Encryption Mining Giant Q1 Performance Analysis and Future Outlook for FY 2025

A well-known cryptocurrency mining company recently announced its financial report for the first quarter of fiscal year 2025. The data shows that the company's Q1 revenue was $70.1 million, a year-on-year decrease of 41.3% and a slight quarter-on-quarter increase of 1.6%. Among this, the revenue from self-operated business was $37.2 million, a year-on-year decline of 10.4%.

It is worth noting that the company's Q1 total gross profit was negative $3.2 million, with a gross margin of -4.6%. This was mainly due to the dry season in the Bhutan region, which led to an increase in electricity prices, causing the company to temporarily shut down local mines. However, as the second quarter enters the rainy season, electricity prices have fallen back to $0.042/kwh.

Another highlight is that the company's new mining machine sales business has officially launched, achieving sales of $4.1 million in Q1. However, the adjusted EBITDA was negative $56.1 million, compared to positive $27.3 million in the same period last year. The net profit reached $410 million, mainly due to the reversal of the fair value of previously accrued convertible notes ( totaling $448.7 million ) and certain cryptocurrency options ( totaling $58.4 million ).

From a financial perspective, the company's Q1 prepaid accounts receivable further increased to $382 million, a significant rise from $310 million in the previous quarter. This amount is sufficient to cover the funds required for the current maximum wafer volume. The new generation mining machines have entered the shipping phase, and subsequent self-operated and sales strategies will be flexibly adjusted based on market competition. The new generation mining machines have also completed the wafer production, and are expected to officially enter self-operated mines and start sales by the end of Q3 or Q4 in 2025.

In response to the impact of U.S. tariff policies, the company plans to complete the construction of its North American assembly plant in Q2. Although this will result in a cost increase of about 10%, it is relatively minor compared to the current tariffs in Southeast Asia. The Southeast Asian assembly plant will meet the demand for mining sites in non-U.S. regions.

In terms of global layout, the company's power infrastructure construction continues to advance rapidly. By the end of Q2, the global available power capacity is expected to reach nearly 1.6GW, with hopes of reaching 1.8GW by the end of the year. As of April, the company's self-operated mining farm has a computing power of 12.5Eh/s, which is expected to increase to 40Eh/s by October, and is anticipated to exceed 40Eh/s by the end of the year.

It is worth mentioning that the company's latest mining machines only started going live in its self-operated mines in March, but the overall mining costs are already more than 20% lower than those of major competitors. As old mining machines are fully replaced, the cost advantage will become even more apparent, with an expected exponential increase in monthly output starting from Q2.

Looking ahead, the price of Bitcoin has recently shown an upward trend, expected to break through the previous historical high of $109,000 per coin. Amid pressure on the dollar, Bitcoin's safe-haven properties as an alternative asset are becoming increasingly prominent. The Federal Reserve's latest monetary policy is also favorable for the price trend of Bitcoin.

For the company, after experiencing the transition period of Q4 and Q1, the key focus in the coming quarters will be on the progress of mining machine R&D and the expansion speed of self-operated mining sites. Q1 of fiscal year 2025 may become the low point of operational status in the next two years, with a turning point expected to start from there. The company is still regarded as a quality choice among North American Bitcoin mining stocks.