Sphere 3D Corp. Provides September 2024 Update

Rhea-AI Summary

Sphere 3D Corp. (NASDAQ: ANY) provides an operational update for September 2024 and a strategic outlook. Key highlights include:

• 9.2 Bitcoin mined in September 2024
• Month-end deployed hash rate of 0.7 EH/s
• Development of a new 12.5 MW hosting site with sub $0.04 power contract

The company is transitioning to lower-cost hosting sites, which led to a decrease in mining production. A hosting provider buyout strengthened the balance sheet. Sphere 3D is adding higher-efficiency machines, including 1,000 Bitmain S21 units scheduled for Q4 2024 and Q1 2025. The new Iowa hosting site will begin energizing over 3,000 miners in December 2024. The company is deploying 875 of 1000 Q4 Bitmain Antminer S21s and has acquired 1,500 XP miners, adding 0.21 EH/s to the overall hash rate.

Positive

• Development of a new 12.5 MW hosting site with sub $0.04/kWh power contract
• Strengthened balance sheet due to hosting provider contract buyout
• Addition of 0.21 EH/s of higher-efficiency machines to the fleet
• Acquisition of 1,500 XP miners, adding 0.21 EH/s to overall hash rate
• Debt-free balance sheet and access to capital through shelf registration

Negative

• Decrease in Bitcoin mined from 12.7 in August to 9.2 in September 2024
• Reduction in month-end deployed hash rate from 1.0 EH/s in August to 0.7 EH/s in September
• Decrease in mining revenue from $0.8 million in August to $0.6 million in September
• Reduction in deployed miners from ~8,900 in August to ~6,300 in September

Insights

Financial Analyst

The September 2024 update for Sphere 3D Corp. reveals a strategic shift towards cost optimization in their Bitcoin mining operations. Key points include:

• Reduction in Bitcoin mined from 12.7 in August to 9.2 in September, with a corresponding decrease in mining revenue to $0.6 million
• Decrease in deployed miners from ~8,900 to ~6,300 and hash rate from 1.0 EH/s to 0.7 EH/s
• Development of a new 12.5 MW hosting site in Iowa with sub-$0.04/kWh energy rates
• Acquisition and deployment of newer, more efficient miners (Bitmain S21 and XP miners)

The company's focus on transitioning to lower-cost hosting sites and upgrading its miner fleet indicates a long-term strategy to improve profitability. The contract buyout at one colocation site has bolstered cash reserves, providing flexibility for future investments. While current production has decreased, the planned expansion and efficiency improvements suggest potential for increased profitability in the coming quarters, especially if Bitcoin prices remain strong.

Tech Expert

Sphere 3D's technological strategy focuses on upgrading its mining infrastructure:

• Deployment of 875 out of 1000 Bitmain Antminer S21s, with more to come in Q4 2024 and Q1 2025
• Addition of 1,500 XP miners, expected to add 0.21 EH/s to overall hash rate
• Development of a new 12.5 MW hosting site with 97%+ uptime

These upgrades signify a shift towards more energy-efficient mining operations. The Bitmain S21 series represents some of the most advanced ASIC miners available, offering improved hash rates and energy efficiency. The move to a hosting site with sub-$0.04/kWh energy rates is particularly noteworthy, as electricity costs are a major factor in mining profitability. This technological refresh, combined with more favorable hosting conditions, positions Sphere 3D to potentially increase its competitive edge in the Bitcoin mining sector, provided they can execute their deployment plans effectively.

Stamford, Connecticut--(Newsfile Corp. - October 17, 2024) - Sphere 3D Corp. (NASDAQ: ANY) ("Sphere 3D"), a Bitcoin mining company focused on strategically growing its production, is providing an operational update for September 2024, as well as a general strategic update.

Key Highlights

• 9.2 Bitcoin mined in September 2024

• Month-end deployed hash rate was 0.7 EH/s

• Development initiated on new 12.5 MW hosting site with multi-year sub $0.04 power contract; energization begins in December 2024

Metrics	Sept. 2023	Aug. 2024	Sept. 2024
Bitcoin Mined	63.6	12.7	9.2
Bitcoin Sold	49.9	12.6	10.0
Mining Revenue	$1.7 million	$0.8 million	$0.6 million
Bitcoin Holdings	16.5	2.1	1.3
Deployed Miners	~12,450	~8,900	~6,300
Month-End Deployed Hash Rate	1.3 EH/s	1.0 EH/s	0.7 EH/s

 

Mining production decreased in September as the company focused on its long-term strategic goal of transitioning to lower-cost hosting sites. The decrease reflects significant changes at one colocation site, where the hosting provider bought out the company's contract. This buyout has strengthened the company's balance sheet by increasing cash reserves and lowering our overall cost of mining. The company is currently evaluating miners from this site and is actively exploring more affordable hosting options.

In line with this strategic shift, the company has recently added 0.21 EH/s of higher-efficiency machines to its fleet. These machines are expected to go live in October, in addition to a total of 1,000 Bitmain S21 units scheduled for energization by Q4 2024 and another 1,000 Bitmain S21s in Q1 2025.

Strategic Update

• New Hosting Site: as announced in early September, the company is developing a 12.5 MW hosting site in Iowa. This new site promises enhanced production capacity at reduced costs. The long-term contract for this facility secures an average energy rate of under $0.04/kWh, with an anticipated uptime of over 97%. The company plans to begin energizing over 3,000 miners at this location in December 2024.

• Bitcoin Production: September's lower production numbers reflect the company's ongoing transition to more cost-effective hosting environments. The buyout of one of our hosting contracts has provided the company with greater cash liquidity, allowing for a reduced cost structure in mining operations. The company is actively assessing options to reallocate its miner fleet to more cost-effective sites.

• Fleet Upgrades: the company has received and is deploying 875 of the 1000 Q4 Bitmain Antminer S21s, expanding its fleet with the latest generation of high-efficiency miners. The total miner fleet now includes a significant number of Bitmain S21 and S21 Pro machines, contributing close to 0.2 EH/s in additional hashrate. Additionally, the company has acquired 1,500 XP miners, which are expected to be energized soon, adding 0.21 EH/s to the company's overall hash rate.

Executive Statements

"Looking ahead to Q4 and into 2025, we anticipate a strong Bitcoin market and remain focused on executing our strategic plan," said Trompeter. "This includes phasing out high-cost hosting contracts, leveraging our access to capital, and reducing our overall mining costs. These efforts will help us maximize production while managing operating expenses effectively. We are also expanding our hash rate by deploying the newest and most efficient Bitcoin miners and relocating older equipment to more profitable hosting sites."

"Additionally, our shelf registration presents an exciting strategic opportunity. With ready access to capital, we're in a strong position to grow Sphere 3D organically, as well as through potential acquisitions or partnerships," Trompeter added. "In a dynamic market like this, maintaining a debt-free balance sheet and having access to new capital could significantly enhance long-term shareholder value."

"The transition to a facility with competitive power costs, reliable uptime, and continued upgrades to our mining fleet ensures that we are well-positioned for profitability and growth through 2025," she concluded.

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 increasing 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 Contact

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/226991

FAQ

How many Bitcoin did Sphere 3D (ANY) mine in September 2024?

Sphere 3D (ANY) mined 9.2 Bitcoin in September 2024.

What was Sphere 3D's (ANY) deployed hash rate at the end of September 2024?

Sphere 3D's (ANY) month-end deployed hash rate was 0.7 EH/s in September 2024.

When will Sphere 3D (ANY) begin energizing miners at its new Iowa hosting site?

Sphere 3D (ANY) plans to begin energizing over 3,000 miners at its new Iowa hosting site in December 2024.

How many Bitmain S21 units is Sphere 3D (ANY) planning to energize by Q1 2025?

Sphere 3D (ANY) is planning to energize a total of 2,000 Bitmain S21 units by Q1 2025, with 1,000 scheduled for Q4 2024 and another 1,000 in Q1 2025.