LM Funding America(LMFA) - 2025 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - For Q3 2025, revenue was $2.2 million, reflecting a 13% sequential increase and a 74% year-over-year increase, driven by stronger average Bitcoin pricing of $114,000 and contributions from the newly operational Mississippi facility [11] - Mining margins improved to 49%, attributed to a shift from hosting fees to self-mining and higher fleet efficiency [11] - The company reported a net loss of $3.7 million and a core EBITDA loss of $1.4 million, primarily due to increased staff costs and payroll expenses [11] - As of quarter-end, the company held cash and cash equivalents of $300,000 and 304 Bitcoin valued at $34.7 million, nearly double its market cap [12] Business Line Data and Key Metrics Changes - The acquisition of the Mississippi facility added approximately 7.5 megawatts of energized capacity and around 230 petahash of installed hash rate, contributing to a 28% increase in Bitcoin production from September to October [5][9] - The company exited October with approximately 0.71 exahash energized, representing a 50% hash rate expansion in one build cycle [8] Market Data and Key Metrics Changes - By the end of September, the company had approximately 304.5 Bitcoin in treasury, valued at nearly $35 million, highlighting a disconnect between treasury value and equity valuation [5] - The Bitcoin production increased from 5.9 Bitcoin in September to 7.6 Bitcoin in October, reflecting operational improvements and increased capacity [6][9] Company Strategy and Development Direction - The company aims to increase Bitcoin per share and grow intrinsic value over time, focusing on disciplined capital allocation and operational control [4][14] - Future strategies include balancing Bitcoin accumulation, strategic investments, and opportunistic share repurchases to enhance per-share value [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term value of Bitcoin and the company's strategy to leverage its operational control and cost efficiency [15] - The company is entering a phase where scale, efficiency, and productivity converge, with plans to enhance production and efficiency [14] Other Important Information - The company executed a substantial balance sheet enhancement initiative, completing an $8 million private repurchase of around 3.3 million shares and 7.3 million warrants [11] - The company has secured Bitmain's S21 immersion-cooled machines, expected to come online in December, which will significantly improve efficiency [10] Q&A Session Summary Question: Thoughts on the path for Bitcoin mining infrastructure in 2026 - Management noted that the Mississippi acquisition has been successful and there is potential for further growth, with plans to add immersion machines in Oklahoma [19] Question: Are there plans for additional site acquisitions? - Management confirmed ongoing exploration for site acquisitions based on energy tariffs but indicated no immediate plans for new acquisitions [21] Question: How to allocate between mining business and acquiring additional Bitcoin? - Management emphasized a long-term strategy, balancing mining growth with treasury strategy based on future Bitcoin pricing [23] Question: Management of old machines in storage - Management stated that old machines are kept in reserve for quick deployment when power becomes available, aligning with their strategy [26] Question: Current cost of mining one Bitcoin - The current mining cost per Bitcoin was reported at $66,000, down from $70,000 in the previous quarter, indicating improved efficiency [27]