Sphere 3D(US:ANY)2025-11-04 21:21Revenue and Financial Performance - For the third quarter of 2025, revenue was $2.6 million, an increase of 8.3% from $2.4 million in the third quarter of 2024, primarily due to the increase in the fair value of Bitcoin[116]. - Revenue for the first nine months of 2025 was $8.5 million, down from $14.0 million in 2024, a decrease of $5.5 million primarily due to the April 2024 halving event and equipment upgrades[125]. Costs and Expenses - Direct cost of revenues decreased by 25.9% to $2.0 million in the third quarter of 2025 from $2.7 million in the same period of 2024, attributed to lower hosting fees and the transition to newer generation machines[117]. - Direct cost of revenues decreased to $6.5 million in 2025 from $11.0 million in 2024, a reduction of $4.5 million attributed to lower hosting fees and the transition to newer mining machines[126]. - General and administrative expenses were $1.8 million for the third quarter of 2025, down 40% from $3.0 million in the third quarter of 2024, mainly due to reduced legal fees and share-based compensation[118]. - General and administrative expenses fell to $7.1 million in 2025 from $9.5 million in 2024, a decrease of $2.4 million mainly due to reduced share-based compensation and legal fees[127]. Mining Operations - The company mined 84.3 Bitcoin during the nine months ended September 30, 2025, a decrease of 40.4% compared to 141.5 Bitcoin mined in the same period of 2024[109]. - As of September 30, 2025, the company held approximately 22.7 Bitcoin, with a fair value of approximately $2.6 million[110]. - The company owned approximately 12,000 miners as of September 30, 2025, with 4,900 in service and a total hashrate capacity of 0.75 EH/s[108]. - New generation mining machines were purchased for $3.9 million, expected to increase deployed EH/s by approximately 25% during the fourth quarter of 2025[114]. Investment Activities - The company reported a loss of $0.2 million from investment activities in the third quarter of 2025, compared to a gain of $2.4 million in the same period of 2024[123]. - Investment gain decreased to $0.4 million in 2025 from $7.5 million in 2024, reflecting lower realized and unrealized gains on equity investments[132]. Cash Flow and Liquidity - Net cash used in operating activities was $(13,395) thousand in 2025 compared to $(3,064) thousand in 2024, reflecting a significant increase in cash outflow[139]. - Cash and cash equivalents as of September 30, 2025, were $5.3 million, a slight decrease from $5.4 million at December 31, 2024[134]. - The company expects to fund operations with existing cash, anticipated revenue from Bitcoin mining, and potential future financing, indicating a focus on liquidity management[134]. - The company issued 1,127,879 common shares under the At-the-Market Offering Program for $0.7 million of net proceeds during the first nine months of 2025[136]. Concerns and Future Outlook - Management expressed substantial doubt about the company's ability to continue as a going concern within 12 months if additional funding is not raised[137]. - The company experienced a loss on disposal of property and equipment of $0.8 million in the third quarter of 2025, related to the sale of mining equipment[120]. - The company reported a loss on disposal of property and equipment of $1.7 million in 2025, up from $0.7 million in 2024, primarily related to mining equipment sales[129].