Fermi Inc (NASDAQ: FRMI) (LSE: FRMI) announced its second quarter 2026 financial results alongside the successful execution of its 90-day strategic plan. The company reported a net loss of $25.8 million for the three months ended June 30, 2026, compared to a net loss of $6.3 million in Q2 2025. This widening loss reflects accelerated spending on development and infrastructure buildout as Fermi transitions from early-stage development into active construction.

The primary driver of the quarter's financial performance was general and administrative expenses, which totaled $26.8 million, up from $5.6 million in Q2 2025. The company remains pre-revenue, meaning all current expenditures are capitalizing toward future power generation capabilities rather than supporting ongoing operational sales.

Commercial Milestones and Strategic Alliances

Fermi signed a 15-year turnkey binding lease agreement with TensorWave, a Neocloud provider, to serve as the first customer at the Project Matador campus. The agreement covers an initial phase of 222 MW of total facility power, with total revenue estimated at approximately $6.5 billion over the life of the contract. The deal includes expansion options that could increase TensorWave's footprint to up to 650 MW. A backstop agreement supporting certain obligations under the lease is being finalized and is expected to be announced in the coming days.

Additionally, Fermi established a build-own-operate-transfer strategic alliance with Hillcore Energy Capital Corporation for approximately 2.6 GW of incremental power generation. Under this framework, Hillcore will finance and construct the facility without requiring capital or debt issuance from Fermi. First power of approximately 350 MW is targeted within 24 months of notice to proceed. Fermi also announced EPC partnerships with Primoris for balance of plant on phase one and TSK for early works engineering on phase two.

Financial Position and Liquidity

Cash and restricted cash on hand stood at $91.7 million as of June 30, 2026, down from $408.5 million at the end of December 2025. The decline reflects significant capital deployment, with $185.0 million invested in property, plant, and equipment during the quarter, bringing the gross balance to approximately $1.55 billion. Outstanding debt rose to $520.1 million, reflecting a $98.8 million net increase in borrowings under equipment financing facilities.

Subsequent to the quarter end, Fermi issued more than $431 million of 5.00% Convertible Senior Notes due 2031. Net proceeds were $416.8 million before capped call transaction costs, with CFO Rob Masson noting net proceeds after capped calls were approximately $382 million. The notes carry no scheduled amortization and no financial maintenance covenants. Capped call transactions eliminate shareholder dilution up to an effective strike price of $14.64 per share, representing a 100% premium to the July 9, 2026 closing price.

Operational Progress and Leadership

Fermi appointed Lee McIntire as Chief Executive Officer to lead the transition into construction and first power delivery. The company plans to deliver 640 megawatts of nameplate capacity by the fourth quarter of 2027, with the first 210 megawatts available July 1, 2027. Three Siemens Energy F-Class turbines arrived at the Port of Houston in July and have cleared customs. Fermi expects to deliver about 200 MW of initial commercial power over the next six months, subject to binding customer agreements and approvals.

What the Numbers Show

The divergence between the rising debt load and the shrinking cash balance highlights the capital-intensive nature of Fermi's current phase. While cash reserves fell by over $316 million in the first half of 2026 due to $626 million in property investments, the company simultaneously increased its debt by nearly $410 million year-over-year. This structure suggests a deliberate strategy to leverage debt for infrastructure buildout while using equity-linked instruments (convertible notes) to preserve immediate liquidity and minimize dilution risk until commercial revenue streams begin.

Fermi Inc., operating as Fermi America, announced on August 11, 2026, the execution of a framework agreement with Hillcore Energy Capital Corporation to develop a 2.6 gigawatt (GW) power complex at its Project Matador campus in Carson County, Texas. This strategic alliance enables Fermi to double its power-to-market capacity to approximately 4.8 GW over the next 30 months without incurring upfront capital expenditure, addressing critical power constraints for AI and hyperscale customers.

The Hillcore Power Center will be developed under a Build-Own-Operate-Transfer (BOOT) structure, wherein Hillcore and its partners finance, build, own, and operate the facility on their own balance sheets. The complex comprises approximately 2.5 GW of natural gas-fired generation, developed in phases, alongside approximately 100 megawatts (MW) of solar generation and battery energy storage. Construction of the first power block, sized at approximately 350 MW, will commence upon the execution of definitive agreements, with first power targeted within 24 months of notice to proceed.

Deal Structure and Financial Implications

The agreement is designed to accelerate project timelines while preserving Fermi's balance sheet. Key structural elements include:

Under the commercial terms, Fermi purchases power only as customer leases are signed, with terms matched to each tenant's lease duration. Fuel costs are passed through, while construction, operating, and performance risks remain with Hillcore. Fermi retains an option to acquire the facility after 10 years at fair market value, preserving long-term ownership upside without committing capital today.

Strategic Context and Execution

Jacobo Ortiz, Fermi Co-President & Chief Operating Officer, stated that power is the gating asset for AI and that this alliance brings gigawatts to customers faster than any self-build path. He noted that Hillcore finances, builds, and operates the plant, allowing Fermi to deliver dedicated, behind-the-meter power matched to every tenant lease while keeping its balance sheet intact.

Russell Negus, President at Hillcore Energy Capital Corporation, emphasized that the project represents long-duration infrastructure backed by Hillcore and its partners' capital platform. He highlighted JV Driver's execution capabilities, noting the intent to deliver first power within 24 months and stand behind the plant for decades. Negus added that Fermi's customer demand and the strategic alliance structure make the Hillcore Power Center immediately financeable.

What the Numbers Show

The partnership significantly de-risks Fermi's expansion strategy by shifting capital intensity off its balance sheet. By leveraging Hillcore's private capital and JV Driver's industrial experience—spanning more than 35 years in heavy-industrial and power-generation projects—Fermi can ramp up capacity from its current trajectory toward an eventual 17 GW target at Project Matador. The ability to add 2.6 GW of dedicated power with zero upfront CAPEX provides a decisive competitive advantage in securing hyperscale AI tenants who require rapid, reliable energy deployment. The next steps involve finalizing constituent agreements and obtaining customary approvals.