BTCS Reports Q2 2024 Results

Rhea-AI Summary

BTCS Inc. (Nasdaq: BTCS) reported its Q2 2024 results, showcasing significant growth in revenue and net income for the first half of 2024. Revenue reached $0.6 million in Q2, a 24% increase from Q1 and 45% year-over-year. For the first half of 2024, revenue surpassed $1.0 million, up 45% from 2023. Despite a net loss of $6.7 million in Q2, the company reported net income of $5.5 million for H1 2024, a 46% increase year-over-year.

BTCS held $33.5 million in cash and crypto assets as of June 30, 2024, a 65% increase year-over-year. The company's Ethereum block building operations have shown progress, and they launched the beta version of ChainQ, an AI-driven blockchain analytics platform. Despite market volatility, BTCS remains focused on blockchain infrastructure security and development of ChainQ and Builder+ operations.

Positive

• Revenue increased by 45% year-over-year to $0.6 million in Q2 2024
• H1 2024 revenue surpassed $1.0 million, up 45% from H1 2023
• Net income for H1 2024 reached $5.5 million, a 46% increase year-over-year
• Cash and crypto assets totaled $33.5 million, a 65% increase year-over-year
• Successful beta launch of ChainQ, an AI-driven blockchain analytics platform

Negative

• Net loss of $6.7 million in Q2 2024 compared to net income in Q1 2024
• Gross margin declined to 70% in Q2 2024 from 72% in H1 2023
• 15% decrease in cash and crypto assets from March 31, 2024 to June 30, 2024

Insights

Financial Analyst

BTCS's Q2 2024 results present a mixed financial picture. While revenue growth is impressive at 45% year-over-year, the company swung to a substantial net loss of $6.7 million in Q2 from a net income of $12.3 million in Q1. This volatility is largely attributed to fluctuations in crypto asset values, highlighting the inherent risks in the crypto market. The decline in gross margin from 72% to 67% year-over-year is concerning, potentially indicating increased operational costs or competitive pressures. However, the 65% year-over-year increase in cash and crypto assets to $33.5 million provides a strong liquidity position. Investors should closely monitor the company's ability to stabilize earnings and improve margins in the face of crypto market volatility.

Blockchain Technology Expert

BTCS's strategic focus on Ethereum block building operations shows promise. Their Builder+ initiative has made significant strides, climbing Ethereum builder market leaderboards and consistently producing blocks. The 50% reduction in average margin on blocks produced in Q2 demonstrates improved efficiency, which could lead to better profitability if scaled effectively. The beta launch of ChainQ, their AI-driven blockchain analytics platform, represents a potential game-changer. By initially supporting Cosmos (ATOM) and planning expansion to larger networks like Bitcoin, BTCS is positioning itself at the intersection of blockchain and AI - two high-growth sectors. However, the success of these initiatives will depend on user adoption and the company's ability to stay ahead in a rapidly evolving technological landscape.

Market Research Analyst

BTCS's performance reflects the broader trends in the crypto market, with significant volatility impacting financial results. The 15% decrease in asset value during Q2's crypto market pullback underscores the risks associated with crypto-focused businesses. However, BTCS's diversification into blockchain infrastructure and analytics could provide more stable revenue streams in the long term. The company's heavy concentration in Ethereum ($27.2 million out of $33.0 million in crypto assets) exposes it to Ethereum-specific risks and opportunities. The blockchain analytics market is growing rapidly and if ChainQ gains traction, it could become a significant differentiator for BTCS. Investors should weigh the potential of these new initiatives against the inherent volatility of the crypto market when evaluating BTCS's long-term prospects.

Silver Spring, MD, Aug. 20, 2024 (GLOBE NEWSWIRE) -- BTCS Inc. (Nasdaq: BTCS) (“BTCS” or the “Company”), a blockchain technology-focused company, announced its results for the second quarter ended June 30, 2024 (“Q2 2024”).

Second Quarter 2024 Financial Highlights

• Revenue (3 Months): Q2 2024 revenue reached $0.6 million, representing a 24% increase from Q1 2024 and a 45% increase from Q2 2023.
  
• Revenue (6 Months): Revenue for the first half of 2024 surpassed $1.0 million, representing a 45% increase from the first half of 2023.
  
• Gross Margin: Gross margin declined to 70% for Q2 2024, with 67% gross margin for the first half of 2024 compared to 72% gross margin for the first half of 2023.
  
• Net Loss (3 Months): Net loss for Q2 2024 was $6.7 million ($0.43 per share), compared to a net income of $12.3 million ($0.78 per share) in Q1 2024 and a net loss of $1.2 million ($0.08 per share) in Q2 2023.
  
• Net Income (6 Months): Net income for the six months ended June 30, 2024, was $5.5 million ($0.35 per share), reflecting a strong first half of the year and a 46% increase year over year.
  
• Cash & Crypto Value: The Company held $33.5 million in cash and crypto assets as of June 30, 2024, marking a 65% increase year over year, despite a 15% decrease from March 31, 2024.
  

Management Commentary

In the first half of 2024, BTCS has maintained a robust financial standing, reporting net income of over $5.5 million and holding $33.0 million in crypto assets, of which $27.2 million was in Ethereum. Our Net Income and Net Loss were primarily driven by the increase and decrease, respectively, in the fair market value of the Company’s crypto assets during the periods reported above. Despite a 15% decline in asset value amid Q2’s crypto market pullback, our strategic blockchain infrastructure initiatives have fortified our position, enabling us to navigate the market turbulence effectively with stable operations.

Our Ethereum block building operations, under the Builder+ initiative, have achieved significant milestones. We have climbed the Ethereum builder market leaderboards and now consistently produce blocks, reinforcing our presence in the sector. Our strategy focuses on maximizing gas fee revenues by increasing block purchases and optimizing the costs associated with block space acquisition. This approach has successfully halved the average margin on blocks produced by over 50% in Q2.

July marked the beta launch of ChainQ, our proprietary AI-driven blockchain analytics platform, aimed at transforming the analysis and understanding of blockchain data. We are actively gathering user feedback to refine ChainQ’s functionalities while advancing our research and development to incorporate additional features and support for additional blockchain networks. Initially supporting Cosmos (ATOM), ChainQ’s design paves the way for integration with larger, simpler blockchain networks such as bitcoin, enhancing its potential market reach. Our ongoing developments and future expansions are set to enhance the visibility and adoption of ChainQ, boosting user engagement. Visit www.chainq.com to learn more about ChainQ’s evolving functionalities.

As we continue to manage through periods of crypto market volatility and shifting economic and political conditions, our commitment remains unwavering in ensuring the security of our blockchain infrastructure and in the continuous development of ChainQ and the Builder+ operations. We are optimistic about BTCS’s prospects and, confident in our ability to drive sustained stakeholder value as we adapt and grow in the rapidly evolving blockchain landscape.

About BTCS:
BTCS Inc. is a Nasdaq listed company operating in the blockchain technology sector since 2014 and is one of the only U.S. publicly traded companies with a primary focus on proof-of-stake blockchain infrastructure. We focus on driving scalable growth through our diverse business streams that leverage our core blockchain infrastructure operations, which include staking and operating validator nodes on various proof-of-stake networks, such as Ethereum. Built atop our blockchain infrastructure operations are: ChainQ, our AI-powered blockchain analytics platform, which provides a simple way for crypto holders to access otherwise hard-to-obtain data; StakeSeeker, offering an analytics-focused cryptocurrency dashboard and Staking-as-a-Service solution, and Builder+, an Ethereum block builder optimizing profit through block construction. For more information visit: www.btcs.com.

Forward-Looking Statements:
Certain statements in this press release constitute “forward-looking statements” within the meaning of the federal securities laws, including statements regarding our ability to drive sustained stakeholder value as we adapt and grow. Words such as “may,” “might,” “will,” “should,” “believe,” “expect,” “anticipate,” “estimate,” “continue,” “predict,” “forecast,” “project,” “plan,” “intend” or similar expressions, or statements regarding intent, belief, or current expectations, are forward-looking statements. While the Company believes these forward-looking statements are reasonable, undue reliance should not be placed on any such forward-looking statements, which are based on information available to us on the date of this release. These forward-looking statements are based upon assumptions and are subject to various risks and uncertainties, including without limitation regulatory issues, unexpected issues with Builder+, unexpected issues with ChainQ, and the reluctance of validators to try or utilize our Builder+ product, as well as risks set forth in the Company’s filings with the Securities and Exchange Commission including its Form 10-K for the year ended December 31, 2023 which was filed on March 21, 2024. Thus, actual results could be materially different. The Company expressly disclaims any obligation to update or alter statements, whether as a result of new information, future events, or otherwise, except as required by law.

Investor Relations:
ir@btcs.com

Financials

The tables below are derived from the Company’s financial statements included in its Form 10-Q filed on August 19, 2024, with the Securities and Exchange Commission. Please refer to the Form 10-Q for complete financial statements and further information regarding the Company’s results of operations and financial condition relating to the fiscal quarter ended June 30, 2024 and 2023. Please also refer to the Company’s Form 10-K for a discussion of risk factors applicable to the Company and its business.

BTCS Inc.
Balance Sheets

		June 30,				December 31,
		2024				2023
			(Unaudited)
Assets:
Current assets:
Cash and cash equivalents		$	536,682			$	1,458,327
Stablecoins			14,797				21,044
Crypto assets			973,413				302,783
Staked crypto assets			32,010,175				24,900,146
Prepaid expenses			180,919				62,461
Receivable for capital shares sold			-				291,440
Total current assets			33,715,986				27,036,201
Other assets:
Investments, at value (Cost $100,000)			100,000				100,000
Property and equipment, net			7,500				10,490
Total other assets			107,500				110,490
Total Assets		$	33,823,486			$	27,146,691
Liabilities and Stockholders’ Equity:
Accounts payable and accrued expenses		$	130,850			$	55,058
Accrued compensation			508,489				712,092
Warrant liabilities			71,250				213,750
Total current liabilities			710,589				980,900
Stockholders’ equity:
Preferred stock: 20,000,000 shares authorized at $0.001 par value:			-				-
Series V preferred stock: 14,567,829 and 14,567,829 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively			2,563,938				2,563,938
Common stock, 975,000,000 shares authorized at $0.001 par value, 15,895,027 and 15,320,281 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively			15,895				15,322
Additional paid in capital			163,681,450				162,263,634
Accumulated deficit			(133,148,386	)			(138,677,103	)
Total stockholders’ equity			33,112,897				26,165,791
Total Liabilities and Stockholders’ Equity		$	33,823,486			$	27,146,691

BTCS Inc.
Statements of Operations
(Unaudited)

		For the Three Months Ended								For the Six Months Ended
		June 30,								June 30,
		2024				2023				2024				2023
Revenues
Blockchain infrastructure revenues (net of fees)		$	561,192			$	385,753			$	1,012,578			$	697,261
Total revenues			561,192				385,753				1,012,578				697,261
Cost of revenues
Blockchain infrastructure costs			168,848				113,612				329,473				195,626
Gross profit			392,344				272,141				683,105				501,635
Operating expenses:
General and administrative		$	538,956			$	617,569			$	1,026,555			$	1,227,398
Research and development			163,777				180,903				310,326				382,528
Compensation and related expenses			875,491				578,496				1,331,270				1,040,586
Marketing			28,477				2,723				86,079				8,966
Realized (gains) losses on crypto asset transactions			(287,327	)			568,031				(298,014	)			560,477
Total operating expenses			1,319,374				1,947,722				2,456,216				3,219,955
Other income (expenses):
Change in unrealized appreciation (depreciation) on crypto assets			(5,943,339	)			355,033				7,159,328				6,648,240
Change in fair value of warrant liabilities			142,500				142,500				142,500				(142,500	)
Total other income (expenses)			(5,800,839	)			497,533				7,301,828				6,505,740
Net income (loss)		$	(6,727,869	)		$	(1,178,048	)		$	5,528,717			$	3,787,420
Basic net income (loss) per share attributable to common stockholders		$	(0.43	)		$	(0.08	)		$	0.35			$	0.27
Diluted net income (loss) per share attributable to common stockholders		$	(0.43	)		$	(0.08	)		$	0.28			$	0.22
Basic weighted average number of common shares outstanding			15,758,157				13,873,331				15,724,917				13,773,782
Diluted weighted average number of common shares outstanding, basic and diluted			15,758,157				13,873,331				19,447,348				17,263,427

BTCS Inc.
Statements of Cash Flows
(Unaudited)

						For the Six Months Ended
						June 30,
						2024						2023
Net Cash flows used from operating activities:
Net income						$	5,528,717					$	3,787,420
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation expense							2,990						2,318
Stock-based compensation							1,178,084						789,453
Blockchain infrastructure revenue							(1,012,578			)			(697,261		)
Builder payments (non-cash)							158,112						-
Change in fair value of warrant liabilities							(142,500			)			142,500
Realized gains on crypto assets transactions							(298,014			)			560,477
Change in unrealized (appreciation) depreciation on crypto assets							(7,159,328			)			(6,648,240		)
Changes in operating assets and liabilities:
Stablecoins							6,247						-
Prepaid expenses and other current assets							(118,458			)			(51,668		)
Receivable for capital shares sold							291,440						-
Accounts payable and accrued expenses							75,792						111,417
Accrued compensation							(203,603			)			(41,940		)
Net cash used in operating activities							(1,693,099			)			(2,045,524		)
Cash flows from investing activities:
Purchase of productive crypto assets for validating							(19,212			)			(1,804,213		)
Sale of productive crypto assets							550,361						1,719,871
Net cash provided by (used in) investing activities							531,149						(84,342		)
Cash flow from financing activities:
Net proceeds from issuance common stock/ At-the-market offering							240,305						926,501
Net cash provided by financing activities							240,305						926,501
Net (decrease)/increase in cash							(921,645			)			(1,203,365		)
Cash, beginning of period							1,458,327						2,146,783
Cash, end of period						$	536,682					$	943,418
Supplemental disclosure of non-cash financing and investing activities:
Series V Preferred Stock Distribution						$	-					$	2,559,533

FAQ

What was BTCS's revenue for Q2 2024?

BTCS reported revenue of $0.6 million for Q2 2024, representing a 24% increase from Q1 2024 and a 45% increase from Q2 2023.

How much net income did BTCS report for the first half of 2024?

BTCS reported net income of $5.5 million ($0.35 per share) for the six months ended June 30, 2024, reflecting a 46% increase year over year.

What was BTCS's cash and crypto asset value as of June 30, 2024?

BTCS held $33.5 million in cash and crypto assets as of June 30, 2024, marking a 65% increase year over year, despite a 15% decrease from March 31, 2024.

What new product did BTCS launch in beta in July 2024?

BTCS launched the beta version of ChainQ, their proprietary AI-driven blockchain analytics platform, in July 2024.