Group 1 - Bitfarms (BITF) stock has achieved a six-day winning streak, resulting in a total gain of 126% during this period, with its current valuation around $1.6 billion [2] - The stock price of Bitfarms is currently 94% higher than its closing value at the end of 2024, contrasting with a year-to-date return of 12.3% for the S&P 500 [2] - Positive investor sentiment is noted for Bitcoin miners, with significant stock price increases for companies like Iris Energy, CleanSpark, and Marathon Digital, driven by expectations of U.S. Federal Reserve interest rate cuts [3] Group 2 - Bitfarms provides cryptocurrency mining services through server farms in North America, validating Bitcoin transactions, and also offers electrical services to commercial and residential clients in Quebec, Canada [4] - A comparison of BITF stock returns with the S&P 500 index indicates that momentum in stock performance can signal increasing investor confidence, which may lead to further buying opportunities [5] - Currently, 23 S&P 500 constituents have experienced three or more consecutive days of gains, while 139 constituents have faced three or more consecutive days of losses [6]

Core Viewpoint - Bitfarms stock price has experienced a significant increase, reaching a high of $2.90, marking its highest level since July of the previous year and a 350% rise from its lowest point this year [1] Company Summary - The stock price surge indicates strong market interest and potential investor confidence in Bitfarms, reflecting a broader trend in the cryptocurrency mining sector [1]

Core Insights - The article serves as a follow-up on Bitfarms Ltd. (NASDAQ: BITF) (TSX: BITF:CA) since the last coverage in May, indicating ongoing interest in the company's developments [1] Company Overview - Bitfarms is involved in cryptocurrency mining and has been strategically resetting its operations as noted in the previous article titled "Bitfarms: Q1 Was A Strategic Reset" [1] Analyst Background - The author has a strong background in cryptocurrency, having been an enthusiast and trader since 2017, with expertise in distributed ledger technology and crypto investment strategies [1]

Group 1 - Cryptocurrency and stablecoin stocks have declined, with Bitfarms dropping over 6%, Robinhood falling more than 5%, and Circle and Canaan Technology decreasing over 4% [1] - Riot Platforms, Bullish, and Trump Media Technology Group have all seen declines of more than 3.5% [1] - The market is currently focused on the Jackson Hole Federal Reserve annual meeting, leading investors to withdraw from technology stocks and high-risk assets [1]

Core Viewpoint - Bitfarms Ltd. has appointed Wayne Duso to its Board of Directors, which now consists of seven members, six of whom are independent, marking a strategic move to enhance its capabilities in the HPC/AI sector [1][5]. Company Overview - Bitfarms is a North American energy and digital infrastructure company focused on building and operating data centers and energy infrastructure for high-performance computing and Bitcoin mining [6][7]. - The company has a robust energy pipeline of 1.3 GW, with over 80% of this capacity based in the U.S., strategically located in areas with strong access to power and fiber infrastructure [6]. Appointment of Wayne Duso - Wayne Duso brings over 25 years of experience in enterprise technologies, particularly in cloud storage systems for large-scale data centers, which is crucial for managing data for AI training and hybrid cloud environments [2][3]. - Duso's previous role at Amazon Web Services involved scaling operations significantly, launching multiple unicorn businesses, and achieving over $1 billion in annual recurring revenue [3]. - His educational background includes a B.S. in Computer Science and an M.S. in Systems Engineering, along with executive education from prestigious institutions [4]. Strategic Importance - The appointment of Duso is seen as timely for Bitfarms as it aims to accelerate its HPC/AI business development across North America [5]. - Duso expressed enthusiasm about joining Bitfarms, highlighting the company's strategic pivot towards HPC/AI and its substantial energy capacity, which aligns with the needs of hyperscalers [5].

Company Strategy - Bitfarms is looking to redomicile in the US [1] Financial Performance - Bitfarms' revenue jumps 87% year-over-year [1]

Core Insights - Bitfarms Ltd. reported a quarterly loss of $0.02 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.01, but an improvement from a loss of $0.07 per share a year ago [1] - The company posted revenues of $77.8 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 4.73%, but showing significant growth from $41.55 million year-over-year [2] - Bitfarms shares have declined approximately 17.5% year-to-date, contrasting with the S&P 500's gain of 8.4% [3] Earnings Outlook - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the next quarter is -$0.01 on revenues of $88.44 million, and for the current fiscal year, it is -$0.10 on revenues of $330.72 million [7] Industry Context - The Technology Services industry, to which Bitfarms belongs, is currently ranked in the top 39% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors or through tools like the Zacks Rank [5][6]

Financial Data and Key Metrics Changes - In Q2 2025, the company mined 7.18 Bitcoin with a direct cost of $48,200 per Bitcoin, achieving revenues of $98,000 per Bitcoin [6][37] - Total revenue for the quarter was $78 million, representing an 87% year-over-year increase, with mining activities contributing $71 million [37] - The gross mining profit was $32 million, resulting in a direct mining margin of 45% [37] - The company reported a net loss of $29 million for the quarter, which included $15 million in impairment charges related to operations in Argentina [38] Business Line Data and Key Metrics Changes - The company completed its Bitcoin mining growth plans by installing over 12,000 miners across all facilities [6] - Free cash flow from mining operations is approximately $8 million per month, with Bitcoin holdings increasing to approximately 1,200, up 25% from the end of 2024 [11][26] - The average electricity price improved by 2%, and direct hash costs improved by 5% [8] Market Data and Key Metrics Changes - The company is positioned as a major player in the North American market, particularly in Quebec and Pennsylvania, with significant investments from major tech firms in nearby data centers [12][18] - The Pennsylvania portfolio is expected to benefit from a surge in data center investments, with commitments exceeding $90 billion from companies like Google and Meta [18] Company Strategy and Development Direction - The company is transitioning from Bitcoin mining to focus on high-performance computing (HPC) and AI, leveraging its energy portfolio [6][12] - Plans to convert Canadian Bitcoin mining megawatts to HPC data center megawatts are in progress, pending regulatory approval [15][61] - The company aims to become a US-domiciled entity by 2026, which is expected to enhance its access to US capital markets and improve operational efficiencies [24][36] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to generate strong cash flows from Bitcoin mining while transitioning to HPC and AI [26] - The company anticipates that the market is undervaluing both its Bitcoin business and HPC potential, leading to the initiation of a stock buyback program [26][27] - Management highlighted the importance of the upcoming 2026 power availability for attracting customers to the Panther Creek site [50] Other Important Information - The company has secured a financing agreement with Macquarie for up to $300 million to fund the Panther Creek HPC data center project [28][29] - The company plans to execute a stock buyback program for up to $49.9 million, funded by excess cash flow from mining operations [32][27] Q&A Session Summary Question: What is the game plan for getting construction procurement lined up for Panther Creek? - The company is engaging T5 to manage the development process, including securing permits and overseeing contractors [45] Question: What is the total CapEx for the Panther Creek project? - The total build-out cost is estimated to be around $400 million, with $10.5 million planned for the remainder of 2025 [47] Question: How does the demand for larger data center campuses affect Panther Creek's strategy? - The company is seeing increased demand for larger campuses, but immediate power availability in 2026 is a priority for potential customers [50] Question: What is the expected timeline for the Macquarie credit facility approval process? - The approval process is expected to take a couple of months, with the company having sufficient liquidity to fund current expenditures [67] Question: How is the company planning to manage share buybacks going forward? - The company anticipates continuing share buybacks based on cash flow generation from Bitcoin mining activities [70] Question: What is the expected revenue per megawatt for the Panther Creek site? - The company is not ready to commit to specific revenue figures as it depends on customer conversations and agreements [81]

Q2 2025 Production Update - Earned 718 BTC in Q2 2025[17] - Direct cost per BTC was $48200[17] - Revenue per BTC was $98000[17] - Estimated proceeds of $18 million for reinvestment in the US from Argentina shut-down[18] - Achieved a 5% improvement in direct hashcost[18] Bitcoin Business - Bitcoin holdings are approximately 1200 BTC, up about 25% from year-end 2024[25] - The company's hashrate is 177 EHuM[21] - Mining operations generate approximately $8 million in free cash flow per month[23, 26] Energy Portfolio and HPC/AI Development - The company has a 1 GW energy pipeline in Pennsylvania[28, 42] - The company has a 1 GW data center built in Washington[28] - The company has a 170 MW energy pipeline in Quebec[28] - The company secured $300 million in debt financing from Macquarie Group for initial Panther Creek data center development[47] Financial Highlights - Q2 2025 revenue was $78 million, an increase of 87% year-over-year from $42 million in Q2 2024[49] - Q2 2025 gross mining margin was 43%[50] - Q2 2025 Adjusted EBITDA was $14 million, an increase of 27% year-over-year from $11 million in Q2 2024[53] - The company has approximately $230 million in total liquidity as of August 11, 2025[56]

[Interim Consolidated Statements of Financial Position](index=3&type=section&id=Interim%20Consolidated%20Statements%20of%20Financial%20Position) [Summary of Financial Position](index=3&type=section&id=Interim%20Consolidated%20Statements%20of%20Financial%20Position_Summary) The company's financial position as of June 30, 2025, shows significant increases in total assets, liabilities, and equity, primarily driven by business acquisitions and financing activities **Consolidated Statements of Financial Position (kUSD):** | Category | June 30, 2025 | December 31, 2024 | Change | | :--------------------------------------- | :------------ | :---------------- | :----- | | **Assets** | | | | | Total Current Assets | 278,261 | 213,709 | +64,552 | | Total Non-current Assets | 549,689 | 453,907 | +95,782 | | **Total Assets** | **827,950** | **667,616** | **+160,334** | | **Liabilities** | | | | | Total Current Liabilities | 89,470 | 36,270 | +53,200 | | Total Non-current Liabilities | 75,994 | 23,351 | +52,643 | | **Total Liabilities** | **165,464** | **59,621** | **+105,843** | | **Shareholders' Equity** | **662,486** | **607,995** | **+54,491** | | **Total Liabilities and Equity** | **827,950** | **667,616** | **+160,334** | - Significant increases in Property, Plant and Equipment (PPE) to **$477,086k** (from $348,525k) and Long-term Debt to **$50,999k** (from $1,430k) reflect capital investments and new financing[3](index=3&type=chunk) - Digital assets (excluding restricted) decreased to **$59,029k** from $87,298k, while restricted digital assets increased to **$66,922k** from $32,826k[3](index=3&type=chunk) [Interim Consolidated Statements of Profit or Loss and Comprehensive Profit or Loss](index=5&type=section&id=Interim%20Consolidated%20Statements%20of%20Profit%20or%20Loss%20and%20Comprehensive%20Profit%20or%20Loss) [Summary of Profit or Loss and Comprehensive Profit or Loss](index=5&type=section&id=Interim%20Consolidated%20Statements%20of%20Profit%20or%20Loss%20and%20Comprehensive%20Profit%20or%20Loss_Summary) For the six months ended June 30, 2025, revenues increased substantially, but higher costs, expenses, and impairment losses led to a larger net and comprehensive loss **Consolidated Statements of Profit or Loss (kUSD, except per share amounts):** | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenues | 77,800 | 41,548 | 144,648 | 91,865 | | Cost of revenues | (83,280) | (52,823) | (150,670) | (113,822) | | Gross loss | (5,480) | (11,275) | (6,022) | (21,957) | | Operating loss | (39,626) | (23,578) | (71,985) | (47,286) | | Net loss | (28,844) | (26,599) | (64,719) | (32,579) | | Total comprehensive loss, net of tax | (5,841) | (32,054) | (55,137) | (20,601) | | Loss per share (Basic and diluted) | (0.05) | (0.07) | (0.12) | (0.09) | - Revenues for the six months ended June 30, 2025, increased by **57.4% year-over-year**, reaching **$144,648k**[5](index=5&type=chunk) - Impairment of non-financial assets significantly impacted operating results, with a loss of **$31,850k** for the six months ended June 30, 2025, compared to nil in the prior year[5](index=5&type=chunk) [Interim Consolidated Statements of Changes in Equity](index=6&type=section&id=Interim%20Consolidated%20Statements%20of%20Changes%20in%20Equity) [Summary of Changes in Equity](index=6&type=section&id=Interim%20Consolidated%20Statements%20of%20Changes%20in%20Equity_Summary) Shareholders' equity increased for the six months ended June 30, 2025, primarily due to common share issuances and equity warrants, partially offset by net loss and revaluation surplus transfer **Consolidated Statements of Changes in Equity (kUSD, except number of shares):** | Metric | January 1, 2025 | June 30, 2025 | | :--------------------------------------- | :-------------- | :------------ | | Balance of shares | 479,332,885 | 557,548,857 | | Share capital | 852,286 | 947,329 | | Equity warrants | — | 11,477 | | Contributed surplus | 67,521 | 70,629 | | Accumulated deficit | (334,507) | (383,992) | | Revaluation surplus | 22,695 | 17,043 | | **Total equity** | **607,995** | **662,486** | **Key Changes (Six months ended June 30, 2025):** | Change | Value (kUSD) | | :--------------------------------------- | :----------- | | Net loss | (64,719) | | Change in revaluation surplus - digital assets, net of tax | 9,582 | | Issuance of common shares | 89,864 | | Issuance of equity warrants | 11,477 | | Share-based payment | 8,052 | - Total equity increased by **$54,491k** from January 1, 2025, to June 30, 2025[6](index=6&type=chunk) - Accumulated deficit increased by **$49,485k** due to the net loss and transfer of revaluation surplus[6](index=6&type=chunk) [Interim Consolidated Statements of Cash Flows](index=7&type=section&id=Interim%20Consolidated%20Statements%20of%20Cash%20Flows) [Summary of Cash Flows](index=7&type=section&id=Interim%20Consolidated%20Statements%20of%20Cash%20Flows_Summary) For the six months ended June 30, 2025, operating cash outflows increased, investing activities shifted to inflows, and financing activities continued substantial inflows, resulting in a net cash increase **Consolidated Statements of Cash Flows (kUSD):** | Category | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--------------------------------------- | :----------------------------- | :----------------------------- | | Net change in cash related to operating activities | (93,106) | (55,391) | | Net change in cash related to investing activities | 74,030 | (68,506) | | Net change in cash related to financing activities | 69,936 | 178,362 | | Net increase in cash | 50,860 | 54,465 | | Cash, beginning of the period | 59,542 | 84,038 | | Cash and restricted cash, end of the period | 110,439 | 138,619 | - Cash flows used in operating activities increased by **68.1% year-over-year**, reaching **$(93,106)k**[7](index=7&type=chunk) - Investing activities shifted from a net outflow of **$(68,506)k** in 2024 to a net inflow of **$74,030k** in 2025, largely due to proceeds from the sale of digital assets (**$137,734k**) and disposal of business (**$47,538k**)[7](index=7&type=chunk) [Notes to the Interim Condensed Consolidated Financial Statements (unaudited)](index=7&type=section&id=Notes%20to%20the%20Interim%20Condensed%20Consolidated%20Financial%20Statements%20(unaudited)) [1. Nature of Operations](index=8&type=section&id=1.%20Nature%20of%20Operations) Bitfarms Ltd. is a cryptocurrency mining company focused on Bitcoin, operating data centers across multiple countries, and recently expanded into refuse power generation via acquisition - Bitfarms' core business involves selling computational power for cryptocurrency mining, primarily on the Bitcoin Blockchain, operating 24 hours a day[9](index=9&type=chunk)[10](index=10&type=chunk) - The company's operations are located in Canada, the United States, Paraguay, and Argentina[9](index=9&type=chunk) - On March 14, 2025, Bitfarms acquired Stronghold Digital Mining, Inc., gaining two refuse power generation facilities and diversifying into internal energy consumption for computational activities or selling energy to the local grid[11](index=11&type=chunk) [2. Liquidity](index=9&type=section&id=2.%20Liquidity) Operating in the volatile Bitcoin Mining industry, Bitfarms faces inherent risks; despite negative operating cash flows, it projects sufficient liquidity for commitments but may require external funding for planned capital investments - The Bitcoin Mining industry is highly volatile, with risks from cryptocurrency price declines, increased mining difficulty, and regulatory changes impacting operations and liquidity[13](index=13&type=chunk) - The company's operating cash flows are negative, as proceeds from BTC sales are classified under investing activities[14](index=14&type=chunk) - Current cash resources and BTC sales are anticipated to be insufficient for planned capital investments in high-performance computing data centers, potentially requiring additional external funding[15](index=15&type=chunk) - On April 1, 2025, the company secured a credit facility for up to **$300,000k** with Macquarie Equipment Capital, Inc., with **$50,000k** drawn as of June 30, 2025[16](index=16&type=chunk) [3. Basis of Presentation and Material Accounting Policy Information](index=10&type=section&id=3.%20Basis%20of%20Presentation%20and%20Material%20Accounting%20Policy%20Information) Interim financial statements are prepared under IFRS Accounting Standards on a historical cost basis with fair value adjustments, adopting new policies for business combinations, warrants, revenue, and RECs, with restated comparative cash flow figures [a. Basis of preparation and measurement](index=10&type=section&id=3a.%20Basis%20of%20preparation%20and%20measurement) Financial statements are prepared under IFRS Accounting Standards on a historical cost basis, with fair value adjustments for certain financial instruments and digital assets - Financial statements are prepared in accordance with International Financial Reporting Standards (IFRS Accounting Standards), specifically IAS 34, Interim Financial Reporting[18](index=18&type=chunk) - The statements are based on the historical cost basis, with exceptions for the revaluation of certain financial instruments and digital assets at fair value, and assets held for sale measured at the lower of carrying amount and fair value less costs to sell[20](index=20&type=chunk) [b. Material new accounting policy information](index=10&type=section&id=3b.%20Material%20new%20accounting%20policy%20information) New accounting policies cover business combinations, warrant liabilities, revenue recognition for energy and hosting, and renewable energy credits - Business combinations are accounted for using the acquisition method, with consideration measured at fair value and acquisition-related costs expensed[22](index=22&type=chunk) - Warrants with a cashless exercise clause are classified as financial liabilities (warrant liabilities) and measured at fair value through profit or loss, while those without are equity instruments (equity warrants)[25](index=25&type=chunk) - Revenue from cryptocurrency hosting and energy sales is recognized over time as performance obligations are met, with energy sales recognized based on invoiced amounts corresponding to delivered megawatt hours[26](index=26&type=chunk)[27](index=27&type=chunk) - Rights to Renewable Energy Credits (RECs) are recognized as intangible assets (IAS 38), with a corresponding contra expense in cost of revenues to offset fuel expenses (IAS 20)[32](index=32&type=chunk) [c. New accounting amendments issued and adopted by the Company](index=13&type=section&id=3c.%20New%20accounting%20amendments%20issued%20and%20adopted%20by%20the%20Company) The company adopted amendments to IAS 21, The Effects of Changes in Foreign Exchange Rates, effective January 1, 2025, with no material impact - Amendments to IAS 21, The Effects of Changes in Foreign Exchange Rates, were adopted for the annual period beginning January 1, 2025, with no impact on the company[35](index=35&type=chunk) [d. New accounting amendments and standards issued to be adopted at a later date](index=14&type=section&id=3d.%20New%20accounting%20amendments%20and%20standards%20issued%20to%20be%20adopted%20at%20a%20later%20date) The company is evaluating the impact of future amendments to IFRS 9, IFRS 7, and the new IFRS 18 on financial statement presentation and disclosure - Amendments to IFRS 9 and IFRS 7 (effective January 1, 2026) clarify financial instrument recognition/derecognition, contingent cash flow characteristics, and disclosure requirements; the company is evaluating the impact[37](index=37&type=chunk)[38](index=38&type=chunk)[39](index=39&type=chunk)[40](index=40&type=chunk)[41](index=41&type=chunk) - IFRS 18, Presentation and Disclosure in Financial Statements (effective January 1, 2027), will replace IAS 1, introducing new concepts for profit or loss statement structure, management-defined performance measures, and aggregation principles; the company is evaluating the impact[41](index=41&type=chunk)[42](index=42&type=chunk) [e. Restatement of comparative figures](index=15&type=section&id=3e.%20Restatement%20of%20comparative%20figures) Comparative cash flow figures for June 30, 2024, were restated to reclassify proceeds from digital asset sales from operating to investing activities - The company restated comparative figures for the statement of cash flows for the six months ended June 30, 2024, reclassifying proceeds from the sale of digital assets from operating activities to investing activities[43](index=43&type=chunk) **Impact of Restatement on Cash Flows (Six months ended June 30, 2024, kUSD):** | Category | As Reported | Reclassification | As Restated | | :--------------------------------------- | :---------- | :--------------- | :---------- | | Net change in cash related to operating activities | 27,935 | (83,326) | (55,391) | | Net change in cash related to investing activities | (151,832) | 83,326 | (68,506) | [4. Significant Accounting Judgments and Estimates](index=14&type=section&id=4.%20Significant%20Accounting%20Judgments%20and%20Estimates) Management makes significant judgments and estimates for business combinations' fair value allocation and assessing significant influence in associates, which may differ from actual results - Significant judgments and estimates are required for business combinations, specifically in determining the fair value allocation of purchase consideration, which relies on forecasts of revenues, operating costs, capital expenditures, future digital currency prices, and income tax rates[47](index=47&type=chunk) - Determining the existence of significant influence in investments in associates requires judgment, even with less than 20% voting rights, based on factors like board representation, participation in policy-making, and material transactions[48](index=48&type=chunk) [5. Business Combination](index=15&type=section&id=5.%20Business%20Combination) On March 14, 2025, Bitfarms acquired Stronghold Digital Mining, Inc. for $144.7 million in a stock-for-stock merger, diversifying operations and expanding its U.S. presence through vertical integration - Bitfarms acquired **100%** of Stronghold Digital Mining, Inc. on March 14, 2025, in a stock-for-stock merger, issuing **59,866,609 common shares** and **12,893,650 warrants**[49](index=49&type=chunk) - The acquisition, valued at **$144,695k**, diversifies Bitfarms' operations and expands its U.S. presence through vertical integration of power generation and energy arbitrage capabilities[51](index=51&type=chunk)[53](index=53&type=chunk) **Stronghold's Contribution to Bitfarms (kUSD):** | Metric | Proforma (Jan 1 - Jun 30, 2025) | Actual Contribution (Mar 15 - Jun 30, 2025) | | :--------------------------------------- | :------------------------------ | :------------------------------------------ | | Revenue | 154,805 | 27,474 | | Net loss | (80,838) | (2,213) | - Total acquisition-related costs amounted to **$7,081k**, expensed as general and administrative expenses[55](index=55&type=chunk) [6. Sale of the Yguazu Mining Site](index=19&type=section&id=6.%20Sale%20of%20the%20Yguazu%20Mining%20Site) On March 17, 2025, Bitfarms sold its Yguazu, Paraguay mining site to HIVE Digital Technologies Ltd. for $63,260k, realizing a gain of $5,225k - Bitfarms sold its **100%** ownership stake in the Yguazu, Paraguay Bitcoin data center to HIVE Digital Technologies Ltd. on March 17, 2025[59](index=59&type=chunk) **Yguazu Mining Site Sale Details (kUSD):** | Metric | Value | | :--------------------------------------- | :---- | | Total consideration | 63,260 | | Total net assets transferred | 58,035 | | **Gain on disposal of subsidiary** | **5,225** | | Remaining net receivable (June 30, 2025) | 15,087 | [7. Rights to energy credits](index=19&type=section&id=7.%20Rights%20to%20energy%20credits) Rights to energy credits, specifically RECs, increased to $5,572k as of June 30, 2025, driven by the Stronghold acquisition and earned RECs, partially offset by disposals **Movement in Rights to Energy Credits (kUSD):** | Metric | Six-month period ended June 30, 2025 | | :--------------------------------------- | :----------------------------------- | | Balance as of January 1, | — | | Addition related to business combination | 3,102 | | Additions during the period: rights to renewable energy credits | 6,540 | | Less: disposal of renewable energy credits to third parties | (4,070) | | **Balance as of period end** | **5,572** | [8. Digital Assets](index=19&type=section&id=8.%20Digital%20Assets) As of June 30, 2025, the company held 1,176 BTC valued at $125,951k, with 625 BTC restricted, earning 1,411 BTC and selling 1,480 BTC for cash, realizing a gain on disposition but an unrealized loss on revaluation **Digital Assets Balance (June 30, 2025, kUSD):** | Category | Quantity (BTC) | Value | | :--------------------------------------- | :------------- | :---- | | Balance of digital assets including restricted | 1,176 | 125,951 | | Less restricted digital assets | (625) | (66,922) | | **Balance of digital assets excluding restricted** | **551** | **59,029** | **Key BTC Transactions (Six months ended June 30, 2025, kUSD):** | Transaction | Quantity (BTC) | Value | | :--------------------------------------- | :------------- | :---- | | BTC earned | 1,411 | 134,405 | | BTC exchanged for cash | (1,480) | (137,734) | | Realized gain on disposition of digital assets | — | 20,753 | | Change in unrealized loss on revaluation of digital assets | — | (7,714) | - Restricted digital assets include **198 BTC** pledged as deposits for Miners and **427 BTC** held by a financial institution for BTC selling contracts[64](index=64&type=chunk) - A redemption obligation of **$18,396k** was recorded as of June 30, 2025, for BTC Pledged for Miners that have been shipped[65](index=65&type=chunk) [9. Inventories](index=22&type=section&id=9.%20Inventories) Inventories significantly increased to $7,112k as of June 30, 2025, primarily due to the addition of waste, limestone, and fuel oil from the Stronghold business combination **Inventories (kUSD):** | Category | June 30, 2025 | December 31, 2024 | | :--------------------------------------- | :------------ | :---------------- | | Waste, limestone and fuel oil | 4,420 | — | | Electronic and networking components | 2,692 | 1,180 | | **Total Inventories** | **7,112** | **1,180** | - Additions from the Stronghold business combination contributed **$3,269k** to inventories[67](index=67&type=chunk) [10. Derivative Assets and Liabilities](index=22&type=section&id=10.%20Derivative%20Assets%20and%20Liabilities) The company uses BTC option and selling contracts and embedded BTC Redemption Options to manage price volatility, reporting total derivative assets of $15,705k and liabilities of $13,082k as of June 30, 2025 - BTC option contracts are purchased to reduce the risk of BTC price volatility and stabilize cash flows from future digital asset sales[68](index=68&type=chunk) - BTC Redemption Options, embedded derivatives in Miner purchase orders, allow the company to redeem pledged BTC at the original pledged price[69](index=69&type=chunk) **Derivative Assets and Liabilities (kUSD):** | Category | June 30, 2025 | December 31, 2024 | | :--------------------------------------- | :------------ | :---------------- | | Total derivative assets | 15,705 | 3,418 | | Total derivative liabilities | (13,082) | (128) | **Gain (Loss) on Derivatives (Six months ended June 30, 2025, kUSD):** | Category | Value | | :--------------------------------------- | :---- | | Gain (loss) on BTC options and selling contracts | 453 | | Gain (loss) on BTC Redemption Option | (383) | | Loss on warrants of private company | (44) | | **Total gain (loss)** | **26** | [11. Assets Held for Sale](index=25&type=section&id=11.%20Assets%20Held%20for%20Sale) Assets held for sale, mainly Miners and mining electrical components, decreased to $5,185k as of June 30, 2025, with an impairment loss of $1,320k recorded on Miners **Assets Held for Sale (kUSD):** | Category | June 30, 2025 | December 31, 2024 | | :--------------------------------------- | :------------ | :---------------- | | Miners | 4,519 | 4,806 | | Mining electrical components | 666 | 1,117 | | **Total Assets Held for Sale** | **5,185** | **5,923** | - An impairment loss of **$1,320k** was recorded on Miners held for sale during the six months ended June 30, 2025[77](index=77&type=chunk)[78](index=78&type=chunk) [12. Impairment](index=25&type=section&id=12.%20Impairment) Bitfarms recognized significant impairment losses totaling $31,850k for the six months ended June 30, 2025, primarily on its Argentina CGU due to market and operational factors **Impairment Loss (kUSD):** | Category | Three months ended June 30, 2025 | Six months ended June 30, 2025 | | :--------------------------------------- | :------------------------------- | :----------------------------- | | Argentina CGU | 14,620 | 30,530 | | Miners held for sale | — | 1,320 | | **Total Impairment Loss** | **14,620** | **31,850** | - Impairment on the Argentina CGU in Q1 2025 was due to a decline in market capitalization, BTC price, and increased gas prices, totaling **$15,910k**[79](index=79&type=chunk) - A further impairment of **$14,620k** was recorded on the Argentina CGU in Q2 2025 following the halting of electricity supply at the Rio Cuarto facility, leading to a decision to discontinue operations there by November 11, 2025[82](index=82&type=chunk)[83](index=83&type=chunk)[160](index=160&type=chunk) [13. Property, Plant and Equipment](index=28&type=section&id=13.%20Property%2C%20Plant%20and%20Equipment) The net book value of PPE significantly increased to $477,086k as of June 30, 2025, driven by substantial additions from the Stronghold acquisition, partially offset by dispositions and impairment losses **Property, Plant and Equipment (kUSD):** | Metric | June 30, 2025 | December 31, 2024 | | :--------------------------------------- | :------------ | :---------------- | | Cost | 709,501 | 521,448 | | Accumulated Depreciation | (232,415) | (172,923) | | **Net book value** | **477,086** | **348,525** | - Additions to PPE for the six months ended June 30, 2025, totaled **$110,149k**, with an additional **$156,687k** from the Stronghold business combination[84](index=84&type=chunk) - Dispositions of PPE amounted to **$(46,177)k**, including **$34,006k** from the sale of the Yguazu Mining Site[84](index=84&type=chunk)[86](index=86&type=chunk) - Impairment losses on PPE totaled **$28,766k** for the six months ended June 30, 2025[84](index=84&type=chunk) [14. Long-term Deposits and Equipment Prepayments](index=29&type=section&id=14.%20Long-term%20Deposits%20and%20Equipment%20Prepayments) Long-term deposits and equipment prepayments decreased significantly to $15,139k as of June 30, 2025, due to the realization of prepayments for received Miners and the sale of deposits with the Yguazu Mining Site **Long-term Deposits and Equipment Prepayments (kUSD):** | Category | June 30, 2025 | December 31, 2024 | | :--------------------------------------- | :------------ | :---------------- | | Security deposits for energy, insurance and rent | 10,878 | 4,513 | | Equipment and construction prepayments | 1,627 | 51,854 | | Deferred transaction fees - undrawn tranche of the credit facility | 2,634 | — | | **Total** | **15,139** | **56,367** | - The sale of the Yguazu Mining Site included **$18,321k** of long-term deposits and equipment prepayments[87](index=87&type=chunk) - All Miners from the March 2024 Purchase Order and March 2025 Swap Order were received by June 30, 2025, reducing equipment prepayment amounts to nil[89](index=89&type=chunk)[90](index=90&type=chunk) [15. Refundable Deposits](index=30&type=section&id=15.%20Refundable%20Deposits) Refundable deposits decreased to $5,430k as of June 30, 2025, mainly due to the settlement of Refundable Hosting Deposits post-Stronghold acquisition and derecognition of security deposits from the Yguazu Mining Site disposal **Refundable Deposits (kUSD):** | Category | June 30, 2025 | December 31, 2024 | | :--------------------------------------- | :------------ | :---------------- | | Security deposits for energy | 5,080 | 7,740 | | Refundable Hosting Deposits | — | 14,216 | | Other | 350 | — | | **Total** | **5,430** | **21,956** | - Refundable Hosting Deposits were terminated and settled following the acquisition of Stronghold on March 14, 2025, resulting in a gain on settlement of **$945k**[93](index=93&type=chunk)[124](index=124&type=chunk) - Security deposits for energy decreased due to the disposal of the Yguazu Mining site[92](index=92&type=chunk)[123](index=123&type=chunk) [16. Investment in Associate](index=31&type=section&id=16.%20Investment%20in%20Associate) In May 2025, Bitfarms acquired a minority interest in a privately held Canadian company, accounted for using the equity method, resulting in a recognized share of net loss of $3k - In May 2025, the company acquired a minority interest in a privately held Canadian company (PHCC), consisting of preferred shares (**$875k**) and warrants to purchase preferred shares (**$375k**)[94](index=94&type=chunk) - The investment provides significant influence and is accounted for using the equity method[94](index=94&type=chunk) - The company's share of the PHCC's net loss for the three and six months ended June 30, 2025, was **$3k**, included in Net financial income (expenses)[95](index=95&type=chunk) [17. Trade Payables and Accrued Liabilities](index=31&type=section&id=17.%20Trade%20Payables%20and%20Accrued%20Liabilities) Trade payables and accrued liabilities significantly increased to $48,853k as of June 30, 2025, driven by the Stronghold business combination and increases in government remittances and BTC option payables **Trade Payables and Accrued Liabilities (kUSD):** | Category | June 30, 2025 | December 31, 2024 | | :--------------------------------------- | :------------ | :---------------- | | Trade accounts payable and accrued liabilities | 35,709 | 21,915 | | Government remittances | 10,757 | 3,736 | | BTC option and selling contracts payable | 2,387 | 243 | | **Total** | **48,853** | **25,894** | - Additions from the Stronghold business combination amounted to **$22,304k** for trade accounts payable and accrued liabilities[96](index=96&type=chunk) [18. Warrant Liabilities](index=31&type=section&id=18.%20Warrant%20Liabilities) Warrant liabilities decreased to $5,151k as of June 30, 2025, including 2023 private placement warrants and new 2025 warrants from the Macquarie credit facility, classified as financial liabilities due to a cashless exercise clause **Warrant Liabilities (kUSD):** | Category | June 30, 2025 | December 31, 2024 | | :--------------------------------------- | :------------ | :---------------- | | 2023 Private Placement | 2,228 | 8,013 | | 2025 Warrants | 2,923 | — | | **Total** | **5,151** | **8,013** | - In April 2025, **5,330,946 warrants** (2025 Warrants) were granted to Macquarie in connection with the credit facility[98](index=98&type=chunk) - Warrants are classified as financial liabilities due to a contingent cashless exercise clause and are measured at fair value through profit or loss[99](index=99&type=chunk) - The weighted average contractual life of the warrants as of June 30, 2025, was **2.5 years**[100](index=100&type=chunk) [19. Long-term Debt](index=33&type=section&id=19.%20Long-term%20Debt) Long-term debt, net, significantly increased to $51,580k as of June 30, 2025, primarily due to the initial $50,000k tranche from a new $300,000k credit facility with Macquarie and Stronghold additions **Long-term Debt (kUSD):** | Category | June 30, 2025 | December 31, 2024 | | :--------------------------------------- | :------------ | :---------------- | | Building financing | 1,690 | 1,576 | | Equipment financing | 1,434 | — | | Credit Facility | 51,486 | — | | Unamortized transaction costs and warrants | (3,030) | — | | **Total long-term debt, net** | **51,580** | **1,576** | | Less current portion | (581) | (146) | | **Non-current portion** | **50,999** | **1,430** | - A credit facility for up to **$300,000k** was signed with Macquarie in April 2025, with an initial **$50,000k** tranche drawn at **8% interest per annum** (effective rate 16.8%)[104](index=104&type=chunk)[105](index=105&type=chunk) - A second tranche of **$250,000k** will be available in October 2025 upon achieving specific development milestones[106](index=106&type=chunk) - The credit facility includes various financial and non-financial covenants, requiring a restricted cash balance of **$25,000k**, and the company was in compliance as of July 31, 2025[109](index=109&type=chunk)[110](index=110&type=chunk) [20. Income Taxes](index=35&type=section&id=20.%20Income%20Taxes) For the six months ended June 30, 2025, the company recognized a total income tax recovery of $3,013k, primarily from deferred tax recovery, a decrease from the prior year **Income Tax (Expense) Recovery (kUSD):** | Category | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Current tax (expense) recovery | 319 | 262 | (444) | 262 | | Deferred tax recovery (expense) | 8,320 | (1,966) | 3,457 | 4,319 | | **Total tax (expense) recovery** | **8,639** | **(1,704)** | **3,013** | **4,581** | - The total income tax recovery for the six months ended June 30, 2025, was **$3,013k**, a decrease from **$4,581k** in the prior year[111](index=111&type=chunk) [21. Share Capital](index=35&type=section&id=21.%20Share%20Capital) Common shares outstanding significantly increased to 557.5 million as of June 30, 2025, driven by the Stronghold acquisition and ATM equity offering, with additional equity warrants issued **Common Shares Outstanding:** | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------- | :----------------------------- | :----------------------------- | | Outstanding, January 1, | 479,332,885 | 334,153,330 | | Issuance through at-the market equity offering program | 14,444,643 | 84,196,144 | | Issuance through business combination | 59,866,609 | — | | Exercise of stock options | 13,900 | 2,289,148 | | Settlement of share awards | 1,543,320 | — | | Settlement of restricted share units | 2,347,500 | 125,000 | | **Outstanding, June 30,** | **557,548,857** | **425,874,733** | - The ATM Program resulted in the issuance of **14,444,643 common shares** for gross proceeds of **$24,386k** during the six months ended June 30, 2025[113](index=113&type=chunk) - **12,893,650 equity warrants**, valued at **$11,477k**, were issued on March 14, 2025, as part of the Stronghold acquisition[114](index=114&type=chunk) [22. Financial Instruments](index=37&type=section&id=22.%20Financial%20Instruments) Financial assets and liabilities are classified by measurement basis, with derivatives and warrant liabilities measured at fair value through profit or loss, categorized as Level 2 or 3 in the fair value hierarchy **Financial Instruments Carrying and Fair Values (June 30, 2025, kUSD):** | Category | Value | | :--------------------------------------- | :---- | | Financial assets at amortized cost | 136,618 | | Financial assets at fair value through profit and loss | 15,705 | | **Total financial assets** | **152,323** | | Financial liabilities at amortized cost | (108,072) | | Financial liabilities at fair value through profit and loss | (18,233) | | **Total financial liabilities** | **(126,305)** | | **Net carrying amount and fair value** | **26,018** | - Warrant liabilities and derivatives (BTC option/selling contracts and BTC Redemption Options) are measured at fair value through profit or loss, categorized as Level 2 or 3 in the fair value hierarchy[117](index=117&type=chunk)[118](index=118&type=chunk)[119](index=119&type=chunk)[120](index=120&type=chunk) - Refundable Hosting Deposits were settled following the Stronghold acquisition on March 14, 2025, and security deposits for energy related to the Yguazu Mining site were derecognized[122](index=122&type=chunk)[123](index=123&type=chunk) [23. Net Loss Per Share](index=40&type=section&id=23.%20Net%20Loss%20Per%20Share) Potentially dilutive securities were excluded from diluted loss per share calculations for the three and six months ended June 30, 2025 and 2024, as their effect was anti-dilutive **Loss Per Share:** | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Basic and diluted loss per share | (0.05) | (0.07) | (0.12) | (0.09) | | Weighted average number of common shares outstanding (Basic and diluted) | 555,843,347 | 401,238,798 | 528,157,206 | 369,991,664 | - Potentially dilutive securities were not included in the diluted loss per share calculation because their effect was anti-dilutive[125](index=125&type=chunk) [24. Share-based Payments](index=40&type=section&id=24.%20Share-based%20Payments) Share-based payment expense increased to $8,052k for the six months ended June 30, 2025, including grants of stock options and RSUs, with a significant portion for Stronghold employees and management **Share-based Payment Expense (kUSD):** | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Equity-settled share-based payment plans | 3,615 | 1,675 | 8,052 | 4,769 | - During the six months ended June 30, 2025, **2,536,227 stock options** were granted, including **302 options** to Stronghold employees[127](index=127&type=chunk) - **2,783,425 RSUs** were granted, with **1,890,000** to Stronghold employees and executive management as part of the business combination[130](index=130&type=chunk) - **1,543,320 share awards** were granted to a former Stronghold executive, which fully vested in April 2025[132](index=132&type=chunk) [25. Additional Details to the Statement of Profit or Loss and Comprehensive Profit or Loss](index=42&type=section&id=25.%20Additional%20Details%20to%20the%20Statement%20of%20Profit%20or%20Loss%20and%20Comprehensive%20Profit%20or%20Loss) Revenues significantly increased for the six months ended June 30, 2025, driven by mining and energy sales, but were offset by higher energy, infrastructure, and general and administrative costs **Revenues (kUSD):** | Category | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--------------------------------------- | :----------------------------- | :----------------------------- | | Cryptocurrency Mining | 136,155 | 89,806 | | Cryptocurrency Hosting | 3,124 | — | | Electrical services | 2,100 | 2,059 | | Energy sales | 3,269 | — | | **Total Revenues** | **144,648** | **91,865** | **Cost of Revenues (kUSD):** | Category | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--------------------------------------- | :----------------------------- | :----------------------------- | | Energy (net of RECs) | (55,516) | (38,808) | | Depreciation and amortization | (66,701) | (96,314) | | Hosting expenses | (7,735) | — | | Infrastructure expenses | (19,011) | (2,896) | | **Total Cost of Revenues** | **(150,670)** | **(113,822)** | **General and Administrative Expenses (kUSD):** | Category | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--------------------------------------- | :----------------------------- | :----------------------------- | | Salaries and wages | (14,277) | (10,079) | | Share-based payments | (8,052) | (4,769) | | Professional services | (9,978) | (7,353) | | **Total G&A Expenses** | **(41,596)** | **(25,598)** | **Net Financial Income (Expenses) (kUSD):** | Category | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--------------------------------------- | :----------------------------- | :----------------------------- | | Gain (loss) on revaluation of warrants | 5,763 | 7,585 | | Gain (loss) on derivative assets and liabilities | 26 | 355 | | Gain on settlement of Refundable Hosting Deposits | 945 | — | | Interest on long-term debt and lease liabilities | (2,795) | (727) | | **Total Net Financial Income (Expenses)** | **4,253** | **10,126** | [26. Geographical Information](index=44&type=section&id=26.%20Geographical%20Information) Bitfarms operates as a single cryptocurrency Mining segment, with significant revenue growth in North America and increased non-current assets in the U.S. for the six months ended June 30, 2025 - The company is organized into one operating segment: cryptocurrency Mining[139](index=139&type=chunk) **Revenues by Country (kUSD):** | Country | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--------------------------------------- | :----------------------------- | :----------------------------- | | Canada | 58,707 | 60,267 | | United States | 51,098 | 8,183 | | Paraguay | 24,231 | 3,860 | | Argentina | 10,612 | 19,555 | | **Global total** | **144,648** | **91,865** | **Property, Plant and Equipment and other non-current assets by Country (June 30, 2025, kUSD):** | Country | PPE | Other | Total non-current assets | | :--------------------------------------- | :---- | :---- | :----------------------- | | Canada | 88,906 | 18,269 | 107,175 | | United States | 299,430 | 20,052 | 319,482 | | Paraguay | 67,834 | 1,656 | 69,490 | | Argentina | 20,916 | 2,196 | 23,112 | | **Total** | **477,086** | **42,173** | **519,259** | [27. Additional Details to the Statements of Cash Flows](index=45&type=section&id=27.%20Additional%20Details%20to%20the%20Statements%20of%20Cash%20Flows) Changes in working capital resulted in a cash inflow of $13,933k for the six months ended June 30, 2025, with notable non-cash transactions including share and warrant issuances for the Stronghold acquisition **Changes in Working Capital Components (Six months ended June 30, kUSD):** | Component | 2025 | 2024 | | :--------------------------------------- | :--- | :--- | | Increase in trade receivables, net | (374) | (21) | | Decrease (increase) in other current assets | 7,375 | (6,723) | | Increase in inventories | (2,663) | (370) | | Decrease (increase) in deposits | 8,569 | (1,822) | | Increase (decrease) in trade payables and accrued liabilities | 1,576 | (2,588) | | Decrease in taxes payable | (254) | (509) | | Decrease in other non-current liabilities | (296) | — | | **Total** | **13,933** | **(12,033)** | - Significant non-cash transactions for the six months ended June 30, 2025, included the issuance of **$78,161k** in common shares, warrants, and RSUs for the Stronghold acquisition[142](index=142&type=chunk) - Equipment prepayments of **$41,045k** were realized as additions to property, plant and equipment[142](index=142&type=chunk) - Depreciation and Amortization totaled **$66,701k** for the six months ended June 30, 2025[142](index=142&type=chunk) [28. Contingent Liability and Lawsuits](index=45&type=section&id=28.%20Contingent%20Liability%20and%20Lawsuits) Bitfarms faces a potential $9,424k U.S. importation duty on Miners, has accrued $3,101k for legal settlements, and is unable to estimate the loss from a new class action lawsuit filed in May 2025 - A potential U.S. importation duty of **$9,424k** on Miners is not considered probable to result in a future cash outflow by management[143](index=143&type=chunk)[144](index=144&type=chunk) **Legal Settlement Accruals (June 30, 2025, kUSD):** | Category | Value | | :--------------------------------------- | :---- | | FERC Matters | 1,065 | | Stronghold Shareholder Securities Lawsuit | 2,036 | | **Total settlement accruals** | **3,101** | - Scrubgrass agreed to a settlement of **$1,420k** for FERC matters, with **$1,065k** remaining to be paid in installments as of June 30, 2025[147](index=147&type=chunk) - The Stronghold shareholder securities lawsuit settlement involves **$4,750k cash** and **25 BTC**, with **$2,036k** (representing 19 remaining BTC) accrued as of June 30, 2025[149](index=149&type=chunk) - A new class action lawsuit, Olympio v. Bitfarms Ltd., was filed on May 9, 2025, alleging violations of the Securities Exchange Act, but the company is currently unable to estimate the reasonably possible loss[150](index=150&type=chunk) [29. Subsequent Events](index=48&type=section&id=29.%20Subsequent%20Events) Subsequent events include a Miner swap, a share buyback program repurchasing 4.9 million shares, land purchases, and the decision to discontinue Rio Cuarto, Argentina operations by November 2025 - In July 2025, the company entered a Miner swap agreement, returning **10,467 Bitmain T21 Miners** for a **$23,865k credit** and purchasing **8,585 Bitmain S21+ Miners** for **$29,831k**[151](index=151&type=chunk) - The TSX approved a Corporate Share Buyback Program (NCIB) on July 22, 2025, allowing the repurchase of up to **49,943,031 common shares**; by August 11, 2025, **4,949,244 shares** were repurchased for **$6,147k**[153](index=153&type=chunk)[155](index=155&type=chunk) - Agreements were made in August 2025 to purchase **3 acres of land in Washington State** for **$1,898k** and **181 acres in Pennsylvania** for **$3,500k**[156](index=156&type=chunk)[157](index=157&type=chunk) - The company determined to discontinue its Bitcoin data center operations in Rio Cuarto, Argentina, by November 11, 2025, due to halted energy supply and future economic uncertainty; an agreement with GMSA includes repayment of a **$3,500k energy deposit** and elimination of a **$2,807k asset retirement obligation**[159](index=159&type=chunk)[160](index=160&type=chunk)