Dmg Blockchain Solutions (DMGI) Q1 2025 earnings summary

Executive summary

• Achieved regulatory approval for Systemic Trust, becoming a Qualified Digital Asset Custodian in Canada, with customer onboarding and revenue ramp expected by year-end.

• Revenue reached CAD 11.6 million in Q1 2025, up 97% sequentially and 20% year-over-year, driven by higher bitcoin prices and increased mining activity.

• Progressed Core+ software and service strategy, including Terra Pool, Helm, and Reactor, targeting carbon-neutral Bitcoin mining and enhanced data center management.

• Signed MOUs for AI data center expansion, including a 10 MW prefabricated data center and a 30 MW generative AI partnership with Malahat Nation, aiming to capitalize on rising demand for private and sovereign AI infrastructure.

• Realized hash rate of 1.62 EH/s in Q1 2025, up 65% sequentially and 68% year-over-year, with 97 Bitcoin mined and improved fleet efficiency.

Financial highlights

• Revenue rose 97% sequentially to CAD 11.6 million, driven by a 106% increase in self-mining revenue and a 49% increase in Bitcoin mined.

• Cash plus Bitcoin balance reached CAD 58.2 million at quarter-end, up 62% sequentially and 110% year-over-year.

• Operating and maintenance costs increased 44% to CAD 6.7 million, reflecting higher hash rate and hosting costs.

• Net income was -CAD 3.1 million or -CAD 0.02 per share, an improvement from -CAD 0.05 per share the prior quarter, but down from net income of CAD 7.0 million in Q1 2024.

• Cash flow from operations was -CAD 2.7 million, impacted by lower Bitcoin sales.

• Total assets increased 32% to CAD 137.1 million from the prior quarter.

Outlook and guidance

• Targeting hash rate growth to 2.1 EH/s in the near term and 3 EH/s by year-end, with further efficiency improvements expected from hydro miners.

• AI and Core+ software/services expected to drive future revenue and profitability, with focus on customer acquisition and platform expansion.

• Cautious approach to capital deployment in mining due to market uncertainties and potential industry restructuring.

• Anticipates expenses to rise nearly 50% in FY2025 due to investments in Systemic Trust and software development.