Ionic Digital (NASDAQ:IOND) reported second-quarter revenue of $48.6 million, with digital infrastructure leasing accounting for 90% of the total as the company continues its transition from Bitcoin mining toward data center operations.
Chief Executive Officer Andy Stewart said the company completed its direct listing in July and recently reached two milestones at its Ward County, Texas, site: energizing its first data center and beginning cash rent under its lease with Nscale.
Lease Revenue Ramps as Cash Rent Begins
Hickman said $43.8 million of the company’s second-quarter digital infrastructure revenue was straight-line, non-cash revenue. Cash rent under the Nscale lease began in August, contributing about $3.3 million during the month.
The company expects approximately $23 million in cash rent during the fourth quarter, about $29 million for full-year 2026 and $135 million in 2027. Ionic expects a fully ramped cash-rent run rate of about $183 million by the end of 2028.
The Nscale lease initially covered 234 megawatts at Ward County and represented $1.9 billion of contracted revenue. The agreement was amended earlier this year to add 89 megawatts, bringing the total contracted capacity to 323 megawatts and contracted revenue to $2.6 billion. NVIDIA guarantees the first five years of rent on the initial contracted capacity, Stewart said.
Ionic expects the additional 89 megawatts to be energized in the second half of 2027. Once the full 323 megawatts is operational, the company expects annualized run-rate revenue to reach $251 million. Hickman said GAAP revenue recognition is already accruing at an annualized rate of roughly $175 million, while cash collection will increase over time.
ERCOT Review Creates Timing Uncertainty
Ward County is Ionic’s flagship 136-acre site in West Texas. The company has a facility extension agreement with Texas New Mexico Power, or TNMP, for 700 megawatts. An initial 234-megawatt phase was energized in 2023, while a planned 466-megawatt expansion depends on transmission and substation upgrades involving TNMP and Oncor.
Stewart said energization of the expansion remains expected by the end of 2027, subject to completion of the utility projects and regulatory approvals. Ionic has executed an EPC contract and ordered long-lead transformers, which are expected to be delivered in early 2027. The company expects to begin development late this year and said it remains on track to break ground in early 2027.
However, ERCOT paused its Batch Zero process after Texas Governor Greg Abbott on Aug. 3 directed the grid operator to verify large-load projects in its interconnection queue. ERCOT has said the review will focus on roughly 250 to 300 projects totaling about 200 gigawatts, out of a large-load queue of approximately 474 gigawatts.
Stewart said Ionic does not have a date for the review process and would not speculate on one. He said the company believes its request is well positioned because its agreement covering all 700 megawatts was executed in 2021, its interconnection studies were filed in 2022, it has had operating load at the site since 2023, and the expansion work is funded and underway.
During the question-and-answer session, Stewart said Ionic does not know whether ERCOT could approve the 466-megawatt expansion in phases rather than all at once. He added that the company believes ERCOT’s effort is intended to narrow the applicant list and reduce speculative projects.
Guidance, Liquidity and Development Strategy
Ionic reaffirmed its full-year 2026 outlook for revenue of $190 million to $195 million, with digital infrastructure leasing expected to contribute 90% to 92% of the total. The company also maintained its forecast for adjusted EBITDA of $137.5 million to $142.5 million and capital expenditures of $45 million to $60 million, excluding spending on new site acquisitions.
On a GAAP basis, Ionic reported a net loss of $35.3 million for the quarter. Hickman attributed most of the loss to a $28.2 million non-cash loss related to the fair value of Bitcoin and a $27.2 million income-tax provision. Adjusted EBITDA was $37.6 million.
General and administrative expense totaled $19.5 million, including $9 million of non-cash stock-based compensation and approximately $2.9 million tied to the direct listing and private placement. Excluding those items, G&A was about $7.6 million, Hickman said.
The company ended the quarter with more than $400 million of cash, 2,882 Bitcoin valued at about $169 million, and no debt. Hickman said the company has nearly $600 million of liquidity when cash and Bitcoin are considered. Ionic expects to use both cash and Bitcoin for near-term development and potential site acquisitions.
Beyond Ward County, Ionic controls 112 megawatts of grid power across four Midland, Texas, sites that currently mine Bitcoin. The company is conducting pre-development work to convert those facilities into high-performance computing and AI data centers. The Midland portfolio is expected to expand to 122 megawatts next year.
Stewart said the company’s broader strategy includes pursuing smaller, metro-area facilities aimed at AI inference and agentic workloads, which he characterized as latency-sensitive and more likely to require capacity near major population centers. Ionic said it may pursue both powered-shell and turnkey leasing arrangements, depending on customer requirements and risk-adjusted returns.
About Ionic Digital (NASDAQ:IOND)
Ionic Digital, Inc is a digital asset mining company focused primarily on the production of bitcoin. The company operates and develops specialized computing infrastructure, including application-specific integrated circuit (ASIC) mining equipment and related power, cooling, and data-center systems used to validate transactions on the Bitcoin network.
Ionic Digital was established using assets associated with Celsius Mining following the bankruptcy proceedings of Celsius Network. Its operations have been associated with mining facilities in the United States, including locations in Texas and New York.
