Bitfarms Ltd. (Canada) Q1 FY2024 earnings call

• CEO Transition: Jeff Murphy's departure was expedited due to a $27M legal claim, with Nico Bonta stepping in as interim CEO until a new CEO is found in the next several weeks.
• Q1 Results: Total revenue was $50M, adjusted EBITDA was $21M (up 50% Q/Q). Received a $24M cash refund from Canadian VAT recovery.
• Growth Plan: Aim to reach 21 exahash by year-end, with a 223% hash rate growth and 40% energy efficiency improvement. Front-loading 70% of new miners to upgrade existing farms and 30% to new locations in Paraguay.
• Fleet Upgrade: Transformative fleet upgrade started in Nov 2023, with additional miner purchases in March. Upgrading older miners for energy efficiency improvements.
• Regional Updates: Quebec has completed 2 farm upgrades (51% energy efficiency improvement) and is testing heat recapture tech. Argentina to deploy 6400 T21 miners in Sept. Paraguay has PASO PE and Yguazu farms under development, with a signed agreement for doubled energy capacity in 2025.

In Q1 2024, Bitfarms' total revenue was $50 million, which is a 67% year-over-year increase and a 9% quarter-over-quarter increase. Adjusted EBITDA was $21 million, up 50% from Q4 2023. Revenue contribution is from Bitcoin mining operations across its global infrastructure, with key growth in regions like Paraguay, Quebec, and Argentina.

• Expect 12 exahash in Q2 and 21 exahash in Q4.
• Target 223% hash rate growth to 21 exahash by year-end.
• Aim for 40% energy efficiency improvement to 21 watts per terahash.
• Anticipate $24M VAT refund to fund growth initiatives.
• Liquidity from ATM program and tax refund to support capex for miner and infrastructure deployment.

• Legal Claim: Jeff Murphy filed a $27M claim against the company for breach of contract, wrong dismissal, etc., which the company believes is without merit but will defend vigorously.

Q: Lucas Pipes asked about use of ATM and power cost mix.

A: Jeff Lucas and Ben Gagnon discussed use of ATM for funding growth, with tax refund covering major capex needs, and power cost in Paraguay being around $0.39 per kilowatt hour with minimal impact on average portfolio cost.

Q: Joe Flynn asked about US expansion and Bitcoin mining moving internationally.

A: Ben Gagnon talked about multiple US expansion opportunities and Bitfarms' global view on securing cost-effective power in various jurisdictions.

Q: Josh Siegler asked about post-halving deal terms and Paraguay infrastructure cost.

A: Ben Gagnon and Jeff Lucas discussed stable deal terms post-halving and Paraguay infrastructure costs around $300,000 per megawatt with accelerated construction.

Q: Mike Grondahl asked about Argentina expansion and CEO search.

A: Jeff Lucas and Ben Gagnon talked about cautious Argentina expansion pending economic/political stability and timeline for new CEO announcement within several weeks.

Q: Martin Toner asked about capex timing and balance sheet liquidity.

A: Jeff Lucas and Ben Gagnon discussed capex timing with $40M in Q2, $85M in Q3, and $30M in Q4 for miners, and Bitfarms' comfort with maintaining $30M-$50M liquidity while pursuing opportunities.