Executive Summary

Q3 2023 revenue was $47.96M, up 8% YoY (vs. $44.27M) and slightly above Q2 ($47.41M), driven by SMC ($15.93M), Circle 8 crane operations ($12.49M), GIGA ($10.28M), and Sentinum bitcoin mining ($7.56M) .
Gross margin compressed to 20% (vs. 38% in Q2; 43% in Q3’22) as crypto mining margins and negative Fintech trading results offset strength in SMC and GIGA .
Operating loss narrowed to $(21.9)M from $(50.5)M in Q2; net loss attributable to Ault improved to $(21.8)M from $(60.7)M in Q2, reflecting fewer impairments but continued high interest expense and negative trading results .
Management guided FY2023 revenue to $190–$200M and highlighted cash‑flow focus at Circle 8/Sentinum and strategic asset sales (AGREE hotels) to reduce debt; however, going‑concern uncertainty and an NYSE American price deficiency notice are notable overhangs .

What Went Well and What Went Wrong

What Went Well
- SMC (The Singing Machine) was the largest contributor at $15.93M; GIGA revenue grew to $10.28M with defense demand, and bitcoin mining revenue nearly doubled YoY to $7.56M .
- Management emphasized “performance in our Circle 8 crane operations and our Sentinum data centers. Cash flow is improving, and we have an eye towards future profitability.” — Executive Chairman Milton “Todd” Ault III .
- FY23 revenue outlook set at $190–$200M; Sentinum annualized mining revenue run‑rate cited at ~$32M, underscoring scale vs. market cap perception .
What Went Wrong
- Gross margin fell to 20% (vs. 38% in Q2), pressured by negative Sentinum crypto mining margins and unfavorable Fintech trading results (Fintech revenue was $(0.25)M, including ~$3.0M unrealized losses on Alzamend) .
- $3.90M impairment of mining‑related property; interest expense remained elevated at $4.41M in Q3 (though down from Q2) .
- Liquidity and going‑concern risk disclosed (cash $8.74M; negative working capital; need for financing), plus NYSE American price deficiency notice (<$0.20 30‑day average) .

Financial Results

Metric	Q3 2022	Q1 2023	Q2 2023	Q3 2023
Revenue ($M)	$44.27	$31.19	$47.41	$47.96
Gross Margin %	43%	7%	38%	20%
Loss from Operations ($M)	$(7.01)	$(31.42)	$(50.51)	$(21.90)
Net Loss Attrib. to Ault ($M)	$(7.27)	$(48.65)	$(60.68)	$(21.77)
Diluted EPS (Net, $)	$(7.61)	$(41.24)	$(50.08)	$(3.97)
Interest Expense ($M)	$2.37	$13.73	$15.93	$4.41

Segment revenue mix – Q3 2023:

Segment / Item	Q3 2023 ($M)
SMC (consumer electronics)	$15.93
Energy – Circle 8 crane operations	$12.49
GIGA (defense)	$10.28
Sentinum – Cryptocurrency mining	$7.56
TurnOnGreen	$1.17
Commercial real estate leases	$0.33
ROI (metaverse)	$0.02
Fintech – Lending & trading activities	$(0.25)

KPIs and cost items (trend context):

KPI / Cost	Q3 2022	Q2 2023	Q3 2023
Bitcoin mining revenue ($M)	$3.87	$8.37	$7.56
Crane operations revenue ($M)	—	$12.59	$12.49
SMC revenue ($M)	$17.11	$2.63	$15.93
GIGA revenue ($M)	$7.78	$8.74	$10.28
Total operating expenses ($M)	$25.83	$68.39	$31.57
Impairment charges ($M)	$2.00 deposit impair.	$35.57 goodwill/intangibles	$3.90 PP&E

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY 2023	Not disclosed in reviewed docs	$190–$200M	Initiated

Earnings Call Themes & Trends

Note: No Q3 2023 earnings call transcript was found; themes are based on the 8‑K press release and 10‑Q. [ListDocuments showed 0 transcripts for period]

Topic	Previous Mentions (Q1 & Q2)	Current Period (Q3)	Trend
Bitcoin mining economics	Q1: Mining revenue $7.35M; margin pressure from BTC price/difficulty . Q2: Mining revenue $8.37M; margins still pressured .	Q3: Mining revenue $7.56M; mining difficulty cited as factor in gross margin compression .	Headwinds persist; scale maintained.
Crane operations (Circle 8)	Q1: $12.65M revenue . Q2: $12.59M .	Q3: $12.49M and management praise for “performance… cash flow improving” .	Stable high run‑rate.
SMC performance	Q2: $2.63M (seasonal/ship timing) .	Q3: $15.93M; largest contributor .	Strong rebound.
Portfolio actions – AGREE hotels	Q2: Renovations & operations .	Q3: Hotels classified as held for sale; proceeds targeted to debt reduction and core focus .	Divest to de‑leverage.
Regulatory/legal	Q2: SEC settlement concluded Aug 15, 2023 .	Q3: No new enforcement; internal control weaknesses remain under remediation .	Controls remediation ongoing.
Listing compliance	—	NYSE American price deficiency letter received (avg < $0.20; cure by May 13, 2024) .	New risk factor for equity.

Management Commentary

“We’re proud of the performance in our Circle 8 crane operations and our Sentinum data centers. Cash flow is improving, and we have an eye towards future profitability.” — Milton “Todd” Ault III, Executive Chairman .
“The annualized revenue run rate of Sentinum Bitcoin mining is currently approximately $32 million…” .
“The defense business, especially our Israeli division, is experiencing robust growth amidst the current conflict.” — on GIGA/Gresham Worldwide .
“Our focus is on delivering a foundation of stable revenue with year-over-year growth.” — on FY2023 guide .
“We are incredibly disappointed in the stock’s performance.” — on common stock .

Q&A Highlights

No Q3 2023 earnings call transcript located in the document set; therefore, there are no Q&A highlights to report for the period. [ListDocuments returned 0 transcripts]

Estimates Context

S&P Global/Capital IQ consensus EPS and revenue estimates for AULT were unavailable due to missing CIQ mapping in our estimates source. As a result, we cannot provide vs‑consensus comparisons for Q3 2023 or FY2023 at this time.

Key Takeaways for Investors

Revenue mix is broadening: SMC, crane services, defense, and bitcoin mining each contributed meaningfully in Q3; SMC and GIGA momentum offset crypto/Fintech volatility .
Margin quality remains the swing factor: 20% gross margin reflects crypto difficulty and negative trading marks; excluding crypto/trading, adjusted gross margins would have been higher per MD&A .
Profitability trajectory improved sequentially (smaller operating and net losses) as Q2’s large impairments did not recur; interest burden remains high .
Balance sheet and listing risks: going‑concern disclosure, need for external financing, and NYSE American price deficiency notice may pressure equity until resolved .
Strategic asset sales (AGREE hotels) and cash‑flow prioritization at Circle 8/Sentinum are the primary levers for de‑leveraging and liquidity in the near term .
2023 revenue outlook of $190–$200M sets a top‑line bar; execution on segment profitability and financing will drive multiple expansion more than revenue alone .

Supporting documents: Q3 2023 10‑Q (filed Nov 20, 2023) ; Q2 2023 10‑Q (filed Aug 21, 2023) ; Q1 2023 10‑Q (filed May 22, 2023) ; Q3 2023 preliminary revenue press release (Oct 23, 2023) .

Ault Alliance, Inc. (AULT)·Q3 2023 Earnings Summary