HIVE Digital Technologies Ltd. (TSX: HIVE) (NASDAQ: HIVE) (BVC: HIVECO) has secured a significant milestone in its artificial intelligence infrastructure expansion through its wholly owned subsidiary, BUZZ High Performance Computing Inc. The company announced on August 17, 2026, that it signed a five-year GPU cloud services agreement with an investment-grade enterprise customer, marking a substantial addition to its recurring revenue base.

The agreement carries a total contract value of approximately $350 million over the five-year term. This deal adds approximately $70 million in annualized revenue to BUZZ HPC's portfolio. Upon inclusion of this contract, BUZZ HPC's total annualized revenue stands at approximately $180 million. This figure comprises approximately $35 million in active, realized annualized revenue and approximately $145 million in contracted annualized revenue expected to come online through Q4 2026.

Infrastructure Deployment and Capital Structure

Under the terms of the agreement, BUZZ HPC will deliver a dedicated AI infrastructure cluster featuring 2,016 NVIDIA Blackwell Ultra GPUs. The system utilizes NVIDIA GB300 NVL72 rack-scale systems, interconnected with NVIDIA Quantum-X800 InfiniBand networking, and supported by VAST Data's high-performance storage platform. The cluster is designed according to NVIDIA's reference architecture to support large-scale AI training, inference, and advanced enterprise workloads.

The deployment is scheduled for the Bell AI Fabric facility in Merritt, British Columbia, with operations expected to commence later this year. The facility operates on 100% renewable hydroelectric energy and employs advanced closed-loop liquid cooling technology, which eliminates ongoing water consumption for cooling purposes.

The company expects capital expenditures associated with the deployment, including hardware and service warranties, to total approximately $185 million. To support this capital outlay, HIVE will receive an upfront deposit of approximately $35 million, representing 10% of the total contract value. Management indicated that this deposit, combined with previously announced financing initiatives and additional equipment financing, is expected to support the deployment and optimize the company's capital structure. CEO Aydin Kilic noted that proceeds from a June 2026 0% convertible bond issuance are being utilized to accelerate this deployment.

What the Numbers Show

The financial structure of this agreement highlights a distinct leverage strategy for HIVE's AI infrastructure business. With capital expenditures estimated at $185 million against a total contract value of $350 million, the project implies a gross multiple of nearly 1.9x on invested capital over the five-year term. Furthermore, the upfront deposit of $35 million covers approximately 19% of the projected capital costs before deployment begins. This structure suggests that the company intends to minimize immediate cash strain on its balance sheet while securing long-term contracted revenue visibility from an investment-grade counterparty. The retention of ownership of the NVIDIA AI infrastructure post-contract also indicates a strategy aimed at capturing residual asset value and potential future cash flows beyond the initial five-year period.

Strategic Outlook

Management emphasized that this agreement supports HIVE's dual-engine strategy, combining long-life digital infrastructure assets with renewable energy. Executive Chairman Frank Holmes stated that the company has the potential to bring over 120,000 GPUs online over the next two years, leveraging approximately 400 MW of capacity in Canada for Tier III data center development.

BUZZ HPC aims to reach an annualized revenue target of $200 million for its GPU cloud business by year-end. Upon completion of the current deployment, HIVE's HPC/AI daily revenue is expected to reach approximately $500,000. The company continues to position itself as a leading Canadian sovereign AI cloud provider, serving global enterprises and AI organizations with sustainable, high-performance compute infrastructure.

HIVE Digital Technologies Ltd. (NASDAQ: HIVE) (TSX: HIVE) reported a GAAP net loss of $142.9 million for the first quarter of fiscal 2027, ended June 30, 2026. The loss was driven primarily by non-cash charges, most notably an $84.7 million provision for regulatory liabilities related to contested Value Added Tax (VAT) assessments by the Swedish Tax Authority. Despite the headline loss, the company’s operational performance improved significantly, with total revenue rising 73.5% year-over-year to $79.1 million and adjusted EBITDA turning positive at $13.4 million.

Revenue Growth and Segment Performance

Total revenue reached $79.1 million, up from $45.6 million in the same period last year and up 10.2% sequentially. The growth was supported by both core business segments:

• Digital Currency Revenue: Generated $72.1 million, up 76.6% year-over-year. This was driven by higher Bitcoin production, with 1,004 Bitcoin received as rewards during the period, compared to 406 Bitcoin in fiscal Q1 2026. The increase reflects the expansion of HIVE’s average operational hashrate to 24.0 EH/s, up from 8.7 EH/s in the prior year period.
• HPC Revenue: BUZZ HPC revenue totaled $7.1 million, up 46.7% year-over-year and 52.1% sequentially. Growth was fueled by the deployment of an NVIDIA B200 GPU cluster in Manitoba, Canada, and strong demand across GPU marketplaces.

Profitability and Margins

While the GAAP net loss widened significantly due to the regulatory provision, underlying operational metrics showed strength. Gross operating margin increased to $24.2 million (30.6% of revenue), up from $17.5 million (24.4%) in the fourth quarter of fiscal 2026.

Adjusted EBITDA, a non-GAAP measure that excludes non-cash items such as depreciation, share-based compensation, and the VAT provision, came in at $13.4 million, representing a 17.0% margin on total revenue. This marks a return to positive adjusted profitability, contrasting with negative adjusted EBITDA figures in recent prior quarters.

SG&A expenses were $9.0 million, down slightly from $9.4 million in the previous quarter but up year-over-year from $5.8 million, reflecting investments in the HPC business and team expansion.

Swedish VAT Matter

The primary driver of the GAAP loss was the $84.7 million non-cash provision for previously disclosed and contested VAT assessments by the Swedish Tax Authority. The assessments relate to the deductibility of input VAT associated with equipment and expenditures used in hashrate services operations in Sweden since 2023.

HIVE has contested these assessments and continues to pursue legal remedies through the Swedish administrative court system. The company stated it believes it has grounds to pursue its position through remaining appeals, noting that over the past five years it has paid more than US$50 million in taxes and government-related charges in Sweden.

AI and HPC Pipeline Expansion

HIVE highlighted significant progress in its high-performance computing and AI infrastructure strategy:

• Contracted GPU Cloud ARR: Increased to approximately $110 million. This includes a new three-year sovereign AI agreement with Bell AI Fabric supporting Cohere, valued at approximately $225 million, which adds $75 million in annual run-rate revenue. The deal involves the deployment of 2,304 NVIDIA GB200 NVL72 GPUs.
• HPC Pipeline: Beyond contracted ARR, HIVE signed a letter of intent for long-term colocation at its 32 MW Big Boden facility in Sweden, representing approximately $45 million in potential annual colocation revenue. Including this opportunity, the total HPC ARR pipeline stands at approximately $155 million.
• Future Targets: The company is targeting approximately $200 million of GPU Cloud ARR by the fourth quarter of calendar 2026. Long-term, its development pipeline supports a target of approximately $700 million in total HPC ARR by year-end 2028.

Liquidity and Capital Allocation

As of June 30, 2026, HIVE held $208.0 million in cash and cash equivalents, along with $11.2 million in digital currencies. During the quarter, the company issued 9,855,902 common shares under its at-the-market offering program, raising gross proceeds of approximately $31.1 million at an average price of $3.16 per share.

The company currently operates approximately 440 MW of global power capacity and expects this to reach approximately 540 MW following the planned energization of an additional 100 MW power purchase agreement in Paraguay in the fourth quarter of calendar 2026.