Q4 2024 Bit Digital Inc Earnings Call
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Operator: Hello, and welcome to the Bit Digital Fiscal Year 2024 Earnings Conference Call. Good morning, good afternoon, and good evening, depending on where you're joining us from. Thank you for being here. We're just giving a few more moments for attendees to dial in, so thank you for your patience. While we wait, please note that during this call, all participant lines will be in a listen-only mode.
Speaker Change: Hello, and welcome to the Big did you don't fiscal year 2024 earnings Conference call. Good morning, Good afternoon, and good evening, depending on where you are joining us from thank you for being here. We're just giving you a few more moments for tennis Dylans Phil. Thank you for your patience, while we while we wait please note that.
Speaker Change: During this call all participant lines will be in a listen only mode. Following the officers update we will open the floor for a question and answer session. If you have a question at that time simply press star one or telephone keypad.
Operator: Following the officer's update, we'll open the floor for a question and answer session. If you have a question at that time, simply press star 1 on your telephone keypad.
Operator: Also, as a reminder, today's conference is being recorded.
So as a reminder, today's conference is being recorded Oh man now hand, it over to your host Cameron Schnier head of Investor Relations at <unk> digital camera and the floor is yours.
Cameron Schnier: I'll now hand it over to your host, Cameron Schnier, Head of Investor Relations at Bit Digital. Cameron, the floor is yours. Thank you.
Cameron Schnier: Thank you good morning, and welcome to the digital 2024 earnings call joining us on the call today are Sam to Barr, Chief Executive Officer, and Eric long, the Chief Financial Officer.
Cameron Schnier: Good morning and welcome to the Bit Digital 2024 Earnings Call.
Cameron Schnier: Joining us on the call today are Sam Tabar, Chief Executive Officer, and Erke Huang, Chief Financial Officer. Before we begin, I would like to remind all participants that some of the statements we will be making today are forward-looking. These matters involve risks and uncertainties that could cause our results to differ materially from those projected in these statements. I therefore refer you to today's 10K filing and our other SEC filings. Our comments today may also include non-GAAP financial Additional details and reconciliation to the most directly comparable gap financial measures can be found in our 10-K filing, which is on our website.
Cameron Schnier: Before we begin I would like to remind all participants that some of the statements. We will be making today are forward looking these matters involve risks and uncertainties that could cause our results to differ materially from those projected in these statements.
Cameron Schnier: Therefore refer you to today's 10-K filing and our other SEC filings.
Cameron Schnier: Our comments today May also include non-GAAP financial measures.
Cameron Schnier: All details and reconciliation to the most directly comparable GAAP financial measures can be found in our 10-K filing which is on our website.
Cameron Schnier: After our prepared remarks, we'll open the call up for questions. If you'd like to ask a question, please hit star one on your keypad.
Cameron Schnier: After our prepared remarks, we'll open the call up for questions if you'd like to ask a question. Please hit star one on your keypad with that covered I will turn the call over to Sam to discuss our performance.
Cameron Schnier: With that covered, I will turn the call over to Sam to discuss our performance.
Sam Tabar: Thank you, Cam. Ladies and gentlemen, thank you for joining us on the call today. Today, I'll walk through our 2024 results, highlight key milestones from a transformational year and provide insight into the strategic direction of Bit Digital as we scale our HPC operations. 2024 was a fantastic year for Bit Digital. Revenues grew exponentially by 141%. Margins expanded and adjusted to reach $73 million. This was driven by the rapid growth of our HPC business, which started in 2024 with one customer, and by early January of this year, we surpassed 20 customers. HPC revenue made up over 40% of full year revenue and more than half of Q4 revenue.
Sam: Thank you, Ken ladies and gentlemen, thank you for joining us on the call today.
Sam: Today I'll walk through our 2024 results highlight key milestones from a transformational year.
Sam: And provide insight into the strategic direction of digital as we scale, our H P C operations.
Sam: 'twenty 'twenty four was a fantastic year for bed digital.
Sam: Revenues grew exponentially by 141% margins expanded and adjusted EBITDA reached $73 million.
Sam: This was driven by the rapid growth of our H P. C business, which started in 2024 with one customer and by early January of this year, we surpassed 20 customers.
Sam: H P. C revenue made up over 40% of full year revenue and more than half of Q4 revenue.
Sam Tabar: The N of M acquisition was a major leap forward. This acquisition vertically integrated our data center operations, added a strong customer base, and brought in a highly experienced team. This team gives us a huge advantage in scaling our infrastructure business. We also built out our organization. Headcount has been focused on hiring seasoned value creators. All focus either on data center operations or cloud services. These aren't businesses you can just throw capital at. You need the right talent. We now have specialized teams leading both divisions.
Sam: The Edison acquisition was a major leap forward.
Sam: This acquisition vertically integrated our data center operations.
Sam: Added a strong customer base and brought in a highly experienced team.
Sam: This team gives us a huge advantage and scaling our infrastructure business.
Sam: We also built out our organization.
Sam: Headcount has been focused on hiring seasoned value creators.
Sam: All focused either on data center operations or cloud services.
Sam: These are businesses you could just throw capital at.
Sam: You need the right talent.
Sam: We now have specialized teams leading both divisions.
Sam Tabar: We have a lot to cover today. I'll walk through each part of the business.
Sam: We have a lot to cover today.
Sam: I'll walk through each part of the business.
Sam Tabar: Eric will then walk you through the financials before we open the line for questions. First, let's start with our cloud services. As we scale our AI infrastructure, we recently launched WhiteFiber, our new HPC platform that integrates GPU cloud services and data center operations.
Sam: Eric will then walk you through the financials before we open the line for questions.
Sam: First.
Sam: Let's start with our card services business.
Sam: As we scale, our AI infrastructure, we recently launched Wi fiber our U S. P. C platform that integrates GPU cloud services and data center operations.
Sam Tabar: As part of this evolution, we have updated our segment reporting to better reflect our business structure. What was previously referred to as High Performance Computing Services is now categorized under HPC, the umbrella term for our entire white fiber business. Cloud Services represents our GPU cloud platform, while Co-Location Services includes our data center business from Enevum. Cloud services did not exist in 2023, and it became our largest business in terms of revenue generation by the second half of 2024, producing $13 million of revenue in the fourth quarter of 2024. This segment contributed 50% of total revenue in Q4 and 64% of gross profit.
Sam: As part of this evolution, we have updated our segment reporting to better reflect our business structure.
Sam: What was previously referred to as high performance Computing services is now categorized under H P C.
Sam: The umbrella term for our entire white fiber business.
Sam: Cloud services represents our GPU cloud platform.
Sam: While co location services includes our datacenter business from any of them.
Cloud services did not exist in 2023, and it became our largest business in terms of revenue generation by the second half of 'twenty 'twenty four producing $13 million of revenue in the fourth quarter of 'twenty 'twenty four.
Sam: This segment contributed 50% of total revenue in Q4, and 64% of gross profit.
Sam Tabar: Gross profits contracted slightly in Q4 as we added new GPUs and leased additional data center capacity ahead of revenue generation. We viewed this as temporary, as we expect margins to normalize over time. A key factor was GPU leasing expenses, particularly the H100 sale lease back from early 2024, which accounted for 70% of cost of revenue for that segment. That was a unique structure reflecting our risk tolerance at that time. Going forward, as we own more GPUs outright or deploy more traditional financing structures, we expect margins to expand. We currently have nine active customers in our cloud segments of Whitefiber.
Sam: Gross profit contracted slightly in Q4, as we added new Gpus at least additional data center capacity ahead of revenue generation.
Sam: We view this as temporary as we expect margins to normalize overtime.
Sam: A key factor it was GPU leasing expenses, particularly the H 100 sell leaseback from early 'twenty, 'twenty, four which accounted for 70% of cost of revenue for that segment.
Sam: That was a unique structure, reflecting our risk tolerance at that time.
Sam: Going forward as we own more gpus outright or deploy more traditional financing structures, we expect the margins to expand.
We currently have nine active customers in our cloud segments of white fiber.
Sam Tabar: The majority are running single-digit servers with annualized revenue, or ARR, below $1,000,000, but most were won in the past few months. And this aligns with our strategy of onboarding customers and scaling deployments over time. We are happy to start with smaller initial deployments to earn trust, demonstrate performance, and expand contract sizes as the relationships grow. Our cloud services run rate is approximately $62 million. This will increase to around $72 million later this month when the H-200 Contractor's DNA Fund begins generating revenue. Revenue generation on the contract was pushed out by a month as we ensured full reliability before going live.
Sam: The majority are running single digit servers with annualized revenue or a R. R below 1 million, but and but most of them one in the past few months and this aligns with our strategy of Onboarding customers and scaling deployments over time.
Sam: We are happy to start with smaller initial deployments to earn trust demonstrate performance.
Sam: And expand contract sizes asked the relationships grow.
Sam: Our cloud our cloud services run rate is approximately $62 million. This will increase to around $72 million. Later this month when the H 200 contractors DNA fun begins generating revenue.
Sam: When the revenue generation on the contract was pushed out by months as we insured full reliability before going live at.
Sam Tabar: A decision made deliberately to prioritize customer experience and long-term satisfaction. Additionally, we have a $15 million in ARR expected to start at the end of June when we deploy 512 B200 GPUs for our anchor customer. And separately, we received our first 512 B200 GPUs, which are being deployed in Iceland. We expect this cluster to go live in April and plan to offer these GPUs through an on-demand pool via third-party platforms. This would be an interim step as we work internally on developing our own on-demand platform. While we see strong demand for reserved B-200 contracts. We believe on-demand deployment effectively pulls forward revenue and shortens payback periods.
Sam: A decision made deliberately to prioritize customer experience and long term satisfaction.
Sam: Additionally, we have a $15 million in a or are expected to start at the end of June when we deploy 512, B 200, Gpus for our anchor customer.
Sam: And separately, we received our first 512 beat 200, Gpus, which are being deployed in Iceland.
We expect we expect this cluster to go live in April and plan to offer these gpus through an on demand pool by a third party platform.
This would be an interim step as we internally as we work internally on developing our own on demand platform.
Sam: While we see strong demand for reserved B 200 contracts.
Sam: We believe all independent on demand deployment effectively pulls forward revenue and source, hence payback periods.
Sam Tabar: Based on current market dynamics, this cluster could generate approximately $25 million in additional ARR. We also have about 113 H200 servers, or 908 GPUs. currently being configured, and we are evaluating reserve contract options for those units. Illustratively, at $2 per hour, that is another $16 million in ARR once contracted. Overall, our customer pipeline remains strong and dynamic. Demands for B200s is surging. Also, since DeepSeek, we've seen renewed enthusiasm for H100s and H200s because one can do less with more. Or rather, one can do more with less. We're consistently engaging new prospective customers and demand continues to outstrip supply.
Sam: Based on current market dynamics, this cluster could generate approximately $25 million and additional a R. R.
Sam: We also have about 113, H 200 servers or 900 900 H P is.
Sam: Currently being configured and we are evaluating reserve contract options for those units.
Illustrative Lee at $2 per hour that is another $16 million in a R. R. Once contracted.
Sam: Overall, our customer pipeline remains strong and dynamic.
Sam: Demands for Btu hundreds is surging.
Also since keepsake since deed each we've seen renewed enthusiasm for H, one hundreds and H 200, because one can do less with more.
Sam: What I can do more with less.
Sam: We're consistently engaging new prospective customers and demand continues to outstrip supply.
Sam Tabar: While we see significant growth opportunities, we are taking a disciplined approach to GPU procurement. Carefully Managing Capital Deployment to Avoid Excess Inventory Risk. Our focus is on growing at a pace that aligns with customer trust. Ensuring that as relationships deepen, we scale deployments accordingly. We've also invested in top-tier technical talent to build a robust, software-driven infrastructure that enhances performance, reliability, and scalability. Customers don't just need access to GPUs. They need a trusted, high-performance platform that ensures seamless deployment and maximal performance. Our investment in this technology layer to deliver just that is a key differentiator. helping us drive customer trust, retention, and long-term growth.
While we see significant growth opportunities, we are taking a disciplined approach to GPU procurement.
Sam: Carefully managing capital deployment to avoid excess inventory risk.
Sam: Our focus is on growing at a pace that aligns with customer trust.
Sam: Ensuring that as relationships deep and we scale deployments accordingly.
Sam: We've also invested in top peer technical talent to build a robust software driven infrastructure that enhances performance reliability and scalability.
Sam: Customers don't just need access to Gpus they.
Sam: They need a trusted high performance platform that ensures seamless deployment and maximize performance.
Sam: Our investment in this technology layer to deliver just that is a key differentiator.
Sam: Helping us drive customer trust retention and long term growth.
Sam Tabar: Also, Riv Busteroid, the third largest cloud gaming provider in the world, we continue to expand our partnership. Currently, we have just under 500 GPUs contracted, represented approximately $1.6 million in annual revenue over the five-year term. We are in the process of finalizing an agreement to deploy an additional 700 GPUs, which, if completed, would generate an additional $2.4 million in annual revenue for BoosterArch. And we expect the deployment cadence to accelerate throughout 2025. Our GPU procurement strategy is a balancing act between growth and risk. We are focused on scaling customer deployments and expanding GPU capacity to meet growing demands.
Sam: Also with booster related the third largest cloud gaming provider in the world We continue.
Sam: To extend our partnership.
Sam: Currently we have just under 500 Gpus contracted represented approximately $1 6 million in annual revenue over the five year term.
Sam: We are in process of finalizing an agreement to deploy an additional 700 Gpus, which if completed will generate an additional $2 4 million in annual revenues are destroyed.
Sam: And we expect the deployment cadence to accelerate throughout 2025.
Sam: Our GPU procurement strategy is a balancing act between growth and risk.
Sam: We are focused on scaling customer deployments and expanding GPU capacity to meet growing demand.
Sam Tabar: Several live opportunities are substantial, with contracts representing nine-figure annual revenue and three- to four-year locked-up terms. Executing these would require the right financing structures, and we are actively evaluating lease financing and other capital-efficient options. We are firmly in the mix for blue chip deals. As our AI compute grows, our focus remains on execution, efficiency, and customer relationships. White fiber is scaling rapidly, and we believe we are well positioned to be a leader in AI infrastructure.
Sam: Several life opportunities are substantial with contracts, representing nine figure annual revenue and three to four year locked up terms.
Sam: Executing these would require the right financing structures and we are actively evaluating lease financing and other capital efficient options.
Sam: We are firmly in the mix for Blue chip deals.
Sam: As our AI compute grows.
Sam: Our focus remains on execution efficiency and customer relationships.
Sam: White fiber is scaling rapidly and we believe we are well positioned to be a leader in AI infrastructure.
Sam Tabar: Turning to our co-location services segment of White Fiber.
Sam: Turning to our co location services segment of White fiber.
Sam Tabar: This business was established with our acquisition of Enivim in October 2024, marking a major step in our evolution as an HPC platform. Before the acquisition, we had no co-location business. Now, we operate a Tier 3 datacenter with a full roster of clients, which currently stands at 14 active customers. We added a recurring revenue stream and expanded our expertise. Beyond its immediate contribution, Enivum provides a scalable foundation for future growth, backed by an experienced team and a very robust development pipeline. The end of an acquisition is a gift that keeps on giving. Since closing the acquisition, we have moved quickly to expand our co-location capacity and secure strategic customer segments.
Sam: This business was established with our acquisition of any of them in October 2024.
Sam: Marking a major step in our evolution as an H P C platform.
Sam: Before the acquisition, we had no co location business.
Sam: Now we operate a tier three data center with a full roster of clients, which currently stands at 14 active customers.
Sam: We added a recurring revenue stream and expanded our expertise.
Sam: Beyond its immediate contribution.
Sam: Any of them provides a scalable foundation for future growth.
Sam: Asked by an experienced team and a very robust development pipeline.
Sam: The end of an acquisition is a gift that keeps on giving.
Sam: Since closing the acquisition, we have moved quickly to expand our colocation capacity and secure a strategic customer segments.
Sam Tabar: to our customer agreement.
Sam: Sorry customer agreements.
Sam Tabar: In Q4, we acquired Montreal 2, a 160,000 square foot industrial site in Montreal. for approximately $23 million as part of our planned expansion to 32 megawatts by 2025. Montreal 2 is being developed into a 5 megawatt Tier 3 data center expected to go live in mid-2025. The facility will be powered by 100% renewable hydroelectricity and will feature direct-to-chip liquid cooling. This site provides key advantages in accelerating our development pipeline. The property was well suited for a retrofit and includes transferable HVAC infrastructure, allowing us to reduce costs and bring capacity online faster. Co-Tenant of our Growth Strategy.
Sam: In Q4, we acquired Montreal too.
Sam: 160000 square foot industrial site in Montreal.
Sam: Approximately $23 million as part of our planned expansion to 32 megawatts by 2025.
Sam: [noise] Montreal, two is being developed into a five megawatt tier three data center expected to go live in mid 2025.
Sam: The facility will be powered by 100% renewable hydro electricity and will feature directed chip liquid cooling.
Sam: Visit the site provides key advantages in accelerating our development pipeline.
Sam: The property was well suited for a retrofit, adding foods transferable HVAC infrastructure.
Sam: Allowing us to reduce costs and bring capacity online faster.
Sam: A core tenet of our growth strategy.
Sam Tabar: We still expect to complete the retrofit for approximately $19 million. We are also in the process of securing cost-effective mortgage financing to support the build-out in a non-dilutive manner.
We still expect to complete the retrofit for approximately $19 million.
Sam: We are also in the process of securing cost effective mortgage financing to support the build out in a non dilutive manner.
Sam Tabar: We plan on announcing the customer for Montreal 2 at a later date. in February. A multi-year co-location agreement with a leading AI hardware innovator. This client is Cerebra. the manufacturer of the fastest inference LLM processor in the world. Cerebris is launching six new data center sites in North America and chose us to be their partner for their first ever Canadian data center. This agreement is a major validation of our co-location strategy. Reinforcing our ability to provide high performance, built-to-suit infrastructure for industry leaders. Under this contract, we will provide 5 megawatts of customized high-density co-location capacity over a five-year term.
Sam: We plan on announcing the customer from Montreal to at a later date.
Sam: In February.
Sam: We announced.
Sam: Our multi year Colocation agreement with a leading AI hardware innovator.
Sam: This client is to regress.
Manufacturer of the fastest inference L M processor in the world.
Sam: So rebirth is launching six new data center sites in North America, and chose us to be their partner for their first ever Canadian data Center.
Sam: This agreement is a major validation of our co location strategy.
Reinforcing our ability to provide high performance build to suit infrastructure for industry leaders.
Sam: Under this contract we will provide five megawatts of customized high density colocation capacity over a five year term.
Sam Tabar: The location for the development has been selected, and we are in the process of finalizing legal ownership of the site. Once that process is complete, we will formally announce the location. We expect the contract to commence in mid-2025. Cerebris is pioneering wafer scale technology. which enables ultra-fast AI infrastructure for some of the largest and most complex AI workloads in the world. Their deployment with us will be the first of its kind in Canada. Expanding AI Compute Access to Enterprises, Research Institutions, and Government Entities. This deployment required a highly customized, high-density solution, validating our ability to design infrastructure for next-generation AI workflows with very unique technical requirements.
The location for the development has been selected and we are in the process of finalizing legal ownership of the site.
Sam: Once that process is complete we will formally announce the locations.
Sam: We expect the contract to commence in mid 2025.
So rebirth is pioneering wafer scale technology.
Sam: Which enables ultra fast AI infrastructure for some of the largest and most complex AI workloads in the world.
Sam: Their deployment with us would be the first of its kind in Canada.
Sam: Expanding AI compute access to enterprises research institutions and government entities.
Sam: This deployment required a highly customized high density solution.
Sam: Validating our ability to design infrastructure for next generation AI workloads with very unique technical requirements.
Sam Tabar: Beyond this initial deployment, we see significant potential for future expansion as Cerebris continues to scale its infrastructure. Their rapid growth reflects the increasing demand for high-density, AI-optimized co-location. Our ability to meet their highly specialized requirements underscores the strength and adaptability of our platform. We are super excited to support them in their next phase of development. As mentioned, we are deep in the mix for blue-chip deals, and that's a prime example of one.
Sam: Beyond this initial deployment, we see significant potential for future expansion as the rebirth continues to scale its infrastructure.
Their rapid growth reflects the increasing demand for high density AI optimized co location.
Sam: Our ability to meet their highly specialized requirements underscores the strength and adaptability of our platform. We are super excited to support them in their next phase of development.
Sam: As mentioned, we are deep in the mix for Blue chip deals and that's a Prime example of one.
Sam Tabar: Stay tuned for more.
Sam: Stay tuned for more.
Sam Tabar: Beyond Montreal 2, our development pipeline has expanded significantly, now totaling 510 megawatts, including 156 megawatts under exclusive LOI. This includes sites in both Canada and the U.S., with six locations under exclusive LOI ranging from 8 megawatts to 100 megawatts. The major driver for the pipeline expansion was the addition of locations in the United States. We recently brought a U.S. site under LOI that could redefine our data center platform. is developed It could be our largest project to date. significantly expanding our scale and market position. Even with our planned capacity expansions, we continue to receive more customer demand than we can currently accommodate.
Sam: Beyond Montreal to our development pipeline has expanded significantly now totaling 510 megawatts <unk>.
Sam: Including 156 megawatts under exclusive LOI.
Sam: This includes sites in both Canada, and the U S with six locations under exclusive LOI ranging from eight megawatts 200 megawatts.
Sam: The major driver for the pipeline expansion was the addition of locations in the United States.
Sam: We recently brought our U S site under LOI that could redefine our data center platform.
Sam: It's developed.
Sam: It could be our largest project to date.
Significantly expanding our scale and market position.
Sam: Even with our planned capacity expansions.
Sam: We continue to receive more customer demand than we can currently accommodates.
Sam Tabar: This underscores the urgent need for additional high-performance data center space and reinforces our approach of prioritizing execution speed and customer alignment.
Sam: This underscores the urgent need for additional high performance data center space and reinforces our approach.
Sam: Advertising execution speed and customer alignment.
Sam Tabar: Everyone knows about the current tariff wars that are playing out. We're currently monitoring and assessing their potential impact on our data centers build out. Many critical components, such as generators, HVAC systems, and electrical infrastructure are imported from the United States, Canada, and Mexico, and new tariffs could increase build costs. We are evaluating strategies to mitigate potential increases, including diversifying supply chains and optimizing procurement, while monitoring if, how, and when these tariff policies may take place.
Speaker Change: Everyone knows about the current tariff wars that are playing out well.
Speaker Change: We're currently monetary and assessing the potential impact on our data centers build out.
Speaker Change: Many critical components, such as generators HVAC systems, and electrical infrastructure are imported from the United States, Canada, and Mexico, and new tariffs could increase build costs.
Speaker Change: Evaluating strategies to mitigate potential increases.
Speaker Change: Including diversifying supply chains, and optimizing procurement, while monitoring is how and when these tariff policies may take place.
Sam Tabar: Looking ahead, we believe inference will be the largest driver for long-term AI compute demand. and we are positioning our data centers to capture this shift. Strategically, we are developing in metropolitan areas where we expect the broadest customer appeal over time. This ensures we can meet the needs of enterprise, government, and research institutions seeking low-latency, high-performance AI infrastructure.
Speaker Change: Looking ahead, we believe influence will be the largest driver for long term AI compute demand.
And we are positioning our datacenters to capture this shift.
Speaker Change: Strategically we are developing in metropolitan areas, where we expect the broadest customer appeal over time.
Speaker Change: This ensures we can meet the needs of enterprise government and reassurance research institutions seeking low latency high performance AI infrastructure.
Speaker Change: [laughter].
Sam Tabar: Turning to our Bitcoin mining business. We remain focused on maintaining a cost-efficient and optimized fleet, rather than growing hashrate for the sake of expansion. Mining accounts for 54% of revenue in 2024, down from 98% in 2023, as we prioritize investments in HTC. That said, mining remains an important part of our business, and we are taking targeted steps to improve efficiency and reduce cost. Our active mining fleet is currently around 1.6 exa-hash with an efficiency of approximately 25 to 26 joules per tera-hash. We have now fully exited all claimant facilities and are refreshing our fleet with more efficient miners at new hosting sites.
Speaker Change: Turning to our big claim mining business, we remain focused on maintaining a cost efficient and optimized fleet rather than growing has rate, but for the sake of expansion.
Speaker Change: Mining accounted for 54% of revenue in 2024 down from 98% in 'twenty two 'twenty three as we prioritized investments in H T C.
Speaker Change: That said mining remains an important part of our business.
Speaker Change: And we are taking targeted steps to improve efficiency and reduce costs.
Speaker Change: Our active mining fleet is currently around one six extra hashed within efficiency of approximately 25 to 26 joules per tear ash.
Speaker Change: We have now fully exited all claim and facilities and are refreshing our fleet with more efficient miners that new hosting sites.
Sam Tabar: To replace lost deployment capacity, we secured 30 megawatts of new hosting. 19 megawatts with ArtDigital and 11 megawatts with Soluna. The 11-megawatt site was filled with 1,800 redeployed K-PROs and about 1,400 S21s and S21-plus units. The 19-megawatt site will support some redeployed assets, as well as 3,800 S21-plus miners. adding 820 pentahash to our fleet. To date, we have deployed 941 S-21 Miners and 500 S21 Plus units, improving overall fleet efficiency. These upgrades are expected to bring our operational hash rate to approximately 2.5 exahash by May. with pro forma efficiency to around 22 joules per tera hash.
Speaker Change: To replace lost payment capacity, we secured 30 megawatts of new hosting.
Speaker Change: 19 megawatts with our digital and 11 megawatts that's Luna.
Speaker Change: The 11 megawatt site was filled with 1008 1800 redeployed K pros and about 1400 F 'twenty ones and as to what 'twenty, one plus units.
Speaker Change: The 19 megawatt site will support some redeployed assets as well as 3800 <unk> F 'twenty, one plus miners.
Speaker Change: Adding 820 penta has to our fleet.
Speaker Change: To date, we have deployed 941 F 'twenty one miners.
Speaker Change: 521, plus units improving overall fleet efficiency.
These upgrades are expected to bring our operational house rate to approximately 2.5 extra hashed by May.
Speaker Change: With pro forma efficiency to around 22 tools Portera house.
Speaker Change: [laughter], reaching three extra house would require securing an additional six six megawatts of hosting and acquiring approximately 1800 more F. 'twenty one plus miners.
Sam Tabar: Reaching three extra halves would require securing an additional 6.6 megawatts of hosting and acquiring approximately 1,800 more S21 Plus miners. The power is available from multiple sources, and we are actively evaluating the best path forward. Our strategy remains unchanged. We are not allocating significant growth capital to mining. Instead, we are structuring the business to maintain Bitcoin exposure on a capital-efficient way, focusing on fleet optimization and cost reductions while keeping a disciplined approach to capital deployment. Mining remains a part of our portfolio.
Speaker Change: The power is available from multiple sources and we are actively evaluating the best path forward.
Speaker Change: Our strategy remains unchanged we.
Speaker Change: We are not allocating significant growth capital to mining instead.
Speaker Change: Instead, we are structuring the business to maintain bitcoin exposure on a capital efficient way.
Speaker Change: Focusing on fleet optimization and cost reductions, while keeping a disciplined approach to capital deployment.
Speaker Change: Mining remains a part of our portfolio.
Sam Tabar: But our investment priority remains on scaling our HPC business.
Speaker Change: But our investment priority remains on scaling our H P C business.
Eric Huang: I'll now hand over the line to Eric, who will discuss our financial results.
Eric: I'll now hand over the line to Eric who will discuss our financial results.
Speaker Change: Yeah.
Eric Huang: Thank you, Sam. I will now discuss our financial results for 2024.
Eric: Thank you Sam.
Eric: I will now discuss our financial results for 2024.
Eric Huang: As a note, we completed our transition to domestic issuer status and filed our first Form 10-K with SEC this morning. Total revenue for the year was $108 million, a 141% increase from 2023. Revenue increased across all business lines. Bitcoin mining revenue was $58.6 million, up 32% year over year. Our Bitcoin production declined 37% to 950 Bitcoin due to higher network difficulty and the April happening event. However, higher Bitcoin prices and increased hash rate led to overall revenue growth. Ethereum staking revenue more than doubled to $1.8 million for 2024 as we earned approximately 566 Ethereum in staking rewards for the year.
Eric: As a note with <unk>.
Eric: Our transition to a domestic issuer status and filed our first Form 10-K with the FCC. This morning.
Eric: Total revenue for the year was $108 million, a 141% increase from 2023.
Eric: Revenue increased across all business lines.
Eric: Bitcoin mining revenue was $58 $6 million up 32% year over year.
Eric: Our vehicle production declined 37% to 950, bitcoin due to higher network difficulty and the April happened to you but.
Eric: However, higher corn prices and increased cash rate led to overall revenue growth.
Eric: You can hear I'm mistaking revenue more than doubled to $1.8 million for 2024, as we earned approximately 566, if theyre taking rewards for the year.
Eric Huang: Cloud services generated $45.7 million in its first year of operation. Starting revenue in January 2024, co-location services acquired through M&M contributed $1.4 million from October 12 through the year end. Our total cost of revenue, excluding depreciation and amortization, was $62.4 million, compared to $29.6 million in the prior year. The increase was driven by a larger mining fleet, higher network difficulty, and the launch of our cloud and co-location businesses. Cloud services costs were $19.5 million, with $13.6 million from H100 server lease expenses. Gross profit was $45.7 million, a nearly three-fold increase from 2023. Gross margins expanded approximately 500 basis points to 42.3%, driven by cloud and co-location revenue, which offset lower mining margins due to the block reward reductions and higher network difficulty.
Eric: Cloud services generated $45 $7 million in its first year of operations.
Eric: Starting revenue in Jan 2020 for Colocation services acquired through them and contributed $1 $4 million for October 12th throw the E. R. M.
Our total cost of revenue, excluding depreciation and amortization was $62 4 million compared to $29 six media in the prior year.
Eric: The increase was driven by a larger mining fleet higher network typically and the launch of our cloud and Colocation businesses.
Eric: Cloud services costs were $19 5 million with $13 6 million from <unk> hundred several lease expenses.
Eric: Gross profit was $45 $7 million and nearly three fold increase from 2023.
Eric: Gross margins expanded approximately 500 basis points to 42, 3% driven by cloud and Colocation revenue.
Eric: Which offset lower mining margins due to the broth rewards reductions and a higher network difficulty.
Eric Huang: General and administrative expenses were $41.5 million, up from $27.7 million. The increase was mainly due to higher payroll and professional fees.
General and administrative expenses were $41 5 million up from $27 7 million.
Eric: The increase was mainly due to higher payroll and professional fees. A large portion of these fees were tied to the Atlanta acquisition and are not expected to recur.
Eric Huang: A large portion of these fees were tied to the M&M acquisition and are not expected to recur. Depreciation and amortization was 32.3 million compared to 14.4 million in 2023, reflecting a larger miner and GPU fleet. 2024 adjusted EBITDA was $73 million compared to $12.4 million in 2023. Adjusted EBITDA for 2024 includes $55.7 million of gain on digital assets, which are predominantly unrealized. Gap earnings per share was $0.19 for 2024 on a fully diluted basis compared to a loss of $0.16 in 2023. Turning to our balance sheet, we held approximately $98.9 million of cash and restricted cash as of December 31, 2024, and our digital asset positions was worth approximately $161.4 million.
Depreciation and amortization was $32 3 million compared to 14 4 million in 2023, reflecting a larger miner and GPU fleet.
224, adjusted EBITDA was $73 million compared to $12 4 million in 2023.
Eric: Adjusted EBITDA for 2024 includes $55 7 million of gain on digital assets, which are predominantly unrealized games.
Eric: GAAP earnings per share was <unk> 19 sites for 2024 on a fully diluted basis compared to a loss of <unk> 16 cents in 2023.
Turning to our balance sheet.
Eric: We held approximately $98 $9 million of cash restricted cash as of December 31st 2024, and our digital asset positions was worth approximately 161 $4 million.
Eric Huang: The total assets were $538 million and shareholders' equity was $463 million. We remain debt free, but actively exploring financing options for our HPC business. Capital expenditures for 2024 totaled $94 million. The majority of the CapEx was deployed in the fourth quarter and was used to fund GPU purchases and the acquisition of Montreal 2.
Eric: And total assets were $538 million and shareholders' equity was 463 million.
Eric: We remain debt free but are actively exploring financing options for our HPLC business.
Eric: Capital expenditures for 24 totaled $94 million. The majority of the Capex was deployed in the fourth quarter and was used to follow <unk> purchases and the acquisition of Montreal too.
Sam Tabar: I will now turn the call back to Sam for closing remarks. Thank you, Eric.
Sam: I will now turn the call back to Sam for closing remarks.
Sam: Thank you Eric.
Sam Tabar: Before we open the line for questions, I want to touch on the broader trends that we're seeing across our business. We are experiencing significant and sustained demand for compute infrastructure. far exceeding the capacity we are currently bringing online. The need for high-performance computing continues to expand, and we believe we are well positioned to capitalize on this long-term trend.
Before we open the line for questions I want to touch on the broader trends that we're seeing across our business.
Sam: We are experiencing significant and sustained demand for compute infrastructure.
Sam: Far exceeding the capacity we are currently bringing online.
Sam: The need for high performance computing continues to expand and we believe we are well positioned to capitalize on this long term trend.
Sam Tabar: This demand stands in stark contrast to broader market sentiment. where we've seen risk assets, including our own stock, come under pressure. specifically for Bit Digital, the bigger our HPC business gets. The more our stock seems to trade like a pure-play Bitcoin miner, which is ridiculous. We believe that we are deeply misunderstood. But time is our friend. And eventually, we believe we will be valued properly.
Sam: This demand.
Sam: Dan.
Sam: In Stark contrast to broader market sentiment.
Sam: Where we've seen risk assets, including our own stock come under pressure.
Sam: Specifically for digital the bigger our APC business gets.
Sam: The more our stock seems to trade like a pure play big claim miner, which is ridiculous.
Sam: We believe that we are deeply misunderstood.
Sam: The time is our friends and.
Sam: And eventually we believe we will be valued properly.
Sam Tabar: While we can't control the macro environment, we are focused on what we can control. executing our strategy, expanding our infrastructure. and positioning our business. for long-term value creation. We believe we are well on our way.
Sam: While we can't control the macro environment, we are focused on what we can control.
Sam: Executing our strategy expanding.
Sam: Expanding our infrastructure.
Sam: And positioning our business.
Sam: We're a long term value creation.
Sam: We believe we are well on our way.
Sam Tabar: A key advantage for our model is the synergistic nature of our co-location and cloud business. These segments are complementary, serving different stages of the AI infrastructure value chain with distinct earnings profile and payback periods. Co-location provides long-term contracted revenue streams. Cloud services offer high margin, shorter duration contracts with greater flexibility. Together, they create a durable and diversified cash flow. that supports sustainable growth.
Sam: A key advantage for our model is the synergistic nature of our co location and cloud business.
Sam: These segments are complementary so.
Sam: Serving different stages of the AI infrastructure value chain with distinct earnings profile and payback periods.
Sam: Colocation provides long term contracted revenue streams.
Cloud services offer high margin shared shorter duration contracts with greater flexibility.
Sam: Together, they create a durable and diversified cash flow.
Sam: That supports sustainable growth.
Sam Tabar: From a capital allocation perspective, we've taken a pragmatic approach to financing growth. In the past, we have used equity issuance as a bridge financing tool to fund our expansion while we evaluated longer-term, cost-effective capital solutions. Given our current valuations, we recognize that issuing equity is clearly less attractive than ever. Our focus is on securing alternative financing options that allow us to scale in a non-dilutive manner that's much more sustainable.
Sam: From a capital allocation perspective, we've taken a pragmatic approach to financing growth.
Sam: In the past, we have used equity issuance as a bridge.
Nancy tool to fund our expansion, while we evaluated longer term cost effective capital solutions.
Sam: Given our current valuations, we recognize that issuing equity is clearly less attractive than ever.
Sam: Our focus is on securing alternative financing options that allow us to scale in a non dilutive manner.
Sam: That's much more sustainable.
Sam Tabar: On the data center side, we are actively pursuing commercial mortgage financing to support our build out. We are making progress on this front and have finally received an attractive term sheet that we can move forward with and continue to explore the best terms before finalizing an agreement.
Sam: On the datacenter side.
Speaker Change: We are actively pursuing commercial mortgage financing to support our buildout.
Speaker Change: We are making progress on the front on this front and have finally received an attractive term sheet that we could move forward with and continue to explore the best terms before finalizing an agreement.
Sam Tabar: For our cloud services business, we are also exploring vendor financing and leasing structures to optimize our GPU investment. Given the rapid evolution of AI hardware, we are structuring our GPU procurement strategy to balance growth and risk management.
Speaker Change: For our cloud services business, we are also exploring vendor financing and leasing structures to optimize our GPU investments.
Speaker Change: Given the rapid evolution of AI hardware, we are structuring our GPU procurement strategy to balance growth and risk management.
Sam Tabar: We are seeing compelling opportunities to scale. And our approach ensures that we remain nimble while preserving capital efficiency.
We are seeing compelling opportunities to scale.
Speaker Change: And our approach ensures that we remain nimble while preserving capital efficiency.
Sam Tabar: As our business continues to evolve. We are assessing the best structure to highlight the value of each of our business lines. We remain committed to making decisions that drive long-term value creation and position Bit Digital for growth.
Speaker Change: As our business continues to evolve.
Speaker Change: We're assessing the best structure to highlight the value of each of our business lines.
Speaker Change: We remain committed to making decisions that drive long term value creation and positioned digital for growth.
Cameron Schnier: With that, I would like to open the line for some questions.
With that I would like to open the line for some questions.
Cameron Schnier: As a note, we have Billy Krassakopoulos, who leads our data center business, and Ben Lamson, head of revenue for White Fiber, on the line for some Q&A. Thank you, if you would like, oh I'm sorry, go ahead. No, I was just suggesting that we should open the line for some Q&A now. Thank you. If you would like to signal with questions, please press star one on your touchtone telephone. If you're joining us today using a speaker phone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, that will be star one if you would like to signal with questions.
Speaker Change: Also note we have built across the populace and who leads our data center business and been Lamson head of revenue for white fiber underlying for some Q&A.
Speaker Change: Thank you if you would like Oh I'm sorry go ahead.
Speaker Change: No I was just suggesting that we should open the line for some Q&A now thank you.
Speaker Change: Thank you.
If you would like to signal with questions. Please press star one on your Touchtone telephone if you're joining us today using a speaker phone. Please make sure. Your mute function is turned off to allow your signal to reach our equipment.
Speaker Change: That will be star one if you would like to signal with questions.
Mike Grondahl: And our first question will come from Mike Grondahl with Northland Security. Hey guys, thanks. Um, first question is just on cloud service. Sam, I think you said the current run rate is $62 million. and you have a contracted customer that's coming on late March. Have you named that customer that gets you to 72 million run Yeah, that's DNA funds. Okay, and then I think there is a... Come on, I'll say roughly July 1st. for a $15 million dollar ARR, that gets you to 87 million run rates. Is there anything else? contracted to come on right now.
Speaker Change: And our first question will come from Mike Grondahl with Northland Securities.
Mike Grondahl: Hey, guys. Thanks.
Speaker Change: First question is just on cloud services.
Sam.
Speaker Change: Thank you said the current run rate is 62 million.
Speaker Change: And you have a contracted customer thats coming on late March.
Have you name that customer that gets you to.
Speaker Change: 72 million run rate, Yeah, that's D N DNA funds.
Speaker Change: Okay.
Speaker Change: Yeah They fund.
Speaker Change: Okay, and then I think there is a.
Speaker Change: Another.
Speaker Change: 512, Gpus come on I'll say roughly July 1st.
Speaker Change: For a $15 million.
Speaker Change: That gets you to 87 million run rate.
Speaker Change: Is there any I'm sorry.
Speaker Change: Contracted to come on right now.
Speaker Change:
Sam Tabar: I guess that's the first question. Anything else we should be aware of that's contracted that lifts that $87 million? Well, we're already well past 100 million from a contracted basis. Our white fiber business includes both the GPU and data center business. So we have, so we're, we are, we will, we, we, go ahead.
Speaker Change: I guess, that's the first question anything else, we should be aware of that contracted.
That lifts that $87 million.
Speaker Change: Well were already well past 100 million from a contracted basis are white fiber business includes both the GPU and data center business. So we are so where we are what we well we go ahead.
Ben Lamson: Great, so let me ask this question. You also talked about setting up this on-demand pool, and I think you said that as the potential for $25 million of ARR once it's contracted. And then there was another, I'll call it GPU pool of 908 that has a $16 million ARR once it's contracted. Did I hear those right?
Speaker Change: Great.
Let me ask this question then.
Speaker Change: You also talked about.
Speaker Change: Setting up this on demand pool.
Thank you said that is the potential.
Speaker Change: For 25 million of a R. R. Once it's contracted.
Speaker Change: And then there was another.
Speaker Change: I'll call. It G. P. You pool of 908 that has a $16 million or once.
Speaker Change: Once it's contracted did I hear those right.
Ben Lamson: Yeah, I would love to, yes, I would love to pass you over to Ben who heads our revenue for that division. Ben? Yeah, thanks, Sam. So I want to be clear on on this on demand is not contracted. But it commands a much higher price per hour. than the contract. So that $25 million number for the B-200s that are coming online at the beginning of April, that is an annualized run rate based on those GPUs reaching full capacity on Now, we may choose to sell some or all of those onto reserved contracts one, two or three years, you know, as that de-risks things long term.
Speaker Change: Yeah, I would love to yes, I would love to pass you over to Ben who who heads our revenue for that Division then.
Speaker Change: Yeah. Thanks, Tim So I want to be clear on this on.
Speaker Change: On demand is not contracted.
But it commands a much higher price per hour.
Speaker Change: Dan the contracted rates, so that $25 million.
Speaker Change: Number four the B two hundreds that are coming online at the beginning of April that is an annualized run rate based on those gpus, reaching full capacity on demand now we may choose to sell some or all of those onto reserved contracts, one two or three years.
Speaker Change: You know as that de risks things long term, but in the short term, we expect demand to be so high that we may choose to keep those on demand for a much higher price per hour.
Ben Lamson: But in the short term, we expect demand to be so high that we may choose to keep those on demand for a much higher price. Got it.
Speaker Change: Got it.
Ben Lamson: End. That $25 million and then the $16 million. I think those are going to be, I don't know, generating revenue. In the next quarter or two or three like how should we think of them? contributing or adding to the 87 a rough So we're gonna hold onto those for a little bit to run some R&D around some pretty cool stuff that we're building. And because of that, I don't wanna give a hard date on when they're gonna start generating revenue. But we'll be talking about some of that in our product roadmap.
Speaker Change: That 25 million and then the 60 million.
Speaker Change: Do you think those are going to be.
Speaker Change: Generating revenue in the next quarter or two or three like how should we think of them.
Speaker Change: Contributing or adding to the $87 million.
Speaker Change: <unk> timeline.
Yes, we expect the V 200, <unk> to start generating revenue in April.
Speaker Change: As for the each two hundreds I want to be careful to give a date on those as those are part of some R&D around some.
Speaker Change: Developments and technological developments, we'll be talking about later this year. So we're going to hold on to those for a little bit to run some R&D around some pretty cool stuff that we're building.
Speaker Change: And because of that I don't want to give a hard date on when they're going to start generating revenue.
Speaker Change: But we'll be talking about some of that in our product roadmap later this year.
Ben Lamson: Great. Okay.
Speaker Change: Great. Okay, and then just one more.
Mike Grondahl: And then just one more. on the co-location or data center. I don't think I heard what fourth quarter. revenue was. And then once we have that number, could we kind of walk through what's contracted and how that's ramping in 25 just like what we did for the cloud services business?
Speaker Change: On the co location or data center business.
Speaker Change: I don't think I heard what.
Speaker Change: First quarter.
Speaker Change: Revenue was and then once we have that number could we kind of walk through what's contracted and how that's ramping and 25, just like what we did for the cloud services business.
Billy Krassakopoulos: Yeah, we have Billy on the line who leads our co-location data center division.
Speaker Change: Yeah, I mean, we have Billy on the line, who is either a colocation data Center Division.
Billy Krassakopoulos: This is Ken, let me just jump in to that first one. Mike, it was 1.4 was the co-location revenue we recognized, but that was from the date of the acquisition. So like, you can annualize that and for Montreal 1, that would be the prevailing run rate until the new capacity comes online. And then, I think you guys talked about Sarah. coming online, and that's a $10 million run rate. Is there anything else we should be factoring in today? I don't think we specified the run rate for that beyond just it being 5 megawatts and you could sort of extrapolate the the market right there.
Karen: This is Karen let me just jump in to that first one.
Speaker Change: It was one for Mr. Colocation revenue, we recognized but that was from the date of the acquisition.
Speaker Change: So like you can annualize that for Montreal, one that would be the prevailing run rate until the new capacity comes online.
Speaker Change: Got it.
Speaker Change: And then I think you guys talked about Sarah breasts.
Speaker Change: Coming on line and that's a 10 million dollar run rate is there anything else, we should be factoring in today.
Speaker Change: I don't think we specified the run rate for that.
Speaker Change: Just it being.
Speaker Change: Five megawatts and you can sort of extrapolate D. A.
Speaker Change: The market rate there.
Billy Krassakopoulos: Got it. But just to clarify, the cerebral sphincter is the only one we should layer in for data center right now. Well, Montreal too, which would be a separate customer that we have not announced, which would also start in the middle of 2025. And then just beyond that, the planned deployments for the second half, which would come on later the year.
Brian: Got it Brian.
But as you said it was the only one we should layer in for data center right now okay.
Speaker Change: Well, Montreal care, which would be a separate customer that we have not announced.
Speaker Change: Which would also start in the middle of 'twenty, two I thought and then just beyond that.
Speaker Change: <unk>.
Speaker Change: Planned deployments for the second half, which will come on later in the year.
Billy Krassakopoulos: Got it.
Speaker Change: Got it okay.
Billy Krassakopoulos: Okay.
Nick Giles: Thank And the next question will come from Nick Giles with Be Riley. Hey, thank you, operator. Good morning, everyone. Guys, congrats on the progress thus far. My first question, you mentioned a 100 megawatt site under LOI that would obviously be transformative. So, I was hoping to get some additional color on when this capacity could come online. Is there any existing power infrastructure in place at the site and then would there be a desire for a larger anchor tenant or how should we think about customer mix? Thanks very much.
Speaker Change: And the next question will come from Nick Giles with B Riley.
Nick Giles: Thank you operator, good morning, everyone. Our guys congrats on the progress thus far.
Nick Giles: My first question you mentioned, a 100 megawatt site under LOI that would obviously be transformative. So I was hoping to get some additional color on when this capacity could come online.
Speaker Change: Is there any existing power infrastructure in place at the site and would there be a desire for a larger anchor tenant or how should we think about customer mix. Thanks very much.
Speaker Change: Okay.
Billy Krassakopoulos: I'm happy to answer that question in a preliminary way, but Billy, would you like to give some more detail on color on that? Unknown Attendee, Samir Tabar, William Schnier, Billy Krassakopoulos, Billy Krassakopoulos, power available at this location with a very easy path to 48, basically double, within 60 to 90 days. And additionally, we have discussions with the utility provider to get us another hundred megawatts towards the end of 2025. Got it. Billy, that's very helpful. And so maybe just to follow up on that, how much of this would be included in your 156 megawatts of exclusive LOI capacity?
Speaker Change: Happy to answer that question in a preliminary way a bit Billy would you like to give some more detail and color on that.
Speaker Change: So we've identified a site in the United States.
Billy: A little boy presently there's currently 24 megawatts of power.
Billy: Our available at that location.
Billy: A very easy path to 48 basically double.
Billy: Within 60 to 90 days.
Additionally, we have discussions with the utility provider to get us another 100 megawatts towards the end of 2025.
Speaker Change: Got it that's very helpful and so maybe just to follow up on that how much of this would be included in your 156 megawatts of exclusive LOI capacity.
Billy Krassakopoulos: This is about 90% of that. I think it's about 100. Unknown Attendee Got it, okay. That's it. Okay, great. That's very helpful.
Speaker Change: This is about a 90% of that right now.
Speaker Change: Got it.
Yeah.
Speaker Change: Got it okay that was it.
Speaker Change: Okay, Great that's very helpful.
Ben Lamson: Um, My next question was just on some of the GPU contracts. What kind of extension options are embedded in some of these smaller 6-12 month contracts? Should we think about all of these customers as, you know, very likely to further expand or could some rotate out and you would plan to backfill that capacity? I'm just trying to get a better sense for GPU utilization.
My next question was just on some of the GPU contracts, what what kind of extension.
Speaker Change: Extension options are embedded in these some of these smaller six to 12 month contracts I mean should we think about all of these customers as you know very likely to further expand or could some rotate out and you would plan to backfill that capacity I'm, just trying to get a better sense for that.
GPU utilization.
Ben Lamson: Absolutely, that's a great question for Ben. Yeah, I mean, we always, with these customers, most of the time, we're expecting them to both expand the amount of GPUs that they're using and the term. You know, we've seen just broadly across the industry that customers prefer to start with, especially earlier stage companies, prefer to start with shorter deployments as they become comfortable with a new provider. And, you know, as we show and prove in that shorter deployment term, they end up renewing for a longer and or larger.
Ben: Absolutely that's a great question for Ben.
Speaker Change: Yeah, I mean, we always would these customers most of the time, we're expecting them to both expand.
The amount of Gpus that they are using and the term.
We've seen just broadly across the industry.
Speaker Change: Is that.
Speaker Change: Customers prefer to start with especially earlier stage companies prefer to start with shorter deployments as they become comfortable with a new provider and as we show improve in and those that shorter deployment term they end up renewing for a longer <unk> lar.
Speaker Change: Or term.
Speaker Change: Yeah.
Ben Lamson: Very helpful.
Speaker Change: Very helpful.
Ben Lamson: Guys, I'll turn it over for now, but keep up the good work. Thank you.
Speaker Change: Guys I'll turn it over for now, but keep up the good work.
Speaker Change: Thank you.
George Sutton: And the next question comes from George Sutton with Craig Howard. Thank you and an impressive range of opportunities in front of you. So first on the more traditional financing structures that you're working on that that seems to be the primary governor to further growth. Can you just give us a sense of where those discussions are currently? With respect to the mortgage financing, I think you're referring to, we don't want to get too deep into it so that we don't jinx it, but we have a very attractive term sheet that we are currently planning on Making the Terms Even Better.
Speaker Change: And the next question comes from George Sutton with Craig Hallum.
Speaker Change: Thank you and an impressive range of opportunities in front of you. So.
Speaker Change: First on the more traditional financing structures that you're working on that that seems to be the primary governor to further growth can you just give us a sense of where those discussions are currently.
Speaker Change: With respect to the mortgage financing I think you're referring to we don't want to get too deep into it so that we don't jinx it but we have a very attractive terms.
Speaker Change: Term sheet that we are currently planning on.
Speaker Change: Making the terms even better but this is definitely a.
Sam Tabar: But this is definitely a really strong start for us. And should we proceed, this would be the most cost effective way to...
Speaker Change: A really strong start for us and.
Speaker Change: Should we proceed. This is this would be the most cost effective way to.
Sam Tabar: Today we're going to be talking about how to tap into sources of financing without diluting our equity, which is correct because, you know, we couldn't do that with Bitcoin mining. You could easily do that with data center and real estate. So we look forward to proving to the markets that we can do this. And now we have finally, after going through a process, a term sheet that we really like. And once we finalize that, we will be able to discuss it publicly. Gotcha.
Speaker Change: Tap into sources of financing without diluting, our equity and which is which is which is correct. Because we couldn't do that with bitcoin mining you could easily do that with this.
Speaker Change: With data center and real estate, so we look forward to proving to the markets that.
Speaker Change: We can do this and now we have finally going after going through a.
Our process of term sheet that we really like and once we finalize that we will be able to discuss it publicly.
Got you so relative to booster right I'm curious if you could just talk about what determines the deployment cadence there.
Sam Tabar: So relative to Boosteroid, I'm curious if you could just talk about what determines the deployment cadence. Thanks for listening. their GPU needs and also our own, I guess. How we wanted to play the capital. I mean, there's only so much runway we have from the balance sheet. So we couldn't realistically do a $200 million deployment for them tomorrow. So it's it's measured, but we see a lot of Opportunity to expand that with booster egg throughout the year and we expect that to gradually increase Gotcha.
Speaker Change: Makes sense.
Speaker Change: Their GPU needs and also our own.
Speaker Change: I guess.
Speaker Change: How we wanted to deploy the capital I mean, there's only so much runway we have from the balance sheet. So we couldnt realistically do it $200 million climate for them Tomorrow. So it's it's measured but we see a lot of.
Speaker Change: Opportunity to expand that with <unk> throughout the year, and we expect that to gradually increase.
Ben Lamson: And then just a question for Ben relative to White Fiber. Can you just give us a sense of the response that you've gotten from the rebranding? And it sounds like you could now do an on-demand platform. I wasn't aware that you could do that yet with your platform. Is that a little bit of an update on this call? Yeah, so let me let me clarify there. So we're going to be offering on demand. instances through a partner. So we do not yet have our on-demand platform live. That's, I don't want to take a, you know, I don't want to pontificate on when that'll be, but we're looking, you know, definitely end of this year, early next year for our on-demand platform.
Speaker Change: Got you and then just a question for Ben relative to White fiber up can you just give us a sense of the the response that you've gotten from the rebranding and it sounds like you you could now do an on demand platform I wasn't aware that you could do that yet with your platform is that.
Speaker Change: Is that a little bit of an update on this call.
Speaker Change: Yes, So let me let me clarify there so we're gonna be offering on demand.
Speaker Change: Instances through a partner.
Speaker Change: So we do not yet have our on demand platform life.
Speaker Change: That's I don't want to do.
Speaker Change: Chip I don't Wanna pontificate on when that'll be but were looking definitely ended this year early next year for our on demand platform.
Ben Lamson: So we'll be leveraging a third party to put those instances into an undo. And in terms of the response on the rebrand, it's been it's been really positive. I think the way that we're positioning our offering is really well received. You know, we've we've had more demand than we've had than we've been able to capture due to the lack of supply being live, which is a champagne problem. So we're really excited about how the rest of the. All right, perfect. Thanks, guys.
Speaker Change: So it will be leveraging a third party.
Speaker Change: To put those instances and into an on demand pool and in terms of the response on the rebrand it's been it's been really positive.
Speaker Change: Do you think the way that we're positioning our offering is really well received.
Speaker Change: We've had more demand than we've had than we've been able to capture due to lack of supply being life, which isn't champagne problems. So we're really excited about how the rest of this year is going to go.
Speaker Change: Alright, perfect. Thanks, guys.
Speaker Change: And the next.
Kevin Eadie: And the next question will come from Kevin Eadie with H.C. Wayland. Hi, Kevin. Hey, Sam. Great to talk to you. Thanks for having me on. Let me echo Georgia sentiments impressive array of opportunity. I think as I as I take a step back and look at it, though, Sam, it It's hard to get get arms around all the moving parts that you have, obviously. And I think that's what most people have been asking about. But beyond that is the equipment. I know you referenced tariffs, but I guess what I'm wondering is How comfortable are you in sourcing the infrastructure equipment you're going to need to support all these, all this effort, number one.
Speaker Change: And the next question will come from Kevin <unk> with H C. Wainwright.
Speaker Change: Hi, Kevin.
Kevin: Hey, Sam.
Speaker Change: Great to talk to you. Thanks for having me on let me Echo, Georgia Center Thats impressive array of opportunity.
Speaker Change: I think as I as I take a step back and look at it those samad.
Speaker Change: It's hard to get get arms around all the moving parts that you have obviously and I think that's what most people have been asking about.
Speaker Change: But beyond that.
Speaker Change: Is the equipment I know you referenced tariffs button.
Speaker Change: I guess, what I'm wondering is.
Speaker Change: How comfortable are you in.
Sourcing the infrastructure equipment youre going to need to support all these all this FERC number one or number two.
Sam Tabar: And number two, Is there a contract recourse for Cerberus or for the eventual tenant of Montreal 2 to push back on the contract if you're not able to deliver on time? Yeah, so there are three things you mentioned there. There are a lot of moving parts of our, of our, of our story in our business. I think that sometimes that's a weakness and not a strength. Because we have, we have a lot of great things happening. And so we're not exactly a one trick pure play Bitcoin miner. So we're not a one trick pony where we're doing a lot of different good things on different fronts.
Speaker Change: Is there a contract recourse for cerberus or for the eventual tenant of Montreal to.
Speaker Change: Two.
Speaker Change: Pushed back on the contract if you're not able to deliver on time.
Speaker Change: Yeah. So there are three things you mentioned there are there are a lot of moving parts of our of our of our story in our business I think that sometimes that's a weakness and not a strength because we have a we have a lot of great things happening and we're not exactly a one trick pure play big Queen.
Speaker Change: So we're not a one trick pony, where we're doing a lot of different good things on different fronts, so sometimes that.
Sam Tabar: So sometimes that That story and that narrative gets a little bit lost. So we appreciate when analysts tease out all the moving parts and provide a good report in terms of the information of what's happening with respect to our businesses. So just wanted to comment on that initial statement you made. Your second question, is it more on the financing side or on the operational side in terms of the logistics potential disruption of tariffs? Just wanted to understand if you're looking at it from an equipment sourcing perspective or financing sourcing perspective. More on the equipment side, honestly, Sam, because there's, I mean, obviously, all the demand that you're seeing is, you know, echoed throughout the industry throughout North America.
Speaker Change: That store and that narrative it gets a little bit lost so we appreciate went endless.
Speaker Change: Tease out every all the moving parts and provide a good report in terms of like the information of what's happening with respect to our businesses. So just one other comment on that initial stage.
Speaker Change: Statement you made.
Speaker Change: Second question is it more on the financing side or on the operational side in terms of.
Speaker Change: The the logistics potential disruption of tariffs just wanted to understand if you are looking at it from an equipment sourcing perspective or financing sourcing perspective.
Speaker Change: Or on the equipment side honestly, Sam Okay. There's I mean, obviously, all the demand that youre seeing.
Speaker Change: Is echoed throughout the industry throughout North America, yet so.
Billy Krassakopoulos: Yeah. So that's the question, right? Are you, will you be able to source? Are you comfortable there? And then there's a recourse for your potential tenant?
Speaker Change: So.
Speaker Change: That's the question right are you will you be able to source are you comfortable there and then theres, a recourse or your potential tenants.
Billy Krassakopoulos: Yeah, Billy is going to give an answer to that, but just before he does, I do want to mention one of the main reasons we acquired Enevim and that team is because they've been doing this their entire careers and have established logistics supply systems and contingencies. So none of this is, it's just not their first rodeo. And that's why it was really important for us, not just to acquire that tier three data center, but really the team and the pipeline, because they know what they're doing. And frankly, before we acquired them, we didn't know what we were doing in co-location services.
Speaker Change: Yeah, Billy Billy is going to give an answer to that but just before he does I do want to mention one of the main reasons, we acquired end of them and that team is because they've been doing this their entire careers and have established logistics supply systems and contingencies. So none of this is that it's just not their first rodeo.
Speaker Change: And that's why it was really important for us not just not just to acquire that tier three data center, but really the team and the pipeline because they know what they're doing and frankly before we acquired them. We didn't know what we were doing in co location services and I salute the others, who are trying it for the first time, but we just didn't have that courage and that's.
Sam Tabar: And you know, I salute the others who are trying it for the first time, but we just didn't have that courage. And that's why we acquired that team, because they know what they're doing.
Speaker Change: Why we acquired that team.
Speaker Change: Because they know what they're doing so anyway, with having said that I would like to turn it to Billy.
Billy Krassakopoulos: So anyway, with having said that, I would love to turn it to Billy to answer the question more deeply. Samir Tabar, William Schnier, Billy Krassakopoulos, Billy Krassakopoulos, Billy Krassakopoulos, A large portion of it is in the production line right now to be delivered within the next 30 to 60 days. Equipment for remainder of 2025. We have purchase orders out, deposits on equipment for the 20 or so megawatts that we forecasted for the remainder of 2025, so we're very confident on that. And we're looking to place orders for deliveries on equipment in 2026 right now, on equipment that's site-agnostic, so stuff like generators, HVAC equipment, battery equipment, even though we have sites that are under exclusivity, LOI, that we plan on closing on very shortly.
Billy Billy: To answer the question more deeply.
Billy Billy: Thanks Sam.
Speaker Change: The equipment for the two five megawatt deployments that we have coming online has all been secured.
Billy Billy: Some of it has actually delivered.
Billy Billy: A large portion of it is in the production line right now to be delivered within the next 30 to 60 days.
Billy Billy: Equipment for remainder of 2025, we have purchase.
Billy Billy: Purchase orders out deposits on equipment for.
Billy Billy: The 20, or so megawatts that we forecasted for the remainder of 2025. So we're very confident on that and we're looking to place orders or deliveries are on equipment in 2026 right now are.
Billy Billy: On equipment that site Ignostic, so stuff like generators HVAC equipment battery equipment.
Billy Billy: Even though we have sites that are under exclusivity LOI that we plan on closing on a very shortly the equipment has already been preordered.
Billy Krassakopoulos: The equipment has already been pre-ordered. And to answer your other question, the two clients that are coming online in the next quarter or early third are do not have recourse because of our confidence in delivering. I mean, we have the equipment, we've secured the sites, the construction has begun, so there's no recourse for these clients. if we do not meet the expected delivery. Thanks very much, Billy. Appreciate it, Sam.
Billy Billy: And to answer your other question.
The two clients that are coming online in the next quarter or early third or do not have recourse because.
Some of our confidence in delivering I mean, we have the equipment.
Billy Billy: We've secured the sites.
Billy Billy: Construction has begun so there's no recourse for these clients.
Billy Billy: If we do not meet the expected delivery date.
Speaker Change: Thanks, very much guys I appreciate it.
Kevin Eadie: On the Bitcoin mining side, you teased us a little bit with a three extra hash target. I guess what I'm wondering is why you would even bother. So that's like one question. The other one is on Boosteroid. I understand that you're, if I have it correct, that is, that you're leasing. You're leasing space in order to host them. And I'm wondering how you've seen that pricing dynamic change, say, I don't know, over the past six months that you've been working with them. Sure, with respect to those are two questions. The first question is why bother with our Bitcoin mining business?
Speaker Change: On the bitcoin mining side, you teased us a little bit where the three extra hash target.
Speaker Change: I guess, what I'm wondering is why you would even bother. So that's like one question. The other one is on booster roid.
Speaker Change: Oh I understand that your if I have it correct that is that you're leasing.
Speaker Change: You're you're leasing space in order to host them.
Speaker Change: And I'm wondering how you've seen that pricing dynamic change say I don't know over the past six months that you've been working with them.
Speaker Change: Sure with respect to your question is my first question is why bother with that bitcoin mining business and the other question is the pricing dynamics as the passage of time has gone on with respect to our relationship with booster right is that correct.
Sam Tabar: And the other question is the pricing dynamics as the passage of time has gone on with respect to our relationship with Boosteroid? Is that correct? Yeah, no, I understand the involvement in Bitcoin mining. I do understand that. But why would you boost from, you know, 2.5 or 2.6 to 3? It just doesn't, you know, seem to correlate with all the other opportunities you have. I mean, look, that's a good question. Our priority is the HPC business. There's no doubt. That's where our business is. We think three is somewhat of an arbitrary number. We do think there's magic in the number three.
Speaker Change: Yeah, Yeah, no I understand <unk> involvement in bitcoin mining I do understand that but.
Speaker Change: Why would you boost from 2.5 or two six to three it just doesn't seem to correlate with all the other opportunities.
Speaker Change: Opportunities you have.
Speaker Change: I mean look that's a good question our priority is the HTC business, there's no doubt that's where our that's where our business is we think we think are three is somewhat of an arbitrary number. We do there is we do think there's magic in the number three.
Sam Tabar: But we also don't want to give up on our Bitcoin mining business. We believe in the thesis of Bitcoin, especially these days with the institutionalization of Bitcoin at the Fed level and increasingly with financial institutions. And so we are actually really excited in the future to talk a little bit more about digital assets and what we will be doing on that front. But for the time being, we believe that, you know, when you're mining Bitcoin, you're getting that at a discount to open markets, and that is an important thing to do. But we're not going to expand for expansion's sake.
Speaker Change: But we also.
Speaker Change: We also don't want to give up on our big core mining business. We believe in the thesis of bitcoin, especially these days with the institutionalization of big coin at the fed level and increasingly with financial institutions.
Speaker Change: And so we are actually really excited in the future to talk a little bit more about.
Speaker Change: Digital our thoughts are and what we will be doing on that front, but for the time being we believe that you know.
Speaker Change: When you're mining bitcoin youre getting out of the discount to open markets and that is an important thing to do but we're not going to expand for expansion sake, we're optimizing our fleet, we're making it lean we're reducing costs and the methods that I talked about earlier today with respect to boost right is that your question is kind of.
Sam Tabar: We're optimizing our fleet, we're making it lean, we're reducing costs, and the methods that I talked about earlier today. With respect to Boostroid, your question is kind of not clear to me. You're asking how has pricing changed during the course of time? It wasn't clear.
Speaker Change: Not clear to me, you're asking how has pricing changed during the course of time that it wasn't clear.
Speaker Change: I am sorry.
Cameron Schnier: I just interject, Kevin. I mean, the way that contract is structured, it's not like our traditional cloud services. It's structured effectively as an equipment lease, which basically means that all the data center expenses are effectively pass-throughs, or more specifically, we're not even billed. So it's pretty agnostic. Like, they directly pay the data center costs. Perfect, Cam.
Speaker Change: At sport.
Speaker Change: I can just interject, Kevin I mean, the way that contract is structured it's not like our traditional.
Speaker Change: Traditional cloud services, it's structured.
Speaker Change: Effectively as an equipment lease.
Speaker Change: Which basically means that all the data center expenses there.
I quickly pass throughs or more specifically.
Speaker Change: And that had been built so it's pretty agnostic.
Speaker Change: They directly pay the datacenter cost.
Speaker Change: Perfect calm. Thank you very much gentlemen, I appreciate you entertaining everything I had for you. Thank you. Thanks, David Thank you got it thank you.
Kevin Eadie: Thank you very much, gentlemen. I appreciate you entertaining everything I had for you. Thank you. Thanks, Kevin. Thank you.
Greg Pinde: And the next question will come from Greg Pinde with ClearStream. Hi, Greg. Thanks for taking my call. Hi. And for Brian Dobson.
Speaker Change: And the next question will come from Greg <unk> with clear Street.
Speaker Change: Hi, great. Thanks for taking my call.
Speaker Change: Hi, <unk>.
Speaker Change: Sure Brian Dobson.
Greg Pinde: But just, I guess the question, you're one of the only companies out there that I'm aware of that has deployed the Ethereum staking yield strategy. But we're hearing from a lot of the other miners, and you said earlier, you're going to remain committed to having some Bitcoin mining, at least for now. But how are you evaluating the yield strategies that some of the pure play Bitcoin miners are looking to do on their HODL balance? And with that shift, are you still going to be very comfortable with staking Ethereum to get yield off the coin? Thanks.
Speaker Change: Just I guess the question you're one of the only.
Speaker Change: Companies out there that I'm aware of that have deployed.
The theory, and taking yield strategy, but we're hearing from a lot of the other miners and you said earlier you get them remain committed to having some bitcoin mining at least for now but.
How are you evaluating the yield strategies that some of.
Speaker Change: The pure play bad coin miners are looking to do on their hottle balance and would that shift or are you still going to bear.
Speaker Change: Very comfortable with sticking with your aim to get yield off the coin. Thanks.
Sam Tabar: Yeah, well, the yield on Ethereum is higher than Bitcoin, Bitcoin, there is no, there is no real yield, there's the yield on Ethereum. But we are, you know, we want to talk about the future of digital assets, and our strategy on that in the medium term future.
Yeah, well the year.
Speaker Change: Yield on the theory, and that's higher than they claim bitcoin. There is no. There is no real yield there is yield on theory them, but we are you know we want to talk about the future of digital assets.
Speaker Change: And our strategy on that in the medium term future I don't want to say too much about it right now, but we do believe that there is a very bright future with digital assets we've seen.
Sam Tabar: I don't want to say too much about it right now. But we do believe that there is a very bright future with digital assets. We've seen, as mentioned earlier with Kevin, that Bitcoin is now an accepted part of the DNA of the financial structure of the United States. They're also now creating a digital assets stockpile for the long tail of other coins. I would imagine that will include Ethereum once that's announced. There are many technologies out there outside of Bitcoin with respect to Ethereum and other coins that are really worth looking at and also provide staking value and have their own merits.
Speaker Change: As mentioned earlier with Kevin that Bitcoin is now in.
Speaker Change: An accepted part of the DNA of the financial structure of the United States. They are also now creating a digital asset stockpile for the long tail of other coins.
Speaker Change: I'd imagine that will include a theory of what once that's announced.
Speaker Change: There are many technologies out there outside of bitcoin with respect to the theory and other coins that are really worth looking at.
Speaker Change: And also provide staking value and have their own merits.
Sam Tabar: And that's something we could, you know, get into in the medium term future, but for the time being, we're focused on white fiber, which includes our co-location services with Billy and our cloud business with Ben. Okay, thanks.
Speaker Change: And that's something we could get into in the medium term future, but for the time being we're focused on white fiber, which includes our co location services with Billy <unk>.
And our cloud business the bed.
Speaker Change: Okay. Thanks, and then just one more real quick one just we all.
Sam Tabar: And then just one more real quick one. We're hearing from a lot of people that the demand for HPC is out there, but how important is the location specifically near the metro areas? Because there's a lot of other miners out there that are teasing the idea of pivoting maybe some of their axle hash to HPC. But just from your discussions and what you're seeing in the environment, can you get more specific on what's drawing people? Is it location? Is it near metro areas or even near specific climate areas that are drawing people? Yeah, Billy will certainly offer a more technical answer than mine, but clearly there is business that we have won, and there are certain requirements, particularly on the inference side, that require low latency, which means you have to be in cities or near cities in order to provide for such clients.
Speaker Change: We're hearing from a lot of people that the demand for H B C is out there, but how important is the location specifically near the metro areas.
Speaker Change: Because theres a lot of other miners out there that are teasing the idea.
Speaker Change: Pivoting, maybe some of their acts of hash.
Speaker Change: Two H P C, but just from your discussions on what Youre seeing in the environment can you get more specific on what's drawing people is it.
Location is it near metro areas or even.
Speaker Change: On your specific climate areas that are drawing people.
Bill: Yes Bill.
Bill: Certainly offer a more technical answer than mine, but clearly there is business that we have won.
Bill: And there are there are certain requirements.
Bill: Particularly on the inference side that require low latency, which means you have to be in cities or near cities at orange provide for such clients.
Billy Krassakopoulos: And so we've always taken that view. For a long time, our thesis is proving correct. We understand that other Bitcoin miners are building in different places, and we salute them, and we wish them the best. But with respect to our strategy, we prefer to have our Tier 3 data centers in metropolitan areas or near them, particularly with respect to inference. And it's one of the reasons why, frankly, we won businesses like Cerebrus.
Bill: So we've always taken that view for a long time or thesis is proving correct. We understand that other big coin miners are building and are in different places and we salute them and in the end there you know we.
Bill: We hope we wish them, the best but with respect to our strategy, we prefer to have our tier three data centers in metropolitan areas or near them, particularly with respect to insurance and it's one of the reasons why I think we won businesses likes to readdress. The ability do you have anything more to add to that I'm sure you do I.
Billy Krassakopoulos: But Billy, do you have anything more to add to that? I'm sure you do. My technical prowess is not as good as yours when it comes to this. For sure, we prefer urban markets because latency is very important in these types of installations. But the markets that we're looking at, price per square foot is not in the high to extreme ranges. We always look for locations. We try to balance out the locations. It's very helpful.
Bill: Hi.
My technical prowess, there is not as good as yours when it comes to this.
Speaker Change: So we look for sure we prefer or urban markets because latency is very important.
Speaker Change: These types of installations, but the markets that we're looking at a price per square foot is not in the high two extreme ranges and we always look for locations, we try to balance out or location.
Speaker Change: That's very helpful. Thanks, a lot.
Billy Krassakopoulos: Thanks a lot.
Joe Gomez: And the next question will come from Joe Gomez with Noble Capital. Good morning. Thanks for taking my question. So I just wanted to circle back here to something you said, Sam, you know, it sounds like, you know, given where the stock is, you're going to turn the ATM off. And, you know, last year, you guys raised over 240 million from and just kind of want to get your thoughts that you're comfortable that you can. you know, finance through other means that that type of capital going forward. Yeah, at these current levels, there is no desire to tap into the ATM.
Speaker Change: And the next question will come from Joe Gomes with noble capital.
Speaker Change: Hi, Joe.
Thanks for taking my question.
Speaker Change: So I just wanted to circle back here to something you said Sam.
Sounds like Youre.
Speaker Change: Given where the stock is youre going to turn the ATM off and you know last year, you guys raised over $240 million from that.
Speaker Change: And just kind of wanted to get your thoughts.
Speaker Change: Comfortable that you can.
Speaker Change: You know financed through other means that that type of of capital.
Speaker Change: Going forward here.
Speaker Change: Yeah at these current levels there is no.
Speaker Change: Desire to tap into the ATM and frankly, we don't want to we don't we.
Sam Tabar: And frankly, we don't want to, we don't. It hurts us as shareholder owners, which is what we are, to dilute the shareholding.
Speaker Change: It hurts us a shareholder owners, which is where we are to dilute the shareholding and we one of the reasons why we decided to pivot.
Sam Tabar: And one of the reasons why we decided to pivot and expand and aggressively pursue the HPC business through cloud, through co-location services, is that it is a much easier path to take on debt. Bit Digital has had historically zero debt in the past, and the reason is because when you take on debt, you can't model, if you take on debt for Bitcoin mining, you can't model out your future cash flows, unless you're using a different type of Excel spreadsheet that I'm used to. You just can't predict the future cash flows because you don't know where the price of Bitcoin is going to be.
Speaker Change: And expand and aggressively pursue the SPC business through cloud to co location services is that it is a much easier path to take on debt that digital has had historically zero deaths in the past and the reason is because when you take on debt.
Speaker Change: Can't matter for them, if you take on debt for Bitcoin mining you can't model out your future cash flows unless you're using a different type of excel spreadsheet that I'm used to you just can't predict the future cash flows because you don't know where the price of bitcoin is going to be so when big coin miners are taking on that too.
Sam Tabar: So when Bitcoin miners are taking on debt to... finance their expansion. It's a wild gamble and that didn't exactly turn out very good for many Bitcoin miners. So we never took on debt historically. And most Bitcoin miners, they realize the risk of taking on debt there too, and they are aggressive with their ATM.
Speaker Change: <unk>.
Speaker Change: Finance their expansion, it's a wild gamble and that didn't exactly turned out very good for many big coin miners. So we never took on debt historically.
Speaker Change: And most big climb miners they realize the risk of taking on debt there too and they are aggressive with their ATM.
Sam Tabar: We decided if we're going to go towards a business that's non-cyclical and we can tap into non-deleted sources of capital, in other words, not touch the ATM, and which is exactly what we're doing now, particularly on the data center side, for example, we already have a very attractive term sheet from a Canadian bank lender where the terms are incredible and we don't have to use the ATM if that's the kind of financing terms that we can do. And it's easier to use those sources of financing because you can model future cash flows when it comes to co-location services.
Speaker Change: We decided if we're going to go.
Speaker Change: Towards a business, that's non cyclical and we can tap into non dilutive sources of capital in other words not touch the ATM.
Speaker Change: And which is exactly what we're doing now, particularly on the datacenter side. For example, we already have a <unk>.
Speaker Change: <unk> attractive term sheet, a farmer Canadian bank lender.
Speaker Change: The terms are incredible and we don't have to use.
The ATM if if if that's the kind of financing terms that we can do and it's easy or to use those sources of financing because you can model future cash flows when it comes to co location services you can model future cash flows when it comes to the card business.
Sam Tabar: You can model future cash flows when it comes to the car business. You can't do that with Bitcoin mining, which is why, as I said, we have zero debt because we were Bitcoin miners and now we've become something very different and that's why we're ready to take on debt at very attractive terms in order to expand our businesses that are growing exponentially. Now I would just say that equity financing is painful, Joe, but I mean, if you look at the platform we built in 2024, I mean, we feel very good about that. So I think it is.
Speaker Change: You can't do that with a bitcoin mining, which is why as I said, we had zero debt because we were big claim miners and now we've become something very different and that's why we're ready to take on debt at very attractive terms.
Speaker Change: To expand our businesses that are growing exponentially.
Speaker Change: No I was just great that extra equity financings painful Joe, but I mean, if you look at the platform. We built in 2024, I mean, we feel very good about that.
Speaker Change: So.
Speaker Change: I think it was.
Joe Gomez: A very good use of funds and near term as a source of funds, we would likely opt to sell some digital assets before Appreciate that, Culler. Thanks, guys. Good question. Tough one, but happy to answer it.
Speaker Change: Good use of funds and near term as a source of funds we would.
Speaker Change: Likely opt to sell some digital assets before equity.
Speaker Change: Okay.
Speaker Change: I appreciate the color thanks, guys.
Speaker Change: Good question tough, one, but happy to happy to answer it.
Cameron Schnier: Thank you and that does conclude the question answer session. I'll now turn the conference back.
Speaker Change: Thank you and that does conclude the question and answer session I will now turn the conference back over to you.
Cameron Schnier: Well, thank you very much, ladies and gentlemen.
Speaker Change: Well, thank you very much ladies and gentlemen, this concludes.
Cameron Schnier: This concludes the call for Bit Digital. We look forward to the next quarterly call. Stay tuned for some more very interesting news. And that's it. Thank you so much. Have a great day.
Speaker Change: The call forbid digital we look forward to the next quarterly call stay tuned for some more very interesting news and that's it. Thank you so much have a great day.
Operator: And that does conclude today's conference. We do thank you for your participation. Have an excellent day.
Speaker Change: And that does conclude today's conference. We do thank you for your participation have an excellent day.
Operator: Thanks for watching!
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Yeah.
Speaker Change: [music].