Bitdeer Technologies Group (BTDR) Q4 2024 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call reveals significant revenue declines across various segments, a substantial net loss, and increased operating expenses. Despite a strong cash position, the Q&A section highlights management's reluctance to provide clear guidance on CapEx and production timelines, which may increase investor uncertainty. The market is likely to react negatively due to these factors, especially considering the company's small-cap status.
Key Financial Performance
Total Revenue Q4 2024 $69 million, down from $114.8 million year-over-year due to the impact of the April 2024 halving, increased global network hashrate, and lower hosting and cloud mining revenue.
Self-Mining Revenue Q4 2024 $41.5 million, down 11.5% year-over-year, primarily due to the April 2024 halving and higher global network hashrate, partially offset by an increase in average self-mining hashrate and higher Bitcoin prices.
Cloud Hashrate Revenue Q4 2024 $2.3 million, down from $16.2 million year-over-year, primarily due to long-term cloud hashrate contracts rolling off and the decision to reallocate hashrate to self-mining.
General Hosting Revenue Q4 2024 $8.5 million, down from $25.2 million year-over-year, mainly due to the expiration of certain hosting contracts and removal of older machines post-halving.
Membership Hosting Revenue Q4 2024 $12.4 million, down from $23.4 million year-over-year, due to the expiration of hosting contracts and removal of less-efficient machines.
Total Gross Profit Q4 2024 $5.1 million, down from $27 million year-over-year, with a gross margin of 7.4% compared to 23.5%, primarily due to the April 2024 halving and expiration of high-margin contracts.
Total Operating Expenses Q4 2024 $42.5 million, up from $27.4 million year-over-year, driven by higher engineering staff and R&D costs related to ASIC roadmap.
Net Loss Q4 2024 $531.9 million, compared to a net loss of $5 million year-over-year, due to significant non-cash derivative losses.
Adjusted EBITDA Q4 2024 Negative $3.8 million, primarily due to revenue declines in cloud hashrate and hosting businesses and lower gross profit margins.
Full-Year Revenue 2024 $349.8 million, with a gross profit of $66.4 million and adjusted EBITDA of $39.4 million.
Cash and Cash Equivalents Q4 2024 $476.3 million, indicating a strong financial position.
Cash Used in Operations Q4 2024 $325.1 million, compared to $67.1 million, primarily due to payments for SEAL02 wafers.
Net Cash Generated from Financing Activities Q4 2024 $522.8 million, primarily from proceeds of convertible notes and ATM program.
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Operating Highlights
SEALMINER A1: Energized 0.4 exahash of SEALMINER A1 miners, with mass production of remaining 3.3 exahash expected to be completed in March 2025.
SEALMINER A2: Mass production commenced at TSMC to deliver approximately 35 exahash by October 2025, with initial customer demand oversubscribed by a factor of six.
SEALMINER A3: Next-generation model expected to deliver industry-leading energy efficiency of 10 joules per terahash, with production readiness targeted for later this year.
SEALMINER A4: Projected to have a chip level energy efficiency of 5 joules per terahash, tape-out planned for Q3 2025.
ASIC Market Penetration: Plans to penetrate the $4 billion to $5 billion annual ASIC market by selling their own mining machines.
Power Generation Project: Acquired a 19-acre site for a 101 megawatt gas-fired power plant, expected to enhance cost-efficiency and contribute to grid stability.
Energy Infrastructure: Secured over 2.6 gigawatts of total power capacity, with 1 gigawatt scheduled to be energized in 2025.
Self-Mining Hashrate: Expect total self-mining hashrate to reach approximately 40 exahash by Q4 2025.
Operational Efficiency: Anticipate significant margin improvements with new, more efficient SEALMINERs.
Vertical Integration Strategy: Commitment to building a fully vertically-integrated business, including power generation and ASIC development.
R&D Focus: Prioritized resources on developing own ASIC technology, which limits hashrate growth but provides long-term advantages.
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Risk or Challenges
Revenue Decline: Total revenue decreased from $114.8 million to $69 million, primarily due to the April 2024 halving and increased global network hashrate.
Self-Mining Revenue: Self-mining revenue fell by 11.5% to $41.5 million, impacted by the April 2024 halving and higher global network hashrate.
Cloud Hashrate Revenue: Cloud hashrate revenue dropped from $16.2 million to $2.3 million due to long-term contracts rolling off and reallocation to self-mining.
Hosting Revenue: General hosting revenue decreased from $25.2 million to $8.5 million, attributed to the expiration of hosting contracts and removal of older machines.
Increased Operating Expenses: Total operating expenses rose to $42.5 million from $27.4 million, driven by higher R&D costs and engineering staff.
Net Loss: Net loss for Q4 was $531.9 million compared to $5 million, largely due to non-cash derivative losses.
Cash Flow Challenges: Cash used in operations surged to $325.1 million from $67.1 million, primarily due to significant payments to TSMC for SEAL02 wafers.
Regulatory Risks: Potential impacts from U.S. Department of Commerce Bureau of Industry and Security ruling regarding advanced computing integrated circuits.
Supply Chain Risks: Delays in production of SEALMINER A2 due to a 6.4 magnitude earthquake in Taiwan, affecting the timeline for mass production.
Market Competition: The highly fluid market for Bitcoin mining ASICs poses risks as transitioning to alternate machines incurs little friction, increasing competitive pressures.
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Guidance & Outlook
Vertical Integration Initiative: Bitdeer is committed to building a fully vertically-integrated business, including developing its own power generation assets, globally diversified data centers, and leading-edge mining hardware.
Acquisition of Power Plant Site: Bitdeer acquired a 19-acre site for a 101 megawatt gas-fired power plant for $21.7 million, with total capital expenditure estimated at $90 million.
ASIC Technology Development: Bitdeer is focusing on developing its own ASIC technology, with plans to ramp up self-mining hashrate and penetrate the $4 billion to $5 billion annual ASIC market.
SEALMINER Production: The mass production of SEALMINER A1 is on schedule for March 2025, with SEALMINER A2 expected to deliver 35 exahash by October 2025.
Energy Optimization Strategy: Bitdeer plans to curtail and sell power back to the Alberta grid during peak demand to enhance cost-efficiency.
Self-Mining Hashrate Guidance: Bitdeer expects to achieve a total self-mining hashrate of approximately 40 exahash by Q4 2025.
2025 Capital Expenditures: Anticipated CapEx for 2025, including the Foxcreek project, is estimated to be in the range of $340 million to $370 million.
Revenue Expectations: As new, more efficient SEALMINERs come online, Bitdeer expects significant improvement in margins.
Long-term ASIC Market Positioning: Bitdeer aims to capture significant market share in the multi-billion dollar ASIC market with its SEALMINER products.
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Shareholder Return Plan
ATM Shelf Registration: Bitdeer filed a $1 billion ATM shelf registration on January 3, 2025, to enhance balance sheet flexibility and provide liquidity for securing additional wafer allocations from TSMC.
ATM Usage: In 2024 and January 2025, Bitdeer utilized only 14.4% of its shares outstanding for the ATM program, indicating a disciplined approach to capital raising.
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Key Q&A
Q:What are your thoughts on U.S.-based miners experiencing delays in receiving ASICs from competitors?
A:We are just watching the news the same as you for in terms of what's happening with other folks miners. We have not had any direct experience of that ourselves.
Q:How should we think about manufacturing capacity for the next batch of A2s and A3 rigs?
A:We do expect the capacity to continue to go up. TSMC is a trusted partner for us, but we don't really pre-announce any of those.
Q:How does revenue recognition work in ASIC sales?
A:Revenue is typically recognized upon delivery of the A6. The down payments are being held on the balance sheet and will be recognized once fully delivered.
Q:Can you outline the CapEx outlook for 2025 and the allocation for self-mining versus HPC or AI spending?
A:The CapEx numbers discussed are specifically for Bitcoin mining infrastructure costs and do not include the cost of steel miners for self-mining.
Q:What will be ready by the outlined date in 3Q 2025 for Clarington and Masilon?
A:The Phase 1 of 266 megawatts in Clarington is expected to be available in 2025, as well as the full 221 megawatts in Masilon.
Q:How are you thinking about Bitcoin mining for existing sites post-acquisition in Alberta?
A:We haven't changed our position; we remain bullish on Bitcoin mining and will continue allocating resources to existing sites.
Q:What is the qualification timeframe for customers receiving the A2 rigs?
A:It typically doesn't take long for mining rigs to be qualified.
Q:What is your pricing strategy for SEALMINER and expected tape-out costs?
A:The existing pricing for A2s is $15 per terahash, and tape-out costs for A2 and A3 are already paid for.
Q:What is the demand environment for HPC AI and how many megawatts are you offering?
A:It's site-specific; once a site is allocated to HPC AI, it's likely to be the entire site.
Q:What are your plans for selling rigs to companies that will host them?
A:We have no objection to that, but it's a separate business.
Q:How long is the wafer prepayment cycle to TSMC?
A:The wafer prepayment cycle is four months.
Q:Will your ability to obtain cash affect your processing of acquiring wafer capacity from TSMC?
A:We have multiple ways to finance wafer ordering, not just through ATM.
Q:Review of Unclear Management Responses
A:Management avoided giving a direct answer regarding the specific breakdown of CapEx allocation between self-mining and HPC or AI spending, as well as the exact timeline for the next batch of A2s or A3s.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
ASIC Slides
ASIC design
ASIC factor
ASIC production
ASIC roadmap
ASICs integration
ASICs stream
Aftahi ROTH
Alberta Electric
Alberta grid
Alberta month
Assembly Test
BIS regulation
BIS rule
Brian Kinstlinger
Brian Perrault
Bureau Industry
Conference
Haris
Markets Strategic
SEAL chip
SEALMINER generation
SEALMINER machine
SEALMINER miner
carbon
chip level
effort
exahash SEALMINER
friction
gas power
investor presentation
machine self
power generation
power plant
slide
success
wafer allocation
world
BTDR Transcript
Bitdeer Technologies Group (BTDR) Q1 2025 Earnings Call Transcript
Unknown5-15
The earnings call revealed a significant decline in revenue and gross profit due to the April 2024 halving and increased global network hashrate. Despite optimistic guidance and strategic initiatives, the financial metrics were weak, with negative gross margins and adjusted EBITDA. The Q&A highlighted uncertainties in achieving the 40 exahash target and vague responses from management. While there is increased interest in ASICs, the financial health and expenses raise concerns. Given the market cap of $1.35 billion, the stock is likely to see a moderate negative reaction in the short term.
Bitdeer Technologies Group (BTDR) Q4 2024 Earnings Call Transcript
Unknown2-25
The earnings call reveals significant revenue declines across various segments, a substantial net loss, and increased operating expenses. Despite a strong cash position, the Q&A section highlights management's reluctance to provide clear guidance on CapEx and production timelines, which may increase investor uncertainty. The market is likely to react negatively due to these factors, especially considering the company's small-cap status.
Bitdeer Technologies Group (BTDR) Q3 2024 Earnings Call Transcript
Unknown11-18
The earnings call shows a significant decline in revenue, gross profit, and margins, alongside increased operating expenses and net loss. Despite some positive aspects like self-mining revenue and CapEx plans, the overall financial performance is weak. The Q&A reveals uncertainty in partnerships and market share, and management's avoidance of direct answers raises concerns. Considering the market cap of $1.36 billion, the stock is likely to see a negative reaction, with a predicted movement between -2% to -8% over the next two weeks.
BTDR Report
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