Financial Data and Key Metrics Changes - Revenue for the quarter grew year-over-year by approximately $19 million, an increase of almost 12% [17] - Bitcoin production was relatively flat, with revenues of almost $100,000 per Bitcoin compared to $84,000 in the same quarter last year [17] - Gross margins declined from approximately 57% a year ago to 47% this quarter, primarily due to increased network difficulty [17] - The company recognized a net loss of approximately $379 million compared to net income of approximately $247 million a year ago, driven by mark-to-market adjustments [18] - Adjusted EBITDA was negative $295 million, compared to positive $322 million a year ago, also influenced by mark-to-market adjustments [18][20] - Cash balance increased over $400 million compared to Q4, due to a $1.15 billion convertible transaction [21] - Total debt is approximately $1.8 billion, with a net debt-to-liquidity ratio of approximately 1.1 [22] Business Line Data and Key Metrics Changes - The company continues to operate a large-scale Bitcoin mining business, generating strong cash flows from a scaled mining footprint of more than 50 exahash per second [7] - Digital Asset Management (DAM) generated over $13 million in premiums and cash, representing about 24% of normalized adjusted EBITDA [15] - The DAM strategy achieved an annualized return of 4.2% on the average HODL balance, surpassing the target of 4% [25] Market Data and Key Metrics Changes - Power prices increased marginally to $0.056 per kWh, up from $0.049 per kWh a year ago [17] - The company is seeing improving economics per megawatt driven by scale, power quality, and contracting structures [6] Company Strategy and Development Direction - The company is evolving into a digital infrastructure and data center development company, building an infrastructure platform with multiple earning streams [5] - Bitcoin mining funds the platform, AI monetizes it, and digital asset management optimizes it across all cycles [5] - The company is focused on securing scarce power and land, with a strategy to capitalize on the demand for larger sites [10] - The company aims to move from portfolio formation into commercialization milestones, reflecting the demand for AI infrastructure [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the demand for AI infrastructure, citing significant investments from major players like Amazon [34] - The company is focused on disciplined capital deployment and optimizing for durability rather than velocity [12] - Management believes that Bitcoin mining will always be core to the business, providing a strategic advantage in power acquisition [13] Other Important Information - The company completed a $1.15 billion convertible offering, part of which was used to repurchase $460 million worth of shares, totaling over $600 million since December 2024 [9] - The company has over 13,000 Bitcoin, with a strategy to use Bitcoin as a productive capital asset [24] Q&A Session Summary Question: Can you talk about the demand environment for HPC and attributes sought in leasing partners? - Management noted that demand is escalating, with interest from trillion-dollar balance sheet companies for long-term leases [34] Question: How does owning additional land at Sandersville impact conversations with potential tenants? - Management confirmed that owning the land allows for a more orderly process in progressing the AI data center project and enhances the specificity of the compute and power ramp [66] Question: What milestones should be expected in the HPC tenant discussions? - Management indicated that there are multiple potential offtake tenants, with a specific front-runner in discussions for the Sandersville site [79] Question: How does the recent downturn in Bitcoin prices affect the HODL approach? - Management stated that the strategy remains intact, with no plans to dip into the HODL despite current market conditions [55] Question: What is the expected timeline for power availability at the new Texas sites? - The Sealy project is expected to have power available in the first half of 2027, while the Brazoria project is anticipated to energize around Q4 2027 to Q1 2028 [82]

CleanSpark (NasdaqCM:CLSK) Q1 2026 Earnings call February 05, 2026 04:30 PM ET Company ParticipantsBrian Dobson - Brian Dobson is Managing Director of Disruptive Technology Equity ResearchGary Vecchiarelli - President and CFOHarry Sudock - Chief Business OfficerMatt Schultz - Chairman and CEOMike Grondahl - Head of Equities and Director of ResearchConference Call ParticipantsGareth Gacetta - Equity Research AnalystGreg Lewis - Managing Director and Energy and Infrastructure AnalystJim McIlree - Senior Resea ...

Group 1 - Riot Platforms signed a 10-year data center lease with AMD valued at $311 million, with potential expansion options that could increase the total to $1 billion, allowing for scalability up to 200 megawatts [1] - Galaxy Digital secured $460 million in new funding, in addition to a prior $1.4 billion loan, to expand its Helios campus in Texas to 3.5 gigawatts, with 800 megawatts already committed to AI firm CoreWeave [2] - The shift towards AI and high-performance computing allows miners to generate income independent of Bitcoin's price fluctuations, as they can rent power and data centers to AI clients [2] Group 2 - Bitcoin mining is becoming increasingly competitive, with rising hashrate leading to lower earnings for individual miners unless Bitcoin prices increase significantly [3] - Riot Platforms now controls approximately 1.7 gigawatts of power in Texas after selling around 1,080 BTC to fund its expansion, positioning itself more like a utility company with long-term contracts [4] - When mining firms maintain solvency during periods of stable Bitcoin prices, they tend to sell fewer coins on the market, which can reduce selling pressure over time [5]

Core Viewpoint - HIVE Digital Technologies has experienced significant growth, with a 285% year-on-year revenue increase in Q2, reaching $87.3 million, and analysts project over 100% upside potential due to its dual mining-and-AI strategy [1][5]. Financial Performance - The company produced 717 Bitcoin in Q2, marking a 76.6% increase, and generated $82.1 million in mining revenue with a 48.6% gross margin after electricity costs [3]. - At a Bitcoin price of $90,000, HIVE's annualized mining revenue run-rate could approach $400 million at 50% post-electricity margins [4]. Strategic Positioning - HIVE is transitioning from pure mining to Tier III+ AI data centers, with record BUZZ HPC revenue of $5.2 million, reflecting a 175% year-over-year increase [4]. - The company aims to increase its operational hashrate from 25 EH/s to 35 EH/s by the end of 2026, positioning itself to benefit from Bitcoin's productivity gains [3]. Risks and Challenges - HIVE reported a negative free cash flow of $220 million for the year ending September 2025, despite a net income of $34.4 million, indicating potential financial strain [6]. - The company has diluted shareholders by 87% over the past year through equity raises, leading to a 57% drop in earnings-per-share [6]. - The AI pivot is considered unproven and capital-intensive, with risks associated with retrofitting facilities for GPU workloads [7]. Market Sentiment - Analyst price targets average $8.46, suggesting a 103% upside, with buy ratings from firms like HC Wainwright and B. Riley [5]. - The stock is seen as having genuine upside potential for high-risk investors who believe in the dual Bitcoin-plus-AI narrative through 2026 [9].

Financial Data and Key Metrics Changes - CleanSpark achieved record revenues of $766 million for fiscal year 2025, representing over 100% year-over-year growth [17] - Gross margin was 55%, a slight decrease of 1% year-over-year, which is notable given it was the first full year post-halving of Bitcoin block rewards [7][17] - Adjusted EBITDA exceeded $800 million, with a normalized adjusted EBITDA from operations of approximately $305 million, translating to a net margin of about 40% [18] - The company reported a significant positive net income of about $365 million [18] Business Line Data and Key Metrics Changes - CleanSpark produced nearly 8,000 Bitcoin during the fiscal year, with an average marginal cost per Bitcoin slightly below $43,000 and average revenue per Bitcoin around $98,000 [17] - The Bitcoin treasury grew by nearly 62% to over 13,000 Bitcoin, generated entirely from the company's own mining operations [8] Market Data and Key Metrics Changes - The company reached an operational hash rate of 50 exahash per second, with 100% U.S.-based infrastructure [7] - The company has secured over a gigawatt of power under contract across its data centers, with nearly 300 megawatts in Texas scheduled to begin energization in early 2027 [10] Company Strategy and Development Direction - CleanSpark is evolving into a digital infrastructure platform, focusing on opportunities in generative AI, grid balancing through Bitcoin mining, and high-performance computing [5][6] - The company aims to diversify revenue streams and enhance margins through a blended approach to growing and monetizing its portfolio [6] - A strategic partnership with Submer aims to enhance energy efficiency and speed to market for AI data center development [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the demand for AI compute and the company's ability to secure tenants for its AI-ready locations [36][39] - The company is focused on operational excellence and leveraging its strong balance sheet to capitalize on growth opportunities in the AI sector [6][33] Other Important Information - CleanSpark completed its largest financing ever with a $1.15 billion upsized 0% convertible note, which included a stock buyback of $460 million, reducing outstanding shares by over 10% [16][30] - The Digital Asset Management (DAM) strategy generated $9.3 million in premiums during the fourth quarter, with an annualized yield of approximately 12% [23][29] Q&A Session Summary Question: Can you provide insights on demand in the HPC AI space? - Management noted strong inquiries about the Sandersville site and additional traction at the Sealy, Texas site, indicating optimism about demand [36] Question: How will Bitcoin mining and HPC campuses be paired? - The company sees potential in blending AI, HPC, and Bitcoin mining to provide power usage versatility, which utilities find appealing [38] Question: What key milestones should investors look for in 2026 regarding HPC? - The focus will be on deployments at the Texas and Sandersville sites, with significant demand for critical IT loads expected [39] Question: What are the expansion plans for the Bitcoin mining business? - The company plans to migrate Bitcoin mining operations to more remote locations while prioritizing HPC AI at sites with quick access to fiber [42] Question: How will the Texas facility energization proceed? - The first 200 megawatts are scheduled to come online in the first half of 2027, with additional tranches in subsequent years [52] Question: What is the CapEx required for the Sandersville site to upgrade to HPC? - The facility is not currently set for HPC but has additional land secured for future construction, allowing for a smooth transition when ready [63]

Core Viewpoint - CleanSpark, Inc. has successfully raised $1.15 billion through an upsized capital raise aimed at expanding its Bitcoin mining and AI data center operations, despite a 6.55% drop in stock price following the announcement, which may present a strategic opportunity for long-term investors [3]. Group 1: Capital Raise Details - The capital raise consists of convertible senior notes with a 0.00% interest rate, allowing CleanSpark to secure over $1 billion in growth capital without ongoing cash interest payments, thus preserving cash flow for operations and investments [4]. - The notes include a 27.50% conversion premium, setting the initial conversion price at approximately $19.16 per share, which provides existing shareholders with a buffer against dilution as the stock must appreciate significantly before conversion risks arise [5]. - The financing structure is designed to minimize shareholder dilution while supporting growth in both Bitcoin mining and the new AI data center division, enhancing the company's long-term strategic position [5]. Group 2: Stock Repurchase Intent - CleanSpark plans to use approximately $460 million of the proceeds from the capital raise to repurchase its own stock, which serves two critical purposes [6].