CleanSpark, Inc. (CLSK) Q4 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
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.
Key Financial Performance
Revenue $766 million, a 100% increase year-over-year. The increase was driven by growth in exahash and Bitcoin price.
Gross Margin 55%, a 1% decrease year-over-year. This decrease is notable as it occurred in the first full year post-halving, when Bitcoin block rewards were reduced by 50%.
Bitcoin Treasury Grew by nearly 62% to over 13,000 Bitcoin, generated entirely from wholly owned and operated hash rate.
Adjusted EBITDA Over $800 million, with a normalized adjusted EBITDA of approximately $305 million after excluding noncash items. This represents a net margin of approximately 40%.
Net Income Approximately $365 million, driven by increases in margins and the fair value of the 13,000+ Bitcoin on the balance sheet.
Quarterly Revenue Growth Increased by $25 million or 13% in Q4 versus Q3, driven by favorable mining economics and high uptime.
Quarterly Margins Increased by 2 points to 56.5% in Q4, attributed to favorable mining economics and operational efficiency.
Average Marginal Cost per Bitcoin Slightly below $43,000 for the fiscal year, while the average revenue per Bitcoin was approximately $98,000.
Digital Asset Management (DAM) Premiums Generated $9.3 million in premiums in Q4, with an all-in effective cash generated per Bitcoin of almost $116,000, a material uplift from the average spot Bitcoin sales price of $111,721.
Convertible Note Financing $1.15 billion upsized 0% convertible note with a 27.5% conversion premium and a 6.25-year term. Proceeds were used for stock buybacks, debt repayment, and strategic growth opportunities.
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Operating Highlights
AI Factories: CleanSpark is positioning itself to evolve its portfolio into AI factories, leveraging its expertise in securing power, developing infrastructure, and deploying at scale. The company has secured a 285-megawatt site in Texas for its first purpose-built AI factory and is aligning its team to deliver projects on time and on budget.
Immersion Units Deployment: CleanSpark is deploying 19,000 S21 XP Immersion units with industry-leading efficiency, expected to be completed by Q1 2026.
Geographic Expansion: CleanSpark has expanded its power and land portfolio across the U.S., with over 1 gigawatt of power under contract and nearly 300 megawatts in Texas scheduled for energization by 2027. The company is also exploring multi-gigawatt opportunities for AI campuses and Bitcoin mining.
Record Revenues: Achieved record revenues of $766 million in fiscal year 2025, with a gross margin of 55%.
Bitcoin Mining Efficiency: Produced nearly 8,000 Bitcoin with an average marginal cost of $43,000 per Bitcoin and an average revenue of $98,000 per Bitcoin, maintaining high margins.
Digital Asset Management (DAM): Generated $9.3 million in premiums through innovative strategies like Spot Plus and yield programs, enhancing cash flow and Bitcoin monetization.
AI Data Center Strategy: CleanSpark is transitioning into an infrastructure and compute platform, focusing on AI data centers. The company is leveraging its infrastructure-first model to secure tenants and expand its land and power footprint.
Convertible Note Financing: Completed a $1.15 billion upsized 0% convertible note, using proceeds for stock buybacks, debt repayment, and strategic growth opportunities.
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Risk or Challenges
Bitcoin mining timeline delays: The deployment of 19,000 S21 XP Immersion units is taking longer than initially planned, now expected to complete in Q1 of 2026. This delay could impact operational efficiency and revenue generation in the short term.
Regulatory and market risks: The company’s operations and future plans are subject to regulatory risks and market conditions, as highlighted in their 10-K disclosures. These factors could adversely affect their strategic objectives.
AI data center execution risks: The transition into AI data centers involves securing tenants and delivering projects on time and on budget. Any delays or failures in execution could impact financial performance and strategic goals.
Supply chain and infrastructure challenges: Scaling the mining business and evolving into AI data centers require significant supply chain, engineering, and construction capabilities. Any disruptions in these areas could hinder progress.
Economic and Bitcoin price volatility: The company’s financial performance is heavily influenced by Bitcoin price fluctuations and economic conditions, which could impact margins and revenue.
Increased operational costs: The AI strategy is expected to increase professional fees, payroll, and general administrative expenses, potentially affecting profitability.
Dependence on tenant acquisition: The success of AI data centers is contingent on acquiring long-term tenants. Failure to secure tenants could result in underutilized assets and financial strain.
Convertible note risks: The $1.15 billion convertible note, while at 0% interest, introduces financial obligations and potential dilution risks if converted into equity.
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Guidance & Outlook
AI Compute Expansion: CleanSpark is positioning itself to support the growing demand for AI compute by leveraging its expertise in securing power, developing infrastructure, and deploying at scale. The company is evolving into a diversified compute platform to serve the needs of the next digital age.
AI Data Center Development: CleanSpark has secured a 285-megawatt site in Texas for its first purpose-built AI factory and is aligning its internal team to deliver projects on time and on budget. The company is also vetting potential tenants and building commercialization plans for its AI campuses.
Infrastructure-First Strategy: The company has prioritized control of power and infrastructure, securing over 1 gigawatt of power under contract and nearly 300 megawatts in Texas scheduled for energization in early 2027. This strategy supports both Bitcoin mining and AI data center development.
Strategic Partnerships: CleanSpark has entered into a memorandum of understanding with Submer to develop sustainable modular data center systems, integrating power generation, data center development, and AI service delivery.
AI Data Center Revenue Potential: CleanSpark expects stable cash flows and high margins from its AI data center business, which will help mitigate the volatility of Bitcoin mining economics.
Tenant Acquisition for AI Campuses: The company is focused on securing tenants for its Sandersville and Houston sites, which will drive commercialization and commissioning efforts.
Capital Strategy for AI Expansion: CleanSpark has raised $1.15 billion through a convertible note to fund AI deployments, expand its power and land portfolio, and invest in strategic growth opportunities.
Future AI Campus Development: CleanSpark plans to expand its AI-focused campuses beyond the initial Texas site, leveraging its vertically integrated infrastructure-first model to meet market demand.
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Shareholder Return Plan
Stock Buyback: CleanSpark completed a $1.15 billion upsized 0% convertible note financing. As part of this transaction, the company bought back $460 million worth of its own stock, representing a more than 10% reduction in outstanding shares. This move was described as a bet on the company's future success.
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Key Q&A
Q:What types of conversations are you having with potential clients and your outlook for demand in the HPC-AI space over the next 2 years?
A:The company has had extensive conversations, including meetings with NVIDIA and follow-ups. There is strong demand for Sandersville and growing traction for the Sealy, Texas site. Despite delivery challenges and credit risks faced by peers, the company is optimistic due to its $800 million annual run rate and 55% gross margins.
Q:What is your perspective on pairing Bitcoin mining with HPC campuses for power-usage versatility?
A:The company sees a dual-pronged strategy. Utilities appreciate Bitcoin miners for their interruptible load, which helps with load balancing. The company has experience in this area and plans to blend AI, HPC, and Bitcoin mining at many sites to serve both loads.
Q:What are some key development milestones for the HPC strategy in 2026?
A:The focus is on deployments at Texas and Sandersville sites. Sandersville is live, powering 11 exahash of Bitcoin miners, but can switch to a 200-megawatt critical IT load. The company has an MOU with Submer for modular immersion-cooled data centers, which speeds up deployment and reduces costs by 10-15%.
Q:What are your near-term expansion plans for the Bitcoin mining business?
A:The company plans to migrate Bitcoin mining to remote locations with favorable utility rates. Locations like Sandersville and Metro Atlanta will prioritize HPC-AI due to quick access to fiber and low latency. The company aims to grow from 50 exahash per second to an additional 6 exahash by Q1 2026, focusing on fleet upgrades and maintaining efficient operations.
Q:How should we think about the aspiration to build a powered land bank while growing the Bitcoin mining fleet?
A:The company will continue to monetize its Bitcoin stack through yield strategies, borrowing, and potential sales. It uses Bitcoin as a form of non-dilutive capital but is strategic about its balance. The company is open to selling Bitcoin if necessary but considers tax implications.
Q:What is the economic impact of the MOU with Submer?
A:The MOU with Submer allows for modular immersion-cooled data centers, which save 10-15% in costs and significantly speed up deployment. Building 1 megawatt of mining infrastructure costs about $1 million, while AI and HPC infrastructure costs closer to $10 million per megawatt.
Q:Can you provide more details about the Texas facility and its expansion potential?
A:The Texas facility will energize in 2027, with 200+ megawatts online in the first half and additional tranches in 2028 and 2029. The site has significant land for expansion and is fully ERCOT-approved. The company plans to use behind-the-meter gas generation for additional scalability.
Q:Is the Sandersville site subject to forced curtailment, and how will you balance HPC and mining there?
A:The Sandersville site is not subject to forced curtailment. The company will balance HPC and mining based on return on investment, with early indications favoring AI as the highest and best use for the site.
Q:How are you addressing credit concerns with neocloud customers and focusing on hyperscalers?
A:The company is prioritizing high-credit-quality tenants to secure the best financing deals. It is confident in obtaining financing at attractive prices and plans to introduce secured debt into the capital stack while maintaining flexibility.
Q:What type of CapEx is required to upgrade Sandersville to HPC, and what are the use cases?
A:The Sandersville site will require new construction on adjacent land for HPC. Use cases include training and inference, with demand for 200-megawatt critical IT loads by 2026. The company is uniquely positioned to meet this demand.
Q:Why is it taking competitors so long to secure leases for HPC-AI conversions?
A:Competitors may face challenges in building sites that meet specific reference architecture requirements for hyperscalers. The company focuses on purpose-built facilities tailored to end-user needs, which accelerates lease execution.
Q:What happens to Bitcoin mining operations when switching Sandersville to HPC?
A:Bitcoin mining ASICs will be migrated to other facilities, and the existing infrastructure will be repurposed. The company has flexibility to move operations to locations like Wyoming or Tennessee.
Q:How does the company plan to manage increased expenses and Bitcoin price fluctuations?
A:The company generates 600-700 Bitcoin per month at 54-55% gross margins. It has $400 million in low-interest Bitcoin-backed credit facilities and plans to use a hybrid approach of financing and Bitcoin sales to manage expenses.
Q:What is the status of the multi-gigawatt pipeline, and where are the opportunities?
A:The company has a dynamic pipeline with opportunities in Georgia, Tennessee, Wyoming, and Texas. Relationships with utilities like TVA provide flexibility and scalability for future projects.
Q:Review of Unclear Management Responses
A:Management avoided directly addressing the timeline for securing leases for HPC-AI conversions, stating only that demand is high and leases will be executed faster than competitors. They also did not provide specific costs for the Texas facility acquisition or detailed CapEx for Sandersville's HPC upgrade.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
AI campus
AI center
AI factory
BITMAIN
Chairman
CleanSpark result
Colby
DAM
Houston
President
Sandersville
Spot
Texas
cash premium
center development
center infrastructure
commercialization
compute platform
delivery
element
expiry
fiber
financing
front
gain value
income
infrastructure platform
land portfolio
line item
loss
need
noncash market
note
power land
program
sale
step
tenant
value noncash
volume
world class
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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