NEW
YORK, Nov. 14, 2023 /PRNewswire/ -- Bit
Digital, Inc. (Nasdaq: BTBT) (the "Company"), a sustainable digital
infrastructure platform for digital assets and artificial
intelligence ("AI") headquartered in New
York City, today announced its unaudited financial results
for the Third Quarter ended September 30,
2023.
Financial Highlights for the Third Quarter
2023
- Total revenue was $11.6 million
for the Third Quarter of 2023. The majority of revenue was earned
from our bitcoin mining business.
- The Company had cash, cash equivalents and restricted cash of
$22.1 million, and total liquidity
(defined as cash equivalents and restricted cash, USDC, and the
fair market value of digital assets) of approximately $72.9 million, as of September 30, 2023.
- Total assets were $108.7 million
as of September 30, 2023.
Shareholders' equity amounted to $103.3
million as of September 30,
2023.
- Adjusted EBITDA[1] was $(2.9)
million for the three-month period ended September 30, 2023.
- Adjusted earnings (loss) per share[2] was
$(0.03) for the three-month period
ended September 30, 2023.
Operational Highlights for the Third Quarter 2023
- The Company earned 403.1 bitcoins during the quarter, a 27%
increase from the prior quarter. Growth was primarily driven by a
higher active hash rate and partially offset by an increase in
network difficulty.
- The Company paid approximately $0.060 per kilowatt hour to its hosting partners
for electricity consumed during the quarter.
- The average fleet efficiency for the active fleet was
approximately 29.2 J/TH during the third quarter.
- For the three months ended September 30,
2023, we earned 115.2 ETH in native staking and
24.1 ETH in liquid staking, respectively.
- Treasury holdings of BTC and ETH were 820.8 and
13,783.4, with a fair market value of approximately $22.1 million and $23.0
million on September 30, 2023,
respectively.
- The BTC equivalent[3] of our digital asset
holdings as of September 30, 2023
(defined as if all ETH, sETH-H, LsETH, and USDC
holdings were converted into BTC as of that date) was approximately
1,881.3 BTC, or approximately $50.7
million.
- As of September 30, 2023, the
Company had 46,852 bitcoin miners owned or operating
(in Iceland) and 730
ETH miners, with an estimated maximum total hash rate
of 3.7 EH/s and 0.3 TH/s, respectively.
- The Company's active hash rate of its bitcoin
mining fleet was approximately 1.19 EH/s as of September 30, 2023. Approximately 600 PH/s of
miners went offline due to a power utility mandated maintenance
outage began on September 26, 2023.
Additionally, approximately 250 PH/s of miners went offline towards
the end of the month following the conclusion of a hosting contract
at one facility. The Company has relocated those miners to
alternative hosting sites.
- Approximately 99% of our fleet's run-rate electricity
consumption was generated from carbon-free energy sources as of
September 30, 2023. These figures are
based on data provided by our hosts, publicly available sources,
and internal estimates, demonstrating our commitment to sustainable
practices in the digital asset mining industry.
- The Company had approximately 13,594 ETH actively
staked in native and liquid staking protocols as of September 30, 2023. Approximately 11,200 were
natively staked and 2,394 ETH were deployed in liquid
staking protocols as of that date.
- As of September 2023, the Company
had 113.4 BTC collateralized with Auros to support yield
optimization strategies which Auros is undertaking on the Company's
behalf. The collateralized BTC was returned to the Company in
mid-October 2023.
Subsequent Events
- In October 2023, the Company
announced the launch of Bit Digital AI, a new business line that
will provide specialized infrastructure to support generative
artificial intelligence ("AI") workstreams. The Company has
commenced Bit Digital AI operations by signing a binding term sheet
with a customer to support their GPU-accelerated workloads. Under
the agreement, Bit Digital will provide the customer with rental
services for a minimum of 1,024 GPUs and a maximum of 4,096 GPUs.
The total number of GPUs, contract length, and corresponding unit
pricing will be determined upon signing the master service
agreement. Concurrently, Bit Digital has agreed to purchase 1,056
NVIDIA HGX H100 GPUs and has funded the initial deposit for the
purchase order. However, the Company opted to cancel this order in
view of regulatory issues and successfully received a refund for
the majority of the deposit in early November. In a strategic move,
the Company has since secured an alternative arrangement to acquire
1,504 NVIDIA HGX H100 GPUs along with the necessary equipment. The
GPUs are expected to be delivered to the Company by the end of 2023
and will be deployed at a Tier-3 data center.
- In October 2023, Bit Digital
finalized an agreement with Soluna Computing, Inc ("Soluna") for
4.4 megawatts of incremental hosting capacity at Project Sophie in
Kentucky to power its miners for
an initial contract term of twelve months.
- In November 2023, Bit Digital
finalized an agreement with Dory Creek, a subsidiary of Bitdeer
Technologies Group, for 17.5 megawatts ("MW") of incremental
hosting capacity to power its miners at a location in Texas. The initial term of the contract is one
year, which shall be automatically renewed for another one year
unless otherwise notified by the parties. Additionally, Bit Digital
will have the first right for up to an additional 17.5 MW of
capacity that may be brought online by the operator. Bit Digital
will fill the capacity with miners from its existing fleet and with
new miner purchases. Approximately 900 S19j Pro units from the
Company's existing fleet have already been delivered to the
facility and are actively hashing. The Company has purchased
approximately 3,600 S19k Pro mining units that are expected to be
delivered to the facility by late-November
2023. The remaining capacity will be filled with future
miner purchase orders.
Management Commentary
"Total revenue increased by 28% sequentially during the third
quarter of 2023, primarily driven by a 27% sequential increase in
bitcoin production. Growth was enabled by an increase
in active hash rate, with our ongoing miner deployment program
leading us to achieving the milestone of an active hash rate above
2.0EH/s during the quarter for the first time in Company history.
Our margins compressed during the quarter primarily due to a
seasonal spike in electricity costs, which affected certain
variable-rate contracts at hosting facilities in the U.S. We ended
our contract with one hosting provider at the end of Q3. In
October 2023, we expanded operations
by adding new hosting locations in Kentucky and Texas, enhancing our geographic
diversification domestically and reducing our exposure to seasonal
trends in a single state. We will continue to look to execute the
most cost-efficient hosting agreements as we scale our
operations.
We anticipate material growth in active hash rate through the
duration of 2023, though we now expect that our 3.5 EH/s target
will be achieved during the first quarter of 2024. The extended
timeline primarily results from our decision to stagger the timing
of capital outlays, as we earmarked capital to be deployed to the
launch of our new Bit Digital AI business in October 2023. Additionally, our growth cadence is
contingent on our evaluation of new generation miners and the
corresponding timeline for procuring and deploying those units. Our
average fleet efficiency was approximately 29.2 J/Th for Q3 2023,
and our objective is to materially improve the metric in
preparation for the 'halving' scheduled for 2024.
Revenue from our ETH staking business nearly
doubled once again during the quarter, growing 95% sequentially
during Q3. We remain constructive on the long-term prospects for
the Ethereum network and intend for this business to
be a more material driver of long-term revenue. We continue to
believe that our Bit Digital Flywheel model whereby
ETH staking rewards can create a self-funding
mechanism for our bitcoin mining operations is an
effective treasury management strategy.
Subsequent to quarter-end we announced the launch of Bit Digital
AI, a new business line that will provide specialized
infrastructure to support generative artificial intelligence ("AI")
workstreams. This represents an expansion from our core business
into an industry with robust demand and growth expectations.
Importantly, we were able to secure an anchor customer for this
business without devoting incremental resources towards customer
acquisition. This business line aims to provide a non-correlated
income stream that will help the Company weather potential
downturns in its core bitcoin mining and
ETH staking businesses and is intended to enable the
Company to be more financially flexible through the 2024 "halving".
Revenue for the initial contract is expected to commence in
January 2024, and we are confident
that we can materially scale the business with the necessary
financial resources."
About Bit Digital
Bit Digital, Inc. is a sustainable digital infrastructure
platform for digital assets and artificial intelligence ("AI")
headquartered in New York City.
Our bitcoin mining operations are located in the US,
Canada, and Iceland. The Company has also established a
business line, Bit Digital AI, that offers specialized
cloud-infrastructure services for artificial intelligence
applications. For additional information, please contact
ir@bit-digital.com or visit our website
at www.bit-digital.com.
Investor Notice
Investing in our securities involves a high degree of risk.
Before making an investment decision, you should carefully consider
the risks, uncertainties and forward-looking statements described
under "Risk Factors" in Item 3.D of our Annual Report on Form 20-F
for the fiscal year ended December 31,
2022. If any material risk was to occur, our business,
financial condition or results of operations would likely suffer.
In that event, the value of our securities could decline and you
could lose part or all of your investment. The risks and
uncertainties we describe are not the only ones facing us.
Additional risks not presently known to us or that we currently
deem immaterial may also impair our business operations. In
addition, our past financial performance may not be a reliable
indicator of future performance, and historical trends should not
be used to anticipate results in the future. Future changes in the
network-wide mining difficulty rate or bitcoin hash
rate may also materially affect the future performance of Bit
Digital's production of bitcoin. Actual operating
results will vary depending on many factors including network
difficulty rate, total hash rate of the network, the operations of
our facilities, the status of our miners, and other factors. See
"Safe Harbor Statement" below.
Safe Harbor Statement
This press release may contain certain "forward-looking
statements" relating to the business of Bit Digital, Inc., and its
subsidiary companies. All statements, other than statements of
historical fact included herein are "forward-looking statements."
These forward-looking statements are often identified by the use of
forward-looking terminology such as "believes," "expects," or
similar expressions, involving known and unknown risks and
uncertainties. Although the Company believes that the expectations
reflected in these forward-looking statements are reasonable, they
do involve assumptions, risks and uncertainties, and these
expectations may prove to be incorrect. Investors should not place
undue reliance on these forward-looking statements, which speak
only as of the date of this press release. The Company's actual
results could differ materially from those anticipated in these
forward-looking statements as a result of a variety of factors,
including those discussed in the Company's periodic reports that
are filed with the Securities and Exchange Commission and available
on its website at http://www.sec.gov. All forward-looking
statements attributable to the Company or persons acting on its
behalf are expressly qualified in their entirety by these factors.
Other than as required under the securities laws, the Company does
not assume a duty to update these forward-looking statements.
[1] Adjusted EBITDA
refers to earnings before interest expense, income tax expense and
depreciation expense ("EBITDA") adjusted to eliminate the effects
of certain non-cash and / or non-recurring items.
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[2] Adjusted EPS
is a financial measure defined as our EBITDA divided by our diluted
weighted-average shares outstanding, adjusted with the EPS impact
related to the adjustments made to EBITDA to derive Adjusted
EBITDA.
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[3] "BTC
equivalent" is a hypothetical illustration of the value of our
digital asset portfolio in bitcoin terms. BTC equivalent is defined
as if all non-BTC digital assets, comprised of ETH, sETH-H, LsETH,
and USDC, were converted into BTC as of September 30, 2023, and
added to our existing BTC balance. Conversion values are found
using the closing price on coinmarketcap.com.
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SOURCE Bit Digital, Inc.