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

Rhea-AI Summary

Bit Digital (NASDAQ: BTBT) reported its Q2 2024 financial results, showing significant growth. Total revenue increased 220% to $29.0 million, driven by the new high performance computing (HPC) services and higher bitcoin prices. Bitcoin mining revenue grew 80% to $16.1 million, while HPC services contributed $12.5 million. The company's liquidity reached $191.9 million, with total assets of $315.5 million. However, Adjusted EBITDA was $(3.8) million, including an $11.5 million unrealized loss on digital assets. GAAP loss per share was $0.09. Operationally, Bit Digital mined 244.2 bitcoins, a 23% decrease due to halving and increased network difficulty. The company maintained a strong focus on sustainable practices, with 86% of its fleet's electricity from carbon-free sources.

Positive

• Total revenue increased 220% year-over-year to $29.0 million
• Bitcoin mining revenue grew 80% to $16.1 million
• New HPC services business contributed $12.5 million in revenue
• Strong liquidity position of $191.9 million
• Total assets of $315.5 million and shareholders' equity of $295.3 million
• 86% of fleet's electricity consumption from carbon-free energy sources
• Signed binding term sheet with Boosteroid for potential $700 million revenue opportunity over five years

Negative

• Adjusted EBITDA decreased to $(3.8) million from $1.9 million in Q2 2023
• GAAP loss per share increased to $0.09 from $0.03 in Q2 2023
• Bitcoin production decreased 23% year-over-year due to halving and increased network difficulty
• Unlikely to reach 6.0 EH/s active hash rate target by year-end 2024 due to challenging mining economics

Financial Analyst

Bit Digital's Q2 2024 results show a significant revenue boost, with total revenue up 220% year-over-year to $29.0 million. This growth was primarily driven by the new High Performance Computing (HPC) services, contributing $12.5 million. However, the adjusted EBITDA turned negative at $(3.8) million, including an $11.5 million unrealized loss on digital assets.

The company's liquidity position remains strong with $191.9 million in total liquidity. Despite challenges in mining economics post-halving, Bit Digital's diversification into HPC services appears to be a strategic move. The potential $700 million revenue opportunity with Boosteroid over five years could significantly impact future growth if realized.

Tech Expert

Bit Digital's shift towards HPC services marks a strategic pivot in the face of challenging bitcoin mining economics. The company's active hash rate of 2.6 EH/s falls short of their 6.0 EH/s year-end target, reflecting the impact of the halving event and increased network difficulty. However, their focus on fleet efficiency (27.9 J/TH) and sustainable practices (86% carbon-free energy) positions them well in the evolving crypto mining landscape.

The partnership with Boosteroid for GPU servers demonstrates Bit Digital's adaptability and potential for growth in the cloud gaming sector. This diversification could provide a more stable revenue stream compared to the volatile nature of cryptocurrency mining.

NEW YORK, Aug. 19, 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 Second Quarter ended June 30, 2024.

Financial Highlights for the Second Quarter of 2024

• Total revenue was $29.0 million for the Second Quarter of 2024, a 220% increase compared to the Second Quarter of 2023. The increase was primarily driven by the commencement of our high performance computing services ("HPC") business and by a higher realized bitcoin price.
• Revenue from bitcoin mining was $16.1 million for the Second Quarter of 2024, an 80% increase compared to the prior year's quarter. The Company's HPC recognized $12.5 million of revenue during the quarter compared to nil the prior year.
• The Company had cash, cash equivalents and restricted cash of $61.4 million, and total liquidity (defined as cash, cash equivalents and restricted cash, USDC, and the fair market value of digital assets) of approximately $191.9 million^[1], as of June 30, 2024.
• Total assets were $315.5 million and Shareholders' Equity amounted to $295.3 million as of June 30, 2024.
• Adjusted EBITDA^[2] was $(3.8) million for the Second Quarter of 2024 compared to $1.9 million for the Second Quarter of 2023. Adjusted EBITDA includes an $11.5 million unrealized loss on digital assets.
• GAAP loss per share was $0.09 on a fully diluted basis for the Second Quarter of 2024 compared to a loss per share of $0.03 for the Second Quarter of 2023.

Operational Highlights for the Second Quarter of 2024

• The Company earned 244.2 bitcoins during the Second Quarter of 2024, a 23% decrease from the prior year. The decline was primarily driven by a reduction in block rewards following the halving event in April 2024 and by an increase in network difficulty.
• The Company paid approximately $0.047 per kilowatt hour to its hosting partners for electricity consumed during the Second Quarter of 2024.
• The average fleet efficiency for the active fleet was approximately 27.9 J/TH as of June 30, 2024.
• The Company earned 109.4 ETH from native staking in the Second Quarter of 2024.
• Treasury holdings of BTC and ETH were 585.6 and 27,226.21, respectively, with a fair market value of approximately $36.7 million and $93.5 million on June 30, 2024, respectively.
• The BTC equivalent^[3] of our digital asset holdings as of June 30, 2024 (defined as if all ETH and USDC holdings were converted into BTC as of that date) was approximately 2,082.1 BTC1, or approximately $130.5 million.
• As of June 30, 2024, we had 50,044 miners owned or operating (in Iceland) for bitcoin mining with a total maximum hash rate of 4.3 EH/s.
• The Company's active hash rate of its bitcoin mining fleet was approximately 2.6 EH/s as of June 30, 2024.
• The Company purchased approximately 1,146 bitcoin mining units during the Second Quarter of 2024.
• Approximately 86% of our fleet's run-rate electricity consumption was generated from carbon-free energy sources as of June 30, 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 17,184 ETH actively staked in native staking protocols as of June 30, 2024.
• In the second quarter of 2024, the Company finalized an agreement to supply its existing customer with an additional 2,048 GPUs over a three-year period. To help finance this operation, the Company entered into a sale-leaseback agreement with a third party, agreeing to sell 128 AI servers (equivalent to 1,024 GPUs) and lease them back for three years. In late July, at behest of the customer, the Company and the customer mutually agreed to temporarily delay the purchase order so that the customer could evaluate potentially upgrading the purchase order to include newer generation Nvidia GPUs. Accordingly, the Company and manufacturer mutually agreed to delay the Company's purchase pending the contractual outcome with the Company's customer. The Company expects to provide additional details about the revised deployment timeline in the coming weeks. The Company's contract with the customer remains fully in effect, but may have to be amended to provide for newer generation GPUs. In early August, the Company received $30.0 million as a non-refundable prepayment from its customer, half of which will be distributed to the Company's leasing partner.

Subsequent Events

• On August 19, 2024, Bit Digital announced that it had signed a binding term sheet with Boosteroid Inc. ("Boosteroid"), the world's third-largest cloud gaming provider. Upon signing a master service agreement ("MSA"), Boosteroid will place an initial purchase for a starting quantity of GPU servers with a five-year service duration. Bit Digital will provide Boosteroid with options to draw down additional servers in multiples of 100, up to a total of 50,000 GPU servers within five years after signing the MSA, depending on their deployment plans and subject to market conditions. The entire 50,000 GPU deployment represents an aggregate revenue opportunity to Bit Digital in excess of $700 million over the five-year term. The initial purchase includes GPU-servers based on AMD EPYC 4th Gen CPUs and RX7900XT GPUs, customized by ASUSTeK Computer Inc. ("ASUS") and AMD for Boosteroid. Deployment is planned across a network of more than 10 data centers in the U.S. and Europe. The initial deployment is scheduled to begin over the next two to three months and is expected to generate approximately $13 million in revenue to Bit Digital over the five-year term, or approximately $2.6 million per year. Bit Digital's entry into a MSA is conditioned upon further diligence of Boosteroid, customary legal and business reviews, internal approvals, and execution of an acceptable MSA.

Management Commentary

"The second quarter of 2024 was an important step in the evolution of Bit Digital. Despite the reduction in block rewards from the April 'halving event', our total revenue more than doubled from the prior year, principally aided by the first full quarter of revenue from our HPC services business. Our balance sheet remains a key strength that will enable us to withstand recent market volatility and deploy growth capital into high-return opportunities.

Mining economics remain challenging, and in the absence of a material improvement in expected payback periods for mining equipment, it is unlikely that we will reach our active hash rate target of 6.0 EH/s by year-end 2024. From the onset of the year, we have been cautious in terms of exahash growth, preferring to wait for the post-halving mining environment before enacting material growth. In the interim, we will focus on high grading our existing fleet while reserving the right to make opportunistic growth purchases should the returns profile justify the expenditure.

We continue to view the HPC business as the most attractive use of incremental growth capex in the current environment. Our pipeline remains strong and the main bottleneck to date has been a lack of personnel and man hours to bring contracts to the finish line. We have started to solve this issue, making our first key hire for this business earlier this month with a plan to further expand our personnel and improve our tech stack. Our growth pipeline remains strong, and we continue to believe we will be able to reach our $100 million annualized revenue target by year-end 2024 even if the 2,000 GPU expansion deployment with our existing customer is pushed into 2025."

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. 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. See disclosure about Non-GAAP Financial Measures on page 24 below.

[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 June 30, 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 was Bit Digital's (BTBT) total revenue for Q2 2024?

Bit Digital's total revenue for Q2 2024 was $29.0 million, a 220% increase compared to Q2 2023.

How much revenue did BTBT generate from bitcoin mining in Q2 2024?

Bit Digital generated $16.1 million in revenue from bitcoin mining in Q2 2024, an 80% increase compared to the previous year.

What was BTBT's Adjusted EBITDA for Q2 2024?

Bit Digital's Adjusted EBITDA for Q2 2024 was $(3.8) million, compared to $1.9 million for Q2 2023.

How many bitcoins did BTBT mine in Q2 2024?

Bit Digital mined 244.2 bitcoins during Q2 2024, a 23% decrease from the prior year due to halving and increased network difficulty.

What was BTBT's active hash rate as of June 30, 2024?

Bit Digital's active hash rate for its bitcoin mining fleet was approximately 2.6 EH/s as of June 30, 2024.