Core Viewpoint - CleanSpark (NASDAQ: CLSK) has experienced a significant increase in its stock price over the past few months, particularly since the lows in April, indicating positive market sentiment towards the company [1]. Company Focus - CleanSpark has primarily focused on bitcoin mining since 2020, branding itself as "America's Bitcoin Miner" [1]. Stock Performance - The appreciation in CleanSpark's stock price suggests a recovery and potential growth trajectory for the company in the bitcoin mining sector [1].

Core Insights - CleanSpark, Inc. is advancing towards a hashrate milestone of 50 EH/s with fully self-operated infrastructure, reflecting its commitment to operational control and scalability [2][3] - The company has doubled its Bitcoin treasury year-over-year to 12,502 BTC, all acquired through mining operations without issuing equity since November 2024, emphasizing disciplined capital management [2][5] - CleanSpark has expanded its contracted power capacity to 987 MW, which supports its growth strategy and operational performance [2][5] Operational Performance - In May 2025, CleanSpark maintained an average hashrate of 42.5 EH/s and achieved a month-end hashrate of 45.6 EH/s, representing a 7.5% increase sequentially [2][5] - The company produced an average of 22.39 BTC daily, with a peak single-day output of 23.50 BTC, and sold a total of 293.5 BTC at an average price of approximately $102,254 per BTC [5] - The average fleet efficiency was reported at 16.71 J/Th, indicating effective energy utilization in mining operations [7] Strategic Positioning - CleanSpark is recognized as the sixth-largest public Bitcoin holder, all mined directly through its operations, validating its infrastructure-first strategy [3] - The company aims to achieve over 60 EH/s in the future, indicating a focus on long-term growth and shareholder value [3] - CleanSpark's participation in Bitcoin 2025 highlighted its leadership in discussions on mining, energy, and digital asset management [3]

Group 1: Company Performance - NetEase-S (09999) saw a significant increase of 10.89% in stock price after reporting Q1 2025 net revenue of RMB 28.8285 billion, a year-on-year increase of 7.4%, and gross profit of RMB 18.5 billion, up 8.6% [1] - H&H International Holdings (01112) rose over 8% as the market speculated on the ergotamine concept, with its Swisse brand showing strong performance in high-growth segments [2] - China Gold International (02099) experienced a stock price increase of over 5% after reporting a 351% rise in Q1 revenue to USD 273 million [2] Group 2: Clinical and Pharmaceutical Developments - Shandong Xinhua Pharmaceutical (00719) surged over 14% as COVID-19 infections showed an upward trend, with the company preparing for Phase II clinical trials of OAB-14 [1] - Innovent Biologics (01801) rose nearly 3% after announcing the completion of the first patient dosing in the Phase III clinical study of Ma Shidu peptide for obesity [1] - Kangxi Biologics (06185) increased over 3% after receiving approval from the Indonesian drug regulatory authority for its inhaled tuberculosis vaccine clinical trial [1] Group 3: Market Trends and Reactions - The Nasdaq Golden Dragon China Index fell over 2%, with notable declines in popular Chinese stocks such as Tiger Brokers (TIGR.US) down over 8% and Beike (BEKE.US) down over 5% [3] - UnitedHealth Group (UNH.US) experienced a significant drop of over 15% following reports of a U.S. Department of Justice investigation into potential insurance fraud [3] - Bitcoin-related stocks declined, with CleanSpark (CLSK.US) down nearly 6% and Coinbase (COIN.US) down over 7%, as Bitcoin itself fell over 1.5% [3]

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]