Bit Digital Q4 2024 Earnings Report

Bit Digital EPS Results

• Actual EPS: -$0.11
• Consensus EPS: -$0.04
• Beat/Miss: Missed by -$0.07
• One Year Ago EPS: -$0.16

Bit Digital Revenue Results

• Actual Revenue: $26.10 million
• Expected Revenue: $25.06 million
• Beat/Miss: Beat by +$1.04 million
• YoY Revenue Growth: N/A

Bit Digital Announcement Details

• Quarter: Q4 2024
• Date: 3/14/2025
• Time: Before Market Opens
• Conference Call Date: Friday, March 14, 2025
• Conference Call Time: 10:00AM ET

Bit Digital (NASDAQ:BTBT) (NASDAQ:BTBT) is a digital-asset and infrastructure company engaged primarily in bitcoin mining and Ethereum staking. The company operates and manages specialized computing equipment used to validate transactions and earn digital assets, while seeking to use energy-efficient and environmentally responsible operating practices.

In addition to bitcoin mining, Bit Digital provides Ethereum staking services through its digital-asset infrastructure platform. The company has also expanded its focus toward high-performance computing and artificial intelligence infrastructure, including services that support data-intensive workloads and may complement its existing expertise in operating specialized computing equipment.

Bit Digital was formerly known as Golden Bull Limited and adopted its current name in 2020 as it repositioned its business around digital assets. Its operations and infrastructure have included locations in North America and other international markets, including Iceland. The company is headquartered in New York City and is led by Chief Executive Officer Samir Tabar.

Bit Digital Q4 2024 Earnings Call Transcript

Key Takeaways

• 141% revenue growth in FY 2024 to $108 million, with adjusted EBITDA of $73 million driven by the rapid expansion of the HPC business.
• New cloud services segment reached a run rate of $62 million and will hit ~$72 million after the D&A Fund contract goes live, with an ARR pipeline of ~$41 million from upcoming B200 and H200 deployments.
• Acquisition of Innovium (Envum) and purchase of the Montreal II site ($23 million) vertically integrated data center operations and secured a 5 MW, five-year colocation deal with Cerebras, while building a 510 MW development pipeline including a 100 MW U.S. LOI.
• Potential new tariffs on imported generators, HVAC systems and electrical equipment could increase data center build costs, prompting supply-chain diversification and advance equipment orders to mitigate risk.
• Bitcoin mining now accounts for 54% of revenue (down from 98%), with a 1.6 EH/s fleet being optimized to ~2.5 EH/s at ~22 J/TH, as capital allocation prioritizes HPC over further mining expansion.

Presentation

[Operator]

Hello, and welcome to the Bit Digital Fiscal Year 2024 Earnings Conference Call. Good morning, good afternoon, and good evening, depending on where you're joining us from. Thank you for being here. We're just giving a few more moments for attendees to dial in, so thank you for your patience. While we wait, please note that during this call, all participant lines will be in a listen-only mode. Following the officer's update, we'll open the floor for a question-and-answer session. If you have a question at that time, simply press star one on your telephone keypad. Also, as a reminder, today's conference is being recorded. I'll now hand it over to your host, Cameron Schnier, Head of Investor Relations at Bit Digital. Cameron, the floor is yours.

[Cameron Schnier, Head of Investor Relations at Bit Digital]

Thank you. Good morning and welcome to the Bit Digital 2024 earnings call. Joining us on the call today are Sam Tabar, Chief Executive Officer, and Erke Huang, Chief Financial Officer. Before we begin, I would like to remind all participants that some of the statements we will be making today are forward-looking. These matters involve risks and uncertainties that could cause our results to differ materially from those projected in these statements. I therefore refer you to today's 10-K filing and our other SEC filings. Our comments today may also include non-GAAP financial measures. Additional details and reconciliation to the most directly comparable GAAP financial measures can be found in our 10-K filing, which is on our website. After our prepared remarks, we'll open the call up for questions. If you would like to ask a question, please hit star one on your keypad.

[Cameron Schnier, Head of Investor Relations at Bit Digital]

With that covered, I will turn the call over to Sam to discuss our performance. Sam.

[Sam Tabar, CEO at Bit Digital]

Thank you, Cam. Ladies and gentlemen, thank you for joining us on the call today. Today, I'll walk through our 2024 results, highlight key milestones from a transformational year, and provide insight into the strategic direction of Bit Digital as we scale our HPC operations. 2024 was a fantastic year for Bit Digital. Revenues grew exponentially by 141%, margins expanded, and adjusted EBITDA reached $73 million. This was driven by the rapid growth of our HPC business, which started in 2024 with one customer, and by early January of this year, we surpassed 20 customers. HPC revenue made up over 40% of full-year revenue and more than half of Q4 revenue. The Enovum acquisition was a major leap forward. This acquisition vertically integrated our data center operations, added a strong customer base, and brought in a highly experienced team.

[Sam Tabar, CEO at Bit Digital]

This team gives us a huge advantage in scaling our infrastructure business. We also built out our organization. Headcount has been focused on hiring seasoned value creators, all focused either on data center operations or cloud services. These aren't businesses you could just throw capital at. You need the right talent. We now have specialized teams leading both divisions. We have a lot to cover today. I'll walk through each part of the business. Erke will then walk you through the financials before we open the line for questions. First, let's start with our cloud services business. As we scale our AI infrastructure, we recently launched WhiteFiber, our new HPC platform that integrates GPU cloud services and data center operations. As part of this evolution, we have updated our segment reporting to better reflect our business structure.

[Sam Tabar, CEO at Bit Digital]

What was previously referred to as high-performance computing services is now categorized under HPC, the umbrella term for our entire WhiteFiber business. Cloud services represent our GPU cloud platform, while colocation services include our data center business from Enovum. Cloud services did not exist in 2023, and it became our largest business in terms of revenue generation by the second half of 2024, producing $13 million of revenue in the fourth quarter of 2024. This segment contributed 50% of total revenue in Q4 and 64% of gross profit. Gross profits contracted slightly in Q4 as we added new GPUs and leased additional data center capacity ahead of revenue generation. We viewed this as temporary as we expect margins to normalize over time.

[Sam Tabar, CEO at Bit Digital]

A key factor was GPU leasing expenses, particularly the H100 sale-leaseback from early 2024, which accounted for 70% of cost of revenue for that segment. That was a unique structure reflecting our risk tolerance at that time. Going forward, as we own more GPUs outright or deploy more traditional financing structures, we expect margins to expand. We currently have nine active customers in our cloud segment of WhiteFiber. The majority are running single-digit servers with annualized revenue, or ARR, below $1 million, but most were won in the past few months. This aligns with our strategy of onboarding customers and scaling deployments over time. We are happy to start with smaller initial deployments to earn trust, demonstrate performance, and expand contract sizes as the relationships grow. Our cloud services run rate is approximately $62 million.

[Sam Tabar, CEO at Bit Digital]

This will increase to around $72 million later this month when the H200 contract with DNA Fund begins generating revenue. Revenue generation on the contract was pushed out by a month as we ensured full reliability before going live, a decision made deliberately to prioritize customer experience and long-term satisfaction. Additionally, we have $15 million in ARR expected to start at the end of June when we deploy 512 B200 GPUs for our anchor customer. Separately, we received our first 512 B200 GPUs, which are being deployed in Iceland. We expect this cluster to go live in April and plan to offer these GPUs through an on-demand pool via a third-party platform. This would be an interim step as we work internally on developing our own on-demand platform.

[Sam Tabar, CEO at Bit Digital]

While we see strong demand for reserved B200 contracts, we believe on-demand deployment effectively pulls forward revenue and shortens payback periods. Based on current market dynamics, this cluster could generate approximately $25 million in additional ARR. We also have about 113 H200 servers, or 908 GPUs, currently being configured, and we are evaluating reserve contract options for those units. Illustratively, at $2 per hour, that is another $16 million in ARR once contracted. Overall, our customer pipeline remains strong and dynamic. Demand for B200s is surging. Also, since DeepSeek, we've seen renewed enthusiasm for H100s and H200s because one can do less with more, or rather, one can do more with less. We're consistently engaging new prospective customers, and demand continues to outstrip supply. While we see significant growth opportunities, we are taking a disciplined approach to GPU procurement, carefully managing capital deployment to avoid excess inventory risk.

[Sam Tabar, CEO at Bit Digital]

Our focus is on growing at a pace that aligns with customer trust, ensuring that as relationships deepen, we scale deployments accordingly. We've also invested in top-tier technical talent to build a robust software-driven infrastructure that enhances performance, reliability, and scalability. Customers do not just need access to GPUs. They need a trusted, high-performance platform that ensures seamless deployment and maximal performance. Our investment in this technology layer to deliver just that is a key differentiator, helping us drive customer trust, retention, and long-term growth. Also, with Boosteroid, the third largest cloud gaming provider in the world, we continue to expand our partnership. Currently, we have just under 500 GPUs contracted, representing approximately $1.6 million in annual revenue over the five-year term. We are in the process of finalizing an agreement to deploy an additional 700 GPUs, which, if completed, would generate an additional $2.4 million in annual revenue for Boosteroid.

[Sam Tabar, CEO at Bit Digital]

We expect the deployment cadence to accelerate throughout 2025. Our GPU procurement strategy is a balancing act between growth and risk. We are focused on scaling customer deployments and expanding GPU capacity to meet growing demand. Several live opportunities are substantial, with contracts representing nine-figure annual revenue and three- to four-year locked-up terms. Executing these would require the right financing structures, and we are actively evaluating lease financing and other capital-efficient options. We are firmly in the mix for blue-chip deals. As our AI compute grows, our focus remains on execution, efficiency, and customer relationships. WhiteFiber is scaling rapidly, and we believe we are well-positioned to be a leader in AI infrastructure. Turning to our colocation services segment of WhiteFiber, this business was established with our acquisition of Enovum in October 2024, marking a major step in our evolution as an HPC platform.

[Sam Tabar, CEO at Bit Digital]

Before the acquisition, we had no colocation business. Now, we operate a tier-three data center with a full roster of clients, which currently stands at 14 active customers. We added a recurring revenue stream and expanded our expertise. Beyond its immediate contribution, Enovum provides a scalable foundation for future growth, backed by an experienced team and a very robust development pipeline. The Enovum acquisition is a gift that keeps on giving. Since closing the acquisition, we have moved quickly to expand our colocation capacity and secure strategic customer segments or customer agreements. In Q4, we acquired Montreal 2, a 160,000 sq ft industrial site in Montreal, for approximately $23 million as part of our planned expansion to 32 MW by 2025. Montreal 2 is being developed into a 5 MW tier-three data center, expected to go live in mid-2025.

[Sam Tabar, CEO at Bit Digital]

The facility will be powered by 100% renewable hydroelectricity and will feature direct-to-chip liquid cooling. The site provides key advantages in accelerating our development pipeline. The property was well-suited for a retrofit and includes transferable HVAC infrastructure, allowing us to reduce costs and bring capacity online faster, a core tenet of our growth strategy. We still expect to complete the retrofit for approximately $19 million. We are also in the process of securing cost-effective mortgage financing to support the build-out in a non-dilutive manner. We plan on announcing the customer for Montreal 2 at a later date. In February, we announced a multiyear colocation agreement with a leading AI hardware innovator. This client is Cerebras, the manufacturer of the fastest inference LLM processor in the world. Cerebras is launching six new data center sites in North America and chose us to be their partner for their first-ever Canadian data center.

[Sam Tabar, CEO at Bit Digital]

This agreement is a major validation of our colocation strategy, reinforcing our ability to provide high-performance, built-to-suit infrastructure for industry leaders. Under this contract, we will provide 5 MW of customized high-density colocation capacity over a five-year term. The location for the development has been selected, and we are in the process of finalizing legal ownership of the site. Once that process is complete, we will formally announce the location. We expect the contract to commence in mid-2025. Cerebras is pioneering wafer-scale technology, which enables ultra-fast AI infrastructure for some of the largest and most complex AI workloads in the world. Their deployment with us will be the first of its kind in Canada, expanding AI compute access to enterprises, research institutions, and government entities. This deployment required a highly customized, high-density solution, validating our ability to design infrastructure for next-generation AI workloads with very unique technical requirements.

[Sam Tabar, CEO at Bit Digital]

Beyond this initial deployment, we see significant potential for future expansion as Cerebras continues to scale its infrastructure. Their rapid growth reflects the increasing demand for high-density, AI-optimized colocation. Our ability to meet their highly specialized requirements underscores the strength and adaptability of our platform. We are super excited to support them in their next phase of development. As mentioned, we are deep in the mix for blue-chip deals, and that's a prime example of one. Stay tuned for more. Beyond Montreal 2, our development pipeline has expanded significantly, now totaling 510 MW, including 156 MW under exclusive LOI. This includes sites in both Canada and the U.S., with six locations under exclusive LOI ranging from 8 MW to 100 MW. The major driver for the pipeline expansion was the addition of locations in the United States.

[Sam Tabar, CEO at Bit Digital]

We recently brought a U.S. site under LOI that could redefine our data center platform. If developed, it could be our largest project to date, significantly expanding our scale and market position. Even with our planned capacity expansions, we continue to receive more customer demand than we can currently accommodate. This underscores the urgent need for additional high-performance data center space and reinforces our approach of prioritizing execution speed and customer alignment. Everyone knows about the current tariff wars that are playing out. We're currently monitoring and assessing their potential impact on our data center's build-out. Many critical components, such as generators, HVAC systems, and electrical infrastructure, are imported from the United States, Canada, and Mexico, and new tariffs could increase build costs. We are evaluating strategies to mitigate potential increases, including diversifying supply chains and optimizing procurement, while monitoring if, how, and when these tariff policies may take place.

[Sam Tabar, CEO at Bit Digital]

Looking ahead, we believe inference will be the largest driver for long-term AI compute demand, and we are positioning our data centers to capture this shift. Strategically, we are developing in metropolitan areas where we expect the broadest customer appeal over time. This ensures we can meet the needs of enterprise, government, and research institutions seeking low-latency, high-performance AI infrastructure. Turning to our Bitcoin mining business, we remain focused on maintaining a cost-efficient and optimized fleet, rather than growing hash rate for the sake of expansion. Mining accounted for 54% of revenue in 2024, down from 98% in 2023, as we prioritized investments in HPC. That said, mining remains an important part of our business, and we are taking targeted steps to improve efficiency and reduce costs. Our active mining fleet is currently around 1.6 exahash, with an efficiency of approximately 25-26 joules per terahash.

[Sam Tabar, CEO at Bit Digital]

We have now fully exited all claimant facilities and are refreshing our fleet with more efficient miners at new hosting sites. To replace lost claimant capacity, we secured 30 MW of new hosting, 19 MW with Arc Digital, and 11 MW with Soluna. The 11-megawatt site was filled with 1,800 redeployed K-Pros and about 1,400 S21s and S21+ units. The 19-megawatt site will support some redeployed assets, as well as 3,800 S21+ miners, adding 820 petahash to our fleet. To date, we have deployed 941 S21 miners and 500 S21+ units, improving overall fleet efficiency. These upgrades are expected to bring our operational hash rate to approximately 2.5 exahash by May, with pro forma efficiency to around 22 joules per terahash. Reaching 3 exahash would require securing an additional 6.6 megawatts of hosting and acquiring approximately 1,800 more S21+ miners.

[Sam Tabar, CEO at Bit Digital]

The power is available from multiple sources, and we are actively evaluating the best path forward. Our strategy remains unchanged. We are not allocating significant growth capital to mining. Instead, we are structuring the business to maintain Bitcoin exposure in a capital-efficient way, focusing on fleet optimization and cost reductions while keeping a disciplined approach to capital deployment. Mining remains a part of our portfolio, but our investment priority remains on scaling our HPC business. I'll now hand over the line to Erke, who will discuss our financial results.

[Erke Huang, CFO at Bit Digital]

Thank you, Sam. We will now discuss our financial results for 2024. As a note, we completed our transition to domestic issuer status and filed our first Form 10-K with the SEC this morning. Total revenue for the year was $108 million, a 141% increase from 2023. Revenue increased across all business lines.

[Erke Huang, CFO at Bit Digital]

Bitcoin mining revenue was $58.6 million, up 32% year-over-year. Our Bitcoin production declined 37% to 950 Bitcoin due to higher network difficulty and the April halving event. However, higher Bitcoin prices and increased hash rate led to overall revenue growth. Ethereum staking revenue more than doubled to $1.8 million for 2024, as we earned approximately 566 Ethereum in staking rewards for the year. Cloud services generated $45.7 million in its first year of operations. Starting revenue in June 2024, colocation services acquired through Enovum contributed $1.4 million from October 12 through the year-end. Our total cost of revenue, excluding depreciation and amortization, was $62.4 million, compared to $29.6 million in the prior year. The increase was driven by a larger mining fleet, higher network difficulty, and the launch of our cloud and colocation businesses.

[Erke Huang, CFO at Bit Digital]

Cloud services costs were $19.5 million, with $13.6 million from H100 server lease expenses. Gross profit was $45.7 million, a nearly three-fold increase from 2023. Gross margins expanded approximately 500 basis points to 42.3%, driven by cloud and colocation revenue, which offset lower mining margins due to the block rewards reductions and higher network difficulty. General and administrative expenses were $41.5 million, up from $27.7 million. The increase was mainly due to higher payroll and professional fees. A large portion of these fees were tied to the Enovum acquisition and are not expected to recur. Depreciation and amortization was $32.3 million, compared to $14.4 million in 2023, reflecting a larger miner and GPU fleet. 2024 adjusted EBITDA was $73 million, compared to $12.4 million in 2023. Adjusted EBITDA for 2024 includes $55.7 million of gain on digital assets, which are predominantly unrealized gains.

[Erke Huang, CFO at Bit Digital]

GAAP earnings per share was $0.19 for 2024 on a fully diluted basis, compared to a loss of $0.16 in 2023. Turning to our balance sheet, we held approximately $98.9 million of cash and restricted cash as of December 31, 2024, and our digital assets positions were worth approximately $161.4 million. Total assets were $538 million, and shareholders' equity was $463 million. We remain debt-free but are actively exploring financing options for our HPC business. Capital expenditures for 2024 totaled $94 million. The majority of the CapEx was deployed in the fourth quarter and was used to fund GPU purchases and the acquisition of Montreal 2. I will now turn the call back to Sam for closing remarks.

[Sam Tabar, CEO at Bit Digital]

Thank you, Erke. Before we open the line for questions, I want to touch on the broader trends that we're seeing across our business.

[Sam Tabar, CEO at Bit Digital]

We are experiencing significant and sustained demand for compute infrastructure, far exceeding the capacity we are currently bringing online. The need for high-performance computing continues to expand, and we believe we are well-positioned to capitalize on this long-term trend. This demand stands in stark contrast to broader market sentiment, where we've seen risk assets, including our own stock, come under pressure. Specifically for Bit Digital, the bigger our HPC business gets, the more our stock seems to trade like a pure-play Bitcoin miner, which is ridiculous. We believe that we are deeply misunderstood, but time is our friend, and eventually, we believe we will be valued properly. While we can't control the macro environment, we are focused on what we can control: executing our strategy, expanding our infrastructure, and positioning our business for long-term value creation. We believe we are well on our way.

[Sam Tabar, CEO at Bit Digital]

A key advantage for our model is the synergistic nature of our colocation and cloud business. These segments are complementary, serving different stages of the AI infrastructure value chain with distinct earnings profile and payback periods. colocation provides long-term contracted revenue streams. Cloud services offer high-margin, shorter-duration contracts with greater flexibility. Together, they create a durable and diversified cash flow that supports sustainable growth. From a capital allocation perspective, we've taken a pragmatic approach to financing growth. In the past, we have used equity issuance as a bridge financing tool to fund our expansion while we evaluated longer-term cost-effective capital solutions. Given our current valuations, we recognize that issuing equity is clearly less attractive than ever. Our focus is on securing alternative financing options that allow us to scale in a non-dilutive manner that's much more sustainable.

[Sam Tabar, CEO at Bit Digital]

On the data center side, we are actively pursuing commercial mortgage financing to support our build-out. We are making progress on this front and have finally received an attractive term sheet that we can move forward with and continue to explore the best terms before finalizing an agreement. For our cloud services business, we are also exploring vendor financing and leasing structures to optimize our GPU investments. Given the rapid evolution of AI hardware, we are structuring our GPU procurement strategy to balance growth and risk management. We are seeing compelling opportunities to scale, and our approach ensures that we remain nimble while preserving capital efficiency. As our business continues to evolve, we are assessing the best structure to highlight the value of each of our business lines. We remain committed to making decisions that drive long-term value creation and position Bit Digital for growth.

[Sam Tabar, CEO at Bit Digital]

With that, I would like to open the line for some questions. As a note, we have Billy Krassakopoulos, who leads our data center business, and Ben Lamson, head of revenue for WhiteFiber, on the line for some Q&A.

[Operator]

Thank you. If you would like to—oh, I'm sorry. Go ahead.

[Sam Tabar, CEO at Bit Digital]

No, I was just suggesting that we should open the line for some Q&A now. Thank you.

[Operator]

Thank you. If you would like to signal with questions, please press star one on your touch-tone telephone. If you're joining us today using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, that will be star one if you would like to signal with questions. Our first question will come from Mike Grondahl with Northland Securities.

[Mike Grondahl, Head of Equities and Director of Research at Northland Securities]

Hey, guys. Thanks. First question is just on cloud services.

[Mike Grondahl, Head of Equities and Director of Research at Northland Securities]

Sam, I think you said the current run rate is $62 million, and you have a contracted customer that's coming on late March. Have you named that customer? That gets you to $72 million run rate.

[Sam Tabar, CEO at Bit Digital]

Yeah, that's DNA Funds.

[Mike Grondahl, Head of Equities and Director of Research at Northland Securities]

Okay. DNA Fund. Okay. And then I think there is another—the 512 GPUs come on, I'll say, roughly July 1 for a $15 million ARR. That gets you to $87 million run rate. Is there anything else contracted to come on right now? I guess that's the first question. Anything else we should be aware of that's contracted that lifts that $87 million?

[Sam Tabar, CEO at Bit Digital]

We're already well past $100 million from a contracted basis. Our WhiteFiber business includes both the GPU and data center business. We are—go ahead.

[Mike Grondahl, Head of Equities and Director of Research at Northland Securities]

Great. Let me ask this question then.

[Mike Grondahl, Head of Equities and Director of Research at Northland Securities]

You also talked about setting up this on-demand pool, and I think you said that has the potential for $25 million of ARR once it is contracted. Then there was another—I will call it GPU pool of 908 that has a $16 million ARR once it is contracted. Did I hear those right?

[Sam Tabar, CEO at Bit Digital]

Yeah, I would love to—yes, I would love to pass you over to Ben, who heads our revenue for that division. Ben?

[Ben Lamson, Head of Revenue at WhiteFiber]

Yeah. Thanks, Sam. I want to be clear on this. On-demand is not contracted, but it commands a much higher price per hour than the contracted rates. That $25 million number for the B200s that are coming online at the beginning of April, that is an annualized run rate based on those GPUs reaching full capacity on demand.

[Ben Lamson, Head of Revenue at WhiteFiber]

Now, we may choose to sell some or all of those onto reserved contracts one, two, or three years as that de-risks things long term. In the short term, we expect demand to be so high that we may choose to keep those on demand for a much higher price per hour.

[Mike Grondahl, Head of Equities and Director of Research at Northland Securities]

Got it. That $25 million and then the $16 million, do you think those are going to be—I do not know—generating revenue in the next quarter or two or three? How should we think of them contributing or adding to the $87 million? A rough timeline.

[Ben Lamson, Head of Revenue at WhiteFiber]

Yeah. We expect the B200s to start generating revenue in April. As for the H200s, I want to be careful to give a date on those as those are part of some R&D around some product developments and technological developments we will be talking about later this year.

[Ben Lamson, Head of Revenue at WhiteFiber]

We're going to hold on to those for a little bit to run some R&D around some pretty cool stuff that we're building. Because of that, I don't want to give a hard date on when they're going to start generating revenue. We'll be talking about some of that in our product roadmap later this year.

[Mike Grondahl, Head of Equities and Director of Research at Northland Securities]

Great. Okay. Just one more. On the colocation or data center business, I don't think I heard what fourth quarter revenue was. Once we have that number, could we kind of walk through what's contracted and how that's ramping in 2025, just like what we did for the cloud services business?

[Sam Tabar, CEO at Bit Digital]

Yep. We have Billy on the line who leads our colocation data center division.

[Cameron Schnier, Head of Investor Relations at Bit Digital]

This is Cam. Let me just jump into that first one, Mike.

[Cameron Schnier, Head of Investor Relations at Bit Digital]

It was $1.4 million was the colocation revenue we recognized, but that was from the date of the acquisition. You can annualize that. For Montreal 1, that would be the prevailing run rate until the new capacity comes online.

[Mike Grondahl, Head of Equities and Director of Research at Northland Securities]

Got it. I think you guys talked about Cerebras coming online, and that's a $10 million run rate. Is there anything else we should be factoring in today?

[Cameron Schnier, Head of Investor Relations at Bit Digital]

I do not think we specified the run rate for that beyond just it being 5 MW, and you could sort of extrapolate the market rate there.

[Mike Grondahl, Head of Equities and Director of Research at Northland Securities]

Got it. Just that Cerebras is the only one we should layer in for data center right now.

[Cameron Schnier, Head of Investor Relations at Bit Digital]

Montreal 2, which would be a separate customer that we have not announced, would also start in the middle of 2025.

[Cameron Schnier, Head of Investor Relations at Bit Digital]

And then just beyond that, the planned deployments for the second half, which would come on later in the year.

[Mike Grondahl, Head of Equities and Director of Research at Northland Securities]

Got it. Okay. Thank you.

[Operator]

The next question will come from Nick Giles with B. Riley.

[Nick Giles, Senior Research Analyst at B. Riley]

Hey, thank you, Operator. Good morning, everyone. Guys, congrats on the progress thus far. My first question, you mentioned a 100 MW site under LOI that would obviously be transformative. I was hoping to get some additional color on when this capacity could come online. Is there any existing power infrastructure in place at the site? Would there be a desire for a larger anchor tenant, or how should we think about customer mix? Thanks very much.

[Sam Tabar, CEO at Bit Digital]

I'm happy to answer that question in a preliminary way. Billy, would you like to give some more deep-down color on that?

[Billy Krassakopoulos, CEO at Enovum]

Sure thing.

[Billy Krassakopoulos, CEO at Enovum]

We have identified a site in the United States that we are under LOI presently. There is currently 24 MW of power available at this location with a very easy path to 48, basically double, within 60 to 90 days. Additionally, we have discussions with the utility provider to get us another 100 MW towards the end of 2025.

[Nick Giles, Senior Research Analyst at B. Riley]

Got it. Billy, that's very helpful. Maybe just to follow up on that, how much of this would be included in your 156 MW of exclusive LOI capacity?

[Billy Krassakopoulos, CEO at Enovum]

This is about 90% of that right now.

[Nick Giles, Senior Research Analyst at B. Riley]

Got it.

[Billy Krassakopoulos, CEO at Enovum]

100 of that is.

[Nick Giles, Senior Research Analyst at B. Riley]

Okay. Great. That's very helpful. My next question was just on some of the GPU contracts. What kind of extension options are embedded in some of these smaller six-12-month contracts?

[Nick Giles, Senior Research Analyst at B. Riley]

I mean, should we think about all of these customers as very likely to further expand, or could some rotate out and you would plan to backfill that capacity? I'm just trying to get a better sense for GPU utilization.

[Sam Tabar, CEO at Bit Digital]

Absolutely. That's a great question for Ben.

[Ben Lamson, Head of Revenue at WhiteFiber]

Yeah. I mean, with these customers, most of the time we're expecting them to both expand the amount of GPUs that they're using and the term. We've seen just broadly across the industry that customers prefer to start with, especially earlier-stage companies, prefer to start with shorter deployments as they become comfortable with a new provider. As we show and prove in that shorter deployment term, they end up renewing for a longer and/or larger term.

[Nick Giles, Senior Research Analyst at B. Riley]

Very helpful. Guys, I'll turn it over for now, but keep up the good work.

[Sam Tabar, CEO at Bit Digital]

Thank you.

[Operator]

The next question comes from George Sutton with Craig-Hallum.

[George Sutton, Senior Research Analyst at Craig-Hallum]

Thank you. An impressive range of opportunities in front of you. First, on the more traditional financing structures that you're working on, that seems to be the primary governor to further growth. Can you just give us a sense of where those discussions are currently?

[Sam Tabar, CEO at Bit Digital]

With respect to the mortgage financing, I think you're referring to. We don't want to get too deep into it so that we don't jinx it, but we have a very attractive term sheet that we are currently planning on making the terms even better. This is definitely a really strong start for us. Should we proceed, this would be the most cost-effective way to tap into sources of financing without diluting our equity, which is correct because we couldn't do that with Bitcoin mining.

[Sam Tabar, CEO at Bit Digital]

You could easily do that with data center and real estate. We look forward to proving to the markets that we can do this. We have finally, after going through a process, a term sheet that we really like. Once we finalize that, we will be able to discuss it publicly.

[George Sutton, Senior Research Analyst at Craig-Hallum]

Gotcha. Relative to Boosteroid, I'm curious if you could just talk about what determines the deployment cadence there.

[Sam Tabar, CEO at Bit Digital]

It's a mix of their GPU needs and also our own, I guess, how we want to deploy the capital. I mean, there's only so much runway we have from the balance sheet, so we couldn't realistically do a $200 million deployment for them tomorrow. It's measured, but we see a lot of opportunity to expand that with Boosteroid throughout the year, and we expect that to gradually increase.

[George Sutton, Senior Research Analyst at Craig-Hallum]

Gotcha.

[George Sutton, Senior Research Analyst at Craig-Hallum]

Just a question for Ben relative to WhiteFiber. Can you just give us a sense of the response that you've gotten from the rebranding? It sounds like you could now do an on-demand platform. I wasn't aware that you could do that yet with your platform. Is that a little bit of an update on this call?

[Ben Lamson, Head of Revenue at WhiteFiber]

Yeah. Let me clarify there. We're going to be offering on-demand instances through a partner. We do not yet have our on-demand platform live. I don't want to put a definite date on when that'll be, but we're looking definitely end of this year, early next year for our on-demand platform. We'll be leveraging a third-party to put those instances into an on-demand pool. In terms of the response on the rebrand, it's been really positive.

[Ben Lamson, Head of Revenue at WhiteFiber]

I think the way that we're positioning our offering is really well received. We've had more demand than we've been able to capture due to lack of supply being live, which is a campaign problem. We are really excited about how the rest of this year is going to go.

[George Sutton, Senior Research Analyst at Craig-Hallum]

All right. Perfect. Thanks, guys.

[Sam Tabar, CEO at Bit Digital]

Thank you.

[Operator]

The next question will come from Kevin Dede with H.C. Wainwright.

[Sam Tabar, CEO at Bit Digital]

Hi, Kevin.

[Kevin Dede, Managing Director and Senior Tech Analyst at H.C. Wainwright]

Hey, Sam. Great to talk to you. Thanks for having me on. Let me echo George's sentiment. It's an impressive array of opportunity. I think as I take a step back and look at it, Sam, it's hard to get arms around all the moving parts that you have, obviously, and I think that's what most people have been asking about. Beyond that is the equipment.

[Kevin Dede, Managing Director and Senior Tech Analyst at H.C. Wainwright]

I know you referenced tariffs, but I guess what I'm wondering is how comfortable are you in sourcing the infrastructure equipment you're going to need to support all this effort, number one. Number two, is there a contract recourse for Cerebras or for the eventual tenant of Montreal 2 to push back on the contract if you're not able to deliver on time?

[Sam Tabar, CEO at Bit Digital]

Yeah. There are three things you mentioned there. There are a lot of moving parts of our story and our business. I think that sometimes that's a weakness and not a strength because we have a lot of great things happening, and we're not exactly a one-trick pure-play Bitcoin miner. We're not a one-trick pony. We're doing a lot of different good things on different fronts. Sometimes that story and that narrative gets a little bit lost.

[Sam Tabar, CEO at Bit Digital]

We appreciate when analysts tease out all the moving parts and provide a good report in terms of the information of what's happening with respect to our businesses. Just one other comment on that initial statement you made. Your second question, is it more on the financing side or on the operational side in terms of the logistics potential disruption of tariffs? Just wanted to understand if you're looking at it from an equipment sourcing perspective or a financing sourcing perspective.

[Kevin Dede, Managing Director and Senior Tech Analyst at H.C. Wainwright]

More on the equipment side, honestly, Sam, because, I mean, obviously, all the demand that you're seeing is echoed throughout the industry, throughout North America. That's the question, right? Will you be able to source? Are you comfortable there? Then there's a recourse for your potential tenants.

[Sam Tabar, CEO at Bit Digital]

Yeah. Billy is going to give an answer to that.

[Sam Tabar, CEO at Bit Digital]

Just before he does, I do want to mention one of the main reasons we acquired Enovum and that team is because they've been doing this their entire careers and have established logistics supply systems and contingencies. None of this is the—it's just not their first rodeo. That is why it was really important for us not just to acquire that Tier 3 data center, but really the team and the pipeline because they know what they're doing. Frankly, before we acquired them, we didn't know what we were doing in colocation services. I salute the others who are trying it for the first time, but we just didn't have that courage. That is why we acquired that team because they know what they're doing. Anyway, having said that, I would love to turn it to Billy to answer the question more deeply.

[Billy Krassakopoulos, CEO at Enovum]

Thanks, Sam. The equipment for the two 5 MW deployments that we have coming online has all been secured. Some of it has actually delivered. A large portion of it is in the production line right now to be delivered within the next 30-60 days. Equipment for the remainder of 2025, we have purchase orders out, deposits on equipment for the 20 or so megawatts that we forecasted for the remainder of 2025. We are very confident on that. We are looking to place orders for deliveries on equipment in 2026 right now on equipment that is site-agnostic. Stuff like generators, HVAC equipment, battery equipment, even though we have sites that are under exclusivity LOI that we plan on closing on very shortly, the equipment has already been pre-ordered.

[Billy Krassakopoulos, CEO at Enovum]

To answer your other question, the two clients that are coming online in the next quarter or early third do not have recourse because of our confidence in delivering. I mean, we have the equipment. We have secured the sites. The construction has begun. There is no recourse for these clients if we do not meet the expected delivery date.

[Kevin Dede, Managing Director and Senior Tech Analyst at H.C. Wainwright]

Thanks very much, Billy. Appreciate it, Sam. On the Bitcoin mining side, you teased us a little bit with a three exahash target. I guess what I am wondering is why you would even bother. That is one question. The other one is on Boosteroid. I understand that you are, if I have it correct, that is, that you are leasing space in order to host them. I am wondering how you have seen that pricing dynamic change, say, I do not know, over the past six months that you have been working with them.

[Sam Tabar, CEO at Bit Digital]

Sure.

[Sam Tabar, CEO at Bit Digital]

With respect to those two questions, the first question is, why bother with that Bitcoin mining business? The other question is the pricing dynamics as the passage of time has gone on with respect to our relationship with Boosteroid. Is that correct?

[Kevin Dede, Managing Director and Senior Tech Analyst at H.C. Wainwright]

Yeah, yeah, yeah. No, I understand the involvement in Bitcoin mining. I do understand that. Why would you boost from 2.5 or 2.6 to 3? It just doesn't seem to correlate with all the other opportunities you have.

[Sam Tabar, CEO at Bit Digital]

I mean, look, that's a good question. Our priority is the HPC business. There's no doubt. That's where our business is. We think three is somewhat of an arbitrary number. We do think there is magic in the number three. We also don't want to give up on our Bitcoin mining business.

[Sam Tabar, CEO at Bit Digital]

We believe in the thesis of Bitcoin, especially these days with the institutionalization of Bitcoin at the Fed level and increasingly with financial institutions. We are actually really excited in the future to talk a little bit more about digital assets and what we will be doing on that front. For the time being, we believe that when you're mining Bitcoin, you're getting that at a discount to open markets, and that is an important thing to do. We are not going to expand for expansion's sake. We're optimizing our fleet. We're making it lean. We're reducing costs and the methods that I talked about earlier today. With respect to Boosteroid, your question's kind of not clear to me. You're asking how has pricing changed during the course of time. It wasn't clear.

[Cameron Schnier, Head of Investor Relations at Bit Digital]

I think. I'm sorry, Sam, what he's asked for. I can just interject, Kevin.

[Cameron Schnier, Head of Investor Relations at Bit Digital]

I mean, the way that contract is structured, it's not like our traditional cloud services. It's structured effectively as an equipment lease, which basically means all the data center expenses are effectively pass-throughs or, more specifically, we're not even billed. So it's pretty agnostic. They directly pay the data center cost.

[Kevin Dede, Managing Director and Senior Tech Analyst at H.C. Wainwright]

Perfect, Cam. Thank you very much, gentlemen. Appreciate you entertaining everything I had for you. Thank you.

[Sam Tabar, CEO at Bit Digital]

Thanks, Kevin.

[Cameron Schnier, Head of Investor Relations at Bit Digital]

Thanks, Kevin.

[Kevin Dede, Managing Director and Senior Tech Analyst at H.C. Wainwright]

Thank you.

[Operator]

The next question will come from Greg Pendy with Clear Street.

[Sam Tabar, CEO at Bit Digital]

Hi, Greg.

[Greg Pendy, Director and Equity Analsyt at Clear Street]

Thanks for taking my call. Hi. In for Brian Dobson. But just, I guess, a question. You're one of the only companies out there that I'm aware of that has deployed the Ethereum staking yield strategy.

[Greg Pendy, Director and Equity Analsyt at Clear Street]

We're hearing from a lot of the other miners, and you said earlier you're going to remain committed to having some Bitcoin mining, at least for now. How are you evaluating the yield strategies that some of the pure-play Bitcoin miners are looking to do on their HODL balance? Would that shift, or are you still going to be very comfortable with staking Ethereum to get yield off the coin? Thanks.

[Sam Tabar, CEO at Bit Digital]

Yeah. The yield on Ethereum is higher than Bitcoin. Bitcoin, there is no real yield. There is the yield on Ethereum. We want to talk about the future of digital assets and our strategy on that in the medium-term future. I don't want to say too much about it right now, but we do believe that there is a very bright future with digital assets.

[Sam Tabar, CEO at Bit Digital]

We've seen, as mentioned earlier with Kevin, that Bitcoin is now an accepted part of the DNA of the financial structure of the United States. They're also now creating a digital asset stockpile for the long tail of other coins. I would imagine that will include Ethereum once that's announced. There are many technologies out there outside of Bitcoin with respect to Ethereum and other coins that are really worth looking at and also provide staking value and have their own merits. That is something we could get into in the medium-term future. For the time being, we're focused on WhiteFiber, which includes our colocation services with Billy and our cloud business with Ben.

[Greg Pendy, Director and Equity Analsyt at Clear Street]

Okay. Thanks. Just one more real quick one. We're hearing from a lot of people that the demand for HPC is out there.

[Greg Pendy, Director and Equity Analsyt at Clear Street]

How important is the location specifically near the metro areas? There's a lot of other miners out there that are teasing the idea of pivoting maybe some of their extra hash to HPC. Just from your discussions and what you're seeing in the environment, can you get more specific on what's drawing people? Is it location? Is it near metro areas or even near specific climate areas that are drawing people?

[Sam Tabar, CEO at Bit Digital]

Yeah. Billy will certainly offer a more technical answer than mine. Clearly, there is business that we have won, and there are certain requirements, particularly on the inference side, that require low latency, which means you have to be in cities or near cities in order to provide for such clients. We've always taken that view for a long time. Our thesis is proving correct.

[Sam Tabar, CEO at Bit Digital]

We understand that other Bitcoin miners are building in different places, and we salute them. We wish them the best. With respect to our strategy, we prefer to have our tier-three data centers in metropolitan areas or near them, particularly with respect to inference. It is one of the reasons why, frankly, we won businesses like Cerebras. Billy, do you have anything more to add to that? I'm sure you do. My technical prowess is not as good as yours when it comes to this.

[Billy Krassakopoulos, CEO at Enovum]

For sure, we prefer urban markets because latency is very important in these types of installations. I mean, the markets that we're looking at, price per square foot is not in the high to extreme ranges. We always look for locations. We try to balance out the locations.

[Greg Pendy, Director and Equity Analsyt at Clear Street]

That's very helpful. Thanks a lot.

[Operator]

The next question will come from Joe Gomez with Noble Capital.

[Sam Tabar, CEO at Bit Digital]

Hi, Joe.

[Joe Gomes, Senior Research Analyst at NOBLE Capital]

Good morning. Thanks for taking my questions. I just wanted to circle back here to something you said, Sam. It sounds like, given where the stock is, you're going to turn the ATM off. Last year, you guys raised over $240 million from that. I just kind of want to get your thoughts that you're comfortable that you can finance through other means that type of capital going forward here.

[Sam Tabar, CEO at Bit Digital]

Yeah. At these current levels, there is no desire to tap into the ATM. Frankly, we don't want to. We don't. It hurts us as shareholder owners, which is what we are, to dilute the shareholding.

[Sam Tabar, CEO at Bit Digital]

One of the reasons why we decided to pivot and expand and aggressively pursue the HPC business through cloud, through colocation services, is that it is a much easier path to take on debt. Bit Digital has had historically zero debt in the past. The reason is because when you take on debt, you can't model for if you take on debt for Bitcoin mining, you can't model out your future cash flows unless you're using a different type of Excel spreadsheet than I'm used to. You just can't predict the future cash flows because you don't know where the price of Bitcoin is going to be. When Bitcoin miners are taking on debt to finance their expansion, it's a wild gamble. That didn't exactly turn out very good for many Bitcoin miners. We never took on debt historically.

[Sam Tabar, CEO at Bit Digital]

Most Bitcoin miners, they realize the risk of taking on debt there too, and they are aggressive with their ATM. We decided if we're going to go towards a business that's non-cyclical and we can tap into non-dilutive sources of capital, in other words, not touch the ATM, which is exactly what we're doing now, particularly on the data center side, for example. We already have a very attractive term sheet from a Canadian bank lender where the terms are incredible. We don't have to use the ATM if that's the kind of financing terms that we can do. It's easier to use those sources of financing because you can model future cash flows when it comes to colocation services. You can model future cash flows when it comes to the cloud business.

[Sam Tabar, CEO at Bit Digital]

You can't do that with Bitcoin mining, which is why, as I said, we have zero debt because we were Bitcoin miners, and now we've become something very different. That is why we're ready to take on debt at very attractive terms in order to expand our businesses that are growing exponentially.

[Ben Lamson, Head of Revenue at WhiteFiber]

I would just say that equity financing is painful, Joe. I mean, if you look at the platform we built in 2024, I mean, we feel very good about that. I think it was a very good use of funds. Near-term, as a source of funds, we would likely opt to sell some digital assets before equity.

[Joe Gomes, Senior Research Analyst at NOBLE Capital]

Okay. Appreciate that color. Thanks, guys.

[Sam Tabar, CEO at Bit Digital]

Good question. Tough one, but happy to answer it.

[Operator]

Thank you. That does conclude the question-and-answer session. I'll now turn the conference back over to you.

[Sam Tabar, CEO at Bit Digital]

Thank you very much, ladies and gentlemen. This concludes the call for Bit Digital. We look forward to the next quarterly call. Stay tuned for some more very interesting news. That is it. Thank you so much. Have a great day.

[Operator]

That does conclude today's conference. We thank you for your participation. Have an excellent day.

Participants

Executives

• Cameron Schnier, Head of Investor Relations
• Sam Tabar, CEO
• Erke Huang, CFO

Analysts

• Billy Krassakopoulos, CEO at Enovum
• Ben Lamson, Head of Revenue at WhiteFiber
• George Sutton, Senior Research Analyst at Craig-Hallum
• Kevin Dede, Managing Director and Senior Tech Analyst at H.C. Wainwright
• Greg Pendy, Director and Equity Analsyt at Clear Street
• Joe Gomes, Senior Research Analyst at NOBLE Capital
• Mike Grondahl, Head of Equities and Director of Research at Northland Securities
• Nick Giles, Senior Research Analyst at B. Riley