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By Gerelyn Terzo, Benzinga
One company that may be well-positioned to ride this bullish blockchain wave is Bitdeer Technologies (NASDAQ: BTDR). Not only is Bitdeer equipping Bitcoin miners with ASIC equipment and chips, but it is also developing data mining centers globally to fulfill its artificial intelligence (AI) and high-performance computing aspirations. The company has just reported its Q3 2024 results, marking its maiden earnings call since becoming a listed company last year. Since that time, the BTDR stock price has more than doubled.
With the Bitcoin price setting a fresh all-time high over $100,000, BTC miners are once again in the spotlight. Meanwhile, market prognosticators suggest that the crypto rally has only just begun, with predictions for the Bitcoin price reaching $200,000 already adding to the momentum.
“This quarter marked a foundational period for Bitdeer, focused on the advancements of our key technological and strategic initiatives,” said Bitdeer chief business officer Matt Kong.
Bitdeer has several high-tech business lines driving growth. Investors interested in the company’s value participation in Bitcoin mining, data centers, AI and more can learn about Bitdeer’s financials here.
Bitdeer’s Q3 Financial Performance
In Q3, Bitdeer’s total revenue came in at $62 million, down 28.9% year-over-year. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) was negative $8.5 million compared with $28 million year-over-year. The company’s net loss widened to $50.1 million vs. $1.8 million in the year-ago period. Cash and cash equivalents were a bright spot, hovering at $291.3 million as of Q3, and the company managed to deliver a gross profit of nearly $3 million.
Bitdeer’s Kong addressed the downturn in the company’s financial results, including revenue and adjusted EBITDA, putting investors’ minds at ease. He attributed it to several headwinds, most of which are short-term in nature and therefore should reverse course. These included the impact of the 2024 halving, a rising global hash rate, decreased hosting revenue and higher research and development spending for its next-gen SEAL02 chip.
The Bitcoin hash rate reflects the difficulty miners face in securing the Bitcoin blockchain. It also represents the computational power being consumed by miners to secure a proof-of-work blockchain like Bitcoin.
Bitdeer’s management isn’t losing sleep over the downturn in hosting revenue, which pressured its Q3 gross margin from 24.2% to 4.5% year-over-year. Instead, they attributed this shift to a conversion toward more efficient hydro-cooling underway at its Texas facility in preparation of its SEALMINER rigs, and a transition among its customers from legacy equipment to the latest technology, both of which could benefit the company in the long-haul.
These headwinds were somewhat offset by a few tailwinds, including higher self-mining hash rates and a rising Bitcoin price during the quarter. Additionally, Bitdeer boasts nearly $300 million in cash and cash equivalents on its balance sheet, providing the company with a runway for its capital-intensive Bitcoin mining budget alone of $250 million-$275 million. This capital will be directed toward sites under construction in Tydal, Norway; Rockdale, Texas; Jigmeling, Bhutan; and Massillon, Ohio; the company says.
Bitdeer’s self-mining revenue increased to $31.5 million, up close to 5% thanks largely to an increase in its average self-mining hashrate for the quarter. Wall Street considers Bitdeer’s self-mining capacity a bullish sign as it expands its ASIC technology market share.
While other Bitcoin miners are relying on a self-mining hashrate as a growth strategy, Bitdeer says it is focused on a long-term strategy through which it is developing its proprietary ASIC technology. As a result, Bitdeer can accelerate its self-mining hash rate using its own ASIC technology for the foreseeable future. The company’s management team believes this differentiates it from the pack in terms of its strategic positioning, revenue and cost structure.
Kong wrapped up the Q3 performance by saying, “In summary, we are on the verge of achieving many exciting milestones, and we remain committed to continuing to execute the SEALMINER roadmap, expanding our self-mining hash rate, and leveraging our industry-leading global 2.5 GW power portfolio.”
Bitdeer Looks Forward
Bitdeer’s seasoned management team, including industry pioneer Jihan Wu, who serves as CEO, is optimistic about the future of Bitcoin mining. They believe the industry is at a critical juncture of modernization that will lead to BTC miners diversifying and differentiating their business models in order to compete, all of which could play into Bitdeer’s hand, not least its ASICs and AI cloud business lines.
As 2024 comes to a close, Bitdeer reflects on the significant strides it has made in its ASIC business. It continues to move closer toward the commercialization of its advanced SEALMINER ASIC technology, which the company expects to disrupt an industry that could be worth an estimated $4 billion-$5 billion in the coming five years. This may allow Bitdeer to further diversify its revenue streams and further fortify its balance sheet, the company says. Investors who are bullish on Bitcoin mining and AI-powered cloud services can learn more about Bitdeer’s stock here.
Featured photo by QuinceCreative on Pixabay.
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