• Revenue: $7.5 million in Q3 2024; $36.7 million for the nine months ended September 30, 2024.
• Bitcoin Mined: 123 Bitcoin in Q3 2024, approximately 1.3 Bitcoin per day.
• Mining Margin: 8% in Q3 2024; 33% for the nine months ended September 30, 2024.
• Net Loss: $6.3 million for Q3 2024; $39.2 million for the nine months ended September 30, 2024.
• Adjusted EBITDA: Negative $2.1 million for Q3 2024; positive $3.9 million for the nine months ended September 30, 2024.
• Debt Reduction: Reduced by $12.4 million in Q3 2024, including full repayment of the Galaxy loan.
• Cash and Bitcoin Holdings: $2.5 million in cash and four Bitcoin equivalents at the end of Q3 2024.
• Non-Mining Operating Expenses: Decreased by approximately 12% year-over-year.

• Warning! GuruFocus has detected 2 Warning Signs with ARBKF.

Release Date: November 20, 2024

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

Positive Points

• Argo Blockchain PLC (ARBKF) successfully reduced its debt by $12.4 million during the quarter, including the full repayment of the Galaxy loan, which strengthens its balance sheet.
• The company generated $36.7 million in revenue for the nine months ended September 30, 2024, reflecting growth compared to the same period last year.
• Argo Blockchain PLC (ARBKF) is exploring a High Performance Computing (HPC) expansion at Baie-Comeau, which could diversify revenue streams and tap into high-growth markets such as AI.
• The company reported a decrease in non-mining operating expenses by approximately 12% year-over-year, indicating a focus on cost discipline and operational streamlining.
• The class action lawsuit, Murphy versus Argo Blockchain, was dismissed with prejudice and without leave to amend, removing a legal overhang for the company.

Negative Points

• Argo Blockchain PLC (ARBKF) reported a net loss of $6.3 million for the quarter and $39.2 million for the nine months ended September 30, 2024.
• The company's mining margin for Q3 was only 8%, a significant drop from 58% in the same period last year, due to lower Bitcoin prices and higher energy costs.
• Revenue for Q3 decreased to $7.5 million from $12.4 million in Q2 2024 and $10.4 million in Q3 2023, primarily driven by lower Bitcoin production and hash prices.
• The hosting agreement at Helios will not be renewed beyond December 2024, affecting the hosted fleet of 23,000 S19J Pro Miners, and the company is exploring alternative arrangements.
• Adjusted EBITDA for Q3 was negative $2.1 million, reflecting challenging mining conditions and a decrease from $2.6 million in Q2 2024.

Q & A Highlights

Q: Have you made any further decisions regarding the 2.4 exahash fleets at Helios after year-end? Additionally, how should you think of Argo's hash rate trajectory heading into next year? A: Thomas Chippas, CEO: We are actively exploring options for the 2.4 exahash fleet at Helios, including alternative hosting arrangements, strategic opportunities, or potential asset sale. No final decision has been made yet. Our hash rate outlook for next year will depend on the chosen path for the Helios fleet and our broader growth initiatives, including potential HPC expansion.

Q: What are Argo's capital allocation priorities, and what progress has been made in the HPC ecosystem? A: Jim Maccallum, CFO: Our capital allocation focuses on initiatives that drive sustainable growth and diversification. We have a non-binding LOI with the BE Group to repurpose 12 megawatts of infrastructure for HPC, with potential expansion for an additional 11 megawatts. We aim to bring HPC operations online in the first half of 2025.

Q: What plans are in store for the fleet that was at Helios? Are there any short-term hosting options available? A: Thomas Chippas, CEO: We are evaluating all options for the Helios fleet, including alternative hosting solutions or selling the machines. Our priority is to ensure operational continuity while aligning with our long-term goals.

Q: Could you share an update on Argo's current debt position and any steps being taken to strengthen the balance sheet? A: Jim Maccallum, CFO: We have retired the Galaxy debt, leaving unsecured notes as our primary outstanding debt, which mature in November 2026. We are looking to expand the mortgage on the Baie-Comeau facility to help finance potential HPC expansion.

Q: How is Argo approaching the evolving regulatory landscape for Bitcoin mining in the US, particularly in light of recent political changes? A: Thomas Chippas, CEO: The political landscape is complex, but the recent post-election environment has brought optimism. We anticipate a more crypto-friendly administration, which could foster a stable regulatory environment. We are closely monitoring developments and believe our diversification into HPC will provide flexibility under potential regulatory shifts.

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