Bit Digital, Inc. Q2 FY2026 earnings call

• Strategic Model and Positioning

  • BitDigital frames itself as a "strategic asset company" positioned to serve two high-growth sectors: Ethereum-based digital asset settlement, and AI-powered data center infrastructure via its majority-owned subsidiary WhiteFiber. The core strategy is active capital allocation to maximize value from all existing balance sheet assets, rather than passive buy-and-hold of digital assets.
  • The company's long-term goal is convergence of digital assets and AI infrastructure, building a "strategic asset flywheel" where productive assets generate recurring cash flow that is reinvested into new high-return opportunities. Infrastructure and staking now represent 89% of total revenue, up from 70% a year prior, as capital is reallocated away from the winding-down mining business.

• Ethereum Treasury Update

  • As of Q2 end, BitDigital holds 75.8 thousand ETH directly (fair value $118.9 million), plus additional Ethereum exposure via an externally managed fund worth $47.9 million. The company purchased 8.57 thousand ETH for $20 million in Q2 at an average cost of $2.33 thousand per ETH, and remains conviction-driven on Ethereum's long-term value.
  • Management notes growing institutional adoption of Ethereum: 2/3 of all $31 billion in tokenized real-world assets currently settle on Ethereum, with major firms including Robinhood, BlackRock, and JPMorgan expanding their Ethereum-based activity. Management believes Ethereum's current price does not reflect its growing network utility, creating a disconnect between fundamentals and market value.

• WhiteFiber Transaction and Update

  • Early in Q2, BitDigital originated a $150 million delayed draw term bridge facility for WhiteFiber, funded in part by $50 million in liquidity raised against a portion of its Ethereum holdings. This transaction allowed WhiteFiber to bridge funding for its 40-megawatt NC1 flagship facility in North Carolina to permanent project financing, preserved BitDigital's full Ethereum position, avoided equity dilution at both firms, and maintained BitDigital's ownership stake in WhiteFiber. The facility generates a higher return than Ethereum staking yield.
  • WhiteFiber has already begun customer deployment, testing, and billing at NC1, which is anchored by investment-grade off-taker Enovum under a 10-year contract worth ~$865 million in total contracted revenue. Full contracted run-rate billing is expected to begin in Q2 end 2026. WhiteFiber has also signed over $500 million in new aggregate contract value for cloud services since the last earnings call, including next-generation GPU deployments. Management does not intend to sell any WhiteFiber shares in 2026, and is evaluating writing modest out-of-the-money covered calls on a limited portion of its holdings to generate premium income (subject to board and regulatory approval).

• Valuation Discount

  • Management calculates that BitDigital trades at a persistent discount of over 40% to its observable intrinsic net asset value, as the market currently values it primarily as a passive digital asset treasury, rather than an active growth-oriented strategic asset company. Management notes that the board is actively evaluating closing this discount, with share repurchases identified as a highly accretive use of capital at current valuations.

1. Cloud Services: Q2 2026 revenue of $23.8 million, up 42% sequentially. 6-month revenue increased 29% year over year, with a 58% gross margin. This segment contributed 74.1% of total Q2 revenue.
2. Colocation Services: Q2 2026 revenue of $4.7 million, flat sequentially. 6-month revenue increased 182% year over year, with a 63% gross margin. This segment contributed 14.6% of total Q2 revenue. The flagship NC1 facility will not contribute to results until Q3 2026.
3. Ethereum Staking: Q2 2026 revenue of $0.9 million, down from $2.3 million in Q1 2026. 6-month revenue increased 246% year over year. This contributed 2.8% of total Q2 revenue. The sequential decline stems from using a portion of ETH as collateral for the WhiteFiber bridge facility and lower Ethereum prices during the quarter.
4. Digital Assets Mining: Q2 2026 revenue of $2.4 million, from 32.3 Bitcoin mined, down from 48.1 Bitcoin mined in Q1 2026. 6-month revenue declined 58% year over year as the company continues to wind down this business. Gross margin for Q2 was 26%, and the business remains solidly gross margin positive. This segment contributed 7.5% of total Q2 revenue.

Total consolidated Q2 2026 revenue was $32.1 million, up 15% from Q1 2026's $27.9 million. 6-month total revenue was $60 million, up 18% year over year.

• NC1 facility is expected to begin contributing revenue to consolidated results in Q3 2026, with full contracted run-rate billing expected by the end of Q2 2026.
• Total remaining performance obligations across the business reached ~$1 billion at Q2 end. Management expects to recognize approximately $57.7 million of this revenue through the end of 2026, $136.7 million in 2027, and $105.1 million in 2028, with the remainder recognized thereafter. 2027's expected contracted revenue alone exceeds full-year 2025's total revenue, providing strong long-term revenue visibility.
• Management reaffirmed its commitment to not selling any WhiteFiber shares in 2026. The potential covered call program on a limited portion of WhiteFiber shares is expected to complete registration processes by the end of Q3 2026, if approved.
• No formal buyback program has been approved, but management identifies share repurchases as an extremely attractive use of capital at current valuations, and the board is evaluating potential programs in real time.

• The bridge facility structure for WhiteFiber carries inherent margin call risk from Ethereum price volatility; management mitigated this by holding an additional buffer of Ethereum collateral to withstand large market moves beyond what is considered reasonably probable.
• The fair value of BitDigital's Ethereum and Bitcoin holdings is subject to significant market volatility; Q2 2026 recorded an unrealized $28.8 million loss from market-to-market adjustments of digital asset holdings. Ethereum closed lower for three consecutive quarters through Q2 2026, creating downward pressure on net results.
• The company's large discount to intrinsic net asset value creates a drag on shareholder value, though management is actively evaluating corrective actions including share repurchases. Any capital allocation initiatives (including buybacks and the covered call program) remain subject to board, shareholder, and regulatory approvals, with no guarantee of finalization or implementation.

Q: Analyst asks for details on the timing of a potential share buyback, and whether it would rely on future proceeds from selling WhiteFiber shares, implying it would be a 2027 event rather than 2026. / A: Management confirms that the board is actively having vigorous discussions about a buyback, as the 40%+ discount to NAV is unacceptable. Management reaffirmed its commitment to not selling WhiteFiber shares in 2026 because it expects strong long-term growth from the asset and does not want to exit prematurely. No exact timing for a buyback decision has been set.

Q: Analyst asks what source of capital would be used for a buyback after the WhiteFiber bridge is repaid via permanent financing, and whether that repayment would fuel a buyback. / A: Management notes that the bridge facility is short-term, maturing by the end of 2026, and when repaid, the Ethereum collateral will be unlocked. While the repayment unlocks liquidity, management has not yet decided whether those proceeds would be used for a buyback; the bridge facility already generates a higher return than Ethereum staking regardless of future capital allocation.

Q: Analyst asks if BitDigital would ever sell a portion of its WhiteFiber stake to fund share repurchases, and if any alternative portfolio investments offer higher returns than buying back BitDigital equity at current valuations. / A: Management confirms that using future WhiteFiber sale proceeds for buybacks is under consideration, but no sale will happen in 2026 per the company's public commitment. Management states that buybacks are a very attractive potential investment at current valuations, but the final decision and timing remain under board review.

Q: Analyst asks why share count increased by ~25 million in Q2, when no shares were issued for the WhiteFiber facility or Ethereum purchases, and asks about the pricing of at-the-market (ATM) share sales, and whether the company would issue shares at a smaller discount to NAV and buy back at a larger discount. / A: Management confirms that prior ATM issuance funded construction spending, completed separately from the Ethereum purchase, when the NAV discount was smaller. Capital allocation priorities have shifted as the discount widened, which is why buybacks are now under evaluation. There is no fixed threshold for issuance versus buybacks; all decisions are made based on circumstances, expected returns, and long-term needs.