Big Digital Energy, Inc. Q4 FY2021 earnings call

Management Statement and Operational Highlights:

• Q4 2021 Financials: Revenue $19.6M, gross profit $16M, EBITDA $10M, all significantly up from prior quarters.
• Operational Milestones Q4 2021: Self-mining hit record 0.83 exahash in Dec, added 200 MW energy infrastructure, purchased 4,000 ASIC miners, expanded Sandersville, GA facility to 230 MW, and secured hosting deals with Foundry Digital and Celsius Mining.
• 2021 Highlights: Contracted hash rate 3.35 exahash, expanded energy portfolio by 220 MW, added 33,000 ASIC miners, and had hosting colocation revenue of $850,000 from 2 MW.
• Balance Sheet: Property and equipment rose to $76.9 million, equipment deposits $51.4 million, total assets $145 million. Secured $20 million debt facility with Celsius Mining.
• Hash Rate Expansion: To move from 1.5 exahash in March 2022 to 4 exahash in Q3 2022, and 5.5 exahash by early Q1 2023. Hosting colocation to expand to 140 MW by end 2022 and 220 MW by 2023.
• ESG: 75% carbon-free energy, offset carbon footprint, plan to plant 100,000 trees by 2022, and active in local communities.

Segment Performance:

• Q4 2021: Revenue was $19.6 million, up 79% from Q3 2021. Gross profit rose to $16 million, up 89% from Q3 2021. EBITDA was $10 million, up 203% from Q3 2021.
• 2021 Full Year: Generated record revenue of $43.9 million, up 886% from 2020. Gross profit was $34 million, up 2,526% from 2020. EBITDA was $17.9 million.
• Hosting Colocation: Currently has 116 megawatts of hosting customer agreements, expects to expand to 140 megawatts by end of 2022 and 220 megawatts by 2023. Hosting colocation revenue in 2021 was $850,000 from 2 megawatts of customers.

Guidance:

• Upgraded exahash targets: From 3.35 exahash in Q2 2022 to 4 exahash in Q3 2022, and from 5 exahash in early Q1 2023 to 5.5 exahash by same date.
• Contracted energy infrastructure capacity upgraded from 220 MW to 350 MW.
• Hosting colocation to expand to 140 MW by end 2022 and 220 MW by 2023.
• Secured $20 million debt facility with Celsius Mining to accelerate energy and hosting colocation infrastructure.

Risks:

• Noise Issues: Managed through site planning, buffer zones, fencing, and appropriate site selection (e.g., industrial areas in PA, forests in GA).
• Miner Pricing/Delivery: Seeing early deliveries and better pricing for miners.
• Regulatory/Community: Potential regulatory or community issues addressed by proactive site planning and local engagement.

Q: Could you just talk a little bit about your hosting objectives?

A: The 220 megawatt hosting is the 2023 target. There's a pipeline of sites in late stage negotiations, and existing infrastructure plus near-term sites will reach 320 MW.

Q: Can you speak to some of the deals that you have announced Celsius and Foundry? Are they rev share at all?

A: They are traditional hosting co-location agreements, not revenue shares. We're comfortable with the first 116 MW in Celsius and Foundry, with equipment already online for Foundry and coming online for Celsius.

Q: How has Quinbrook embraced the flexibility that Bitcoin minings offers a power producer?

A: Quinbrook's PPA allows curtailment, which benefits both the miner and power provider, and helps with community and power price value.

Q: What drives the hash rate jump in June?

A: Delivery of equipment sold in May, which will be fully online and operational in June.

Q: What are you seeing in terms of miner pricing and delivery schedules?

A: Seeing early deliveries and better pricing for miners, with more opportunities to pick up additional terahash at appropriate pricing.

Q: Has Mawson encountered any noise issues at their sites?

A: No noise issues. Managed through site planning, buffer zones, fencing, and appropriate site selection.

Q: Does Georgia’s proposed energy tax incentives accelerate your plans in Georgia?

A: Energy tax incentives make Georgia more competitive. We're already expanding our Georgia facility and will pursue opportunities related to it.

Q: What's the fourth site in Pennsylvania?

A: Signed a lease, completed preliminary load study, awaiting PPA finalization, with preliminary results positive for expansion.