Dmg Blockchain Solutions (DMGI) Q4 2024 earnings summary

Executive summary

• Achieved major milestones in building a carbon-neutral ecosystem, including nearing regulatory approval for Systemic Trust as a digital asset custodian and revamping Terra Pool for carbon-neutral Bitcoin mining.

• Fiscal 2024 revenue rose 21% year-over-year to $33.9 million, driven by higher bitcoin prices and new mining equipment.

• Expanded software suite with internal mine management (Helm), hash rate contract platform (Reactor), and plans for a general-purpose blockchain explorer.

• Signed a memorandum of understanding with Malahat Nation for a 30 MW generative AI compute JV, with potential for $1 billion+ investment and replication with other indigenous bands.

• Transitioning focus from development to customer acquisition and operational execution for Core+ software and services.

Financial highlights

• Q4 2024 revenue was $5.9 million, down 29% sequentially; full year revenue was $33.9 million, up 21% year-over-year.

• Net loss was $5.2 million in 2024, narrowing from $16.5 million in 2023; EPS loss improved to -$0.03 from -$0.10.

• Cash and digital assets at year-end totaled $36.0 million, up 90% year-over-year.

• Cash flow from operations increased 69% to $8.2 million for the year.

• Operating and maintenance costs rose 17% to $19.7 million for the year, mainly due to higher utilities costs and a 21% increase in hash rate.

Outlook and guidance

• Plans to grow hashrate to 2.1 EH/s by February 2025 and target 3 EH/s by year-end, leveraging hydro direct liquid cooling.

• Fleet efficiency targeted to improve to 21 J/TH by February 2025.

• Expecting margin rebound in the current quarter due to higher Bitcoin prices and increased efficiency.

• Anticipate expenses to rise ~50% in FY2025 as investments in Systemic Trust and software platforms continue.

• Plan to access capital markets for new site development and AI projects, using a mix of cash, debt, and equity.