Dmg Blockchain Solutions (DMGI) Q3 2024 earnings summary

Executive summary

• Achieved regulatory approval for Systemic Trust, aiming for qualified digital asset custodian status by year-end, and advanced Core+ software initiatives including Terra Pool and Helm mine management platform.

• Revamped Terra Pool to support carbon-neutral Bitcoin mining, with collaborations such as PayPal and new features to attract miners.

• Q3 2024 revenue increased 11% year-over-year to $8.3M, driven by higher self-mining revenue and a 139% rise in bitcoin prices, partially offset by a 71% increase in network difficulty.

• Progressed on infrastructure and supply chain strategies to improve mining deployment speed and efficiency, with a focus on hydro and direct liquid cooling for future growth.

• Exploring expansion into AI data centers, leveraging existing infrastructure and planning upgrades for Tier 3 data center requirements.

Financial highlights

• Revenue for the June quarter was $8.3M, up 11% year-over-year but down 17% sequentially; self-mining revenue dropped 11% sequentially due to the Bitcoin halving.

• Mined 87 Bitcoin in the quarter, down 42% sequentially, with realized hash rate of 0.95 exahash and fleet efficiency of 25.6 J/TH.

• Cash and digital currency holdings totaled $39.6M at quarter end, with total assets at $111M.

• Net loss was $3.8M, or -$0.02 per share, compared to breakeven the prior quarter and $4.3M loss in Q3 2023.

• Operating cash flow was -$1.3M, a decline from $4.5M in the previous quarter.

Outlook and guidance

• Targeting 1.7 exahash at 23 J/TH efficiency by end of current quarter, with plans to reach 3 exahash in 2025.

• Expecting Core+ products, especially Systemic Trust and Terra Pool, to begin generating meaningful revenue in 2025, contingent on customer acquisition.

• Non-mining expenses (excluding interest) guided to $1.5–2M per quarter.

• Hosting revenue expected to decline to near zero as capacity shifts to self-mining.

• Focus on regaining profitability by increasing hashrate, improving fleet efficiency, and executing Core+ software initiatives.