Fermi (NASDAQ:FRMI) executives used the company’s fourth-quarter and full-year 2025 earnings call to emphasize construction progress at its Project Matador site, continued tenant negotiations, and a capital deployment strategy that management said will remain tightly linked to signing definitive tenant agreements and closing project financing.
Project Matador: Site progress and permitting seen as key catalysts
Co-founder and CEO Toby Neugebauer said the company has focused on earning credibility with “investment-grade counterparties” and the financiers needed to fund “multi-billion-dollar-per-gigawatt construction projects.” He described Fermi’s goal as creating “a private community powered by a private grid” to support AI-driven demand.
Management repeatedly cited permitting as a turning point in customer engagement. Neugebauer said, “What really turned our shoppers into buyers was the air permit,” adding that Fermi now has a “6 GW air permit” and filed on Friday for “an additional five” gigawatts of permitted capacity.
Tenant negotiations: Demand described as strong, but allocation and diligence are central issues
Neugebauer said customer conversations have centered on securing large amounts of power for long durations. “The number one issue, the number two issue, and the number three issue with our tenants is they want all of our power, and they want it all forever,” he said. He added that Fermi’s model requires multiple tenants to achieve load diversity and efficiency on its private grid.
Chief Financial Officer Miles Everson said the company is “in active negotiations with multiple counterparties,” but “as of today, we’ve not executed a definitive lease agreement.” Everson also said tenant revenues are expected to begin in 2027, while noting that early revenue would not be sufficient to fund the company’s “full operating capital requirements until Matador is built out and operating at scale.”
Both executives said Fermi is placing emphasis on counterparties’ credit support and ability to execute. Everson told Macquarie analyst Paul Golding the company is holding firm on “investment-grade wraps,” describing it as a requirement tied to counterparties putting “their balance sheet up.” He also said Fermi is conducting “reverse due diligence” to ensure prospective tenants can complete their mechanical, electrical, and plumbing (MEP) infrastructure in time, since “our power is ahead of most people’s ability to get the other stuff in place.”
Neugebauer said the company is prioritizing tenants in part based on their readiness to take power, noting that ensuring tenants can build out MEP has become a “bigger bottleneck than we originally anticipated.” He added that Fermi has made hires to support diligence on tenant execution, including bringing in “a really great person from Meta” to help evaluate the pace of tenant development.
On tenant mix, Neugebauer said there has been “significant engagement by chip makers,” explaining they are increasingly focused on where power will come from because “those chips are only worth the power behind them.” Everson also pointed to “the emergence…of modular MEP” as a potential accelerator for tenant readiness, calling it a “huge positive” given Fermi’s power position.
While investors asked for timeline guidance, Neugebauer said the board is cautious about disclosures that could affect negotiations. He said providing timing guidance could “change the dynamics of the negotiations to Fermi’s disadvantage,” and management largely declined to discuss expected signing dates.
Financial results: Pre-revenue buildout, large non-cash loss, and infrastructure-heavy cash use
Everson said the company’s first Form 10-K as a public company covers the period from inception on Jan. 10, 2025, through Dec. 31, 2025. He characterized Fermi as “pre-revenue and in full scale construction,” arguing that at this stage the balance sheet and cash flow statement better reflect the business than a traditional income statement.
As of Dec. 31, 2025, Everson reported:
- Total assets: approximately $1.4 billion
- Property, plant, and equipment: $935 million, “nearly all” construction in progress with no assets placed into service
- Cash and cash equivalents: $409 million
- Accounts payable and accrued liabilities: $177 million
- Total stockholders’ equity: $1.1 billion
For the full year, Everson said net loss was $486 million, with approximately $445 million of that described as non-cash. General and administrative (G&A) expenses totaled $178 million, including $133 million of non-cash share-based compensation. He said cash used for G&A was approximately $45 million, including $12 million in personnel costs for a team of roughly 35 employees, $22 million in professional services, and $11 million in other corporate expenses.
Everson also detailed “other expenses net” of $312 million, described as “almost entirely non-cash,” including $174 million related to a charitable contribution of Class B units prior to the IPO, $61 million of fair value losses on Series B convertible notes, $46 million of losses on embedded derivatives linked to preferred unit financing, and $24 million related to preferred unit issuances.
On cash flow, Everson said operating cash use for the year was $34 million, which he described as the “true operating cash burn” during formation, the IPO process, securing a 99-year ground lease, building the organization, and advancing “phase zero construction.”
Investing activities reflected what Everson called “the core of our financial story,” with net cash used of $570 million, “virtually all” invested into property, plant, and equipment at Project Matador. He said more than half of that capital went to natural gas generation, including turbine procurement across Siemens F-class and SGT-800 units, GE 6B fleets, mobile generation, and balance-of-plant equipment. The remainder went to data center infrastructure, substation and electrical interconnection, general construction, land and water development, and “early-stage nuclear pre-development.”
Liquidity and financing: Equipment facilities added; next phase gated by leases and project finance
Everson said cash provided by financing activities totaled approximately $1 billion in 2025, including $746 million of net proceeds from the IPO, $108 million of preferred units, $100 million from a Macquarie term loan, $76 million from Series A convertible notes, and $26 million from seed convertible notes.
He said that after year-end the company executed three equipment financing facilities:
- A $500 million MUFG non-recourse turbine warehouse facility supporting Siemens F-class procurement that “also fully refinanced” the Macquarie term loan
- A $120 million facility with Keystone National Group, expandable to $220 million, for high-voltage equipment including transformers and switchgear
- A $165 million facility with Yellowstone to finance additional Siemens SGT-800 units
Everson said the facilities, combined with existing cash, provide liquidity to satisfy obligations for “at least 12 months.” He also said the company will not commit “significant capital” to the next construction phase until two “gates” are met: execution of a definitive tenant agreement and closing project financing.
Everson cautioned that future financings are “not certain to occur” and said that if capital is not available in the needed amounts or timing, the company could delay investments, amend purchase commitments, or potentially “surrender collateral to preserve liquidity.” In response to a question from Cantor Fitzgerald’s Richard Anderson, Everson said that is “not our intention whatsoever” and is not something management expects to do, describing it as a lever that could be pulled in a downside scenario. Neugebauer added that the generation assets are “incredibly valuable,” underscoring management’s preference to keep the equipment.
REIT election, lock-up expiration, and ownership considerations
Everson said Fermi intends to elect REIT status for U.S. federal income tax purposes beginning with its short taxable year ended Dec. 31, 2025, and said the company does not anticipate material REIT taxable income in the near term due to expected non-cash depreciation. As a result, he said the company does not expect to pay dividends until taxable income requires it.
Everson also noted that the lock-up agreement for certain pre-IPO investors expires “today.” In response to Evercore ISI’s Nicholas Amicucci, Everson said no management sale is “necessarily required” due to lock-up expiration, but that to meet REIT “5/50 rules” the company expects an “orderly sell-down” over the coming months, supported by an advisor.
Neugebauer said his family owns about 38% of the company and said if a sell-down is required, he would prefer it be to an “accretive buyer” that adds to Fermi’s brand rather than a transaction he characterized as dilutive.
About Fermi (NASDAQ:FRMI)
Fermi’s mission is to power the artificial intelligence (“AI”) needs of tomorrow. We are an advanced energy and hyperscaler development company purpose-built for the AI era. Our mission is to deliver up to 11 gigawatts (“GW”) of low-carbon, HyperRedundant™, and on-demand power directly to the world’s most compute-intensive businesses with 1.1 GW of power projected to be online by the end of 2026. We have entered into a long-term lease on a site large enough to simultaneously house the next three largest data center campuses by square footage currently in existence.
