Hut 8 (HUT) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue rose 102% year-over-year to $43.7 million, driven by Managed Services, colocation, and GPU-as-a-Service, despite a decline in Digital Asset Mining due to the Bitcoin halving and network difficulty.

• Net income was $0.9 million, reversing a prior year loss, with Adjusted EBITDA at $5.6 million, down from $11.4 million due to higher G&A expenses and digital asset losses.

• Major initiatives included a ~15 EH/s colocation partnership with BITMAIN, a GPU-as-a-Service launch with over 1,000 NVIDIA H100 GPUs, and a significant ASIC fleet upgrade.

• The company completed an all-stock merger with US Bitcoin Corp in November 2023 and converted a $37.9 million Anchorage loan to equity, saving $17.6 million in interest.

• 234 Bitcoin mined at an average revenue per Bitcoin of $61,025 and cost to mine of $31,482; 9,106 Bitcoin held in reserve valued at $576.5 million.

Financial highlights

• Revenue: $43.7 million (+102% YoY); Net income: $0.9 million (vs. $-4.4 million YoY); Adjusted EBITDA: $5.6 million (down from $11.4 million YoY).

• Digital Asset Mining revenue declined to $11.6 million due to the Bitcoin halving and higher network difficulty.

• Managed Services revenue rose to $20.8 million, including a $13.5 million contract termination fee.

• Other segment revenue increased to $7.9 million, mainly from Ontario power plants and Far North JV.

• Energy cost per MWh dropped 33% year-over-year to $28.83, supporting improved mining margins.

Outlook and guidance

• Anticipates continued top-line growth from new colocation and GPU-as-a-Service businesses, with the Vega project expected to generate $135 million in annualized revenue starting Q2 2025.

• Initial ASIC fleet upgrade to improve average fleet efficiency by 37% and increase self-mining hashrate by 66% in Q1 2025; potential to reach ~24 EH/s and 15.7 J/TH efficiency by Q2 2025.

• Ongoing focus on AI data center development, expanding energy infrastructure, and optimizing mining operations.

• Further gross margin expansion expected with fleet upgrades in Q1 2025.