LM Funding America Q3 2026 Earnings Results & Report

LM Funding America EPS Results

• Actual EPS: $0.20
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A
• EPS Beat Rate: 2 of last 8 quarters

LM Funding America Revenue Results

• Actual Revenue: $1.89 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

LM Funding America (NASDAQ:PWCM) is a specialty finance company that provides funding solutions to nonprofit community associations in the United States. Its core business involves advancing funds against delinquent association assessments, helping community associations maintain cash flow while pursuing collection of unpaid amounts from property owners.

The company has offered several assessment-receivable funding programs, including traditional and cooperative arrangements. These programs are designed to provide associations with an alternative to waiting for delinquent assessments to be collected and may include services related to receivables management and collection support.

LM Funding America has also expanded into cryptocurrency mining through its digital-asset operations, including the mining of bitcoin and related infrastructure activities. The company was founded in 2008 and has historically focused on serving community associations in selected U.S. markets. Public company disclosures have identified Bruce Rodgers as a founder and senior executive. The symbol provided, NASDAQ: PWCM, may not correspond to the company’s current trading symbol.

LM Funding America Q3 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: PowerCompute mined 23.9 Bitcoin, up 36% year over year, while mining margin after curtailment and energy sales rose to 50.7% from 29% in the prior quarter. Management put energy cost per Bitcoin at about $35,000, compared with average Bitcoin revenue of about $71,000.
• Positive Sentiment: The company paid cash for 600 replacement miners, which it expects to deploy by mid-December and add about 10% to hash rate without increasing power capacity. It also reduced secured debt by about 94% since June, holds no Bitcoin pledged, and extended its remaining secured note’s maturity to December 2027.
• Negative Sentiment: Third-quarter revenue fell 13.3% year over year to about $1.9 million as the average value of mined Bitcoin declined 37.5%, despite higher production. The reported $400,000 net income included significant, nonrecurring fair-value effects tied to the repaid Arch facility; the company also disclosed substantial doubt about its ability to continue as a going concern.
• Neutral Sentiment: PowerCompute said early GPU-hosting utilization and demand on Vast.ai exceeded expectations, but described its HPC business as being at an early stage and gave no quantitative results. Management is still evaluating whether future capital and power should go to Bitcoin mining or HPC.

Presentation

[Operator]

Good day, and thank you for standing by. Welcome to PowerCompute's third quarter 2026 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to turn the call over to Phil Carlson from KCSA. Please go ahead.

[Phil Carlson, Managing Director of Investor Relations at KCSA]

Thank you, operator, and thank you all for joining us on PowerCompute's third quarter 2026 earnings conference call. Joining us today are Chairman and Chief Executive Officer Bruce Rodgers and Chief Financial Officer Richard Russell. An accompanying supplemental investor presentation has been posted under the Events section of our investor relations website. Before we begin, please note that today's remarks include Forward-Looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are not guarantees of future results and are subject to risks and uncertainties that could cause actual results to differ materially.

[Phil Carlson, Managing Director of Investor Relations at KCSA]

Important factors include, among others, our ability to retain the listing of our securities on the Nasdaq Capital Market, our liquidity, our ability to continue as a going concern, and our ability to obtain additional financing on acceptable terms, our ability to repay or refinance our remaining secured note at maturity, the timing and cost of installing new miners, and our ability to achieve expected hash rate, the early stage of our AI infrastructure business and our lack of operating history in it, the volatility of Bitcoin prices, and our ability to secure customers and capital for any conversion of our power capacity. We will also reference certain non-GAAP financial measures.

[Phil Carlson, Managing Director of Investor Relations at KCSA]

Please refer to the earnings release issued this morning and our Form 10-Q for a full reconciliation to the most comparable GAAP measures and to our SEC filings and the Investors section of our website at power-compute.com/investors for a more comprehensive discussion of these and other risks. I will now turn the call over to Chairman and Chief Executive Officer Bruce Rodgers. Bruce, please go ahead.

[Bruce Rodgers, Chairman and CEO at PowerCompute]

Thank you, and good morning, everyone. Three numbers frame our third quarter. We mined 36% more Bitcoin than a year ago. In November 2026, we paid cash for 600 new S21++ miners that we expect to add about 10% to our hash rate by mid-December. Our secured debt is down 94% since June, with none of our Bitcoin pledged. Our job is to earn the best return we can on every megawatt we own, and here's how the quarter moved forward for us. First, we're getting more Bitcoin out of power we already own. PowerCompute owns or controls 26 MW of interconnected power, a 15 MW site in Calumet, Oklahoma, and an 11 MW site in Columbus, Mississippi. We operated at a blended net cost of about $0.024 per kilowatt hour for the third quarter after curtailment and energy sales.

[Bruce Rodgers, Chairman and CEO at PowerCompute]

Our power is priced at variable market rates and will fluctuate. We mined 23.9 Bitcoin in the quarter, up 36% from a year ago, and our mining margin after curtailment and energy sales was 50.7%, up from 29% in the second quarter. Our energy cost to mine one Bitcoin after curtailment and energy sales was about $35,000, down from about $58,000 a year ago, against average revenue of about $71,000 for each Bitcoin we mined. It's worth repeating. Our average cost to mine a Bitcoin is down to $35,000 for each Bitcoin we mined at an average price of $71,000. We're in the Bitcoin go up business, and we are mining coins for about $35,000 each. We are also replacing older miners with newer machines that produce more hash rate on the same power.

[Bruce Rodgers, Chairman and CEO at PowerCompute]

Degradation in our older fleet pulled hash rate down from about 771 petahash per second at June 30 to about 718 at September 30. With the newer machines, it reached about 800 at October 31, up about 11% without adding a megawatt. In October, we mined nine Bitcoin, up 20% from October of 2025. This month, we paid about $1 million in cash for 600 Antminer S21++ miners. They go into existing slots in Columbus, replacing about 500 older S19s and 100 S19j Pros, and we expect them to add 80-85 petahash per second of net hash rate, adding about 10% once they are deployed in mid-December. That would bring us to about 880 petahash per second. Hash rate drives how much Bitcoin we mine. At steady network difficulty and Bitcoin price, about 10% more hash rate means 10% more Bitcoin.

[Bruce Rodgers, Chairman and CEO at PowerCompute]

This estimate replaces the 964 petahash projection in our September 30 release. We assumed a 3.5 MW expansion in Mississippi that is not included here. Second, we cleaned up the balance sheet. In late September, we repaid and terminated our Bitcoin-backed credit facility with Arch Lending. Secured debt fell from about $19.4 million at June 30 to $1.25 million at September 30, a reduction of about 94%. Interest on what remains costs us about $138,000 a year. None of our Bitcoin is pledged, and after a quarter end, we extended the remaining million-a-quarter note from a December 31, 2026 maturity to a December 31, 2027 maturity. Third, we secured our power position in Mississippi. The Tennessee Valley Authority, or TVA, adopted a new data center rate in August that includes capacity commitment charges of about $1.5 million per megawatt above the first 5 MW.

[Bruce Rodgers, Chairman and CEO at PowerCompute]

That changes the economics for anyone building a data center in this region, despite its low power costs. We moved to the new rate before it took effect on October 1, 2026. More importantly, we raised our contracted power demand from 8.5 MW-11 MW without being assessed the capacity commitment charge on any of it. At that rate, a new data center project seeking the same 11 MW would face about $9 million in TVA capacity commitment charges before incurring any build-out costs. That covers how we turn our power into Bitcoin today. At our Oklahoma site, we are also learning how to turn that same power into high-performance computing. We listed our GPU capacity on Vast.ai and are building operating experience with it. HPC can generate more revenue per kilowatt than Bitcoin mining, but it also requires sustained uptime, additional infrastructure, and committed customers.

[Bruce Rodgers, Chairman and CEO at PowerCompute]

Our program is at an early stage. Our goal is to be ready to build out our own HPC capacity using our own power when we believe the technology, the customers, and the economics justify it. I will now turn the call over to Rick to review the financial results.

[Richard Russell, CFO at PowerCompute]

Thank you, Bruce. Total revenue for the third quarter of 2026 was approximately $1.9 million, compared with $2.1 million in the second quarter of 2026 and $2.2 million in the third quarter of 2025, which is a 13.3% decrease year-over-year. Digital mining revenue was approximately $1.7 million for the current quarter, compared with $2 million a year ago. The year-over-year change was driven almost entirely by Bitcoin price, not by production. We mined 23.9 Bitcoin in the third quarter, an increase of 35.8% from 17.6 Bitcoin in the third quarter of 2025. Over that same period, the average value of the Bitcoin we mined declined 37.5% from approximately $114,000-$71,000. In other words, we produced materially more Bitcoin, and we paid materially less for each one.

[Richard Russell, CFO at PowerCompute]

On September 30, 2026, our 63.8 Bitcoin were valued at approximately $5.3 million, and Bitcoin was valued at $83,800. Our mining margin after including curtailment and energy sales was 50.7% in the third quarter of 2026, compared with 29% in the second quarter of 2026 and 49% in the third quarter of 2025. The sequential improvement reflects lower energy costs, higher energy sales, and the selective idling of machines during on-peak hours, all set in part by the lower average Bitcoin price. Curtailment and energy sales recognized as a reduction of cost of revenues for $304,000 in the quarter, compared with $152,000 in the third quarter of 2025, roughly double year-over-year. Mining margin is calculated as digital mining revenue less digital mining cost of revenues net of curtailment and energy sales.

[Richard Russell, CFO at PowerCompute]

Total operating costs and expenses were approximately $2.8 million for the current quarter, down $2.9 million from $5.7 million in the third quarter of 2025. The largest drivers of this change were a $1.5 million decrease in staff costs and payroll, primarily due to lower incentive compensation. There was also a $1.2 million decrease in depreciation and amortization to $800,000 from $2 million in the prior year quarter, reflecting the impairment of mining machines taken in the fourth quarter of 2025. We also recognized a gain of approximately $1 million on the fair market value adjustment of mined digital assets, consistent with a $1 million gain in the third quarter of 2025. The operating loss narrowed to approximately $900,000 from $3.5 million a year ago.

[Richard Russell, CFO at PowerCompute]

Net income for the third quarter of 2026 was approximately $400,000, or $0.20 per basic and diluted share, compared with a net loss of approximately $3.7 million in the third quarter of 2025. Core EBITDA income was approximately $2.3 million, compared with a core EBITDA loss of $1.4 million in the third quarter of 2025 and a core EBITDA loss of $2.8 million in the second quarter of 2026. Third quarter EBITDA includes approximately $2.8 million of net gains related to the Arch loan facility, which I will describe next. Below the operating line, we recognized a gain of approximately $6.7 million on the fair value of the digital assets receivable, which is the Bitcoin held in custody under the Arch facility, partially offset by a loss of $4.4 million on the related loan derivative.

[Richard Russell, CFO at PowerCompute]

We also incurred interest expense of $1 million, of which $700,000 was non-cash and related to the loan derivative. These fair value loans are tied to a facility that no longer exists, and they will not recur in this form going forward. With the facility repaid, interest on our remaining secured debt now runs about $138,000 a year. Since June 30th, we have eliminated the Galaxy, Liebel, and Arch borrowings, along with their interest and collar-related expense. According to the balance sheet on September 30th, 2026, total assets were approximately $22.5 million, including 63.8 Bitcoins. Total liquidity comprising cash, Bitcoin, and marketable securities were approximately $6 million at September 30th, 2026. The total value of the Bitcoin were around $5.3 million, and cash was approximately $650,000. None of that Bitcoin is pledged.

[Richard Russell, CFO at PowerCompute]

Total liabilities were approximately $3.7 million compared with $21.6 million at June 30th, 2026, and $22.4 million at December 31st, 2025. Total debt outstanding at September 30th, 2026, was approximately $1.5 million, consisting of a $1.2 million secured promissory note, Brown Family Enterprises, whose maturity we extended after quarter end to December 31st, 2027, and $212,000 of unsecured insurance premium financing. None of our remaining borrowings are secured by Bitcoin. Under the Arch facility settlement provisions, Arch sold approximately 267.4 of the 307 Bitcoin to satisfy the facility, and returned the remaining 39.6 Bitcoins, valued at approximately $3.3 million to the company. The facility was non-recourse, had no margin call or price-triggered liquidation provisions, and was settled on a scheduled reset date.

[Richard Russell, CFO at PowerCompute]

During the quarter, we sold approximately 1.5 million shares at-the-market program for $2.8 million in net proceeds, which was used for investments in new miners and working capital. Our Form 10-Q includes a going concern disclosure, tied in part to the drop in Bitcoin prices, cash used in operations, and our remaining $1.25 million secured note. The full discussion is in filing. As a subsequent update, on October 31, 2026, we held 65.7 Bitcoin, valued at approximately $5.1 million based on a Bitcoin price of around $77,000 on that date. I will now turn the call back to Bruce.

[Bruce Rodgers, Chairman and CEO at PowerCompute]

Thank you, Rick. To sum up, we mined 36% more Bitcoin than a year ago. Our mining margin is above 50%. We paid cash for 600 new miners that should add about 10% to our hash rate by mid-December. Secured debt is down 94% since June, with none of our Bitcoin pledged. We added 2.5 MW of contracted demand in Mississippi without a capacity commitment charge. With interest expense down to about $138,000 a year, more of our capital can go into our miners and sites instead of debt service. Our priorities are to finish the miner refresh, keep our power costs low, and direct each megawatt to the use that earns the best return. We look forward to updating you with our progress. Thank you for your continued support. Operator, please open the line for questions.

[Operator]

As a reminder, if you would like to ask a question at this time, please press star one one on your touchtone phone and wait for your name to be announced. To withdraw your question, please press star one one again. We have a question from Matthew Galinko with Maxim Group.

[Matthew Galinko, Analyst at Maxim Group]

Hi. Thanks for taking my question. Maybe firstly, might have missed this in the script, but do you have a back-of-the-envelope what your mining margin will look like, all else equal, with the new machines and hash rate deployed?

[Bruce Rodgers, Chairman and CEO at PowerCompute]

No, I don't think that we did any prospective disclosure in the script about the new machines deployed. We took the mining. Our mining margin went above 50% from 29% in the second quarter is what's in the script.

[Richard Russell, CFO at PowerCompute]

Going forward, this is Rick, it's going to be hard to determine the margin because of what Bitcoin price will be, right?

[Matthew Galinko, Analyst at Maxim Group]

Yeah, sure.

[Richard Russell, CFO at PowerCompute]

The power draw is about the same.

[Matthew Galinko, Analyst at Maxim Group]

Right. Okay, so I mean, if you kind of back out the curtailment and then sort of give you the higher efficiency and utilization, you end up with incrementally better, but maybe not quite as high as this quarter with the curtailment benefit?

[Richard Russell, CFO at PowerCompute]

Right. Curtailment is high during this quarter. It will slip down some in the fourth quarter. So, the rate per hour per kilowatt will probably increase slightly on the average from what we had the third quarter. But the newer miners will have better production, right, at that same price.

[Matthew Galinko, Analyst at Maxim Group]

Yeah. Okay. Then I think it has been, I think at least a quarter, maybe a quarter and a half that you have been operating the GPUs. Any learnings that you can share, or just any additional color you could provide on how that is going?

[Bruce Rodgers, Chairman and CEO at PowerCompute]

No quantitative stuff, just anecdotally that it amazes us the demand for our machines, and the utilization rate is exceeding our expectations. Then there is an interesting component to it that when people use the machines for an instance, they leave their data behind, and then they pay rent for, we charge them rent for leaving their data, and we never kind of factored that into the revenue of it. So, that is the type of stuff we learn in that.

[Matthew Galinko, Analyst at Maxim Group]

I mean, as we look into 2027, obviously I think you have some planning to do and capital matter, but do you see I think you mentioned that the higher value per megawatt is probably in that direction. Is there any preliminary thought toward allocating more in that direction?

[Bruce Rodgers, Chairman and CEO at PowerCompute]

I guess the question is allocating more to GPU purchases or more power to GPUs?

[Matthew Galinko, Analyst at Maxim Group]

Maybe to that, and given what we've seen in the election cycle, I am curious if you have any new views on sites or access to new sites for adding power to your portfolio.

[Bruce Rodgers, Chairman and CEO at PowerCompute]

Well, we have 3.5 MW that is not energizing Bitcoin machines or GPUs in Mississippi. Once the refresh is complete, that is where the low-hanging fruit is for us in terms of revenue. Once that is complete, then the utilization of that 3.5 MW in Mississippi kind of begs for the next dollars of capital, and which type of use we use is still kind of open in the air.

[Matthew Galinko, Analyst at Maxim Group]

All right. Very good. Thank you. I will jump back in the queue.

[Bruce Rodgers, Chairman and CEO at PowerCompute]

Thanks, Matt.

[Operator]

There being no further questions, this concludes PowerCompute's third quarter 2026 earnings conference call. Thank you for participating. You may now disconnect.

Participants

Analysts

• Phil Carlson, Managing Director of Investor Relations at KCSA
• Bruce Rodgers, Chairman and CEO at PowerCompute
• Richard Russell, CFO at PowerCompute
• Matthew Galinko, Analyst at Maxim Group