Executive Summary / Key Takeaways

• Digi Power X Inc. (NASDAQ:DGXX) is strategically transforming from a cryptocurrency mining company into a vertically integrated energy infrastructure and artificial intelligence (AI) data center provider, capitalizing on the surging demand for high-performance computing (HPC).
• The company's proprietary ARMS 200 (AI-Ready Modular Solution) platform has achieved Tier III certification, a critical differentiator that ensures 99.982% uptime and N+1 redundancy, positioning DGXX as a first mover in modular AI infrastructure.
• Financially, DGXX demonstrates a strong balance sheet with approximately $29.4 million in cash, deposits, and digital assets and no long-term debt as of September 2025, providing a solid foundation for its ambitious AI infrastructure build-out.
• Operational expansion is underway, with plans to significantly increase megawatt capacity at existing sites and deploy 5 MW of HPC in Alabama by Q4 2025/early 2026, with a roadmap to 55 MW of Tier 3 AI infrastructure by 2026-2027.
• The shift towards colocation services and energy sales, which generated $10.7 million and $10.3 million respectively for the nine months ended September 30, 2024, is driving revenue growth and reducing reliance on volatile digital mining, promising more predictable, high-margin revenue streams.

The Strategic Pivot: From Bitcoin to Blackwell

Digi Power X Inc., formerly known as Digihost Technology Inc., stands at the precipice of a profound transformation, repositioning itself from a cryptocurrency mining entity to a formidable player in the burgeoning AI infrastructure and energy solutions sector. With a current market capitalization of approximately $105.11 million and trading at $2.345, the company is strategically leveraging its foundational strength in energy assets to meet the escalating global demand for scalable, high-density computing power. This pivot is not merely an adjustment but a fundamental reimagining of its business model, aiming to build a versatile energy infrastructure platform for high-performance computing (HPC) that will evolve with technological breakthroughs for years to come.

The digital infrastructure landscape is undergoing a pivotal era of change, driven by the accelerating need for AI-ready computing power. This shift necessitates a rethinking of the entire data center lifecycle, from energy sourcing to advanced infrastructure design. Digi Power X's overarching strategy is to develop a robust platform that seamlessly combines energy resources and digital infrastructure at scale. While its immediate focus remains on mining colocation, the long-term vision is firmly set on becoming a leader in advanced AI infrastructure. This strategic evolution is critical for the company, as it seeks to differentiate itself in a competitive market that includes established electrical infrastructure contractors like MYR Group Inc. and AI-focused digital infrastructure providers such as Cipher Mining Inc. and Iris Energy .

Technological Edge: The ARMS Platform and NeoCloud

At the heart of Digi Power X's strategic transformation is its proprietary ARMS 200 (AI-Ready Modular Solution) platform. This cutting-edge technology has achieved Tier III certification under the globally recognized ANSI/TIA-942 standard, validated by EPI. This certification is a significant competitive advantage, making ARMS 200 one of the few modular AI data center platforms worldwide to meet such stringent requirements. The Tier III certification ensures a remarkable 99.982% uptime, N+1 redundancy for power and cooling, concurrent maintainability, and enhanced security and reliability, all critical factors for mission-critical AI applications.

The tangible benefits of the ARMS 200 platform are substantial. Each modular unit is engineered as part of the company's NeoCloud data center architecture, purpose-built for high-density AI clusters and hyperscale compute. These pods support modular deployments starting at 1 megawatt (MW) and are configured for up to 256 NVIDIA (NVDA) B200/B300 GPUs per 1MW pod. The platform integrates liquid cooling, dual-path power redundancy, and Digi Power X’s NeoCloud orchestration for GPU-as-a-Service operations. This technological prowess is further bolstered by a strategic partnership with Super Micro Computer, Inc. (SMCI) to integrate AI-optimized rack-scale systems into the ARMS platform, built to support NVIDIA’s Blackwell-class architecture.

The company's commitment to innovation extends to its research and development initiatives. Digi Power X has obtained a provisional patent for the ARMS solution cluster line, underscoring its uniqueness and long-term commercial potential. Future developments include the upcoming ARMS 300 and ARMS 400 platforms, tailored for hyperscale enterprise and government-grade AI infrastructure. Furthermore, Digi Power X is conducting a feasibility study with NANO Nuclear Energy Inc. (NNE) on the potential deployment of small modular reactor (SMR) technology at its data center facilities. This initiative aims to secure a stable, clean, and long-term power source to support its AI data center operations, aligning with the company's ESG goals of achieving carbon emission-free operations.

For investors, this technological differentiation is paramount. The valuation for a Tier 3 data center site is estimated at approximately $15 million per megawatt, a significant premium compared to a Tier 1 mining operation valued at about $500,000 per megawatt. By developing its ARMS platform, Digi Power X is positioning itself to capture higher-margin, predictable revenue streams through high-performance GPU cloud rentals, with a stated goal of achieving a sub-three-year payback period. This strategic move provides a robust competitive moat, clearly differentiating Digi Power X from traditional hyperscalers and many crypto mining peers.

Financial Transformation: From Mining Volatility to AI Growth

Digi Power X's financial performance reflects its ongoing strategic pivot. For the nine months ended September 30, 2024, the company reported a total revenue of $31.4 million, representing a robust 104% year-over-year increase. This growth occurred despite the Bitcoin halving in April 2024, which significantly reduced coin production across the industry. The company's EBITDA for the same period was positive at $5.5 million, marking a nearly 3.5x increase compared to 2023, with adjusted EBITDA totaling $3 million for the year.

A closer look at segment performance reveals the impact of the strategic shift. The colocation services segment, new to fiscal year 2024, generated $10.7 million in revenue for the nine months ended September 30, 2024. This segment, structured as joint ventures with large U.S.-based Bitcoin miners, leverages competitive energy costs and cutting-edge mining infrastructure, yielding dual revenue streams from mined coins and energy generation. The energy sales segment also saw substantial growth, producing $10.3 million in revenue, a significant increase from $1.7 million in the same period of 2023. Conversely, the digital mining business experienced a year-over-year revenue decline from $13.5 million to $10.3 million, primarily due to the Bitcoin halving and the company's increased focus on its colocation services. This trend underscores the company's deliberate move away from the capital-intensive nature of self-mining towards more profitable colocation and Tier 3 data center development.

The company's liquidity and capital resources are strong, providing a solid foundation for its growth initiatives. As of September 16, 2025, Digi Power X holds approximately $29.4 million in cash, deposits, and digital assets, with no long-term debt. This financial strength was bolstered by a $15 million registered direct offering in July 2025, which further solidified its cash position. Additionally, the company established a US$100 million at-the-market (ATM) equity program in May 2025, providing a flexible capital access tool for future growth without immediate dilution. The removal of "going concern" risk in Q2 2025, coupled with its robust cash position, marks a transformational moment for Digi Power X, enabling it to aggressively pursue opportunities in the rapidly expanding AI infrastructure market.

Operational Momentum and Strategic Expansion

Digi Power X is actively executing on its expansion plans to meet the anticipated demand for AI and HPC infrastructure. The company currently operates with approximately 100 MW of developed and available power across its three sites, with a mining hash rate of 3 EH/s. A brief maintenance period at its flagship North Tonawanda power plant impacted Q3 2024 results, but the plant is expected to return to full operational power in Q4 2024, increasing long-term efficiency.

Looking ahead, Digi Power X expects to significantly expand its total megawatt capacity within the next 12 months. The company has completed a LOT study at its Columbiana, Alabama plant to expand its capacity from 22 MW to 55 MW. Furthermore, it anticipates a decision from New York regulators in Q1 2025, which could allow the company to expand its capacity from 60 MW to 120 MW by pulling power from the grid. This megawatt expansion is crucial groundwork for achieving its 6 to 7 EH/s goal by the end of Q1 2026.

The company's foray into Tier 3 data centers is already in motion. Digi Power X expects 5 MW of HPC capacity to come online at its Alabama facility by Q4 2025 or early 2026, with incremental 5 MW additions planned through 2026, aiming for a total of 20 MW of Tier 3 HPC setup. The 2026-2027 roadmap includes the development of 55 MW of Tier 3 AI infrastructure. Beyond Alabama, the company holds an impressive 200 MW allocation at its North Carolina site, which is planned for development after the Alabama project, targeting 2026-2027. This expansion is expected to be financed through non-dilutive debt, backed by predictable income from large HPC operators.

Competitive Positioning and Market Differentiation

Digi Power X occupies an emerging yet strategically significant position within the energy infrastructure and data center market. Its differentiation stems from a unique combination of vertically integrated power assets and proprietary, Tier 3 certified modular AI data centers. This "power first" approach allows the company to control its energy costs and supply, a critical advantage in an industry where power is the primary operational expense.

Compared to traditional electrical infrastructure giants like MYR Group Inc. (MYRG), Digi Power X offers a more specialized and technologically advanced solution for the rapidly evolving AI data center market. While MYRG boasts a robust backlog and steady revenue growth from broad infrastructure projects, Digi Power X's focus on cutting-edge modular AI infrastructure, such as the ARMS 200, allows for faster deployment and greater adaptability to specific AI workload requirements. MYRG's established scale and project execution provide a strong competitive presence, but DGXX aims to carve out market share through innovation and efficiency in a niche that demands specialized solutions.

Against AI-focused digital infrastructure peers like Cipher Mining Inc. (CIFR) and Iris Energy (IREN), Digi Power X's integrated energy and data center model provides a broader value proposition. While CIFR and IREN are also capitalizing on AI demand, DGXX's ownership of power generation assets and its Tier 3 certification for modular solutions offer a distinct edge in reliability and performance. The company's ability to secure partnerships with major players, including a "$100 billion plus market cap company" investing in AI chips, further validates its strategic direction and potential to attract high-value clients. Digi Power X is positioning itself to be among the first U.S. public companies to deploy and monetize NVIDIA’s Blackwell architecture at cloud scale, a testament to its forward-looking strategy.

Risks and Challenges

Despite its promising trajectory, Digi Power X faces inherent risks. Operational challenges, such as the planned maintenance at the North Tonawanda power plant in Q3 2024, can temporarily impact production and financial results. Market volatility, particularly in cryptocurrency prices, remains a factor, as evidenced by the revenue decline in the digital mining segment following the Bitcoin halving. Regulatory environments also present a challenge; management has noted the "aggressive on crypto" sentiment in New York, despite the company's commitment to over 90% zero carbon emissions. Furthermore, the success of its technological advancements, such as the provisional patent for the ARMS platform, is subject to the uncertain outcome of the patent application process. Execution risk associated with the timely delivery of equipment and implementation of systems for its ambitious expansion plans, as well as future capital needs, are also factors to monitor.

Outlook and Guidance: Powering the Future of AI

Digi Power X's outlook is firmly centered on its AI infrastructure strategy. The company anticipates continued top-line growth, driven by the expansion of its megawatt footprint and the growth of its colocation agreements. High-performance computing is expected to become the primary driver of value for its power assets, and the company is actively positioning itself to serve this high-demand market within the next 12 months.

Specific guidance includes the expectation of 5 MW of HPC capacity coming online in Alabama by Q4 2025 or early 2026, with a broader roadmap to develop 55 MW of Tier 3 AI infrastructure by 2026-2027. The first NVIDIA B200 GPU cluster is slated to go live in Q1 2026. The ARMS 200 platform is planned to scale to 40 MW of critical power (55 MW total) at the Alabama site, supporting approximately 10,240 NVIDIA GPUs. Management's focus for Q4 2025 includes accelerating the deployment of ARMS 200 clusters in Alabama, expanding sales and marketing for NeoCloud GPU-as-a-Service, securing additional purchase orders, and optimizing energy infrastructure for AI workloads. The company aims to finance this growth with non-dilutive debt, backed by predictable AI compute revenue, with a model designed to deliver strong margins and full equity retention for shareholders.

Conclusion

Digi Power X is undergoing a profound and well-articulated strategic transformation, shifting its core focus from the volatile cryptocurrency mining sector to the high-growth, high-margin domain of AI infrastructure. Its vertically integrated energy assets, coupled with the Tier III certified ARMS 200 modular data center platform, provide a compelling competitive advantage in a market hungry for reliable and scalable HPC solutions. The company's strong balance sheet, demonstrated revenue growth, and clear operational roadmap for expanding its AI-ready capacity underscore its potential. While execution risks and market dynamics remain, Digi Power X's technological leadership and strategic pivot position it to capture significant value in the burgeoning AI revolution, offering investors a unique opportunity to participate in the foundational build-out of next-generation digital infrastructure.