost volatility — Energy costs are the most significant driver of bitcoin mining profitability and can be affected by macroeconomic or geopolitical events, such as the Russia-Ukraine conflict's pressure on power generation input costs.
• Customer concentration and lease execution — A single customer, Nscale, accounts for the large majority of contracted digital infrastructure revenue, and failure to perform or expand under that agreement would materially affect results.

Outlook

Management reaffirmed full year 2026 guidance of total revenue of $190 million to $195 million, with 90% to 92% from digital infrastructure leasing. It expects Adjusted EBITDA of $137.5 million to $142.5 million and capital expenditures of $45 million to $60 million, excluding potential new site acquisitions. The company says its 2026 taxes cannot be reasonably predicted and do not necessarily correlate to business performance, so it has not reconciled Adjusted EBITDA guidance to a GAAP measure.