Soluna Holdings Announces September Site Level Financials

Rhea-AI Summary

Soluna Holdings, Inc. (SLNH) released its September financial results, indicating stable BTC production with a minor 3% decrease despite market fluctuations. Key highlights include improved cash contribution margins, which reached 30% in September, and a profitable restructuring of a 10MW hosting agreement, boosting margins to 35%. CEO Michael Toporek noted that steps to enhance liquidity are ongoing as the company prepares for Project Dorothy, potentially doubling their operational capacity. September margins improved even amidst an 11% drop in BTC prices, reflecting resilience in a challenging environment.

Positive

• 30% consolidated cash contribution margins in September.
• Restructured hosting agreement raised margins from (15%) in August to 35% in September.
• Peak hashrate remained above 1EH/s, indicating consistent performance.

Negative

• BTC equivalent mined per day decreased by 3%.
• Average BTC price declined by 11%, which might impact future revenues.

Improved Power Costs and Increased Cash Contribution Margin from Summer Lows; Improved Liquidity to Support Dorothy Energization

ALBANY, N.Y.--(BUSINESS WIRE)-- Soluna Holdings, Inc. (“SHI” or the “Company”), (NASDAQ: SLNH), the parent company of Soluna Computing, Inc. (“SCI”), a developer of green data centers for cryptocurrency mining and other intensive computing, today announced the release of its September site level financials.

Michael Toporek, CEO of Soluna Holdings, stated, “Soluna continues to deliver healthy hashrate and margins despite low BTC prices and energy market volatility. We have taken important steps to improve our near term liquidity as we focus on energizing Project Dorothy, which we expect to double our existing operating footprint.”

Key Summary Highlights:

• Flat BTC Production Despite Volatile Market
  • BTC equivalent mined per day decreased 3% despite average 7-day network hashrate increasing ~15% from the beginning of August to the end of September
  • Peak hashrate remained above 1EH/s
• Cash Contribution Margins Improved from July and August Lows
  • Margins in September improved despite ~11% decline in average BTC price
  • ~30% consolidated cash contribution margins despite low BTC environment and energy costs that remain above historical averages
    • 35% cash contribution prop mining margins slightly offset by weaker hosting margins
• 10MW Hosting Agreement at Marie More Profitable
  • Contract was restructured to be more responsive to energy fluctuations
  • Hosting margins in September were 35% compared to (15%) in August

A presentation and corresponding video are available on the Company’s website here. In connection with the table below, see reconciliation of non-GAAP results of operations to the nearest comparable GAAP measures in the appendix to the presentation available on the Company’s website.

Revenue & Contribution Margin Summary:

*all numbers below exclude legacy hosting
**New hosting contract as of September 2022 passes 100% of power costs on to hosted customer. The effect of this change is to reduce revenues but also to reduce expenses. It lowers risk to Soluna since the risk of increased costs is mitigated. In September 2022, if power expenses had been included in revenues, they would have been $276,000 higher.
($ in 000s, Unaudited)				(Estimate)	(Estimate)	(Estimate)	(Estimate)
	FY 21	Q1 2022	Q2 2022	July 2022	August 2022	September 2022	Q2 2022
Revenue	$13,010	$9,264	$8,676	$2,251	$2,388	$1,734	$6,372
Cash Contribution Margin	$8,888	$5,206	$5,005	$319	$361	$514	$1,194
Annualized Revenue	$13,010	$37,056	$34,704	$27,010	$28,651	$20,809	$25,490
Annualized Contribution Margin	$8,888	$20,824	$20,019	$3,828	$4,327	$6,168	$4,774
Note: Represents non-GAAP financial metrics.

About Soluna Holdings, Inc (SLNH)

Soluna Holdings, Inc. is the leading developer of green data centers that convert excess renewable energy into global computing resources. Soluna builds modular, scalable data centers for computing intensive, batchable applications such as cryptocurrency mining, AI and machine learning. Soluna provides a cost-effective alternative to battery storage or transmission lines. Soluna uses technology and intentional design to solve complex, real-world challenges. Up to 30% of the power of renewable energy projects can go to waste. Soluna’s data centers enable clean electricity asset owners to ‘Sell. Every. Megawatt.’

For more information about Soluna, please visit www.solunacomputing.com or follow us on LinkedIn at linkedin.com/solunaholdings and Twitter @SolunaHoldings.

View source version on businesswire.com: https://www.businesswire.com/news/home/20221027005612/en/

Philip F. Patman, Jr.

Chief Financial Officer

Soluna Holdings, Inc.

ppatman@soluna.io

713 906 5705

MZ Contact

Brian M. Prenoveau, CFA

MZ Group – MZ North America

SLNH@mzgroup.us

561 489 5315

Source: Soluna Holdings, Inc.

FAQ

What were the key financial metrics for Soluna Holdings (SLNH) in September 2022?

In September 2022, Soluna reported 30% cash contribution margins and a 3% decrease in BTC equivalent mined per day.

How did Soluna Holdings improve its cash contribution margin?

Soluna Holdings improved its cash contribution margin to 30% in September through better management of operational costs and a profitable restructuring of a hosting agreement.

What is Project Dorothy for Soluna Holdings (SLNH)?

Project Dorothy aims to double Soluna Holdings' existing operational capacity, enhancing its market presence in cryptocurrency mining.

How did the BTC price affect Soluna Holdings' performance?

Despite an 11% decline in average BTC price, Soluna Holdings improved its cash contribution margins, indicating resilience in challenging market conditions.