EPS of $-0.06 decreased by 65.2% from previous year
Gross margin of 5.1%
Net income of -7.66M
"We reached 5.6 exahash in October, and we have very exciting plans to expand to 12.5 exahash by summer of next year." - Aydin Kilic
HIVE Blockchain Technologies Ltd (HIVE) QQ2 2025 Results — Green Bitcoin Mining Growth and AI Compute Expansion with Paraguay Scale-Up
Executive Summary
HIVE Blockchain Technologies reported a Q2 FY2025 quarter ended September 30, 2024 with total revenue of $22.6 million, of which $20.8 million was from Bitcoin mining and $1.9 million from high-performance compute (HPC) AI workloads. Despite a challenging mining backdrop—post-halving economics and elevated hash rates—the company delivered an adjusted EBITDA of $5.6 million, and an annualized ROIC of 15% for the quarter, reinforcing its disciplined capital allocation and asset-light approach to incremental growth amid crypto-market volatility. On the balance sheet, HIVE held $7.2 million in cash and cash equivalents and $165.2 million in digital currencies (Bitcoin) as of 2024-09-30, with a current ratio of 5.6, underscoring liquidity strength even as the company funds expansion initiatives via paid-in capital and operating cash flow reallocation.
Strategically, HIVE is advancing a multi-year growth trajectory anchored by a 100 MW Paraguay expansion and a plan to scale total hash rate to 12.5 exahash by summer 2025, targeting approximately 2% of the global Bitcoin network. The management team emphasizes ROI-driven capital deployment, upgrading to energy-efficient Canaan ASICs to maintain margins, and converting selected data centers to Tier 3 GPU compute capacity to exploit the AI compute opportunity. The AI strategy is reinforced by NVIDIA GPU partnerships and a move toward a vertical integration model (GPU cloud services and data-center operations) intended to reach an ambitious $100 million of annualized HPC revenue by the end of 2025, with a broader objective of 20+ exahash of Bitcoin mining capacity and improved energy efficiency.
From a risk-reward standpoint, the bear-case remains highlighted by ongoing cryptocurrency price and hash-rate volatility, execution risk around Paraguay regulatory and grid-connection timelines, and substantial capital expenditures. However, management’s emphasis on robust HODL (Bitcoin on balance sheet) strategy, 2% hash-rate target, and improving mining efficiency supports a constructive long-run investment thesis should Bitcoin sustain elevated price levels and the AI compute market accelerates as projected.
Key Performance Indicators
Revenue
22.65M
QoQ: -29.74% | YoY:-33.18%
Gross Profit
1.17M
5.15% margin
QoQ: 149.10% | YoY:134.31%
Operating Income
-4.45M
QoQ: 29.44% | YoY:27.87%
Net Income
-7.66M
QoQ: -335.21% | YoY:-121.86%
EPS
-0.06
QoQ: -319.73% | YoY:-65.22%
Revenue Trend
Margin Analysis
Key Insights
Revenue: $22.6 million in Q2 FY2025 (YoY decline vs. $22.8 million in the prior-year Q2; QoQ decline from $32.2 million in Q1 FY2025).
Gross profit: $1.166 million (approx. 5.15% gross margin).
EBITDA: $9.6127 million (reported) for the period; Adjusted EBITDA: $5.6 million (per management commentary).
Operating income: $(4.449) million; Net income: $(7.663) million; EPS: $(0.0646).
Financial Highlights
Revenue and profitability:
- Revenue: $22.6 million in Q2 FY2025 (YoY decline vs. $22.8 million in the prior-year Q2; QoQ decline from $32.2 million in Q1 FY2025).
- Bitcoin mining revenue: $20.8 million; HPC revenue: $1.9 million.
- Gross profit: $1.166 million (approx. 5.15% gross margin).
- EBITDA: $9.6127 million (reported) for the period; Adjusted EBITDA: $5.6 million (per management commentary).
- Operating income: $(4.449) million; Net income: $(7.663) million; EPS: $(0.0646).
Balance sheet and liquidity:
- Cash and cash equivalents: $7.241 million; Bitcoin on balance sheet: $165.2 million (as of 2024-09-30).
- Total assets: $334.686 million; Total liabilities: $55.155 million; Total stockholders’ equity: $279.531 million.
- Working capital and liquidity: Current ratio 5.56x; net debt: $(20.643) million (net debt calculation from cash and Bitcoin offset against debt).
- Cash flow: Net cash used by operating activities $(1.366) million; net cash used for investing activities $(18.911) million; net cash provided by financing activities $1.851 million; free cash flow (FCF): $(21.242) million for the period.
Operational and asset mix:
- Hash rate and efficiency: 5.6 exahash achieved in October 2024; plan to reach 12.5 exahash by summer 2025; targeted efficiency ~17.6–20.5 joules per terahash after fleet upgrades.
- Asset-light expansion: Paraguay 100 MW expansion underway; first 30 MW to be online by Q2 2025; total capex and timing subject to regulatory and construction risk.
- HODL andBitcoin exposure: HODL on balance sheet rose meaningfully, with value approximating $165 million at Sept-30 and around $226 million at Bitcoin price around $86k (as of Nov-11-2024).
- AI compute: HPC segment generated $1.9 million in revenue in Q2 FY2025, with ongoing optimization of GPU clusters (4,000+ A-Series NVIDIA GPUs across two data centers in Sweden and Quebec) and a plan to scale HPC capacity through fixed-term, multi-cluster contracts.
Strategic highlights and outlook:
- Growth trajectory: The company reiterates a 12.5 exahash goal by Summer 2025 and intends to achieve roughly 2% of global Bitcoin network hash rate. Paraguay expansion is a cornerstone to that plan, supported by a green hydroelectric power base.
- AI compute upside: Conversion of data-center capacity to Tier 3 GPU compute is intended to monetize GPU-based AI workloads, with NVIDIA partnerships and the aim of achieving substantial HPC revenue growth in 2025.
- Margin discipline: The company emphasizes ROI-focused equipment procurement (e.g., 6,500 Canaan ASICs) to reduce energy costs and improve efficiency, contributing to a lower cost per terahash than peers in the bear market.
Bear case considerations:
- Bitcoin price and hash-rate volatility remain primary sensitivities; the near-term margin trajectory is highly dependent on macro Bitcoin price action and network difficulty.
- Paraguay regulatory and grid-stage risk could impact timing and capex deployment; project delays or tariff changes could affect unit economics.
- Financing needs for capex could pressure liquidity if operating cash flow remains negative or if fundraising conditions tighten.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
22.65M
-33.18%
-29.74%
Gross Profit
1.17M
134.31%
149.10%
Operating Income
-4.45M
27.87%
29.44%
Net Income
-7.66M
-121.86%
-335.21%
EPS
-0.06
-65.22%
-319.73%
Key Financial Ratios
currentRatio
5.56
grossProfitMargin
5.15%
operatingProfitMargin
-19.6%
netProfitMargin
-33.8%
returnOnAssets
-2.29%
returnOnEquity
-2.74%
debtEquityRatio
0.1
operatingCashFlowPerShare
$-0.01
freeCashFlowPerShare
$-0.18
priceToBookRatio
1.33
priceEarningsRatio
-12.11
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Key management insights from the QQ2 2025 earnings call and investor presentation:
- Strategy and growth trajectory: The management team outlined a clear plan to scale mining capacity to 12.5 exahash by summer 2025 and to achieve 2% of the global hash rate, anchored by Paraguay expansion and fleet upgrades with energy-efficient machines. Frank Holmes stated the Paraguary project is a 100 MW expansion with green hydroelectricity, designed to double the footprint globally in the next year. Aydin Kilic highlighted the target of 6 exahash by Q1 2025 and 12.5 exahash by Summer 2025, with improving global efficiency to 17.6 J/TH once Paraguay is fully online.
- Near-term revenue and profitability: Aydin Kilic summarized the quarter as $22.6 million in revenue (Bitcoin mining $20.8m; HPC $1.9m) with a gross operating margin of about $1.1–1.2 million and an adjusted EBITDA of $5.6 million, set against bear-market mining economics and post-halving dynamics. The company maintained a disciplined capital allocation and reported ROIC of 15% on an annualized basis for the quarter.
- Bitcoin HODL and macro backdrop: Kilic noted Bitcoin hodling on the balance sheet of approximately 2,600 BTC, with value rising alongside Bitcoin price volatility; as of November 11, Bitcoin traded around $86k–$88k, lifting the HODL value to roughly $226 million. The team emphasized Bitcoin as a currency hedge with green energy mining and upside optionality in a potential bull market.
- AI compute and data-center strategy: The company discussed converting crypto mining assets and data centers to Tier 3 GPU compute capacity, with over 4,000 A-Series NVIDIA GPUs deployed and 492 GPU nodes across two data centers. Management framed AI compute as a material growth vector toward a target of $100 million annualized HPC revenue by end-2025, leveraging NVIDIA GPUs and strategic data-center investments.
- Competitive positioning and efficiency: The call underscored HIVE’s competitive advantages—best uptime, lowest G&A per Bitcoin mined, and a disciplined capex program delivering ROI. Analysts highlighted HIVE’s position as a persistent leader in efficiency among large-scale miners and potential for multiple expansion paths via Paraguay and AI compute.
We reached 5.6 exahash in October, and we have very exciting plans to expand to 12.5 exahash by summer of next year.
— Aydin Kilic
Our 100-megawatt Paraguay expansion in our recent press release, we show that we've broken ground in Paraguay. It's 100% green hydroelectricity.
— Frank Holmes
Forward Guidance
Management guidance centers on aggressive but disciplined capacity expansion and a diversified revenue base. Key forward-looking elements include:
- Hash-rate expansion: 12.5 exahash by summer 2025, with Paraguay representing a meaningful portion of that uplift. If Bitcoin remains range-bound or improves modestly, annualized mining margins could rise from the current base toward target levels of $70–$150 million (calendar Q1–Q2 2025 and Paraguay completion scenarios), assuming current difficulty and hash price trajectories hold or improve. A potential Bitcoin price rally (e.g., to $120k) could push annualized mining margins toward $120–$250 million in modeled scenarios.
- HPC growth and data-center conversion: The AI compute business is expected to scale through fixed-term multi-cluster contracts, with a broader objective of achieving $100 million in annualized HPC revenue by the end of 2025. Margin stability will depend on hardware pricing, GPU utilization, and demand for AI compute, but management expects gross margins to remain robust given high-demand GPU infrastructure and favorable utilization of fixed assets.
- Currency and capital allocation: With HODL on the balance sheet, the Bitcoin position acts as a balance sheet hedge, but the company will manage capex via ATM and project financing rather than large dilutive financings, reinforcing an efficient capital structure.
- Monitoring factors for investors: Bitcoin price and hash rate dynamics, Paraguay regulatory and grid-supply developments, GPU supply and pricing, and utilization rates on GPU clusters; macro policy shifts around crypto regulation and energy pricing will be key drivers of the next 6–12 months.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
HIVE Focus
5.15%
-19.60%
-2.74%
-12.11%
BITF
-27.10%
-56.80%
-5.61%
-10.11%
CLSK
53.00%
-76.00%
-7.34%
-3.61%
MARA
-25.20%
-1.60%
-7.56%
-7.87%
RIOT
-29.90%
-1.67%
-3.27%
-7.79%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Overall, HIVE presents a bifurcated, long-duration growth thesis anchored in the dual engines of green Bitcoin mining expansion and AI compute monetization. The QQ2 2025 results reflect a period of sector-wide stress—from halving and higher hash rates—yet demonstrate disciplined capital allocation, a credible plan to reach 12.5 exahash by mid-2025, and a meaningful pivot toward Tier 3 data-center compute capacity. The HODL balance sheet provides optionality to weather downturns and participate in upside as Bitcoin price cycles recover. However, the near-term cash flow profile remains negative given capex commitments, and execution risk around Paraguay’s build-out and GPU/AI capacity ramp must be monitored. Investors should weigh HIVE’s premium value for efficient miners, its strategic AI compute play, and the potential for multiple expansion catalysts (Paraguay, GPU-driven HPC contracts, and possible selective M&A) against the macro crypto volatility backdrop. If Bitcoin sustains strength and the Paraguay project remains on track, HIVE could transition from a hedged Bitcoin miner to a diversified Computing & Crypto Infrastructure platform with material upside in 2025–2026.
Key Investment Factors
Growth Potential
Catalysts include Paraguay expansion reaching full 100 MW (and potential future expansion), upgrade to 6.5k Canaan ASICs delivering ~1.2 exahash and improving fleet efficiency; target of 12.5 exahash by mid-2025 and 2% of global hash rate. AI compute growth supports diversification into Tier 3 GPU cloud services with potential to achieve ~$100 million annualized HPC revenue by end-2025. HIVE’s ROIC of 15% signals attractive capital efficiency in a capital-intensive industry.
Profitability Risk
Key risks include Bitcoin price and hash-rate volatility, regulatory and tariff exposure in Paraguay and other jurisdictions, execution risk of large-scale data-center conversions, supply chain constraints for ASICs and GPUs, and the need to fund continued capex with uncertain financing conditions while maintaining liquidity.
Financial Position
Balance sheet is liquidity-positive on a net-basis given Bitcoin holdings (approx. $165–226m value range around 3Q2024–4Q2024) and cash of $7.2m, with total assets of ~$334.7m and stockholders' equity of ~$279.5m. Current ratio of 5.56x indicates strong short-term liquidity, but free cash flow negative due to capex and working-capital needs, reflecting ongoing Paraguay build-out and AI data-center investments. Net debt is modest at about $20.6m, suggesting manageable leverage amid capex plans.
SWOT Analysis
Strengths
First-mover advantage as a publicly traded crypto miner with a diversified, global footprint (Canada, Sweden, Iceland) and a forward-looking AI compute strategy.
Strong operating discipline: best-in-class uptime, low G&A per Bitcoin mined, and ROIC leadership (reported 15% annualized ROIC).
Lean capital allocation with ROI-driven ASIC investments (e.g., 6,500 Canaan units) and use of ATM facilities to fund growth without onerous equity dilution.
Significant HODL position (Bitcoin on balance sheet) providing optionality against volatility and potential upside with Bitcoin price rallies.
Near-term profitability pressured by halving impact and higher network difficulty, resulting in negative net income for the quarter and sizable ongoing capex.
Significant capital expenditure requirements (Paraguay build-out, GPU/data-center expansion) exerting pressure on near-term free cash flow.
Reliance on Bitcoin price as a major revenue driver; equity upside is contingent on crypto market cycles.
Execution risk related to Paraguay regulatory approvals, grid integration, and potential tariff changes.