Release Date: August 15, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Gryphon Digital Mining Inc (GRYP, Financial) achieved a 20% increase in quarterly average hashrate, reaching 899 terahashes per second in Q2 2024.
- The company set a new peak in energy efficiency, achieving 28.5 joules per terahash in June 2024.
- Gryphon's self-mining hashrate reached approximately 0.94 exahash per second due to the Q2 miner upgrade program.
- The company was selected to join the Russell Microcap Index, reflecting significant progress in capital markets.
- Gryphon Digital Mining Inc (GRYP) mined approximately 84 Bitcoin, generating $5.5 million in mining revenues in Q2 2024, up from $4.9 million in the same period the previous year.
Negative Points
- The company reported a net loss of $4 million in Q2 2024, compared to a net loss of $2.6 million in Q2 2023.
- Adjusted EBITDA stood at approximately negative $3 million for Q2 2024, largely due to higher marketing expenses.
- Breakeven costs increased to approximately $45,452 in Q2 2024 from $34,063 in Q1 2024, reflecting the halving event and increased global hashrate.
- The company's balance sheet reported a decrease in Bitcoin holdings from $2.1 million in December 2023 to $1 million in June 2024.
- The CFO, Sim Salzman, announced his decision to step down, which could lead to transitional challenges.
Q & A Highlights
Q: Can you give us some background on the power draw at your hosting facility and your plans for fleet upgrades?
A: Currently, we're drawing approximately 20 megawatts from our hydro-powered facility in upstate New York. We have an understanding to take more space as it becomes available. We started at around 23 megawatts and now it's 28 megawatts. We are also looking outside this location for additional power to grow. Regarding fleet upgrades, we aim to be opportunistic and upgrade machines when good pricing is available, while also saving capital for new acquisitions.
Q: Are there any outstanding orders for machines?
A: As of what we've noted to the market, there are no outstanding orders for machines.
Q: Can you provide a ballpark figure for general and administrative expenses for the rest of the year?
A: Our normal expenditures are around $2.2 million cash out per month. The increase in expenses for the three and six months ended June 30 was due to advertising and marketing expenses, which we consider one-time costs. We expect to return to our normal expenditure levels moving forward.
Q: Can you give more details on the 25 acquisition opportunities you reviewed and what you're specifically looking for?
A: Many opportunities had higher cost structures, such as $0.07 to $0.08 per kilowatt hour, which is not viable. Some hosted operations had expiring contracts, making them less attractive. We are now focusing more on acquiring low-cost power, ideally $0.04 or lower, to ensure long-term success.
Q: What geographies are you considering for acquisitions?
A: We remain open-minded and consider politically safe locations, but most opportunities are in North America.
Q: How do you approach getting distressed private companies to agree to fair valuations?
A: Many companies believe they are worth more than they are, often using inflated valuations. We believe more pain needs to occur for them to realize their true value. The bigger issue is whether the investment is worthy in the first place, which often stops us from proceeding further.
Q: Given your low-cost operations, do you think the current market will expedite deals?
A: Yes, our low-cost operations make us relatively more efficient, especially in weaker Bitcoin pricing environments. This should help expedite deals as other companies lower their asks for potential combinations or deals.
Q: Are you still actively engaged with some of the 25 acquisition opportunities you reviewed?
A: Yes, we are still actively engaged with several attractive opportunities and look forward to potentially making announcements soon.
Q: If you were to swap out all your machines for the latest models, what would that do to your hashrate?
A: It would depend on the machines used, but we would expect at least a 30% improvement, possibly more. However, our preference is to use capital for new acquisitions rather than upgrades.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
