CleanSpark(CLSK) - 2024 Q4 - Earnings Call Transcript

Financial Data and Key Metrics - Revenue for the fiscal year 2024 was $378.9 million, a 125$164.8 million in the previous year [7] - Adjusted EBITDA for the year was $245.8 million, an 882$25 million in 2023 [8] - Gross profit for the year was $213.5 million, a 185$145.8 million, largely due to a non-cash impairment expense of $197 million [33] - Bitcoin production for the year was approximately 7,100 Bitcoins, compared to 6,900 Bitcoins in fiscal year 2023 [31] Business Line Data and Key Metrics - The company's operational hash rate reached 33.5 exahash per second, up from 9.6 exahash per second the previous year [14] - The company added over 425 megawatts to its operational power capacity, bringing the total portfolio to over 726 megawatts [14] - The current fleet efficiency stands at 19 joules per terahash, significantly lower than the fleet average of 28.4 joules per terahash from September of last year [17] Market Data and Key Metrics - The company has a geographically diverse portfolio of mining assets in Georgia, Wyoming, Tennessee, Mississippi, and New York [13] - The company's all-in power costs for fiscal year 2024 were$0.046 per kilowatt hour, lower than $0.048 per kilowatt hour in fiscal 2023 [34] - The average cost to mine Bitcoin in 2024 was approximately$21,400 for wholly-owned facilities [35] Company Strategy and Industry Competition - The company remains committed to Bitcoin mining as a vertically integrated pure play operation, contrasting with competitors diversifying into AI and high-performance computing [24] - The company's growth strategy includes greenfield development, organic expansion, and opportunistic acquisitions [11][18] - The company aims to achieve 50 exahash per second in 2025 and is focused on increasing installed hash rate and boosting monthly Bitcoin production [26][27] Management Commentary on Operating Environment and Future Outlook - The company is well-positioned to capitalize on the current bull market and expects to exceed 1 gigawatt of contracted capacity across its portfolio in 2025 [14][27] - The company anticipates a friendlier regulatory environment and increased capital market opportunities following the recent presidential election [57] - The company is focused on operational efficiency, driving strong margins, and consistent performance [26] Other Important Information - The company closed the acquisition of grid infrastructure in October, which included 68 megawatts of developed infrastructure in Tennessee and over 400 megawatts of identified upside expansion opportunity [21] - The company renewed its insurance policy in November, cutting the comparable rate by 25% [39] - The company has approximately $121 million in cash and is rapidly approaching 10,000 Bitcoin in holdings, representing almost$1 billion at current Bitcoin prices [40] Q&A Session Summary Question: Why have miners lagged Bitcoin this year? - The company believes that miners, including itself, have meaningfully outperformed Bitcoin over a two-year period and expects another upswing as the market better understands the miners' capabilities [49] Question: How is the company approaching the ASIC market? - The company has locked in price certainty for ASICs through 63 exahash and has the ability to take down additional units with price certainty [50][51] Question: What are the paths to generate yield on Bitcoin holdings? - The company is exploring strategies such as providing covered calls, lending Bitcoin, and providing liquidity to ETFs [56] Question: What trends are expected to drive mining in 2025? - The company expects a friendlier regulatory environment, increased capital market opportunities, and continued focus on scale and efficiency [57][58] Question: How is the company prioritizing build versus buy decisions? - The company is focusing more on building hardened immersion-cooled infrastructure in rural areas and may consider air-cooled infrastructure for acquisitions [66][67] Question: What is the outlook for fleet efficiency? - The company expects incremental improvements in fleet efficiency and believes immersion cooling will play a key role in keeping up with efficiency advancements [70][72] Question: What are the expectations for CapEx in 2025? - The company expects to invest roughly $200 million in infrastructure and has secured advantageous prices for miners [77] Question: What is the company's view on buying Bitcoin outright? - The company believes the best use of capital is buying or building facilities that produce Bitcoin, but it is not opposed to buying Bitcoin for strategic reasons [93][94]