Keel Infrastructure Corp. (KEEL) Q3 2026 earnings review
Keel starts building its first data center, but leases wait
Keel Infrastructure started building its first artificial intelligence data center while its legacy Bitcoin revenue shrank. Sales fell 59% from a year ago to $28 million after the company shut its U.S. mining rigs in the second quarter, while corporate overhead doubled, pushing operating cash profit excluding one-offs to negative $27 million. Finance chief Jonathan Mir sold the company's entire Bitcoin treasury for $192 million, lifting unrestricted cash to $780 million.
| Revenue from continuing operations | $27.6M -59% from a year ago after U.S. mining shutdown |
|---|---|
| Operating cash profit, excluding one-offs (Adj. EBITDA) | -$27.4M +$19.2M a year ago |
| Unrestricted cash (as of Nov 4) | $780M after selling 2,520 Bitcoin for $192M |
| Moses Lake HPC revenue outlook | Unchanged construction started; first revenue in 2027 |
⚖️ Verdict: ⚪ Neutral
The story is unchanged because Keel cleared early building and balance-sheet steps but still has zero signed tenant leases. Starting construction at Moses Lake and turning volatile Bitcoin into $780 million of cash removed treasury risk and kept the 2027 delivery plan moving. The bad news: six quarters of customer talks have yet to produce a single contract, and four environmental permits remain open in Pennsylvania.
The question now is whether waiting to sign a lease reflects bargaining strength on scarce 2027 power or customer resistance to Keel's sites and terms. If power scarcity gives Chief Executive Ben Gagnon leverage, a creditworthy tenant will sign at attractive rental rates; if customers are hesitating, Keel is spending cash to build Moses Lake without committed rent. A signed lease announcement with build-cost figures before year-end will settle it.
🐂 Bull Case
Moses Lake Starts Building and Bitcoin Risk Ends
Keel Infrastructure, which is converting former cryptocurrency sites into data centers for high-performance computing (HPC) and artificial intelligence (AI), cleared two milestones this quarter. In September the company received its final building permits and started construction at its 18-megawatt site in Moses Lake, Washington. It also engineered an optional design at the site "to support next generation Vera Rubin architecture (formerly GB300) driven by customer demand".
During the same period the company sold 2,520 Bitcoin — its entire 2,261-coin treasury plus 259 coins mined in the quarter — for $192 million, or about $76,190 per coin by our math. Keel now sells daily output from its remaining Quebec rigs right away, "effectively eliminating the Company’s exposure to Bitcoin price movements on treasury holdings". That sale lifted unrestricted cash to $780 million and gave finance chief Jonathan Mir "no current need for debt or equity financing before signing a lease".
What to watch: the quarterly filing's commitment schedule and cash flow statement. Those tables will show how much of the $780 million cash pile must go toward equipment deposits and utility letters of credit before a tenant signs.
Load Studies Could Quadruple Secured Power Capacity
Keel's value rests on how much electricity it can deliver to data center tenants from the power grid, which it measures in megawatts (MW) and gigawatts (GW). Today the company holds 478 MW of secured capacity across its three priority sites. Grid operators are now running detailed load studies for up to 500 MW of extra power at Panther Creek and up to 1.3 GW at Scrubgrass in Pennsylvania.
If approved, those additions would lift secured data center capacity by about 300% to 1,928 MW. Management said both studies remain on track to finish in the first quarter of 2027, with no delay from Pennsylvania's new executive order on data centers.
What to watch: signed electric service agreements from the Pennsylvania studies in the first quarter of 2027. Securing firm grid power would expand the company's developable inventory fourfold, provided it can also fund the utility deposits.
🐻 Bear Case
Six Quarters of Talks Have Produced Zero Leases
"Power supply is getting scarcer while demand keeps climbing. Keel’s 2027 and 2028 power is further advanced, more secure, and closer to delivery than it was last quarter," chief executive Ben Gagnon said. Bulls argue that holding scarce 2027 power gives the company leverage to wait for top rental rates. Gagnon added, "I have every confidence we will sign the right leases for each site, ones that deliver the most attractive returns for our shareholders."
The numbers show zero signed leases across Moses Lake, Sharon and Panther Creek after six quarters of commercial talks. In the first quarter Keel aimed to sign three leases in 2026, yet this release does not mention that target and pushes initial data center revenue at Moses Lake to 2027. Building Moses Lake and buying equipment before a customer commits puts the company's own cash at risk.
What to watch: a binding lease announcement with a named, creditworthy tenant before year-end. Another quarter without a contract would show that customers are balking at Keel's sites or terms despite tight power supply.
Pennsylvania Sites Still Lack Four Environmental Permits
To deliver its largest sites in late 2027, Keel must clear environmental permitting and state rules in Pennsylvania. This quarter the company redesigned its Sharon and Panther Creek site plans to comply with the Pennsylvania governor's new executive order on data centers, stating the revisions brought "no meaningful changes to project costs or timelines for tenants".
While the developer cleared three permits across the two Pennsylvania sites, four environmental permits remain open, with two in draft stage. Earlier this year management aimed to finish Panther Creek permitting by late summer, so the regulatory timeline has slipped into year-end.
What to watch: final approval of the remaining four environmental permits in the fourth quarter. Further delays at the state agency would push site construction into 2027 and threaten the late-2027 delivery target.
Overhead Costs Doubled While Mining Revenue Shrank
Shutting down U.S. Bitcoin mining in the second quarter cut revenue by 59% from a year ago to $27.6 million, while cost of revenues — the direct cost of power and site operations — reached 153% of sales, up 50 percentage points. At the same time, Keel hired senior project managers and granted more equity awards to build its data center team.
- General and administrative overhead: $34.3 million, up 100% from a year ago (124% of revenue vs 25%)
- Stock-based compensation: $8.8 million, up 209% from a year ago (32% of revenue vs 4%)
- Cash overhead excluding stock grants: $25.5 million by our math, up 78% from $14.3 million a year ago
- Gross margin: negative 53%, down from negative 3% a year ago
Because revenue stepped down while payroll grew, operating cash profit excluding one-offs (Adjusted EBITDA) swung from positive $19.2 million a year ago to negative $27.4 million. Until a tenant begins paying rent in 2027, Canadian mining and small power sales cannot cover corporate overhead.
What to watch: fourth-quarter cash overhead against the $28.9 million remainder implied by the full-year $100 million plan. Spending above that level would speed up cash burn before lease revenue starts.
Risks this quarter didn't answer
Four standing risks received no new figures in the third-quarter earnings release.
- Build cost and return on cost: management still gives no dollar cost per megawatt or target rental yield for Moses Lake or the Pennsylvania sites; the first lease announcement must supply them.
- Project construction financing: building the 2027 sites requires billions in project debt that depends on tenant credit quality; terms await a signed lease.
- Convertible debt and share dilution: over $1 billion in convertible notes sit above current share levels while implied share count rose 12% from a year ago by our math; the quarterly filing's debt and equity footnotes will update the balances.
- Legal and tariff contingencies: the release gives no update on the shareholder lawsuit or customs duty assessments on imported miners; the filing's legal footnote will show any changes.
👓 Other Themes
Capped Call Hedges Swung Net Loss by $55 Million
Loss from continuing operations widened to $62.4 million from $11.0 million a year ago, driven by a $55.3 million non-cash unrealized loss on capped call derivatives attached to the 2025 convertible notes. Because accounting rules require Keel to mark those option hedges to market each quarter, a $77.0 million paper gain in the second quarter reversed into a $55.3 million charge in the third; excluding that swing, pre-tax loss was $5.6 million by our math.
💲 Other KPIs
Total liquidity stepped down by $39 million from $819 million in August as the company funded overhead and site work, but unrestricted cash rose by $82 million after Keel turned its remaining $192 million of Bitcoin into cash.
Non-cash depreciation fell 52% from $26.5 million a year ago and dropped from $84.1 million last quarter. The charge shrank because Keel finished writing down its U.S. Bitcoin mining machines when it shut them off in the second quarter, which narrowed the reported operating loss to $7.7 million.
By our math, dividing the $62.4 million loss from continuing operations by the $0.10 per-share loss points to about 624 million average shares, up 12% from 556.5 million a year ago following stock grants, warrant exercises and acquisition shares.
🔮 Guidance
Unchanged from last quarter. Management expects Moses Lake to be the "first energized site generating HPC revenue in 2027" after starting construction in September 2026. A year ago the company targeted completion as early as December 2026, so the schedule has settled into next year while lease talks continue.
Unchanged. Detailed grid studies for up to 500 MW at Panther Creek and up to 1.3 GW at Scrubgrass remain on schedule to finish in the first quarter of 2027. If approved, the studies could lift secured data center capacity from 478 MW to 1,928 MW.
❓ Key Questions
Why has the 2026 three-lease goal gone unmentioned?
In the first quarter management aimed to sign one lease at each of its three priority sites during 2026. With two months left in the year and zero leases signed, investors need to know if any contract will close before January.
What will Moses Lake cost to build and yield?
Keel began construction at Moses Lake and engineered an optional Vera Rubin upgrade without naming a tenant or a budget. Management still has not disclosed the dollar build cost per megawatt or target rental yield.
Why wasn't the $100 million cash overhead plan updated?
Cash general and administrative expenses reached $71.1 million over the first nine months by our math, leaving $28.9 million for the fourth quarter under the prior $100 million full-year target. Management did not say in the release whether that cap still holds.
How much cash is tied up in utility deposits?
Last quarter's filing showed $219.6 million in purchase commitments and over $140 million in upcoming utility credit support. The press release reports $780 million in unrestricted cash but does not show how much was drawn or pledged since August.