HIVE Digital Technologies Ltd. (HIVE:CA) Q3 2026 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call showed strong financial performance with significant revenue growth, improved margins, and increased Bitcoin production. The strategic partnership with Bell Canada and plans for expansion in AI and HPC sectors are promising. Despite a net loss due to noncash charges, future guidance is optimistic. The Q&A session confirmed robust demand for GPUs and strategic capital allocation, enhancing growth prospects. However, management's reluctance to provide specific details on CapEx for the New Brunswick facility slightly tempers the outlook, but overall, the sentiment remains positive.
Key Financial Performance
Bitcoin production 191% year-over-year growth. Despite increased difficulty, economies of scale and improved fleet efficiency contributed to this growth.
Revenue $93 million for the quarter, a significant increase from $29.2 million in the previous year's quarter. This growth was driven by higher production scale and operational uptime.
Gross Operating Margin $32 million for the quarter, up from $5.3 million in the previous year's quarter. The margin expanded from 18% to 35% year-over-year due to efficiency initiatives and higher production.
Net Loss $91 million for the quarter, compared to a net income of $68.2 million in the previous year's quarter. The loss was primarily due to noncash charges, including $57 million in depreciation and $31 million in fair value derivative changes.
Adjusted EBITDA $5.7 million for the quarter, down from $82.9 million in the previous year's quarter. The prior year's figure included a $77.4 million unrealized gain on digital currencies.
Bitcoin Mined 879 Bitcoin mined during the quarter, up from 719 in the previous quarter. This increase was supported by stable operations and the expansion in Paraguay.
HPC Revenue $5 million for the quarter, contributing to a $20 million annualized run rate. This was driven by the addition of GPUs and strong demand for HPC services.
Fleet Efficiency Improved from 17.5 to 16.7 Joules per Terahash, reducing global mining costs by 5%. This was achieved through the upgrade of mining equipment using a dynamic HODL strategy.
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Operating Highlights
GPU Cloud Revenue: Achieved $30 million 2-year contract for NVIDIA Blackwell GPUs, increasing ARR to $35 million. Targeting $225 million ARR by year-end with 11,000 GPUs.
Bitcoin Mining: Achieved 25 exahash capacity, producing 879 Bitcoin in the quarter. Expanded operations in Paraguay with 100 MW PPA.
Paraguay Expansion: Expanded operations to 440 MW globally, with an additional 100 MW PPA in Paraguay. Paraguay positioned as a stable jurisdiction for investment.
HPC Market Demand: Strong demand for HPC services, with realized contract values 30% above forecasted prices.
Operational Efficiency: Improved fleet efficiency from 17.5 to 16.7 Joules per Terahash, reducing global mining costs by 5%.
Revenue Growth: Achieved $93 million in total revenue, a 300% increase year-over-year, with $32 million gross operating margin.
Strategic Shift to HPC: Focused on Tier 3 data center conversion and HPC growth, targeting $225 million ARR by year-end.
Dynamic Treasury Management: Realized $14 million value from Bitcoin pledge strategy, reinvested in new ASICs to enhance efficiency.
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Risk or Challenges
Market Volatility: The cryptocurrency market, including Bitcoin, is experiencing significant volatility, with events like the Binance flash crash on October 10, 2025, causing a $350 billion drop in total crypto market cap. This has led to margin calls, loss of trust in ETFs, and amplified stress in the ecosystem.
Regulatory Uncertainty: The U.S. Senate Committee's delay in passing a crypto bill, coupled with opposition from Coinbase, creates uncertainty for the crypto ecosystem. Additionally, the lack of regulation in exchanges like Binance undermines trust and stability.
Competitive Pressures: Increased competition in the AI and GPU cloud markets, as well as the Bitcoin mining sector, poses challenges. Companies like NVIDIA and AMD are advancing rapidly, and hyperscalers are ramping up their CapEx, intensifying competition.
Supply Chain Disruptions: Backlogs for critical components like transformers, server racks, and chillers for data center construction are delaying expansion plans. This impacts the ability to scale operations efficiently.
Economic Uncertainties: Global economic factors, including China's weaponization of trade and the BRICS nations moving away from the U.S. dollar, create macroeconomic risks. Additionally, the carry trade unwinding has added $500 billion in stress to the market.
Strategic Execution Risks: The transition from Bitcoin mining to high-performance computing (HPC) data centers is complex and requires significant investment in infrastructure, such as thicker cement floors and advanced cooling systems. Delays in these projects could impact revenue growth.
Trust and Reputation Risks: Events like the Binance flash crash and the lack of regulatory oversight have eroded trust in the crypto ecosystem. This could deter institutional and retail investors, impacting market liquidity and growth.
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Guidance & Outlook
Business Growth: We grew our business from 6 exahash to 25 exahash in 2025, and we are 2% of the global network. We still have more growth ahead in 2026, with a very pragmatic and thoughtful expansion.
Production Growth: Bitcoin production showed 191% year-over-year growth. Despite increased difficulty, we maintained substantial growth due to economies of scale.
Fleet Efficiency: We have driven down our fleet efficiency to 17.5 joules per terahash, with the next generation expected to reduce this to 11 joules.
Strategic Vision: Our long-term vision is to reach $10 million a month in revenue, with a focus on measured growth and maintaining a conservative balance sheet.
Data Center Expansion: We are expanding our data centers in New Brunswick and Paraguay, with plans to convert New Brunswick to a Tier 3 data center, adding $85 million of ARR.
HPC and GPU Cloud Business: We are targeting $225 million ARR between the GPU cloud business and HPC colo, with plans to scale to 11,000 GPUs by the end of the year.
Partnerships: We have a 2-year contract with Bell Canada for GPU rollout, and we are working with the government of Paraguay to expand our operations there.
Market Position: We aim to become the biggest player in Canada and Paraguay in the data center and AI infrastructure space.
Revenue Projections: We project $385 million ARR for the quarter, with a target of $225 million ARR between the GPU cloud business and HPC colo.
HPC Revenue Growth: We expect a 70% increase in HPC ARR, reaching $35 million by the end of the current quarter.
Bitcoin Mining: We are mining approximately 10 Bitcoin a day, with a focus on maintaining low G&A per Bitcoin mined.
Future Contracts: We have secured a 2-year contract for NVIDIA Blackwell B200 GPUs, which will be cash flowing by the end of the current quarter.
Market Demand: Strong market demand for our GPU cloud services, with potential to reach $200 million ARR by the end of the year.
Geographical Diversification: Our operations in Paraguay and Canada provide geographical diversification, with plans to expand further in these regions.
Energy Efficiency: We are focused on improving energy efficiency, with plans to reduce joules per terahash to 11 in the next generation.
Strategic Partnerships: We are working with Bell Canada and the government of Paraguay to expand our data center and AI infrastructure.
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Shareholder Return Plan
The selected topic was not discussed during the call.
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Key Q&A
Q:Can you benchmark the thought process of returns with AI cloud versus colocation and the specific metrics used for decision-making?
A:The ROIs on GPUs are approximately 2.5 years after direct operating costs. The company has experience operating GPUs from Ethereum mining days and has had AI cloud revenue for 3 years. They sold 34,000 NVIDIA A series GPUs at 80%-90% of face value to upgrade to H100s and H200s. GPUs have strong residual market value, retaining 60%-80% of their value after 3-4 years. The demand for GPUs is increasing, driven by higher hourly rental rates and market prices. The company aims to bring more GPUs online, targeting 11,000 GPUs and $200 million ARR.
Q:Is the mention of Tier 3 hyperscaler in New Brunswick meant to benchmark the level of build or indicate interest from hyperscalers?
A:The company has been in talks with interested groups and is advancing engineering design for New Brunswick. They aim for a market rate of $130 per kilowatt per month, targeting $80 million ARR with 53 megawatts of IT load. Updates will be provided as designs and conversations progress.
Q:What is the current breakeven price for Bitcoin mining operations, and how does Bitcoin's current level influence capital allocation for AI and HPC infrastructure?
A:The company is scaling its Bitcoin mining business to 25 exahash by 2025, reflecting significant capital deployment. They aim to scale HPC revenue from $20 million ARR to $225 million ARR by expanding the GPU cloud from 5,000 to 11,000 GPUs and converting New Brunswick to Tier 3 HPC. They use OEM vendor financing for GPUs with single-digit interest rates, enabling a CapEx-light, high-margin GPU cloud business. In Paraguay, they are building power infrastructure for 100 megawatts, which can support both Bitcoin mining and future HPC conversion.
Q:What are the milestones and CapEx for the New Brunswick Tier 3 HPC facility?
A:The company has purchased additional land and is advancing design and permitting. The next step involves ordering long lead items. No further specifics were provided, but updates will be announced as milestones are achieved.
Q:Why is there a mismatch between 3-year OEM financing and 2-year deals?
A:The mismatch allows for better cash flow management. GPUs have strong residual value, providing optionality to sell for a gain or re-rent after 2 years.
Q:What is the expected depreciation expense for the next few quarters?
A:Depreciation can be estimated based on the incremental amount from Q1 to Q3. All ASIC equipment in Paraguay was operational by Q3, which will drive future depreciation.
Q:What are the CapEx requirements for the remaining GPUs at Manitoba, and is there any CapEx needed for the data center?
A:The first cluster of 504 GPUs is being commissioned and expected to go live by March 31. The company plans to finance and deploy additional clusters in a similar manner. No additional CapEx is needed for the Manitoba data center.
Q:Review of Unclear Management Responses
A:Management avoided providing specific details on the milestones and CapEx for the New Brunswick Tier 3 HPC facility, stating only that updates will be announced as milestones are achieved.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
AI
ARR
America
China
Coinbase
GPU
GPUs
HIVE
HPC
NVIDIA
Paraguay
SP
bank
basis
center
cloud
contract
country
crash
crisis
day
demand
deviation
dollar
dot
ecosystem
end
energy
exahash
fintech
hash price
lot
margin
market fund
megawatt
mining
money market
month
news
stablecoin
value
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HIVE Transcript
HIVE Digital Technologies Ltd. (HIVE:CA) Q3 2026 Earnings Call Transcript
Positive2-17
The earnings call showed strong financial performance with significant revenue growth, improved margins, and increased Bitcoin production. The strategic partnership with Bell Canada and plans for expansion in AI and HPC sectors are promising. Despite a net loss due to noncash charges, future guidance is optimistic. The Q&A session confirmed robust demand for GPUs and strategic capital allocation, enhancing growth prospects. However, management's reluctance to provide specific details on CapEx for the New Brunswick facility slightly tempers the outlook, but overall, the sentiment remains positive.
HIVE Digital Technologies Ltd. (HIVE:CA) Q2 2026 Earnings Call Transcript
Positive11-17
The earnings call shows a significant improvement in operating margin and adjusted EBITDA, suggesting strong operational efficiency. Despite a net loss, the company's strategic investments and expanded Bitcoin production indicate a positive outlook. The Q&A section highlights a proactive capital strategy and a strong liquidity position. Concerns about unclear management responses are offset by optimistic guidance on AI and HPC opportunities. Overall, the positive financial performance and strategic initiatives suggest a favorable stock price reaction, likely in the positive range of 2% to 8%.
HIVE Digital Technologies Ltd. (HIVE) Q4 2025 Earnings Call Transcript
Unknown6-26
The earnings call presents a mixed picture. Positive elements include the expansion of HPC capabilities and strong demand projections, particularly for GPUs. However, uncertainties around the cost of acquisition and retrofit, along with the lack of clear guidance on financing and demand specifics, raise concerns. The market's reaction is likely to remain neutral due to these mixed signals, with no clear catalyst for a strong price movement in either direction.
Earnings call transcript: HIVE Digital Tech posts Q3 FY2025 profit, stock dips
Unknown2-12
The earnings call presents mixed signals. While there are positive aspects such as a profit per share, a strong cash position, and an increase in digital currency holdings, the revenue and margins have declined year-over-year. The Q&A reveals uncertainty in the AI cloud business demand and vague responses on future opportunities, which may concern investors. Despite improvements in adjusted EBITDA and strategic investments, the halving event and increased mining difficulty impact negatively. The overall sentiment remains neutral due to these balanced positive and negative factors.
HIVE Slides
HIVE Report
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