Greenidge Generation Announces Favorable Preliminary Financial and Operating Results for the Fourth Quarter 2023

Rhea-AI Summary

Greenidge Generation Holdings Inc. (NASDAQ: GREE) announced favorable preliminary financial and operating results for the fourth quarter of 2023, with revenue of approximately $19.7 million, net income of $1.4 million to $2.4 million, adjusted EBITDA of $1.6 million to $2.6 million, and earnings per share of $0.18 to $0.32. The company reported its first profitable quarter in two years and highlighted a significant reduction in debt by over 54% in 2023. The CEO expressed confidence in the company's approach and resources, positioning it well for future growth.

Positive

• The company reported a revenue of approximately $19.7 million for the fourth quarter of 2023
• Net income from continuing operations was approximately $1.4 million to $2.4 million
• Adjusted EBITDA was approximately $1.6 million to $2.6 million
• Earnings per share were $0.18 to $0.32
• The company produced approximately 710 bitcoin during the fourth quarter of 2023
• Greenidge reduced its debt by $85.3 million in 2023, representing over 54% of its total debt

Negative

• None.

Insights

Financial Analyst

The preliminary results released by Greenidge Generation Holdings Inc. illustrate a notable turnaround, marking the company's first profitable quarter in two years. The reported net income range of $1.4 million to $2.4 million, coupled with an Adjusted EBITDA of $1.6 million to $2.6 million, signals an operational upswing. Particularly, the earnings per share (EPS) of $0.18 to $0.32 exceeds the typical breakeven point for many firms in the industry, suggesting a robust cost management and revenue generation strategy.

From a financial perspective, the debt reduction of over 54% is a commendable feat, alleviating concerns about the company's leverage and interest burden. This strategic debt management could enhance the company's creditworthiness and potentially lower its cost of capital. However, investors should consider the volatility of Bitcoin prices, which directly impact the company's performance, given its revenue streams from cryptocurrency datacenter operations.

It is also worth noting the balance of cash to debt, with approximately $13.6 million in cash against $68.7 million in debt, which indicates ongoing financial obligations but also reflects a liquidity position that may support operational needs and further debt reduction efforts.

Cryptocurrency Market Analyst

The report highlights Greenidge's cryptocurrency datacenter operations, which produced approximately 710 bitcoins in Q4 2023. The average Bitcoin price during this period was $36,276.79, which is a critical factor in the company's profitability given the current lower price environment. The revenue split between self-mining and hosting—$7.3 million and $10.7 million, respectively—indicates a diversified approach to revenue generation within the crypto sector.

Greenidge's operational capacity of 3.1 EH/s (exahash per second) is a significant metric for investors, as it reflects the company's mining efficiency and potential output. The industry-standard measurement of EH/s is crucial for understanding the competitiveness of mining operations. With the reduction of debt and a focus on expanding into low-cost power centers, Greenidge appears to be strategically positioning itself to capitalize on the increasing interest in Bitcoin and other cryptocurrencies.

However, given the inherent volatility of cryptocurrency markets, the company's future performance remains sensitive to price fluctuations and regulatory developments. Investors should weigh the company's operational strengths against the potential risks associated with the crypto industry.

Energy Sector Analyst

Greenidge's focus on expanding into low-cost power centers is a strategic move that aligns with industry trends towards sustainability and cost efficiency. The energy consumption of cryptocurrency mining operations is a widely discussed topic and Greenidge's ability to lower its operational costs through access to inexpensive power could provide a competitive edge.

The company's EPCM (Engineering, Procurement, Construction and Maintenance) business and AI infrastructure/data centers represent diversification efforts beyond cryptocurrency, which may mitigate risks and stabilize earnings. This diversification is particularly pertinent given the fluctuating nature of cryptocurrency markets.

While the company's financial results are promising, the long-term sustainability of its business model will depend on the evolution of the energy market, regulatory changes and the company's ability to maintain low operational costs while adhering to environmental standards.

Select Results Include Q4 Net Income of $1.4 million to $2.4 million, Adjusted EBITDA of $1.6 million to $2.6 million, and Earnings Per Share of $0.18 to $0.32

Company Reports First Profitable Quarter in Two Years As Ongoing Transformation of Business Continues

Complete Fourth Quarter and Full-Year 2023 Financial Results to be Announced on March 27, 2024

DRESDEN, N.Y.--(BUSINESS WIRE)-- Greenidge Generation Holdings Inc. (NASDAQ: GREE) (“Greenidge”), a vertically integrated cryptocurrency datacenter and power generation company, today announced favorable preliminary financial and operating results for the fourth quarter of 2023.

Preliminary Fourth Quarter 2023 Financial Results¹:

• Revenue of approximately $19.7 million;
• Net income from continuing operations of approximately $1.4 million to $2.4 million;
• Adjusted EBITDA of approximately $1.6 to approximately $2.6 million;
• Earnings per share of $0.18 to $0.32²;
• Cryptocurrency datacenter self-mining revenue of $7.3 million;
• Cryptocurrency datacenter hosting revenue of $10.7 million; and
• Power and capacity revenue of $1.7 million;

Fourth Quarter 2023 Highlights:

Our cryptocurrency datacenter operations produced approximately 710 bitcoin during the fourth quarter of 2023, of which 506 bitcoin were produced for colocation and 203 bitcoin were produced for self-mining. The average closing price of Bitcoin during the fourth quarter of 2023 was $36,276.79.

As of December 31, 2023, Greenidge datacenter operations consisted of approximately 29,700 miners with approximately 3.1 EH/s of combined capacity for both datacenter hosting and cryptocurrency mining, of which 19,000 miners, or 1.9 EH/s, is associated with datacenter hosting and 10,700 miners, or 1.2 EH/s, is associated with Greenidge's cryptocurrency mining.

Greenidge ended the quarter with approximately $13.6 million of cash and approximately $68.7 million of debt. In aggregate, Greenidge reduced its debt by $85.3 million in 2023, representing over 54% of its total debt.

Greenidge CEO Jordan Kovler commented: “We had a strong year on many fronts, including significantly reducing our debt load and making the necessary changes to alter the trajectory of the business, culminating in our first profitable quarter in two years. We continue to work diligently on paths to increasing profitable revenue and reducing debt. While there is more to come, I want to thank our team for the hard work that led to us delivering at least $0.18 in earnings per share and $1.4 million in net income in the fourth quarter, with a lower average Bitcoin price than we see today. We remain relentlessly focused on expanding our reach into low-cost power centers, our growing EPCM business, AI infrastructure/data centers and innovative approaches to embrace increased interest in bitcoin. I am confident that Greenidge’s approach and resources differentiate us from our competitors and positions us well for future growth.”

The preliminary financial information presented in this press release is based on Greenidge’s current expectations and may be adjusted as a result of, among other things, completion of customary annual audit procedures. Management plans to discuss Greenidge’s complete fourth quarter and full-year 2023 financial results after the market closes on March 27, 2024.

Preliminary Financial and Operating Results

The preliminary financial and operating results set forth above for the three months ended December 31, 2023, reflect preliminary estimates with respect to such results based solely on currently available information, which is subject to change. Readers are cautioned not to place undue reliance on such preliminary results which are unaudited and constitute forward-looking statements. Greenidge has not completed its standard closing process, including the completion of all of its controls procedures, which could identify adjustments causing the actual results to be different from the expectations presented in this release. These estimates should not be viewed as a substitute for Greenidge's full quarterly financial statements for the three months ended December 31, 2023, which will be prepared in accordance with U.S. GAAP.

About Greenidge Generation Holdings Inc.

Greenidge Generation Holdings Inc. (NASDAQ: GREE) is a vertically integrated power generation company, focusing on cryptocurrency mining, infrastructure development, engineering, procurement, construction management, operations and maintenance of sites.

Forward-Looking Statements

This press release includes certain statements that may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are forward-looking statements for purposes of federal and state securities laws. These forward-looking statements involve uncertainties that could significantly affect Greenidge’s financial or operating results. These forward-looking statements may be identified by terms such as “anticipate,” “believe,” “continue,” “foresee,” “expect,” “intend,” “plan,” “may,” “will,” “would,” “could,” and “should,” and the negative of these terms or other similar expressions. Forward-looking statements are based on current beliefs and assumptions that are subject to risks and uncertainties and are not guarantees of future performance. Forward-looking statements in this press release include, among other things, statements regarding the business plan, business strategy and operations of Greenidge in the future. In addition, all statements that address operating performance and future performance, events or developments that are expected or anticipated to occur in the future are forward looking statements. Forward-looking statements are subject to a number of risks, uncertainties and assumptions. Matters and factors that could cause actual results to differ materially from those expressed or implied in such forward-looking statements include but are not limited to the matters and factors described in Part I, Item 1A. “Risk Factors” of Greenidge’s Annual Report on Form 10-K for the year ended December 31, 2022 and Quarterly Reports on Form 10-Q for the periods ended March 31, 2023 and June 30, 2023, as well as statements about or relating to or otherwise affected by the completion of management’s final review of the financial results and Greenidge’s other closing procedures. Consequently, all of the forward-looking statements made in this press release are qualified by the information contained under this caption. No assurance can be given that these are all of the factors that could cause actual results to vary materially from the forward-looking statements in this press release. You should not put undue reliance on forward-looking statements. No assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do occur, the actual results, performance, or achievements of Greenidge could differ materially from the results expressed in, or implied by, any forward-looking statements. All forward-looking statements speak only as of the date of this press release and Greenidge does not assume any duty to update or revise any forward-looking statements included in this press release, whether as a result of new information, the occurrence of future events, uncertainties or otherwise, after the date of this press release.

Use of Non-GAAP Information

To provide investors and others with additional information regarding Greenidge’s financial results, Greenidge has disclosed in this press release the non-GAAP operating performance measures of Adjusted EBITDA. Adjusted EBITDA is defined as earnings before interest, taxes and depreciation and amortization, which is then adjusted for stock-based compensation and other special items determined by management, including, but not limited to, business expansion costs, impairments of long-lived assets, gains or losses from the sales of long-lived assets, remeasurement of environmental liabilities, restructuring and loss on extinguishment of debt. These non-GAAP financial measures are a supplement to and not a substitute for or superior to, Greenidge’s results presented in accordance with U.S. GAAP. The non-GAAP financial measures presented by Greenidge may be different from non-GAAP financial measures presented by other companies. Specifically, Greenidge believes the non-GAAP information provides useful measures to investors regarding Greenidge’s financial performance by excluding certain costs and expenses that Greenidge believes are not indicative of its core operating results. The presentation of these non-GAAP financial measures is not meant to be considered in isolation or as a substitute for results or guidance prepared and presented in accordance with U.S. GAAP.

Because of these limitations, EBITDA and Adjusted EBITDA should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. Greenidge compensates for these limitations by relying primarily on its GAAP results and using EBITDA and Adjusted EBITDA on a supplemental basis.

^{__________________________
1} For the three months ended December 31, 2023; Greenidge expected, approximate financial results.
² Based on 7,605,782 weighted average Class A and Class B shares outstanding for the three months ended December 31, 2023. 9,175,329 combined Class A and Class B shares outstanding as of January 29, 2024.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240201427476/en/

Investor Relations

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Media Inquiries

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Source: Greenidge Generation Holdings Inc.

FAQ

What is Greenidge Generation Holdings Inc.'s ticker symbol?

Greenidge Generation Holdings Inc.'s ticker symbol is GREE.

What were the revenue and net income for the fourth quarter of 2023?

The revenue for the fourth quarter of 2023 was approximately $19.7 million, and the net income was approximately $1.4 million to $2.4 million.

What is the CEO's comment on the company's performance in the fourth quarter of 2023?

The CEO expressed confidence in the company's approach and resources, positioning it well for future growth.

How much debt did Greenidge reduce in 2023?

Greenidge reduced its debt by $85.3 million in 2023, representing over 54% of its total debt.

When will Greenidge discuss its complete fourth quarter and full-year 2023 financial results?

Management plans to discuss Greenidge’s complete fourth quarter and full-year 2023 financial results after the market closes on March 27, 2024.