On August 13, 2024, Hut 8 Corp (HUT, Financial) released its 8-K filing detailing the financial results for the second quarter of 2024. Hut 8 Corp is a leading Bitcoin miner and energy infrastructure operator with a diversified portfolio that includes Digital Assets Mining, Managed Services, High Performance Computing - Colocation and Cloud, and Other segments.
Performance and Challenges
Hut 8 Corp reported a significant increase in revenue for Q2 2024, reaching $35.2 million, a 72% rise from $20.5 million in the same period last year. This growth was driven by a diversified revenue stream, including $13.9 million from Digital Assets Mining, $9.0 million from Managed Services, $3.4 million from High Performance Computing – Colocation and Cloud, and $8.9 million from Other services.
Despite the revenue growth, the company faced challenges, including a substantial increase in the cost to mine a Bitcoin, which rose to $26,232 from $11,321 in the prior year. This increase in costs, coupled with a decrease in the number of Bitcoins mined (279 compared to 740 in Q2 2023), highlights the operational difficulties faced by the company.
Financial Achievements
Hut 8 Corp's gross margins in the Digital Assets Mining segment improved to 46% from 34% in the prior year period, reflecting the company's successful restructuring and optimization initiatives. The company also reported a 21% reduction in energy costs per kilowatt-hour, from $0.040 in Q1 2024 to $0.032 in Q2 2024, due to the energization of Salt Creek and advancements in ASIC efficiencies.
Additionally, Hut 8 Corp closed a $150 million strategic investment from Coatue to partner in building AI infrastructure, further strengthening its financial position and operational capabilities.
Income Statement and Key Metrics
Revenue for the three months ended June 30, 2024, increased by 72% to $35.2 million from $20.5 million in the prior year period. The cost of revenue exclusive of depreciation and amortization was $20.6 million, up from $12.0 million in the prior year period. Depreciation and amortization expenses also saw a significant increase, reaching $11.5 million compared to $4.1 million in the prior year period.
General and administrative expenses rose to $17.9 million from $5.2 million in the prior year period, driven by increased stock-based compensation, salary and benefit costs, and other expenses related to being a publicly listed entity.
Net loss attributable to Hut 8 for the three months ended June 30, 2024, was $71.9 million, compared to a loss of $1.7 million in the prior year period. This loss was primarily due to the decrease in Bitcoin prices during the quarter, resulting in a $71.8 million loss on digital assets.
Operational Insights and Future Outlook
Hut 8 Corp's CEO, Asher Genoot, commented on the company's performance:
“Our results this quarter reflect the ambitious restructuring program we set in motion six months ago. Despite the network halving, gross margins in our Digital Assets Mining segment rose to 46% for the three months ended June 30, 2024 from 34% in the prior year period. Restructuring and optimization initiatives, together with the energization of Salt Creek, enabled a 21% reduction in our energy cost per kilowatt-hour from $0.040 in Q1 2024 to $0.032 in Q2 2024.”
Hut 8 Corp continues to focus on scaling its power footprint and enhancing its energy infrastructure. The company announced a new site in the Texas Panhandle with 205 megawatts of immediately available, low-cost, long-term power, which is expected to support future growth and operational efficiency.
For more detailed insights and the full earnings report, visit the 8-K filing.
Explore the complete 8-K earnings release (here) from Hut 8 Corp for further details.
