WhiteFiber Reports 19% Revenue Growth as NC-1 Data Center Hits Full Billing

WhiteFiber's third-quarter revenue rose 19% year over year to $24 million, and all 40 megawatts of contracted IT capacity at its NC-1 data center in North Carolina are now operational and billing, the company said on its earnings call. The quarter also carried a $101.4 million net loss, driven largely by an $80.8 million expense tied to the induced conversion of convertible notes, while adjusted EBITDA came in roughly break-even.

The revenue growth came from colocation services (data center space and power sold to tenants), Chief Financial Officer Justin Zhu said. Here's what the numbers say about where the company is headed.

What finally happened at NC-1?

Chief Executive Officer Sam Tabar said the second 20-megawatt hall at NC-1 began full billing on Nov. 9, completing delivery of a contract worth approximately $865 million over 10 years. The first hall started billing in mid-August, but a switchgear software issue interrupted service and billing until Sept. 23.

The delays had a geopolitical root. Shipping disruptions tied to the Middle East conflict held up the original switchgear (high-voltage electrical distribution equipment), and the replacement gear required electrical design changes plus integration and commissioning work. Tabar said the company doesn't expect late-delivery penalties.

Development costs should land just below $9 million per gross megawatt, within the original $7 million to $9 million guidance — a figure that excludes site acquisition and is net of customer-funded nonrecurring costs.

WhiteFiber also signed a $300 million secured credit facility for NC-1. Zhu said initial funding is expected later in November or in December, subject to remaining conditions and any mutually agreed extension. Tabar said the funding would let the company recover part of its NC-1 investment and redeploy that capital into future projects. In plain terms: the first project is done, and the machine for the next ones is now funded.

How big is the North Carolina expansion?

The company completed its $60 million acquisition of the NC-2 and NC-3 sites in Yadkin County, North Carolina. It expects at least 60 megawatts of initial gross utility capacity across the two sites, targeting initial capacity in late 2027. Delivery still depends on power, customer commitments, financing and remaining approvals, Tabar said.

Across the North Carolina portfolio, WhiteFiber is in advanced customer discussions for roughly 105 megawatts of gross capacity for 2027, including about 45 megawatts of expansion at NC-1. Tabar said interest in NC-2 and NC-3 is substantially stronger than it was for the initial NC-1 phase.

President Billy Krassakopoulos said the company is still budgeting for the two new sites and expects customers to cover customization or additional costs through payments, installation fees and prepayments. He identified two key steps before prospective customers sign service agreements: design revisions and validation of delivery times for long-lead equipment.

Cameron Schnier, senior vice president of capital markets and corporate strategy, said WhiteFiber aims to secure investment-grade credit and committed debt financing before signing its next lease. He noted the initial NC-1 lease was not directly with an investment-grade counterparty and lacked a full investment-grade credit wrap on a prevailing basis.

What's driving the cloud business?

The headline number: approximately $750 million in new cloud services contract value across five customers since the previous earnings call. New dedicated compute agreements cover roughly 13,000 GPUs with an average term of about 4.2 years, bringing total signed dedicated compute contracts to approximately 20,000 GPUs.

The new deployments enter service between late Q4 and the second quarter of 2027. Once fully deployed, the signed cloud portfolio should generate about $365 million in annualized revenue, a run rate the company targets by mid-2027. Timing depends on equipment and data center readiness, customer acceptance and financing, Tabar said.

Fourth-quarter cloud revenue should be roughly in line with the third quarter's $18.1 million, which included a $3.4 million customer termination fee. Sequential growth should then accelerate in Q1 and Q2 of 2027.

WhiteFiber also signed four managed services agreements with roughly $58 million in total contract value, expected to produce about $15 million in annual recurring revenue once fully deployed. The company targets more than $50 million in annualized managed services revenue by the end of Q1 2027 — contingent on signing additional agreements. Under that model, customers fund hardware and data center capacity while WhiteFiber deploys and operates the infrastructure. For signed dedicated compute deployments not yet in service, customer prepayments cover about 40% of estimated capital expenditure.

Where does the balance sheet stand?

Third-quarter colocation revenue more than tripled to $5.6 million, reflecting contributions from Montreal III and NC-1, Zhu said. Excluding the termination fee, cloud revenue fell about 18% year over year as the company transitions to new deployments.

Gross profit excluding depreciation and amortization was $13.7 million, or roughly 57% of revenue. General and administrative expenses dropped 15% from a year earlier to $18 million, including $3.8 million in share-based compensation.

The company ended September with $138.5 million in cash and equivalents plus $9 million in restricted cash. Deferred revenue, largely customer prepayments, climbed to $306 million from $80 million at year-end. Remaining performance obligations stood at $729 million at quarter-end, excluding roughly $421 million in future lease payments under certain colocation agreements — and the second NC-1 hall's lease hadn't commenced by Sept. 30.

The takeaway: a paper loss masks a backlog that more than tripled in nine months.