North American Bitcoin miner and energy infrastructure operator Hut 8 Corp. released its financial results for the three and six months ending June 30, 2024, reporting a mixed bag of significant revenue growth and substantial net losses.
Revenue Growth Amidst Challenges
Hut 8 reported a 72% year-over-year increase in revenue, reaching $35.2 million for Q2 2024. This growth was primarily driven by a 21% reduction in the cost per kilowatt-hour for mining Bitcoin and the expansion of its computing power business lines.
Energy Capacity and Hash Rate Expansion
The company’s energy capacity now stands at 1,075 megawatts (MW), encompassing Bitcoin mining, natural gas power generation, and cloud data centers. This expansion has bolstered revenue growth despite challenges such as the Bitcoin network halving and a decline in Bitcoin prices.
CEO Asher Genoot highlighted the improved performance, noting that the gross margins for the Digital Assets Mining segment rose to 46%, up from 34% year-over-year. The activation of the Salt Creek facility significantly reduced energy costs per kilowatt-hour by 21%, from $0.040 in Q1 2024 to $0.032 in Q2 2024. Hut 8 now owns approximately 49,400 miners, achieving a total hash rate of 4.8 exahash per second (EH/s).
Financial Losses and Accounting Adjustments
Despite the positive revenue growth, Hut 8 posted a net loss of $71.9 million for Q2 2024. This loss was primarily attributed to a $71.8 million fair value adjustment on its holdings, influenced by new Financial Accounting Standards Board (FASB) rules and a decline in Bitcoin prices. This is a significant increase compared to the net loss of $1.7 million in the same period last year.
Bitcoin Holdings and Production
Hut 8 produced approximately 279 bitcoins in the past quarter, increasing its total holdings to 9,102 self-mined coins, valued at around $571 million as of July 31. This production, however, represents a decrease from the 740 bitcoins mined in the same quarter last year, with the cost to mine Bitcoin nearly doubling year-over-year to $26,232 per coin.
Alternative Revenue Streams and Strategic Investments
The company’s revenue is increasingly coming from alternative computing business lines, including high-performance computing and managed services, which generated $21.3 million, compared to $13.9 million from Bitcoin mining.
Hut 8 is focusing on scaling its power footprint and enhancing its energy infrastructure. Notably, the company is developing a new 205 MW site in the Texas Panhandle and has entered into a $150 million partnership with Coatue.
Investment Partnership with Coatue
On June 24, Coatue Management announced a $150 million investment in Hut 8 through a convertible note, offering an 8% annual return with a five-year term and potential one-year extensions. The transaction was completed on July 11 and filed with the SEC on June 21,
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