Greenidge Generation Reports Financial and Operating Results for the Fourth Quarter and Full Year 2023
- Greenidge reported total revenue of $19.6 million in Q4 2023, surpassing guidance expectations.
- Net income from continuing operations was $2.7 million, exceeding the guidance range of $1.4 million to $2.4 million.
- Adjusted EBITDA stood at $3.6 million, above the guidance range of $1.6 million to $2.6 million.
- Earnings per share reached $0.36, surpassing the guidance range of $0.18 to $0.32.
- Debt was reduced by 54% to $72 million from $157.3 million in full year 2023.
- Greenidge diversified its revenue stream through hosting arrangements and announced a partnership with Infinite Reality, Inc. for AI and HPC datacenter space.
- The company saw a GAAP net loss of $29.0 million in 2023, including noncash impairment charges and remeasurement of environmental liabilities.
- Adjusted EBITDA for the full year was $153,000.
- Greenidge ended Q4 2023 with $13.3 million in cash and $68.7 million in debt at book value.
- In 2023, Greenidge produced 2,938 bitcoin, with 891 from owned miners and 2,047 through datacenter hosting.
- Significant expansions in power capacity and strategic investments were made in the first quarter of 2024.
- None.
Insights
The recent financial disclosure by Greenidge Generation Holdings Inc. presents a favorable snapshot of the company's performance in the fourth quarter of 2023. The reported net income and adjusted EBITDA surpassing the projected guidance suggest operational efficiency and effective cost management. This performance is particularly noteworthy given the volatile nature of the cryptocurrency market, which has faced significant price fluctuations and regulatory scrutiny. Investors may interpret the reduction of debt by over half as a strong indicator of the company's commitment to fiscal responsibility and its potential to improve creditworthiness.
Furthermore, the diversification of revenue streams and the strategic partnership with Infinite Reality, Inc. indicate a forward-looking approach to business growth. The expansion into AI and HPC datacenter spaces could provide a hedge against the risks associated with cryptocurrency dependency. The company's proactive measures in reducing SG&A costs while restructuring the executive team signal a leaner, potentially more agile management structure.
However, the GAAP net loss, inclusive of noncash impairment charges and environmental liabilities, raises questions about the sustainability of current profitability levels. It is essential for stakeholders to consider the long-term implications of these non-operating expenses and their potential recurrence. The development of new datacenter sites and the ongoing business transformation, supported by external investment, suggest a strategic pivot that may redefine the company's market position and investor expectations.
Greenidge's expansion into low-cost power capacity and the deployment of additional miners align with industry trends where operational scale and energy efficiency are critical to profitability in the cryptocurrency mining sector. The company's investment in GPU datacenter pilot programs and the development of specialized offerings such as EPCM, O&M and GREE Pod, indicate an attempt to diversify its service portfolio, which could appeal to a broader client base beyond cryptocurrency.
The strategic location choices for datacenter development, including South Carolina and Mississippi, reflect a targeted approach to leverage regional energy markets. This geographical expansion is a smart move, potentially reducing operational risks associated with single-site dependency and tapping into new markets. The company's focus on optimizing SG&A structures is in line with industry best practices aimed at streamlining operations and maximizing profitability.
However, the cryptocurrency market remains highly unpredictable and the company's significant reliance on this sector could pose risks to investors. The long-term success of Greenidge's business model will likely depend on the sustained performance of its diversification strategy and its ability to navigate the regulatory and market challenges inherent in the cryptocurrency and datacenter industries.
The production of 2,938 bitcoin in the full year of 2023 by Greenidge is a clear demonstration of the company's mining capabilities. The distinction between Greenidge-owned miner production and datacenter hosting production provides insight into the company's operational model, which benefits from both ownership and service provision in the cryptocurrency mining ecosystem.
The company's strategic decision to deploy idle miners and increase access to low-cost power is a response to one of the primary challenges in the industry: the high cost of electricity. By focusing on low-cost power capacity, Greenidge is positioning itself to maintain competitive operational costs, which is important in an industry where the profitability of mining activities is highly sensitive to power prices.
Investors should be aware of the potential impact of cryptocurrency market volatility on Greenidge's performance. While the reported earnings and adjusted EBITDA are positive, the broader market conditions, including Bitcoin price fluctuations and changes in network difficulty, can significantly influence future earnings potential. Additionally, the company's ability to continue reducing its debt while expanding its operations will be an important factor to monitor.
Results Include Q4 Net Income of
Ongoing Transformation and Growth of Business Continues with Recent Expansion
Fourth Quarter 2023 Financial Results:
-
Total revenue of
$19.6 million -
Net income from continuing operations of
$2.7 million $1.4 million $2.4 million -
Adjusted EBITDA of
$3.6 million $1.6 million $2.6 million -
Earnings per share of
$0.36 $0.18 $0.32 -
Cryptocurrency datacenter self-mining revenue of
$7.2 million -
Cryptocurrency datacenter hosting revenue of
$10.7 million -
Power and capacity revenue of
$1.7 million
Full Year 2023 Financial Results & Highlights:
-
Total revenue of
$70.4 million -
Debt reduced by
54% to$72 million $157.3 million - Diversified revenue stream through hosting arrangements;
- Partnership announced with Infinite Reality, Inc. to enter AI and HPC datacenter space;
-
GAAP net loss from continuing operations of
$29.0 million $4.0 million $2.4 million -
Adjusted EBITDA of
$153,000 - Restructured executive team and reduced going-forward SG&A costs.
Recent First Quarter 2024 Highlights:
-
Significant expansion of power capacity, with the addition of 100 MW of low-cost power capacity:
-
Secured access to 60 MW in
South Carolina for development of datacenter; -
Acquired site in
Mississippi with 32.5 MW of mining capacity; -
Leased site in
North Dakota with 7.5 MW of mining capacity;
-
Secured access to 60 MW in
-
$6 million - Ongoing deployment of 2,700 miners that were idle in Q4 2023;
- Continued to optimize SG&A structure;
- Development of GPU datacenter pilot program;
- Development of EPCM, O&M and GREE Pod offerings; and
- Evaluation of future sites with significant low-cost power capacity.
Greenidge ended the fourth quarter with
Greenidge CEO Jordan Kovler commented: “The strong progress we made throughout 2023 has helped us to better position Greenidge for the future. After significantly reducing both our debt load and future SG&A expenses, we focused our efforts this quarter on the prudent deployment of idle miners as well as on increasing our access to low-cost power for datacenter development and bitcoin hosting and self-mining. Our team’s collective efforts enabled us to deliver
Greenidge will be presenting at the Planet MicroCap Showcase: Vegas 2024 on May 1, 2024 at 4:00pm PST and will file an updated investor presentation in advance of the event. In lieu of a conference call, Greenidge CEO Jordan Kovler will be answering questions at the conclusion of the presentation and holding 1x1 investor meetings. To attend and access the live presentation, please visit https://www.webcaster4.com/Webcast/Page/3026/50312.
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 and its other filings with the Securities and Exchange Commission. 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
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.
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Investors
Nick Ratti
315-536-2359
nratti@greenidge.com
investorrelations@greenidge.com
Media
Longacre Square Partners
Charlotte Kiaie / Kate Sylvester
646-386-0091
greenidge@longacresquare.com
Source: Greenidge Generation Holdings Inc.
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