Hut 8 (HUT) Q2 2024 earnings summary

Executive summary

• Revenue for Q2 2024 grew 72% year-over-year to $35.2 million, reflecting the combined company's performance post-merger and growth in Managed Services, HPC, and Other segments, despite a decline in Digital Assets Mining revenue due to the Bitcoin halving and increased network difficulty.

• Net loss attributable to the company was $71.9 million, primarily due to a $71.8 million loss on digital assets from Bitcoin price decline and new fair value accounting rules.

• Adjusted EBITDA was a loss of $57.5 million, compared to income of $14.8 million in the prior year, mainly due to digital asset losses.

• Closed the Drumheller, Alberta mining site, resulting in a $1.7 million loss from discontinued operations in Q2 2024.

• Strategic $150 million investment from Coatue Management to accelerate AI infrastructure and energy platform expansion.

Financial highlights

• Digital Assets Mining revenue was $13.9 million, down from $15.9 million year-over-year due to Bitcoin halving and increased network difficulty.

• Managed Services revenue rose to $9.0 million from $4.7 million, driven by Ionic Digital management fees and new agreements.

• High-performance computing, colocation, and cloud revenue reached $3.4 million, with no comparable prior year revenue.

• Other revenue was $8.9 million, including equipment sales, hosting reimbursements, and power revenues.

• Cost of revenue was $20.6 million, up from $12.0 million, reflecting expanded operations.

Outlook and guidance

• Plans to commercialize GPU-as-a-service in Q3 2024 to diversify compute revenue.

• Ongoing discussions for large-scale partnerships, fleet upgrades, and disciplined capital allocation to maximize shareholder value.

• Anticipate energizing the 205-MW Texas Panhandle site in the first half of next year, targeting large-scale AI and ASIC deployments.