LM Funding America (LMFA) Q3 2024 earnings summary

Executive summary

• Strategic shift to vertical integration in Bitcoin mining post-halving, focusing on low-cost, sustainable power, operational efficiency, and expansion potential.

• Operates in two segments: cryptocurrency mining and specialty finance, with mining as the primary revenue driver.

• Net loss attributable to common shareholders was $6.4 million for Q3 2024, impacted by $1.7 million in deemed dividends from warrant repricing and $1.2 million impairment on mining equipment.

• Raised $2.3 million in equity and $6.4 million in new debt during the period to support liquidity.

• Appointed Ryan Duran as president of US Digital Mining and Hosting Co LLC to drive strategic direction.

Financial highlights

• Q3 2024 revenue was $1.3 million, down from $3.4 million in Q3 2023, mainly due to the April Bitcoin halving and miner repositioning.

• Digital mining revenue for Q3 2024 was $1.1 million, with 18.5 Bitcoins mined at an average price of $60,870.

• Net loss for Q3 2024 was $4.8 million, with a core EBITDA loss of $1.6 million; positive $0.6 million Core EBITDA for the first nine months of 2024.

• Cash and Bitcoin holdings totaled approximately $14.9 million at quarter-end, with 142.3 Bitcoins valued at $12.4 million as of September 30, 2024.

• Operating expenses decreased to $5.6 million from $6.6 million year-over-year, mainly due to lower digital mining costs.

Outlook and guidance

• Expects to redeploy 2,200 miners in Oklahoma by year-end or early January, reaching full 15 MW site capacity.

• Monitoring Texas site expansion (potential 60 MW), with decision expected by year-end; if not pursued, Oklahoma or other sites will be prioritized.

• Management anticipates negative operating cash flows as it works to scale digital mining revenue and maintain operational efficiencies.

• Confident in Bitcoin's upward trajectory, projecting price above $100,000 in 2025.

• No substantial doubt about ability to continue as a going concern, with sufficient liquidity and access to capital.