Bit Digital (BTBT) 2024 Annual Gateway Conference summary

Business overview and strategic direction

• Focus shifting from Bitcoin mining to high-performance computing (HPC), which began at the end of 2023 and is now the main business priority.

• Mining operations are geographically diversified across the U.S., Canada, and Iceland, with HPC currently based in Iceland.

• Sustainability remains a value, though carbon-free mining has decreased from 99% to 86% due to industry economics.

• Mining economics have deteriorated post-halving, making new investments unattractive; all near-term growth CapEx is directed to HPC.

• Strategic decision to walk back mining fleet expansion, focusing instead on efficiency and higher-return HPC investments.

Financial performance and contracts

• HPC business has $92 million in contracted ARR, with $275 million over three years; $50 million is active, $42 million pending upgrade for new NVIDIA chips.

• Second quarter revenue rose 220%, driven by HPC's first full quarter, contributing $12.5 million at 63% gross margin.

• Total liquidity as of August 31 is about $215 million, with $110 million in cash, representing over half of the market cap.

• No debt currently, but open to financing for HPC growth or infrastructure, not for mining.

• Adjusted enterprise value is about $200 million, with over $50 million in contracted EBITDA.

HPC business model and growth

• HPC operates as GPU-as-a-service, offering highly customized solutions for clients in AI and non-AI sectors.

• First HPC customer is under NDA; second is Boosteroid, a major cloud gaming company, with a potential $700 million contract over five years.

• Boosteroid contract expected to ramp up in 2025 as new AMD chips become available, with 30% deployment in 2025 and linear growth through 2027.

• Margins for HPC are significantly higher than mining (63% vs. 37%), with much greater revenue per megawatt.

• Plans to own a Tier 3 data center to expand offerings, enable on-demand computing, and capture more value from hardware post-contract.