Hut 8 Mining p(US:HUT)2022-03-17 15:09Financial Data and Key Metrics Changes - Hut 8 Mining Corp achieved record revenue of CAD173.8 million for 2021, more than tripling from CAD40.7 million in 2020, driven by strong mining activity and increased hash rate [8][9] - The company recorded a net loss of CAD72.7 million for 2021, compared to a net income of CAD19 million in 2020, primarily due to non-operational accounting treatments [16][27] - Adjusted EBITDA for 2021 was CAD96.6 million, a significant improvement from negative adjusted EBITDA of CAD0.2 million in 2020 [20] Business Line Data and Key Metrics Changes - Revenue from mining activities was CAD165.4 million, with 2,786 new Bitcoin mined at an average price of approximately CAD59,400 per Bitcoin [9] - The hosting business generated CAD8.4 million in revenue, up from CAD1.7 million in the prior year, benefiting from onboarding a second customer [10] Market Data and Key Metrics Changes - The cost of revenue for the year was CAD85 million, an increase from CAD59.2 million in the prior year, driven by higher site operating costs and increased depreciation expense [11] - General and administrative costs rose to CAD40.3 million from CAD5.1 million in the prior year, reflecting strategic investments in management and corporate practices [13] Company Strategy and Development Direction - The company is focused on diversifying its operations, including mining Ethereum and expanding its infrastructure through the acquisition of TeraGo's Data Center and Cloud Business [33][36] - Hut 8 aims to achieve a hash rate goal of 6 exahash over the balance of the year, with ongoing evaluations of supply chain opportunities for new mining equipment [45] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's position for continued growth, citing strong operating results and strategic capital investments [6] - The company is committed to leveraging its Bitcoin holdings and exploring non-dilutive measures to enhance liquidity [28][30] Other Important Information - As of December 31, 2021, Hut 8 held 3,518 Bitcoin in custody and 2,000 Bitcoin subject to lending arrangements, totaling CAD323.9 million in Bitcoin holdings [30] - The company recorded a CAD57.9 million unrealized gain on digital assets, contributing to an other comprehensive loss of CAD14.9 million for 2021 [20] Q&A Session Summary Question: What is your mining production plan for the rest of the year? - Management indicated that the third site in North Bay is nearing completion and expected to add over 1 exahash of incremental compute [44] Question: What is your vision for the TeraGo acquisition in the next one to two years? - Management stated that they will continue to drive growth through both organic and inorganic means, evaluating opportunities on a case-by-case basis [46] Question: How do you view capital allocation between mining, hosting, and the data center business? - Management noted that the capital requirements for mining and data centers are fundamentally different, and they will deploy capital based on market opportunities [54] Question: What is the expected impact of the North Bay facility on cost per coin? - Management acknowledged that while the North Bay facility could potentially lower costs, it is difficult to predict due to the variability in global network hashrate and difficulty [62] Question: How much did Ethereum mining contribute recently? - Management confirmed that Ethereum mining still contributes significantly, but they are prepared to shift to the next most profitable blockchain if necessary [67]