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CleanSpark stock slides 9% as quarterly earnings miss estimates on bitcoin holdings loss
TL;DR
CleanSpark's stock dropped over 9% after reporting a net loss of $378.3 million for Q2, significantly missing earnings estimates. The loss was driven by a $224.1 million non-cash bitcoin fair value adjustment amid market volatility.
Key points
- CleanSpark stock fell over 9% in pre-market trading
- Reported a net loss of $378.3 million for Q2
- Loss driven by a $224.1 million non-cash bitcoin fair value loss
- Quarterly revenue decreased by 25% year-over-year
- CEO announced a pivot to AI and HPC-applicable assets
Mentioned in this story
CleanSpark
CleanSpark (CLSK) stock fell over 9.4% in pre-market trading on Tuesday after the U.S. bitcoin BTC$80,621.04 mining company reported a widening net loss of $378.3 million for its second fiscal quarter, hit by a significant non-cash adjustment to its digital asset holdings.
The company reported a net loss of $378.3 million for the quarter ending on March 31, a steep increase from the $138.8 million loss reported the same period last year. The loss of $1.52 per share was more than triple the analyst estimate on EPS of a 41 cents' loss.
The firm’s bottom-hit was mainly driven by a $224.1 million non-cash bitcoin fair value loss, reflecting market volatility.
Quarterly revenue reached $136.4 million, down 25% from $181.7 million year-over-year, the report revealed, missing estimates of $154.3 million.
Despite the dip, CleanSpark expanded its infrastructure, doubling its megawatts (MW) under contract. CEO Matt Schutz said the company is pivoting to commercializing “AI/HPC-applicable assets,” joining a sector-wide shift toward leasing their computing power as AI data centers.
CFO Gary Vecchiarelly cited the firm’s balance sheet as a “competitive advantage, reporting a bitcoin holdings increase of 14% to $925.2 million in respects to last year. Total cash is $260.3 million, while total assets now sit at $2.9 billion with a long-term debt of $1.8 billion.
The estimated average cost of mining one bitcoin was $88,000 in mid-March, according to a Checkonchain difficulty regression model report. The current price of bitcoin hovers just over $80,000, meaning bitcoin mining companies across the board are operating at a loss
These economics have forced bitcoin miners to pivot toward artificial intelligence and high-performance computing infrastructure. The bitcoin mining industry had taken on roughly $70 billion in such contracts by late March.
Read More: Circle raises $222 million for Arc, beats Q1 earnings estimates but misses on revenue
Q&A
What caused CleanSpark's stock to drop over 9%?
CleanSpark's stock fell due to a reported net loss of $378.3 million for the second fiscal quarter, which was significantly higher than analysts' expectations.
How much was CleanSpark's net loss compared to last year?
CleanSpark's net loss of $378.3 million for the quarter ending March 31 is a steep increase from the $138.8 million loss reported in the same period last year.
What is CleanSpark's plan after the earnings miss?
Despite the earnings miss, CleanSpark plans to pivot towards commercializing AI and HPC-applicable assets, expanding its infrastructure and leasing computing power.
