Bitcoin Miner Hut 8 Misses Forecasts But Rises 20%

Canadian crypto miner Hut 8 posted lower-than-expected second-quarter revenue, sending its stock up more than 20% after markets opened Thursday.

Hut 8 reported second-quarter revenue of $34.3 million, which fell short of analysts’ expectations of $38.75 million. Revenue marked an increase of around $8 million from the first quarter of 2022.

The company owes $23.5 million in outstanding loans, a trend that other mine operators have mirrored in recent months.

During the market downturn – fueled by the demise of Terra stablecoin UST and the subsequent implosion of crypto lenders including Celsius, BlockFi and Voyager – miners were faced with either selling bitcoin near the bottom or taking out increasingly expensive lines of credit to make ends meet. .

The revenue jump was driven primarily by Hut 8’s crypto mining operations, the company said in its earnings report. Hut 8 mined 946 bitcoins in the second quarter, up from 553 bitcoins in the first three months of 2022. An increased hash rate – a measure of computational power for crypto mining – and expanded mining facilities allowed the company to increase production despite the bear market, according to executives director Jaime Leverton.

“In light of the challenging capital markets environment in general and the ongoing volatility affecting the digital asset space, we remain committed to balance sheet management,” Shane Downey, Hut 8’s chief financial officer, said on the earnings call.

Even with its earnings numbers, Hut 8 posted an increased loss of $0.38 per share, which Leverton said was due to an increase in non-cash revaluation losses on crypto assets as market conditions have worsened.

“It’s very difficult for me to see where the need for growth is going to occur in the next six to 12 months when we’re in really unique market conditions,” Leverton said.

Shares were trading around $3.27 Thursday morning, up about 21% before midday. The stock has still lost around 58% year-to-date – one of a plethora of public crypto companies surprised by turbulent market conditions.

The company withdrew the revenue growth guidance given in its first quarter earnings report.

“I want to emphasize that we believe these rationalizations made sense to position us well to realize profitable earnings growth in 2023,” Downey said.

Consistent with its “long-term” balance sheet management strategy, the company has not sold any bitcoin since early 2021, Downey said. The company has 7,406 bitcoins in its reserves, he added.

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