Breakeven Analysis
Finance
March 28, 2026
Four breakeven views (cash $2.0M at 15.9%, accounting $8.4M at 67%), 33% margin of safety, M3 inflection point, ~16% BE utilization
$2.0M
Cash Breakeven
15.9% of revenue
$8.4M
Accounting Breakeven
67.0% of revenue
33%
Margin of Safety
$4.2M above BE
~16%
BE Utilization
46 of 288 GPUs
Fixed Cost Structure
| Category | Annual | Monthly | Share |
|---|---|---|---|
| Infrastructure OPEX (COGS) | $1,000,000 | $83,333 | 11.9% |
| Personnel (7 roles) | $711,000 | $59,250 | 8.4% |
| Marketing & Sales | $145,000 | $12,083 | 1.7% |
| General & Administrative | $150,000 | $12,500 | 1.8% |
| Total Cash Fixed Costs | $2,006,000 | $167,167 | 23.8% |
| Depreciation (7yr SL, $45M) | $6,428,571 | $535,714 | 76.2% |
| Total Fixed Costs (Accounting) | $8,434,571 | $702,881 | 100% |
Breakeven Thresholds
Infrastructure BE
$1,000,000
7.9% of net revenue
→ Month 1–2
Cash Breakeven
$2,006,000
15.9% of net revenue
→ Month 2–3
Accounting Breakeven
$8,434,571
67.0% of net revenue
→ Month 7–8
Tax-Adjusted BE
$8,434,571
= Accounting (VZ 0% CIT)
→ Month 7–8
Monthly Breakeven Progression
M1
($62K) deficit
M2
($19K) near BE
M3
Cash BE ✓
T3 activation
M5
Net profit +
M8
Acct BE ✓
M12
$10.6M surplus
Pre-breakeven (M1–M2)
Cash BE crossed (M3)
Accounting BE crossed (M8)
Revenue vs Breakeven Thresholds
Cash Fixed Costs
$2.0M
Depreciation
$6.4M
Net Profit
$4.2M
Safety Margin
33%
Key Insights
Cash breakeven at 15.9% of revenue — among the lowest in AI infrastructure. Track 3 alone covers all costs 5× over.
Month 3 is the structural inflection. Pre-T3: cash deficit. Post-T3: monthly surplus exceeds $800K immediately.
33% margin of safety — accounting breakeven sits $4.2M below Base Case revenue. Resilient to demand shocks.
Price erosion -6%/yr narrows safety margin from 33% to ~9% by Year 5 — validates multi-site expansion timeline.
Virtual Zone 0% CIT eliminates tax breakeven entirely. Accounting BE = full BE. No additional revenue needed for tax coverage.
BE utilization ~16% of cluster — only 46 of 288 GPUs at full load. Extreme operational resilience.
Key Assumptions
Year 1 = 2029 (Base Case)
CAPEX: $45M, 7yr straight-line
Electricity: $0 (BTM JV)
Tax: 0% VZ CIT on export IT
Personnel: 7 roles, $711K/yr
COGS: $1.0M/yr infra OPEX
Variable costs: $0
Contribution margin: ~100%
No debt service
