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.

HIVE Digital Technologies Ltd. has priced an upsized US$115 million aggregate principal amount of 0% exchangeable senior notes due 2031 in a private offering. The aggregate principal amount was increased from the previously announced US$100 million. Net proceeds from the offering are expected to total US$110 million. The notes are being offered by HIVE Bermuda 2026 Ltd., a wholly-owned subsidiary, to qualified institutional buyers pursuant to Rule 144A under the U.S. Securities Act of 1933. The offering aims to raise capital for general corporate purposes, capital investment, and data center development.

The notes will not bear regular interest, and the principal amount will not accrete. They are exchangeable for cash, common shares of HIVE, or a combination of both, at the issuer's election. The initial exchange rate is 206.9429 common shares per US$1,000 principal amount, equivalent to an initial exchange price of approximately US$4.83 per share. This price represents a premium of approximately 27.5% above the closing sale price on the Nasdaq Capital Market on June 25, 2026. HIVE guarantees the issuer's obligations on a senior unsecured basis.

The issuer granted initial purchasers an option to purchase up to an additional US$15 million aggregate principal amount of notes within 13 days of issuance. If exercised, proceeds from the additional notes will also fund subsidiaries for general corporate purposes and capital investment. The sale of the notes is expected to close on June 30, 2026, subject to customary closing conditions.

HIVE intends to enter into cash-settled capped call transactions with financial institutions to reduce potential dilution upon exchange. The cap price of these transactions is initially US$8.5275 per common share, representing a premium of 125.0% to the last reported sale price on the Nasdaq on June 25, 2026. Option counterparties may purchase common shares or enter into derivative transactions concurrently with pricing, which could affect the market price of the shares or notes.

The company is relying on an exemption under Section 602.1 of the TSX's Company Manual for the offering. The notes, guarantee, and underlying common shares are not registered under the Securities Act or other securities laws.