HIVE Digital Technologies Ltd. Q4 FY2025 earnings call

Macro Recap

• Frank Holmes highlighted it as a transformative year for HIVE, noting the company's growth, including hash rate increasing from less than 4 exahash a year ago to over 11 exahash, and HPC AI business run rate doubling under Craig Tavares' leadership.

Executive Overview by Aydin Kilic

• Revenue for the fiscal year was $115 million, with $56 million adjusted EBITDA and $25 million gross operating margin. Mined over 1,400 Bitcoin in the fiscal year, hit 11.5 exahash in June, and targets 25 exahash by Thanksgiving. Fully funded for growth to 25 exahash, with ASICs arriving weekly and deposits in place.

Financial Reporting by Darcy Daubaras

• Transitioned from IFRS to U.S. GAAP, with key adjustments including functional currency, digital assets, and leases. Maintained a healthy balance sheet with cash, digital currencies, and receivables, and a current ratio of 3.7.

For the year ended March 31, 2025, HIVE generated $115.3 million in revenue. Bitcoin mining contributed $105 million (approximately 91.3% of total revenue) and HPC AI contributed $10 million (approximately 8.7% of total revenue). Adjusted EBITDA was $56.2 million. The gross operating margin was $25.1 million. Cash position as of March 31, 2025, was $23.4 million, with $181.1 million in digital currencies (primarily Bitcoin), $15.3 million in amounts receivable of prepaid, and a total market value of strategic investments at $24.1 million. The current ratio was 3.7.

Growth Targets

• Targets 25 exahash by Thanksgiving. Expect revenue to grow substantially with Bitcoin price at $100,000, potentially reaching over $400 million run rate. HPC AI business aims for $100 million ARR. Fully funded for scaling to 25 exahash, with ASICs and deposits in place.

Regulatory and Market Risks

• Regulatory situation in Paraguay, with past tariff issues but actively working with local authorities. Currency volatility impact on financial results due to operations in multiple time zones and languages. Dependence on Bitcoin price and mining difficulty for mining margins.

Q: Can you provide more color on the recent data center acquisition timeline and when the liquid cooling will be installed?

A: The 7.2-megawatt site has about 5.5-megawatt compute, with a 9- to 12-month retrofit with liquid cooling, effectively tripling the HPC compute footprint.

Q: How are you weighing the deployment of latest versus next-generation equipment for HPC?

A: It's an economic analysis based on available models. For example, considering the availability of models like B200 and B300, and their power and revenue implications, as the latest models often fetch higher rates.

Q: What is the revenue mix outlook for HIVE, especially with the HPC business?

A: Buzz is positioned as a pure-play HPC company, while HIVE is in Bitcoin mining, with a potential 80/20 revenue mix based on projections.

Q: Can you share the cost of the Toronto data center acquisition and the related retrofit?

A: Details on the cost of acquisition and retrofit have not been publicly commented yet; stay tuned for future disclosures.

Q: What about customer demand for HPC and contract dynamics?

A: Targeting longer-term contracts with governments, research institutes, and having over demand for GPUs. Focuses on providing a good user experience for end users, which is important to partners like NVIDIA.

Q: What is the regulatory situation in Paraguay and how does power cost compare to other facilities?

A: There's a holding pattern until 2027, but actively working with local authorities. Power prices in Paraguay are still attractive compared to many other jurisdictions.

Q: What is the CapEx cadence for 2026 and the expansion of the HPC cloud?

A: ASICs for Bitcoin mining are fully funded, with CapEx for the Toronto data center spread out. GPU purchases have net 30 payment terms, and CapEx for the HPC cloud will be managed accordingly.

Q: Can you elaborate on the scale and composition of the Toronto HPC data center fleet?

A: The 7.2-megawatt site has 5.5-megawatt IT load, 3.5x expanding HPC footprint. Considers latest GPUs like H200, B200, B300, and their power-intensive nature and revenue potential.

Q: What is the outlook for mining gross margin, especially with Paraguay coming online?

A: There's sequential improvement, with Paraguay's full ramp in the current quarter. Fleet efficiency is improving with Paraguay's hydros and more efficient machines, leading to better mining margins in the future.