CLEANSPARK, INC. Q3 FY2024 earnings call

• Upgraded external audit firm to BDO. - Agreed to acquire up to an additional 22.8 exahash per second of S21 XP series immersion-cooled miners. - Achieved 20 exahash per second operational hash rate by midyear and 22.3 exahash per second as of last night. - Expanded infrastructure to operate over a dozen unique sites in 4 states. - Fleet efficiency improved to 22.3 joules per terahash from 28.4 joules per terahash at the start of the fiscal year. - Plan to remove units less efficient than 22 joules per terahash to maintain efficiency and maximize resell value. - Confidence in executing plans to reach 32 exahash per second by year-end and expand to 50 exahash per second in 2025.

In the third quarter, CleanSpark achieved total revenue of $104 million, which is a 129% increase over the prior year's fiscal third quarter. Gross profit was approximately $59 million, a $34 million or 137% increase over last year. However, a net loss of approximately $236 million was recognized, driven by non-cash items such as the change in fair value of Bitcoin and an impairment charge related to fleet upgrades. The revenue contribution isn't broken down by product segments as the focus is on overall mining operations.

• On track to meet and exceed 32 exahash per second by year-end. - Pursuing M&A opportunities and greenfield/brownfield construction for 2025 and beyond. - City of Sandersville expects to provide final 50 megawatts of power in September, adding to infrastructure. - Target to reach 200 megawatts in Tennessee by 2025 and several hundred megawatts in Wyoming in coming years.

• Market volatility affecting Bitcoin price and mining revenue. - Regulatory risks at state and local levels impacting power contracts. - Dependencies on timely execution of M&A and infrastructure expansion plans.

Q: Provide an update on the GRIID acquisition. What needs to happen to finalize the transaction and do you still expect to close the deal this quarter?

A: The S4 filing needs to go through SEC review. We'd love to close this quarter but it depends on SEC timeline.

Q: What is the thinking behind the Coinbase transaction? What rate will be paid on that facility?

A: It's another tool in the toolbox. Cost of capital is below 10%.

Q: Provide timing and requirements for expansion in Wyoming?

A: Several hundred megawatts in 2025 and 2026. Requires continuing to build relationships.

Q: Remind on fleet upgrade timing and unit economic payback periods?

A: Execution in bear markets, leveraging market conditions, and considering Moore's Law, expecting upgrades every 3 years based on market-based decisions.