Keel Infrastructure (KEEL) Q3 2024 earnings summary

Executive summary

• Upgraded 10 data centers, added 3 new ones, replaced 50,000+ old miners, and installed 46,000+ new miners, boosting hash rate by 83% to 11.9 EH and improving efficiency by 40% to 21 W/TH, reaching the year-end target ahead of schedule.

• Acquired Stronghold Digital Mining, the largest public Bitcoin mining sector acquisition, adding 307 MW in Pennsylvania and rebalancing the portfolio toward North America, with plans to expand energy portfolio to over 950 MW by end of 2025 and shift 66% of portfolio to the U.S.

• Enhanced leadership and board, reorganized operations into mining and infrastructure divisions, and settled with Riot Platforms, avoiding a proxy contest.

• Revenue reached $45M, up 8% sequentially and 30% year-over-year, with 703 BTC mined at an average direct cost of $36,000 per BTC.

• Significant progress on fleet upgrades, achieving 21 W/TH efficiency three months ahead of schedule and deploying 5,400 new miners.

Financial highlights

• Mined 703 Bitcoin in Q3, up 14% from Q2; total revenue was $45M, up 8% sequentially and 30% year-over-year.

• Gross mining profit was $17M (38% margin), down from $21M (51%) in Q2; adjusted EBITDA was $6M (14% margin), down from $12M (28%).

• Operating loss was $44M, up from $24M in Q2, driven by $12M in one-time costs and $29M in non-cash depreciation.

• Net loss was $37M ($0.08/share), compared to $27M ($0.07/share) in Q2.

• Total liquidity at quarter-end was $146M, split evenly between cash and Bitcoin; synthetic HODL balance rose to 602 BTC.

Outlook and guidance

• Year-end 2024 hash rate target of 21 EH delayed to H1 2025 due to miner shipment and servicing delays; upgraded to S21 Pro miners for better efficiency.

• 2025 guidance under review as management evaluates optimal use of 950+ MW secured power for mining, hosting, and HPC/AI; updated guidance to be issued once finalized.

• Expect better returns from Bitcoin mining over HPC/AI through 2025, with meaningful HPC/AI revenue contribution targeted for late 2025 or 2026.

• Early-stage plans for U.S. HPC/AI pilot sites, with land and power secured and deployment targeted for 2025.

• Clear path to 1.6 GW of power capacity by year-end 2025, with a multi-year pipeline and 950+ MW expansion planned.