CleanSpark, Inc. (CLSK) Q2 2025 Earnings Conference Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call presents mixed signals: strong revenue growth and strategic partnerships are positive, but increased mining costs and a net loss are concerning. The Q&A session reveals cautious optimism but lacks specific guidance, which could unsettle investors. The market cap suggests moderate volatility, leading to a neutral stock price prediction over the next two weeks.
Key Financial Performance
Revenue $181.7 million, an increase of $69.9 million, or 62.5% year-over-year, primarily due to the increase in average revenue per Bitcoin and growing hash rate.
Gross Profit $100 million, up almost 5% sequentially and more than 24% year-over-year, with a gross margin of 53%.
Net Loss $138.8 million, primarily driven by a decrease in the marked market adjustment in Bitcoin value.
Adjusted EBITDA Negative $57.8 million, but normalized operations produced approximately $70 million of positive EBITDA, representing 39% net margins.
Average Revenue per Bitcoin $92,811, an increase of approximately $38,000, or 69% year-over-year.
Marginal Cost per Coin Approximately $42,600, a 26% increase over the first quarter, attributed to increased mining difficulty and rising power prices.
Total Liquidity Position Over $1 billion at the end of Q2.
Bitcoin Treasury 12,101 Bitcoin, representing a fair value of approximately $1.2 billion at current Bitcoin prices.
Total Debt $641.7 million, net of debt issuance costs.
Cash Position $97 million in cash at the end of the quarter.
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Operating Highlights
Bitcoin Production: Produced 1,957 Bitcoin for the quarter, only 3.6% fewer than the same quarter last year despite block rewards being cut in half in late April 2024.
Fleet Efficiency: Improved fleet efficiency from an average of 18 joules per terahash in December to less than 17 joules per terahash at the end of April.
ASIC Acquisition: Paid approximately $135 million for state-of-the-art ASICs, equating to approximately 7 Exahash above and beyond the 50 Exahash target.
Revenue Growth: Revenue increased 12% quarter over quarter and 62.5% year over year, reaching $181.7 million.
Bitcoin Treasury: Bitcoin treasury now exceeds 12,101, the third largest among public miners.
Institutional Ownership: Institutional ownership in common stock increased to nearly 64% following inclusion in the S&P Small Caps 600 Index.
Liquidity Position: Ended the quarter with a total liquidity position of over $1 billion.
Power Management: Power under contract is approaching 1 gigawatt, providing opportunities for future expansion.
Cost Management: Average revenue recognized per Bitcoin produced in Q2 was $92,811, an increase of approximately $38,000, or 69%, over the same quarter last year.
Capital Strategy: Evolved from a near-100% HODL strategy to using a portion of monthly Bitcoin production to support operations.
Growth Guidance: Intend to modify growth guidance to be less time-bound and more focused on ROI-positive potential.
Tariff Management: Proactive procurement has insulated CleanSpark from near-term tariff risks, allowing for continued expansion.
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Risk or Challenges
Bitcoin Price Volatility: The company reported a net loss primarily driven by a decline in Bitcoin spot price, which necessitated a mark-to-market adjustment under GAAP accounting rules.
Rising Power Costs: The average cost per kilowatt-hour increased to $0.06 due to higher nationwide power prices and elevated demand charges, impacting overall margins.
Mining Difficulty Increase: Mining difficulty rose by 3.6% during the quarter, which, combined with rising power costs, posed challenges to maintaining profit margins.
Tariff Risks: While CleanSpark is insulated from near-term tariff risks due to proactive procurement, ongoing global trade negotiations could create significant headwinds for less prepared operators.
Debt Management: The company has a total debt of $641.7 million, which they plan to manage on a net-debt basis to ensure proper liquidity for covering obligations.
Market Competition: The potential for acquiring smaller miners at attractive valuations due to tariff impacts on their operations presents both a risk and an opportunity for CleanSpark.
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Guidance & Outlook
Bitcoin Treasury Growth: Our Bitcoin treasury has grown to over $12,000 as of April 30th, with a total of 12,101 Bitcoin, the third largest among public miners.
Operational Efficiency: Fleet efficiency improved significantly from an average of 18 joules per terahash in December to less than 17 joules per terahash at the end of April.
Power Management Strategy: We have a power under contract approaching 1 gigawatt, providing opportunities for future expansion.
Infrastructure Expansion: We are on track to reach 50 exahash by mid-2025 and have secured infrastructure for growth beyond 60 exahash.
Strategic Flexibility: We will reduce time-bound guidance related to hash rate expansion, focusing on disciplined and opportunistic growth.
Digital Asset Management: We are building an institutional-grade digital asset management function to maximize returns and minimize counterparty risk.
Revenue Expectations: Revenue for Q2 was $181.7 million, a 62.5% increase year-over-year.
Gross Margin: Gross profit reached nearly $100 million with a gross margin of 53%.
CapEx: We have paid approximately $100 million towards additional infrastructure supporting almost 200 megawatts.
Debt Management: Total debt stands at $641.7 million, with a focus on managing the business on a net-debt basis.
Future Growth: Current projects are expected to increase hash rate towards 57 exahash, with potential growth to 65 exahash.
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Shareholder Return Plan
Shareholder Return Plan: CleanSpark has evolved from a near-100% HODL strategy to a balanced approach, using a portion of monthly Bitcoin production to support operations. This shift aims to enhance shareholder value by diversifying capital structure and avoiding equity dilution. The company has no plans for equity offerings and emphasizes a disciplined capital strategy.
Bitcoin Treasury: As of April 30, 2025, CleanSpark's Bitcoin treasury exceeds 12,100 BTC, valued at over $1.2 billion. The company is strategically monetizing new production to fund operations while preserving long-term asset growth.
Line of Credit: CleanSpark expanded its line of credit with Coinbase to $200 million, which will be used for accretive capital expenditures.
Debt Management: The company has a total debt of $641.7 million, net of issuance costs, and intends to manage its business on a net-debt basis to ensure liquidity.
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Key Q&A
Q:What is your outlook for the growth in the network cash rate in 2025 and CleanSpark's market share?
A:We've seen a plateau effect with limited growth due to upgrade cycles. We're at about 5% market share and intend to grow that.
Q:How do you envision the digital asset management team generating shareholder value?
A:We're selecting the right partners and using strategies like covered calls to generate cash and maintain flexibility.
Q:Has the slowdown in buying from larger competitors impacted the pricing of mining rigs?
A:Yes, it has created opportunities for us to acquire rigs at lower costs, with a 15% decrease in prices.
Q:Did the Bitcoin sales in April cover the CapEx for Q2?
A:On average, we need about $35 million a month, and anything above that can go towards CapEx or servicing debt.
Q:Would you consider using some of your HODL to repurchase shares?
A:We look at all levers available, but currently, we prioritize growing our Bitcoin balance over equity.
Q:Will we see more Bitcoin-backed facilities in the future?
A:Yes, there's a lot of capital wanting to be deployed using Bitcoin as collateral.
Q:How much of the incremental capacity is liquid cooled versus air cooled?
A:Most of the prepaid infrastructure relates to immersion cooling, which we believe is the best path forward.
Q:Are you seeing any price impact from HPC demand on infrastructure?
A:We are still the largest buyer and have an advantageous position in the supply chain.
Q:Can we start forecasting a yield on your Bitcoin treasury strategy?
A:We're not prepared to give guidance, but we're targeting mid-single digits on an annualized basis.
Q:Is it getting easier to find power and sites due to hyperscalers pulling back?
A:Hyperscalers are still committed to investing, but they are canceling co-location contracts.
Q:Review of Unclear Management Responses
A:Management avoided giving a direct answer regarding specific guidance on the yield from the Bitcoin treasury strategy, stating they are still in the 'crawl phase' and not prepared to provide forecasts.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
ASICs
CleanSpark term
Coinbase
HODL portion
Tennessee
Wyoming
adaptability
amount
approach capital
change
classification
coin increase
contract
core
cost coin
cost kilowatt
debt
decision
difficulty power
diligence process
discipline
disruption
equity dilution
line credit
loss
margin
market adjustment
model
option
phase
play
power price
rate
shareholder value
spot price
tariff
topic
transaction
treasury
velocity
vendor
CLSK Transcript
CleanSpark, Inc. (CLSK) Q4 2025 Earnings Call Transcript
Positive11-26
The earnings call summary and Q&A reveal strong financial performance with a focus on growth and efficiency. The strategic expansion in hash rate and power pipeline, coupled with regulatory tailwinds and a strong capital strategy, are positive indicators. The Q&A section provided clarity on risks and strategic initiatives, further boosting confidence. Despite some concerns over expenses and Bitcoin price fluctuations, the overall sentiment is optimistic, particularly with the potential for increased shareholder returns and strategic partnerships. Given the market cap, a positive stock price movement of 2% to 8% is expected.
CleanSpark, Inc. (CLSK) Q3 2025 Earnings Call Transcript
Positive8-8
The earnings call highlights strong financial performance with a significant revenue increase and gross margin, operational efficiency improvements, and strategic growth plans. The Q&A section reveals management's focus on mitigating risks and leveraging market opportunities, such as power management and M&A. While some responses were vague, the overall sentiment is positive, supported by strategic flexibility and a robust pipeline for future growth. Given the company's market cap and strategic initiatives, the stock is likely to experience a positive movement in the short term.
CleanSpark, Inc. (NASDAQ:CLSK) Q2 2025 Earnings Call Transcript
Unknown5-9
The earnings call reveals mixed sentiments. Financial performance shows strong revenue growth and liquidity, but there are concerns over net losses and increased marginal costs. The strategic monetization of Bitcoin and lack of equity dilution are positives, yet the lack of guidance on Bitcoin treasury yield and unclear responses in the Q&A section add uncertainty. The market cap suggests moderate sensitivity to news, but the overall mixed signals likely result in a neutral stock price movement over the next two weeks.
CleanSpark, Inc. (CLSK) Q2 2025 Earnings Conference Call Transcript
Unknown5-8
The earnings call presents mixed signals: strong revenue growth and strategic partnerships are positive, but increased mining costs and a net loss are concerning. The Q&A session reveals cautious optimism but lacks specific guidance, which could unsettle investors. The market cap suggests moderate volatility, leading to a neutral stock price prediction over the next two weeks.
CLSK Report
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