Bit Digital, Inc Q2 FY2025 earnings call

• Bit Digital transitioned to an Ethereum treasury and staking platform, completed the WhiteFiber IPO. WhiteFiber is now a stand-alone AI infrastructure company, and Bit Digital plans to build the largest ETH treasury in public markets.
• In Q2, launched plan to be a dedicated Ethereum holding and yield generation platform. Held ~3,663 ETH in June, increased to ~121,000 ETH by August 11 by selling Bitcoin and using proceeds. Earned ~166.8 ETH in staking rewards, with ~21,568 ETH actively staked at quarter-end, annualized yield ~3.1%.
• Exploring strategic alternatives for Bitcoin mining business, not investing in new mining units, expecting ETH to deliver better long-term returns. Produced 68 bitcoins in Q2, mining revenue $6.6M, gross margins positive but winding down the business.

Total revenue for the second quarter was $25.7 million. Digital asset mining revenue was $6.6 million, down due to the April 2024 halving, higher network difficulty, and a lower active hash rate. Cloud services revenue was $16.6 million, up 33% from the prior year quarter due to new customer contracts. Collocation services contributed $1.7 million, as the business was launched in late 2024. Ethereum staking revenue was $400,000, down about 2% year over year due to a lower realized Ethereum price offsetting higher staking rewards. Cost of revenue (excluding depreciation) was $13.2 million, gross profit was $12.5 million with a gross margin of about 49%, up 80 basis points from the prior year quarter. Net income was $14.9 million or 7¢ per diluted share. Adjusted EBITDA was $27.8 million. Balance sheet as of June 30: $181.2 million in cash and cash equivalents, $91.2 million in digital assets (Ethereum and ~280 Bitcoin), total liquidity ~$273 million, debt-free.

• Continue scaling ETH position through operational cash flow, opportunistic market access, and suitable capital sources.
• Proposal in upcoming proxy to increase authorized share count for executing ETH treasury strategy.
• Stand-alone Bit Digital cost structure expected to be significantly less than consolidated G&A with WhiteFiber.

• Forward-looking statements involve risks where results may differ materially.
• Market fluctuations, regulatory changes could impact performance.
• Impact of WhiteFiber IPO on Bit Digital's financials and strategy if ownership/control thresholds for consolidation change.

Q: Growing acceptance of Ethereum staking among institutional investors? And how do you see this business model developing over time?

A: Sam Tabar says other companies leaning into ETH strategy helps validate the asset, sees it as cooperation-competition, Bit Digital has been staking ETH for years generating yield, and WhiteFiber stake provides potential nondilutive capital for growing ETH holdings.

Q: G&A normalization? Will G&A go back to normalized level?

A: Eric Wong states second quarter G&A included one-time items like stock-based awards and consulting/legal expenses, stand-alone Bit Digital G&A expected to be significantly less.

Q: Supporting Ethereum ecosystem, partnerships?

A: Sam Tabar mentions post-WhiteFiber IPO will be more visible, competing on mindshare to own the narrative for ETH treasury play.

Q: Bitcoin mining tapering, hash rate trend?

A: Sam Tabar says winding down Bitcoin mining, deploying efficient S21 miners, fleet efficiency improving, total hash rate expected to decline gradually as mining business winds down.

Q: Ethereum staking partners, in-house nodes?

A: Eric Wong says partnered with Fireblocks as custodian, staked through Fireblocks with Figment for native staking and Lido for liquid staking, and currently using partners for staking, with R&D on in-house nodes but using partners in short/medium term.