CleanSpark, Inc. (CLSK) Q3 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
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.
Key Financial Performance
Revenue $199 million for Q3 2025, an increase of $95 million or 91% year-over-year. The increase was driven by greater Bitcoin production at higher Bitcoin prices and lower energy costs.
Bitcoin Production 2,012 Bitcoin produced in Q3 2025, an increase of 436 Bitcoin or 28% year-over-year. This growth reflects significant operational expansion and efficiency improvements.
Gross Profit $50 million increase year-over-year with a profit margin of 55% for Q3 2025. The increase was due to higher Bitcoin production, higher Bitcoin prices, and lower energy costs.
Earnings Per Share (EPS) $0.90 for Q3 2025, supported by healthy gross margins of 54.6% and operational efficiency.
Bitcoin Treasury Value $1.08 billion by the end of Q3 2025, an increase of more than $100 million since the previous quarter. This was driven by Bitcoin production and price appreciation.
Cost Per Bitcoin $44,806 in Q3 2025, significantly below the average spot price of $98,500 during the same period. This reflects operational efficiency and cost management.
All-in Cost Per Kilowatt Hour $0.056 in Q3 2025, nearly $0.005 lower than in Q2 2025. The decrease was due to seasonal power price reductions and the energization of additional sites.
Net Income $257 million for Q3 2025, reflecting strong operational performance and favorable market conditions.
Adjusted EBITDA $378 million for Q3 2025, with $78 million representing cash generated from mining operations net of all cash expenses.
Bitcoin Holdings 12,608 Bitcoin at the end of Q3 2025, demonstrating the company's ability to scale without equity funding since November 2024.
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Operating Highlights
Operational Hash Rate: Achieved 50 exahash of operational hash rate, a milestone reached exclusively with American infrastructure.
Bitcoin Production: Produced 2,012 Bitcoin in Q3, with a treasury value of $1.08 billion, up $100 million from the previous quarter.
Fleet Efficiency: Average power efficiency of 16 joules per terahash, making it one of the most efficient fleets globally.
Global Hash Rate Share: Increased share of global hash rate from 4.3% to 5.6% by achieving 50 exahash.
Market Expansion in Tennessee: Expanded operations in Tennessee with two acquisitions and a 60-megawatt greenfield development.
New Sites in Wyoming: Launched two sites in Wyoming, with potential for hundreds of additional megawatts in the region.
Power Portfolio Utilization: Utilizing 80% of a 1-gigawatt contracted power portfolio, leaving 200 megawatts for immediate expansion.
Cost Efficiency: Reduced all-in cost per kilowatt hour to $0.056, down $0.005 from the previous quarter.
Speed to Revenue: Achieved operational status for a new site in Georgia within five weeks of land acquisition.
Regulatory Tailwinds: Benefiting from U.S. regulatory developments like the GENIUS Act and Clarity Act, which support Bitcoin adoption.
Treasury Management: Initiated a derivatives trading strategy to generate yield from Bitcoin holdings, targeting a 4% yield on the treasury.
Future Growth Plans: Secured miners and infrastructure to add 10 exahash of operational hash rate, representing a 1% increase in global hash rate.
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Risk or Challenges
Regulatory Risks: The company acknowledges the importance of regulatory clarity and tailwinds, but there is a risk of potential changes in regulations or policies that could adversely impact Bitcoin mining operations or the broader cryptocurrency market.
Energy Costs and Availability: While the company has reduced its all-in cost per kilowatt hour, fluctuations in energy prices or disruptions in energy supply could increase operational costs and impact profitability.
Bitcoin Price Volatility: The company's financial performance is heavily tied to Bitcoin prices. Significant drops in Bitcoin value could negatively affect revenue and profitability.
Mining Difficulty and Competition: Increasing mining difficulty and competition for global hash rate could reduce the company's ability to mine Bitcoin efficiently, impacting operational performance.
Capital Expenditure and Debt Management: The company has significant capital expenditure plans and debt obligations. Mismanagement or inability to secure cost-effective funding could strain financial resources.
Supply Chain Risks: Delays or disruptions in acquiring mining equipment or infrastructure could hinder expansion plans and operational efficiency.
Geopolitical and Economic Risks: Global economic uncertainties or geopolitical tensions could impact Bitcoin adoption, energy costs, or supply chain stability, indirectly affecting the company's operations.
Operational Risks: The company’s rapid expansion and reliance on self-operated infrastructure could lead to operational inefficiencies or challenges in maintaining fleet efficiency.
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Guidance & Outlook
Future Hash Rate Expansion: CleanSpark plans to rapidly deliver an additional 10 exahash of operational hash rate on a cost-effective timeline. All miners required for this growth have already been secured, nearly half of the necessary infrastructure is in place, and plans for the remainder are being finalized. This expansion would represent approximately a 1% increase in global hash rate.
Global Hash Rate Share: The company aims to increase its share of the global hash rate beyond the current 5.6%, reflecting its ability to outpace the broader mining landscape and earn more Bitcoin over time.
Power Pipeline Expansion: CleanSpark is evaluating approximately 1.2 gigawatts of potential near-term power opportunities and an additional 1.7 gigawatts of long-term power opportunities. These projects are expected to provide scalable, low-cost power for future growth.
Capital Strategy: The company intends to use a balanced approach between monetizing new Bitcoin production and growing its treasury. It plans to further diversify its capital stack and use proceeds from its revolving line of credit for accretive capital expenditures.
Regulatory Tailwinds: CleanSpark expects significant regulatory tailwinds, including the GENIUS Act and the Clarity Act, which establish clear frameworks for digital assets and are anticipated to drive increased demand for Bitcoin and U.S. treasuries.
Bitcoin Treasury Management: The company is implementing a conservative yet opportunistic approach to its Bitcoin treasury, including derivative strategies to generate a target yield of 4% on its Bitcoin holdings. It plans to use approximately 40% of its HODL balance for this purpose.
Operational Efficiency: CleanSpark aims to continue improving fleet efficiency and reducing power costs across its portfolio, with a focus on profitability and operational excellence.
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Shareholder Return Plan
The selected topic was not discussed during the call.
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Key Q&A
Q:Zach, you mentioned that you have over 200 megawatts of additional contracted power available in the existing pipeline. Could you unpack that and speak to how you envision bringing those megawatts online over the coming quarters?
A:The 200 megawatts are in areas where the company operates, with some contracts resulting from expanding existing operations or nearby locations. The focus is on achieving 10 exahash, requiring only a portion of the 200 megawatts, leaving 100 megawatts of optionality. The next 10 exahash is expected to come up quickly, with more updates on the balance in the near term.
Q:What are your views on the current M&A landscape and your appetite for potential deals?
A:The M&A landscape is robust, particularly in the private space. There is opportunity as miners transition to HPC and evaluate their assets. The company is ready to take advantage of these opportunities and sees great potential in the M&A space.
Q:When would you expect to reach targeted run rates for the Digital Asset Management side?
A:The ramp is expected over the coming quarters, with a measured approach to ensure strategies, financial reporting, internal controls, and tax considerations are in place. The company expects to ramp to targeted run rates within the next year.
Q:What are the conversations with utility partners like today? Have lead times for interconnect shifted, or is there competition with HPC sites?
A:The company approaches utilities with a flexible load, which is an asset for utilities during peak capacity times. This flexibility differentiates the company from data centers requiring firm loads. The pipeline includes multiple gigawatts with utilities that can move forward quickly, with flexibility creating significant opportunities.
Q:What percentage of your HODL are you thinking about putting to work for yield generation, and what is the time frame?
A:The company plans to use 40% of the HODL balance for yield generation, targeting a 4% return on the entire HODL balance, equating to a 10% return on the 40%. The ramp to this target is expected within the next year.
Q:Are you encouraged by recent M&A activity, and how do you view demand for power assets?
A:The company evaluates the use cases of its power assets, focusing on cash-on-cash returns. While not looking to downsize or exit, the company is open to maximizing asset use cases. The fair value of assets is considered higher than their balance sheet value.
Q:Do you see treasury models as an accelerant for Bitcoin-related ownership in portfolio management?
A:Yes, the company sees treasury models as positive for Bitcoin adoption, with billions of dollars waiting for SEC approvals. This buying power is expected to push Bitcoin prices higher and infiltrate traditional financial networks like 401(k)s and pensions, creating additional opportunities.
Q:Did the sharp run-up in Bitcoin price in July trigger covered calls to be exercised, leading to more Bitcoin sold?
A:The company focuses on no dilution and is willing to sell monthly production if needed. The July sales were part of a strategy to cover operational expenditures, CapEx, and service the line of credit while adding to the HODL balance. Covered calls may have contributed to the sales.
Q:What is the structure of the 1.7 gigawatts pipeline, and when could it come online?
A:The pipeline is optionality-based, with 30%-40% of power available quickly without long-term infrastructure investment. The rest requires investment, with lead times of 12-24 months. The company focuses on areas with lower lead times and strategic advantages.
Q:How are you approaching the hash rate price dynamics given institutional miners pausing and pivoting to HPC/AI?
A:The company sees countercyclical opportunities as miners exit the space, leading to softening demand and favorable pricing. Increased competition among manufacturers also contributes to price softening, benefiting the company over the next 12 months.
Q:How are you weighing the existing tariff environment for future fleet expansion, and what are your options to mitigate impacts?
A:The company considers secondary market purchases and aims to acquire miners at the lowest cost. Manufacturers are moving production to North America, which could benefit the company as a large-scale buyer of U.S.-made equipment, avoiding tariffs.
Q:How could the Bitcoin treasury strategy change with Bitcoin price movements?
A:If Bitcoin prices increase, the company would sell less Bitcoin. If prices decrease, more Bitcoin would be sold. The digital asset management strategy aims to monetize volatility and add downside protection to the HODL balance over time.
Q:At what point does scale allow you to sell less Bitcoin to cover cash costs?
A:The company's operating leverage means that every new exahash brought online drops to the bottom line, reducing the need to sell Bitcoin to cover cash costs.
Q:What are your expectations for network hash rate growth over the next year?
A:The company expects a general slowing of hash rate growth due to reduced capital deployment by public miners and an upgrade cycle for more efficient miners. The company is confident in outpacing global hash rate growth and sees M&A as a way to add hash rate without diluting itself.
Q:What are the risks in the yield-generating strategy?
A:The strategy involves writing short-term high-delta calls and longer-term low-delta calls, with collateral posted as a percentage of contracts. The company conducts due diligence on counterparties to reduce risk and uses premiums to offset operational costs.
Q:What is the timeline for M&A opportunities, and are assets attractive now compared to a few years ago?
A:The company sees a robust pipeline of opportunities, focusing on the best ROI. It avoids paying premiums for public companies and prefers private or greenfield acquisitions.
Q:How are you weighing the potential flexibility of certain sites for non-mining applications like AI/HPC?
A:The company evaluates geography and returns, favoring sites near major metro areas. Any shift would require better returns than Bitcoin mining and consideration of opportunity costs from lost revenue during site transitions.
Q:What are you seeing in terms of transaction fees for each Bitcoin block?
A:Transaction fees are currently low, between 1%-3% of the block size. The company expects fees to increase with Bitcoin adoption, providing additional revenue without incremental costs.
Q:Is there a market for older mining equipment as you upgrade your fleet?
A:Yes, there is a robust market for older miners, especially due to tariffs and shipping timing. The company extracts value from selling older equipment, which helps with ROI calculations for future investments.
Q:Why is 40% of the HODL balance used for asset management, and what limits this percentage?
A:The 40% allocation reflects a conservative approach to risk management. Only a percentage of this is posted as collateral, and the company adjusts the allocation based on opportunities and experience.
Q:How might changes in the nation's energy strategy impact your expansion activities?
A:The company sees medium- to long-term benefits from policies focusing on generation, which could lower power costs. In the short term, the company is well-positioned to handle volatility and views the U.S. as a strong location for growth.
Q:Review of Unclear Management Responses
A:Management avoided providing specific timelines or details for certain M&A opportunities, the exact impact of energy policies on short-term operations, and the potential shift to non-mining applications like AI/HPC. Responses were often broad, emphasizing optionality and strategic evaluation without committing to concrete actions or outcomes.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Bitmain
Chief
Co
House
Inc Research
LLC Research
Officer
President
Research Division
Washington
activity
basis
compute
concept
cost spot
design
desk
dollar
end hash
exahash hash
exahash milestone
exahash share
extent
figure
fleet efficiency
focus
gigawatt
history
insurance
land
lending
model
money
partner
policy
power opportunity
power portfolio
proof
rate exahash
self
speed
spot price
state level
tailwind
yield
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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