Hyperscale Data (GPUS) Q2 2024 earnings summary

Executive summary

• Reported a net loss attributable to common stockholders of $35.2 million for Q2 2024, compared to $61.0 million in Q2 2023, and a net loss of $32.8 million for the six months ended June 30, 2024, versus $109.9 million in the prior year period.

• Total revenue for Q2 2024 was $28.4 million, with $76.3 million for the six months ended June 30, 2024; total assets were $271 million as of June 30, 2024.

• Announced strategic reorganization into Hyperscale Data (AI data centers/Bitcoin) and Ault Capital Group (private equity/other assets), with plans for special dividends of subsidiary stock to shareholders.

• Significant impairments recorded: $8.0 million on property and equipment and $35.6 million on goodwill and intangible assets in Q2 2024.

• Company faces substantial doubt about its ability to continue as a going concern due to negative working capital and ongoing net losses.

Financial highlights

• Q2 2024 revenue: $28.4 million (Q2 2023: $47.4 million); H1 2024: $76.3 million (2023: $78.6 million).

• Digital assets mining revenue rose 27% to $19.9 million in H1 2024; hotel/real estate revenue up 23% to $8.1 million; Enertec Systems (defense) sales up 47%; TurnOnGreen (EV charging) sales up 54%.

• Gross margin for Q2 2024 was -2%; adjusted gross margin excluding lending/trading was 24%.

• Operating expenses for Q2 2024 were $68.4 million, up from $45.4 million in Q2 2023, driven by impairments.

• Achieved $17 million reduction in G&A expenses and 59% decrease in interest expenses in H1 2024.

Outlook and guidance

• Management expects existing cash, receivables, and marketable securities will not be sufficient to fund operations for the next year; additional capital raises are anticipated.

• Reaffirms focus on AI data center operations and divestiture of non-core assets; name and ticker change to Hyperscale Data, Inc. (GPUS) expected in September 2024.

• No formal financial guidance provided for the remainder of 2024.