CleanSpark, Inc. (NASDAQ:CLSK) Q2 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
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.
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 the 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.
Marginal Cost per Coin Approximately $42,600, a 26% increase over the first quarter, attributed to increased mining difficulty and rising power prices.
Average Revenue per Bitcoin $92,811, an increase of approximately $38,000, or 69% year-over-year.
Cash Position $97 million in cash and 11,869 Bitcoin, representing a fair value of approximately $980 million.
Total Liquidity Over $1 billion at the end of Q2.
Total Debt $641.7 million, net of debt issuance costs.
Bitcoin Treasury 12,101 Bitcoin at the end of April, representing over $1.2 billion at current Bitcoin prices.
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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.
ASICs Purchase: Paid approximately $135 million for state-of-the-art ASICs, equating to approximately 7 Exahash above the 50 Exahash target.
Market Positioning: CleanSpark was ranked number 35 in the Financial Times 2025 list of the 500 fastest-growing companies in the Americas.
S&P Small Caps 600 Index: Added to the S&P Small Caps 600 Index, increasing institutional ownership to nearly 64%.
Gross Profit: Gross profit reached nearly $100 million, up almost 5% sequentially and more than 24% year over year.
Fleet Efficiency: Fleet efficiency improved from an average of 18 joules per terahash in December to less than 17 joules per terahash at the end of April.
Liquidity Position: Ended the quarter with a total liquidity position of over $1 billion.
Capital Strategy: Evolved from a near-100% HODL strategy to using a portion of monthly Bitcoin production to support operations.
Growth Guidance: Intends to modify growth guidance to be less time-bound and more focused on ROI-positive potential.
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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 at quarter-end, which necessitated a mark-to-market adjustment.
Rising Power Costs: Increased power prices, particularly in the southeast, were attributed to elevated demand charges and weather-related increases, impacting overall operational costs.
Mining Difficulty: The mining difficulty rose by 3.6% during the quarter, which increased the marginal cost per Bitcoin and posed challenges to maintaining profitability.
Tariff Risks: While CleanSpark is insulated from near-term tariff risks due to proactive procurement, ongoing trade negotiations could create significant headwinds for less prepared operators.
Supply Chain Challenges: The company has positioned itself to mitigate supply chain risks by securing necessary machines in advance, but potential tariff impacts could affect future operations.
Economic Factors: The overall economic environment, including rising energy prices and Bitcoin price fluctuations, presents ongoing challenges that could affect operational margins.
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Guidance & Outlook
Bitcoin Production: CleanSpark produced 1,957 Bitcoin in Q2, only 3.6% fewer than the same quarter last year despite block rewards being cut in half in late April 2024.
Infrastructure Investment: Paid approximately $100 million towards additional infrastructure supporting almost 200 megawatts and $135 million for state-of-the-art ASICs, equating to approximately 7 Exahash above the 50 Exahash target.
Power Management Strategy: CleanSpark's power under contract is approaching 1 gigawatt, providing opportunities for future expansion.
Tariff Management: CleanSpark is insulated from near-term tariff risks and has secured machines needed to reach the 50 exahash target.
Digital Asset Management: CleanSpark is building an institutional-grade digital asset management function to maximize performance of its Bitcoin treasury.
Revenue Growth: Revenue for Q2 was $181.7 million, a 62.5% increase over the same quarter last year.
Hash Rate Expansion: Current projects are expected to increase hash rate towards 57 exahash, with vendor options supporting growth to 65 exahash.
Capital Expenditure: Intends to use proceeds from the revolving line of credit for accretive CapEx purposes.
Liquidity Position: Ended the quarter with a total liquidity position of over $1 billion.
Shareholder Value: CleanSpark aims to balance treasury growth with strategic monetization to enhance shareholder value.
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Shareholder Return Plan
Bitcoin Treasury: CleanSpark's Bitcoin treasury now exceeds 12,101 BTC, valued at approximately $1.2 billion at current prices.
Equity Dilution: The company has not issued any shares since concluding its ATM in November 2024 and has no plans for equity offerings.
Line of Credit: CleanSpark expanded its line of credit with Coinbase to $200 million, which will be used for accretive capital expenditures.
Strategic Monetization: The company is transitioning from a nearly 100% HODL strategy to monetizing a portion of its monthly Bitcoin production to support operations.
Repurchase Option: CleanSpark negotiated a favorable payment arrangement for miners, allowing them to repurchase Bitcoin at a set price, potentially saving $10 million.
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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 interspersed with some growth. Limited growth is likely due to upgrade cycles, but we are sitting at about 5% market share and intend to maintain and grow that.
Q:How do you envision the digital asset management team generating shareholder value?
A:We are selecting the right counterparties and partners. We are looking at strategies like covered calls, which provide attractive premiums, allowing us to stay ahead of spot prices.
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, leading to 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. 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. Our book value is greater than our market cap, nudging us towards not utilizing equity. We prioritize growing our Bitcoin balance.
Q:Do you think we’ll see more Bitcoin-backed facilities in the future?
A:Yes, there’s a lot of capital that wants to be deployed using Bitcoin as collateral.
Q:How much of the incremental capacity is liquid cooled versus air cooled?
A:The prepaid amount on infrastructure relates to immersion cooling, which we believe is the best path forward.
Q:Are you seeing any price impact from the demand for HPC infrastructure?
A:We are still the largest buyer in our supply chain, and we have an advantageous position in line.
Q:Can we start forecasting a yield on your Bitcoin treasury strategy?
A:We’re not prepared to give guidance yet, 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 pulling back on co-location contracts. We are still finding access to power readily available.
Q:Review of Unclear Management Responses
A:Management avoided giving a direct answer regarding specific forecasts for yield on the Bitcoin treasury strategy, stating they are not prepared to provide guidance. Additionally, there was vague language used when discussing the impact of HPC demand on pricing, lacking specific data.
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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
decision
difficulty power
diligence process
discipline
disruption
efficiency margin
equity dilution
flexibility
function
line credit
loss
market adjustment
model
phase
play
portfolio
power price
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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They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
