Sphere 3D Corp. Provides April 2024 Update
Sphere 3D Corp., trading under NASDAQ: ANY, provided its April 2024 update. The company mined 29.9 Bitcoin in April, a decrease from April 2023 but an increase from March 2024. Revenue for April stood at $1.4 million, with Bitcoin holdings increasing to 2.6. The month-end deployed hash rate was 0.9 EH/s, reduced due to machine transit and operational issues.
Sphere 3D is partnering with Sunnyside Digital to upgrade its fleet and aims to pursue M&A opportunities for long-term growth. The company plans to replace older machines with more efficient ones, leveraging the recent rise in Bitcoin prices. CEO Patricia Trompeter emphasized their debt-free status and focus on cost reduction.
However, the company expects fluctuations in Bitcoin production during the fleet upgrade process. Operational challenges at hosting sites in Springfield, MO, and Granbury, TX, have prompted a focus on finding a merger partner for vertical integration to control uptime and costs.
- 29.9 Bitcoin mined in April 2024, up from March 2024.
- April 2024 mining revenue was $1.4 million.
- Increase in Bitcoin holdings to 2.6 units from 1.8 units in March 2024.
- Partnership with Sunnyside Digital for fleet upgrade and efficiency improvement.
- Debt-free status providing financial flexibility.
- Strategic focus on M&A for long-term growth and cost reduction.
- Proactive plan to replace older machines with next-gen models, leveraging Bitcoin price rise.
- Bitcoin mined in April 2024 decreased from April 2023 (35.6 to 29.9).
- Month-end deployed hash rate decreased to 0.9 EH/s due to operational issues and machine transit.
- Significant downtime at hosting sites in Springfield, MO, and Granbury, TX, affecting operations.
- Expectation of production volatility during fleet upgrade process.
Insights
Sphere 3D's financial update shows mixed results for April 2024. While they mined
Sphere 3D's technical strategy to refresh their mining fleet is noteworthy. Transitioning to next-generation machines is important for staying competitive in the Bitcoin mining industry, where efficiency and cost-effectiveness are paramount. The company's partnership with Sunnyside Digital suggests a commitment to modernizing their technical infrastructure, which could significantly enhance their hash rate and reduce energy consumption. However, the temporary reduction in hash rate due to machines in transit and operational issues at hosting sites highlights the challenges in executing large-scale upgrades. In the long term, successful implementation of these upgrades could position Sphere 3D as a more resilient and efficient player in the market, potentially increasing their production capacity and profitability.
The Bitcoin mining market is highly competitive and volatile and Sphere 3D's strategic moves reflect an understanding of these dynamics. The planned focus on organic growth and strategic M&A, especially targeting vertical integration, aligns with industry trends towards reducing operational dependencies and enhancing control over production processes. Investors should view these moves as a positive step towards long-term stability and growth. However, it's important to be cautious about the expected production volatility during the fleet upgrade phase. Understanding the seasonal and market-driven fluctuations in Bitcoin prices will be essential for assessing the effectiveness of Sphere 3D's strategy. The company's proactive stance in mitigating third-party risks and focusing on cost reduction through M&A could prove beneficial in the long-term, though short-term impacts on production and revenue should be anticipated.
Stamford, Connecticut--(Newsfile Corp. - May 14, 2024) - Sphere 3D Corp. (NASDAQ: ANY) ("Sphere 3D," "we," "our" or "us"), dedicated to becoming a growing Bitcoin mining company, is providing a strategic and operational update for April 2024.
Key Highlights
- Partnering with Sunnyside Digital for fleet upgrade and refresh
- 29.9 Bitcoin were mined in April 2024
- Month-end operating hash rate was 0.9 EH/s; this reduction was primarily due to machines in transit at month end as well as operational issues at two hosting sites
| Metrics | April 2023 | March 2024 | April 2024 |
| Bitcoin Mined | 35.6 | 26.0 | 29.9 |
| Bitcoin Sold | 41.3 | 48.0 | 29.1 |
| Mining Revenue | |||
| Bitcoin Holdings | 16.2 | 1.8 | 2.6 |
| Deployed Miners | ~4,330 | ~12,500 | ~9,100 |
| Month End Deployed Hash Rate (EH/s) | 0.5 EH/s | 1.3 EH/s | 0.9 EH/s |
Strategic Update
We are proactively strategizing for our future growth with a two-pronged approach to our strategic business plan:
- First, we plan to focus on organic growth through a fleet refresh and the addition of more exahash. We believe that a pivotal step in this direction is our recent partnership with Sunnyside Digital. We expect Sunnyside Digital to assist us in divesting a significant portion of our older-generation fleet, while acquiring next-gen machines to bolster efficiency. We expect that the increase in the price of bitcoin over the past few months will allow us to take machines offline and replace them with later generation machines starting in the second quarter of 2024 and continuing in a phased approach over the remainder of the year.
- Second, we plan to grow through strategic M&A. We are actively pursuing M&A opportunities with an eye toward enhancing shareholder value. Our criteria prioritizes targets with secure vertical integration, which we expect to result in long-term low mining costs. These potential strategic transactions are part of our broader M&A strategy of securing robust long-term infrastructure solutions, with a focus on vertical integration opportunities.
Furthermore, we intend to continue to pursue cost reduction opportunities, both in operations and SG&A.
CEO Comments
"We are dedicated to advancing long-term solutions that drive shareholder value. By prioritizing the reduction of third-party exposure and upgrading our fleet, alongside targeted M&A pursuits emphasizing partners with vertical integration capabilities, we believe we are positioning our company for optimal outcomes," explained Patricia Trompeter, CEO of Sphere 3D. She added, "Maintaining proper financial management has been our focus, to increase flexibility during challenging periods. Our debt-free status has afforded us the freedom to focus on innovative solutions that we believe will position our company for sustained success and productivity. As we refresh our fleet over the coming months, we may experience fluctuations in our bitcoin production, for example, as we progress with our fleet upgrade and refresh."
Production
Over the upcoming months, as we execute our planned strategic steps, we expect to experience volatility in our Bitcoin production. We expect that this will lead to greater gross profits as more productive machines use less power and generate more bitcoin.
"The significant downtime that we have experienced with our hosting partners in Springfield, MO and Granbury, TX further strengthens our focus on finding a merger partner that enables us to vertically integrate, to enable us to control our own uptime and costs."
About Sphere 3D
Sphere 3D Corp. (NASDAQ: ANY) is a cryptocurrency miner growing its industrial-scale Bitcoin mining operation through the capital-efficient procurement of next-generation mining equipment and partnering with best-in-class data center operators. Sphere 3D is dedicated to growing shareholder value while honoring its commitment to strict environmental, social, and governance standards. For more information about Sphere 3D, please visit Sphere3D.com.
Forward-Looking Statements
This communication contains forward-looking statements within the meaning of Section 27A of the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended. In some cases, you can identify forward-looking statements because they contain words such as "may," "will," "should," "experts," "plans," "anticipates," "could," "intends," "target," "project," "contemplates," "believes," "believes," "estimates," "predicts," "potential," or "continue" or the negative of these words or other similar terms or expressions. Expectations and beliefs regarding matters discussed herein may not materialize, and actual results in future periods are subject to risks and uncertainties that could cause actual results to differ materially from the projected. The forward-looking statements contained in this communication are also subject to other risks and uncertainties, including those more fully described in filings with the SEC, including Sphere 3D's reports filed on Form 10-K, Form 10-Q and Form 8-K and in other filings made by Sphere 3D with the SEC from time to time and available at www.sec.gov. These forward-looking statements are based on current expectations, which are subject to change.
Sphere 3D Contacts
Kurt Kalbfleisch CFO, Sphere 3D
Investor.relations@sphere3d.com
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/209092
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