GuruFocus -
- Revenue: $5.9 million in the September quarter, down 29% from the previous quarter.
- Full Year Revenue: $33.9 million, up 21% year-over-year.
- Bitcoin Mined: 65 bitcoins in the September quarter, down 26% sequentially; 503 bitcoins for the full year, down 43% year-over-year.
- Cash and Digital Currency Balance: $36 million at the end of the September quarter, down 9% sequentially, up 90% year-over-year.
- Operating and Maintenance Costs: $4.6 million in the September quarter, down 1% from the prior quarter.
- Net Income: Loss of $8.4 million in the September quarter, or $0.05 per share.
- Full Year Net Income: Loss of $5.2 million, or $0.03 per share.
- Cash Flow from Operations: $1.3 million in the September quarter; $8.2 million for the full year, up 69% year-over-year.
- Fleet Hash Rate: 1.7 exahash, with a target to reach 2.1 exahash.
- Fleet Efficiency: 24.6 joules in the September quarter, targeting 21 joules with future upgrades.
- Depreciation Expense: $5.8 million in the September quarter, up 14% from the prior quarter.
- Full Year Depreciation: $18.9 million, down 13% year-over-year.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- DMG Blockchain Solutions Inc (DMGGF) achieved significant milestones in its Core+ strategy, focusing on building a carbon-neutral ecosystem with Terra Pool and Systemic Trust.
- The company is in the final stages of obtaining a certificate of registration for Systemic Trust, which will enable secure custody of digital assets.
- DMG's partnership with the Malahat Nation could potentially drive a total investment exceeding $1 billion, indicating a strong growth opportunity.
- The company has increased its hash rate by over two-thirds this quarter, leading to higher Bitcoin production and improved fleet efficiency.
- DMG is positioned to expand into AI with a differentiated strategy, leveraging unique relationships with indigenous bands and focusing on customer acquisition for Systemic Trust and Terra Pool.
- DMG Blockchain Solutions Inc (DMGGF) experienced a 29% decrease in revenue in the September quarter, primarily due to a drop in self-mining revenue.
- The company reported a net income loss of $8.4 million in the September quarter, with a negative cash flow from operations.
- DMG's Bitcoin production decreased by 26% sequentially, impacted by the halving event and increased network difficulty.
- The company faces challenges in reaching definitive agreements for new data center sites, leading to delays in expansion plans.
- DMG's recent capital raise resulted in dilution, and the company anticipates further capital requirements for new site development and AI projects.
A: We actually have a definitive agreement in hand with the Malahat Nation. We are waiting to sign it until we line up our offtake agreements and an execution partner. We anticipate being able to sign the definitive agreement in the coming months. - Sheldon Bennett, CEO
Q: What is the Malahat partnership's expected impact on revenues?
A: We expect a three- to five-year payback on generative AI servers, with investments possibly in the hundreds of millions of dollars. Revenue should follow accordingly over that payback period. - Sheldon Bennett, CEO
Q: What is your plan to bring on clients on Systemic Trust, and how much revenue do you expect next year?
A: Laurence Strong, Systemic's CEO, and his team have been preparing to onboard clients. We are optimistic that upon receiving regulatory approval, onboarding will start early next year, with revenue following quickly. Exact projections will be clearer in the next one or two quarters. - Sheldon Bennett, CEO
Q: What is your plan to generate revenue from Terra Pool?
A: Terra Pool's software and user experience have been revamped to allow seamless migration for clients. The primary goal is to enable Systemic Trust clients to send Bitcoin in a carbon-neutral manner, with Terra Pool providing a steady stream of carbon-neutral blocks. Additional revenue from Terra Pool is considered supplementary. - Sheldon Bennett, CEO
Q: Your new mining site announced keeps getting delayed, is it ever going to happen?
A: We are still working towards an agreement and remain optimistic. The recent spike in Bitcoin price has influenced discussions, but we are proactively addressing this. We aim to finalize the agreement and start procurement for early construction in the new year. - Sheldon Bennett, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.