Q2 2024 BitFuFu Inc Earnings Call

August 20, 2024

Speaker Change: Good day and thank you for standing by. Welcome to the BitFuFu INC second quarter 2024 NX conference call. At this time, all participants are in a listen-only mode.

Operator: This is the second quarter 2024 Enix conference call. At this time, all participants are in a listen-only mode.

Operator: Good morning, ladies and gentlemen, and welcome to BitFuFu's second quarter 2024 earnings call. The company's financial results were released earlier today and are available on the BitFuFu, Investor Relations website at ir.bitfufu.com as well as on the globalnewswire.com website.

Operator: Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Charlie Brady. Please go ahead.

Charlie Brady: Thank you, Operator. Good morning, ladies and gentlemen. And welcome to BitFuFu's second quarter, twenty-five minutes. The company's financial results were released earlier this year, and are available on the BitFuFu Investor Relations website, at ir.bitfufu.com as well as on the global newswire.com. Thank you for joining me today on the, You'll lose, chairman. Kalazao, Chief Financial Officer. Please note that the discussion today will contain forward-looking statements, made under the safe harbor, Private Security Litigation and the Litigation Reform Act. Statements that are not historical facts, statements about the company's beliefs and expectations are forward-looking statements.

Operator: Good morning, ladies and gentlemen, and welcome to BitFuFu's second quarter 2024 earnings call. The company's financial results were released earlier today and are available on the BitFuFu Investor Relations website at ir.bitfuFu.com as well as on the GlobalNewswire.com website. Joining me today on the call are Leo Liu, Chairman and CEO, and Kalazou, Chief Financial Officer.

Operator: Thank you for participating.

Operator: Joining me today on the call are Leo Liu, Chairman and CEO, and Kal Azau, Chief Financial

Operator: Officer.

Operator: Before we begin, please note that the discussion today will contain forward-looking statements, made under the Safe Harbor provisions of the U.S.

Operator: You may now disconnect.

Operator: Before we begin, please note that the discussion today will contain forward-looking statements made under the safe harbor provisions of the U.S. private security litigation and the Litigation Reform Act of 1995. Statements that are not historical facts, including statements about the company's beliefs and expectations, are forward-looking statements. Forward-looking statements involve risks and uncertainties that make our actual results differ materially from the management's current expectations. Potential risks and uncertainties include but are not limited to those outlined in the company's public filings with the SEC. The company does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

Speaker Change: Before we begin.

Charlie Brady: More looking statements involve risks and a- actual results to differ materially from the management's current expectations. Potential Risks and Uncertainties. But I'm not limited, was outlined in the company's public filing, does not undertake any obligation to update except as required under applicable law. We were discussing non-GAAP financial information, companies providing that information as a sub, Information prepared in accordance with the county, generally accepted in the United States or GAAP. Find a Reconciliation of These, What a gap.

Speaker Change: Note that the discussion today will contain forward looking statements.

Operator: Private Securities Litigation and the Litigation Reform Act of 1995.

Speaker Change: Made under the Safe Harbor provisions of the U S Private Securities litigation.

Speaker Change: And reform Act of 1995.

Operator: Statements that are not historical facts, including statements about the company's beliefs, and expectations, are forward-looking statements. Forward-looking statements involve risks and uncertainties that may cause actual results, to differ materially from the management's current expectations. Potential risks and uncertainties include, but are not limited to, those outlined in, the company's public filings with the SEC.

Speaker Change: Statements that are not historical facts, including statements about the company's beliefs and expectations are forward looking statements.

Speaker Change: Forward looking statements involve risks and uncertainties that may cause.

Speaker Change: Cause actual results to differ materially from the management's current expectations potential risks and uncertainties include but are not limited to those outlined in the company's public filings with the SEC.

Operator: The company does not undertake any obligation to update any forward-looking statement except, as required under applicable law.

Speaker Change: The company does not undertake any obligation to update any forward looking statement, except as required under applicable law.

Operator: We were discussing non-GAAP financial information on this call. The company is providing that information as a supplement to information prepared in accordance with accounting principles generally accepted in the United States or GAAP. You can find a reconciliation of these metrics to the company's reported GAAP results in the reconciliation tables provided in today's earnings release.

Operator: We will be discussing non-GAAP financial information on this call. The company is providing that information as a supplement to information prepared in, accordance with accounting principles generally accepted in the United States or GAAP. You can find a reconciliation of these metrics to the company's reported GAAP results in, the reconciliation tables provided in today's earnings release.

Speaker Change: We were discussing non-GAAP financial information on this call.

Speaker Change: Company is providing that information as a supplement to information prepared in accordance with accounting principles generally accepted in the United States or GAAP.

Speaker Change: You can find a reconciliation of these metrics to the company's reported GAAP results.

Speaker Change: Reconciliation tables provided in today's earnings release.

Operator: One final note: due to some time constraints, we will not be conducting a Q&A this quarter. However, questions can be emailed to IR at bitfufu.com, and we will respond as quickly as possible, generally within 24 hours.

Operator: One final note, due to some time constraints, we will not be conducting a Q&A this quarter.

Speaker Change: One final note due to some time constraints, we will not be conducting a Q&A this quarter.

Operator: However, questions can be emailed to ir at bitfufu.com, and we will respond as quickly, as possible, generally within 24 hours.

Speaker Change: However questions can be emailed to IR at bit fufu Dot com and we will respond as quickly as possible generally within 24 hours.

Operator: I will now turn the call over to Leo Liu, the company's Chairman and Chief Executive

Leo Liu: I will now turn the call over to Leo Lu, the company's Chairman and Chief Executive Officer. Good morning, everyone. Thank you for joining us today to discuss Bitfufu's operational and financial results for the second quarter of 2024. I'm pleased to share that we have once again demonstrated our ability to deliver strong financial and operational performance, even in the face of a dynamic and challenging market environment. Let me begin by providing an overview of our second quarter results. Total revenue for the quarter came in at 100 and 29.4 million dollars, representing a 70% increase year-over-year. This growth was driven by strength in both our cloud mining and self-mining operations.

Speaker Change: Now I'll turn the call over to.

The company's chairman and Chief Executive Officer.

Leo Liu: Officer.

Leo Liu: Good morning, everyone.

Charlie Brady: Reconciliation Tables provided in today's earnings release. One final note, due to some time, not be conducting a Q&A However, questions can.., ir at BitFuFu.com Spawn as quickly as possible, generally within 20- chairman and chief executive, Good morning, everyone. Thank you for joining us today to discuss BitFuFu's operational and financial results for the second quarter of 2024. I'm pleased to share that we have once again demonstrated our ability to deliver strong financial and operational performance, even in the face of a dynamic and challenging market environment. Let me begin by providing an overview of our second quarter results. Total revenue for the quarter came in at $106,000, and 29.4 million dollars, representing a 70% increase year-over-year.

Speaker Change: Good morning, everyone.

Leo Liu: Thank you for joining us today to discuss Bitfufu's operational and financial results, for the second quarter of 2024.

Speaker Change: Thank you for joining us today to discuss <unk> full foods operational and financial results for the second quarter of 2024.

Leo Liu: I'm pleased to share that we have once again demonstrated our ability to deliver strong, financial and operational performance, even in the face of a dynamic and challenging market environment.

Speaker Change: I'm pleased to share that we have once again demonstrated our ability to deliver strong financial and operational performance.

Speaker Change: Even in the face of a dynamic and challenging market environment.

Leo: This growth was driven by strength in both our cloud mining and self-mining operations. Our cloud mining solutions have been a standout performer this quarter. Cloud mining revenue reached 76.3 million dollars in the second quarter, up 67 percent from 46.2 million dollars in the same period of 2023. The number of registered users on our cloud mining platform increased to over 395,000 by the end of June. An 87% increase compared to the same period last year.

Leo Liu: Let me begin by providing an overview of our second quarter results. Total revenue for the quarter came in at $129.4 million, representing a 70% increase, year over year. This growth was driven by strength in both our cloud mining and self-mining operations. Our cloud mining solutions have been a standout performer this quarter. Cloud mining revenue reached $76.3 million in the second quarter.

Speaker Change: Let me begin by providing an overview of our second quarter results.

Speaker Change: Total revenue for the quarter came in at 100.

Speaker Change: And $29 $4 million.

Speaker Change: Representing a 70% increase year over year.

Speaker Change: This growth was driven by strength in both our cloud mining and self mining operations.

Leo Liu: Our cloud mining solutions have been a stand-up performer this quarter. Cloud mining revenue reached $76.3 million in the second quarter. Up 67% from $46.2 million in the same period of 2023. The number of registered users on our cloud mining platform increased to over 395,000 by the end of June. An 87% increase compared to the same period last year. This significant growth in our user base is a testament to the value proposition that our cloud mining services offer to both individual and institutional investors. By providing a seamless and efficient way to participate in Bitcoin mining, we are maintaining our leadership position and capturing additional share of the global cloud mining market, which continues to grow.

Speaker Change: Our cloud mining solutions have been a standout performer this quarter cloud mining revenue reached $76 $3 million in the second quarter.

Leo Liu: Up 67% from $46.2 million in the same period of 2023. The number of registered users on our cloud mining platform increased to over 395,000, by the end of June, an 87% increase compared to the same period last year.

Speaker Change: Up 67% from $46 $2 million in the same period of 2023.

Speaker Change: The number of registered users on our cloud mining platform increased to over 395000 by the end of June.

And 87% increase compared to the same period last year.

Leo: This significant growth in our user base is a testament to the value proposition that our cloud mining services offer to both individual and institutional investors, by providing a seamless and efficient way to participate in Bitcoin mining. We are maintaining our leadership position and capturing additional share of the global cloud mining market, which continues to grow. The current composition of our users, consists of individual customers and institutional customers, majority of which are individual customers in terms of quantity. There are sophisticated customers with extensive mining experience. High Net Worth Individual, Family of.., private equity fund.

Leo Liu: This significant growth in our user base is a testament to the value proposition that, our cloud mining services offer to both individual and institutional investors by providing a seamless and efficient way to participate in Bitcoin mining.

Speaker Change: This significant growth in our user base is a testament to the value proposition that our cloud mining services offer to both individual and institutional investors.

Speaker Change: By providing a seamless and efficient way to participate in bitcoin mining, we are maintaining our leadership position and capturing additional share of the global cloud mining market, which continues to grow the current composition of our users consists of individual customers and institute.

Leo Liu: We are maintaining our leadership position and capturing additional share of the global, cloud mining market, which continues to grow.

Leo Liu: The current composition of our users consists of individual customers and institutional customers. A majority of which are individual customers in terms of quantity. There are sophisticated customers with extensive mining experience, high net worth individuals, family offices, private equity funds, cryptocurrency exchanges, and some publicly listed companies that wish to invest in and hold Bitcoin. However, in terms of revenue contribution, institutional customers contribute the majority of our cloud mining revenue because their average contract amount may be 10 to even 100 times larger than that of individual customers. In the future, the growth of our cloud mining customer base will primarily come from increasing our outreach in low penetration countries and regions.

Leo Liu: The current composition of our users consists of individual customers and institutional, customers, majority of which are individual customers in terms of quantity.

Speaker Change: <unk> customers.

Speaker Change: You already have which.

Speaker Change: Our individual customers in terms of quantity.

Leo Liu: There are sophisticated customers with extensive mining experience, high net worth individuals, family offices, private equity funds, cryptocurrency exchanges, and some publicly listed companies that wish to invest in and hold Bitcoin.

Speaker Change: There are sophisticated customers with extensive mining experience <unk>.

Speaker Change: High net worth individuals.

Speaker Change: Family offices.

Private equity funds.

Leo: Cryptocurrency exchange, and some publicly listed companies that wish to invest in and hold Bitcoin. However, in terms of revenue contribution. Institutional customers contribute the majority of our cloud mining revenue, because their average contract amount may be ten to even a hundred times larger than that of individual customers, in the future. The growth of our cloud mining customer base will primarily come from increasing our outreach. In, Low Penetration Countries and Regions Additionally, We aim to attract more users who are interested in Bitcoin mining.

Speaker Change: Crypto currency exchanges and some publicly listed companies that wish to invest in and hold bitcoin.

Leo Liu: However, in terms of revenue contribution, institutional customers contribute the majority, of our cloud mining revenue because their average contract amount may be 10 to even, 100 times larger than that of individual customers.

Speaker Change: However in terms of revenue contribution.

Speaker Change: Institutional customers contribute the majority of our cloud mining revenue.

Speaker Change: Because their average contract amount maybe tend to even 100 times larger than that of individual customers.

Leo Liu: In the future, the growth of our cloud mining customer base will primarily come from increasing, our outreach in low penetration countries and regions. Additionally, we aim to attract more users who are interested in Bitcoin mining by offering, products that are easier to understand and cater to customers with different risk preferences. We are enabling more people to participate in mining activities.

Speaker Change: In the future the growth of our cloud mining customer base will primarily come from increasing our outreach.

Speaker Change: In.

Speaker Change: Low penetration in countries and regions.

Leo Liu: Additionally, we aim to attract more users who are interested in Bitcoin mining by offering products that are easier to understand and cater to customers with different risk preferences. We are enabling more people to participate in mining activities in addition to the expansion of the customer base, which is increasingly turning to our platform as a trusted and reliable partner in the digital asset space. The strength of our customer relationships is reflected in our net dollar retention rate, which stood at 103% for the quarter. This metric highlights the loyalty of our customers and their ongoing engagement with our platform.

Speaker Change: Additionally, we aim to attract more users who are interested in bitcoin mining by offering products that are easier to understand and cater to customers.

Leo: By offering products that are easier to understand and cater to customers, with different risk preferences, we are enabling more people to participate in mining activities, in addition to the expansion of customer base. Which is increasingly turning to our platform as a trusted and reliable partner in the digital assets space. The strength of our customer relationships is reflected in our net dollar retention rate, which stood at 103% for the quarter.

Speaker Change: With different risk preferences, we are enabling more people to participate in mining activities.

Leo Liu: In addition to the expansion of customer base, which is increasingly turning to our platform, as a trusted and reliable partner in the digital assets space, the strength of our customer relationships is reflected in our net dollar retention rate, which stood at 103% for the quarter. This metric highlights the loyalty of our customers and their ongoing engagement with, our platform.

Speaker Change: In addition to the expansion of customer base, which is increasingly turning to our platform as a trusted and reliable partner in the digital asset space the strength of our customer relationships as reflected in our net dollar retention rates.

Which stood at 103% for the quarter.

Leo: This metric highlights the loyalty of our customers and their ongoing engagement with our platform. As our cloud mining platform continues to scale with an expanding user base, we are increasingly positioned to unlock new opportunities within the digital currency ecosystem. This growth enables us to strategically explore and introduce additional products and services, that can diversify and strengthen our revenue stream. We are actively evaluating potential avenues to enhance our offerings and drive long-term value for our shareholders. Moving on to our self-mining operations. We also saw substantial growth in this area, with revenue increasing 81% year-over-year to $51.1 million.

Speaker Change: This metric highlights the loyalty of our customers and their ongoing engagement with our platform.

Leo Liu: As our cloud mining platform continues to scale with an expanding user base, we are increasingly positioned to unlock new opportunities within the digital currency ecosystem. This growth enables us to strategically explore and introduce additional products and services that can diversify and strengthen our revenue streams. We are actively evaluating potential avenues to enhance our offerings and drive long-term value for our shareholders. Moving on to our self-mining operations, we also saw substantial growth in this area, with revenue increasing 81% year-over-year to $51.1 million. This increase was largely driven by a significant rise in the average price of Bitcoin and the expansion of our mining capacity.

Leo Liu: As our cloud mining platform continues to scale with an expanding user base, we are, increasingly positioned to unlock new opportunities within the digital currency ecosystem. This growth enables us to strategically explore and introduce additional products and services, that can diversify and strengthen our revenue streams.

Speaker Change: As our cloud mining platform continues to scale with an expanding user base.

Speaker Change: We are increasingly positioned to unlock new opportunities within the digital currency ecosystem.

Speaker Change: This growth enables us to strategically explore and introduce additional products and services that can diversify and strengthen our revenue streams.

Leo Liu: We are actively evaluating potential avenues to enhance our offerings and drive long-term, value for our shareholders.

We are actively evaluating potential avenues to enhance our offerings and drive long term value for our shareholders.

Leo: This increase was largely driven by a significant rise in the average price of Bitcoin and the expansion of our mining capacity. Partially offset by increased blockchain difficulty and the recent halving event. It's important to note that while our Bitcoin production from self-mining operations decreased by 23% to 780 Bitcoins. This was an anticipated outcome due to the impact of halving. That was already factored into our internal forecasts and long-term strategy. We recognize that following the April halving event.

Leo Liu: Moving on to our self-mining operations, we also saw substantial growth in this area, with revenue increasing 81% year over year to $51.1 million. This increase was largely driven by a significant rise in the average price of Bitcoin and the, expansion of our mining capacity, partially offset by increased blockchain difficulty and the recent halving event.

Speaker Change: Moving onto our self mining operations.

Speaker Change: We also saw substantial growth in this area.

Speaker Change: With revenue, increasing 81% year over year to $51.1 million.

Speaker Change: This increase was largely driven by a significant rise in the average price of bitcoin and the expansion of our mining capacity.

Leo Liu: Partially offset by increased blockchain difficulty and the recent having event. It's important to note that while our Bitcoin production from self-mining operations decreased by 23% to 780 bitcoins. This was an anticipated outcome due to the impact of halving. That was already factored into our internal forecasts and long-term strategy. We recognize that following the April halving event, investors may be focused on operational performance and profitability post-halving. Mining companies, including our competitors. Faced the impact of reduced mining rewards and the recent Bitcoin price decline. Should the price of Bitcoin remain at the current level without increasing? Profit margins in the mining space will be significantly pressured in response.

Speaker Change: Partially offset by increased blockchain difficulty and the recent having event.

Leo Liu: It's important to note that while our Bitcoin production from self-mining operations decreased, by 23% to 780 Bitcoins. This was an anticipated outcome due to the impact of halving. That was already factored into our internal forecasts and long-term strategy.

Speaker Change: It's important to note that while our bitcoin production from self mining operations decreased by 23% to 780 bitcoins.

Speaker Change: This was an anticipated outcome due to the impact of Harvey.

Speaker Change: That was already factored into our internal forecast and long term strategy.

Leo Liu: We recognize that following the April halving event, investors may be focused on operational, performance and profitability post-halving. Mining companies, including our competitors, face the impact of reduced mining rewards, and the recent Bitcoin price decline. Should the price of Bitcoin remain at the current level without increasing, profit margins, in the mining space will be significantly pressured.

Speaker Change: We recognize that following the April having event.

Leo: Investors may be focused on operational performance and profitability post halving, mining companies, including our competitors, face the impact of reduced mining rewards and the recent Bitcoin price decline. Should the price of Bitcoin remain at the current level without increasing?

Speaker Change: Investors may be focused on operational performance and profitability post having.

Speaker Change: Mining companies, including our competitors.

Speaker Change: Faced the impact of reduced mining rewards and the recent bitcoin price decline.

Should the price of bitcoin remain at the current level without increasing <unk>.

Leo: Profit margins in the mining space will be significantly pressured, in response. We have implemented several measures to reduce costs and improve profit margins. First...

Speaker Change: <unk> margins in the mining space will be significantly pressured.

Leo Liu: In response, we have implemented several measures to reduce costs and improve profit margins.

Speaker Change: In response, we have implemented several measures to reduce costs and improve profit margins.

Leo Liu: We have implemented several measures to reduce costs and improve profit margins. First, technological leadership has always been a competitive advantage for BitFuFu. Since April, we have applied technology to overclock the hash rate of our ASIC mining machines. For air cooled machines, overclocking can increase computing power by 10% to 30% over the theoretical mining capacity of a mining machine. Importantly, it is worth noting that we have the ability to provide this technical service to other miners and charge a portion of the mining output. As technical service income, which could be a future source of revenue for us.

Leo Liu: First, technological leadership has always been a competitive advantage for BitFuFu. Since April, we have applied technology to overclock the hash rate of our ASIC mining, machines. For air-cooled machines, overclocking can increase computing power by 10% to 30% over, the theoretical mining capacity of a mining machine.

Speaker Change: First.

Leo: Technological leadership has always been a competitive advantage for BitFuFu. Since April, we have applied technology to overclock the hash rate of our ASIC mining machine, for air-cooled machines. Overclocking can increase computing power by 10% to 30% over the theoretical mining capacity of a mining machine. Importantly, it is worth noting that we have the ability to provide this technical service, to other miners and charge a portion of the mining output, as technical service income, which could be a future source of revenue for us.

Speaker Change: Technological leadership has always been a competitive advantage for bit fufu.

Speaker Change: Since April we have applied technology to overclock, the hash rate of our ASIC mining machines.

Speaker Change: For air cooled machines.

Speaker Change: Clocking can increase computing power by 10% to 30% over the theoretical mining capacity of our mining machine.

Leo Liu: Importantly, it is worth noting that we have the ability to provide this technical service, to other miners and charge a portion of the mining output as technical service income, which could be a future source of revenue for us.

Speaker Change: Importantly.

Speaker Change: It is worth noting that we have the ability to provide this technical service to other miners and charge a portion of the mining output.

Speaker Change: As technical service income.

Speaker Change: Which could be a future source of revenue for us.

Leo Liu: Second, the mining facility management system we developed has helped us improve the management, efficiency of our cell phone mining machines and leased mining machines, as well as that of our partners. Currently, this software is being used to manage approximately 400,000 machines and, has the ability to scale significantly higher.

Leo Liu: Second, the mining facility management system we developed has helped us improve the management efficiency of our self-all mining machines and least mining machines, as well as that of our partners. Currently, this software is being used to manage approximately 400,000 machines and has the ability to scale significantly higher. Third, we have strategically adjusted the operating mode of our mining machines in certain facilities where electricity and hosting fees are higher. This adjustment has allowed us to enhance fleet efficiency and reduce electricity costs. While this decision did lead to a temporary reduction in the operating mining capacity of these machines, it resulted in an improvement in their gross profit margin.

Speaker Change: Second.

Leo: The Mining Facility Management System we developed, has helped us improve the management efficiency of our self-owned mining machine, and leased mining machines, as well as that of our partners. Currently, this software is being used to manage approximately 400,000 machines and has the ability to scale significantly higher. Third, we have strategically adjusted the operating mode of our mining machines in certain facilities where electricity and hosting fees are higher. This adjustment has allowed us to enhance fleet efficiency and reduce electricity costs.

Speaker Change: The mining facility management system, we developed has.

Speaker Change: Has helped us improve the management efficiency of our cell phone mining machines and leased mining machines.

Speaker Change: As well as that of our partners.

Speaker Change: Currently this software is being used to manage approximately 400000 machines and has the ability to scale significantly higher.

Leo Liu: Third, we have strategically adjusted the operating mode of our mining machines in certain, facilities where electricity and hosting fees are higher. This adjustment has allowed us to enhance fleet efficiency and reduce electricity costs. While this decision did lead to a temporary reduction in the operating mining capacity, of these machines, it resulted in an improvement in their gross profit margin.

Speaker Change: Third we are strategically adjusted the operating mode of our mining machines in certain facilities, where our electricity and hosting fees are higher.

This adjustment.

Speaker Change: It has allowed us to enhance fleet efficiency and reduce electricity costs.

Leo: While this decision did lead to a temporary reduction in the operating mining capacity of these machines, it resulted in an improvement in their gross profit margin. Fourth, as part of our strategy to manage cost. A floating price mechanism was implemented in our hosting contracts with certain mining facilities. This allows us to adjust costs in line with Bitcoin price fluctuation. Reducing expenses and ensuring profitability during periods of lower Bitcoin prices. Additionally, We are actively exploring mining facilities globally that offer lower electricity costs, and are confident that we will soon finalize some agreements.

Speaker Change: While this decision did lead to a temporary reduction in the operating mining capacity of these machines.

Speaker Change: It resulted in an improvement in their gross profit margin.

Leo Liu: Fourth, as part of our strategy to manage costs, a floating price mechanism was implemented in our hosting contracts with certain mining facilities. This allows us to adjust costs in line with Bitcoin price fluctuation. Producing expenses and ensuring profitability during periods of lower Bitcoin prices. Additionally, we are actively exploring mining facilities globally that offer lower electricity costs and are confident that we will soon finalize some agreements. Finally, given our long-term bullish outlook on Bitcoin, we are taking advantage of the current downturn in Bitcoin pricing to secure lower costs. Long-term computing power. Specifically, we intend to sign a two-year purchase agreement for computing capacity, enabling us to lock in a portion of our mining costs over the next two years.

Leo Liu: Fourth, as part of our strategy to manage costs, a floating price mechanism was implemented, in our hosting contracts with certain mining facilities. This allows us to adjust costs in line with Bitcoin price fluctuation. Finally, given our long-term bullish outlook on Bitcoin, we are taking advantage of the, current downturn in Bitcoin pricing to secure lower costs.

Speaker Change: Fourth as part of our strategy to manage costs.

Speaker Change: Floating price mechanism was implemented in our hosting contracts with certain mining facilities.

Speaker Change: This allows us to adjust costs in line with bitcoin price fluctuations.

Speaker Change: Reducing expenses and ensuring profitability during periods of lower bitcoin prices.

Speaker Change: Additionally, we are actively exploring mining facilities globally that offer lower electricity costs.

Operator: Thank you, operator.

Speaker Change: And are confident that we will soon finalize some agreements.

Operator: Good morning, ladies and gentlemen, and welcome to BitFuFu's second quarter, 2024 earnings call. The company's financial results were released earlier today, and are available on the BitFuFu investor relations website at ir.bitfuFu.com as well as on the global newswire.com website.

Leo: Finally, given our long-term bullish outlook on Bitcoin, We are taking advantage of the current downturn in Bitcoin pricing to secure lower costs, long-term computing power. Specifically, we intend to sign a two-year purchase agreement for computing capacity, enabling us to lock in a portion of our mining costs over the next two years, in terms of our operational metrics. Our total mining capacity under management grew by 63% to 24.7 XAH, as of June 30th, 2024, compared to the second quarter of 2023.

Speaker Change: Finally, given our long term bullish outlook on bitcoin.

Speaker Change: Taking advantage of the current downturn in bitcoin pricing to secure lower cost.

Operator: Joining me today on the call are Leo Liu, Chairman and CEO and Kalazou, Chief Financial Officer.

Operator: Joining me today on the call are Leo Liu, Chairman and CEO and Kalazou, Chief Financial Officer. Before we begin, please note that the discussion today will contain forward-looking statements made under the safe harbor provisions of the U.S, private security litigation and the litigation reform act of 1995. Statements that are not historical facts, including statements about the company's beliefs and expectations, are forward-looking statements. Forward-looking statements involve risks and uncertainties that make us actual results to differ materially from the management's current expectations.

Speaker Change: Long term computing power.

Speaker Change: Specifically, we intend to sign a two year purchase agreement for computing capacity, enabling us to lock in a portion of our mining costs over the next two years.

Leo Liu: Long-term computing power. Specifically, we intend to sign a two-year purchase agreement for computing capacity, enabling us to lock in a portion of our mining costs over the next two years.

Operator: Before we begin, please note that the discussion today will contain forward-looking statements made under the safe harbor provisions of the U.S, private security litigation and the litigation reform act of 1995. Statements that are not historical facts, including statements about the company's beliefs and expectations, are forward-looking statements.

Leo Liu: In terms of our operational metrics, our total mining capacity under management grew by 63% to 24.7 xAH as of June 30th, 2024. Compared to the second quarter of 2023, this significant expansion is a clear indication of our ongoing commitment to scaling our operations and enhancing our market presence. Similarly, our hosting capacity increased year-over-year by 40% to 522 megawatt, underscoring our position as a leading player in the digital asset mining industry. On a sequential basis, total mining capacity under management and hosting capacity declined from the first quarter of 2024. This temporary decline was the result of our deliberate decision to decrease our leasing of mining machines and purchasing of computing power in order to minimize the uncertain impacts.

Speaker Change: In terms of our operational metrics.

Operator: Forward-looking statements involve risks and uncertainties that make us actual results to differ materially from the management's current expectations.

Leo Liu: In terms of our operational metrics, our total mining capacity under management grew by 63% to 24.7 XAH as of June 30, 2024. Compared to the second quarter of 2023, this significant expansion is a clear indication, of our ongoing commitment to scaling our operations and enhancing our market presence.

Speaker Change: Our total mining capacity under management grew by 63% to 24.7 Xa hash.

Speaker Change: As of June 30th 2024.

Speaker Change: Compared to the second quarter of 2023.

Operator: Potential risks and uncertainties include but are not limited to those outlined in the company's public filings with the SEC.

Operator: Potential risks and uncertainties include but are not limited to those outlined in the company's public filings with the SEC. The company does not undertake any obligation to update any forward-looking statement, except as required under applicable law. We were discussing non-GAAP financial information on this call. The company is providing that information as a supplement to information prepared in accordance with accounting principles generally accepted in the United States or GAAP. You can find a reconciliation of these metrics to the company's reported GAAP results in the reconciliation tables provided in today's earnings release.

Leo: This significant expansion is a clear indication of our ongoing commitment, to scaling our operations and enhancing our market presence. Similarly, our hosting capacity increased year over year by 40% to 522 megawatts, underscoring our position as a leading player in the digital asset mining industry, on a sequential basis. Total mining capacity under management and hosting capacity declined from the first quarter of 2024. This temporary decline was the result of our deliberate decision to decrease our leasing of mining machines, and purchasing of computing power in order to minimize the uncertain impact.

This significant expansion is a clear indication of our ongoing commitment to.

Operator: The company does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

Speaker Change: To scaling our operations and enhancing our market presence.

Leo Liu: Similarly, our hosting capacity increased year over year by 40% to 522 MW, underscoring our position as a leading player in the digital asset mining industry.

Speaker Change: Similarly, our hosting capacity increased year over year by 40% to 522 megawatt.

Speaker Change: Underscoring our position as a leading player in the digital asset mining industry.

Leo Liu: On a sequential basis, total mining capacity under management and hosting capacity declined from the, first quarter of 2024. This temporary decline was the result of our deliberate decision to decrease our leasing of mining machines and purchasing of computing power in order to minimize the uncertain impacts. Following the Bitcoin halving, this approach is consistent with the strategy we employed in the second and third quarters of 2023, where a similar temporary reduction in our mining capacity under management was followed by a recovery and growth in the fourth quarter.

Speaker Change: On a sequential basis.

Speaker Change: Total mining capacity under management and hosting capacity declined from the first quarter of 2024.

Operator: One final note, due to some time constraints, we will not be conducting a Q&A this quarter. However, questions can be emailed to IR at bitfufu.com and we will respond as quickly as possible generally within 24 hours.

Speaker Change: This temporary decline was the result of our deliberate decision to decrease our leasing of mining machines.

Speaker Change: And purchasing of computing power in order to minimize the uncertain impacts.

Leo Liu: I will now turn the call over to Leo Lu, the company's chairman and Chief Executive Officer. Good morning, everyone. Thank you for joining us today to discuss bitfufu's operational and financial results for the second quarter of 2024. I'm pleased to share that we have once again demonstrated our ability to deliver strong financial and operational performance even in the face of a dynamic and challenging market environment.

Leo Liu: Following the Bitcoin halving, this approach is consistent with the strategy we employed in the second and third quarters of 2023, where a similar temporary reduction in our mining capacity under management was followed by a recovery and growth in the fourth quarter. One of the key highlights of the quarter was the continued improvement in our fleet efficiency. For the eighth consecutive quarter, we made strides in optimizing our operations, with our average fleet efficiency reaching 21.1 joules per tear hash. This improvement is a direct result of our ongoing investments in technology and our continuous focus on operational excellence by steadily enhancing the efficiency of our mining fleet.

Leo: Following the Bitcoin halving, This approach is consistent with the strategy we employed in the second and third quarters of 2023, where a similar temporary reduction in our mining capacity. Under-management was followed by a recovery and growth in the fourth quarter. One of the key highlights of the quarter was the continued improvement in our fleet efficiency. For the eighth consecutive quarter, we made strides in optimizing our operations, with our average fleet efficiency reaching 21.1 joules per terahertz.

Speaker Change: Following the bitcoin having.

Operator: One final note, due to some time constraints, we will not be conducting a Q&A this quarter.

Speaker Change: This approach is consistent with the strategy, we employed in the second and third quarters of 2023.

Operator: However, questions can be emailed to IR at bitfufu.com and we will respond as quickly as possible generally within 24 hours.

Speaker Change: We're similar temporary reduction in our mining capacity under management was followed by a recovery in growth in the fourth quarter.

Leo Liu: I will now turn the call over to Leo Lu, the company's chairman and Chief Executive Officer.

Leo Liu: One of the key highlights of the quarter was the continued improvement in our fleet efficiency.

Speaker Change: One of the key highlights of the quarter was the continued improvement in our fleet efficiency.

Leo Liu: For the eighth consecutive quarter, we made strides in optimizing our operations. With our average fleet efficiency reaching 21.1 joules per terahash, this improvement is a direct, result of our ongoing investments in technology and our continuous focus on operational excellence by steadily enhancing the efficiency of our mining fleet. We are able to reduce our cost per unit of Bitcoin mined, which in turn supports our profitability and long-term sustainability.

Leo Liu: Good morning, everyone.

Leo Liu: Let me begin by providing an overview of our second quarter results. Total revenue for the quarter came in at 100 and 29.4 million dollars, representing a 70% increase year-over-year. This growth was driven by strength in both our cloud mining and self-mining operations. Our cloud mining solutions have been a stand-up performer this quarter. Cloud mining revenue reached $76.3 million in the second quarter. Up 67% from $46.2 million in the same period of 2023.

Speaker Change: For the eighth consecutive quarter, we made strides in optimizing our operations with our average fleet efficiency, reaching 21.1, Jules Portera Ash <unk>.

Leo Liu: Thank you for joining us today to discuss bitfufu's operational and financial results for the second quarter of 2024.

Leo: This improvement is a direct result of our ongoing investments in technology and our continuous focus on operational excellence, by steadily enhancing the efficiency of our mining fleet. We are able to reduce our cost per unit of Bitcoin mined, which in turn supports our profitability and long-term sustainability. As we look ahead to the next 6 to 12 months, We remain confident in our ability to continue growing our mining and hosting capacity, however, Similar to our approach in the second quarter, any decisions regarding additional mining capacity will be driven by our profitability forecast.

Speaker Change: This improvement is a direct result of our ongoing investments in technology and our continuous focus on operational excellence.

Leo Liu: I'm pleased to share that we have once again demonstrated our ability to deliver strong financial and operational performance even in the face of a dynamic and challenging market environment.

Speaker Change: By steadily enhancing the efficiency of our mining fleet.

Leo Liu: We are able to reduce our cost per unit of Bitcoin mined, which in turn supports our profitability and long-term sustainability. As we look ahead to the next six to 12 months, we remain confident in our ability to continue growing our mining and hosting capacity. However, similar to our approach in the second quarter, any decisions regarding additional mining capacity will be driven by our profitability forecast.

Speaker Change: We are able to reduce our cost per unit of bitcoin mind, which in turn supports our profitability and long term sustainability.

Leo Liu: Up 67% from $46.2 million in the same period of 2023.

Leo Liu: As we look ahead to the next 6 to 12 months, we remain confident in our ability to continue, growing our mining and hosting capacity. However, similar to our approach in the second quarter, any decisions regarding additional mining capacity will be driven by our profitability forecast.

As we look ahead to the next six to 12 months.

Speaker Change: We remain confident in our ability to continue growing our mining and hosting capacity. However.

Leo Liu: The number of registered users on our cloud mining platform increased to over 395,000 by the end of June. An 87% increase compared to the same period last year. This significant growth in our user base is a testament to the value proposition that our cloud mining services offer to both individual and institutional investors. By providing a seamless and efficient way to participate in Bitcoin mining, we are maintaining our leadership position and capturing additional share of the global cloud mining market, which continues to grow.

Speaker Change: Similar to our approach in the second quarter.

Speaker Change: Any decisions regarding additional mining capacity will be driven by our profitability forecasts.

Leo Liu: Our business model's inherent flexibility, whether by increasing or reducing purchases of computing power, matching short-term and long-term procurements, or optimizing the mix between cloud mining and self-mining computing power, enables us to sustain growth and profitability in a complex and volatile market environment. That said, considering that total revenue of $274 million in the first half of 2024 nearly matches our full year revenue for 2023, and with combined Q1 and Q2 adjusted EBITDA reaching $58 million, we expect substantial growth in both revenue and adjusted EBITDA in 2024 compared to 2023. Our strategy of acquiring or building our own mining farms is progressing well, and we believe this will be a key driver of our future growth. We are currently evaluating several opportunities in regions with favorable energy costs and regulatory environments, which we believe will provide us with the competitive advantage needed to succeed in this highly competitive industry. HPC and AI data centers present a compelling growth prospect. We are carefully evaluating potential opportunities, given the significant capital expenditures required to enter the market. Our focus is on identifying the right strategy and entry point to ensure that even with the significant costs, we can achieve healthy profit margins. In conclusion, the second quarter of 2024 was another period of strong performance for BitFuFu. We delivered solid financial results, made significant progress in expanding our operational capacity, and continued to enhance our efficiency and profitability. As we move forward, we remain focused on executing our growth strategy, optimizing our operations, and delivering long-term value to our shareholders. With that, I'll now turn the call over to our CFO, Kala, who will provide a more detailed review of our financial results. Kala?

Leo: Our business models inherent flexibility, whether by increasing or reducing purchases of computing power, matching short-term and long-term procurements, or optimizing the mix between cloud mining and self-mining computing power, enables us to sustain growth and profitability in a complex and volatile market environment. That said, considering that total revenue of $274 million in the first half of 2024, nearly matches our full year revenue for 2023. And with combined Q1 and Q2 adjusted EBITDA reaching $58 million.

Speaker Change: Our business models inherent flexibility, whether by increasing or reducing purchases of computing power.

Matching short term and long term procurements or optimizing the mix between cloud mining and self mining computing power.

Leo Liu: By providing a seamless and efficient way to participate in Bitcoin mining, we are maintaining our leadership position and capturing additional share of the global cloud mining market, which continues to grow.

Speaker Change: Enables us to sustained growth and profitability.

Speaker Change: In a complex and volatile.

Speaker Change: Market environment.

Leo Liu: That said, considering that total revenue of $274 million in the first half of 2024 nearly matches our full-year revenue for 2023, and with combined Q1 and Q2 adjusted EBITDA reaching $58 million, we expect substantial growth in both revenue and adjusted EBITDA in 2024 compared to 2023. Our strategy of acquiring or building our own mining farms is progressing well, and we believe this will be a key driver of our future growth.

Leo Liu: The current composition of our users consists of individual customers and institutional customers.

Leo Liu: The current composition of our users consists of individual customers and institutional customers. A majority of which are individual customers in terms of quantity. There are sophisticated customers with extensive mining experience, high net worth individuals, family offices, private equity funds, cryptocurrency exchanges, and some publicly listed companies that wish to invest in and hold Bitcoin. However, in terms of revenue contribution, institutional customers contribute the majority of our cloud mining revenue, because their average contract amount may be 10 to even 100 times larger than that of individual customers.

Speaker Change: That said considering that total revenue of $274 million in the first half of 2024.

Leo Liu: A majority of which are individual customers in terms of quantity.

Speaker Change: Nearly matches, our full year revenue for 2023.

Speaker Change: And with combined Q1, and Q2, adjusted EBITDA, reaching $58 million.

Leo: We expect substantial growth in both revenue and adjusted EBITDA in 2024, compared to 2023. Our strategy of acquiring or building our own mining farms is progressing well. And we believe this will be a key driver of our future growth. We are currently evaluating several opportunities in regions with favorable energy costs and regulatory environments, which we believe will provide us with the competitive advantage needed to succeed in this highly competitive industry. HPC and AI data centers present a compelling growth prospect.

Speaker Change: We expect substantial growth in both revenue and adjusted EBITDA in 2024.

Speaker Change: Compared to 2023.

Leo Liu: However, in terms of revenue contribution, institutional customers contribute the majority of our cloud mining revenue, because their average contract amount may be 10 to even 100 times larger than that of individual customers.

Speaker Change: Our strategy of acquiring or building our own mining farms is progressing well.

Speaker Change: And we believe this will be a key driver of our future growth.

Leo Liu: We are currently evaluating several opportunities in regions with favorable energy costs and regulatory environments, which we believe will provide us with the competitive advantage needed to succeed in this highly competitive industry.

Speaker Change: We are currently evaluating several opportunities in regions with favorable energy costs and regulatory environments, which we believe will provide us with a competitive advantage needed to succeed in this highly competitive industry.

Leo Liu: In the future, the growth of our cloud mining customer base will primarily come from increasing our outreach in low penetration countries and regions. Additionally, we aim to attract more users who are interested in Bitcoin mining by offering products that are easier to understand and cater to customers with different risk preferences. We are enabling more people to participate in mining activities in addition to the expansion of customer base, which is increasingly turning to our platform as a trusted and reliable partner in the digital asset space.

Leo Liu: HPC and AI data centers present a compelling growth prospect. We are carefully evaluating potential opportunities given the significant capital expenditures required to enter the market.

Speaker Change: HBC and AI data centers presents a compelling growth prospect.

Leo: We are carefully evaluating potential opportunities, given the significant capital expenditures required, to enter the market. Our focus is on identifying the right strategy and entry point, to ensure that even with the significant cost. We can achieve healthy profit margins. In conclusion, the second quarter of 2024 was another period of strong performance for BitFuFu. We delivered solid financial results, made significant progress in expanding our operational capacity and continued to enhance our efficiency and profitability.

Speaker Change: We are carefully evaluating potential opportunities given the significant capital expenditures required.

Speaker Change: To enter the market.

Leo Liu: Our focus is on identifying the right strategy and entry point to ensure that even with the significant costs, we can achieve healthy profit margins.

Speaker Change: Our focus is on identifying the right strategy and the entry point.

Speaker Change: To ensure that even with the significant costs, we can achieve healthy profit margins.

Leo Liu: In conclusion, the second quarter of 2024 was another period of strong performance for Bitfufu. We delivered solid financial results, made significant progress in expanding our operational capacity, and continued to enhance our efficiency and profitability.

Speaker Change: In conclusion, the second quarter of 2024 was another period of strong performance for bit fufu.

Leo Liu: The strength of our customer relationships is reflected in our net dollar retention rate, which stood at 103% for the quarter. This metric highlights the loyalty of our customers and their ongoing engagement with our platform. As our cloud mining platform continues to scale with an expanding user base, we are increasingly positioned to unlock new opportunities within the digital currency ecosystem.

Speaker Change: We delivered solid financial results made significant progress in expanding our operational capacity and continued to enhance our efficiency and profitability as.

Leo Liu: As we move forward, we remain focused on executing our growth strategy, optimizing our operations, and delivering long-term value to our shareholders.

Leo: As we move forward, we remain focused on executing our growth strategy, optimizing our operations, and delivering long-term value to our shareholders, with that. I'll now turn the call over to our CFO, Kala, who will provide a more detailed review of our financial results. Kala?

Speaker Change: As we move forward, we remain focused on executing our growth strategy optimizing our operations.

Leo Liu: This growth enables us to strategically explore and introduce additional products and services that can diversify and strengthen our revenue streams. We are actively evaluating potential avenues to enhance our offerings and drive long-term value for our shareholders.

Speaker Change: And delivering long term value to our shareholders.

Leo Liu: With that, I'll now turn the call over to our CFO, Kala, who will provide a more detailed review of our financial results.

Speaker Change: With that I will.

Karla: I'll now turn the call over to our CFO Karla will.

Leo Liu: We are actively evaluating potential avenues to enhance our offerings and drive long-term value for our shareholders.

Karla Will: We will provide a more detailed review of our financial results Calla.

Leo Liu: Kala?

Kalazou: Thank you, Leo. We continue to see strong growth across our key metrics, reflecting the successful execution of our strategy and the increasing demand for our services. Starting with our top line, total revenue for the quarter was $129.4 million, representing a 69.7% increase from $76.3 million in the same period of 2023. This strong performance was driven by growth in both our cloud mining solutions and our self-mining operations. Our ability to allocate hash rate between cloud mining and self-mining allows us to mitigate the impact of Bitcoin price volatility. Cloud mining revenue of $77 million in the second quarter was up 66.8% year over year.

Karla Will: Thank you Leo.

Kala: Thank you, Leo. We continue to see strong growth across our key metrics, reflecting the successful execution of our strategy and the increasing demand for our services. Starting with our top line, total revenue for the quarter was $129.4 million, representing a 69.7% increase from $76.3 million in the same period of 2023. This strong performance was driven by growth in both our cloud mining solutions and our self-mining operations. Our ability to allocate hash rate between cloud mining and self-mining allows us to mitigate the impact of Bitcoin price volatility, cloud mining revenue of 77 million dollars in the second quarter was up 66.8% here over here. This growth was primarily driven by the continued expansion of our user base, as well as strong repeat business from existing customers.

Karla Will: We continue to see strong growth across our key metrics, reflecting the successful execution of our strategy and increasing demand for our services.

Leo Liu: Moving on to our self-mining operations, we also saw substantial growth in this area, with revenue increasing 81% year-over-year to $51.1 million. This increase was largely driven by a significant rise in the average price of Bitcoin and the expansion of our mining capacity. Partially offset by increased blockchain difficulty and the recent having event.

Kala Azau: Thank you, Leo.

Kala: In fact, recurring revenue from customers who were active in the same period last year accounted for $47.4 million, or approximately 62% of our cloud mining revenue. The addition of new customers contributed $29.3 million or 38% to our cloud mining revenue, underscoring the effectiveness of our marketing and customer acquisition efforts. Turning to our self-mining operations, revenue for the quarter was $51.1 million, an 81% increase compared to the second quarter of 2023. This growth was largely driven by a 135% year-over-year increase in the average price of Bitcoin, which had a significant positive impact on our revenue.

Karla Will: Starting with our top line total revenue for the quarter was $129 4 million, representing a 69, 7% increase from $76 $3 million in the same period of 2023.

Kala: However, it's important to note that this was partially offset by a decrease in Bitcoin production, which fell by approximately 23% to 780 Bitcoins. The decrease in production was primarily due to the increase in blockchain difficulty and the halving event in April 2024, which reduced the block rewards for miners. As of June 30, 2024, total mining capacity under management was 24.7 Exahash, among which 22.1 Exahash were from lease miners, 2.1 Exahash were from our cell phone miners, and 0.5 Exahash were from customer-hosted miners.

Kala Azau: We continue to see strong growth across our key metrics, reflecting the successful execution of our strategy and the increasing demand for our services. Starting with our top line, total revenue for the quarter was $129.4 million, representing a 69.7% increase from $76.3 million in the same period of 2023. This strong performance was driven by growth in both our cloud mining solutions and our self-mining operations. This growth was primarily driven by the continued expansion of our user base, as well as strong repeat business from existing customers.

Kala: In second quarter 2024, 64% of the average daily mining capacity was used for our cloud mining solutions, with the remaining 36% used for self-mining operations, as a percentage of total revenue during the second quarter of 2024, cloud mining solutions accounted for approximately 60%. Bitcoin self-mining operations accounted for just under 39%, and hosting services accounted for 1%. Now, let's take a closer look at our coffee.

Karla Will: This strong performance was driven by growth in both our cloud mining solutions and our self mining operations.

Kala: The cost of revenue for the second quarter was $118.4 million including depreciation and amortization of $6.1 million, representing an increase of 74.2 percent from $68 million in the same period of 2023. This increase was in line with the expansion of our cloud mining and self-mining operations as we scaled up our activities to meet growing demand. The increase in costs was also driven by higher electricity and hosting fees which are directly correlated with the scale of our operation.

Karla Will: Our ability to allocate hash rate between cloud mining and self mining allows us to mitigate the impact of bitcoin price volatility.

Leo Liu: It's important to note that while our Bitcoin production from self mining operations decreased by 23% to 780 Bitcoins. This was an anticipated outcome due to the impact of halving.

Leo Liu: It's important to note that while our Bitcoin production from self mining operations decreased by 23% to 780 Bitcoins. This was an anticipated outcome due to the impact of halving. That was already factored into our internal forecasts and long-term strategy. We recognize that following the April halving event, investors may be focused on operational performance and profitability post- halving. Mining companies including our competitors. Faced the impact of reduced mining rewards and the recent Bitcoin price decline.

Kala: Our gross profit margin was 8.5%, decreased from 11% in the same period of 2023, which was primarily attributable to the combined effect of growth in Bitcoin price and decline in Bitcoin production. Sales and marketing expenses for the quarter were $0.6 million, compared to $0.4 million in the same period of 2023. This increase reflects our ongoing investment in advertising and promotional activities to support the growth of our cloud mining user base. However, despite the increase in absolute terms, sales and marketing expenses as a percentage of cloud mining revenue remained stable at 0.8%, demonstrating our ability to scale efficiently.

Karla Will: Cloud mining revenue.

Karla Will: Of $77 million in the second quarter.

Was up 66, 8% year over year.

Leo Liu: That was already factored into our internal forecasts and long-term strategy.

Kalazou: This growth was primarily driven by the continued expansion of our user base, as well as strong repeat business from existing customers. In fact, recurring revenue from customers who were active in the same period last year. Accounted for $47.4 million or approximately 62% of our cloud mining revenue. The addition of new customers contributed $29.3 million, or 38%, to our cloud mining revenue, underscoring the effectiveness of our marketing and customer acquisition efforts.

Karla Will: This growth was primarily driven by the continued expansion of our user base.

Leo Liu: We recognize that following the April halving event, investors may be focused on operational performance and profitability post- halving.

Karla Will: Well as strong repeat business from existing customers.

Kala Azau: In fact, recurring revenue from customers who were active in the same period last year accounted for $47.4 million or approximately 62% of our cloud mining revenue.

Karla Will: In fact recurring revenue from customers, who are active in the same period last year accounted for 47 $4 million or approximately 62% of our cloud mining revenue.

Leo Liu: Mining companies including our competitors.

Leo Liu: Faced the impact of reduced mining rewards and the recent Bitcoin price decline.

Kala Azau: The addition of new customers contributed $29.3 million or 38% to our cloud mining revenue, underscoring the effectiveness of our marketing and customer acquisition efforts.

Leo Liu: Should the price of Bitcoin remain at the current level without increasing? Profit margins in the mining space will be significantly pressured in response. We have implemented several measures to reduce costs and improve profit margins. First, technological leadership has always been a competitive advantage for BitFuFu. Since April we have applied technology to overclock the hash rate of our ASIC mining machines. For air cooled machines, overclocking can increase computing power by 10% to 30% over the theoretical mining capacity of a mining machine.

Karla Will: The addition of new customers contributed $29 $3 million or 38% to our cloud mining revenue underscoring the effectiveness of our marketing and customer acquisition efforts.

Kala Azau: Turning to our self mining operations, revenue for the quarter was $51.1 million, an 81% increase compared to the second quarter of 2023. This growth was largely driven by a 135% year over year increase in the average price of Bitcoin, which had a significant positive impact on our revenue. However, it's important to note that this was partially offset by a decrease in Bitcoin production, which fell by approximately 23% to 780 Bitcoins. The decrease in production was primarily due to the increase in blockchain difficulty and the halving event in April 2024, which reduced the block rewards for miners.

Kalazou: Turning to our self mining operations, revenue for the quarter was $51.1 million, an 81% increase compared to the second quarter of 2023. This growth was largely driven by a 135% year-over-year increase in the average price of Bitcoin. Which had a significant positive impact on our revenue. However, it's important to note that this was partially offset by a decrease in Bitcoin production, which fell by approximately 23% to 780 bitcoins. The decrease in production was primarily due to the increase in blockchain difficulty and the halving event in April 2024, which reduced the block rewards for miners. As of June 30th, 2024, total mining capacity on the management was 24.7 ex-a-hash, among which 22.1 ex-a-hash were from least miners.

Karla Will: Turning to our self mining operations.

Leo Liu: First, technological leadership has always been a competitive advantage for BitFuFu. Since April we have applied technology to overclock the hash rate of our ASIC mining machines. For air cooled machines, overclocking can increase computing power by 10% to 30% over the theoretical mining capacity of a mining machine. Importantly, it is worth noting that we have the ability to provide this technical service to other miners and charge a portion of the mining output. As technical service income, which could be a future source of revenue for us.

Karla Will: Revenue for the quarter was 51 $1 million and 81% increase compared to the second quarter of 2023. This growth was largely driven by a 135% year over year increase in the average price of bitcoin.

Karla Will: Which had a significant positive impact on our revenue.

Karla Will: However, it's important to note that this was partially offset by a decrease in bitcoin production, which fell by approximately 23% to 780 <unk> coins.

Leo Liu: Importantly, it is worth noting that we have the ability to provide this technical service to other miners and charge a portion of the mining output. As technical service income, which could be a future source of revenue for us. Second, the mining facility management system we developed has helped us improve the management efficiency of our self-all mining machines and least mining machines, as well as that of our partners. Currently, this software is being used to manage approximately 400,000 machines and has the ability to scale significantly higher.

Karla Will: The decrease in production was primarily due to the increase in blockchain difficulty and having event in April 2024.

Karla Will: Which reduced the block rewards for minus.

Kala Azau: As of June 30, 2024, total mining capacity under management was 24.7 Exahash, among which 22.1 Exahash were from leased miners, 2.1 Exahash were from our cell phone miners, and 0.5% Exahash were from customer hosted miners.

Karla Will: As of June 32024, total mining capacity under management was $24 seven excess cash.

Speaker Change: <unk> reached 22.1 extra hash were from leaf miners to one extra has were from our cell phone miners and 0.5% extra hash were from customer hosted miners.

Kalazou: 2.1 ex-a-hash were from our cell phone miners, and 0.5% ex-a-hash were from customer hosted miners. In second quarter 2024, 64% of the average daily mining capacity was used for our cloud mining solutions, with the remaining 36% used for self-mining operations. As a percentage of total revenue during the second quarter of 2024, cloud mining solutions accounted for approximately 60%. Bitcoin self mining operations accounted for just under 39%, and hosting services accounted for 1%.

Kala Azau: In second quarter 2024, 64% of the average daily mining capacity was used for our cloud mining solutions, with the remaining 36% used for self mining operations. As a percentage of total revenue during the second quarter of 2024, cloud mining solutions accounted for approximately 60%, Bitcoin self mining operations accounted for just under 39%, and hosting services accounted for 1%.

Speaker Change: In second quarter 2024, 64% of the average daily mining capacity was used for cloud mining solutions with the remaining 36% is first self mining operations.

Leo Liu: Third, we have strategically adjusted the operating mode of our mining machines in certain facilities where electricity and hosting fees are higher. This adjustment has allowed us to enhance fleet efficiency and reduce electricity costs. While this decision did lead to a temporary reduction in the operating mining capacity of these machines, it resulted in an improvement in their gross profit margin.

Speaker Change: As a percentage of total revenue during the second quarter of 2024.

Speaker Change: Cloud mining solutions accounted for approximately 60%.

Speaker Change: <unk> self mining operations accounted for just under 39% and hosting services accounted for 1%.

Kalazou: Now, let's take a closer look at our costs. The cost of revenue for the second quarter was 118.4 million dollars, including depreciation and amortization of $6.1 million. Representing an increase of 74.2% from $68 million in the same period of 2023. This increase was in line with the expansion of our cloud mining and self mining operations as we scaled up our activities to meet growing demand. The increase in cost was also driven by higher electricity and hosting fees, which are directly correlated with the scale of our operations. Our growth profit margin was 8.5%, decreased from 11% in the same period of 2023, which was primarily attributable to the combined effect of growth in Bitcoin price and decline in Bitcoin production.

Kala Azau: Now, let's take a closer look at our costs. The cost of revenue for the second quarter was $118.4 million including depreciation and amortization of $6.1 million, representing an increase of 74.2% from $68 million in the same period of 2023. This increase was in line with the expansion of our cloud mining and self mining operations as we scaled up our activities to meet growing demand.

Speaker Change: Now, let's take a closer look at our costs.

Speaker Change: Cost of revenue for the second quarter was $118 $4 million, including depreciation and amortization of $6 $1 million, representing an increase of 74.2% from $68 million in the same period of.

Leo Liu: This allows us to adjust costs in line with Bitcoin price fluctuation. Producing expenses and ensuring profitability during periods of lower Bitcoin prices. Additionally, we are actively exploring mining facilities globally that offer lower electricity costs and are confident that we will soon finalize some agreements. Finally, given our long-term bullish outlook on Bitcoin, we are taking advantage of the current downturn in Bitcoin pricing to secure lower costs. Long-term computing power. Specifically, we intend to sign a two-year purchase agreement for computing capacity, enabling us to lock in a portion of our mining costs over the next two years.

Leo Liu: Additionally, we are actively exploring mining facilities globally that offer lower electricity costs and are confident that we will soon finalize some agreements.

Speaker Change: 2023. This increase was in line with the expansion of our cloud mining and self mining operations as we scaled up our activities to meet growing demand.

Leo Liu: Finally, given our long-term bullish outlook on Bitcoin, we are taking advantage of the current downturn in Bitcoin pricing to secure lower costs.

Speaker Change: The increase in cost was also driven by higher electricity and hosting fees, which are directly correlated with the scale of our operations.

Speaker Change: Our gross profit margin was eight 5% decreased from 11% in the same period of 2023.

Speaker Change: Which was primarily attributable to the combined effect of growth in bitcoin price and decline in bitcoin production.

Kalazou: Sales and marketing expenses for the quarter were $0.6 million, compared to $0.4 million in the same period of 2023. This increase reflects our ongoing investment in advertising and promotional activities to support the growth of our cloud mining user base. However, despite the increase in absolute terms, sales and marketing expenses as a percentage of cloud mining revenue remained stable at 0.8%, demonstrating our ability to scale efficiently. General and administrative expenses rose to $1.4 million from $0.6 million in the same period last year. The increase in G&A expenses was driven by a $0.5 million rise in legal and consulting fees associated with our business expansion, as well as a $0.3 million increase in staff costs and other expenses related to being a public company as a result of our listing on NASDAQ in March 2024.

Leo Liu: In terms of our operational metrics, our total mining capacity undermanagement grew by 63% to 24.7xAH as of June 30th, 2024. Compared to the second quarter of 2023, this significant expansion is a clear indication of our ongoing commitment to scaling our operations and enhancing our market presence. Similarly, our hosting capacity increased year-over-year by 40% to 522 megawatt, underscoring our position as a leading player in the digital asset mining industry. On a sequential basis, total mining capacity undermanagement and hosting capacity declined from the first quarter of 2024.

Kala Azau: Sales and marketing expenses for the quarter were $0.6 million, compared to $0.4 million, in the same period of 2023. This increase reflects our ongoing investment in advertising and promotional activities, to support the growth of our cloud mining user base.

Speaker Change: Sales and marketing expenses for the quarter were zero point $6 million compared.

Speaker Change: Compared to point $4 million in the same period of 2023.

Speaker Change: This increase reflects our ongoing investment in advertising and promotional activities to.

Support the growth of our cloud mining user base.

Kala Azau: However, despite the increase in absolute terms, sales and marketing expenses as a percentage, of cloud mining revenue remained stable at 0.8%, demonstrating our ability to scale efficiently.

Speaker Change: However, despite the increase in absolute terms sales and marketing expenses as a percentage of cloud mining revenue remained stable at 0.8% demonstrating our ability to scale efficiently.

Leo Liu: Similarly, our hosting capacity increased year-over-year by 40% to 522 megawatt, underscoring our position as a leading player in the digital asset mining industry.

Kala: General and administrative expenses rose to $1.4 million from $0.6 million in the same period last year. The increase in G&A expenses was driven by a $0.5 million rise in legal and consulting fees associated with our business expansion, as well as a $0.3 million increase in staff costs and other expenses related to being a public company as a result of our listing on Nasdaq in March 2024. Research and development expenses were roughly flat at $0.3 million for the quarter, consistent with the same period of 2023.

Kala Azau: General and administrative expenses rose to $1.4 million from $0.6 million in the same, period last year. The increase in G&A expenses was driven by a $0.5 million rise in legal and consulting, fees associated with our business expansion, as well as a $0.3 million increase in staff costs and other expenses related to being a public company as a result of our listing on NASDAQ in March 2024.

Speaker Change: General and administrative expenses rose to $1.4 million from zero point $6 million in the same period last year.

Speaker Change: The increase in G&A expenses was driven by zero point $5 million rise in legal and consulting fees associated with our business expansion.

Leo Liu: On a sequential basis, total mining capacity undermanagement and hosting capacity declined from the first quarter of 2024. This temporary decline was the result of our deliberate decision to decrease our leasing of mining machines and purchasing of computing power in order to minimize the uncertain impacts. Following the Bitcoin halving, this approach is consistent with the strategy we employed in the second and third quarters of 2023, where a similar temporary reduction in our mining capacity undermanagement was followed by a recovery and growth in the fourth quarter.

Speaker Change: As well as a zero point $3 million increase in staff costs and other expenses related to being a public company as a result of our listing on NASDAQ in March 2024.

Leo Liu: This temporary decline was the result of our deliberate decision to decrease our leasing of mining machines and purchasing of computing power in order to minimize the uncertain impacts. Following the Bitcoin halving, this approach is consistent with the strategy we employed in the second and third quarters of 2023, where a similar temporary reduction in our mining capacity undermanagement was followed by a recovery and growth in the fourth quarter. One of the key highlights of the quarter was the continued improvement in our fleet efficiency.

Kalazou: Research and development expenses were roughly flat at $0.3 million for the quarter, consistent with the same period of 2023. We continue to invest in innovation and technology development to enhance our mining operations and maintain our competitive edge in the market.

Kala Azau: Research and development expenses were roughly flat at $0.3 million for the quarter, consistent, with the same period of 2023. We continue to invest in innovation and technology development to enhance our mining operations, and maintain our competitive edge in the market.

Speaker Change: Research and development expenses were roughly flat at <unk> $3 million for the quarter.

Speaker Change: Consistent with the same period of 2023.

Kala: We continue to invest in innovation and technology development to enhance our mining operations and maintain our competitive edge in the market. During the quarter, we also recognized a non-cash fair value loss on Bitcoin of $16.4 million following the early adoption of FASB fair value accounting rules. This loss reflects the unfavorable mark-to-market adjustment of Bitcoin prices in the second quarter. We also recognize the gain of $9.9 million on the sale of digital assets, compared to $2.9 million in the second quarter of 2023.

Speaker Change: We continue to invest in innovation and technology development to enhance our mining operations and maintain our competitive edge in the market.

Kalazou: During the quarter, we also recognized a non-cash fair value loss on Bitcoin of $16.4 million, following the early adoption of SESB fair value accounting rules. This loss reflects the unfavorable mark to market adjustment of Bitcoin prices in the second quarter. We also recognized a gain of $9.9 million on the sale of digital assets compared to $2.9 million in the second quarter of 2023. This increase was driven by the higher volume of Bitcoin sold during the quarter, as well as a favorable spot rate when the Bitcoins were sold. Similar to previous quarters, we continue to sell part of mine Bitcoins to cover our electricity and hosting costs, but unlike previous quarters, in which we sold Bitcoin consistently on a daily basis.

Kala Azau: During the quarter, we also recognized a non-cash fair value loss on Bitcoin of $16.4 million, following the early adoption of SESB fair value accounting rules. This loss reflects the unfavorable mark-to-market adjustment of Bitcoin prices in the second, quarter. We also recognized a gain of $9.9 million on the sale of digital assets, compared to, $2.9 million in the second quarter of 2023. This increase was driven by the higher volume of Bitcoin sold during the quarter, as well, as a favorable spot rate when the Bitcoins were sold.

Speaker Change: During the quarter. We also recognized a noncash fair value loss on bitcoin of $16 $4 million. Following the early adoption of SaaS ESP fair value accounting rules.

Leo Liu: One of the key highlights of the quarter was the continued improvement in our fleet efficiency. For the eighth consecutive quarter, we made strides in optimizing our operations with our average fleet efficiency reaching 21.1 Joules per tear hash. This improvement is a direct result of our ongoing investments in technology and our continuous focus on operational excellence by steadily enhancing the efficiency of our mining fleet. We are able to reduce our cost per unit of Bitcoin mind, which in turn supports our profitability and long-term sustainability.

Leo Liu: For the eighth consecutive quarter, we made strides in optimizing our operations with our average fleet efficiency reaching 21.1 Joules per tear hash. This improvement is a direct result of our ongoing investments in technology and our continuous focus on operational excellence by steadily enhancing the efficiency of our mining fleet. We are able to reduce our cost per unit of Bitcoin mind, which in turn supports our profitability and long-term sustainability. As we look ahead to the next six to 12 months, we remain confident in our ability to continue growing our mining and hosting capacity.

Speaker Change: This loss reflects the unfavorable mark to market adjustment of bitcoin prices in the second quarter.

Speaker Change: We also recognized a gain of $9 $9 million on the sale of digital assets compared to $2 $9 million in the second quarter of 2023.

Leo Liu: However, similar to our approach in the second quarter, any decisions regarding additional mining capacity will be driven by our profitability forecast.

Kala: This increase was driven by the higher volume of bitcoins sold during the quarter as well as a favorable spot rate when the bitcoins were sold. Similar to previous quarters, we continue to sell part-of-mine bitcoins to cover our electricity and hosting costs, but unlike previous quarters in which we sold bitcoin consistently on a daily basis, in the second quarter our sophisticated quantitative trading team strategically sold relatively more bitcoins at a price of around $70,000 to cover our near-term hosting costs.

Speaker Change: This increase was driven by the higher volume of bitcoin, so during the quarter as well as a favorable spot rate when the bitcoins were sold.

Kala Azau: Similar to previous quarters, we continue to sell part-of-mine Bitcoins to cover our, electricity and hosting costs, but unlike previous quarters in which we sold Bitcoin consistently on a daily basis, in the second quarter our sophisticated quantitative trading team strategically sold relatively more Bitcoins at a price of around $70,000 to cover our near-term hosting costs.

Speaker Change: Similar to previous quarters, we continue to sell part of mine bitcoin to cover our electricity in hosting costs, but unlike previous quarters in which we sold bitcoin consistently on a daily basis in the second quarter, our sophisticated quantitative trading team strategically sold relatively more bit coins at a price of around 70.

Leo Liu: As we look ahead to the next six to 12 months, we remain confident in our ability to continue growing our mining and hosting capacity.

Kalazou: In the second quarter, our sophisticated quantitative trading team strategically sold relatively more Bitcoins at a price of around $70,000 to cover our near-term hosting costs.

Leo Liu: However, similar to our approach in the second quarter, any decisions regarding additional mining capacity will be driven by our profitability forecast.

Speaker Change: $1000 to cover our near term hosting costs.

Kala: Our business models inherent flexibility whether by increasing or reducing purchases of computing power matching short-term and long-term procurements or optimizing the mix between cloud mining and self-mining computing power enables us to sustain growth and profitability in a complex and volatile market environment That said, considering that total revenue of $274 million in the first half of 2024 nearly matches our full year revenue for 2023 and with combined Q1 and Q2 adjusted EBITDA reaching $58 million We expect substantial growth in both revenue and adjusted EBITDA in 2024 compared to 2023 Our strategy of acquiring or building our own mining farms is progressing well and we believe this will be a key driver of our future growth We are currently evaluating several opportunities in regions with favorable energy costs and regulatory environments which we believe will provide us with the competitive advantage needed to succeed in this highly competitive industry HPC and AI data centers present a compelling growth prospect We are carefully evaluating potential opportunities given the significant capital expenditures required to enter the market Our focus is on identifying the right strategy and entry point to ensure that even with the significant costs we can achieve healthy profit margins In conclusion, the second quarter of 2024 was another period of strong performance for BitFuFu We delivered solid financial results, made significant progress in expanding our operational capacity and continued to enhance our efficiency and profitability As we move forward, we remain focused on executing our growth strategy, optimizing our operations and delivering long-term value to our shareholders With that, I'll now turn the call over to our CFO, Kala, who will provide a more detailed review of our financial results Kala?

Leo Liu: Our business models inherent flexibility whether by increasing or reducing purchases of computing power matching short-term and long-term procurements or optimizing the mix between cloud mining and self-mining computing power enables us to sustain growth and profitability in a complex and volatile market environment That said, considering that total revenue of $274 million in the first half of 2024 nearly matches our full year revenue for 2023 and with combined Q1 and Q2 adjusted EBITDA reaching $58 million We expect substantial growth in both revenue and adjusted EBITDA in 2024 compared to 2023 Our strategy of acquiring or building our own mining farms is progressing well and we believe this will be a key driver of our future growth We are currently evaluating several opportunities in regions with favorable energy costs and regulatory environments which we believe will provide us with the competitive advantage needed to succeed in this highly competitive industry HPC and AI data centers present a compelling growth prospect We are carefully evaluating potential opportunities given the significant capital expenditures required to enter the market Our focus is on identifying the right strategy and entry point to ensure that even with the significant costs we can achieve healthy profit margins In conclusion, the second quarter of 2024 was another period of strong performance for BitFuFu We delivered solid financial results, made significant progress in expanding our operational capacity and continued to enhance our efficiency and profitability As we move forward, we remain focused on executing our growth strategy, optimizing our operations and delivering long-term value to our shareholders With that, I'll now turn the call over to our CFO, Kala, who will provide a more detailed review of our financial results Kala?

Kalazou: Net income for the second quarter was $1.3 million compared to $5.1 million in the same period of 2023. Earnings per share were one cent down from three cents in the second quarter of last year. The decline in net income was primarily due to the non-cash fair value loss on Bitcoin. Adjusted EBDA for the quarter was $8.3 million compared to $13.8 million in the same period of 2023, largely driven by the fair value loss on Bitcoin.

Kala: Net income for the second quarter was $1.3 million compared to $5.1 million in the same period of 2023. Earnings per share were $0.01, down from $0.03 in the second quarter of last year. The decline in net income was primarily due to the non-cash fair value loss on Bitcoin. Adjusted EBITDA for the quarter was $8.3 million compared to $13.8 million in the same period of 2023, largely driven by the fair value loss on Bitcoin.

Kala Azau: Net income for the second quarter was $1.3 million, compared to $5.1 million in the same, period of 2023.

Net income for the second quarter was $1 3 million compared to $5 $1 million in the same period of 2023.

Kala Azau: Earnings per share were $0.01, down from $0.03 in the second quarter of last year.

Speaker Change: Earnings per share were <unk> <unk> down from three <unk> in the second quarter of last year the.

Speaker Change: The decline in net income was primarily due to the noncash fair value loss on bitcoin.

Speaker Change: Adjusted EBITDA for the quarter was $8 $3 million compared to $13 8 million in the same period of 2023, largely driven by the fair value loss on bitcoin.

Kala Azau: Turning to the balance sheet, as of June 30, 2024, we had cash and cash equivalents of $48.4 million, and digital assets totaling $106.6 million up from $32 million and $44 million, respectively as of December 31, 2023. This increase was largely due to the funds raised in connection with our business combination and NASDAQ listing, as well as the Bitcoin mined and received from our operations in the first half of the year.

Kalazou: Turning to the balance sheets as of June 30, 2024, we had cash and cash equivalence of $48.4 million and digital assets totaling $106.6 million, up from $32 million and $44 million, respectively, as of December 31, 2023. This increase was largely due to the funds raised in connection with our business combination and NASDAQ listing, as well as a Bitcoin mind and received from our operations in the first half of the year. Our strong liquidity position provides us with the financial flexibility to pursue growth opportunities and navigate market volatility.

Kala: Turning to the balance sheet, as of June 30, 2024, we had cash and cash equivalents of $48.4 million, and digital assets totaling $106.6 million, up from $32 million and $44 million respectively as of December 31, 2023. This increase was largely due to the funds raised in connection with our business combination and NASDAQ listing, as well as a Bitcoin mined and received from our operations in the first half of the year.

Speaker Change: Turning to the balance sheet as of June 32024.

Speaker Change: Had cash and cash equivalents of $48 4 million and digital assets totaling $106 6 million up from $32 million and $44 million risk.

Speaker Change: Respectively as of December 31, 2023.

Speaker Change: This increase was largely due to the funds raised in connection with our business combination and NASDAQ listing.

Speaker Change: Well as a bitcoin mind and we see from our operations in the first half of the year.

Kala Azau: Our strong liquidity position provides us with the financial flexibility to pursue growth opportunities and navigate market volatility.

Leo: Our strong liquidity position provides us with the financial flexibility to pursue growth opportunities and navigate market volatility. Now I will turn the call back over to Leo for some closing remarks. Thanks, Kala, to sum up. BitFuFu had a strong second quarter and is well positioned for continued growth in the second half of 2024. We remain focused on our strategy to increase our mining capacity while also improving fleet efficiency to grow revenue and profitability and drive long-term shareholder value.

Speaker Change: Our strong liquidity position provides us with the financial flexibility to pursue growth opportunities and navigate market volatility.

Leo Liu: Now I will turn the call back over to Leo for some closing remarks. Thanks, Kala, to Sama. BitFuFu had a strong second quarter and is well positioned for continued growth in the second half of 2024. We remain focused on our strategy to increase our mining capacity while also improving fleet efficiency to grow revenue and profitability and drive long-term shareholder value.

Kala Azau: Now I will turn the call back over to Leo for some closing remarks.

Speaker Change: Now I will turn the call back over to Leo for some closing remarks.

Leo Liu: Thanks, Kala, to sum up.

Leo: Thanks Kayla.

Leo: To sum up.

Leo Liu: BitFuFu had a strong second quarter and is well positioned for continued growth in the second half of 2024.

Leo: Painful had a strong second quarter and is well positioned for continued growth in the second half of 2024.

Leo Liu: We remain focused on our strategy to increase our mining capacity while also improving fleet efficiency to grow revenue and profitability and drive long-term shareholder value.

Leo: We remain focused on our strategy to increase our mining capacity, while also improving fleet efficiency to grow revenue and profitability and drive long term shareholder value.

Leo Liu: Thanks for joining us today.

Leo Liu: Thanks for joining us today. We look forward to updating you with our third quarter results in November. Thank you.

Operator: Thanks for joining us today. We look forward to updating you with our third quarter results in November. Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.

Thanks for joining us today.

Leo Liu: We look forward to updating you with our third quarter results in November.

Leo Liu: Thank you.

Leo: We look forward to updating you with our third quarter results in November thank.

Speaker Change: Thank you.

Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.

Operator: This concludes today's conference call.

Speaker Change: This concludes today's conference call. Thank you for participating you may now disconnect.

Speaker Change: Yeah.

[music].

Speaker Change: Okay.

Speaker Change: [music].

Kala: Thank you Leo We continue to see strong growth across our key metrics reflecting the successful execution of our strategy and the increasing demand for our services Starting with our top line, total revenue for the quarter was $129.4 million, representing a 69.7% increase from $76.3 million in the same period of 2023 This strong performance was driven by growth in both our cloud mining solutions and our self mining operations Our ability to allocate hash rate between cloud mining and self mining allows us to mitigate the impact of Bitcoin price volatility. Cloud mining revenue of $77 million in the second quarter was up 66.8% year over year.

Kalazou: Thank you Leo We continue to see strong growth across our key metrics reflecting the successful execution of our strategy and the increasing demand for our services Starting with our top line, total revenue for the quarter was $129.4 million, representing a 69.7% increase from $76.3 million in the same period of 2023 This strong performance was driven by growth in both our cloud mining solutions and our self mining operations Our ability to allocate hash rate between cloud mining and self mining allows us to mitigate the impact of Bitcoin price volatility. Cloud mining revenue of $77 million in the second quarter was up 66.8% year over year.

Kala: This growth was primarily driven by the continued expansion of our user base as well as strong repeat business from existing customers. In fact, recurring revenue from customers who were active in the same period last year. Accounted for $47.4 million or approximately 62% of our cloud mining revenue.

Kalazou: This growth was primarily driven by the continued expansion of our user base as well as strong repeat business from existing customers. In fact, recurring revenue from customers who were active in the same period last year. Accounted for $47.4 million or approximately 62% of our cloud mining revenue. The addition of new customers contributed $29.3 million or 38% to our cloud mining revenue underscoring the effectiveness of our marketing and customer acquisition efforts.

Kala: The addition of new customers contributed $29.3 million or 38% to our cloud mining revenue underscoring the effectiveness of our marketing and customer acquisition efforts.

Kala: Turning to our self mining operations revenue for the quarter was $51.1 million and 81% increase compared to the second quarter of 2023. This growth was largely driven by a 135% year over year increase in the average price of Bitcoin. Which had a significant positive impact on our revenue. However, it's important to note that this was partially offset by a decrease in Bitcoin production, which fell by approximately 23% to 780 Bitcoins. The decrease in production was primarily due to the increase in blockchain difficulty and the halving event in April 2024, which reduced the block rewards for miners.

Kalazou: Turning to our self mining operations revenue for the quarter was $51.1 million and 81% increase compared to the second quarter of 2023. This growth was largely driven by a 135% year over year increase in the average price of Bitcoin. Which had a significant positive impact on our revenue. However, it's important to note that this was partially offset by a decrease in Bitcoin production, which fell by approximately 23% to 780 Bitcoins. The decrease in production was primarily due to the increase in blockchain difficulty and the halving event in April 2024, which reduced the block rewards for miners.

Kala: As of June 30th, 2024, total mining capacity on the management was 24.7 ex-a-hash, among which 22.1 ex-a-hash were from least miners. 2.1 ex-a-hash were from our cell phone miners and 0.5% ex-a-hash were from customer hosted miners.

Kalazou: As of June 30th, 2024, total mining capacity on the management was 24.7 ex-a-hash, among which 22.1 ex-a-hash were from least miners. 2.1 ex-a-hash were from our cell phone miners and 0.5% ex-a-hash were from customer hosted miners. In second quarter 2024, 64% of the average daily mining capacity was used for our cloud mining solutions, with the remaining 36% used for self mining operations. As a percentage of total revenue during the second quarter of 2024, cloud mining solutions accounted for approximately 60%. Bitcoin self mining operations accounted for just under 39%, and hosting services accounted for 1%.

Kala: In second quarter 2024, 64% of the average daily mining capacity was used for our cloud mining solutions, with the remaining 36% used for self mining operations. As a percentage of total revenue during the second quarter of 2024, cloud mining solutions accounted for approximately 60%. Bitcoin self mining operations accounted for just under 39%, and hosting services accounted for 1%.

Kala: Now, let's take a closer look at our costs. The cost of revenue for the second quarter was 118.4 million dollars, including depreciation and amortization of $6.1 million.

Kala: Representing an increase of 74.2% from $68 million in the same period of 2023. This increase was in line with the expansion of our cloud mining and self mining operations as we scaled up our activities to meet growing demand. The increase in cost was also driven by higher electricity and hosting fees, which are directly correlated with the scale of our operations.

Kala: Our growth profit margin was 8.5%, decreased from 11% in the same period of 2023, which was primarily attributable to the combined effect of growth in Bitcoin price and decline in Bitcoin production.

Kala: Sales and marketing expenses for the quarter were $0.6 million, compared to $0.4 million in the same period of 2023. This increase reflects our ongoing investment in advertising and promotional activities to support the growth of our cloud mining user base.

Kala: However, despite the increase in absolute terms, sales and marketing expenses as a percentage of cloud mining revenue remained stable at 0.8%, demonstrating our ability to scale efficiently.

Kalazou: General and administrative expenses rose to $1.4 million from $0.6 million in the same period last year. The increase in G&A expenses was driven by a $0.5 million rise in legal and consulting fees associated with our business expansion, as well as a $0.3 million increase in staff costs and other expenses related to being a public company as a result of our listing on NASDAQ in March 2024. Research and development expenses were roughly flat at $0.3 million for the quarter, consistent with the same period of 2023. We continue to invest in innovation and technology development to enhance our mining operations and maintain our competitive edge in the market.

Kala: Research and development expenses were roughly flat at $0.3 million for the quarter, consistent with the same period of 2023. We continue to invest in innovation and technology development to enhance our mining operations and maintain our competitive edge in the market.

Kala: During the quarter, we also recognized a non-cash fair value loss on Bitcoin of $16.4 million, following the early adoption of SESB fair value accounting rules. This loss reflects the unfavorable mark to market adjustment of Bitcoin prices in the second quarter. We also recognized a gain of $9.9 million on the sale of digital assets compared to $2.9 million in the second quarter of 2023. This increase was driven by the higher volume of Bitcoin sold during the quarter, as well as a favorable spot rate when the Bitcoins were sold.

Kala: Similar to previous quarters, we continue to sell part of mine Bitcoins to cover our electricity and hosting costs, but unlike previous quarters, in which we sold Bitcoin consistently on a daily basis.

Kalazou: Similar to previous quarters, we continue to sell part of mine Bitcoins to cover our electricity and hosting costs, but unlike previous quarters, in which we sold Bitcoin consistently on a daily basis. In the second quarter, our sophisticated quantitative trading team strategically sold relatively more Bitcoins at a price of around $70,000 to cover our near-term hosting costs.

Kala: In the second quarter, our sophisticated quantitative trading team strategically sold relatively more Bitcoins at a price of around $70,000 to cover our near-term hosting costs.

Kala: Net income for the second quarter was $1.3 million compared to $5.1 million in the same period of 2023.

Kala: Earnings per share were one cent down from three cents in the second quarter of last year. The decline in net income was primarily due to the non-cash fair value loss on Bitcoin. Adjusted EBDA for the quarter was $8.3 million compared to $13.8 million in the same period of 2023, largely driven by the fair value loss on Bitcoin.

Kala: Turning to the balance sheets as of June 30, 2024, we had cash and cash equivalence of $48.4 million and digital assets totaling $106.6 million up from $32 million and $44 million respectively as of December 31, 2023. This increase was largely due to the funds raised in connection with our business combination and NASDAQ listing as well as a Bitcoin mind and received from our operations in the first half of the year.

Kalazou: Turning to the balance sheets as of June 30, 2024, we had cash and cash equivalence of $48.4 million and digital assets totaling $106.6 million up from $32 million and $44 million respectively as of December 31, 2023. This increase was largely due to the funds raised in connection with our business combination and NASDAQ listing as well as a Bitcoin mind and received from our operations in the first half of the year. Our strong liquidity position provides us with the financial flexibility to pursue growth opportunities and navigate market volatility.

Kala: Our strong liquidity position provides us with the financial flexibility to pursue growth opportunities and navigate market volatility.

Leo Liu: Now I will turn the call back over to Leo for some closing remarks.

Leo Liu: Thanks, Kala, to Sama.

Leo Liu: BitFuFu had a strong second quarter and is well positioned for continued growth in the second half of 2024.

Leo Liu: We remain focused on our strategy to increase our mining capacity while also improving fleet efficiency to grow revenue and profitability and drive long-term shareholder value.

Leo Liu: Thanks for joining us today.

Leo Liu: Thanks for joining us today. We look forward to updating you with our third quarter results in November. Thank you.

Leo Liu: We look forward to updating you with our third quarter results in November.

Operator: Thank you.

Operator: This concludes today's conference call.

Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.

Operator: Thank you for participating.

Operator: You may now disconnect.

Q2 2024 BitFuFu Inc Earnings Call

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