Financial Data and Key Metrics - Revenue for the 9 months ended September 30, 2024, grew 104% year-over-year to 5.5 million, a nearly 3.5x increase compared to the same period in 2023 [9] - Adjusted EBITDA for the quarter was positive, totaling 1 million and had a cash balance of close to 4 million financing early in the quarter [18] Business Line Data and Key Metrics - Colocation service segment revenue was 0 in the same period in 2023 [15] - Digital mining business revenue declined year-over-year from 10.3 million, primarily due to reduced Bitcoin mining following the halving and increased focus on colocation services [16] - Energy Sales segment revenue increased to 1.7 million in the same period in 2023, driven by participation in behind-the-meter generation bidding programs [17] Market Data and Key Metrics - The company's consolidated opening capacity represents approximately 100 MW of developed and available power and a mining hash rate of 3 EH/s [11] - The company expects to expand its total megawatt capacity significantly in the next 12 months, with plans to increase capacity from 22 MW to 55 MW at the Columbiana Alabama plant and from 60 MW to 120 MW at the North Tonawanda plant [12] Company Strategy and Industry Competition - The company is focused on developing a robust platform combining energy resources and digital infrastructure at scale, with an emphasis on energy as the foundation for mining colocation and high-performance computing (HPC) [7] - The company is shifting its CapEx investment upstream in power production assets to focus on more profitable mining colocation and Tier 3 development [16] - The company is positioning itself to serve the high-demand HPC market, with plans to develop existing assets into Tier 3 infrastructure [13] Management Commentary on Operating Environment and Future Outlook - The company anticipates continued top-line growth driven by the expansion of its megawatt footprint and colocation agreements with large U.S.-based Bitcoin miners [8] - The company expects further improvements to profitability in 2025 as it rolls out additional megawatt capacity at existing energy sites [19] - The company believes its power-first approach to data center development positions it well to capitalize on secular trends in the digital infrastructure sector [19] Other Important Information - The company experienced a brief maintenance period in Q3 2024 to increase long-term efficiency at its flagship North Tonawanda power plant, which is expected to return to full operational power in Q4 2024 [11] - The company has initiated a development plan for existing assets to be developed into Tier 3 infrastructure, with plans to begin traditional Tier 3 data center collection as market demand scales [13] Q&A Session Summary Question: Details on the maintenance period and its impact on Q3 results - The company underwent a major maintenance program, which took 2/3 of the quarter, resulting in lower-than-expected Q3 results. Full capacity is expected to resume in December [21][22] Question: Revenue split between colocation services and self-mining - The company operates more like a joint venture (JV) than a hosting service, with a split profit formula for mined coins and additional revenue from energy generation. Approximately 25% of revenue comes from energy sales independent of Bitcoin mining [24] Question: Capacity and development plans for the Alabama facility - The Alabama facility currently has a developed setup for 22 MW, with 14 MW running. The company plans to develop 20 MW of Tier 3 data center capacity in 5 MW increments, with the first 5 MW expected by Q4 2025 or early 2026 [26][27][28] Question: Plans for the North Carolina site - The company owns a site in North Carolina with access to 200 MW. The plan is to develop Alabama first, then expand in North Carolina via debt financing or JV with a large HPC operator, targeting 2026-2027 for development [31][32] Question: Building a customer base in HPC - The company is leveraging its existing relationships with large market cap companies in the mining sector to transition into HPC. It expects consistent and predictable 5-year program orders, which will facilitate financing without diluting shareholders [35]
Digihost(DGHI) - 2024 Q3 - Earnings Call Transcript