Bitdeer Technologies Group (BTDR) Q1 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
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.
Key Financial Performance
Total Revenue $70.1 million (down from $119.5 million, a decrease of 41.4%) due to the April 2024 halving event, an increase in global network hashrate, and lower hosting and cloud mining revenue.
Self-Mining Revenue $37.2 million (down 23.1%) primarily due to the April 2024 halving event and an increase in global network hashrate, partially offset by higher self-mining hashrate and higher bitcoin prices.
Cloud Hashrate Revenue $0.1 million (down from $18.1 million) due to the expiration of long-term cloud hashrate contracts and the subsequent reallocation of the hashrate to self-mining operations.
General Hosting Revenue $9.6 million (down from $29 million) due to the conversion of hosting capacity to hydro cooling and the removal of less efficient miners after the halving.
Membership Hosting Revenue $16.3 million (down from $19.5 million) due to the overall decline in hosting revenue.
SEALMINER Sales Revenue $4.1 million (new metric introduced) reflecting the sales of SEALMINER mining rigs.
Total Gross Profit Negative $3.2 million (down from positive $34.1 million) due to the impact of the April 2024 halving events and lower hosting and cloud hashrate revenues.
Gross Margin Negative 4.6% (down from positive 28.6%) primarily driven by the April 2024 halving events and lower revenues.
Total Operating Expenses $75.8 million (up from $37.8 million) primarily driven by higher R&D costs related to SEALMINER 03 and higher engineering costs.
Other Operating Expenses $7.8 million due to non-cash impairment of Bitcoin.
IFRS Net Profit $409.5 million (up from $0.6 million) due to non-cash derivative gains.
Adjusted Profit Negative $89.8 million (down from positive $9.7 million) primarily driven by the impact of the 2024 halving and higher R&D costs.
Adjusted EBITDA Negative $56.1 million (down from positive $27.3 million) due to the impact of the 2024 halving and lower revenues.
Net Cash Used for Operating Activities $284 million predominantly driven by SEALMINERs, supply chain, and manufacturing.
Net Cash Used for Investing Activities $73.6 million, including $45.7 million for capital expenditures.
Net Cash Generated from Financing Activities $94.9 million, primarily from the issuance of shares under the ATM facility.
Cash and Cash Equivalents $215.6 million at the end of the quarter.
Cryptocurrencies $131.1 million at the end of the quarter.
Borrowings $215.4 million excluding derivative liabilities.
Derivative Liabilities $256.8 million, representing a $507.2 million decline compared to the last quarter.
Loan Agreement Entered into a loan agreement for up to $200 million, with approximately $90 million drawn as of today.
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Operating Highlights
SEALMINER A1: Completed mass production of 3.7 exahash per second of SEALMINER A1 mining rigs.
SEALMINER A2: Mass production of 35 exahash per second is on track for completion in October 2025.
SEALMINER A3: Completed rigorous testing of prototype models; mass production expected to commence in Q3 2025.
SEALMINER A4: Targeting unprecedented efficiency of approximately 5 Joules per Terahash; tape-out on track for Q4 2025.
New Mining Capacity: Bringing online nearly 500 megawatts of new self-mining power capacity by mid-year, increasing total capacity to nearly 1.6 gigawatts.
Geographic Diversification: More than half of new power capacity located in Norway and Bhutan, with plans to prioritize deployments of A2 mining machines in these regions.
Ethiopia Data Center: Signed an agreement for a 50 megawatt mining data center in Ethiopia, targeting energization by Q4 2025.
U.S. Manufacturing Shift: Plans to migrate a portion of manufacturing to the U.S. in the second half of 2025.
R&D Costs: Higher R&D costs related to one-off development and tape-out costs of SEAL03 chip.
Operational Efficiency: Conversion of 100 megawatts of Hosting capacity to hydro cooling capacity.
HPC/AI Initiative: Paused Bitcoin mining-related construction at the 570 megawatt site in Clarington, Ohio to focus on HPC/AI.
Financial Advisory Engagement: Engaged Northland Capital Markets for HPC/AI data center development strategy.
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Risk or Challenges
Financial Performance Risks: Total revenue decreased to $70.1 million from $119.5 million, with self-mining revenue down 23.1% due to the April 2024 halving event and increased global network hashrate.
Operational Risks: Gross profit was negative $3.2 million, primarily due to the impact of the 2024 halving, lower hosting and cloud mining revenues, and increased R&D costs.
Supply Chain Challenges: Net cash used for operating activities was $284 million, predominantly driven by SEALMINERs, supply chain, and manufacturing issues.
Regulatory Risks: The company is navigating U.S. tariff policies, which may impact Bitcoin mining-related manufacturing and necessitate a shift in operations.
Market Risks: The decline in hosting revenue was attributed to the expiration of long-term cloud hashrate contracts and the removal of less efficient miners post-halving.
Investment Risks: The pause in Bitcoin mining-related construction at the Clarington, Ohio site reflects strategic reassessment, which may affect future growth.
Debt and Financing Risks: Derivative liabilities increased to $256.8 million, reflecting non-cash fair value adjustments that could impact perceived financial stability.
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Guidance & Outlook
Self-Mining Hashrate Growth: Expecting self-mining hashrate to reach 40 exahash per second by October 2025, driven by new SEALMINER production and nearly 500 megawatts of new power capacity.
ASIC Technology Development: Prioritizing development of ASIC technology to achieve cost advantages and control over growth trajectory.
Geographic Diversification: Focus on deploying A2 mining machines in Bhutan and Norway to enhance self-mining capacity.
HPC/AI Initiative: Engaged Northland Capital Markets for HPC/AI data center development strategy, with advanced discussions on large-scale sites in the U.S.
Manufacturing Shift: Planning to migrate a portion of manufacturing to the U.S. in the second half of 2025.
Revenue Expectations: Total revenue for Q1 was $70.1 million, with expectations for increased self-mining revenue as new capacity comes online.
CapEx Guidance: Expecting CapEx for 2025 infrastructure spending to be in the range of $260 million to $290 million, reduced due to paused construction in Clarington, Ohio.
Future Hashrate Projections: Self-mining hashrate could exceed 40 exahash per second by Q4 2025, depending on manufacturing schedules.
Power Capacity Expansion: Total available power capacity expected to reach over 1.8 gigawatts by the end of 2025.
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Shareholder Return Plan
Share Repurchase Program: $21 million used for share repurchases during the quarter.
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Key Q&A
Q:How has interest in A2 and your chips in general changed in the last few weeks?
A:The desire for purchasing mining ASICs has increased significantly after the Bitcoin price increase. Our priorities are still self-mining.
Q:What is under consideration for the 40 exahash target by the end of the year?
A:The upside of our target is uncertain due to the availability of capacity from TSMC, but we have strong confidence in our partnership with them.
Q:Can you provide color on the type of customers for the Clarington site and where demand is strong?
A:We are getting inbound requests from potential end users, but our main focus is on finding a development partner.
Q:Why did you enter the recent loan agreement and how do you view capital structure moving forward?
A:We stopped using the ATM due to market corrections and believe a responsible amount of debt can finance chip purchases.
Q:What will be the strategy for the SEAL A4 ASIC and its demand?
A:We will transition to more external sales as we fill our existing capacity, but A4 won't be ready for mass production for a couple of quarters.
Q:What is the expected average fleet efficiency for the second half of 2025 and 2026?
A:We expect to be in the lower-20s in Joules per Terahash range as we approach the 40 exahash range.
Q:Can you provide more detail on the SEALMINER loan facility?
A:The loan will be used to finance the purchase of chips and will be secured by the chips.
Q:What percentage of ASIC demand comes from outside the U.S.?
A:Mostly right now, demand is from the United States.
Q:How has customer interest trended for upcoming SEALMINERs?
A:U.S. based Bitcoin miners have the best capital market and will continue to expand operations.
Q:Are you considering ASIC option payment structures for A4s or A3s?
A:We don't have plans for that now, as we have access to market capital.
Q:Review of Unclear Management Responses
A:Management avoided giving a direct answer regarding the specific percentage of ASIC demand from outside the U.S. and the exact timeline for the A4 ASIC's mass production readiness.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
AI decision
AI initiative
AI summary
ASICs future
Advisor Orange
Advisor remark
Bhutan Norway
Bhutan focus
Bhutan megawatt
Bhutan wafer
Brett Knoblauch
Brian Kinstlinger
CEO Kevin
Cantor Fitzgerald
Cassidy
Clarington Ohio
Ethiopia
Jigmeling Bhutan
Slide
Tydal Norway
agreement
capacity gigawatts
construction megawatt
development partner
discussion development
efficiency Terahash
effort
exahash SEALMINER
investor presentation
megawatt Jigmeling
megawatt Tydal
negotiation
partner user
site Clarington
tariff
testing
track
trade
wafer allocation
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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