Fermi Q3 loss widens past estimates, signs $200 million hyperscaler prepayment

Fermi (FRMI) reported a net loss of $141.6 million, or 22 cents per share, a wider loss than the 7 cents expected. The company reported no revenue, missing the $2.44 million consensus estimate.

Fermi also signed agreements with an undisclosed investment-grade hyperscaler for 600 megawatts at Project Matador.

Here's how the company did:

• Net loss: $141.6 million vs. $346.8 million a year earlier
• Loss per share: 22 cents vs. 84 cents a year earlier
• Revenue: none, against $2.44 million expected

Hyperscaler agreements

Capacity begins in 2027. The agreements include a $200 million prepayment agreement and a $15 million early construction and site development agreement.

Fermi and the customer are finalizing a $90 million structural steel and building materials purchase agreement for long-lead materials Fermi secured in advance.

The parties continue to work toward a definitive long-term lease, and the customer's identity remains confidential. CEO Lee McIntire said, "Hyperscalers want sites that are ready with permitted power."

TensorWave lease terminated

Fermi and TensorWave terminated the Data Center Lease and Services Agreement signed in August, a $6.5 billion deal announced in October. The AMD credit support agreement tied to that lease is also terminated.

Spending and debt

Fermi invested $133.4 million in property, plant and equipment during the quarter and $759.5 million over the nine months, bringing net property to about $1.67 billion. Cash and restricted cash totaled $315.5 million at quarter end.

Debt, net, was $958.4 million, reflecting a $463.0 million net increase in borrowings under convertible senior notes and equipment financing facilities. General and administrative expenses of $142.2 million included $65.8 million of non-cash stock compensation and $21.5 million of financial advisory fees settled through the issuance of common stock.

Hillcore framework

The investor presentation describes a build-own-operate-transfer framework agreement with Hillcore for up to about 2.6 gigawatts of power capacity. It lists $0 of Fermi capital or debt for the plant and targets first Hillcore power within 24 months of notice to proceed.