Hive Digital loses $51.2-million (U.S.) in fiscal 2024 Ouff. HIVE ACHIEVES ANNUAL REVENUE OF $114.5 MILLION, ADJUSTED EBITDA OF $37.5 MILLION WITH 2,287 BITCOIN ON THE BALANCE SHEET AND MINED 3,123 BITCOIN FOR THE YEAR ENDED MARCH 31, 2024
Hive Digital Technologies Ltd. has released its results for the full year ended March 31, 2024 (all amounts are in U.S. dollars, unless otherwise indicated).
Revenue from digital currency mining was $111.0-million this fiscal year, in addition to the company's HPC operations, resulting in a gross operating margin of $40.3-million, or a 36-per-cent operating margin. The company's selling, general and administrative costs for the fiscal year ended March 31, 2024, were $13.2-million. Therefore, on a cash basis, the corporate margin was positive for the fiscal year at $23.7-million. Hive Digital achieved adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $37.5-million for the fiscal year.
The company increased its bitcoin mining ASIC hash rate by 57 per cent in this fiscal year from 3.0 exahashes in March, 2023 to 4.7 exahashes in March, 2024. In this fiscal year, the company mined 3,123 bitcoin, including digital assets mined from GPUs. Hive Digital emerged through this period with 2,287 bitcoin on the balance sheet, as at March 31, 2024, worth $161.3-million. The company noted these bitcoin are unencumbered, unleveraged and all mined through Hive Digital's green-energy-focused operations.
The company earned comprehensive income of $25.0-million, which includes the gain from revaluation of digital currencies. The company reported a net loss of $51.2-million, which includes $66.4-million of depreciation and a $6.8-million provision on sales tax receivables, and does not include the gain from revaluation of digital currencies. The prior year, the company incurred significant non-cash charges such as an impairment of $70.4-million applied to equipment, and furthermore an impairment of $27.3-million was applied to deposits. In fiscal 2024, the company recorded a gain on the revaluation of its bitcoin treasury in the amount of $77.3-million that is excluded from the net loss reported as a result of international financial reporting standards whereas, in fiscal 2023, the company reported a revaluation loss on its bitcoin treasury in the amount of $55.8-million in the net loss reported. Basic loss per share was 57 cents whereas last year's basic loss per share was $2.85. Using comprehensive income of $25.0-million, the earnings per share were 28 cents. Gross operating margin contracted to $40.4-million from $50.9-million last year.
Frank Holmes, executive chairman of Hive Digital, emphasized the evolving landscape of bitcoin mining stocks, noting, "Investors should recognize that the industry has grown to over 20 public bitcoin mining stocks today, compared to approximately five at the last halving."
Mr. Holmes further highlighted the difference between U.S. generally accepted accounting principles and IFRS accounting standards, and explained, "U.S.-based companies adhere to U.S. GAAP, known for its rules-based approach, ensuring consistency but some times at the cost of flexibility."
Conversely, he pointed out, "Hive reports using IFRS, a principles-based system used in Canada, offering broader guidelines that foster flexibility but may result in varying interpretations."
Mr. Holmes concluded by stressing the importance of transparency, particularly in webcasts, where the company aims to provide a clear comparison of financial results within the U.S. GAAP framework so that Hive Digital can be compared against its industry peers.
Aydin Kilic, president and chief executive officer, stated: "We have led the industry with having among the lowest G&A and the lowest share dilution while using cash flow from operations to strategically and carefully upgrade and expand our fleet of bitcoin mining ASICs to optimize cash flow return on invested capital. This is possible through our dedication to maintaining high uptime, lean operations and seeking efficiencies in all aspects of our operations, whether it is using firmware to increase energy efficiency or software to strive for the best uptime. Additionally, Hive continues its innovative practices of demand response in Sweden and carefully analyzing bitcoin mining economics to ensure only our most efficient and profitable machines are operating through any periods of economic downturn, as evidenced by our sterling record of mining profitability (positive gross mining margin and corporate margin) through the last three years."
Fiscal year 2024 highlights:
- Generated digital currency mining revenue of $111.0-million and $3.4-million of HPC revenue, with a gross operating margin of $40.3-million;
- Ending the year with $7.2-million of annualized run rate revenue from its HPC business;
- Mined 3,123 bitcoin during the year ended March 31, 2024;
- Adjusted EBITDA income of $37.5-million for the year;
- Earned comprehensive income of $25.0-million for the year, which includes the $77.3-million gain from the revaluation of digital currencies;
- Reported a net loss of $51.2-million for the year, due greatly to non-cash charges for depreciation of ASIC equipment, and a provision on sales tax receivables, and does not include the $77.3-million gain from the revaluation of digital currencies;
- Working capital increased by $98.5-million during the year ended March 31, 2024, as bitcoin prices were substantially higher in this fiscal year;
- Digital currency assets of $161.6-million, as at March 31, 2024.
The company's consolidated financial statements and management's discussion and analysis thereon for the three months and year ended March 31, 2024, will be accessible on SEDAR+ under Hive Digital's profile and on the company's website.
Fiscal 2024 financial review
For the fiscal year ended March 31, 2024, revenue was $114.5-million, an increase of approximately 8 per cent from the prior year, which includes $3.4-million of revenue from its HPC business segment.
Gross operating margin during the year was $40.4-million, or 35 per cent of revenue, compared with $50.9-million, or 48 per cent of revenue, in fiscal 2023. Gross operating margin is directly impacted by digital currency prices and network difficulties as this impacts revenue from mining operations. The decrease is mainly attributed to an increase in the bitcoin network difficulty versus the prior year offset by the increase in bitcoin price, combined with the company not mining ether since the merge on Sept. 15, 2022, and the elimination of a reduced energy tax for data centres in Sweden as of July 1, 2023, resulting in increased operating costs on the energy consumption in Sweden leading to increased operating and maintenance costs.
Net loss during fiscal 2024 was $51.2-million, or 57-cent loss per share, compared with a net loss of $236.4-million, or $2.85 loss per share, in fiscal 2023.
Financial statements and management's discussion and analysis
The company's consolidated financial statements and management's discussion and analysis thereon for the year ended March 31, 2024, will be accessible on SEDAR+ under Hive Digital's profile and on the company's website.
At-the-market offering
On May 10, 2023, the company entered into an equity distribution agreement with Stifel GMP and Canaccord Genuity Corp. Under the May, 2023, equity distribution agreement, the company may, from time to time, sell up to $100-million of common shares in the capital of the company. The May, 2023, equity distribution agreement was terminated as of Aug. 16, 2023, to proceed with the August, 2023, equity distribution agreement (as defined below).
On Aug. 17, 2023, the company entered into an equity distribution agreement with Stifel GMP and Canaccord Genuity. Under the August, 2023, equity distribution agreement, the company may, from time to time, sell up to $90-million of common shares in the capital of the company.
For the three-month period ended March 31, 2024, the company issued 7,436,884 common shares pursuant to the August, 2023, ATM equity program for gross proceeds of $38.1-million (Canadian) ($28.2-million). The August, 2023, ATM shares were sold at prevailing market prices, for an average price per August, 2023, ATM share of $5.12 (Canadian). Pursuant to the August, 2023, equity distribution agreement, a cash commission of $800,000 on the aggregate gross proceeds raised was paid to the agent in connection with its services under the August, 2023, equity distribution agreement. In addition, the company incurred $69,239 in fees related to its August, 2023, ATM equity program.
The company is using the net proceeds from the May, 2023, equity distribution agreement and the August, 2023, equity distribution agreement for the purchase of data centre equipment, strategic investments, including building BTC assets on its balance sheet, and general working capital.
About Hive Digital Technologies Ltd.
Hive Digital went public in 2017 as the first cryptocurrency mining company listed for trading on the TSX Venture Exchange with a focus on sustainable green energy.
Hive Digital is a growth-oriented technology stock in the emergent blockchain industry. As a company whose shares trade on a major stock exchange, it is building a bridge between the digital currency and blockchain sector and traditional capital markets. Hive Digital owns and operates state-of-the-art, green-energy-powered data centre facilities in Canada, Sweden and Iceland, where it endeavours to source green energy to mine digital assets such as bitcoin on the cloud. Since the beginning of 2021, Hive Digital has held in secure storage the majority of its treasury of BTC derived from mining rewards. Its shares provide investors with exposure to the operating margins of digital currency mining, as well as a portfolio of bitcoin. Because Hive Digital also owns hard assets such as data centres and advanced multiuse servers, it believes its shares offer investors an attractive way to gain exposure to the cryptocurrency space.
Environmental sustainability:
- Green energy: By sourcing green renewable energy, Hive Digital is committed to environmental responsibility, positioning itself as a leader in sustainable cryptocurrency mining.
- Competitive advantage: It believes this environmentally conscious approach sets Hive Digital apart from competitors and aligns with evolving investor preferences.
Expansion into artificial intelligence strategy:
- Diversification: Hive Digital's diversification into HPC enables it to support artificial intelligence using Nvidia GPU chips, showcasing its adaptability and innovation beyond traditional bitcoin mining.
- Revenue streams: This strategic move into HPC broadens Hive Digital's revenue streams and places it at the forefront of technological advancements in both cryptocurrency and AI industries.
Hive Digital's unique value proposition encompasses efficient operations, a proven agile management team, financial strength, environmental sustainability and innovative expansion strategies. Beyond bitcoin mining, Hive Digital is firmly part of the global boom in data centre infrastructure, sourcing primarily green renewable energy.
Hive Digital presents a unique growth opportunity with over 2,480 bitcoins on its balance sheet and growing revenue from its suite of Nvidia GPU chips powering data services for the AI revolution.