• Revenue: $162.3 million, a 120% increase compared to the same period last year.
• Net Income: $246.8 million, or $0.85 per basic share.
• Adjusted EBITDA: $321.6 million.
• Bitcoin Treasury: 9,952 Bitcoins at the end of the quarter, increasing to 10,556 by the end of the following month.
• Average Bitcoin Price: Exceeded $83,000, peaking above $108,000.
• Marginal Cost per Bitcoin: Approximately $34,000, a $2,000 improvement from the prior quarter.
• Fleet Efficiency: Improved to 16.15 joules per Terahash as of January 31.
• Gross Profit Margin: 57% for the quarter.
• Cost of Power: 4.09 cents per kilowatt-hour.
• Total Assets: Almost $2.8 billion, with nearly half in liquid form (cash and Bitcoin).
• Convertible Bond: Secured $650 million, with a 0% coupon and 100% conversion premium.

• Warning! GuruFocus has detected 5 Warning Signs with CLSK.

Release Date: February 06, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Cleanspark Inc (NASDAQ:CLSK) achieved a significant revenue growth of 120% year-over-year, reaching $162.3 million for the first quarter.
• The company secured a $650 million convertible bond, fully funding its growth strategy to reach 50 exahash by mid-2025 without relying on equity.
• Cleanspark Inc (NASDAQ:CLSK) reported a net income of $246.8 million, demonstrating strong financial performance.
• The company holds one of the largest self-mined Bitcoin treasuries in the industry, with over 10,000 Bitcoins mined in the U.S.
• Cleanspark Inc (NASDAQ:CLSK) has improved its fleet efficiency, reducing the marginal cost per Bitcoin to approximately $34,000, enhancing profitability.

Negative Points

• The company's uptime slightly decreased to 94% due to factors like a hurricane and moving miners, impacting operational consistency.
• Cleanspark Inc (NASDAQ:CLSK) faces increased power costs, with the cost per kilowatt hour rising to $0.09, slightly higher than previous quarters.
• The company is cautious about leveraging its balance sheet further, indicating potential limitations in accessing additional non-dilutive capital.
• There is uncertainty in the Bitcoin rig market, with prices potentially 37% higher than Cleanspark Inc (NASDAQ:CLSK)'s fixed price options, affecting future growth costs.
• Cleanspark Inc (NASDAQ:CLSK) acknowledges the complexity and challenges of repurposing Bitcoin mining facilities for high-performance computing, which could impact strategic diversification.

Q & A Highlights

Q: Can you provide more details on your Bitcoin Treasury Management strategy and how you plan to utilize your Bitcoin reserves? A: Gary Vecchiarelli, CFO, explained that they are currently evaluating options through requests for proposals from counterparties. They plan to adopt a cautious approach, gradually implementing strategies without leveraging 100% of their Bitcoin holdings. More details will be shared in future quarters.

Q: How do you plan to achieve your mid-year target of 50 exahash, and what is the expected cadence of hash rate growth? A: Zachary Bradford, CEO, stated that the growth will be steady over the next six months, with incremental additions each month. The expansion will primarily occur at existing sites and a few new Greenfield sites, ensuring a smooth increase in hash rate.

Q: Can you discuss your capital allocation strategy and what differentiates your management philosophy from competitors? A: Zachary Bradford, CEO, emphasized that their strategy focuses on the intersection of various factors that drive Bitcoin mining profitability. They prioritize operational excellence and strategic growth without pursuing arbitrary targets, relying on the dedication and perseverance of their team.

Q: What are your plans for expansion beyond 2025, and which regions are you considering for growth? A: Zachary Bradford, CEO, mentioned that expansion is possible in all current regions, with a focus on Tennessee and Wyoming due to their potential for growth. These areas have utilities that understand the benefits of Bitcoin mining, making them ideal for future expansion.

Q: How do you manage operational expenses while achieving significant growth, and is there any additional OpEx needed for future targets? A: Gary Vecchiarelli, CFO, explained that they maintain strict budgeting and focus on operational investments. Their low CapEx costs and efficient operations allow for growth without significant increases in corporate overhead, enabling them to sustain growth with relatively flat indirect expenses.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.