Release Date: August 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Bitfarms Ltd (BITF, Financial) has a strong balance sheet with $195 million in total liquidity at the end of Q2 2024.
- The company achieved a 70% increase in hashrate from Q1 2024, with further growth expected in the second half of the year.
- Bitfarms Ltd (BITF) is on track to deliver record hashrate growth and efficiency improvements in 2024.
- The company has a diversified energy portfolio, which de-risks its operations and supports its growth strategy.
- Bitfarms Ltd (BITF) is exploring new business opportunities in HPC/AI, which could provide high-margin revenue streams not correlated to Bitcoin prices.
Negative Points
- Second quarter revenue of $42 million was down 16% quarter-over-quarter, primarily due to the decrease in block rewards following the April halving.
- The company reported an operating loss of $24 million in Q2 2024, largely unchanged from the first quarter.
- General and administrative expenses increased by $3 million due to unusual costs associated with strategic alternatives review and other legal matters.
- The company experienced temporary delays in hitting its mid-year target of 12 EH/s due to equipment delays and underperforming miners.
- Bitfarms Ltd (BITF) faces challenges in integrating HPC/AI opportunities, requiring recruitment of specialized talent and significant capital investment.
Q & A Highlights
Q: Ben, what are your views on hash prices, which recently hit all-time lows? Do you think we've reached the bottom, and how does the current market environment influence your decision on non-mining opportunities?
A: Benjamin Gagnon, CEO: The pullback in Bitcoin price affects hash price, but our operations remain cash flow positive due to our competitive electricity costs and efficient fleet. The market is responding to low hash prices by turning off miners or underclocking them. We believe our growth and hash price will be justified long-term. Regarding non-mining opportunities like HPC/AI, we see potential but plan to integrate these streams in about 12 months, aligning with the expected Bitcoin bull market cycle.
Q: What pieces do you need to execute on the HPC/AI strategy, and have you had discussions with hyperscalers?
A: Benjamin Gagnon, CEO: We excel in building electrical infrastructure but need to bolster our expertise in HPC/AI data centers, which differ from Bitcoin data centers. We are recruiting talent for data center engineering and management. We've had discussions with hyperscalers and third parties, and we aim to integrate these opportunities by late 2025 or early 2026.
Q: Regarding the 120 megawatts in Pennsylvania, do you have a goal for additional megawatts in the US for 2025?
A: Benjamin Gagnon, CEO: We aim to rebalance our energy portfolio with more US exposure, focusing on economically sustainable opportunities. We don't target a specific megawatt number but seek competitive energy profiles suitable for multiple applications.
Q: Can you provide details on the power supply for the Sharon site in Pennsylvania, given the recent PJM auction results?
A: Benjamin Gagnon, CEO: We haven't locked in a power provider yet, but the reduction of thermal assets and increase in renewables in PJM offers energy trading opportunities. The capacity auction reflects the value of reliable base loads, and we are exploring options to maximize these opportunities.
Q: What is your plan for financing the capital-intensive HPC/AI segment?
A: Benjamin Gagnon, CEO: We are focused on developing and operating energy infrastructure, not purchasing HPC/AI compute. There are numerous financing opportunities available, and we are exploring various structures to support these projects.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
