Q3 2025 LM Funding America Inc Earnings Call
Good day and thank you for standing by, welcome to the LM funding America. Inc's third quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session to ask a question during the session. You will need to press star 1, 1 on your telephone. You will then hear an automated message. Advise, your hand is raised to withdraw your question. Please press star 1 1 again, please be advised. That today's conference is being recorded, I would now like to hand the conference over to your speaker today. Cody Fletcher, please go ahead sir.
Thank you operator and thank you all for joining. LM funding America's third quarter 2025 earnings conference call
Joining us today are our Chairman and CEO, Bruce Rodgers; President of US Digital Mining, Ryan Duran; and CFO, Richard Russell.
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 9 gaap Financial measures today. Please refer to our 10q filing and our website for a full reconciliation of these non-gaap performance measures for the most comparable gaap measures.
For a more comprehensive discussion of these and other risks, please refer to our filings with the SEC, available on sec.gov and then the investor section of our website at lmf funding.com back investors.
I'll now turn the call over to our CEO. Bruce Rogers.
Thanks Cody. Good morning everyone and thank you for joining us. Third quarter was 1 of execution integration and discipline Capital allocation as we continue building Ln, funding into a vertically integrated Bitcoin miner with a simple ambition.
Increase in Bitcoin per share and grow intrinsic value over time.
We entered the quarter with momentum from our Oklahoma site and a growing Bitcoin treasury a summer progressed, we added meaningful scale and strengthen our foundation.
$21 million of capital designated primarily for Bitcoin accumulation was quickly deployed, with a large portion of those proceeds used to purchase 164 Bitcoin, accelerating our treasury growth.
Just weeks later. We closed on the acquisition of 11 megawatt facility in Columbus Mississippi, bringing our total capacity to 26 megawatts across 2, wholly controlled sites.
This move expanded our operational base Diversified our power and climate exposure and gave us full control of energy and uptime across the second location.
That disconnect between our treasury value alone and our Equity valuation, underscores, the opportunity. We are working toward then in October, we Advanced, 2 core, priorities simultaneously.
We retired more than 3.3 million shares and over 7.3 million warrants in a single transaction. Reducing dilution simplifying, our capital structure and increasing our Bitcoin per share.
Subsequently in early November, we announced a 1.5 million stock buyback. Further committing our resources to increase in Bitcoin per share
During the same quarter, we secured bitm S21 immersion, cool machines. To grow our E Systems at our Oklahoma site. We expect these machines to come online in December,
Importantly, October was also our first full month with Mississippi operating at steady state and the results validated our strategy.
Bitcoin production, increased 28% sequentially rising from 5.9. Bitcoin in September to 7.6 Bitcoin in October taken together Q3 in October. We're about strengthening control of our energy expanding, our mining footprint, growing our Treasury.
And reducing our share count, all in service of improving Bitcoin ownership on a per share basis.
We strongly believe in Bitcoin. As a growth asset, we built our company to take advantage of Bitcoin's growth and long-term value proposition. We find inexpensive power machines to add to our Bitcoin holdings, and we are active in the capital markets, trying to increase our total Bitcoin's health and our Bitcoin's per share. It's a long game, and it starts with sound mining operations. With that, let me turn it over to Ryan.
An operational update.
Thanks Bruce operationally, the last 4 months were about turning owned infrastructure, into accelerating hash power and building an asset base that compounds efficiency over time we moved from a single site facility at roughly 048. Xah hash in June to exiting October with roughly 71x, energized plus additional growth coming online in. December representing roughly 50% hash rate expansion in 1 build cycle.
That growth came from owning and controlling. Our power, upgrading fleet mix, and integrating. Our second site at Mississippi, the acquisition added roughly 7.5 megawatts of energized capacity and approximately 230 petahash of installed hash rate at an attractive $0.036 per kilowatt hour power cost. This gives us a second low-cost, self-managed facility and a diversified operating base.
Equally important, we quickly integrated Mississippi and the site immediately started contributing to our mining operations.
And when we reached our first full month of steady state operation in October total production of the company increased as Bruce mentioned, 27% month-over-month from 5.9 Bitcoin to 7.6 Bitcoin.
This gain reflects, not only expanded capacity but also the compounding benefits of tighter operational control, optimize firmware, refined curtailment, and power sales, scheduling and more efficient Fleet deployment in warmer months.
We Now operate, approximately 6,700 machines across the fleet and additional units stage for deployment behind immersion. Our energized hash rate helps stable through high heat periods supported by curtailment and energy sales that directly improve our margins and we position the fleet for stronger, winter uptime, when performance conditions naturally improve
Gives us a step change in efficiency and should meaningfully increase Bitcoin per megawatt at the site.
This is the same philosophy that guided our site acquisition combine own power, with modern generation hardware, and operate it with discipline. We Now operate a cleaner more efficient and fully controlled mining platform improving uptime and next-gen hardware and emerging coming online,
The foundation is built from here. The focus is simple, increase production, efficiency and Bitcoin per share.
With that, I'll turn it over to Rick to walk through the financials Rick.
Thanks, Ryan, for the third quarter. Revenue is $2.2 million, up approximately 13% sequentially and 74% year-over-year.
The increase reflects stronger average Bitcoin pricing of $114,000 and contributions from the newly operational Mississippi facility for the second half of September.
Mining margins improved to 49% driven by ship from hosting fees to self mining.
Utilizing our curtailment and energy sales to offset mining expenses and higher Fleet efficiency.
Curtailment in energy cells, total 152,000 down from 223 in Q2 due to cooler, seasonal temperatures.
We reported a net loss of 3.7 million in a core evil, laws of 1.4 million, both driven by increased staff calls and payroll expenses.
Following the quarter in, we executed a substantial balance sheet and equity enhancement initiative, completing an $8 million private repurchase of around 3.3 million shares and 7.3 million warrants. Finance are $11 million facility secured by Bitcoin.
This transaction. We moved a large warrant. Overhang in materially reduced the Share account, improving per share, economics and shareholder alignment.
We pair that with a newly authorized 1.5 million public hearing we purchase program which gives us flexibility to act opportunistically. When our market value trades means we leave below our Bitcoin Holdings and infrastructure value.
In terms of our balance sheet at quarter end, LM funding helped cash and cash equivalents of 300,000 and 34 Bitcoin valued at 34.7 million nearly double or market cap.
Well actually, it was 50 million nearly 3 times our market cap.
as of October 31st, our Bitcoin, Trilogy stood at proxy 295 Bitcoin
Value at roughly 3, 1. 9 2.
Compared to a stock price near a17 on 12.2 million shares.
Our liquidity Treasury and credit capacity, give us flexibility to support operations growth continued, share repurchases, while limiting daily should and preserving long-term upside for shareholders.
The numbers tell a clear story, expanding hash rate, improving operating leverage discipline cost control and balance sheets and cap table built to improve per share value over time.
Thanks, Rick. Our focus remains clear: increased Bitcoin per share, expanded infrastructure, and closing the gap between intrinsic value and market value.
We built a vertically integrated platform that gives us operational control cost efficiency and treasury. Leverage with Mississippi, fully online, Oklahoma adding immersion and bitmain S21 machines coming online in December. We are entering a phase of where scale efficiency and productivity converge.
From a capital strategy standpoint, we will continue to balance Bitcoin accumulation, strategic investment, and opportunistic share repurchases that we'll use only when it comes to the balance sheet without sacrificing per share value.
We have no interest in growing for growth's sake. We're interested in growing per share Bitcoin and per share intrinsic value.
We believe deeply in the long-term value of Bitcoin, and we believe just as deeply in the long-term value of LM Funding.
Every action, we take every machine deployment, every site decision, every Capital move is designed to improve per share ownership per share, cash flow and per share Bitcoin.
Please press star 1 1 again.
1 moment.
Our first question is going to come from the line of Matthew galeno with Maxim group, your line is open. Please go ahead.
Hey, good morning guys, thanks for taking my question. Congrats on all the progress uh, over the last uh few months. Um with you know your mining infrastructure, pretty radically different from where it was entering 25. I'm curious if you could maybe give us some thoughts on how you think about um,
you know, that your path in 26 as far as the
The mind you know, the Bitcoin mining infrastructure and um equipment go.
Sure um, the Mississippi acquisition has worked really, really well first off, it's doing what it was supposed to and then, secondly, Greenies left behind some some low-hanging fruit and they did some things to, you know, grow their, that they didn't take advantage of that. We're now kind of slipping into. And, uh, so we've got a nice Runway there that we didn't anticipate. So I look for more growth there and on the magnitude of what we've achieved this year, it seems foreseeable. So that's there. Um Oklahoma we're out in the 2 e machines in there, we'll have that thing. Built out pretty soon and then it just starts paying for itself and making money after that.
That it's going to be a long-term Bitcoin mining site, um, given the energy pricing there. And this is Rick. Um, we also have the...
The ability to expand in Mississippi by additional 4 megawatts. So
Got it, okay, so if I can read between the lines there it sounds like you're not necessarily um you know pursuing or close on any additional site Acquisitions or is that something you're still? You know, exploring but just nothing uh, appealing at this point we always have have people exploring site Acquisitions when we do it based on where the energy tariffs. And then we look for property that goes with those energy tariffs or something.
Got it. And last question for me and I'll jump back in the queue just you know with the uh I guess with the respective that you have the uh I guess mandate now to maximize your, your Bitcoin per share. Um, how do you? You know, I guess think about allocating between mining business and you know, directly acquiring uh additional Bitcoin.
Um, we always say it's you have to take a dollar and decide whether the price of Bitcoin, the price of the infrastructure, Etc and then it's a target of where in the future, you want that to pay off and so we kind of play a long game 5 years on that. Looking at what do we think the price of Bitcoin is that?
That that means you don't necessarily make a a dollar decision based on the the current circumstances you have to make it on a proforma basis which kind of makes it a little more black magic, I get it but it's a long game. So growing the mining helps pay the bills and it it has the potential to be a creative to the overall treasury strategy. And then the treasury strategy is a balance between your equities market and the Bitcoin Market.
Thank you, and we'll move on to our next question.
Our next question comes from the line of Kev DD with hcw. Your line is open, please go ahead.
Oh, well, let me say this is Skai Moore calling for Kevin deei, thanks for taking my call. I've got 2 questions for you all. Uh, the first is going to be with about 15% of your old machines in storage, as reported in the companies October update. How are you guys managing your Fleet of these machines going forward?
Do you want to be this granular? Do you want to handle that?
Right. Sorry. Hey, Skye took a second to get off of me there.
um,
So uh, yeah those uh those machines um, are kind of sitting in the wings as uh, as we've hit on, we do have uh, buildout capacity. Available already immediately at uh, Mississippi.
Awesome. Thanks for that. My final question is, you know, you mentioned more efficient machines being placed at your current sites. Could you guys provide a current cost of mining 1 Bitcoin, or perhaps a range for mining 1 Bitcoin?
Yeah, this is Rick. Um, our
current, you know, mining cost right now per Bitcoin for this most recent quarter was uh, 66,000. Uh, last quarter. It was like 70,000. So we've been able to reduce
It by direct mine cost um, quarter over quarter.
Awesome. Thank you so much for taking my questions, and I look forward to speaking with you guys next earnings. Thank you.
Ladies and gentlemen, this will also conclude today's conference call. Thank you for participating, and you may now disconnect. Everyone have a great day.