Hut 8 Corp. Q2 FY2022 Earnings Call

· Earnings call transcript and AI-powered summary

Key Highlights

  • Generated $43.8 million revenue in Q2 2022 (first full quarter with fee-based recurring revenue from 5 data centers and mining capacity at 2.78 EH/s), up 31% from $33.5 million in Q2 2021.
  • Mined 946 Bitcoin (71% increase vs. 553 in Q2 2021), with mining revenue of $39.1 million (vs. $31.4 million in Q2 2021).
  • High-performance computing (HPC) business contributed $4.7 million revenue (full quarter since acquisition end of Jan 2022).
  • Hash rate grew >9% since Q1 end; targeting organic growth to ~3.55 EH/s by end of 2022.
  • Maintained HODL strategy: 7,406 BTC held unencumbered ($188.8 million fair value); no Bitcoin sold since early 2021. Recalled 2,000 BTC from yield programs in mid-May.
  • Three-pillar strategy: Bitcoin mining, maximize Bitcoin reserves value, grow HPC data center business to reduce reliance on capital markets.

Financial Performance (Q2 2022 vs. Q2 2021)

  • Revenue: $43.8M (+31% from $33.5M)
  • Cost of revenue: $47.7M (vs. $16.6M); site operating costs rose $13.1M to $26.8M due to higher electricity prices/consumption and $2.3M incremental HPC costs; depreciation increased to $20.9M (from $3M) due to ~$178M new mining equipment and $25M data center assets.
  • Mining margins: ~38% (vs. 62% prior year) due to lower Bitcoin prices and higher electricity costs.

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Operator: Welcome to Hut 8 Second Quarter Analyst and Investor Call. In addition to the press release issued earlier today, you can find Hut 8’s financial statement and MD&A on SEDAR and shortly on both EDGAR and the hut8mining.com. Unless noted otherwise, all amounts referred during this call are denominated in Canadian dollars. Any comments made during this call may include forward-looking statements within the meaning of applicable securities legislation regarding the future performance of Hut 8 Mining Corp and its subsidiaries. The statements made reflect current expectations and as such are subject to the variety of risks and uncertainties that could cause actual results to differ materially from current expectations. These risks and uncertainties include, but are not limited to, the factors discussed in the quarterly MD&A for the 3 months ended June 30, 2022 as well as the company’s MD&A and annual information form for the year ended December 31, 2021. Any forward-looking statement speaks only as of the date which it is made and the company disclaims any intent or obligation to update any forward-looking statement unless required by law. I would now like to turn the call over to Hut 8 CEO, Jaime Leverton. Jaime Leverton: Thanks, Michelle. Good morning, everyone and thank you for joining us to discuss Hut 8’s financial results for the second quarter of the year. In our first full quarter generating fee-based monthly recurring revenue through our 5 data centers and an inc

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