Release Date: August 13, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- HIVE Digital Technologies Ltd (HIVE, Financial) reported a significant increase in revenue, reaching $32.2 million for the quarter, driven by a production of 449 BTC equivalent mined.
- The company maintains a strong balance sheet with $25.6 million in cash and $153.9 million in digital currencies, primarily Bitcoin.
- HIVE is expanding its operations with plans to build a 100 megawatt hydroelectric data center in Paraguay, aiming to double its revenue and increase its hashrate.
- The company has achieved a milestone of $10 million in annualized run rate revenue from its AI business, with a target of $20 million for the second half of the year.
- HIVE continues to operate with a low G&A per Bitcoin margin, maintaining profitability even in a challenging post-halving environment.
Negative Points
- The company faces significant volatility in Bitcoin prices, which impacts its daily operations and financial performance.
- HIVE's revenue decreased compared to the previous quarter, primarily due to the Bitcoin halving event, which reduced the number of Bitcoins mined.
- The expansion into Paraguay requires substantial capital investment, which could strain financial resources if not managed carefully.
- The company operates in a highly competitive and rapidly evolving industry, which requires constant technological upgrades and efficiency improvements.
- HIVE's stock is trading at a discount compared to its peers, which may reflect market skepticism or undervaluation of its business model.
Q & A Highlights
Q: Which site will HIVE be converting to HPC from Bitcoin mining, and what will be the strategy for the 20 megawatts? Will you purchase and deploy your own GPUs or focus on a co-location model?
A: Aydin Kilic, President and CEO, explained that the sites in New Brunswick and Boden will be converted. These facilities are already data centers, with Boden previously being a GPU mining facility. The strategy involves a hybrid approach, using both self-owned GPUs and a co-location model, considering the high CapEx involved in populating with GPUs.
Q: How should we think about the cadence of deployment for the new 100 megawatt data center in Paraguay?
A: Aydin Kilic stated that the first six months will focus on high voltage and substation work, with capacity expected to come online in the second half of 2025. The project is attractive due to low build-out costs, low power costs, and green energy availability.
Q: What are HIVE's top three priorities for the second half of calendar 2024?
A: Aydin Kilic highlighted the goals of achieving $20 million in annualized AI revenue, starting construction in Paraguay, and converting 30 megawatts into 20 megawatts of HPC. These projects are expected to be underway by the end of the year.
Q: How is HIVE assessing the sustainability of market compute prices for GPU hardware over the next 12 to 24 months?
A: Aydin Kilic noted that while GPU prices do decline over time, they do so at a slower rate than Bitcoin mining ASICs. HIVE focuses on maintaining high uptime and good user experience to secure long-term contracts, with current rates for H100s around $2.50 per hour.
Q: What is HIVE's outlook for the Bitcoin mining landscape, and how does it influence the decision to scale operations in Paraguay?
A: Aydin Kilic emphasized using cash flow to grow the business while adhering to a green energy mandate. Paraguay was chosen for its low build-out costs, attractive electricity rates, and green energy availability, making it an accretive use of capital.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
