CLEANSPARK, INC. Q1 FY2025 earnings call

• Strategic positioning: Vertically integrated pure-play Bitcoin mining company, largest producer of Bitcoin in the U.S. and world's largest publicly traded pure-play bitcoin miner.
• Financial results: Revenue of $162.3M, net income $246.8M, adjusted EBITDA $321.6M; average Bitcoin price exceeded $83,000 during the quarter.
• Infrastructure: Closed first quarter at 39.1 exahash, exceeded 37 exahash target; fleet efficiency improved to 16.15 tools per terahash as of Jan 31.
• Growth strategy: On track to achieve 50 exahash in first half of 2025 via greenfield development and facility expansion across 5 sites in 4 states; secured $650 million convertible bond to fund growth.
• Regulatory environment: Positive shift in Washington D.C. regarding Bitcoin, SEC repealed SAP 121, and supportive legislative leadership; energy policy critical for industry growth.
• Employee recognition: Team exceeded 37 exahash target, working towards 50 exahash by midyear.

CleanSpark's first quarter revenue was $162.3 million, representing a 120% growth compared to the same period last year. Net income was $246.8 million or $0.85 per basic share, and adjusted EBITDA grew to $321.6 million. The company closed the quarter with 39.1 exahash, having exceeded the 37 exahash target. Bitcoin and treasury stood at $9,952 at the end of the quarter and reached $10,556 as of the end of last month. Fleet efficiency stood at 17.59 tools per terahash at quarter's end, with revenue contribution driven by Bitcoin mining and energy portfolio.

• Aim to achieve 50 exahash in the first half of 2025 through greenfield development and facility expansion.
• Fully funded to reach 50 exahash without relying on equity, with infrastructure already sourced for additional 10 exahash needed for midyear target.
• Auction contract provides flexibility to scale down 60 exahash at $21.50 per terahash, significantly below spot market.
• Remaining proceeds from convertible bond will allow adding mined Bitcoin to balance sheet and exploring opportunistic acquisitions.

• Counterparty risks associated with certain business models, such as repurposing Bitcoin mining facilities for high-performance computing which is complex and impacts revenue/profitability.
• Regulatory uncertainties despite positive shifts; ongoing monitoring required.
• Energy price fluctuations, as electricity is a large component of direct costs, which could impact business if prices increase.

Q: Mike Colonnese asks about Bitcoin treasury management and deployment strategy.

A: Gary Vecchiarelli says they're in process of gathering RFPs, taking a crawl-walk-run approach, not leveraging 100% immediately.

Q: Michael Colonnese asks about cadence of cash rate growth to 50 exahash.

A: Zachary Bradford says it will be an even cadence over next 6 months, rolling out projects in existing sites and some greenfield.

Q: Brian Dobson asks about management philosophy driving improvement.

A: Zachary Bradford mentions focus on intersection of factors for profitability, perseverance and dedication of people.

Q: Brett Knoblauch asks about power capacity pipeline and OpEx management.

A: Zachary Bradford says majority growth in Tennessee and Wyoming; Gary Vecchiarelli says indirect expenses relatively flat, focus on operations keeps overhead low.

Q: Tyler DiMatteo asks about execution from 40 to 60 exahash.

A: Zachary Bradford says repeatable blueprint, leveraging proven technology like immersion cooling; Gary Vecchiarelli reinforces track record of growing exahash.

Q: Stephen Glagola asks about focus shifting to free cash flow and capital return.

A: Zachary Bradford says scale drives free cash flow benefiting shareholders; Gary Vecchiarelli says will return capital when balance sheet fortified.

Q: Bill Papanastasiou asks about growth beyond 50 exahash.

A: Zachary Bradford says will continue growing responsibly as long as it improves margins and cash flow.

Q: Gregory Lewis asks about community partnerships and tenor shift.

A: Zachary Bradford says communities now welcome Bitcoin mining for economic benefits, partnering with utilities to use idle assets in rural areas.