Bitfarms Stock Gains 22% after Q2 Loss Came in Lower Than Predicted
Canadian Bitcoin mining firm Bitfarms' stock performed remarkably after the release of its second-quarter earnings report.
Bitfarms' Q2 earnings came in better than projected, with only a 7 cents loss reported per share. Zach Investment Research earlier predicted an 11 cents per share loss.
Following the low-than-expected loss, Bitfarm stock soared 22%, reaching $3.17 on Thursday.
Bitfarms Stock Gains 22% as Company Explores Further OpportunitiesCommenting on the Q2 earnings report, Bitfarms' new CEO, Ben Gagnon, said the miner continues to expand and focus on new opportunities. According to Gagnon, Bitfarms is rapidly improving energy efficiency and offering competitive prices.
Bitfarms Q2 earnings below
Key highlights:
Increasing marketshare from faster hashrate growth than the network
Rapidly improving energy efficiency and competitive energy prices
Continuous reductions in direct hashcost of roughly 2.7c/TH/Day and trending down https://t.co/BIEZ0lj13f
- Hashoveride (en Gagnon) (@hashoveride) August 8, 2024
The CEO also revealed that Bitfarms' market share is increasing to ensure faster hashrate growth for miners. In addition, the company has witnessed continuous reductions in direct hashcost of approximately 2.7c/TH/Day.
According to the CEO, the goal is to change the company's operating profile through ongoing fleet upgrades. Bitfarms will also focus on geographical expansion and diversity.
#Bitfarms continues to grow and explore new opportunities!
"We continue to dramatically alter our operating profile via our ongoing fleet upgrades and our geographic expansion," said CEO Ben Gagnon. We are taking a very close look at all of our MWs and evaluating several... pic.twitter.com/9p0nvTHun4
- Bitfarms (@Bitfarms_io) August 8, 2024
Gagnon further revealed that the company is exploring other growth opportunities beyond Bitcoin mining. These opportunities include High-Performance Computing (HPC) and Artificial Intelligence (AI).
While Bitfarm's loss per share came out lower than projected, its total revenue of $42 million represents a 16% decline from Q1 earnings. However, this value is lower than expert estimates.
This decline is likely due to the recent Bitcoin halving event that slashed miners' rewards by half. Currently, Bitcoin miners receive 3.125 BTC per block mined, half the previous value of 6.25 BTC coins.
It mined 614 BTC in total during the second quarter of 2024. Based on current market value, the total BTC mined is worth approximately $37 million.
Also, the earnings report revealed that the total cash cost of production for each BTC has increased to $47,300 from $27,900 in Q1.
Innovative Developments Drive the ProgressBitfarms Chief Financial Officer Jeff Lucas noted that the company has a robust balance sheet and applied capital-effective strategies. Lucas claims that Bitfarms enjoys exceptional financial flexibility and has enough liquidity for infrastructure and miner developments.
In April, Bitcoin mining announced expansion plans to invest around $240 million and boost its mining equipment. This upgrade will add 88,000 miners to the current stock, likely aiding the company's gains.
Bitfarms recorded a 34% increase in its earnings in July, producing 253 BTC worth $14 million, higher than the $11 million realized from the 189 BTC produced in June.
Meanwhile, Bitfarms sold 515 BTC at an average of $65,500 each for total proceeds of $34 million in Q2. The company also sold 142 BTC out of the 253 produced in July, realizing $9 million.
Further, Bitfarms' hashrate, computing power, and processing speed increased from 6.5 EH/s to $11.2 EH/s. Jeff Lucas said the proposed developments and expansion would help Bitfarms achieve a hashrate of 21 EH/s and 21w/TH this year.
Mining costs are rising due to higher electricity tariffs and lower miner rewards. However, if Bitfarms' diversification plans succeed, they could sustain their long-term goals.
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