Executive Summary

Q2 2024 total revenue was $28.4M, down 40% year over year, driven by a $19.3M swing to negative revenue in lending/trading and lower crane utilization; gross margin fell to (2%) vs 38% in Q2 2023 .
Net loss available to common was $(35.2)M (diluted EPS $(1.08)), an improvement from $(61.0)M in Q2 2023, helped by lower interest expense and G&A, but offset by an $8.0M hotel asset impairment and $6.3M investment impairments .
Management reaffirmed a strategic split: Ault Alliance to focus on AI data centers and Bitcoin under Hyperscale Data, Inc. (planned ticker GPUS) with special dividends of non-AI assets to shareholders; no quantitative revenue/EPS guidance was provided .
Q1 2024 was profitable (net income to common $2.5M) with revenue $44.9M and 43% gross margin; Q2 reversed as trading losses and hotel impairment weighed on results, highlighting volatility tied to markets and strategic repositioning .
Potential stock catalysts: execution of Hyperscale Data spin and special dividends, resolution of litigation, and progress leasing the Michigan AI/colocation facility; risks include going concern uncertainty and funding needs .

What Went Well and What Went Wrong

What Went Well
- Digital assets mining revenue rose 27% in 1H 2024 to $19.9M, supported by a 134% Bitcoin price increase and expansion of hosted mining; management emphasized focus on AI data centers and Bitcoin operations .
- Defense segment (GIGA/Enertec) delivered growth: GIGA Q2 revenue increased 21% YoY; Enertec sales up 47% 1H, contributing to a 16% Gresham revenue increase 1H .
- Cost discipline: G&A down meaningfully YoY; interest expense decreased vs Q2 2023; adjusted gross margin ex trading improved to 24% in Q2 .
- Quote: “This move reflects our commitment to unlocking the true value of our assets. On one hand, Hyperscale Data will concentrate on AI data centers and Bitcoin operations—areas with immense growth potential.” — Milton “Todd” Ault III .
What Went Wrong
- Lending/trading swung to negative revenue of $(9.8)M in Q2 (vs +$9.5M in Q2 2023), driven largely by unrealized losses in White River and Alzamend positions, creating significant earnings volatility .
- Hotel asset impairment of $8.0M after reversing “held for sale” classification; gross margin deteriorated to (2%) in Q2 .
- Energy/crane revenue decreased 7% YoY in Q2 due to five cranes out of service; AGREE reclassification increased complexity and debt remains high with near-term maturities and amendments .

Financial Results

Metric	Q2 2023	Q1 2024	Q2 2024
Revenue ($USD Millions)	$47.408	$44.9	$28.404
Net Income Available to Common ($USD Millions)	$(61.004)	$2.5	$(35.235)
Diluted EPS ($USD)	$(1244.98)	—	$(1.08)
Gross Margin %	38%	43%	(2%)
Total Operating Expenses ($USD Millions)	$68.390	$19.1	$26.297

Notes: Q1 2024 revenue in press release excluded ~$3M AGREE as discontinued operations; later reclassified to continuing operations in Q2 10-Q .

Segment revenue breakdown (Q2 2024):

Segment	Revenue ($USD Millions)
Sentinum – Digital assets mining	$8.490
AGREE – Hotel & real estate	$5.389
Energy – Crane operations	$11.700
GIGA – Defense	$10.612
TurnOnGreen – EV/electronics	$1.236
Fintech – Lending/trading	$(9.763)
Other (ROI, Holding Co.)	$0.711 combined ($0.039 + $0.672)

KPIs (Q2 2024):

KPI	Value
Digital assets mining revenue – owned facilities	$6.339M
Digital assets mining revenue – hosted	$2.151M
Adjusted gross margin ex trading (company)	24%
Cash and equivalents (end of Q2)	$9.551M
Total assets (end of Q2)	$270.779M
Notes payable (gross)	$106.839M
Convertible notes payable (gross)	$19.134M

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Corporate strategy (spin/split)	2024	Prior intent announced	Reaffirmed plan to rename to Hyperscale Data (GPUS), focus on AI data centers/Bitcoin, and issue special dividends of non-AI assets	Strategic reaffirmation
Quantitative revenue/EPS guidance	2024	None	None	Maintained “no quantitative guidance” stance
Dividends (special distributions)	2024	Indicated intent	Reaffirmed intent; terms/timing not specified and subject to approvals	Maintained; details pending

Earnings Call Themes & Trends

No Q2 2024 earnings call transcript was found; themes below reflect press releases and Q2 10-Q commentary.

Topic	Previous Mentions (Q4 2023 and Q1 2024)	Current Period (Q2 2024)	Trend
AI/data center strategy (Michigan facility)	Q1: 34.5-acre, 617k sq ft site; ~30 MW with plan to 300 MW; 7–10 year leases targeted; debt financing preferred	Reaffirmed focus; Hyperscale Data spin; positioning for AI colocation/hosting	Building toward spin and monetization
Bitcoin mining/halving impact	Q4: Sentinum revenue up ~97% YoY; BTC price tailwind	1H mining revenue +27%; Q2 halving reduced block subsidies; difficulty +71% QoQ; hosted contribution increased	Mixed: revenue up, margin headwinds from halving/difficulty
Hotels/real estate	Q1: AGREE revenue excluded as discontinued; later reversed	Reclass from held-for-sale; $8.0M impairment in Q2; 1H hotel revenue +23% YoY	Stabilizing operations; impairment reset
Crane operations	2023 growth to $49.2M full-year; core customer strength	Q2 revenue down 7% YoY due to cranes out of service; 1H near flat (-2%)	Operational utilization issue in Q2
Lending/trading	2023: gains supported results	Q2: $(9.8)M negative revenue; White River/Alzamend losses; high volatility acknowledged	Volatility amplified; risk factor
Litigation/regulatory	N/A	Arena litigation matters; inspection injunction; motions to dismiss; losses not estimable	Legal overhang elevated
Internal controls/going concern	N/A	Material weaknesses persist; going concern substantial doubt without new capital; remediation plan underway	Risk management focus

Management Commentary

Strategic split and focus: “Hyperscale Data will concentrate on AI data centers and Bitcoin operations—areas with immense growth potential… The second entity, Ault Capital Group… stockholders will receive a special dividend comprising equity ownership in ACG” — Milton “Todd” Ault III .
Q1 execution and outlook: “We are beginning to see the results of our commitment to focusing on and strengthening our key assets… Sentinum, Fintech and Energy all reported positive income from operations… the next few quarters may present fluctuations in our results, due to variables such as Bitcoin volatility and difficulty as well as the dynamic, evolving AI industry” .
Capital strategy for AI expansion: “Committed to minimizing equity issuance and currently plans to finance the significant expansion of the MI Facility primarily through debt” .

Q&A Highlights

No Q2 2024 earnings call transcript was found, so no Q&A highlights are available based on primary sources. Management clarifications from filings and press releases include: halving/difficulty impact on mining, hotel impairment rationale, and strategy to split assets and pursue AI/colocation growth .

Estimates Context

Wall Street consensus estimates from S&P Global for Ault Alliance Q2 2024 were unavailable due to missing SPGI/CIQ mapping for AULT. As a result, comparisons vs consensus could not be made. Estimates likely need reassessment post-strategic split and reclassifications [GetEstimates errors].
Investors should anchor near-term modeling on reported segment revenue disaggregation and disclosed margin drivers (trading volatility, halving impact, crane utilization), until formal coverage is established .

Key Takeaways for Investors

Execution on Hyperscale Data spin and special dividends is the principal narrative; tangible steps (name/ticker change, asset lists) are disclosed, but timing/terms remain pending regulatory approvals—monitor related 8-Ks and NYSE actions .
Earnings quality is sensitive to market marks in lending/trading; core operations (mining, defense, hotel, crane) improved in 1H, but Q2 losses underscore the need to evaluate ex-trading margins and cash generation (24% adjusted gross margin in Q2) .
Bitcoin halving and difficulty increases are structural headwinds; hosted mining and AI colocation may diversify revenue—watch progress on long-term leases and capacity ramps at the Michigan facility .
Balance sheet risk is non-trivial: substantial near-term debt maturities, amendments, and ongoing capital needs; filings cite going concern doubt without fresh financing—track note conversions, ELOC activity, and cash covenant compliance .
Legal overhang (Arena matters) and internal control material weaknesses add execution risk; remediation initiatives are in flight, but resolution timelines are uncertain—position sizing should reflect headline/litigation risk .
Near-term trading implication: outcomes around the spin, special dividends, and financing could drive volatility; medium-term thesis depends on monetizing AI data center assets with multi-year lease visibility and stabilizing non-core segments .

Sources: Q2 2024 10‑Q (filed Aug 16, 2024) –; Q2 2024 8‑K press release (Aug 19, 2024) –; Q1 2024 press releases (Apr 29 & May 21, 2024) –; FY 2023 preliminary press release (Feb 27, 2024) –.

Ault Alliance, Inc. (AULT)·Q2 2024 Earnings Summary