Hut 8 Reports Operating and Financial Results for the Six Months Ended December 31, 2023

Revenue of $60.6 million including $12.6 million from Managed Services
Net Income of $6.2 million and Adjusted EBITDA of $62.3 million
9,195 self-mined Bitcoin on balance sheet as of December 31, 2023

MIAMI - March 28, 2024 (GLOBE NEWSWIRE) -- Hut 8 Corp. (Nasdaq | TSX: HUT) (“Hut 8” or the “Company”), a leading, vertically integrated operator of large-scale energy infrastructure and one of North America’s largest Bitcoin miners, today announced its financial results for the six months ended December 31, 2023.

“Our results this period demonstrate the strength and potential of the new Hut 8. Our thesis for the merger was to combine the operating scale and discipline of US Bitcoin Corp with the strong balance sheet, access to capital markets, and liquidity of Hut 8 Mining Corp. Since closing, we have focused tirelessly on driving efficiencies through a comprehensive restructuring program. While there is still work to do, I am proud of the progress we have made,” said Asher Genoot, CEO of Hut 8. “Our goal is to continue building a profitable, diversified business during fiscal year ’24. With this in mind, we will continue to focus on driving topline revenue growth and cost reduction across the business.

“Looking ahead, we are focused on two pillars of growth: strengthening and growing our self-mining business, and continuing to diversify our broader business. We currently have more than 1,100 megawatts of energy development capacity under exclusivity, which represents nearly 63 exahash of capacity if filled with current generation miners. As we head into the halving, we maintain a strong balance sheet with what we believe to be healthy and manageable debt. This will allow us to invest in growth while reducing the need for external capital and limiting shareholder dilution.

“We have already proven that we can operate at scale, with approximately 27 exahash under management across our self-mining, hosting, and managed services business lines as of the end of February. We believe our ability to build sites quickly and cost-efficiently without sacrificing quality is unmatched, and our team has a single-minded focus on building a best-in-class operating business. With our capabilities, resources, and team, I am more confident than ever that we will build a lasting, generational business committed to maximizing shareholder value.”

Six Months Ended December 31, 2023 Financial and Operational Highlights

U.S. Data Mining Group, Inc. dba US Bitcoin Corp (“USBTC”) and Hut 8 Mining Corp. completed an all-stock merger of equals (the “Business Combination”) on November 30, 2023. USBTC was deemed the accounting acquirer in the transaction, so the Company’s results of operations reflect only USBTC’s performance up until the completion of the Business Combination on November 30, 2023. The Company’s results of operations for the combined company start on December 1, 2023.

There was also a change of year-end for the accounting acquirer, USBTC, from June 30 to December 31. As a result, the Company is filing transition period financial statements as a bridge between USBTC’s last year-end, which was June 30, 2023, and Hut 8 Corp.’s new year-end, which is December 31, 2023. The outcome of this is a six-month set of financials, including audited financials for the six months ended December 31, 2023 and unaudited financials for the six months ended Dec 31, 2022.

• Operating portfolio totaled 839 megawatts (“MW”) across 11 sites in North America comprising six digital asset mining sites and five cloud and colocation data centers as of December 31, 2023.
• Self-mining hashrate totaled approximately 6.3 exahash per second (EH/s) as of December 31, 2023, including the Company’s net share of the King Mountain joint venture (“King Mountain JV”).
• Revenue increased by $14.6 million to $60.6 million from $46.0 million in the six months ended December 31, 2022.
• Net income improved to $6.2 million compared to a net loss of $81.3 million in the six months ended December 31, 2022.
• Adjusted EBITDA increased by $49.5 million to $62.3 million from $12.8 million in the six months ended December 31, 2022.
• During the six months ended December 31, 2023, 1,244 Bitcoin were mined. As of December 31, 2023, total self-mined Bitcoin balance of 9,195, which represented a market value of approximately $388.1 million. As of February 29, 2024, total self-mined Bitcoin balance of 9,110 Bitcoin, which represented a market value of approximately $557.3 million.
• Cost to mine a Bitcoin for owned facilities, including the Company’s net share of the King Mountain JV, was $16,353, versus $16,447 for the six months ended December 31, 2022. Cost to mine including hosted miners was $18,815, versus $16,305 in the six months ended December 31, 2022.

Key Performance Indicators

Select Six Months Ended December 31, 2023 Financial Results
Revenue for the six months ended December 31, 2023 increased by 32% to $60.6 million from $46.0 million in the prior period, and consisted of $41.5 million in Digital Assets Mining revenue, $12.6 million in Managed Services revenue, $1.1 million in High Performance Computing – Colocation and Cloud revenue, and $5.4 million in Other revenue. Other consists primarily of hosting services revenue and equipment sales, if any.

Cost of revenue (exclusive of depreciation and amortization) for the six months ended December 31, 2023 was $34.3 million versus $27.8 million in the prior period, and consisted of $26.5 million in cost of revenue – Digital Assets Mining, $3.4 million in cost of revenue – Managed Services, $0.7 million in cost of revenue – High Performance Computing – Colocation and Cloud, and $3.8 million in cost of revenue – Other.

Depreciation for the six months ended December 31, 2023 was $10.6 million versus $11.8 million in the prior period. The reduction was due to a lower net book value of plant and equipment after the recognition of a non-cash impairment charge in the prior period.

General and administration expenses for the six months ended December 31, 2023 were $37.6 million versus $10.6 million in the prior year period. This increase was due to non-recurring items related to the Business Combination and a sales tax accrual recorded in the current period.

Net income for the six months ended December 31, 2023 improved to $6.2 million compared to a net loss of $81.3 million in the prior year period. Net income was impacted by the Company’s decision to early adopt ASU 2023-08, the new FASB fair value accounting rules, which led to a $32.6 million gain on the revaluation of the Company’s digital asset holdings in the six months ended December 31, 2023.

Adjusted EBITDA for the six months ended December 31, 2023 increased by 386% to $62.3 million from $12.8 million in the prior year period. Adjusted EBITDA includes the gain from the early adoption of ASU 2023-08.

As of December 31, 2023, the Company held 9,195 Bitcoin on its balance sheet, representing a market value of approximately $388.1 million. As of February 29, 2024, the Company held 9,110 Bitcoin on its balance sheet, representing a market value of approximately $557.3 million.

A reconciliation of Adjusted EBITDA to the most comparable GAAP measure, net income (loss), and an explanation of this measure has been provided in the table included below in this press release.

CONFERENCE CALL
The Hut 8 Corp. Q4 2023 webcast will commence at 8:30 a.m. ET, today.

Analyst Coverage of Hut 8 Mining:
A full list of Hut 8 Corp. analyst coverage can be found here: https://hut8.com/investors/

About Hut 8
Hut 8 is an energy infrastructure operator and Bitcoin miner with self-mining, hosting, managed services, and traditional data center operations spanning ten sites across North America. Headquartered in Miami, Florida, Hut 8 operates five Bitcoin mining, hosting, and managed services sites in Alberta, New York, Nebraska, and Texas and five high performance computing data centers in British Columbia and Ontario. For more information, visit www.hut8.com and follow us on X (formerly known as Twitter) at @Hut8Corp.