Mawson Infrastructure Group, Inc. Q2 FY2022 earnings call

• Q2 Operational Results: Generated $19.5 million in revenue in Q2, up 236% year-over-year. Gross profit was $5.4 million, flat year-over-year. Non-GAAP EBITDA was $13.7 million, up 756% year-over-year. - Infrastructure Expansion: Completed build-out of 80 MW facility in Georgia, commenced expansion to 130 MW. Secured 120 MW/4 exahash facility in Texas and received favorable energy load study for Sharon, PA facility (120 MW/4 exahash). - Energy Demand Response: Participated in energy demand response programs, curtail energy use for revenue and cost reduction. Valuation of energy contracts increased derivative assets by $17.7 million. - ESG Focus: Net zero carbon miner in hosting co-location. Utilizes carbon-free energy sources (e.g., nuclear in PA, new reactors in GA). Offsets residual carbon footprint with carbon offset credits.

Self-mining: As of end of July 2022, installed operating capacity was approximately 1.7 exahash, producing ~7.5 bitcoin per day. By Q4 2022, expected to be ~2.3 exahash, with annualized revenue projected at $95.8 million at 2.3 exahash (assuming bitcoin price at $25,000) and rising to $223.5 million at 5.5 exahash in 2023. Hosting co-location: Installed capacity at end of July was approximately 1.8 exahash. Revenue in Q2 was $3.57 million, up 536% from $550,000 in Q1. By Q4 2022, expected to be ~3 exahash, with total operations (self-mining + hosting) at approximately 5.3 exahash.

• Self-mining: Anticipated to be approximately 2.3 exahash by Q4 2022, rising to 5.5 exahash in 2023. - Hosting co-location: Hosting co-location capacity expected to reach 3 exahash by Q4 2022 and 200 MW in 2023. - Debt Repayment: Expect foundry digital debt facility to be paid off completely by October 2022.

• Market Volatility: Bitcoin price fluctuations can impact revenue and profitability. - Energy Market Fluctuations: Changes in energy prices and availability can affect production costs and demand response program benefits. - Regulatory Risks: Changes in regulations related to Bitcoin mining or energy usage could impact operations.

Q: Additional color on demand environment for hosting?

A: James Manning says there's a lot of inbound inquiry for hosting, and they're comfortable building out more hosting than current capacity allows.

Q: Potential benefit from energy demand response program?

A: James Manning states demand response helps avoid peak prices and provides additional revenue stream, expected to have a material impact on Q3 financials.

Q: Average cost per megawatt to develop infrastructure?

A: James Manning says cost varies by location, averaging low to mid $200,000 per MW, with variations based on substation upgrades and jurisdiction.

Q: Deployment in Texas and power divvying?

A: James Manning explains Texas partnership allows for both self-mining and hosting, with low CapEx due to existing substations, and focus on finalizing PA build-out before turning to Texas.

Q: Energy contract in Pennsylvania cost and term?

A: James Manning says energy costs in PA are mid $0.03, five-year PPA, green energy from Energy Harbor with demand responsibility.