Hut 8 (HUT) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue rose 102% year-over-year to $43.7 million, with net income of $0.9 million and Adjusted EBITDA of $5.6 million, reflecting improved operating performance and the impact of the merger with US Bitcoin Corp.

• Major initiatives included a 15 exahash colocation agreement and partnership with BITMAIN, launch of GPU-as-a-Service with over 1,000 NVIDIA H100 GPUs, and a significant ASIC fleet upgrade.

• 234 Bitcoin mined at an average revenue per Bitcoin of $61,025 and cost to mine of $31,482; 9,106 Bitcoin held in reserve valued at $576.5 million.

• Strategic focus on integrating energy and digital infrastructure, with a power-first approach to data center development and expansion into AI and colocation services.

• Completed acquisition of four Ontario natural gas power plants and all-stock merger with US Bitcoin Corp.

Financial highlights

• Revenue doubled year-over-year to $43.7 million, with 26% from digital asset mining, 48% from managed services, and significant contributions from other segments.

• Net income was $0.9 million, reversing a $4.4 million loss in the prior year, aided by a $6.0 million gain on debt extinguishment.

• Adjusted EBITDA was $5.6 million, down from $11.4 million year-over-year, mainly due to higher G&A expenses and digital asset losses.

• Digital asset mining revenue declined to $11.6 million due to the Bitcoin halving and increased network difficulty; managed services revenue rose to $20.8 million, including a $13.5 million termination fee.

• Other segment revenue grew to $7.9 million, largely from power revenues at Ontario natural gas plants.

Outlook and guidance

• Expects continued top-line growth from new colocation and GPU-as-a-Service businesses, with further deployment of next-generation ASIC miners in 2025.

• Initial ASIC fleet upgrade to improve average fleet efficiency by 37% and increase self-mining hashrate by 66% in Q1 2025; BITMAIN partnership could enable up to 24 EH/s self-mining as early as Q2 2025.

• Projected annualized colocation revenue of ~$135 million from BITMAIN agreement.

• Focus remains on AI data center development, colocation opportunities, and expanding energy infrastructure.