Q1 2026 BitFuFu Inc Earnings Call

May 29, 2026

Operator: Good day. Thank you for standing by. Welcome to BitFuFu's First Quarter 2026 Earnings Conference Call. At this time, and for the duration of the conference, all participants are in a listen-only mode. Please be advised that today's conference is being recorded. I'd now like to hand the conference over to your first speaker today, Mr. Charles Brady. Please go ahead, sir.

Speaker #1: Please be advised that today's conference is being recorded. I'd now like to hand the conference over to your first speaker today, Mr. Charles Brady.

Speaker #1: Please go ahead, sir.

Charles Brady: Thank you, operator. Ladies and gentlemen, good morning, and thank you for joining BitFuFu's Q1 2026 earnings conference call. The company's financial results were released earlier today and are available on BitFuFu's investor relations website at ir.bitfufu.com and globenewswire.com. Joining me today on the call are Chairman and CEO Leo Lu and CFO Calla Zhao. As we begin, please note that today's call will contain forward-looking statements under the Safe Harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties. Actual results may differ materially. We refer you to our filings with the SEC for a full discussion of these risks. The company assumes no obligation to update any forward-looking statements, except as required by law. We will also discuss non-GAAP financial information on this call. The company provides this information to supplement information prepared in accordance with U.S. GAAP.

Speaker #2: Thank you, operator. Ladies and gentlemen, good morning, and thank you for joining Bitfufu's first quarter 2026 earnings conference call. The company's financial results were released earlier today and are available on Bitfufu's investor relations website at ir.bitfufu.com and on GlobeNewswire.com.

Speaker #2: Joining me today on the call are Chairman and CEO Leo Lu and CFO Calla Zhao. As we begin, please note that today's call will contain forward-looking statements under the Safe Harbor provisions of the U.S.

Speaker #2: Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties, and actual results may differ materially. We refer you to our filings with the SEC for a full discussion of these risks.

Speaker #2: The company assumes no obligation to update any forward-looking statements, except as required by law. We will also discuss non-GAAP financial information on this call.

Speaker #2: The company provides this information to supplement information prepared in accordance with U.S. GAAP. Our reconciliation of these measures to the company's reported GAAP results can be found in the Reconciliation Tables provided in today's earnings release.

Charles Brady: A reconciliation of these measures to the company's reported GAAP results can be found in the reconciliation tables provided in today's earnings release. For those new to our call, we will not be conducting a Q&A session on the call itself. If you have any questions, please send them to ir@bitfufu.com. We aim to respond within 24 hours. We value your questions and are committed to transparent, timely communication. I will now turn the call over to Leo to begin the management discussion.

Speaker #2: Finally, for those new to our call, we will not be conducting a Q&A session on the call itself. However, if you have any questions, please send them to ir@bitfufu.com.

Speaker #2: We aim to respond within 24 hours. We value your questions and are committed to transparent, timely communication. I will now turn the call over to Leo to begin the management discussion.

Leo Lu: Thanks, Charlie, and thank you all for joining us today. As we begin, let's take a moment to step back and look at the broader landscape, not just for BitFuFu, but for the entire Bitcoin mining and infrastructure space. The Q1 2026 has been defined by a return to volatility. Bitcoin's price rebounded from $87,000 at the end of December 2025 to $96,000 in early January, then fell sharply to $63,000 by mid-February. This wasn't an anomaly. It reflects a maturing cycle. Bull markets build hype, and bear markets build resilience. Across the industry, we've seen peers react in different ways. Some doubled down on expansion, locking in debt or selling Bitcoin to fund their growth. Others chose to pause operations to avoid losses. We observed these patterns closely. They taught us something critical.

Speaker #3: Thanks, Charlie, and thank you all for joining us today. As we begin, let's take a moment to step back and look at the broader landscape.

Speaker #3: Not just for Bitfufu, but for the entire Bitcoin mining and infrastructure space. The first quarter of 2026 has been defined by a return to volatility. Bitcoin's price rebounded from $87,000 at the end of December 2025 to $96,000 in early January, then fell sharply to $63,000 by mid-February.

Speaker #3: This wasn't an anomaly; it reflects a maturing cycle. Bull markets build hype, and bear markets build resilience. Across the industry, we've seen peers react in different ways.

Speaker #3: To temper the downturn on expansion, some companies are locking in debt or selling Bitcoin to fund their growth. Others have chosen to pause operations to avoid losses. We observe these patterns closely.

Speaker #3: They taught us something critical: the companies that survive and eventually thrive are not those that chase the highest growth rate during bull markets, but those that design their business to withstand inevitable downturns.

Leo Lu: The companies that survive and eventually thrive are not those that chase the highest growth rate during bull markets, but those that design their business to withstand inevitable downturns. At BitFuFu, our strategy from day one has been clear. We are building for consistency across cycles with the discipline to manage through volatility. That means focusing on structural advantages such as asset-light agility, capital-light scalability, operational discipline, and technological leverage. This quarter, we leaned even harder into that philosophy. Our dual-engine model remains central. In Q1, we focused on proof through execution. Q1 was not simply about reallocating hash rate. It was about using our dual-engine model, combining cloud mining stability with self-mining's upside as the operating framework that guided our decisions in a low-price environment. Here's what that looked like in practice.

Speaker #3: At Bitfufu, our strategy from day one has been clear: we are building for consistency across cycles, with the discipline to manage through volatility. That means focusing on structural advantages such as asset-light agility, capital-light scalability, operational discipline, and technological leverage.

Speaker #3: This quarter, we leaned even harder into that philosophy. Our dual-engine model remains central. In the first quarter, we focused on proof through execution. The quarter was not simply about reallocating hashrate; it was about using our dual-engine model, combining cloud mining stability with self-mining's upside, as the operating framework that guided our decisions in a low-price environment.

Speaker #3: Here's what that looked like in practice. First, we deliberately reduced self-mining exposure to preserve liquidity and mitigate risk during significant price volatility. Second, we leaned further into cloud mining to prioritize more durable, recurring performance.

Leo Lu: First, we deliberately reduced self-mining exposure to preserve liquidity and mitigate risk during significant price volatility. Second, we leaned further into cloud mining to prioritize more durable recurring performance. Cloud mining revenue grew to $57.5 million, up 7.1% year over year, and net dollar retention rate was 85.7%. Results were driven by disciplined client management, platform reliability, and consistent service execution. Third, we invested in efficiency across both engines by purchasing S21 units and optimizing their deployment. Average fleet efficiency improved to 17.7 joules per terahash from 23.2 joules per terahash a year ago. This improvement is structural and strengthens our cost position through cycles by lowering our cost of production. These were deliberate choices, the differentiator was how we executed them. The key was operational discipline, not just in finance, but in the field. We implemented multiple layers of cost control.

Speaker #3: Cloud mining revenue grew to $57.5 million, up 7.1% year over year, and net dollar retention rate was 85.7%. Results were driven by disciplined client management, platform reliability, and consistent service execution.

Speaker #3: Third, we invested in efficiency across both engines by purchasing S21 units and optimizing their deployment. Average fleet efficiency improved to 17.7 joules per terahash from 23.2 joules per terahash a year ago.

Speaker #3: This improvement is structural and strengthens our cost position through cycles by lowering our cost of production. These were deliberate choices. But the differentiator was how we executed them.

Speaker #3: The key was operational discipline, not just in finance but also in the field. We implemented multiple layers of cost control. First, we reduced site operating expenses by cutting non-essential maintenance, optimizing staffing, and consolidating logistics.

Leo Lu: First, we reduced site operating expense by cutting non-essential maintenance, optimizing staffing, and consolidating logistics. This delivered meaningful savings. Second, we leveraged BitFuFuOS to dynamically manage mining operating modes. We overclock to maximize output during favorable price windows and underclock to reduce power consumption and protect margins during prolonged downturns. Through an AI-enabled dashboard, we coordinate a large fleet and make real-time decisions based on market, power, and hardware metrics. Third, we managed operating costs through disciplined Bitcoin sales, strategically timing Bitcoin disposals to better match power expenses and operational needs. In essence, we treated Bitcoin not just as an asset, but also as a source of strategic liquidity to maintain financial balance and operational resilience. We also delivered meaningful operational improvements.

Speaker #3: This delivered meaningful savings. Second, we leveraged Bitfufu OS to dynamically manage mining operating modes. We overclocked to maximize output during favorable price windows and underclocked to reduce power consumption and protect margins during prolonged downturns.

Speaker #3: Through an AI-enabled dashboard, we coordinate a large fleet and make real-time decisions based on market, power, and hardware metrics. Third, we managed operating costs through disciplined Bitcoin sales.

Speaker #3: We strategically timed Bitcoin disposals to better match power expenses and operational needs. In essence, we treated Bitcoin not just as an asset but also as a source of strategic liquidity to maintain financial balance and operational resilience.

Speaker #3: We also delivered meaningful operational improvements. Power capacity at the end of the first quarter was 457 megawatts, slightly lower than 478 megawatts at the start of the year, primarily due to higher machine efficiency rather than capacity reduction.

Leo Lu: Power capacity at the end of Q1 was 457 MW, slightly lower than 478 MW at the start of the year, primarily due to higher machine efficiency rather than capacity reduction. We're producing more hash rate per unit of power, which strengthens our cost position and supports better margins going forward. To be clear, Q1 was not without its challenges. Gross margin, particularly on self-mining, declined year-over-year due to increased network difficulty, lower Bitcoin prices, and the carrying cost of higher-priced hash rate procured in the prior quarter. In response, we strategically reduced our self-mining exposure to prioritize capital preservation and risk management, and we reallocated capacity toward cloud mining, which supports a more durable and predictable margin profile. Yes, we felt the pressure, but we responded proactively. We didn't wait for the market to recover to improve the model.

Speaker #3: We're producing more hashrate per unit of power, which strengthens our cost position and supports better margins going forward. To be clear, the first quarter was not without its challenges.

Speaker #3: Gross margin, particularly when self-mining, declined year over year due to increased network difficulty, lower Bitcoin prices, and the carrying cost of higher-priced hashrate procured in the prior quarter.

Speaker #3: In response, we strategically reduced our self-mining exposure to prioritize capital preservation and risk management. And we reallocated capacity toward cloud mining, which supports a more durable and predictable margin profile.

Speaker #3: So yes, we felt the pressure. But we responded proactively. We didn't wait for the market to recover to improve the model. We made adjustments ourselves through scale, flexibility, and operational execution.

Leo Lu: We made adjustments to ourselves through scale, flexibility, and operational execution. Looking ahead, we're moving from defense to offense with discipline. We plan to scale deliberately, invest selectively, and expand within a clear risk framework. Here's our roadmap for Q2 and Q3. First, we plan to optimize our procurement mix by selectively increasing the portion of longer-term 360-day hash rate contracts. Short-term agreements will continue to comprise the majority of our portfolio, but increasing the mix of long-term commitments is intended to improve operational stability and help mitigate rollover risk. As a result, total managed hash rate by year end may remain relatively stable while the portfolio becomes better positioned should network difficulty growth slow down as other major miners transition to AI and HPC.

Speaker #3: Looking ahead, we're moving from defense to offense with discipline. We plan to scale deliberately, invest selectively, and expand within a clear risk framework. Here's our roadmap for the second quarter and third quarter.

Speaker #3: First, we plan to optimize our procurement mix by selectively increasing the portion of longer-term, 360-day hashrate contracts. Short-term agreements will continue to comprise the majority of our portfolio, but increasing the mix of long-term commitments is intended to improve operational stability and help mitigate rollover risk.

Speaker #3: As a result, total managed hashrate by year-end may remain relatively stable, while the portfolio becomes better positioned should network difficulty growth slow down as other major miners enter HPC.

Leo Lu: We see this as a strategic window and an opportunity to lock in cost-effective long-term hash rate while Bitcoin prices remain in a lower range, which can improve upside participation while managing downside risk. Second, we will continue to evaluate opportunities in real-world assets and energy, but only where they align with our core economics and risk profile. Finally, we will maintain our focus on capital efficiency. We intend to remain disciplined on equity issuance and avoid speculative bets. We expect to fund growth through a combination of operating cash flow, selective Bitcoin sales, and our $100 million revolving credit facility, which supports financial flexibility while limiting dilution. This is not a pivot. It's a progression in how we manage the business through cycles. These strategic priorities guided our execution in Q1, and despite market headwinds, they improved the durability of our model.

Speaker #3: We see this as a strategic window and an opportunity to lock in cost-effective, long-term hashrate while Bitcoin prices remain in a lower range, which can improve upside participation while managing downside risk.

Speaker #3: Second, we will continue to evaluate opportunities in real-world assets and energy, but only where they align with our core economics and risk profile. Finally, we will maintain our focus on capital efficiency.

Speaker #3: We intend to remain disciplined on equity issuance and avoid speculative bets. We expect to fund growth through a combination of operating cash flow, selective Bitcoin sales, and our $100 million revolving credit facility, which supports financial flexibility while limiting dilution.

Speaker #3: This is not a pivot. It's a progression in how we manage the business through cycles. These strategic priorities guided our execution in the first quarter and, despite market headwinds, they improved the durability of our model.

Leo Lu: I will now turn the call over to Calla to provide more details on our financial results.

Speaker #3: I will now turn the call over to Calla to provide more details on our financial results.

Calla Zhao: Good morning, everyone, and thanks, Leo. Let's take a closer look at our Q1 results, starting with revenue and more importantly, what drove it. Cloud mining solutions remain our largest revenue source at $57.5 million. This represents 7.1% year-over-year growth and accounted for 79.1% of our total revenue, reinforcing the resilience of our core platform and why we continue to lean into cloud mining. Self-mining operations contributed $11.4 million in Q1, down 35.2% from the same period last year. The decline reflects a combination of market conditions and our deliberate decision to reduce self-mining exposure to preserve liquidity and reallocate hash rate toward cloud mining solutions, which supports a higher and more predictable margin profile. We saw significant growth in hosting and other services in Q1, increasing to $3.8 million compared with $0.7 million in Q1 2025.

Speaker #2: Good morning, everyone, and thanks, Leo. Let's take a closer look at our first-quarter results, starting with revenue and, more importantly, what drove it.

Speaker #2: Cloud mining solutions remain our largest revenue source at $57.5 million. This represents 7.1% year-over-year growth and accounted for 79.1% of our total revenue, reinforcing the resilience of our core platform and why we continue to lean into cloud mining.

Speaker #2: Self-mining operations contributed $11.4 million in the first quarter, down 35.2% from the same period last year. The decline reflects a combination of market conditions and our deliberate decision to reduce self-mining exposure to preserve liquidity and reallocate hashrate toward cloud mining solutions, which support a higher and more predictable margin profile.

Speaker #2: We saw significant growth in hosting and other services in the first quarter, increasing to $3.8 million compared with $0.7 million in the first quarter of 2025.

Calla Zhao: This growth was driven primarily by our 2025 mining facility acquisition, which enabled us to offer a buy and host one-stop solution that meets client demand for both asset ownership and operational simplicity. Finally, I want to highlight customer retention. Our cloud mining net dollar retention rate was 85.7% in Q1, reflecting continued customer engagement and platform reliability in a volatile market. Now turning to costs. Cost of revenue was $72.3 million, up a modest 1.8% year-over-year despite a 6.8% decline in revenue. In addition to the year-over-year increase in network difficulty, the primary driver was higher cost hash rate procured during Q4 2025. Those contracts were entered into when Bitcoin prices were higher, and they pressured gross margin as prices moved lower in Q1. We view this as a timing effect rather than a change in underlying operational efficiency.

Speaker #2: This growth was driven primarily by our 2025 mining facility acquisition, which enabled us to offer a buy-and-host one-stop solution that meets client demand for both asset ownership and operational simplicity.

Speaker #2: Finally, I want to highlight customer retention. Our cloud mining net dollar retention rate was 85.7% in the first quarter, reflecting continued customer engagement and platform reliability in a volatile market.

Speaker #2: Now, turning to costs. Cost of revenue was $72.3 million, up a modest 1.0% year-over-year despite a 6.8% decline in revenue. In addition to the year-over-year increase in network difficulty, the primary driver was higher-cost hashrate procured during the fourth quarter of 2025.

Speaker #2: Those contracts were entered into when Bitcoin prices were higher, and they pressured gross margin as prices moved lower in the first quarter. We view this as a timing effect rather than a change in underlying operational efficiency.

Calla Zhao: We are already taking action to realign our cost structure with current market conditions by renegotiating contracts, improving procurement timing, and locking in more cost-efficient hash rate at current market rates. Net loss for Q1 was $35.0 million, compared to a loss of $16.9 million in the same period last year. Importantly, fair value losses on our Bitcoin holdings and digital asset receivables and payables contributed $35.6 million to our net loss. Excluding the fair value loss impacts, adjusted EBITDA would have been approximately +$1.1 million. As of 31 March 2026, our balance sheet remains strong. Total cash and digital assets stood at $141.5 million, compared to $177.1 million at year-end, primarily reflecting mark-to-market impact from a lower Bitcoin price. Total Bitcoin holdings were 1,794 Bitcoin, including 357 Bitcoin pledged as collateral for loans and payables.

Speaker #2: We are already taking action to realign our cost structure with current market conditions by renegotiating contracts, improving procurement timing, and locking in more cost-efficient hashrate at current market rates.

Speaker #2: Net loss for the first quarter was $35.0 million, compared to a loss of $16.9 million in the same period last year. Importantly, fair value losses on our Bitcoin holdings and digital asset receivables and payables contributed $35.6 million to our net loss.

Speaker #2: Excluding the fair value loss impacts, adjusted EBITDA would have been approximately positive $1.1 million. As of March 31, 2026, our balance sheet remains strong.

Speaker #2: Total cash and digital assets stood at $141.5 million, compared to $177.1 million at year-end, primarily reflecting mark-to-market impact from a lower Bitcoin price.

Speaker #2: Total Bitcoin holdings were 1,794 Bitcoin, including 357 Bitcoin pledged as collateral for loans and payables. We continue to manage our Bitcoin treasury strategically to support operations and maintain financial flexibility.

Calla Zhao: We continue to manage our Bitcoin treasury strategically to support operations and maintain financial flexibility. Importantly, we continue to maintain a strong liquidity position supported by our $100 million revolving credit facility. We ended the quarter with $50 million outstanding under the revolver, and subsequent to quarter end, we reduced that balance to $5 million. This reflects our ongoing commitment to strengthen our balance sheet and preserve financial optionality, and it gives us flexibility to fund growth, invest selectively, or preserve capital as market conditions evolve. In summary, Q1 was a quarter of disciplined execution. We managed costs, preserved liquidity, and maintained a strong balance sheet even in a challenging market. While our GAAP results were impacted by market-driven fair value changes, the underlying operating performance of the business was solid, and we believe we are well-positioned for the next phase of growth.

Speaker #2: And importantly, we continue to maintain a strong liquidity position, supported by our $100 million revolving credit facility. We ended the quarter with $15 million outstanding under the revolver, and subsequent to quarter-end, we reduced that balance to $5 million.

Speaker #2: This reflects our ongoing commitment to strengthen our balance sheet and preserve financial optionality. It gives us flexibility to fund growth, invest selectively, or preserve capital as market conditions evolve.

Speaker #2: In summary, the first quarter was a quarter of disciplined execution. We managed costs, preserved liquidity, and maintained a strong balance sheet, even in a challenging market.

Speaker #2: While our GAAP results were impacted by market-driven fair value changes, the underlying operating performance of the business was solid, and we believe we are well-positioned for the next phase of growth.

Calla Zhao: I'll now turn it back to Leo to close out the call.

Speaker #2: I'll now turn it back to Leo to close out the call.

Leo Lu: Okay. Thank you, Calla. Q1 was not about headline numbers. It was about execution, preserving capital, refining our cost structure, and strengthening the business. We achieved this by reducing self-mining exposure, improving fleet efficiency, managing our Bitcoin treasury with discipline, and maintaining strong customer execution in cloud mining. As a result, we enter Q2 with a stronger foundation, clearer priorities, and greater flexibility. We are not chasing trends. We are building a business designed to perform through cycles. We are not merely reacting to short-term volatility. We are actively preparing for the next cycle. We are confident the discipline we showed in Q1 will translate into results in the quarters ahead as efficiency gains and procurement improvements strengthen our cost structure. To our shareholders, thank you for your trust. We remain committed to delivering long-term sustainable value through execution, transparency, and a focus on building a business that lasts.

Speaker #3: Okay, thank you, Calla. The first quarter was not about headline numbers; it was about execution, preserving capital, refining our cost structure, and strengthening the business.

Speaker #3: We achieved this by reducing self-mining exposure, improving fleet efficiency, managing our Bitcoin treasury with discipline, and maintaining strong customer execution in cloud mining. As a result, we enter the second quarter with a stronger foundation, clearer priorities, and greater flexibility.

Speaker #3: We are not chasing trends. We are building a business designed to perform through cycles; we are not merely reacting to short-term volatility. We are actively preparing for the next cycle. We are confident the discipline we showed in the first quarter will translate into results in the quarters ahead, as efficiency gains and procurement improvements strengthen our cost structure. To our shareholders, thank you for your trust.

Speaker #3: We remain committed to delivering long-term, sustainable value through execution, transparency, and a focus on building a business that lasts. This concludes our prepared remarks.

Leo Lu: This concludes our prepared remarks. Thank you for your time, and we look forward to updating you again next quarter.

Speaker #3: Thank you for your time, and we look forward to updating you again next quarter.

Operator: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect your lines.