Gryphon Digital Mining (GRYP) Q3 2024 earnings summary

Executive summary

• Leadership team expanded with new CEO, Chairman, and board members, and completed a reverse merger with Akerna, resulting in a public listing and exit from SaaS cannabis software.

• Strategic focus on Bitcoin mining and planned expansion into AI infrastructure hosting, leveraging existing infrastructure and expertise.

• Operations centered on mining and holding bitcoin, selling only to cover expenses and reinvestment, with about 8,800 ASIC miners hosted in New York using renewable hydro energy.

• Vision to maximize shareholder value through operational improvements, strategic acquisitions, and diversification.

• Market capitalization exceeded $40 million, meeting Nasdaq listing requirements and reflecting increased market confidence.

Financial highlights

• Q3 2024: mined 61 Bitcoin, generated $3.7M in revenue (down from 176 Bitcoin and $5.2M in Q3 2023), net loss of $5.9M (improved from $8.1M loss in Q3 2023), and adjusted EBITDA loss of $2.5M (improved from $4.7M loss in Q3 2023).

• Nine months ended September 30, 2024: mining revenues $16.7M (up 11.4% YoY), net loss $21.7M (up 23.2% YoY), adjusted EBITDA $(3.5)M, and cost of revenues $12.3M.

• Break-even cost per Bitcoin rose to $59,213 in Q3 2024 from $21,501 in Q3 2023.

• Cash and cash equivalents at September 30, 2024 were $0.4M, with $0.6M in Bitcoin and $19.3M note payable.

• Depreciation expense for nine months ended September 30, 2024 was $9.4M, and interest expense was $908,000.

Outlook and guidance

• Expecting to announce new low-cost power mining site(s) and fleet relocation plans by year-end 2024, with ongoing search for new hosting after Coinmint termination.

• Projecting continued focus on mining and AI hosting, with potential for organic growth, strategic M&A, and several new initiatives expected.

• Current cash levels are insufficient for the next 12 months; additional capital will be required.

• Considering options to regain Nasdaq compliance after receiving notices for minimum bid price and market value deficiencies.

• Transition to new sites will be based on cost and operational efficiency, with Coinmint agreement ending January 1, 2025.