Gryphon Digital Mining (GRYP) 13 Nov 242024 Q3 Earnings call transcript

Greetings, and welcome to the Gryphon Digital Mining Third Quarter 2024 Earnings Call.

On the call are Steve Gutterman, Chief Executive Officer of the company; and Sim Salzman, Chief Financial Officer of the company.

Before I turn the call over to Mr. Gutterman, please note that the statements made on this call that are not historical facts may be forward-looking statements from the company's management made within the meaning of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities and Exchange Act of 1934 as amended, concerning future events. Words such as may, should, projects, expects, intends, plans, believes, anticipates, hopes, estimates and variations of such words and similar expressions are intended to identify forward-looking statements. These statements are subject to numerous conditions, many of which are beyond the control of the company, including those set forth in the Risk Factors section of the company's Form 10-Q and 10-K as updated by the company's subsequent disclosures filed with the SEC. are the documents www.sec.gov. website these of available SEC's on at Copies results those forward-looking from differ or Actual materially such expressed may implied by statements. as subsequent obligation to made are or supplement that statements this statements update does of to such only reflect company any forward-looking and today's undertake Any not any date, developments. on made call

Steve proceed. please Now like turn to Steve, I the Gutterman. would call over to

results. Mining's positioning We few joining Jenny, we us everyone, today operations third planned expansion and quarter both Gryphon discuss months long-term and you, tremendous XXXX Thank made strategic mining in for into Digital believe past have core progress Gryphon thank to the infrastructure Bitcoin AI our our success you, over for in hosting.

letter, the now shareholder balance verticals. that As creation and significant the growth our we team, strength strategy these outlined have to drive across sheet value recent we the high believe X in

developments. a So key let highlight me few

My First, Dan we know and the expanded X continue Anchorage our enhanced team of team and Salzman, that personally am CFO of execute to our growth expertise that as added Former deep brings strategy. from of leadership importantly, be was Marathon, appointed accelerate Digital we thrilled. I thrilled of Board, Jimmy Chairman. as Former Gryphon. as CFO CEO role was to are -- we Director instrumental Hut continue I to and expanded was Grigorin decided CEO; Vaiopoulos, to Sim growth. CFO This expect we to

of to have $XX $X our and increased we million million our on expect substantial the is flexibility substantial to previous reduction equity that Anchorage monthly restructuring equity net have financial obligation. what premium now in our to price, to from favorable By remaining a $XX,XXX with growth. The converting the interest at $X Digital of greater debt we on debt just much terms, debt payment invest significantly and believe transformative remaining is million a completed strengthened restructuring stock highly we position. has Second,

sweep now and mandatory us excess is the cash flexibility. even to Bitcoin Anchorage of giving Additionally, gone, greater

sophisticated Dan adviser showcases Anchorage our we key potential. to This Importantly, become joined investor week, debt value in going a expect shareholder, this true our belief and capitalization north forward. in to market of as and $XX them appears has of a be restructuring our largest Board, Gryphon's reflected exceeding share requirements. the The NASDAQ moving has this million listing confidence and market

our taken to now have expect we look with closing on results turn ambitious environment. goals additional balance vision but maximize have ultimate per growth. set to Our believe added transformed team building we and recently our that we announcement and value we've quarters power maintaining ultra strong to while we to over Sim? mining mining the power sheet, a advantage a have we for current to of some that it foundation soon. that foundation build at achievable is forward the Bitcoin substantial share steps remarks. kilowatt short, a we has Sim financial but significant market $X.XX before a announced price shareholder not yet review is years around acquisition come. I'll in acquisition closed, to the to low-cost our value, in hour. to In note, in that $X.XX small fundamentals. On operations competitive Securing strong range And and about to create now an The

XXX $X.X $X.X in same XXXX results quarter highlight our now Bitcoin and will period compared the QX million mining million ended generated and XXXX. I Bitcoin September financial Steve. to you, for approximately mined XX, of the Gryphon Thank the XX revenues in The were costs combined with change $XX,XXX Breakeven event XX%, Bitcoin Bitcoin year. year-over-year per by the that decreased global QX occurred the reflects QX XXXX in the XXXX, XXXX. in in rewards costs to where breakeven in increase in prior hashrate. compared halving $XX,XXX in

equity the of our Our in the mining nearest X for QX XXXX that of $X.X in ended a payable operational months non-cash effectiveness $X.X approximately investors net be fair to found on XX, notes million measures the months adjusted compared which $X.X prior including digital net EBITDA to securities, highlighting million. analysis expenses and for these better depreciation, $X.X marketable million to included in value million. XXXX, our consisted loss the QX adjusted gain change gives XX, stock release compensation metrics analysts important issued the value gauges $X.X unrealized on employee disseminated common We comparative EBITDA are X of $X.X breakeven compares negative negative September GAAP of Net of million across assets. ended stood unrealized and Reconciliations expenses XXXX. in non-cash for of market can net includes expenses of to at September and expense, transparency This costs stock-based which loss call. The loss to company net non-cash million, and a items, earnings consultants, companies. XXXX, recognized of believe fair

As Bitcoin. balance million approximately of note and the $XX.X for Bitcoin, of in million September denominated cash million XXXX, $X.X and our in sheet cash due reports $X.X XX, approximately equivalents,

Anchorage equity Digital, noted, to restructuring terms. debt with favorable a premium million a converting the Steve at of $XX Gryphon million As $X remaining debt very with and has completed restructuring

Bitcoin. December approximately of $X.X equivalents, balance the million and sheet our million Bitcoin, cash reported million in cash in denominated for $X.X XX, and due $XX.X XXXX, As note in

value change in XX, the price during reflects the to as September correlation mentioned direct of of of notes Bitcoin period end. as As the the a XXXX, payable of fair quarters, prior

Bitcoin production. We have due, position and to our of remain fully increased not our we hedged

to is Bitcoin. With Following comments. that, back the for restructuring, Steve denominated the some to in remaining turn debt due no I'll Anchorage it longer additional

Sim. Thanks,

the aware potential the on Bitcoin AI keenly business While mining rapidly laser-focused our in we're of we're transformational building doubles, and evolving singles also methodically core through space.

AI in capabilities in changing. We in cannabis unique the of And boom for business XXXXs, equally and with time not low disconnected Gryphon, about moment Fundamentally, in such valuable right where are into windows in is this mining AI right right that we to power, the company place computing computing. securing right some the importantly, our XXXX, in the computers and plugging as Bitcoin those be Just believe cost a right can is perform to game opportunity at with being there work. the is pivot. This saw computers the we're now. applicable to early power dot-com asking

shareholders substantial and our well to AI early for growing So growth an to to revenue, of performance it's we the about positioned for our hosting pragmatically understanding mining by providing on in value drive strengths for landscape, outsized we hype, the bets high assessing expertise see capitalize And diversify our provider leading becoming applications. be to making computing a be chasing believe deliberate about infrastructure mover returns. and substantial can calculated we we compute. We AI AI demand market clear, are where but our and services, isn't believe leveraging the accelerate this create on opportunity

move this approach. And in window and the of diligent we to need thoughtful recognize be purpose seize with also this to will opportunity. We

addition of you and potentially us organic to to in opportunities shareholder of build-out the the to can strategy the hosting summary, in mining approach, M&A. our progress and AI business towards the our aggressive space, two-pronged both meaningful made see this the the is believe Gryphon right strategic remarkable value. In last few steady has months. We mining strides pursuit making development advancing expect in AI coming So core months, Bitcoin operations, through maximize

We have the right team in place.

have We strengthened our significantly sheet. balance

a road computing We in the acquiring value, growth low are assets, and map mining both clear AI and evolving to rapidly and in drive have working space. on cost create we growing shareholder power and

we us. While the energized and opportunities excited are remains of ahead, by work much ahead

that, let's please with So line Thanks. open the for operator, questions.

Hickman [Operator Instructions] is from Jon coming Thalmann. Your Ladenburg question of first

more bit So talking Are new could you the facility? to a in HPC? efforts about you elaborate on mean, your a I new you. little

not you on what Bitcoin York You're in about talking New side? have the going converting

ours. is facility That Right. not

our for be we And we say AI. think would looking so to I are where it could spaces reasonable launch that

has you in last the could with of anything of happened And cost or X your that's -- out ordinary? Okay. X months the power

Yes, I'll let Sim jump in here.

power past at relatively of been over several months the cost consistent. has Coinmint Our

alternatives are costs. previously, to we've making on lower announcements December. Sim, that subsequent that to at several to did you our want stated We we'll prior anything actively add of end -- as that? be looking We the to

Steve. Yes,

it quarter, was $X.XXX. So like about past what hour where to I'd to the around is add, kilowatt for it's versus been $X.XXX essentially $X.XXX quarter prior a $X.XXX, the Jon, averaging

So as more gets active, the continues up profit go hashrate and the Bitcoin would mining to down. the space share go global

a technically as better the go point. variable we're even past such, [ looking a to for we're just pegged share though at ] profit power So And down. would this rate of alternative energy, to

be on past the that have clear, one this is To for several And that, in Okay. months. piece last actively something we engaged Jon. been

so to and where And -- the like relocating between have end we're we significant announcements now expect our the quarter. fleet, said, I we're of about

math. just average price the average have the to Okay. was don't What Bitcoin do quarter? what was And the your I -- so during

asking $XX,XXX. for that. Jon, you're per the about -- sorry

Okay.

that doesn't think So costs $XX,XXX the There's mine of today. to $XX,XXX at no you, profit Bitcoin right? all it markedly -- $XX,XXX. it's I higher, it to at with -- over change you I to Bitcoin Is that's I That it mean, same mean the mine price right? as does your

have fixed share. Actually, currently, our is it part -- a has and part we a contract of profit of

as up. do our price the up go So goes costs

Bitcoin that that's hard you on -- long you so believe that at. obviously to going take And that's are you that then Bitcoin increase, if a something obviously look something and is

it's your profit -- your of -- of kind is I partner with get not So it. hosting sharing some

go more your up is, -- gross the up profit the more costs of So those will that right? some will with you meet, go

Correct.

Okay.

that before at end say does Or get in to year? future, we're are looking that not-too-distant we news XXXX? you mean the you when of the early So from some going the

on No, where will update have fleet. we we an are taking definitively our

year. an We by the provide of end will the update

be I on I in mute. queue think to you're Kevin, the think our operator speak. might

hear you Can me okay?

Yes.

Great.

I little here, of sorry, didn't So a a to responses over I -- question. technical missed Steve, Jon's have couple difficulty may and

So But not is referencing per as administration that to there. the having this But that up power. a sort I'm teed $X.XX is there's assume apologies power if of some that going of previous hour you're redundant. Louisiana understanding my lot kilowatt the of that spot

I think of close megawatts full a probably Coinmint you're XX almost to using power exahash. to

understand expect from would say, through your now that see quarter? Is of hashrate or and what Coinmint? And something something as might until of miners transition that you that quarter me take that March happen the help move between, you you foreseeable the be this you'd to course expect So how to the end the future?

Yes.

-- we we that what So I'll first give announced than XXX% on hashrate. is it's we've a that much Sim smaller assumptions right in -- or our I that foray that would let what transaction we and that previously tell we're that Louisiana is you're currently source, currently into What great actually operating you believe are over power time. expandable It's we using. are

all much are assumptions? we that aforementioned and of answer so of is you now is did the where would your point, won't anything when the like announcing be you about end And and And that missed -- it, between will now Sim, year, transaction, from current we go of this we to last is and complete that sorry, which end questions, our what the if to what in the relocating set year, want the about fleet. be our smaller. I'm means it the between and the

heard Thanks, Steve. it. Sim. Thanks, him Yes. I Appreciate forgot.

No Yes. Kevin. worries,

that ending So the and very long global ago, pegged months it's keep few projection story be already together around put of there we we our short, and creeping updating been XXX on just up our Bitcoin right, price hype all And and exahash. for out Bitcoin's every it, the to we $XX,XXX, the a passing Also, now calling model was and then, blown which to away. that cap clearly it of with price. has around kind

than maybe somewhere more change at given much would going XX facility. are just that megawatts. like to beneficial profitability at, It's wouldn't a currently at i.e., we Coinmint much a you're a So spot static share, in yield profit removing $X.XX, of deal, our really kind alluded a the $X.XX, better we before, $X.XX production

So are where we've at, been in kind direction. that's trending looking of that's kind of and that we what

Okay.

[ improve X fleet now, but obviously, at it different you do Bitcoin enough? months efficient -- As what yes, X at I the you see look on might to right? would it's consider ago months are a mean, efficiency? and been you me issue, ] to -- ago with 'XX, give So do have have your story, an where fleet just the you perspective

Very good question.

[Technical months. looking we over Difficulty] current next this XX Steve. are with the being at fleet, depreciated sorry fully So

However, global hashrate we're where global is X.XX% is, as about and hashrate. where the the it roughly it Bitcoin price is is of the

So in this still breaking around anything even above $XX,XXX, prices not those those making even, respective revenues decent margin a $XX,XXX, current you're if at environment.

$XX,XXX, as let's are So upside current that Pros. fleet at you with we are additional of, SXXj say, X,XXX this getting

were at -- should think little I look But you concerned -- those going to do. before transition in given to up you and Gryphon more this that. do infrastructure trying see hash. changes on happens in that the access global to running I'm you I exahash if might dialing Sim, through really able So again. quarter, period insight is to shoes, my figure appreciate and in you're in Every be could what take the on I what X long bit helps how of anticipating generate almost balance that how about the

answer Kevin, I'll that.

agreement our end the current Coinmint runs So of with year. through the

fleet a And And we a quickly see our so least it can place otherwise. would as reason significant if do into significant would reason we the move the a that of had everything expectation possible lower significantly where the in through place be, would year end keep amount the of as we cost. we unless disruption to be with

background sharing I perfect if what sense, a to mind he HPC/AI little understand given you're your wondering perfect agenda? the talked Anchorage. from Board Dan brings table you sense. joining on to Makes just wouldn't entertaining the Steve. I Makes you And was

Yes.

right? So even kept Bitcoin still paid had that of $XX Bitcoin is worth had and amount XXX increasing, the notional kind back where kept we we original of know, me paying though step it's like million Dan. Anchorage -- for Bitcoin talk We talked about significant We thing in Bitcoin. was for and Anchorage, Let we've about a XXX. paid the originally about second XXX just back loan $XX in of walking in the like million, an talk you the about through was then a debt Anchorage, was on $XX notional of price I'll a took XXX it the that But specifically of liability. about significant us. out was left Bitcoin, increasing because the a and And certainly, as quicksand. amount environment kind it million, of value, With about off

million a So very premium structure X.XX% where equity, that balance transaction financial And to taken at then standpoint terms. sheet. the X important million transform is VWAP. term, it the $XX into did, debt year It's was XXX% term. a a really of Anchorage of during we to We the way and from $X us is $XX we've to really gratified previous were on to remaining it where be to interest the converted only converting favorable million notional that able the the

month month. per unless decide prepaying and we the accelerating a to start paying is that next we're amount Anchorage $XX,XXX the over years, So X

turned equity -- we've financial liability We've cash the area into we've significant we've a from the out and month. balance was added what So to significant amount every transformed sheet, much completely a strength. of a of more standpoint,

in vision us it really is is the think and if and just thing in have where shareholder. exciting that And that now we been more story So largest believes we our pleased. can was But think and even I I Anchorage would the in they're go. our that, in

a to have obviously have we've and Anchorage in have incredibly so partner. transformed partner. them where a as one mining, really a this we we experienced grateful is one where to we're relationship lender And from And

co-led Anchorage, has time versed Dan a at Dan, and is portfolio on the in he the mining space. for well long incredibly Specifically

to in so member power to from calling been And talk machines times find the to is on where significant already, everything on several adding getting of as ideas we Board, value. a where He's of a sick, He cheap he's the be him industry me great interesting may because ideas going. fact, day.

member. as to a partners Dan So we're general as specifically Board and real have and grateful in Anchorage

-- money conversion. that in too. I Steve. can't when I Anchorage's But you they first make spoke, plenty color, that under on say appreciate the skin game of loan, Bitcoin the we noted didn't It's

making kudos Is you slots you that the -- in to be team you'll So or order there, are to HPC to for need but any handle transition. that to able there think fill endeavor? the in

Yes, absolutely.

power opportunities, adding as identify first The we power is, experts. significant we be will

you who These year people experts. board. on relevant then in are been sequencing of HPC been have We've power, appropriate, down a the lock need that, plus power. team. have And to absolutely as been a handful appropriate we And people these would yes, you who after down consulting as working add to with leadership lock we basis. the people are as we are us. is real need to AI add experts. We And that power have will roles consultative And Same talking would them bring thing. and and -- -- significant on the XX then after They've people. with

So the will be and if adding yes, answer move to we And XXX% we successful, is hope are the we forward. which will appropriate. believe as team we be, we as

we closing comments. very back to our of session. end over management you much. have hand appear reached I for the question-and-answer team Thank to will Well, the now any

time We the on thank Right. Well, call. you look everybody, very thanks, and time. very, communicating much updates, to for forward your the for future

conclude you much. This does today's Thank very conference.

You time, wonderful participation. of at have may for your disconnect rest the and you Thank day. a lines phone this your