Stronghold Digital Mining (SDIG) 13 Nov 242024 Q3 Earnings call transcript

Good morning, and welcome to the Stronghold Digital Mining's Conference Call for the Third Quarter ended September 30, 2024. My name is Tanya, and I'll be your operator this morning.

Before this call, Stronghold issued its results for the third quarter 2024 in a press release, which is available in the Investors section of the company's website at www.strongholddigitalmining.com.

You can find the link in the Investors section at the top of the home page.

Joining us today on the call are Stronghold's Chairman and CEO, Greg Beard and CFO, Matt Smith.

would cautions provide during regarding I statement safe this begin, includes that forward-looking we like Stronghold's to harbor call. Before statements made

or to, products presentation, about about or the Bitfarms, the this subject uncertainties management to required but forward-looking discuss previously statements projections, and During not announced update including, limited to with may made. The otherwise from make that differ cause the are of company's services and to information company's and future, or the a markets financial not expectations which risks by does results could actual materially obligation undertake statements company number law. any as them merger

risks today forward-looking be considered made law statements statements and may uncertainties. number and securities Some of under involve a

it results that company's As differ events of which is a number many note actual which the materially are those beyond in important cause are and to factors could forward-looking there -- statements. of described to from which a control, result,

metrics. Form November or to its XXXX to to GAAP consider more release the as measures expects applicable or events and in undertaking XX, For company's disclosures file these encourage earnings earnings disclosures you carefully on no Commission. date to prior and or XX-Q reconciliation forward-looking statements except non-GAAP metrics and and the company's you circumstances, could Exchange caption law. The quarterly forth report businesses identified on but discuss financial is tables to and the the reflect Commission, forward-looking company uncertainties under including, these to with and of the variable occur not in Risk read see uncertainties related as release statements, detailed after by Securities Factors. our disclosures and There to, limited assumptions please and filings update Securities the forward-looking and the made obligation sets other statements required that circumstances the the risks with the Exchange as as well made, are risks, will to public descriptions Stronghold also detailed uncertainties the which

Stronghold's free SEC and Stronghold's website access website ir.strongholddigitalmining.com. or may at Securities Investor Commission You visiting by Relations filings at the Exchange www.sec.gov for

may merger These or call of not or on proxy this the any we with offer addition, the of to or company SEC. for the registration make approval F-X with that Form Bitfarms. to directors on pending on an and securities respective Bitfarms or behalf statements buy, any any our solicit the concerning with In or by or solicitation or are an offer executive substitute Bitfarms vote the the or in filed sell a other statements the or file event filed Form or file F-X statement number prospectus on by officers Bitfarms will proxy statement XXX-XXXXXX and registration has not are sell SEC, statement included Stronghold documents the

everyone be Relations read section. carefully Investor free I website, remind that by the is replay should and important this these can visiting documents, or via by information available Relations Investors the website Stronghold's contacting which would on like obtained recorded for merger concerning Stronghold's sdig@gateway-grp.com. for being a SEC be at call Investor link and will to contain

and CEO, Now Stronghold's proceed. I Beard, call to to Mr. like the would over may turn Chairman Beard, you Greg

call. for thank And you everyone. joining third morning, our Good quarter XXXX

today's Bitfarms, agreement global with To next a be with step brief. on August XX, Bitfarms, recap, Bitcoin in will this we merger merger update pending our for definitive mining. a we're transformative thrilled about relatively which leader Stronghold, Given announced

the year-end an offers of the are successfully HPC/AI pipeline, with Bitfarms' incrementally. We enhance XXXX success. believe with company stock-for-stock and proven the to to combined realize and value opportunity optimal recipe operations capacity potential shareholders. merge forma pro multiple accelerate to After The at whereby is $XX efficiency Stronghold's of significant partnering its expertise for valued million the underway, structured a close. with are which operational a company thorough that Stronghold we Bitfarms potential leverage to full million Bitcoin build a receive the is transaction add growth strategic Stronghold alternatives confident merger, review assets, megawatts studies The as be this Bitfarms in shareholders the the X.XX that our a process, and by platform result growth and to in $XXX assets for each portfolio equity will there shares have debt time approximately plus at Stronghold announcement, XXX share, can at to for the transaction energy related paid exceeding mining with

waste combined shareholders Upon growth company. the from unique the expanded them low-cost Scrubgrass deliver around positioning platform. support the improve of conversion mining to we'll Panther hold leverage and facilities Pennsylvania Stronghold's Creek into directly the benefit sustainability. to our will advancing of the of grid potential the energy, power, Together, XX% in capabilities commitment of the environment this to closing, through local and

integrate Additionally, facilities the better position high-performance we to the will business diversifying beyond believe platform Bitcoin computing, the that mining.

year. Bitfarms operation on host generated adjustments January. agreement expected of with for account in of at of at the taxes Bitcoin XX% of expected on are by host we to miners. at this, December economic we mining to fleet Creek. XX, Bitfarms, operations agreements the made miners the Miner November into XX,XXX net payments terms. In a December a high-grade or pass deliveries the miners through hosting will Bitmain strengthened remainder Bitfarms, with associated addition an our We these Building Panther our to monthly agreement hosting additional cost Scrubgrass same some to September On October this second X certain to will begin the the by miners of the facilities. upfront Bitcoin late and received at an of XX,XXX subject we the in entered entered power to which XX, miners fee recently early profit merger, with and TXX

I a transition. address over hand leadership recent to I want the Before call,

Smith through for was and how critical. enhancing navigating ultimately success a CFO, filing XX quarter merger down business attractive tracks will time and stepping and capital, Our Matt effective in third in raising Bitfarms. efforts report. the operational and procedures data to with company been the establishing His instrumental difficult our following be November of an Matt the have uses

smooth We in to are and ensure to Stronghold years, working role contributions look to Matt's a with the grateful for forward past X a over him we transition. consulting

I'll turn that, Matt. it to With over

truly you, and you a with the the of pleasure Greg. Thank team. It's working Stronghold been rest

about energy $X.X third production average XXX Bitcoin generated operations, equivalent mining equivalent the XXXX, which Bitcoin million compared we block to XX% approximately X the from This revenue, to the This to quarter brought the to Bitcoin the in reduced April decline of quarter primarily our reward our by driven on XXXX. for decrease quarter X.XX representing during X.XXX price. at second the For Bitcoin having of XXX XX, the an and additional was when a of Bitcoin. total Bitcoin

production, While adapting this evolving and continue optimize this impacted our mining to strategy environment. energy we having revenue in

quarter million XX% revenue $X.X sequentially from Revenue of and and cryptocurrency totaled $XX.X of XX% million, sales. $XX.X down XXXX million operations year-over-year. included energy This for the third

our with $X.X non-GAAP was GAAP side, $XX.X loss loss of EBITDA a third adjusted net million On the for million. profitability the quarter

You'll reconciliation our detailed these find release. a of in earnings figures

sheet. balance our to Turning

next coal $X.X and the XX, As in and respectively, we of had November of September cash receivables million, equivalents expected has XX of $X.X in from the million as X including tax contracted approximately million X, XXXX, within waste cash X. Stronghold XX XX Bitcoin and XXXX XXXX, also of and sale as September Bitcoin November $X.X credits. our days

Our our again, November of of Thank my shares Greg. XXXX, was ATM ATM [ this experience ]. also as year. million of remarks. team it. indebtedness the X, That principal with approximately quarter. million no greatly under $XX.X we outstanding under concludes Back as and And the remaining $X.X approximately Greg I appreciate sold you have to the you, end during third

All joining us all thank you today. for Matt, right. Thank you, and

merger our positioning to are Thank your you underway you our to day. continued and a operational focused opportunities ahead, Operator? and forward commitment again we look enhance and about expand updating the progress. evolving we initiatives for a capacity, have strengthen As Bitfarms remain the We for sustainability. will excited joining. on infrastructure bring strategic we the shareholders look to Stronghold space. We as support our and our with efficiency our appreciate value on digital great in leader long-term Have creating

you Thank today for Stronghold joining conference for us call.

disconnect. now may You