PowerCompute (PWCM) Q2 2024 earnings summary

Executive summary

• Operates two business lines: cryptocurrency mining (Bitcoin) and specialty finance for nonprofit community associations, with mining as the primary revenue driver.

• Mined 44.1 Bitcoins in Q2 2024, generating $2.9 million in revenue at an average price of $65,600 per Bitcoin, despite the Bitcoin halving event reducing miner rewards by 50%.

• As of June 30, 2024, owned 5,900 mining machines with 639 PH/s capacity; 3,000 additional miners went online in July 2024.

• Relocated miners to more cost-effective sites, including a 15 MW Oklahoma facility and a potential 72 MW Texas site under LOI.

• Transitioned all Bitcoin holdings to fair value accounting under ASC 350-60 as of January 1, 2024, impacting reported results.

Financial highlights

• Q2 2024 revenue was $3.0 million, down from $3.2 million in Q2 2023; digital mining revenue was $2.9 million, nearly flat year-over-year.

• Net loss attributable to shareholders was $6.1 million, including a $1.9 million unrealized loss in securities, compared to a $4.5 million net loss in the prior year.

• Operating expenses rose to $7.8 million from $6.4 million year-over-year, driven by a $1.3 million Bitcoin fair value loss and higher depreciation/amortization.

• Core EBITDA loss was $2.2 million in Q2 2024, versus $0.1 million in Q2 2023; positive core EBITDA of $2.2 million for the first half of 2024.

• Cash, cash equivalents, and Bitcoin at June 30, 2024: $10.2 million.

Outlook and guidance

• Plans to expand Texas site to 72 MW, targeting 1,000 Bitcoin mined annually at current network difficulty.

• Partnership with Arthur Mining provides cost-effective hosting for 3,000 S19j Pro machines at cost for 10 months, with potential for a new 60 MW site in Oklahoma.

• Focus on reinvesting mining revenue into new miners and integrating advanced software to enhance hash rate.

• Expects continued negative operating cash flows as it invests in mining operations and seeks operational efficiencies.

• Working capital at June 30, 2024 was $8.4 million, up $1.0 million from year-end 2023.