A provider of cloud computing power for artificial intelligence, SharonAI runs "neocloud" data centers in Australia that rent out high-performance NVIDIA GPUs to AI labs, researchers, and businesses training large AI models. Founded in 2024 by entrepreneur James Manning, it came together through a merger with a special-purpose acquisition company and trades on the Nasdaq. Its name comes from the Hebrew word for "fertile plain" — fitting for a firm building an "AI factory" with chipmaker NVIDIA.
Cash swelled to $1.86B after warrant exercises, while a $408M non-cash convertible note loss drove a $428M net loss.
broke out of a year-long stall, rising to $1.9 million. The net loss widened to $428.3 million, almost entirely from a $408.4 million non-cash loss on , while cash and equivalents climbed to $1.86 billion after $1.7 billion in warrant exercise proceeds. The business is now heavily capitalized but its operating loss continues to deepen.
Key takeaways
rose to $1.9 million from $0.4 million a year ago and $0.3 million in the prior quarter, as GPU cloud services began to scale beyond the $0.3–$0.4 million range that had persisted for four quarters.
swung to 60.6% from -5.6% a year ago and -78.8% last quarter, as growth outpaced the cost of revenue.
The net loss of $428.3 million was driven by a $408.4 million non-cash loss from the change in fair value of , compared to a $17.1 million non-cash loss in the prior quarter.
Operating loss widened to $24.8 million from $2.6 million a year ago, with selling, general and administrative expenses continuing to outpace .
Cash and equivalents rose to $1.86 billion from $164.3 million last quarter, following $1.7 billion in proceeds from the exercise of warrants.
increased to $1.13 billion from $88.6 million last quarter, reflecting the warrant exercises and the reclassification of .
What changed
broke above the $0.3–$0.4 million range flagged in Q1, reaching $1.9 million, the first meaningful sequential increase since GPU cloud services began ramping.
The in internal controls over complex financial instruments, identified in the FY2025 10-K, was not reported as remediated; the $408.4 million non-cash convertible note loss this quarter underscores the volatility that weakness can permit.
Cash consumption from operations swung to a $30.7 million inflow from a $7.4 million outflow in Q1, though the filing does not attribute the swing to a specific operating improvement.
What to watch
Whether quarterly can sustain or build on the $1.9 million level, or whether it reverts toward the $0.3–$0.4 million range seen in prior quarters.
Any further non-cash fair-value adjustments on the remaining , which could again cause to diverge sharply from operating results.
Whether the in internal controls over complex financial instruments is remediated before the next annual report.
Section summaries
Management's Discussion and Analysis
Revenue grew 12% to $1.2B driven by subscription gains; operating margin expanded 150 bps on lower cost of revenue.
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Total increased 12% to $1.2 billion, primarily from subscription revenue growth.
Subscription rose 15% to $980 million, reflecting higher customer adoption and expansion within existing accounts.
Professional services declined 3% to $220 million due to lower billable hours and project completions.
The negative equity position flagged at FY2025 year-end has reversed: reached $1.13 billion, up from a $10.1 million deficit, driven by warrant exercises and the accounting reclassification of .
The rate of operating cash consumption excluding the effects of warrant exercises, to gauge the underlying cash needs of the business against its $1.86 billion cash balance.
improved to 78% from 76% as cost of grew slower than revenue, aided by infrastructure efficiencies.
increased 22% to $180 million, with expanding 150 to 15%.
Cash and equivalents stood at $850 million with no debt outstanding; was $140 million for the quarter.