Approaches 50 EH/s milestone with fully self-operated infrastructureDoubles BTC treasury year-over-year to 12,502 and expands contracted power capacity to 987 MWLAS VEGAS, June 3, 2025 /PRNewswire/ -- CleanSpark, Inc. (Nasdaq: CLSK), America's Bitcoin Miner® (the "Company"), today released its unaudited Bitcoin mining and operations update for the month ended May 31, 2025. "May was a strong execution month for CleanSpark as we continued to advance toward key growth targets," said Zach Bradford, CEO and Pres ...

Company Overview - CleanSpark Inc. is a Bitcoin mining firm with operations in the Southeastern and Southwestern United States, distinguished by its background as an energy resource and clean microgrid energy company before entering the cryptocurrency space [1] Stock Performance - CleanSpark's current stock price is $9.19, reflecting a 5.88% increase, with a 52-week range between $6.45 and $20.64 [2] - The company has received seven Buy ratings from analysts, despite a 15% decline in shares so far in 2025, with a consensus price target of $21.57, indicating potential for significant upside [2][10] Mining Operations - CleanSpark has focused primarily on Bitcoin mining, avoiding diversification into high-performance computing (HPC) or AI, which has contributed to a modest year-to-date decline compared to competitors like MARA Holdings Inc., which has seen a 23% drop [4] - The company's cost to mine a Bitcoin in Q4 2024 was approximately $34,000, lower than many competitors [5] - In April 2025, CleanSpark achieved an average hash rate of over 40 EH/s and mined 633 Bitcoin, bringing its total holdings to over 12,000 Bitcoin by the end of the month [7][8] Financial Stability - CleanSpark's financial standing provides stability amid Bitcoin price fluctuations, with low mining costs enhancing its gross margin [9] - The company sold over 401 Bitcoin in April at an average price above $90,000, demonstrating effective market discipline [10] - CleanSpark secured a $200 million revolving credit facility with Coinbase Global Inc., aiding in liquidity and operational expense management [11] Market Position - CleanSpark's Bitcoin reserves are valued at approximately $1.2 billion, with a total market capitalization of $2.3 billion, although its price-to-sales ratio of 4.86 is less attractive compared to competitors like Hut 8 Corp. [12] - The company's operational efficiency and strategic handling of Bitcoin reserves contribute to positive analyst sentiment [13]

Company Overview - CleanSpark is identified as "America's Bitcoin miner" and is focused on the Bitcoin mining industry [3]. Financial Results - The conference call discusses the financial results for the second quarter of fiscal year 2025, covering the three and six months ended March 31, 2025 [3]. - A press release detailing these results was issued shortly before the call and is available on the company's website [3]. Leadership Participation - The call features key company executives including Zach Bradford (CEO) and Gary Vecchiarelli (CFO) [4]. Forward-Looking Statements - The company acknowledges that some statements made during the call are forward-looking and based on current views of the business environment [4]. Financial Measures - The discussion includes non-GAAP financial measures related to the company's performance, with reconciliations available in the press release [5].

Company Performance - CleanSpark reported a quarterly loss of $0.02 per share, which was better than the Zacks Consensus Estimate of a loss of $0.03, but a decline from earnings of $0.13 per share a year ago, representing an earnings surprise of -166.67% [1] - The company posted revenues of $181.71 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 0.58%, and showing an increase from year-ago revenues of $111.8 million [2] - Over the last four quarters, CleanSpark has surpassed consensus EPS estimates only once and has topped consensus revenue estimates just once [2] Stock Performance - CleanSpark shares have declined approximately 12.8% since the beginning of the year, compared to a decline of -4.3% for the S&P 500 [3] - The current consensus EPS estimate for the upcoming quarter is $0.05 on revenues of $219.54 million, and for the current fiscal year, it is $0.99 on revenues of $817.49 million [7] Industry Outlook - The Zacks Industry Rank for Financial - Miscellaneous Services, to which CleanSpark belongs, is currently in the bottom 43% of over 250 Zacks industries, indicating potential challenges for stock performance [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact CleanSpark's stock performance [5]

Financial Data and Key Metrics Changes - Revenue for Q2 2025 was $181.7 million, an increase of 62.5% year-over-year and 12% quarter-over-quarter [28][5][30] - Gross profit reached nearly $100 million, up 24% year-over-year with a gross margin of 53% [5][30] - The company reported a net loss of $138.8 million, primarily due to a decline in Bitcoin spot prices [30][14] - Adjusted EBITDA was negative $57.8 million, but operations produced approximately $70 million of positive EBITDA when normalized [30][12] - The average revenue per Bitcoin was $92,811, a 69% increase year-over-year [29][30] Business Line Data and Key Metrics Changes - Bitcoin production for the quarter was 19.57 Bitcoin, a slight decrease of 3.6% year-over-year despite a halving event [28][30] - The marginal cost per coin rose to approximately $42,600, a 26% increase over the previous quarter [31][30] - Cash overhead decreased by 16% quarter-over-quarter [12] Market Data and Key Metrics Changes - Bitcoin traded at approximately $81,000 at quarter-end, down from $93,000 at the beginning of the year [14] - The mining difficulty increased by 3.6% during the quarter [14] Company Strategy and Development Direction - The company is focused on maintaining and growing its market share, currently at about 5% [47] - CleanSpark is committed to a balanced approach between treasury growth and strategic monetization of Bitcoin [11][36] - The company plans to continue expanding its operations, targeting over 50 exahash by mid-2025 [12][20] - CleanSpark aims to avoid equity dilution and instead utilize non-dilutive funding options [10][36] Management's Comments on Operating Environment and Future Outlook - Management highlighted resilience amid challenges such as rising energy prices and declining Bitcoin prices [14][26] - The company is well-positioned to capitalize on market opportunities, particularly in acquiring smaller miners at attractive valuations [18][76] - Management emphasized a disciplined approach to capital management and operational efficiency [11][26] Other Important Information - CleanSpark was ranked 35th in the Financial Times 2025 list of the 500 fastest-growing companies in the Americas [22] - Institutional ownership in the company's stock increased to nearly 64% following its inclusion in the S&P SmallCap 600 Index [22] Q&A Session Summary Question: Outlook for network cash rate growth in 2025 and CleanSpark's market share - Management noted a plateau effect in network growth but expressed confidence in maintaining and growing market share [46][47] Question: How the digital asset management team will generate shareholder value - Management discussed selecting the right counterparties and strategies to generate cash flow and flexibility [48][49] Question: Impact of competitors pivoting to HPC on rig pricing - Management indicated that reduced demand from competitors has created opportunities for acquiring rigs at lower costs [56][58] Question: Coverage of CapEx through Bitcoin sales - Management confirmed that excess cash from Bitcoin sales could cover CapEx and operational expenses [61][62] Question: Consideration of using Bitcoin holdings to repurchase shares - Management stated that while they consider all options, the focus remains on growing the Bitcoin balance and enhancing shareholder value [67][70] Question: Future of Bitcoin-backed facilities and M&A opportunities - Management expressed openness to bolt-on acquisitions, especially if valuations are advantageous [75][76]

Financial Data and Key Metrics Changes - Revenue for Q2 increased to $181.7 million, a 62.5% increase year-over-year and a 12% increase quarter-over-quarter [25][26] - Gross profit reached nearly $100 million, up 5% sequentially and more than 24% year-over-year, with a gross margin of 53% [4][26] - The company reported a net loss of $138.8 million, primarily due to a decline in Bitcoin spot prices [27][12] - Adjusted EBITDA was a negative $57.8 million, but operations produced approximately $70 million of positive EBITDA when normalized [27][28] - The marginal cost per Bitcoin rose to approximately $42,600, a 26% increase over the previous quarter [28] Business Line Data and Key Metrics Changes - Bitcoin production for the quarter was 19.57 Bitcoin, a slight decrease of 3.6% year-over-year despite a halving event [25][26] - Average revenue per Bitcoin produced was $92,811, an increase of 69% year-over-year [26] - Cash overhead decreased by 16% quarter-over-quarter [10] Market Data and Key Metrics Changes - Bitcoin traded at approximately $81,000 at quarter-end, down from $93,000 at the start of the year [12] - The company’s Bitcoin treasury now exceeds 12,101 Bitcoin, valued at over $1.2 billion at current prices [31][11] Company Strategy and Development Direction - The company is transitioning from a nearly 100% HODL strategy to using a portion of monthly Bitcoin production to support operations [8][31] - CleanSpark aims to reach 50 exahash by mid-2025 and has plans for further expansion beyond that [10][19] - The company is focused on maintaining a strong balance sheet and avoiding equity dilution, contrasting with peers who rely on such methods [8][32] Management's Comments on Operating Environment and Future Outlook - Management highlighted resilience amid rising energy prices, declining Bitcoin prices, and increasing mining difficulty [12][21] - The company is well-positioned to capitalize on market opportunities, particularly in acquiring smaller miners at attractive valuations due to tariff pressures [15][69] - Management emphasized a disciplined approach to capital management and strategic flexibility in a volatile market environment [19][32] Other Important Information - CleanSpark was ranked number 35 in the Financial Times 2025 list of the 500 fastest-growing companies in the Americas [20] - Institutional ownership in the company increased to nearly 64% following its inclusion in the S&P SmallCap 600 Index [20] Q&A Session Summary Question: Outlook for network cash rate growth in 2025 and CleanSpark's market share - Management noted a plateau effect in network growth but believes CleanSpark is well-positioned to maintain and grow its market share, currently at about 5% [42][43] Question: How the digital asset management team will generate shareholder value - The team is focused on selecting the right partners and utilizing strategies like covered calls to generate cash flow and maintain flexibility [44][45] Question: Impact of competitors pivoting to HPC on mining rig pricing - Management indicated that reduced demand from larger players has created opportunities for CleanSpark to acquire rigs at lower costs, with expectations of continued price decreases [51][54] Question: Coverage of CapEx through Bitcoin sales - Management clarified that monthly operational expenses are around $35 million, and excess revenue from Bitcoin sales can be allocated towards CapEx or debt servicing [55][58] Question: Consideration of using Bitcoin holdings to repurchase shares - Management is open to various capital strategies but prioritizes growing the Bitcoin balance and enhancing shareholder value through operational investments [62][65] Question: Future of Bitcoin-backed facilities and market for acquisitions - Management expressed interest in bolt-on acquisitions, especially if valuations are favorable, and noted that they are always open to opportunities in the market [68][69]

Financial Performance - CleanSpark reported a significant increase in revenue, reaching $50 million for the quarter, representing a 25% year-over-year growth[8] - The company reported a net income of $5 million, compared to a net loss of $2 million in the same quarter last year, marking a significant turnaround[8] - CleanSpark anticipates a further increase in revenue by 15% in the next quarter, projecting $57.5 million based on current market trends[14] Operational Efficiency - The company achieved a hash rate capacity of 3.5 EH/s, up from 2.8 EH/s in the previous quarter, indicating a 25% increase in mining efficiency[12] - CleanSpark's operational costs decreased by 10% due to improved energy efficiency measures implemented in its mining facilities[12] - The company is investing $10 million in new mining equipment to enhance operational capacity and efficiency[14] Strategic Expansion - CleanSpark plans to expand its market presence by entering two new states for mining operations by the end of the fiscal year[14] - The company is exploring potential acquisition opportunities to further enhance its market position and operational capabilities[14] Risk Management - CleanSpark is focusing on developing an in-house bitcoin treasury function to manage its bitcoin holdings and mitigate risks associated with market volatility[22] - The company has identified and is addressing material weaknesses in its internal controls over financial reporting, aiming for full remediation by the end of the fiscal year[14]

Financial Performance - Quarterly revenue reached $181.7 million, an increase of 62.5% from $111.8 million in the same prior fiscal quarter[4] - Net loss for the quarter was ($138.8 million) or ($0.49) per basic share, compared to net income of $126.7 million or $0.59 per basic share in the prior year[4] - Adjusted EBITDA decreased to ($57.8 million) from $181.8 million in the same period a year ago[4] - Bitcoin mining revenue for Q2 2025 reached $181.712 million, a 62.4% increase from $111.799 million in Q2 2024[19] - Total costs and expenses for Q2 2025 were $319.736 million, compared to a negative $25.322 million in Q2 2024, indicating a significant increase in operational costs[19] - Net loss for Q2 2025 was $138.792 million, contrasting with a net income of $126.735 million in Q2 2024[19] - Adjusted EBITDA for Q2 2025 was $(57.789) million, a decrease from $181.829 million in Q2 2024[22] - The company reported a loss on the fair value of bitcoin of $127.667 million in Q2 2025, compared to a gain of $119.702 million in Q2 2024[22] - The company reported a total comprehensive loss attributable to common shareholders of $135.846 million in Q2 2025, compared to a comprehensive income of $123.922 million in Q2 2024[19] Assets and Capital Structure - Total assets amounted to $2.7 billion, with total stockholders' equity at $1.9 billion[8] - The company had working capital of $838.2 million as of March 31, 2025, including $50 million capacity on a bitcoin collateralized line of credit[5] - Cash reserves stood at $97.0 million, while bitcoin holdings were valued at $979.6 million[4] - The weighted average common shares outstanding for Q2 2025 were 280,853,882, up from 209,287,089 in Q2 2024[20] Operational Efficiency and Strategy - CleanSpark aims to reach a target of 50 EH/s in bitcoin mining by June 2025[2] - The company maintains one of the most efficient cost structures in the industry, focusing on capital efficiency and long-term stockholder value[2] - CleanSpark is committed to strategic expansion without relying on dilutive capital, as evidenced by its expanded revolving line with Coinbase[2] Expenses - The company incurred $78.901 million in depreciation and amortization expenses in Q2 2025, compared to $32.187 million in Q2 2024[19] - Professional fees increased to $2.983 million in Q2 2025 from $2.208 million in Q2 2024[19] - Interest income for Q2 2025 was $2.014 million, slightly down from $2.684 million in Q2 2024[19] Bitcoin Production - Bitcoin production grew to 1,957 coins, with an average revenue per coin of $92,811[1]

Core Insights - CleanSpark, Inc. reported a quarterly revenue of $181.7 million, reflecting a 62.5% increase from the previous year [1][4] - The company produced 1,957 bitcoins, with an average revenue per coin of $92,811 [1] - The net loss for the quarter was $138.8 million, translating to a loss of $0.49 per basic share, compared to a net income of $126.7 million or $0.59 per share in the same period last year [4][15] Financial Performance - Quarterly revenues reached $181.7 million, up from $111.8 million in the same quarter last year, marking an increase of $69.9 million [4][15] - Adjusted EBITDA decreased to ($57.8 million) from $181.8 million in the same period a year ago [4][17] - The company had total assets of $2.7 billion and total liabilities of $766.5 million as of March 31, 2025 [4][14] Strategic Focus - CEO Zach Bradford emphasized the company's commitment to being a pure-play public bitcoin miner, aiming for a target of 50 EH/s by June 2025 [2] - The company has maintained a disciplined approach to cost control while expanding its operations without relying on dilutive capital [2][3] - CleanSpark's Digital Asset Management group is focused on optimizing the company's bitcoin treasury, positioning it as a productive asset [2] Balance Sheet Highlights - As of March 31, 2025, CleanSpark had working capital of $838.2 million, including a capacity of $50 million on a bitcoin collateralized line of credit [3] - Total current assets amounted to $947.5 million, with cash holdings of $97.0 million and bitcoin valued at $979.6 million [4][14] - Total stockholders' equity was reported at $1.9 billion, reflecting a strong financial position despite the net loss [4][14]

Core Viewpoint - CleanSpark (CLSK) is expected to report second-quarter fiscal 2025 results on May 8, with earnings estimated at 3 cents per share, reflecting a significant year-over-year decline of 76.92%, while revenues are projected to increase by 76.27% to $197.07 million [1]. Group 1: Earnings Performance - CleanSpark has a mixed earnings surprise history, missing the Zacks Consensus Estimate in two of the last four quarters and beating in the other two, resulting in an average earnings surprise of 11.54% [2]. - The upcoming earnings announcement is anticipated to reflect the company's strategic investments and operational efficiencies [3]. Group 2: Operational Efficiency - The company's operational efficiency is expected to be bolstered by investments in S21 and S21 XT immersion units, which enhance efficiency and align with CleanSpark's expansion strategy, aiding in scaling operations while minimizing idle assets [4]. - CleanSpark is well-positioned to meet its mid-year target of 50 exahash due to a strong infrastructure foundation, including sourced transformers and power distribution [5]. Group 3: Strategic Focus - CleanSpark's focus on Bitcoin mining, as opposed to speculative high-performance computing, is projected to drive stable revenues, with continued progress in mining operations expected in the second quarter [6]. - The company's strategy is likely to capitalize on Bitcoin's price fluctuations while maintaining cost-effective mining operations [5]. Group 4: Earnings ESP and Zacks Rank - According to the Zacks model, CleanSpark currently has an Earnings ESP of -180.00% and a Zacks Rank of 3, indicating a lower likelihood of an earnings beat [7].