Hut 8’s Revenue Decreases 13% QoQ Due To Increasing Bitcoin Difficulty

Key Points:

  • Hut 8 Mining’s first-quarter sales fell by a larger-than-expected 64% to C$19 million from the previous year.
  • Sales dropped 13% from the prior quarter, falling short of analyst projections of $21.2 million.
Hut 8 Mining, one of North America’s biggest, most innovative digital asset mining pioneers and providers of high-performance computing infrastructure, has released its financial results for the quarter ending March 31, 2023.
Hut 8's Revenue Decreases 13% QoQ Due To Increasing Bitcoin Difficulty

Hut 8 Mining’s first-quarter sales fell 64% year on year to C$19 million, exceeding expectations, as the firm was forced to switch off several pieces of equipment owing to a disagreement with its energy source.

Hut 8 CEO Jaime Leverton stated:

“We also reached an all-time operational high of 1.72 EH/s at our Medicine Hat facility and announced a merger of equals with USBTC, and since then have made progress on key regulatory files required to complete the transaction.”

Sales declined 13% from the previous quarter, below analyst forecasts of C$21.2 million. The Toronto-based firm posted profits per share (EPS) of C$0.47, compared to FactSet’s prediction of a loss of C$0.15.

The firm had problems at the Drumheller location, mostly because of excessive energy input levels, which caused miners to fail. This has substantially decreased operations, which are now at around 15% of the installed hash rate at the location.

Remediation started in March and gained speed in April when the team deployed new custom software across all miner models to reduce the maximum output voltage of the power supply, ensuring our equipment functions within safe boundaries.

The company has a total self-mined, unencumbered, and custodied Bitcoin balance of 9,133 with a market value of $352.0 million as of March 31, 2023. During the first quarter of 2023, 475 Bitcoin were mined, and 428 Bitcoin were sold, netting the company $14.5 million.

While the crypto mining industry is emerging from a brutal crypto winter that saw major names like Compute North and Core Scientific file for Chapter 11 bankruptcy protection, Hut 8 was forced to turn off approximately 8,000 machines in its Ontario facility in mid-November due to a dispute with its energy provider. Since then, it has managed to get just approximately 1,000 back online.

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