Bitfarms Ltd. (Canada) Q2 FY2024 earnings call

• Ben Gagnon highlighted the company's strong team, diversified energy portfolio, and plans for growth. He discussed progress towards 21 EH/s and 21 w/TH, noting temporary equipment delays were addressed and Bitmain is replacing underperforming miners. - Jeff Lucas provided financial details, including revenue, profit, depreciation, and liquidity, stating the company is fully funded for year-end targets and has a strong balance sheet with $195 million total liquidity at the end of Q2. - Ben also discussed opportunities in HPC/AI, geographic expansion in the US, and ongoing fleet upgrades, emphasizing the company's focus on continuous optimization and growth.

Second quarter revenue was $42 million, down 16% quarter-over-quarter but up 17% year-over-year. Mining revenue was $40 million, down from $49 million in the prior quarter. Gross mining profit was $21 million, or 51% of mining revenue, down from $31 million and 64% last quarter and up from 48% in the prior year quarter. The corporate cost of electricity rate for the quarter was 4.3 cents/kWh, an increase from 4.1 cents/kWh in the first quarter. However, due to efficiency improvements, the electricity cost per terahash decreased by 17%, from 3.6 cents per TH per day to 3.0 cents per terahash per day.

• The company remains committed to reaching 21 EH/s and 21 w/TH by year-end 2024. - Focus on growth into 2025 and beyond, including continued diversification of the portfolio (geographic and beyond Bitcoin mining), increasing US exposure, and pursuing miner purchases with strategic structures.

• Temporary equipment delays affected the mid-year target of 12 EH/s. - Market uncertainties related to hash prices. - Legal process with Riot Platforms (unable to comment beyond disclosed info).

Q: Mike Colonnese asked about hash prices and HPC/AI opportunities.

A: Ben discussed hash price trends, stating the company is well-positioned with competitive electricity and fleet upgrades, and noted HPC/AI timelines are at least 12 months away but align with Bitcoin bull market cycles.

Q: Mike Grondahl asked about HPC/AI team recruitment and US expansion.

A: Ben talked about recruiting HPC/AI talent for data center engineering and management, and the company's disciplined approach to increasing US exposure, focusing on long-term economically sustainable growth opportunities.

Q: Fedor Shabalin asked about Sharon site power supply and HPC financing.

A: Ben discussed the flexibility in power supply at the Sharon site with multiple providers and noted HPC/AI infrastructure financing will involve various structures, not relying on ATM or debt specifically for compute hardware.

Q: Martin Toner asked about Sharon site build-out and US opportunities.

A: Ben talked about the quick build-out of the initial 12 MW at Sharon and the company's focus on increasing US exposure, particularly in the PJM region, for its benefits in curtailment and energy trading programs.

Q: Joe Flynn asked about CapEx and strategic alternatives.

A: Jeff discussed remaining CapEx needs for year-end targets and the ending of the strategic alternatives process, with the board determining the standalone plan is the best path for maximizing shareholder value.

Q: Thomas Shinske asked about PJM region and AI/HPC customers.

A: Ben talked about the benefits of the PJM region for HPC/AI and the ideal customers for such infrastructure, aiming for hyperscalers with strong credit profiles.

Q: Martin Toner asked about PJM Reserve auction impact.

A: Ben discussed the PJM Reserve auction's impact on energy trading and grid stabilization opportunities, noting increasing value in the changing energy profile of the region.