Hut 8 Mining p(US:HUT)2021-05-13 19:43Financial Data and Key Metrics Changes - Hut 8 achieved record financial results for Q1 2021, with total revenue of CAD 32.5 million, up from CAD 12.7 million in Q1 2020 [4] - Revenue from digital assets mined was CAD 30.6 million, significantly increasing from CAD 12.7 million in the prior year [6] - Adjusted EBITDA for Q1 2021 was CAD 16 million, compared to a loss of CAD 560,000 in Q1 2020 [9] - The cost of mining each Bitcoin increased to approximately CAD 27,000 from CAD 11,300 in the prior year [8] Business Line Data and Key Metrics Changes - The company mined 539 Bitcoin in Q1 2021, down from 1,116 Bitcoin in the same period last year due to halving events and increased network difficulty [7] - Hosting services revenue was CAD 1.4 million, and interest income from Bitcoin lending was CAD 530,000 [5] Market Data and Key Metrics Changes - The average price of Bitcoin in Q1 2021 was approximately USD 45,000, compared to USD 8,000 in the prior year, marking a 5.5x increase [7] Company Strategy and Development Direction - The company aims to diversify revenue streams and reduce reliance on Bitcoin mining by expanding into hosting services and exploring GPU-based mining for Ethereum [18][20] - Hut 8 is focused on sustainability and has initiated partnerships to enhance its ESG initiatives, including a deal with Validus Power to utilize unproductive energy sources [25][26] - The management is committed to building a best-in-class leadership team to drive innovation and shareholder value [17] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the volatility in the digital asset market but emphasized the importance of creating a diversified revenue strategy to mitigate risks [18] - The company is optimistic about its future growth prospects, particularly with the expansion into GPU mining and strategic partnerships [19][20] Other Important Information - Hut 8 raised CAD 77.5 million in early January 2021 and used part of the capital to repay a USD 20 million loan, reducing leverage on its balance sheet [12] - As of March 31, the fair market value of digital assets held was CAD 168 million, with a combined self-mined Bitcoin balance of over 3,200 Bitcoin valued at CAD 242 million [13] Q&A Session Summary Question: What kind of utilization rates are you running? - Management noted that there was some curtailment of energy in February due to extreme weather conditions, which affected utilization rates [31] Question: Is the cost structure fully baked in Q1? - Management indicated that some costs in Q1 were one-time in nature and not expected to repeat, suggesting a more stable cost structure moving forward [35][36] Question: What are your thoughts on M&A? - Management stated that they are considering M&A but did not provide specific details at this time [38] Question: How will carbon costs impact financials? - Management mentioned that it is too soon to provide a definitive answer but expects costs associated with carbon to be more controlled with the Validus Power expansion [41] Question: Has there been a full transition to Foundry for mining? - Management confirmed that they have fully transitioned to Foundry as their largest mining pool [47] Question: What is the status of the Validus deal? - Management explained that they are working on standing up the initial 35 megawatts and will build a path for further expansion [81] Question: What are the plans for fleet upgrades? - Management is exploring options for legacy miners but has not made a decision yet [108] Question: How does Hut 8 create excess value for shareholders? - Management highlighted their large self-mined Bitcoin balance and the strategic pivot to GPU mining as key competitive advantages [120]