Axe Compute CEO: Prepayments Cover About a Third of $3 Billion Contract Build-Out

Axe Compute has received $317 million in customer prepayments, representing about 30% to 35% of the total capital required to build out its $3 billion contract book, Chief Executive Christopher Miglino told Investing.com. This is the first time the company has detailed the financing structure for the large-scale contracts, most of which were signed in July.

Funding Strategy

The disclosure provides crucial context to the company's second-quarter earnings, which reported just $3.2 million in revenue and $21.9 million in cash at the end of June. Miglino explained that Axe Compute's model is to secure multi-year commitments before building capacity, rather than constructing speculative infrastructure.

"Every dollar of buildout sits behind a signed, multi-year commitment, and that contract quality unlocks the rest of the capital structure," Miglino said. He stated that the remaining funding is expected to come from off-balance-sheet project financing raised against the contracted revenue streams.

Contract and Customer Profile

While the customers have not been named, Miglino described them as "creditworthy counterparties," including one with an A-plus rating from S&P. He noted that discretion was a key reason they chose to work with Axe Compute for their mission-critical workloads.

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Miglino also provided details on an agreement with Duos Technologies (NASDAQ: DUOT), which covers 55 megawatts and includes expansion rights to double the capacity to 110 megawatts over the next year. He indicated this represents only a portion of the company's total signed contracts.

Financial Outlook

Once the recently signed contracts are fully deployed, they are projected to generate an annualized revenue run rate exceeding $696 million by the first quarter of 2027, according to Miglino. "The revenue is already signed," he said. "The job is execution."

The CEO also addressed the company's $17.2 million second-quarter net loss, attributing it to its digital asset position. He characterized these holdings of Aethir tokens as a "compute reserve" used to buy and sell compute capacity, describing it as a non-dilutive method for generating cash. The first revenue from the new build-outs is expected to be realized in the current quarter.