Ault Alliance, Inc. (AULT)·Q4 2023 Earnings Summary

Executive Summary

• Ault Alliance preannounced FY 2023 revenue of $153.0M excluding discontinued operations (AGREE), up 30% y/y; including AGREE, revenue would have been $169.2M. By contrast, management’s prior Q3 outlook had called for $190–$200M, implying a material shortfall vs guidance despite strong growth at Sentinum (Bitcoin/data centers), Circle 8 (cranes) and GIGA (defense) .
• Based on company-reported FY and earlier-quarter totals, Q4 2023 revenue is derived at ~$21.9M (FY $153.0M minus Q1 $31.186M, Q2 $47.408M, Q3 $52.518M). The company did not disclose Q4 EPS or margins in its Q4/FY press release or 10-K; consensus estimates from S&P Global were unavailable for Q4 2023 comparison .
• Mix continued to pivot toward operating businesses: FY 2023 segment revenues were led by Energy (Circle 8) $49.2M, GIGA $37.8M, SMC $31.6M, and Sentinum (digital mining) $34.5M; Fintech (lending/trading) was negative on the year from impairments and unrealized losses, driving volatility and pressuring consolidated gross margin (20% FY) .
• Strategic focus sharpened: management reorganized reporting under Sentinum and Ault Capital Group, highlighted Montana data center buildout, and initiated hotel and land divestiture (AGREE) to concentrate on core assets—narrative that should matter for valuation and balance sheet flexibility in 2024 .
• No Q4 2023 earnings call transcript or S&P consensus data found; near-term stock narrative likely hinges on perceived credibility after the FY revenue miss vs prior outlook and execution on de-leveraging and data center/AI monetization plans .

What Went Well and What Went Wrong

What Went Well

• Strong operating growth: Circle 8 revenue expanded ~1,696% to $49.2M in FY 2023 (full-year ownership), Sentinum nearly doubled to ~$33.1–$34.5M, and GIGA rose ~25% to $37.8M, underscoring breadth beyond crypto cycles .
• Strategic clarity: “Our operations now report under two subsidiaries, Sentinum and Ault Capital Group… positions us to better capitalize on the opportunities for our asset base,” noted Founder/Executive Chairman Todd Ault, signaling a streamlined portfolio approach .
• Positive crypto leverage: Management cited “recent uptick in Bitcoin prices” as supportive to Sentinum’s outlook; company reported ~2.1 EH/s capacity and 2H23 power costs of ~$42–$62/MWh, implying direct cost per Bitcoin mined of $()$51k, which can be attractive vs price environment entering 2024 .

What Went Wrong

• Guidance miss: Management projected $190–$200M FY 2023 revenue in October; preliminary FY revenue landed at $153.0M excluding AGREE (or $169.2M including AGREE), a sizeable shortfall that may weigh on confidence in forecasting discipline .
• Margin pressure and P&L volatility: FY 2023 gross margin fell to 20% (from 43%) due to negative margins at Sentinum amid higher mining difficulty and losses in lending/trading activities, underscoring sensitivity to crypto economics and mark-to-market swings .
• Capital intensity and restructuring drag: Elevated depreciation and several impairments (e.g., SMC, Energy, AGREE held-for-sale) and high interest burden left FY operating losses substantial; discontinued AGREE contributed to further net loss from discontinued operations .

Financial Results

Note: The company did not publish a Q4 2023 EPS or margin line in the Q4/FY press release or 10-K; S&P Global consensus for Q4 2023 was unavailable.

Revenue comparison (oldest → newest):

• Derivation note for Q4 2023 revenue: FY (ex-AGREE) $153.011M minus Q1 $31.186M , Q2 $47.408M , Q3 $52.518M = ~$21.899M.

EPS and margin comparison:

Segment revenue (FY 2023):

Select KPIs and operating data:

Guidance Changes

Management also disclosed a portfolio focus including listing hotels and land (AGREE) as held for sale to sharpen focus on core businesses; no quantified forward guidance ranges were provided for margins/OpEx in Q4 materials .

Earnings Call Themes & Trends

No Q4 2023 earnings call transcript was found. Thematic evolution drawn from Q2 and Q3 press releases and FY materials:

Management Commentary

• “Our operations now report under two subsidiaries, Sentinum and Ault Capital Group… [to] better capitalize on the opportunities for our asset base.” – Milton “Todd” Ault III, Founder & Executive Chairman .
• “The recent uptick in Bitcoin prices has positively impacted our outlook… We will concentrate on digesting this growth and optimizing operations…” .
• “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 (Q3) .
• “The defense business… is experiencing robust growth amidst the current conflict.” (regarding GIGA) .

Q&A Highlights

• No Q4 2023 earnings call transcript was available; therefore no Q&A highlights or on-call guidance clarifications could be corroborated.

Estimates Context

• Wall Street consensus (S&P Global) for Q4 2023 revenue/EPS was unavailable due to missing CIQ mapping in our data connector; we cannot provide an estimate vs. actual comparison at this time. As a result, we anchor to company-issued preliminary results and FY disclosures .

Key Takeaways for Investors

• The company delivered substantial FY top-line growth across core operating units (Circle 8, GIGA, Sentinum), but still materially missed its late-October revenue outlook—expect scrutiny on forecasting discipline and the drivers of the delta vs prior guidance .
• Mix is improving toward cash-generative subsidiaries, yet consolidated margins were pressured in 2023 by mining difficulty and negative lending/trading results; watch for margin normalization as crypto dynamics and portfolio actions evolve .
• Sentinum’s cost position (power $42–$62/MWh; ~2.1 EH/s) and AI/HPC hosting ambitions can be a medium-term upside lever if execution and pricing align with demand for high-density compute; Montana buildout progress is a key operational milestone .
• Balance sheet strategy hinges on asset sales (AGREE hotels/land) and ongoing financing activity; deleveraging and liquidity management remain central to the equity case in 2024 .
• Defense demand (GIGA) offers a counter-cyclical ballast with geopolitical tailwinds; continued growth and margin capture in that segment could stabilize consolidated results .
• Without a Q4 call transcript or consensus estimates, near-term narrative is driven by credibility rebuilding and evidence of operational execution (Sentinum hosting ramp, Circle 8 utilization, GIGA backlog) rather than a clean “beat-and-raise” story .
• For trading: the visible miss vs prior FY guidance is a negative catalyst, but proof points on AI/data center monetization, crypto price tailwinds, and asset sale proceeds could shift sentiment; catalysts include updates on Montana capacity, hotel sale closings, and segment profitability inflections .

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Appendix: Prior-quarter revenue detail (for trend context)

Sources: Company 8-K 2.02 press releases for Q2 and Q3 2023 .