Full Year 2024 HIVE Digital Technologies Ltd Earnings Call - Pre-Recorded
For the fiscal year ended March 30, <unk> 2024 on slide number two I would like to briefly note disclosures except for statements of historical fact this presentation contains forward looking information within the meaning of the applicable Canadian and U S. Securities regulations. These forward looking statements are based on X.
Spectation estimates and assumptions as of the date of this presentation.
On the next slide I am pleased to introduce today's presenters Frank Holmes Executive Chairman, Ivan Killik, President and CEO, and Darcy Dewberry, Chief Financial Officer.
Speaker Change: I would now like to hand, the presentation over to Mr. Frank Holmes for a macro recap of the quarter Frank Thank you everyone.
Speaker Change: I wish to give you.
Speaker Change: Quick macro recap.
Speaker Change: Capital markets are counting our results.
Speaker Change: And the granularity the details I'm going to leave to our.
Darcy Daubaras: Our CFO Darcy diverse is probably the longest lasting CFO and the crypto mining industry of consistency.
Speaker Change: And just been through the first having the second having successfully.
Speaker Change: <unk> successfully.
Speaker Change: And adding to Luke who will talk as well as our CEO. He will give you much.
Speaker Change: Much more detail on the impact of difference is accounting.
Luke: But basically what's most important is that we continue to have operating income that's positive even after this having and we're very thrilled that we've been able to do it from the first having we've experienced is the first.
Speaker Change: Crypto mining company in the World to go public in September 2017, and then.
Speaker Change: Theory them to go away and disappear at the same time, we now have our second having.
Speaker Change: Weather through the storm, so let's talk about the big picture right now and.
Speaker Change: And look at the next slide I always like to talk about the DNA volatility investors have to understand the different asset classes based on their maturity on external risks.
Speaker Change: Often external risks.
Speaker Change: Internal risks that create this.
Speaker Change: Volatility of countries in stocks and industries and the S&P on a daily basis basically says it's a non event, 70% of the time for the S&P to go up or down 1% and over 10 days. It's 2% goal is 1% over one day and over 10 days.
Speaker Change: 3% and when you go to Bitcoin you literally got four fold and.
Speaker Change: 10 day volatility from the S&P 500, so daily it's doubled its 2% up or down is a non event 10 days is 8% and that's quite big when it comes to the stocks themselves.
Speaker Change: You can see in video it has a much greater volatility over one day is the same as Tesla and over 10 days it expands to nine and 11% Pi is over one day is a non event to go up or down 5% just like micro strategy.
Speaker Change: But over 10 days high can go up or down 19% and now micro strategy has a 10 day volatility of plus or minus 21%. So you can see these differences and I think the last time, we reported on this high was was the most volatile over 10 days and micro strategy has now taken to another leg.
Speaker Change: But they have also made some incredible moves and building it.
Speaker Change: Epic size total position and it was great to see.
Speaker Change: Adele is all of a sudden embracing this idea.
Speaker Change: This concept of putting on your balance sheet and hive has always done that ever since our initial.
Speaker Change: Take over of a reverse takeover to go public in September 2017, we've been Heartland crypto currency flow. We're proud we're coming up the Olympics and we're proud of what we are having so many first like bolt is always bolting here.
Speaker Change: The fastest man the spread in the World and we were the first to go public on the PSX Vancouver September 2017, we were the first to viral data centers and expand and build on them, where the first a balanced electrical grid in Sweden, where they are first to develop our own ASIC mining rig with Intel.
Speaker Change: We were the first be green energy focused and we're the first to have an AI strategy with GPU chips.
Speaker Change: <unk> is about three energy and sustainability and that's what I believe greatly and significantly differentiates us from our peers focus in Canada, Iceland and in Sweden.
Speaker Change: We've been pioneers in the recycling of molecules of electricity.
Speaker Change: We eat a building in Montreal five times, our size from the same molecule that was used to mine bitcoin. So we're very proud of being thought leaders and actually creating the leadership in the technology sector <unk> been able to maintain a relatively tight tight slope when you.
Speaker Change: <unk> to the massive dilution that has happened with our peers.
Speaker Change: When you take a look at issue outstanding basic common shares as of March 31.
Speaker Change: I really.
Speaker Change: I'm amazed that yes people have raised more capital than us.
Speaker Change: But it's not free and it's been a huge cost of dilution that over time will start to show up on the value metrics per share and my experience in the capital markets is that it will show up.
Speaker Change: When the clients really start to analyze one mining company versus the other of who has the real value proposition on a per share basis not top line growth.
Speaker Change: Bottom line growth as a macro number but what are those metrics on a per share basis next lease bitcoin and high but will perform gold in the S&P 500 now this is going on with a 15 month run.
Speaker Change: Hi was put on a wonderful spreads in the past.
Speaker Change: Four weeks.
Speaker Change: When we look at the data points, but.
Speaker Change: As an asset class, even though it's more volatile.
Speaker Change: <unk> done a great job and outperforming the S&P 500, and spot gold, which really shock a lot of people because they focus so much on that short term volatility.
Speaker Change: That is not how is <unk> done in a diversified portfolio.
Speaker Change: Coins volatility is nearing historical low levels and this has always happened in the capital markets. When Tesla became part of the S&P 500 is volatility dropped dramatically.
Speaker Change: We saw this with gold in 2004 with the growth of the <unk>, which was the first bullion ETF.
Speaker Change: And now we're seeing with bitcoin with the creation of the Etfs.
Speaker Change: The volatility.
Over shorter periods of time will change long term supply and demand factors will be most significant when looking at bitcoin as a as a currency or commodity.
Speaker Change: But when you look at the stocks, it's different value metrics and what is the revenue growth on a per share basis, what is the EBITDA growth on a per share basis.
Speaker Change: Are those multiples and I think as we gone through this having that over the next six months, we're probably going to see a reset button on the value drivers on a per share basis. When it comes to the miners and I'm, giving you this sort of a pagan based on my.
Speaker Change: 40 years of experience with the world of gold and with the bullion.
Speaker Change: <unk> being launched and how it's changed the valuation metrics for gold stocks.
Speaker Change: In the press release, which we evolve read I think is important to recognize that differences between U S versus Canadian accounting rules. The reason why I bring this up is because Canada was the first to have crypto mining companies.
First was high in immediately.
Speaker Change: Okay. So emulating the copy in the model of Hive was eight.
Speaker Change: And then we had right in the U S.
Speaker Change: Interesting to see that journey that now there's 24 bitcoin mining companies.
Speaker Change: And the majority of them are in the U S.
Speaker Change: No.
Speaker Change: When you do that relative comparison.
Different accounting.
Speaker Change: Does create changes and it's just actually trying to.
Speaker Change: Recognize that what is the new one what are the nuances and accounting reporting of the.
Speaker Change: <unk>.
Speaker Change: Our asset accounting versus GAAP.
Speaker Change: Do you find the international financial reporting standards.
Speaker Change: General generally accepted accounting principles in the U S GAAP.
Speaker Change: Which is it.
Is the full frameworks major accounting frameworks globally.
Speaker Change: They both basically aimed to provide transparency and comparable financial reporting there are several key differences and nuances between them and I think that's really important that when you look at high versus U S companies, who are reporting on GAAP.
Speaker Change: Rules, there are big changes and Darcy and items are going to give you more granularity.
Darcy: On those changes.
Darcy: I think that.
Speaker Change: In particular.
Speaker Change: Yes.
Speaker Change: Is the way things are reported on mark to market.
Speaker Change: It does it can have a significant difference next please.
Let me come to gap.
Speaker Change: In the U S.
Speaker Change: It is more rules based it includes detailed rules and guidelines for virtually every accounting scenario.
Speaker Change: And this results in less flexibility and provides more specific guidance, which can reduce the level of judgment needed and enhanced consistency.
Speaker Change: So the IRS is a single model and it provides principle base five step model for recognizing revenue from contracts and customers and the focus is on the transfer of control of goods and services. So is this recognizing these differences or new ones and so how do you actually compare.
Speaker Change: What is unique about hive, two mostly U S peer group.
Speaker Change: It was simple when you say well, we're 100% Green energy.
Speaker Change: And theyre not that simple, but when it comes to the accounting.
Speaker Change: I think the interpretation of our mark to market of how you Mark to market your big point.
Speaker Change: <unk> on your balance sheet and depreciation Hibor has always had an accelerated depreciation which means our reported earnings are always going to look.
Speaker Change: Less than our peers.
Speaker Change: But we have found.
Speaker Change: Based on operations and based on the new technology of basic ship cycle was about two years not four years. So what that means is that our peers depreciate.
Speaker Change: The acquisition cost of producing chip over four years, and we do it two years or if youre going to depreciate, a $40 million investment.
Speaker Change: <unk> four years is $10 million.
Speaker Change: Makes it simple 10 million a year, but with high was $20 million a year. So therefore that charge that noncash charge is going to look like we lost money when it's really accelerated depreciation that better reflect for us in operating the business I do believe that hasn't shown up in our efficiency ratios.
Speaker Change: Our uptime ratios.
How we manage sharp facilities et cetera next please.
Speaker Change: The other part is this.
Speaker Change: Recognizing earnings in bottom line earnings and understanding that operational earnings cash flow, which is the key for bank financing.
Speaker Change: And as Youre looking at this where you have to add investment earnings.
Speaker Change: Realized and unrealized gains and losses from your investments such as bitcoin portal businesses.
Speaker Change: So our investments in defy, which go down go back up and they could have sort of what's called a realized and unrealized and end with GAAP, you're going to see this how it flows through is different.
And I think that's important for investors to recognize and I believe we're going to walk you through the scenario that if we did apply.
Speaker Change: Be unaudited GAAP.
Speaker Change: Rules.
How well hive has done.
Speaker Change: We will be is really quite impressive on a relative basis next please positive corporate margin through the bear market I'm really thrilled to share with you. This visual that even with Celsius going bankrupt ethereum disappearing.
Speaker Change: Bank been trying the industry banquet free.
Speaker Change: Slightly getting convicted and going to jail.
Speaker Change: All of those disasters, we were still able to basically squeeze out operating margin corporate margin and I think that's a real testament of how conserve we run our balance sheets with the inherent volatility that difficulty of the hashing the global how should be more competition coming in.
Speaker Change: Meaning that particular before that having which was used to be 900 coins a day now it's $4 50, but we saw this incredible run up even after the meltdown of bitcoin going from 60000 down to 16000.
Speaker Change: Fortunately a climb back to an all time high.
Speaker Change: In this past quarter, but for investors to recognize we've been pretty consistent.
Speaker Change: Generating corporate margin and you can see this past quarter.
It was a huge rebound.
Speaker Change: With the least amount of dilution of shares being issued compared to our peers. So I'm very thrilled to share with you on a per share basis, how well we did next please.
Speaker Change: So this is.
Speaker Change: Interesting analysis.
Done by an independent consultant.
Speaker Change: And I think was for me to share with everyone is that.
Speaker Change: Anthony.
Speaker Change: <unk> will also have our compass mining.
CPA: It was a retired accountants CPA that fell in love with this industry and started doing his own work and due diligence and all of a sudden you realize that.
Anthony: He had a business.
Speaker Change: And so we started to change overall his passion for the industry and said look at if you want to be ranked and compared.
Speaker Change: Against that.
Speaker Change: It appears youre going to have to pay because I have to spend so much additional time, because there is a proliferation and growth for so many critical mining companies.
Speaker Change: And so one has to go and look at the overall.
Speaker Change: Industry in America in particular on tax free bonds, which is a trillion dollar business and corporate bonds.
Speaker Change: They have what's called an issue a pay model and the issuer pay model companies issuing bonds pay rating agencies like S&P and Moody's to evaluate an si assigned a credit rating to their debt.
This model is widely adopted for several reasons it creates market.
Speaker Change: Credibility and consistency.
Speaker Change: Removes a lot of investment banker biases, which are alleged enough that there is always there, but it's sort of this independent person and then you have a regulatory compliance the regulatory world is able to oversee but really for the corporation.
Speaker Change: It's the cost of capital so we look at it.
Anthony powers, what he is doing is like S&P or Moody's.
Providing a relative ranking to our peers on several different metrics and I want to walk you through and several of those metrics and I think that's what's important for you like Moody's and S&P. They don't tell you.
Speaker Change: To buy bond a over be they do not recommend that they just give you what the credit ratings and in fact as many different types of mutual funds and Etfs.
That will buy only a rated bonds are b plus bonds are and that's the when you go to buy those particular funds you recognize that this is sort of a new industry and it's good to have this and what I found with the capital markets. If you want to get research all the vessel <unk>.
Speaker Change: <unk> wanted to.
Speaker Change: Research they say, but you have to do the ATM with them, that's what they want and I've said day. One then if theres no research coverage and I, just don't think there's a real passion for how well we're doing what we're doing.
Speaker Change: Is interesting is that what we have here is a very <unk>.
Speaker Change: Driven model and when we look at Bitcoin mine per extra harsh per month.
Speaker Change: Hi, does well month in month out.
Speaker Change: It's a it's always in the top.
Speaker Change: Core tile and most often on this metric.
Speaker Change #100: We are one two and three so I'm pretty proud about this sort of a metric, but it's all independent he does not recommend to buy or sell any of these companies. He just gives you a snapshot that's very important to recognize next place. This is.
Speaker Change #101: Another metric and it's looking at revenue by energized hash rate in May of 2024, and I am thrilled to share with you we did much better.
Speaker Change #101: And several of these companies in the far right side.
Speaker Change #101: They have.
Speaker Change #102: A much bigger market caps than hive.
Speaker Change #102: Sure.
Speaker Change #102: The revenue by energized harsh rate.
Speaker Change #103: Is lower than ours. So this is a very favorable metric on a relative basis next please.
Speaker Change #103: Ranked by utilization in May.
We were number two so what that means.
Speaker Change #104: Our utilization was 94%.
Speaker Change #104: As you can see.
Speaker Change #105: Companies that have seen there'll be a big component of energy and taxes.
Speaker Change #106: Had a lower overall utilization rate.
Speaker Change #107: And in some of these hub a partnership balancing the grids.
Speaker Change #108: And Thats really positive for the overall crypto industry and the energy energy, but I'm really happy to share with you that the team has done a phenomenal job. So big joint minor valuation metrics hype ratio per bitcoin mine and basically saying, okay used hive has one.
Speaker Change #108: Who has a much greater valuation thats basically, saying what is the market cap per bitcoin mind.
Speaker Change #109: And if hibor is number is one is the number as a base than when you looked at some of these other names the most expensive would be marathon.
Speaker Change #109: It trades at 11 times the valuation for the same bitcoin.
Speaker Change #109: His mind.
Speaker Change #110: And then you can see comes in riot and clean spark who have been darlings in the U S. For a particular tech funds that want to get some exposure to it.
Speaker Change #110: And you can see this relative rankings is quite significant.
Speaker Change #110: And you are paying for a much higher valuation for that same bitcoin mind. These are all other companies are great management, but it is sort of nuances that happen in the capital markets and.
Speaker Change #111: Our GARP investors are always looking for.
Where do I find the growth at a reasonable price in that industry.
Speaker Change #112: <unk> say hi next please.
Speaker Change #113: May BTC sold percent of production this is interesting.
Speaker Change #114: Way of looking at what you're doing with your hurdle amount and.
Speaker Change #114: As you can see.
Speaker Change #114: Ah.
Speaker Change #115: Some of the other companies are building, but hybrid is clearly here in the bottom the bottom half bottom quartile.
Speaker Change #116: I would say of all the 24 companies. These are all the companies that are paying for the rating services of Anthony power.
Speaker Change #117: And most of the other companies are selling 100% of their production to cover their costs.
Speaker Change #118: And this is after the having.
Speaker Change #118: <unk>.
I'm impressed with what the team has been able to do this as another perspective.
Speaker Change #119: As you can see just analytics of looking at the share price to toll energized hash rate the operational hash rate in April.
Planned hash rates total BTC produce in April BTC, perhaps.
Speaker Change #120: Extra hash in April and is this a good way to look at relative valuations and I think that that's what the service that this industry has and maybe as this industry evolves that there'll be a ranking of rating by Moody's and S&P, but right now we have to rely on.
Speaker Change #121: <unk> power power mining and doing these analytics.
Speaker Change #122: But what you can see here's our utilization rate is.
Speaker Change #122: <unk> is quite high.
Is a significant testament to the efficiency of the high teen Ohio's Hpt's strategy and AI vision for growth historical accordingly in a quarter got up to a quarter million dollars a month.
Speaker Change #123: We have bought H, one hundreds we haven't been deployed.
Speaker Change #124: We are.
Looking for huge opportunities for energy.
It's a big it's been a big challenge to find Green energy.
And to get size and there is a big claim mining sector and it has been.
Speaker Change #125: Challenge on finding data centers, but we're getting better at analyzing and doing the due diligence on looking at these facilities. So I'm very happy.
Speaker Change #125: Copy.
Speaker Change #126: This the sort of growth this vision.
Speaker Change #126: It is in place and hopefully buy buy our year end this year.
Speaker Change #127: That will be able to get up to a quarter million dollars a day.
Speaker Change #128: It's all hands on deck.
Speaker Change #129: Doing this and we're happy that we're throwing off free cash flow from our video chips, which we basically.
Earned its money back and mining a theory and now focus on the buildup in the AI boom, what I want.
Ill turn it over to hard working Mr. Dynamite.
Speaker Change #130: Darcy to barriers to talk because it gives us a snapshot of growth in our financials and then iron will come on and give a wrap up although much more of both these guys will give you the granularity, especially for the analysts what they need of looking at the industry. Thank you all are being cheerleaders and supporters.
Speaker Change #131: Our vision and.
Speaker Change #132: And staying green and mining and hauling as much bitcoin as possible and stay tuned to this station we have a lot of excitement growth in the future. Thank you.
Frank Edward Holmes: Thank you Frank.
Speaker Change #134: As usual at this point for the presentation I will be taking you through a snapshot of the period looking at the most recently completed quarter and some financial indicators.
Speaker Change #135: First of all I'd like to remind our stakeholders that our earnings are comprised of our operational earnings or cash flow plus our investment earnings which includes realized and unrealized earnings which often includes noncash charges.
Speaker Change #136: Moving on to the next slide.
Mark to market accounting is a practice that involves adjusting the volume and asset to reflect its value as determined by current market conditions. The market value is determined based on what a company would get for your house.
Speaker Change #136: If it was sold at that point in time in the open market.
Speaker Change #136: Mark to Mark losses are paper losses generated from an accounting entry rather than the actual sale of the security.
Speaker Change #136: The swings and digital assets impact paper profits and losses each quarter.
Speaker Change #137: So our bitcoin digital assets do generate unrealized gains and losses each quarter, depending on the movement in bitcoin during that period.
Speaker Change #138: It is important that investors understand the differences in operating earnings or losses. In addition to mark to market paper gains and losses each quarter.
Speaker Change #139: Noncash charges is a write down or accounting expense, but does not involve the cash payment. These are items like depreciation amortization depletion stock based compensation asset impairment impairments when those happen and these are common.
Speaker Change #140: Reduce our earnings but not our cash flows.
Speaker Change #141: Moving onto the next slide.
Speaker Change #142: During this most recently completed quarter of March 31, 2024, we recorded $36 9 million of revenue and $16 2 million profit and adjusted EBITDA driven by our production of 658 bitcoin equivalent mind.
Speaker Change #142: Increased bitcoin prices during the quarter.
Speaker Change #143: On the next slide you can see we continue to be proud, having a very healthy balance sheet.
Speaker Change #144: Our cash position stood at $9 7 million at March 31, 2024, along with an additional $161 6 million and digital currencies comprised almost entirely of bitcoin.
Speaker Change #144: <unk> currency position is over double from our position at the end of the previous quarter, driven mostly by the increase in bitcoin prices.
Speaker Change #145: We also had $6 9 million amounts receivable and prepaid a decrease from the prior period.
The total market value of our strategic investments stayed steady during the period at 7.0 million.
Speaker Change #146: We maintain a strong net cash position and healthy working capital to fund our operations and growth objectives.
Speaker Change #147: With a current ratio, which is our current assets divided by our current liabilities of six eight which was extremely strong.
Speaker Change #148: Next slide please.
Speaker Change #149: Switching gears and taking a look at our gross operating margin on a year over year basis, comparing the fourth quarter versus the fourth quarter, our gross operating margin, which equates to our total revenues minus direct operating and maintenance cost increased in absolute dollars to 60.
Speaker Change #150: $1 3 million or 44% in the most recent quarter compared to $4 1 million or 22% in the prior year compare.
Speaker Change #149: <unk>.
Speaker Change #149: Gross mining margin is also partially dependent on various external network factors, including the high mining difficulty we are experiencing the <unk>.
Speaker Change #151: Mount of digital currency rewards miners received.
Speaker Change #151: And market price of the digital currencies at the time of mining.
Speaker Change #151: Which were on average higher than the prior comparative period.
Speaker Change #152: In this most recent completed year, we are reporting a net loss of <unk> 57 per share compared to a net loss of $2 85 per share reported in the March 31, 2023 last year.
Speaker Change #153: Now to note the net loss reported by Hive has done using our regulatory requirement of Ifr RFS, our international financial reporting standards as opposed to U S GAAP, which quite a few of our competitors use.
Speaker Change #154: One of the main differences between <unk> and U S. GAAP is the treatment of revaluation gains on digital currencies.
Speaker Change #154: U S. GAAP allows these gains to be included in earnings per share calculations, which <unk> does not.
Speaker Change #155: If high used U S. GAAP and included these gains our earnings per share calculations.
Speaker Change #156: <unk> gains for the year were $77 3 million. So taken those into account if we were using U S. GAAP non adjustment will result in our earnings per share being 29 cents per share profit as opposed to the loss that we are required to report under higher for us.
Speaker Change #157: Moving onto the next slide taking a look at our year over year revenue. We generated total revenue in the fourth quarter of fiscal 2024 of $36 9 million versus $18 2 million in the previous year fourth quarter.
Speaker Change #158: The increase in revenues versus the same quarter in fiscal 2023 can be attributable mostly to the average bitcoin price, which is double what it was last year, even with the ever increasing between difficulty hash rates over the past year.
As mentioned previously our gross mining margin, which equates to our revenues minus direct operating and maintenance cost increased in absolute dollars to $16 3 million in the most recent quarter compared to $4 1 million in the prior year comparative.
Speaker Change #159: Turning to the next slide comparing our current fiscal Q4 quarter to the previous Q3 quarter regenerated revenue.
Speaker Change #159: Fourth quarter of fiscal 2024, or $36 9 million versus $31 3 million in the previous quarter.
Speaker Change #160: The increase in revenues versus the prior quarter was impacted by an increase in the price of bitcoin.
Speaker Change #161: Our gross operating margin also in absolute dollars increased to $16 3 million in the most recent quarter compared to $11 3 million in the prior quarter comparative.
Speaker Change #161: The increase in gross margin versus the prior quarter was positively impacted by the increase in the price of bitcoin.
Speaker Change #162: First quarter.
Speaker Change #163: Looking at our financial metrics on the next slide our adjusted EBITDA in this fourth quarter of fiscal 2024 was $16 2 million versus an adjusted EBITDA of $17 4 million in the prior quarter.
I will highlight again that adjusted EBITDA is a non IR for us figure.
Speaker Change #164: In the fourth quarter of fiscal 2024, we experienced a loss of $3 5 million compared to a loss of $7 million in the prior quarter.
Speaker Change #165: At this time I want to thank our loyal stakeholders.
Speaker Change #166: Turning the presentation over to our president and CEO <unk> <unk> for an executive update.
Speaker Change #167: All right guys. Thank you for that summary, I think it's been a strong year and a great quarter. So let's.
Speaker Change #168: Just zoom out and look at any operation view of what we've accomplished at high.
Speaker Change #169: So in the last 12 months, our fiscal year, we mined over 30, 108 point with clean and Green energy.
Speaker Change #170: So you've seen difficulty.
Speaker Change #171: Candidly increase effectively almost doubling in that period. Nevertheless, we maintain consistent production through the year and it's worth noting.
Speaker Change #171: In the first quarter of 2024, while our production was a little bit lower than the winter. It's because we were upgrading our existing fleet.
Speaker Change #172: Do not grow our ex ash, but rather to increase our efficiency rate and we did that strategically going into the having to approach our target 25 dual deter ash efficiency more on that later next slide.
Speaker Change #173: Over the last three years, you could see our revenue here in millions and our gross mining margin. So the bear market, we made it through that and we mine profitably through those bear market again, having.
High uptime strong efficiency.
Speaker Change #174: Low G&A.
Speaker Change #175: Pound for pound I believe highest one of the best miners in the industry and now things are on the uptick and by the way we navigated the Celsius bankruptcy theory emerge MTS bank of pre bankruptcy Wednesday, 16th.
Speaker Change #176: And we still look at those green bonds, we still mine profitably even in the worst towards at the bare market and now this quarter $16 million of gross mining margin, which is fantastic on next slide.
This is not seen Dana just with a bit more granularity. So you could see that things here really on the uptick.
Speaker Change #176: This really covers the last year.
Year, and a half so again coming out of the last few quarters strong uptick in gross operating margin of $16 3 million and by the way.
Speaker Change #177: Quarter over quarter, our G&A is usually about $3 2 million ranks as you want to look at how much money are we making as an operating business, including G&A.
Speaker Change #177: Take any one of these numbers here and subtract $3 2 million and so fundamentally we make money as a business on a cash basis and I know Darcy did a great job of covering everything on <unk> accounting principles, but when you just when you strip out because we have subsidiaries and there's all these noncash items and.
Darcy: Mark to market et cetera, when you just look at our gross mining margin subtract our corporate G&A.
Darcy: Right, we still make money as a business, which is fantastic in my opinion next slide please.
Darcy: Now.
Darcy: On a quarter over quarter basis.
Speaker Change #178: Between production so you do see.
Speaker Change #179: These data similar to what we showed on our monthly but this actually shows you.
Speaker Change #180: Six quarters, so what I actually wanted to emphasize on this site difficulty has grown by almost 100% in this period.
Speaker Change #181: Quarter over quarter increased 22% range, so even though difficulty had been steadily increasing over these last six quarters. Our production was quite steady and in fact grew into the $800 a point a quarter range and by the way. This is all posted theory emerge.
Speaker Change #182: And again in this last quarter, while there was less big point in mind overall relative to the last quarter our fleet.
Efficiency improved and therefore, we had a great gross operating margin.
Speaker Change #183: Next slide please.
Speaker Change #184: Now I wanted to just shine a little bit of light on as Frank commented very interesting. So I think the first public crypto mining wherever we're Vancouver head office company, our home exchanges at TSMC Yatra on NASDAQ the outrun the Frankfurt stock exchange, but.
Speaker Change #185: There's a key difference on one hand.
Speaker Change #186: Illustrate here.
Speaker Change #187: A lot of our peers have U S GAAP accounting treatment.
Speaker Change #188: And we do not we're under <unk>, because thats the accounting treatment for Canada potato Caetano I'm, an engineer I'm not an accountant so.
Speaker Change #188: Yes.
Speaker Change #189: I feel more comfortable commenting on this.
Speaker Change #189: <unk>.
Speaker Change #190: It's just a different treatment rate same business different treatment, we could we could literally and I think some of our peers I think had it now does U S gap, even though he started in Canada allows you to realize digital currency revaluation on your income statement.
Speaker Change #191: Right I'm going to say that again.
Speaker Change #191: Digital currency revaluation can be realized on your income statement.
Speaker Change #192: Following U S. GAAP now on ours because of our <unk> shows net loss of $51 million.
Speaker Change #193: But if you show our digital reevaluation.
Speaker Change #194: Which is $77 million by the way that's a center bar, our net income goes up to $25 million and so when you look at an earnings per share. It's usually done on the net income.
Speaker Change #195: On our financials you can see this $25 million figure, but that comes in quote unquote below the line and Thats called comprehensive income, but again, if we were doing U S. GAAP, we actually have 2008 earnings per share. So I just wanted to point that out and so that way for the analysts and all the shareholders out there if you wanted to.
Speaker Change #196: Do an apples to apples you better off looking at the comprehensive income comparing to a lot of our peers net income so let's hop to the next slide.
Speaker Change #197: EBITDA is another helpful way to compare our peers adjusted EBIT.
Speaker Change #197: Strips out noncash charges such as <unk>.
Speaker Change #197: Share based comps, sometimes youll have tax provisions, which are noncash items.
And derivative liabilities so.
The adjusted EBITDA is a good way to do a fairly apples to apples comparison amongst our peers again.
Speaker Change #197: Rock solid quarter.
$16 million adjusted EBITDA previous quarter, 17 million EBIT is up quarter over quarter as well, but if you look at that for the entire year next slide.
Speaker Change #198: You could see that our adjusted EBITDA was $37 million and our EBITDA was $25 million, which is very similar to that comprehensive income figure I gave you earlier. So it was a solid year for hi.
Speaker Change #199: And I'm going to point this out for a second year, you look at where we're trading at roughly $300 million market cap, we have over $150 million of decline on the balance sheet Ratably over 2400 gig plan on the balance sheet, so that pegs, our enterprise value at maybe $100 million to $130 million. So on an adjusted EBITDA.
Speaker Change #200: Thesis, we're not even trading at Forex rate and we're not talking one year forward. This is this is our adjusted EBITDA for the last 12 months. So I think hydrogen amazing value proposition were well undervalued amongst our peers right now let's look at that next slide.
Speaker Change #201: And here it is spelled out getting a very accurate enterprise value looking at cash and value Bitcoin holdings and this is market cap as of June.
Speaker Change #201: 20th.
Speaker Change #202: 2024, and so youll see that the enterprise value relative to our EBIT.
Speaker Change #203: And by the way this quarter the EBITDA now I just want to clarify in range. So this is a quarterly adjusted EBITDA of $16 2 million.
Speaker Change #204: You could see that we're treating in a $3 three multiple by far by far the lowest multiple than our industry peers 12, 14, 2038 X. The adjusted EBITDA multiple so high is an absolute bargain right now and we have costs.
Speaker Change #205: <unk> fundamentals profitable business.
Speaker Change #206: Positive corporate margin, even after G&A, let's.
Speaker Change #207: Let's look at the next slide please and so as we were we found ourselves reread. It based on a multiple of revenue we were quite curious to see how our revenue multiple looks compared to our Peters.
Speaker Change #207: And again, we've got.
Speaker Change #208: The best value industry by a long shot one forex enterprise value to our annualized revenue our peers for 5678, even nine times on a revenue basis and so.
It really makes me think if a company is going to be re rating based on a multiple of revenue that might make sense. If they already are trading at really high multiple but we are trading at a bargain it doesn't matter how we slice. It I think this and I see this confident needs clear heightened best bargain in the space.
Speaker Change #208: And we are a great operator, we've got amazing operational efficiency and uptime.
Speaker Change #209: <unk> fleet efficiency coming out of the having and we'll talk more about that in a moment next slide please.
Speaker Change #210: So what we've also looked at as the next 12 months. So we know that a lot of the analysts will have their projections in revenue and adjusted EBITDA for the next 12 months.
So running that same analysis.
Speaker Change #211: This you see here that were again trading at a margin relative to our peers. So we.
Speaker Change #212: <unk> got $5 five acts in some of our peers are trading at 10, 15, 20 X. So again no matter how you slice it we are.
The best market in the industry.
Speaker Change #213: Next slide.
Speaker Change #214: On a.
Speaker Change #215: Earnings per share basis right.
Speaker Change #216: For the quarter rate earlier, we were going over the year, So 18% earnings per share on an adjusted EBITDA basis for the quarter, which stacks up very respectively.
Speaker Change #217: Against our peers and keep in mind, our shares are trading at three box right now some of our peers are trading at 10 or $20. So you on 18 cents a share yield on a $3 stock or 18.
Speaker Change #218: I share yield on a $20 stock. So the other point is that we have the tightest slowed the industry eight 8 million shares out and this is an industry where the average is 243 million shares out. So we've accomplished this all with the least amount of dilution in the industry.
Speaker Change #219: As well next slide please.
Speaker Change #220: Upgrading our fleet we've got.
Speaker Change #221: F 'twenty, one pros that we announced recently and our recent order.
21 June batches getting upgraded F. 'twenty, one pros for free so that's exciting. So again. This is where this is all within our existing data center and we've been upgrading the older 38, Youll procure ash machines, so that our fleet efficiencies 20, <unk> ash and our target operational efficiencies five.
Mike: Mike <unk> has overall.
Speaker Change #223: Which is putting us in a great position post having where we are able to mine profitably next slide please.
Speaker Change #223: You can see here a little bit of post having commentary so are we.
Speaker Change #224: We actually mined in May of 119 coins, which is actually a little more than half of what we mined in April.
Speaker Change #225: And we've had to our F 'twenty one's coming in and.
Speaker Change #226: Averaging about four coins of day rate with pinpoint where tenants that's over a quarter million dollars gain revenue.
Speaker Change #227: We are operating profitably, even post having and I'm very proud to say this and we work really hard to do this to upgrade our fleet to keep our energy costs down we've always kept our lean G&A and to make sure that on an operating income basis, we're still making money as a company post having which again, we did with little to no dilution.
Speaker Change #228: And let's look at bank clients.
Speaker Change #229: Here's the real kicker we actually grew our hurdle month over month and you look at our obviously our year end was $22 87, we actually Nash increase our model.
Speaker Change #230: And may right. So if you look at our RMA production report it was.
Speaker Change #231: 2000, and 451, we almost increased our hurdle by almost 200 Big point in the last two months and we're talking post having some incredibly proud of my team.
Speaker Change #232: Were closely with Darcy and frankly, you've got a rigorous treasury management.
Speaker Change #233: Program as well as.
Speaker Change #234: Selectively selling bitcoin.
Speaker Change #235: And again, just being very prudent and conservative with our share treasuries.
Speaker Change #236: We haven't done these big dilutive bought deals.
Speaker Change #237: The industry, there's always there's always a money if you want a diluted but its the path let's take units.
Speaker Change #238: Requires some more fiscal discipline, but we manage it pull it off so low solution growing our hurdle profitable both having best value in the entire industry barring on no matter, which way you slice. It adjusted EBITDA revenue 12 months for you name. It next slide please.
Speaker Change #239: Just a quick summary of the main production press release again, we covered 119 bitcoin.
Speaker Change #240: Ended may with five eggs hash and again well on our way to our.
Speaker Change #239: Yes.
Speaker Change #241: <unk> five <unk> efficiency.
Speaker Change #241: Next slide please.
Speaker Change #241: So.
Speaker Change #242: On top of all that we also have our AI business, which has obviously been a really exciting part is the highest store annual Frank covered it. So we're well on our way we're sort of we had this four step vision board 250 to 250 <unk> quarter of 2050, <unk> well. This last quarter, we did $1 8 million and our HPT.
Speaker Change #242: Business, so that puts us right between step two and three trending upwards.
Speaker Change #243: And yes, so more on that now we are just giving mark to market or just a little glimpse and we have some exciting things in store as we work on building out this business stay tuned for more updates for my next slide.
Please check all our Socials, we've got a very active Twitter and of course, our press release to find out the latest and greatest of what's happening our high digital technologies mines, <unk>, <unk>, President and CEO and I look forward to speaking with you. If you have any questions. One on one please arrange a meeting thank you and have a great day.