Q1 2025 LM Funding America Inc Earnings Call
Yeah.
Operator: Good day and thank you for standing by.
Speaker Change: Good day, and thank you for standing by and welcome to the L. M funding America's first quarter 2025 earnings Conference call. At this time, all participants are in a listen only mode.
Operator: Welcome to the LM Funding America's First Quarter 2025 Earnings Conference Call. At this time, all participants are on a listen-only mode. After the presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. Please note that today's conference is being recorded.
Speaker Change: After the presentation there'll be a question and answer session. Just a question. During this session you will need to press star one on your telephone.
Speaker Change: We'll then hear an automated message advising you of hangar space.
Speaker Change: Note that today's conference is being recorded I will now hand, the conference over to your speaker host Scotty Fletcher of installation.
Cody Fletcher: I will now hand the conference over to your speaker host, Cody Fletcher, for the resolutions. Please go ahead. Thank you, operator.
Speaker Change: Please go ahead.
Speaker Change: Thank you operator, and thank you all for joining L. M funding America's first quarter 2025 earnings conference call.
Cody Fletcher: And thank you all for joining LM Funding America's first quarter 2025 earnings conference call. Joining us today are Chairman and CEO Bruce Rogers, President of U.S. Digital Mining, Ryan Duran, and CFO, Richard Russell.
Speaker Change: Joining us today are chairman and CEO Bruce Rogers.
Speaker Change: Evidence of U S digital mining, Ryan <unk> and CFO Richard Russell.
Cody Fletcher: For today's call, we have uploaded an accompanying supplemental investor presentation, which can be found under the events section of LM Funding's investor relations website. Before we get started, please note that our remarks today may include forward-looking statements. These statements are subject to risks and uncertainties and actual results may differ materially. We will also reference certain non-GAAP financial measures today. Please refer to our 10-Q filing and our website for a full reconciliation of these non-GAAP performance measures to the most comparable GAAP measures.
Speaker Change: For today's call, we have uploaded and accompanying supplemental investor presentation, which can be found under the events section a L. M fundings Investor Relations website.
Speaker Change: Before we get started please note that our remarks today may include forward looking statements.
Speaker Change: These statements are subject to risks and uncertainties and actual results may differ materially.
Speaker Change: We'll also reference certain non-GAAP financial measures today.
Speaker Change: Please refer to our 10-Q filing on our website for a full reconciliation of these non-GAAP performance measures to the most comparable GAAP measures.
Cody Fletcher: For a comprehensive discussion of these and other risks, please refer to our filings with the SEC available on sec.gov and in the investor section of our website at www.lmfunding.com backslash investors.
Speaker Change: For a comprehensive discussion of these and other risks please refer to our filings with the SEC available on SEC Gov and in the investors section of our website at Www Dot L. M funding dot com backslash investors.
Bruce Rodgers: I will now turn the call over to our CEO, Bruce Rodgers. Thanks, Cody. Good morning, and thank you for joining us today. The first quarter of 2025 marked another period of strong execution and strategic progress for LM Funding. Since entering the Bitcoin mining business in 2021, we have transitioned from an asset-like model to a vertically integrated operator, gaining full control of our fleet, improving margins, and reducing operational risk. We mined 24.3 Bitcoin for the quarter, continuing to scale our production capabilities while improving our operational efficiency. Parallel, we've begun monetizing our curtailment energy sales by selling energy back to the grid during periods of peak demand.
Speaker Change: I'll now turn the call over to our CEO Bruce Rogers.
Speaker Change: Bruce.
Bruce Rogers: Thanks, Carrie good morning, and thank you for joining us today.
Bruce Rogers: First quarter of 2025 marked another period of strong execution and strategic progress for al and funding.
Bruce Rogers: Since entering the bitcoin mining business in 2021, we've transitioned from an asset light model to a vertically integrated operator, gaining full control of our fleet improving margins and reducing operational risks.
Bruce Rogers: We mined $24 three big corn for the quarter continuing to scale, our production capabilities, while improving our operational efficiency.
Bruce Rogers: In parallel.
Bruce Rogers: We've begun monetizing our curtailment energy sales by selling energy back to the grid during periods of peak demand, creating a natural hedge against bitcoin price volatility and further reducing our cost of operations.
Bruce Rodgers: Creating a natural hedge against Bitcoin price volatility and further reducing our cost of operation. Our disciplined approach to cost management also drove a meaningful reduction in operating expenses, as we continue to build a leaner, more agile, vertically integrated business without compromising performance.
Bruce Rogers: Our disciplined approach to cost management also drove a meaningful reduction in operating expenses as we continue to build a leaner more agile vertically integrated business without compromising performance.
Bruce Rodgers: Rick will cover this in more detail shortly. We're seeing progress in margin improvements and cost. Furthering our Discipline Growth Strategy. Finally, we again call attention to the disparity between the value of our Bitcoin held versus our market cap. On April 30th, we held 148.7 big Given a market price of $104,000 per Bitcoin, our Bitcoin holdings will be worth $15.5 million, or approximately $3.01 per share. when our stock is trading at $1.87 as of May 13 close.
Bruce Rogers: Rick will cover this in more detail shortly.
Speaker Change: We're seeing progress and margin improvements and cost control.
Speaker Change: Furthering our disciplined growth strategy.
Speaker Change: Finally.
Speaker Change: We again call attention to the disparity between the value of our bitcoin held versus our market cap.
Speaker Change: On April 30, we held $148 seven bitcoin.
Speaker Change: Given the market price of $104000 per bitcoin or bitcoin holdings will be worth $15 5 million or approximately $3 <unk> per share.
Speaker Change: When our stock is trading at $1.87 as of May 13th close.
Ryan Duran: I'll now turn the call over to Ryan Duran, our President of U.S. Digital Mining, to review our operational highlights in more detail. Ryan. Thank you, Bruce. In the first quarter, we focused on maximizing the operational efficiency of our existing infrastructure while targeting strategic growth opportunities. We achieved 560 petahash at the end of March, deployed LuxOS upgrades across our Oklahoma fleet, and executed our first power sales back to the grid. In May, we ordered two one megawatt immersion mining containers for our previously announced two megawatt expansion of our Oklahoma site. We expect to complete construction and energization by the end of third quarter pending international shipping timeline.
Speaker Change: I'll now turn the call over to Ron <unk>, our president of U S digital mining to review our operational highlights in more detail Brian.
Speaker Change: Uh huh.
Speaker Change: Thank you Bruce and the first quarter, we focused on maximizing the operational efficiency of our existing infrastructure, while targeting strategic growth opportunities. We achieved 560 <unk> at the end of March deployed lumps OS upgrades across our Oklahoma fleet and executed our first power sales back to the grid.
Speaker Change: In May we ordered two one megawatt emerging mining containers for our previously announced two megawatt expansion of our Oklahoma site, we expect to complete construction and energy station by the end of third quarter pending international shipping timelines.
Ryan Duran: We believe the shift to immersion cooling marks a meaningful advancement in our operational strategy. This technology will allow us to operate in crowded and harsh environments that offer access to lower cost power. Immersion technology reduces dust, heat and humidity, leading to a more consistent performance with longer equipment lifespan and improved reliability. We expect immersion technology to expand our operational horizons and add shareholder value. Our shift to immersion cooling led to the strategic decision to sell the 256 Bitmain S21 Plus machines ordered last December and delivered this April. Machine prices have been relatively stable throughout this period, so we anticipate this transaction to be cash neutral.
Speaker Change: We believe the shift to emerging cooling marks a meaningful advancement in our operational strategy. This technology will allow us to operate in crowded in harsh environment to offer access to lower cost power.
Speaker Change: Emerging technology reduces dust heat and humidity, leading to more consistent performance with longer equipment lifespan and improved reliability.
Speaker Change: We expect emerging technology to expand our operational horizons and add shareholder value.
Speaker Change: Our shift to emerging cooling led to the strategic decision to sell the 256 F. 'twenty one plus machines ordered last December and delivered this April machine prices have been relatively stable throughout this period. So we anticipate this transaction to be cash neutral.
Ryan Duran: Lastly, as mentioned in our April production update, we began relocating our 800 machines from our hosting partner site to our wholly owned Oklahoma site. Once installed, these machines will operate with lower power costs, enabling us to mine bitcoins at more cost.
Speaker Change: Lastly, as mentioned in our April production update we began relocating our 800 machines from our hosting partner side to our wholly owned Oklahoma site. Once installed these machines will operate with lower power costs, enabling us to mine more cost effectively.
Richard Russell: Our CFO Rick Russell will now provide a review of the financial highlights for the first quarter of 2025. Rick. Thank you, Ryan. In the first quarter of 2025, we mined 24.3 bitcoins at an average price of $93,500. which was 12% more Bitcoin mined. Bitcoin mining revenue for the quarter was approximately $2.3 million dollars up 25% Reflecting the success of our infrastructure investments and improved machine efficiency for the Lux OS upgrade.
Speaker Change: Our CFO, Rick Russell will now provide a review of the financial highlights for the first quarter of 2025 Rick.
Rick Russell: Thank you Ryan and the first quarter of 2025, we mined $24 three big points at an average price of 93500 hours.
Speaker Change: Which was 12% more pinpoint mine sequentially.
Speaker Change: Bitcoin mining revenue for the quarter was approximately $2 3 million up 25% sequentially.
Speaker Change: Reflecting the success of our infrastructure investments and improved machine efficiency from that.
Speaker Change: OS upgrades.
Richard Russell: Year over year, revenue declined 50.5%, largely due to the impact of the April 2024 habit. Additionally, we have made significant strides in our operational strategy. As Bruce mentioned, during the first quarter, we generated approximately $150,000 from power cells back to the grid, offsetting our mining cost of revenue. This contributed to an improvement in mining margins from 31.2% in Q4 2024 to 38.5% in Q1 2025. In April, we generated approximately $120,000 in power sales, demonstrating early momentum in this initiative. By incorporating curtailment into our operational models, we aim to stabilize operating costs by establishing a partial hedge against Bitcoin price volatility.
Speaker Change: Year over year revenue declined 35% largely due to the impact of the April 2020 for Abbvie.
Speaker Change: Additionally, we have made significant strides in our operational strategy.
Speaker Change: As Bruce mentioned during the first quarter, we generated approximately $150000 from power sales back to the grid Allstate, our mining cost of revenue.
Speaker Change: This contributed to an improvement in mining margins from 31, 2% in Q4 2024.
Speaker Change: To the 38, 5% in Q1 2025.
Speaker Change: In April we generate a profit of 120000 hours of power sales.
Speaker Change: Demonstrating early momentum in this initiative.
Speaker Change: Corporate curtailment into our operational models, we aimed to stabilize operating cost by establishing a partial hedge against big point price volatility.
Richard Russell: As Bruce also mentioned, another highlight for the quarter was reduction in our staff costs, professional fees, SG&A, and other costs by 7.7% year over year. This improvement was driven by our transition to a linear operational model while maintaining output and efficiency.
Speaker Change: As Bruce also mentioned another highlight for the quarter was reduction in our staff costs professional fees.
Speaker Change: <unk> and other costs by seven 7% year over year.
Speaker Change: This improvement was driven by our transition to a leaner operational model, while maintaining output and efficiency.
Richard Russell: Net loss for the quarter was 5.4 million with a core EBITDA loss of 2.8 million both driven by a 1.8 million Bitcoin non-cash write down for fair market value of our big held as of March 31, 2025. However, as of the date of this call, the 1.8 million write down has nearly reversed given Bitcoin's price recovery to approximately $104,000 as of May 13, 2025. We finished the quarter with $1 million in cash and our Bitcoin holdings increased to 160.2 Bitcoin valued at $13.2 million as of March 31, 2025. or approximately $2.58 per share. User April month in holdings of 148.7 Bitcoin and a Bitcoin price of 104,000 as of May 13, 2025.
Speaker Change: Net loss for the quarter was $5 4 million with a core EBITDA loss of $2 8 million, both driven by a $1 8 million Big point noncash write down for fair market value of our <unk>.
Speaker Change: As of March 31, 2025.
Speaker Change: However, as of the date of this call.
Speaker Change: The 1.8 million write down is the only reverse given breakpoints price recovery to approximately 100.
Speaker Change: 4000 as of May 13, 2025.
Speaker Change: We finished the quarter with $1 billion in cash and our <unk> holdings increased to 162 Big point valued at $13 2 million as of March 31 2025.
Speaker Change: Our approximately $2 <unk> per share.
Speaker Change: You said April Martin Holdings.
Speaker Change: $8 7 million a breakpoint price of 104000 as of May 13, 2025.
Richard Russell: Calculating value of our holdings would be approximately $15.5 million or about $3 per share compared to our May 13th stock price of $1.87 on the same day.
Speaker Change: To calculate <unk>.
Speaker Change: Would be approximately $15 5 million or about $3 per share compared to our may 13th stock price of $1 87 on the same date.
Bruce Rodgers: Bruce will now provide some thoughts on our outlook and strategy heading into the remainder of 2020. Thanks, Rick. Looking ahead, as Ryan mentioned, we're excited to begin immersion mining with expansion of our Oklahoma site. We believe immersion mining will produce immediate returns in Oklahoma and open up unique mining site selection opportunities. We're seeking to deploy immersion technology at greenfield and brownfield sites offering 5 to 20 megawatts. Facilities that typically fall below the acquisition thresholds of larger operators or offer environments best suited for immersion mining. In Oklahoma, curtailment and energy sales complement our mining revenue and provide a natural hedge against Bitcoin price volatility.
Speaker Change: Bruce will now provide some thoughts on our outlook and strategy heading into the remainder of 2025.
Bruce Rogers: Thanks, Rick.
Bruce Rogers: Looking ahead as Ryan mentioned, we're excited to begin emerging mining with expansion of our Oklahoma site.
Speaker Change: We believe immersion mining will produce immediate returns in Oklahoma and open up unique mining site selection opportunities to us.
Speaker Change: We're seeking to deploy immersion technology at Greenfield and brownfield sites offering 5% to 20 megawatts facilities that typically fall below the acquisition thresholds of larger operators or offer environments best suited for emerging mining.
Speaker Change: And Oklahoma curtailment in energy sales complement our mining revenue and provide a natural hedge against bitcoin price volatility.
Bruce Rodgers: by treating Bitcoin mining sites like ours as power producers. Our energy agreement in Oklahoma allows us to sell curtailed energy back to the grid at market prices. We hope to build a sustainable business model around similar sites that can thrive in various market conditions, mining Bitcoin with greater flexibility and at lower cost. We remain bullish on Bitcoin and committed to our long term Bitcoin accumulation strategy. We have. We began our treasury strategy in 2021. Holding and mining Bitcoin remains a logical continuation of this strategy. Recent news reports indicate we're not alone in our thinking. 2024, we borrowed $5 million secured by our Bitcoin holders.
Speaker Change: By trading Bitcoin mining sites like ours as power producers are energy agreement in Oklahoma allows us to sell curtailed energy back to the grid at market prices.
Speaker Change: We hope to build a sustainable business model around similar sites that can thrive in various market conditions mining bitcoin with greater flexibility and at lower cost.
Speaker Change: We remain bullish on bitcoin and committed to our long term big coin accumulation strategy.
Speaker Change: Hello.
Speaker Change: We began our treasury strategy in 2021, holding in mining Bitcoin remains a logical continuation of this strategy.
Speaker Change: Recent news reports indicate we're not alone in our thinking in 'twenty 'twenty four we borrowed $5 million secured by our Bitcoin holdings.
Bruce Rodgers: So like others in the news, we may want to add Bitcoin to our balance sheet with debt and or equity.
Speaker Change: Others in the news, we may want to add big coin to our balance sheet with debt <unk> equity.
Bruce Rodgers: In closing, we believe this approach to Bitcoin treasury management will create substantial long-term value for our shareholders, particularly given that our Bitcoin holdings are currently valued at more than one and a half times our market capitalization.
Speaker Change: In closing we believe this approach to bitcoin Treasury management will create substantial long term value for our shareholders, particularly given that our bitcoin holdings are currently valued at more than one five times our market capitalization.
Bruce Rodgers: Thank you for your time this morning and your continued support.
Speaker Change: Thank you for your time this morning, and your continued support.
Operator: Thank you, Bruce. Ladies and gentlemen, as a reminder, to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced. Please stand by while we compile the Q&A roster.
Speaker Change: Great.
Speaker Change: Thank you, ladies and gentlemen, as a reminder to ask a question you will need to press star one on your telephone and wait for your name to be announced.
Speaker Change: Please standby, while we compile the Q&A roster.
Michael Donovan: Our first question coming from the line of Michael Donovan with AC Van Rydelen is open. Hi, Bruce, Rick, Ryan, thank you for taking my question. This is Michael Dobbin calling in for Kevin Dede. Um, can you guys talk a little bit more about the Oklahoma site build out and, and what you're thinking about currently in Texas? Sure. Texas has got a counterparty issue, so I don't think that there's anything in the short-trising force at this point. Oklahoma, we are up and running, and we're looking for containers to expand by the end of the year, and that is on the timetable that we discussed earlier.
Speaker Change: Our first question coming from the line of Michael Donovan with H C. Wainwright. Your line is open.
Speaker Change: Hi, Bruce Rick Ryan. Thank you for taking my question. This is Michael Donovan, calling in for Kevin Didi.
Speaker Change: Can you guys talk a little bit more about the Oklahoma site, Buildout and and what Youre thinking about currently in Texas.
Speaker Change: Sure.
Speaker Change: Texas.
Speaker Change: Now the counterparty issues I don't think that any.
Speaker Change: In the short term has enforced.
Speaker Change: <unk>, we are up and running and where we.
Speaker Change: We will take delivery containers to expansion.
Speaker Change: And that is on the timetable that we discussed earlier.
Bruce Rodgers: and we'll update you as the quarter progresses. Now the two megawatts we expect, I think, Ryan, the machines will be ready to ship to us from China and North Korea. Segment. We've got a lot going on so far. Okay, I appreciate that.
Speaker Change: And.
Speaker Change: Update you as the quarter progresses.
Speaker Change: No that does.
Speaker Change: Megawatts, we expect I think Brian that machine to be ready to ship to us.
Speaker Change: Got it.
Speaker Change: Securities that can be better.
Speaker Change: Yes.
Speaker Change: Got it.
Speaker Change: Sure.
Speaker Change: Okay I appreciate that.
Unknown Executive: Now, after that April sales of the S21.
Speaker Change: After that April sales of the F. 'twenty, one so does that take care of all of the machines that were in inventory.
Unknown Executive: So does that take care of all all the machines that were in inventory and, and not plugged in? I'm taking care of it, I don't know what that means. So we did sell S21s and S21 pluses rather and now they're at a facility that we're operating over and Okay, now that's fine.
Speaker Change: And im not plugged in.
Speaker Change: Okay take care of it I don't know what that means so we did.
Speaker Change: 21 months.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: Sure.
Speaker Change: Turning over.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: Brian.
Speaker Change: Okay.
Speaker Change: And in the wholesale side.
Unknown Executive: Candidate, Tony Freelander. The Net Revenue will be backed up. Interviews, FSB Office, Regular Meetings, or decided.
Speaker Change: And Paul.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: The net revenue.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Now some thoughts.
Speaker Change: Okay perfect.
Speaker Change: Okay.
Speaker Change: Okay.
Unknown Executive: Okay, maybe we'll, we'll, we'll work on it.
Speaker Change: Okay.
Speaker Change: Sure.
Speaker Change: Yes.
Ryan Duran: Okay, um, now then for I guess just a 20,000 foot perspective question with the new sites, do you have any geographies? in mind targeting the 5 to 20 megawatt greenfield brownfield buildouts are you exploring? The geography.
Okay.
Speaker Change: Yes sure.
Speaker Change: I guess, just a 20000 foot perspective question with the new sites do you have any geographies.
Speaker Change: In mind targeting the 5% to 20 megawatt green Greenfield brownfield build outs.
Speaker Change: Exploring.
Speaker Change: Still at exactly the geography.
Speaker Change: Sure.
Speaker Change: Okay.
Speaker Change: Okay.
Ryan Duran: Ryan Duran. and we do that through our energy provider, to have an insight into the type of extracts we would like to be found. That's taking us right down to Oklahoma. This is in Oklahoma, the other slide is in Pennsylvania.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: And when we do that through our energy provider tablets.
Speaker Change: At this time.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Let's take right now.
Speaker Change: This is in Oklahoma.
Speaker Change: Lynn.
Speaker Change: Okay.
Unknown Executive: I'll be calling you from Texas. Everything that has this kind of power range. Okay, great. Well, thanks, guys. And best of luck. As a reminder, if you have a question, please press star 11.
Speaker Change: I'm, calling you from Texas.
Speaker Change: Yes.
Speaker Change: Texas that has this kind of power arrangement.
Speaker Change: Okay, great well thanks, guys.
Speaker Change: Best of luck.
Speaker Change: Okay.
Speaker Change: As a reminder.
Speaker Change: A question Please press star one.
Operator: And since there are no further questions in the queue, I would like to thank everyone for joining us on LM Funding Americas, Inc. first quarter earnings call.
Speaker Change: And since there are no further questions in the queue I would like to.
Speaker Change: Thank you everyone for joining us on Ellen Funding America, Inc. First quarter earnings call. Thank.
Operator: Thank you for your participation and you may now disconnect.
Speaker Change: Thank you for your participation and you may now disconnect.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: [music].