I'm a full time value investor and writer who enjoys using classical value ratios to pick my portfolio. My previous working background is in private credit and CRE mezzanine financing for a family office. I'm also a fluent Mandarin speaker in both business and court settings, previously serving as a court interpreter. I have spent a good chunk of my adult working life in China and Asia. I have worked with top CRE developers in the past including The Witkoff Group , Kushner Companies, Durst Organization and ...

Core Insights - The article discusses the author's background as a value investor with experience in private credit and commercial real estate financing, highlighting a focus on classical value ratios for portfolio selection [1] Group 1: Company Insights - The author has previously worked with notable commercial real estate developers such as The Witkoff Group, Kushner Companies, Durst Organization, and Fortress Investment Group, indicating a strong network within the industry [1] Group 2: Investment Position - The author holds long positions in several major companies including Johnson & Johnson (JNJ), Apple (AAPL), Microsoft (MSFT), Berkshire Hathaway (BRK.B), and Alphabet (GOOGL, GOOG), suggesting a diversified investment strategy [2]

Financial Data and Key Metrics Changes - Total revenues for Q1 2025 increased 363% to $4,950,000 compared to $1,070,000 in Q1 2024 [13] - Gross margin for Q1 2025 increased 1288% to $1,310,000 compared to $90,000 for Q1 2024 [15] - Net loss for Q1 2025 totaled $2,080,000 compared to a net loss of $2,750,000 for Q1 2024, representing a 24% decrease in net loss [17] Business Line Data and Key Metrics Changes - The power line of business contracted 570 megawatts with APR Energy's gas turbine fleet, an increase of 180 megawatts since the last report [4] - The edge data center business, DuosEdge AI, has customer commitments for an additional eight edge data centers, expecting to complete installations in the next six months [5][11] Market Data and Key Metrics Changes - Current contracts and backlog represent more than $45,000,000 in revenue, with approximately $17,400,000 projected to be recognized in Q2 2025 [20] - The company expects to enter 2026 with more than $3,000,000 in annual recurring revenue from multi-year contracts [11] Company Strategy and Development Direction - The company is focused on three distinct segments: Duos Technologies, DuosEdge AI, and DuosEnergy, aiming for significant growth [8] - The strategy includes expanding the edge data center business and enhancing the power management services through the asset management agreement with APR Energy [10][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving guidance and executing the strategy effectively, with expectations for continued revenue growth [6][20] - The outlook for the company is promising, with ongoing discussions with hyperscalers for potential partnerships in the edge data center space [32][54] Other Important Information - The company has improved its balance sheet, with shareholders' equity now over $5,100,000 and cash reserves of $6,480,000 [18] - The company has retired $1,000,000 of debt during the quarter and expects to retire an additional $1,200,000 by year-end [19] Q&A Session Summary Question: What is the expected gross margin for the power business throughout the year? - Management indicated that a gross margin of around 32% is a reasonable expectation for the year, with opportunities for improvement [29][30] Question: Any updates on hyperscaler opportunities in the data center business? - Management confirmed active discussions with three to four hyperscalers interested in utilizing edge data centers for their computing needs [32][33] Question: Has there been any change in the sales cycle due to tariffs? - Management reported no significant changes in the sales cycle or contract signing, indicating strong demand in both the power and edge data center businesses [42][44] Question: How does the company plan to allocate resources for new projects? - Management stated that they are focused on maintaining high utilization rates of their assets and are evaluating opportunities to acquire additional assets to support growth [62][63]

Financial Data and Key Metrics Changes - Total revenues for Q1 2025 increased 363% to $4,950,000 compared to $1,070,000 in Q1 2024 [11] - Gross margin for Q1 2025 increased 1288% to $1,310,000 compared to $90,000 for Q1 2024 [13] - Net loss for Q1 2025 totaled $2,080,000 compared to a net loss of $2,750,000 for Q1 2024, representing a 24% decrease in net loss [15] Business Line Data and Key Metrics Changes - The power line of business contracted 570 megawatts with APR Energy's gas turbine fleet, an increase of 180 megawatts since the last report [3] - The edge data center business, DuosEdge AI, has customer commitments for an additional eight edge data centers, expecting to complete installations in the next six months [4][8] - Revenues from the asset management agreement (AMA) with APR Energy are expected to positively impact gross margins [11] Market Data and Key Metrics Changes - Current contracts and backlog represent more than $45,000,000 in revenue, with approximately $17,400,000 projected to be recognized in Q2 2025 [18] - The company expects to enter 2026 with more than $3,000,000 in annual recurring revenue from multi-year contracts [9] Company Strategy and Development Direction - The company is focused on executing its strategy to grow into a larger entity through three distinct divisions: Duos Technologies, DuosEdge AI, and DuosEnergy [6] - The edge AI division is actively marketing remote data centers to serve local communities and businesses, with plans to deploy 15 edge data centers by the end of the year [7][8] - The company is evaluating opportunities to acquire additional assets to grow the overall value of APR Energy [46] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth of the power business and the edge data center market, noting that both lines of business are currently performing well [34][36] - The company anticipates breakeven or potential profitability in the third and fourth quarters, with a focus on minimizing losses in the first half of the year [19] Other Important Information - The company has improved its balance sheet, with shareholders' equity now over $5,100,000 and cash of $6,480,000 [16] - The company has retired $1,000,000 of debt during the quarter and expects to retire an additional $1,200,000 by year-end [17] Q&A Session Summary Question: What is the expected gross margin for the power business throughout the year? - Management indicated that a gross margin of around 32% is a good range to expect for the year, with opportunities to improve [26][27] Question: Any updates on hyperscaler opportunities in the data center business? - Management confirmed active discussions with three or four hyperscalers interested in utilizing edge data centers and behind-the-meter power solutions [28][29] Question: Has there been any change in the sales cycle due to tariffs? - Management reported no significant impact from tariffs on the power or edge data center businesses, stating that both lines are performing well [33][34] Question: How does the company plan to allocate resources for new projects? - Management noted that they are maintaining a high utilization rate of their assets and are evaluating opportunities for additional acquisitions to support growth [45][46]

Core Insights - Upstart Holdings and Affirm Holdings are prominent players in the fintech industry, leveraging artificial intelligence to transform traditional lending practices [1][2] - Upstart focuses on AI-driven personal loans, while Affirm is recognized for its "buy now, pay later" (BNPL) model, with differing financials and future outlooks [2] Upstart Holdings - Upstart has created an AI-based underwriting platform that surpasses traditional FICO scoring by incorporating alternative variables such as education and employment history, allowing for 92% loan automation by Q1 2025 [3] - The company is experiencing growth not only in personal loans but also in auto loans, HELOCs, and small-dollar loans, with auto loan originations increasing by 42%, HELOCs by 52%, and small-dollar loans by 7% sequentially in Q1 2025 [4] - Financially, Upstart reported a 67% year-over-year revenue increase in Q1, with non-GAAP EPS turning from a loss of $0.31 to a profit of $0.30, and it anticipates 76% revenue growth in Q2 and 59% for the full year [5] - Upstart is strengthening its funding relationships, with institutional investors like Fortress Investment Group now funding over half of its originations, and it is shifting towards super-prime borrowers, who now account for 32% of personal loan originations [6] - Despite challenges such as high interest rates and a dip in contribution margin from 61% to 55%, Upstart's expanding product suite and improving credit performance position it as a resilient fintech player [7] Affirm Holdings - Affirm has established a strong BNPL brand, facilitating payment splitting at checkout through partnerships with major companies like Amazon and Shopify, and its AI platform allows for quick loan approvals [8] - The company has 21.9 million active users and 358,000 active merchants as of Q3 fiscal 2025, and is expanding into sectors like travel and home improvement while also moving towards broader banking services [9] - Affirm is pursuing international expansion, recently launching Shop Pay Installments in Canada and planning to enter the U.K., Australia, and Western Europe, although it faces competition from established players like Klarna and PayPal [10] - Financially, Affirm's Q3 fiscal 2025 revenues grew by 36% year-over-year, but this growth lags behind Upstart's performance, with a non-GAAP EPS of $0.01 compared to a loss of $0.43 in the previous year [11] - Management projects Q4 revenue growth between 23% and 28%, indicating a potential slowdown [12] EPS Estimate Trends - The Zacks Consensus Estimate for Affirm's fiscal 2025 indicates year-over-year growth of 36.9% for revenue and 95.8% for EPS, but the estimate revision trend has been volatile [13] - In contrast, Upstart's estimates imply a 58.8% revenue increase and an 830% EPS increase for 2025, with a steady upward revision trend reflecting predictable performance [14][15] Price Performance & Valuation - Both companies have experienced share price fluctuations in 2025, with Affirm shares down 11.8% year-to-date and Upstart down 14% [17] - Currently, both companies have similar forward price-to-sales ratios, with Affirm at 4.46 and Upstart at 4.52 [18] Conclusion - While Affirm has built a strong consumer brand and is diversifying its financial services, it remains heavily reliant on the competitive BNPL market, with uncertain profitability and slower growth [21] - Upstart, on the other hand, is executing across multiple high-growth verticals, demonstrating operational leverage and a path towards consistent profitability, making it a more attractive investment opportunity [22][23]

Group 1 - The article discusses the ongoing trade war, highlighting that while it is not completely resolved, China remains a significant player in trade deals [1] - The author emphasizes the complexities and uncertainties surrounding the trade deal, indicating that the situation is fluid and requires close monitoring [1] Group 2 - The author has a background in private credit and commercial real estate financing, which may provide insights into investment opportunities in these sectors [1] - The author has experience working with prominent commercial real estate developers, suggesting a strong understanding of the industry dynamics [1]

Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was approximately $213 million, representing a 67% year-on-year increase [27] - Revenue from fees was $185 million, up 34% year-on-year, while net interest income was approximately $28 million, exceeding expectations by $13 million [28] - Adjusted EBITDA reached $43 million, indicating significant operating leverage [30] Business Line Data and Key Metrics Changes - Platform originations grew 89% year-on-year, with personal loan originations flat sequentially but up 83% year-on-year [7][10] - Home and Auto lending saw sequential growth rates of 5242% and 42% respectively, with auto lending growing almost 5x compared to a year ago [8][14] - HELOC originations grew 52% quarter-on-quarter and more than 6x year-on-year [17] Market Data and Key Metrics Changes - The volume of loan transactions across the platform was approximately 241,000, up 102% from the prior year [28] - Average loan size increased to approximately $8,865 from $8,580 in the prior quarter [28] - The Upstart Macro Index remains elevated but stable, indicating improving consumer financial health [9] Company Strategy and Development Direction - The company aims to 10x its leadership in AI, focusing on model improvements and automation to enhance conversion rates [21] - Plans to return to GAAP net income profitability in the second half of the year, with a focus on expanding both core and new products [23] - The strategy includes diversifying into super prime loans while maintaining competitive rates and processes [24][66] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in adapting to changing macroeconomic conditions, noting that credit performance has remained stable despite recent market turbulence [9][27] - The company is cautious about potential risks from reinflation and is planning for a steady macro environment without expecting rate cuts [32][33] - Management remains optimistic about the demand for personal loans, particularly as the tax season ends [56] Other Important Information - The company signed a one-year agreement with Walmart's FinTech subsidiary, One Pay, to offer its products to Walmart customers [37][38] - A universal shelf and a $500 million at-the-market program were established to enhance balance sheet flexibility [31] Q&A Session Summary Question: Can you talk about the Walmart partnership? - The company signed a one-year agreement with Walmart's One Pay to make its products available to Walmart customers, which has already been launched [37][38] Question: Can you provide trends in April and early May? - Management indicated that guidance captures the current quarter's trends, providing limited additional color [40] Question: How should we think about conversion rates for the remainder of the year? - Conversion rates grew from 14% to 19%, with expectations to drive them higher through better models and automation [45] Question: Why was the 2025 outlook not increased despite new funding? - The company was never short of funding; the gating item for growth is the economic acquisition of the right borrowers [102] Question: How have funding partners reacted to market volatility? - Committed partnerships have performed as designed, with no pullbacks from private credit partners or banks [71] Question: How is the company adapting to macroeconomic changes? - The company relies on adaptive models and has built conservatism into its planning, ensuring readiness for macro changes [74]

Financial Data and Key Metrics Changes - In Q1 2025, Cipher Mining reported revenue of $49 million, a 16% increase from $42 million in Q4 2024, driven by higher Bitcoin production and prices [28][30] - The average Bitcoin price rose from approximately $83,000 in Q4 2024 to about $93,000 in Q1 2025, although the spot price declined from $93,000 to roughly $83,000 by the end of Q1 2025, resulting in a $20 million unrealized loss on Bitcoin holdings [29][30] - The company reported a GAAP net loss of $39 million or $0.11 per share, compared to a net income of $40 million or $0.13 per share in Q1 2024 [31][32] Business Line Data and Key Metrics Changes - The Odessa data center mined 5.24 Bitcoin in Q1 2025, generating $49 million in revenue, up from 4.92 Bitcoin and $42 million in Q4 2024, reflecting a 6.5% increase in production [27][32] - The cost of revenue decreased by 18% sequentially due to less frequent curtailment, while year-over-year costs remained flat [33] Market Data and Key Metrics Changes - The company’s operating capacity stands at 327 MW, with a pipeline expansion of approximately 2.8 GW planned for the coming years [9] - The average all-in electricity cost was approximately $23,379 per Bitcoin produced, showcasing competitive pricing [8] Company Strategy and Development Direction - Cipher Mining is transitioning from solely a Bitcoin miner to a developer of high-performance computing (HPC) data centers, with a focus on operational flexibility and strategic partnerships [11][12] - The company has signed a term sheet with Fortress Credit Advisors LLC for financing at the Barbara Lake site, indicating a shift towards joint ventures for capital-intensive projects [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company’s operational flexibility and ability to navigate market challenges, highlighting a disciplined treasury management strategy that outperformed simple holding strategies [15][16] - The management noted ongoing interest from potential tenants and financing partners, with a robust pipeline of data center developments expected to meet future demand [12][14] Other Important Information - The company’s treasury management strategy unlocked $90 million in liquidity, supporting growth without diluting shareholders [17] - The Odessa facility achieved a hash rate of 11.3 Exahashes per second, with a fleet efficiency of 17.6 Joules per Terahash [18] Q&A Session Summary Question: Can you provide more details on the Fortress announcement and the financing arrangement? - Management confirmed that Barbara Lake would enter a joint venture with Fortress, which will backstop the financing for the data center build, with Cipher retaining the right to own up to 49% of the JV [46][48] Question: Have conversations with potential tenants changed since the tariff announcements? - Management reported that the pace of conversations has increased, with more inquiries from large investors and tenants, indicating sustained interest despite tariff announcements [52][53] Question: How does the financing strategy at Barbara Lake differ from other Bitcoin miners? - Management emphasized the optionality in their strategy, focusing on acquiring sites and developing assets while leveraging partnerships to minimize capital expenditure [58][63] Question: How is the interconnection process evolving in Texas? - Management noted that new legislation is expected to streamline the interconnection process, which could make it more challenging but ultimately beneficial for the market [66][69] Question: What is the efficiency of the rigs being deployed? - Management indicated that the initial efficiency of the 2.5 Exahash from idle rigs would be around 20-21 Joules per Terahash, but this would improve with the arrival of new rigs [70][71]

Financial Data and Key Metrics Changes - In Q1 2025, the company reported revenue of $49 million, a 16% increase from $42 million in Q4 2024, driven by higher Bitcoin production and prices [26][27] - The average Bitcoin price increased from approximately $83,000 in Q4 2024 to approximately $93,000 in Q1 2025, although the spot price declined to roughly $83,000 by the end of Q1 [26][27] - The company reported a GAAP net loss of $39 million or $0.11 per share, compared to a net income of $40 million or $0.13 per share in Q1 2024 [28][29] Business Line Data and Key Metrics Changes - The Odessa data center mined 5.24 Bitcoin in Q1 2025, generating $49 million in revenue, compared to 4.92 Bitcoin and $42 million in Q4 2024, reflecting a 6.5% increase in production [25][29] - The cost of revenue decreased by 18% sequentially due to less frequent curtailment, while year-over-year costs remained flat [30] Market Data and Key Metrics Changes - The company’s operating capacity stands at 327 MW, with an expected pipeline capacity expansion of approximately 2.8 GW in the coming years [7] - The average all-in electricity cost was approximately $23,379 per Bitcoin produced, reflecting competitive pricing [6] Company Strategy and Development Direction - The company is transitioning from solely a Bitcoin miner to a developer of high-performance computing (HPC) data centers, with a focus on operational flexibility and strategic partnerships [9][11] - A term sheet was signed with Fortress Credit Advisors LLC for financing at the Barbara Lake site, indicating a strategic move to leverage external capital for development [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company’s operational flexibility and ability to adapt to market cycles, despite turbulent macroeconomic conditions [5][12] - The treasury management strategy has been effective, unlocking $90 million in liquidity to support growth without diluting shareholders [14] Other Important Information - The company has engaged in discussions with potential tenants and financing partners, indicating strong interest in its data center developments [10][11] - The Odessa facility has received industry recognition for its operational excellence, setting benchmarks for efficiency [15] Q&A Session Summary Question: Can you provide more details on the Fortress announcement? - The Fortress partnership will be a joint venture, with Fortress backing the financing of a full data center build, allowing the company to retain up to 49% ownership without additional capital [43][44][45] Question: How have conversations progressed since the tariff announcements? - The pace of conversations has increased, with more inquiries from large investors and tenants, indicating sustained interest despite tariff changes [48][49] Question: What is the financing strategy for Barber Lake? - The financing strategy allows the company to develop data centers without the high cost of capital typically associated with Bitcoin mining, enabling better economics [54][56][59] Question: How is the company managing long lead time item purchases? - The company prioritizes getting substations ordered and built, which are critical for tenant due diligence and project timelines [74][75] Question: What is the relationship with SoftBank now that they have invested? - The company is focused on securing a high-quality tenant for Barbara Lake, with hopes that SoftBank could become a tenant, while also exploring other potential tenants [78][80]

Group 1 - The article discusses a value investing approach focusing on classical value ratios such as low P/B, P/FCF, Owner Earnings discounting, PEG ratios, and the Graham Number [1] - It emphasizes the importance of tracking earnings growth versus price appreciation as a key element in evaluating investment quality [1] - The author advocates for self-indexing using the Dow Jones Industrial Average combined with Joel Greenblatt's Magic Formula for tax efficiency [1] Group 2 - The author has a background in private credit and CRE mezzanine financing, having worked with notable developers like The Witkoff Group and Fortress Investment Group [1] - The author is fluent in Mandarin and has experience working in China and Asia, which may provide insights into those markets [1]