Bit Digital, Inc. Announces First Quarter of Fiscal Year 2024 Financial Results

Rhea-AI Summary

Bit Digital (Nasdaq: BTBT) announced its unaudited financial results for Q1 FY2024, ending March 31, 2024. Key highlights include a 266% revenue increase to $30.3M, driven by its new AI business and higher bitcoin prices. Bitcoin mining revenue surged 166% to $21.9M, while the AI segment earned $8.1M. A $1.3M service credit was issued for decreased AI utilization. Adjusted EBITDA rose to $58.5M from $1.5M YoY, and GAAP EPS was $0.43 compared to a loss of $0.03. The company mined 410.7 bitcoins and 111.1 ETH, with total liquidity of $163.2M. Operationally, the active hash rate was 2.76 EH/s, and 48,898 miners were active. 85% of electricity was carbon-free. Management highlighted ongoing growth strategies and post-halving readiness.

Positive

• Revenue increased by 266% YoY to $30.3M.
• Bitcoin mining revenue grew by 166% YoY to $21.9M.
• AI segment generated $8.1M in its first quarter.
• Adjusted EBITDA rose significantly to $58.5M from $1.5M YoY.
• GAAP EPS improved to $0.43 from a loss of $0.03 YoY.
• Total liquidity stood at $163.2M with zero debt.
• 410.7 bitcoins mined, a 13% increase YoY.
• Company aims to reach 6.0 EH/s hash rate in 2024.
• 85% of electricity consumed was from carbon-free sources.

Negative

• Issued a one-time service credit of $1.3M for decreased AI utilization.
• Pro forma gross margins for the AI segment were affected, adjusted to 72% from reported 61%.
• Active hash rate increase partially offset by higher network difficulty.
• Decrease in ETH staked due to changing native staking provider.

Insights

Financial Analyst

Bit Digital, Inc.'s first-quarter results for fiscal year 2024 show impressive growth, particularly due to the launch of its AI business and favorable bitcoin prices. Revenue surged by 266% year-over-year to $30.3 million, a significant milestone driven by key business developments. The bitcoin mining segment alone generated $21.9 million, up 166% compared to the same period last year. This spike highlights the company's effective scaling strategies and market positioning.

The relatively new High-Performance Computing (HPC) services brought in $8.1 million despite operational teething problems, reflecting a strong potential for future revenue streams. Adjusted EBITDA saw a dramatic increase to $58.5 million, marking a stark contrast from $1.5 million in the previous year's first quarter. This highlights improved operational efficiency and profitability.

For retail investors, the cash and liquidity positions are particularly reassuring, with total liquidity at $163.2 million. This strong balance sheet and zero debt position provide a solid foundation for future growth and resilience against market fluctuations. Additionally, the pro forma gross margin of 72% for the HPC segment suggests that the initial hiccups in service delivery are not expected to be long-term issues.

In summary, the financial data presents a promising outlook for Bit Digital, bolstering investor confidence in the sustainability and scalability of its operations.

Tech Expert

Bit Digital's expansion into AI and HPC services represents a strategic pivot into high-growth areas. The AI contracts began generating revenue in January 2024, contributing significantly to the overall revenue with $8.1 million. This move diversifies their revenue streams beyond the volatile bitcoin mining sector, making the business model more robust against market shifts.

The company's fleet efficiency and active hash rate improvements are noteworthy. Achieving an average fleet efficiency of 28.3 J/TH and an active hash rate of 2.76 EH/s suggests a commitment to technological optimization. This not only enhances productivity but also reduces operational costs in the long run. The addition of 2,350 new mining units and the agreement for additional hosting capacity indicate aggressive growth plans that could further boost hash rates and efficiency.

Importantly, approximately 85% of the fleet's electricity consumption derived from carbon-free sources underscores Bit Digital's commitment to sustainable practices. This aligns with growing ESG (Environmental, Social and Governance) trends, potentially attracting environmentally conscious investors.

Overall, the technical advancements position Bit Digital favorably in the competitive landscape of digital asset mining and AI services.

NEW YORK, May 15, 2024 /PRNewswire/ -- Bit Digital, Inc. (Nasdaq: BTBT) (the "Company"), a sustainable platform for digital assets and artificial intelligence ("AI") infrastructure headquartered in New York City, today announced its unaudited financial results for the First Quarter ended March 31, 2024.

Financial Highlights for the First Quarter of 2024               

• Total revenue was $30.3 million for the First Quarter of 2024, a 266% increase compared to the First Quarter of 2023. The increase was primarily driven by the commencement of our Bit Digital AI business and by a higher realized bitcoin price.
• Revenue from bitcoin mining was $21.9 million for the First Quarter of 2024, a 166% increase compared to the prior year's quarter. The Company's Bit Digital AI business, referred to as High performance computing services ("HPC"), began generating revenue in January 2024, and recognized $8.1 million of revenue during the quarter. The Company issued a one-time service credit of $1.3 million to its HPC customer as compensation for decreased utilization during the initial deployment period, which included testing and optimization phases. Illustratively, adding back this credit would yield pro forma gross margins of approximately 72% on a net basis compared to reported gross margins of 61% for the segment. Revenue from ETH staking was approximately $0.3 million.
• The Company had cash, cash equivalents and restricted cash of $35.5 million, and total liquidity (defined as cash equivalents and restricted cash, USDC, and the fair market value of digital assets) of approximately $163.2 million^[1], as of March 31, 2024.
• Total assets were $291.1 million and Shareholders' Equity amounted to $265.2 million as of March 31, 2024.
• Adjusted EBITDA^[2] was $58.5 million for the First Quarter of 2024 compared to $1.5 million for the First Quarter of 2023.
• GAAP earnings per share was $0.43 on a fully-diluted basis for the First Quarter of 2024 compared to a loss of $0.03 for the First Quarter of 2023.

Operational Highlights for the First Quarter of 2024

• The Company earned 410.7 bitcoins during the First Quarter of 2024, a 13% increase from the prior year. Growth was primarily driven by a higher active hash rate and partially offset by an increase in network difficulty.
• The Company paid approximately $0.05 per kilowatt hour to its hosting partners for electricity consumed during the First Quarter of 2024.
• The average fleet efficiency for the active fleet was approximately 28.3 J/TH as of March 31, 2024.
• The Company earned 111.1 ETH in native staking and 1.3 ETH in liquid staking, respectively, in the First Quarter of 2024.
• Treasury holdings of BTC and ETH were 956.4 and 16,031.411, respectively, with a fair market value of approximately $68.2 million and $58.5 million on March 31, 2024, respectively.
• The BTC equivalent^[3] of our digital asset holdings as of March 31, 2024 (defined as if all ETH and USDC holdings were converted into BTC as of that date) was approximately 1,790.0 BTC1, or approximately $127.7 million.
• As of March 31, 2024, we had 48,898 miners owned or operating (in Iceland) for bitcoin mining with a total maximum hash rate of 4.2 EH/S.
• The Company's active hash rate of its bitcoin mining fleet was approximately 2.76 EH/s as of March 31, 2024.
• The Company purchased approximately 2,350 bitcoin mining units during the First Quarter of 2024.
• Approximately 85% of our fleet's run-rate electricity consumption was generated from carbon-free energy sources as of March 31, 2024. These figures are based on data provided by our hosts, publicly available sources, and internal estimates, demonstrating our commitment to sustainable practices in the digital asset mining industry.
• The Company had approximately 3,008 ETH actively staked in native staking protocols as of March 31, 2024. The decrease relative to the prior quarter was due to the Company changing its provider for native staking solutions. As of April 30, 2024, the Company had approximately 17,184 ETH actively staked in native staking protocols.
• On January 22, 2024, approximately 192 servers (1,536 GPUs) began generating revenue from the Company's AI customer contract. Subsequently, approximately 64 additional servers (512 GPUs) commenced revenue generation on February 2, 2024.
• On January 26, 2024, the Company finalized an agreement with Coinmint for up to 6 MW of additional mining capacity at Coinmint's hosting facility in Massena, New York. This new agreement brings the Company's total contracted hosting capacity with Coinmint to approximately 46 MW.

Management Commentary

"Our First Quarter 2024 results represent a strong start to the year with revenue growing by more than 250% and GAAP Net Income in excess of $50 million. The primary drivers for the improved performance were the commencement of our Bit Digital AI business and a higher realized bitcoin price.

We were well prepared for the halving which occurred in April 2024. Our balance sheet remains a core strength with over $160 million of total liquidity as of March 31, 2024, zero debt, and a growing revenue stream that is not correlated to the economics of bitcoin mining. While we continue to evaluate the post-halving bitcoin mining landscape, our goal of reaching 6.0 EH/s this year remains intact. We are actively engaged in discussions for both incremental hosting opportunities and potential acquisitions.

We continue to believe that capital allocation optionality provided by our complementary business lines is a key differentiator for our Company. We are actively evaluating a number of growth opportunities, both organic and inorganic, across each of our business lines. We are in the late stages of finalizing an agreement to double the size of the GPU fleet for our anchor client and our negotiations with prospective clients are progressing well. Our target of reaching a $100 million annualized revenue run-rate by year-end for this segment remains intact."

First Quarter 2024 Earnings Webcast and Conference Call

Senior management will host a live webcast and conference call to review its First Quarter 2024 results on Thursday, May 16, 2024, at 10 a.m. ET.

To register for the earnings call, please click here. Additionally, participants can join the conference call by dialing 1-855-303-0072 (passcode: 951267).

About Bit Digital

Bit Digital, Inc. is a sustainable platform for digital assets and artificial intelligence ("AI") infrastructure headquartered in New York City. Our bitcoin mining operations are located in the US, Canada, and Iceland. The Company has established a business line, Bit Digital AI, that offers infrastructure services for artificial intelligence applications.  For additional information, please contact ir@bit-digital.com or visit our website at www.bit-digital.com.

Investor Notice

Investing in our securities involves a high degree of risk. Before making an investment decision, you should carefully consider the risks, uncertainties and forward-looking statements described under "Risk Factors" in Item 3.D of our Annual Report on Form 20-F for the fiscal year ended December 31, 2023. If any material risk was to occur, our business, financial condition or results of operations would likely suffer. In that event, the value of our securities could decline and you could lose part or all of your investment. The risks and uncertainties we describe are not the only ones facing us. Additional risks not presently known to us or that we currently deem immaterial may also impair our business operations. In addition, our past financial performance may not be a reliable indicator of future performance, and historical trends should not be used to anticipate results in the future. Future changes in the network-wide mining difficulty rate or bitcoin hash rate may also materially affect the future performance of Bit Digital's production of bitcoin. Actual operating results will vary depending on many factors including network difficulty rate, total hash rate of the network, the operations of our facilities, the status of our miners, and other factors. See "Safe Harbor Statement" below.

Safe Harbor Statement

This press release may contain certain "forward-looking statements" relating to the business of Bit Digital, Inc., and its subsidiary companies. All statements, other than statements of historical fact included herein are "forward-looking statements." These forward-looking statements are often identified by the use of forward-looking terminology such as "believes," "expects," or similar expressions, involving known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company's periodic reports that are filed with the Securities and Exchange Commission and available on its website at http://www.sec.gov. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.

[1] This figure excludes approximately 2,701 ETH that were transferred to an internally managed fund.

[2] Adjusted EBITDA refers to earnings before interest expense, income tax expense and depreciation and amortization expense ("EBITDA") adjusted to eliminate the effects of certain non-cash and / or non-recurring items.

[3] "BTC equivalent" is a hypothetical illustration of the value of our digital asset portfolio in bitcoin terms. BTC equivalent is defined as if all non-BTC digital assets, comprised of ETH and USDC, were converted into BTC as of March 31, 2024, and added to our existing BTC balance. Conversion values are found using the closing price on coinmarketcap.com.

 

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SOURCE Bit Digital, Inc.

FAQ

What were Bit Digital's Q1 FY2024 revenues?

Bit Digital reported total revenues of $30.3 million for Q1 FY2024.

How much did Bit Digital's bitcoin mining revenue increase in Q1 FY2024?

Bitcoin mining revenue increased by 166% YoY to $21.9 million in Q1 FY2024.

What was Bit Digital's GAAP EPS for Q1 FY2024?

The GAAP EPS for Bit Digital in Q1 FY2024 was $0.43.

How many bitcoins did Bit Digital mine in Q1 FY2024?

Bit Digital mined 410.7 bitcoins in Q1 FY2024.

What is the total liquidity reported by Bit Digital for Q1 FY2024?

Bit Digital reported total liquidity of approximately $163.2 million for Q1 FY2024.

How did Bit Digital's AI business perform in Q1 FY2024?

Bit Digital's AI business generated $8.1 million in revenue in Q1 FY2024.

What was the adjusted EBITDA for Bit Digital in Q1 FY2024?

Adjusted EBITDA for Bit Digital in Q1 FY2024 was $58.5 million.

What percentage of Bit Digital's electricity consumption was carbon-free in Q1 FY2024?

Approximately 85% of Bit Digital's electricity consumption was carbon-free in Q1 FY2024.

What is Bit Digital's target hash rate for 2024?

Bit Digital aims to reach a 6.0 EH/s hash rate in 2024.