Executive Summary

Q3 FY2024 revenue was $104.1M, down 7% QoQ due to the April halving, but up 129% YoY; gross profit was ~$58.9M (~57% margin), reflecting resilient operations despite lower block rewards .
GAAP net loss of ($236.2)M and diluted EPS of ($1.03) were driven by two non-cash items: a $189.2M impairment from accelerating fleet upgrades and a ~$48.3M fair value mark-to-market loss on bitcoin holdings as BTC ended June 30 below March 31 .
Operational KPIs remained strong: 1,583 BTC mined (vs. 2,031 in Q2), uptime ~98%, all‑in energy cost $0.048/kWh; end‑of‑quarter hashrate reached 20 EH/s with 22.3 EH/s achieved immediately post‑quarter .
Liquidity and growth catalysts: $129.2M cash, ~$413.0M BTC, $50M bitcoin‑backed revolving line with Coinbase to opportunistically fund machines or tuck‑ins; guidance maintained to 32 EH/s by year‑end 2024 and 50 EH/s in 2025 .

What Went Well and What Went Wrong

What Went Well

Efficiency and scale: Fleet efficiency improved to ~22.3 J/TH; gross margins remained >50% post‑halving driven by low power costs and operational uptime; management cites CleanSpark as “most efficient large‑scale publicly traded Bitcoin miner” .
Production resilience: Despite block rewards halved, Q3 revenue fell only ~7% QoQ with 1,583 BTC mined vs. 2,031 BTC in Q2, highlighting hashrate growth and uptime (~98%) .
Strategic financing and breadth: Secured a $50M BTC‑backed revolver with Coinbase to lower cost of capital and fund opportunistic expansion; diversification across multiple states mitigates regulatory/power risk .

Quote: “We had a tremendous quarter… We determined to replace a substantial portion of our fleet… We believe… CleanSpark is currently the most efficient large‑scale publicly traded Bitcoin miner.” — CEO Zach Bradford .

What Went Wrong

Non‑cash GAAP headwinds: $189.2M impairment on older miners due to accelerated upgrade cycle and ~$48.3M fair value loss on BTC holdings drove GAAP net loss of ($236.2)M .
QoQ revenue/production decline: Revenue decreased ~7% QoQ and BTC production fell ~22% QoQ (1,583 vs. 2,031) as halving cut block rewards 50% .
Higher overhead with scale/M&A: Legal, accounting, and other professional fees increased with active M&A and a workforce that grew from ~100 to >250 employees YoY .

Financial Results

Metric	Q1 FY2024	Q2 FY2024	Q3 FY2024
Revenue ($USD Millions)	$73.786	$111.799	$104.108
Net Income ($USD Millions)	$25.909	$126.735	($236.242)
Diluted EPS ($USD)	$0.14	$0.58	($1.03)
Cost of Revenues ($USD Millions)	$28.896	$34.298	$45.180
Gross Profit ($USD Millions)	$44.890	$77.501	$58.928
Adjusted EBITDA ($USD Millions, non‑GAAP)	$69.090	$181.829	($12.669)

Notes:

Gross profit is calculated as revenue minus cost of revenues (exclusive of D&A), consistent with company presentation .
Management referenced ~57% gross margin in Q3; the calculation above aligns (~56.6%) .

KPIs and Operations

KPI	Q1 FY2024	Q2 FY2024	Q3 FY2024
BTC Mined (units)	—	2,031	1,583
Avg Revenue per BTC ($USD)	~$36,000	~$55,000	~$66,000
Uptime (%)	>98%	—	~98%
All‑in Energy Cost ($/kWh)	$0.044	$0.043	$0.048
Energy Cost per BTC ($USD)	—	—	~$27,000
Cost per BTC incl. Depreciation & Financing ($USD)	—	—	< $44,000

Hashrate & Efficiency

Metric	Q1 FY2024	Q2 FY2024	Q3 FY2024	Post‑Quarter
Operational Hashrate (EH/s)	>12.5	>17	20.0 (EoQ)	22.3 EH/s
Fleet Efficiency (J/TH)	—	—	~22.3	~22.3

Balance Sheet

Metric	Q1 FY2024	Q2 FY2024	Q3 FY2024
Cash ($USD Millions)	$48.5	$323.1	$129.2
Bitcoin ($USD Millions)	$127.0	$358.0	$413.0
Working Capital ($USD Millions)	$139.3	$632.7	$531.9
Total Debt ($USD Millions)	$14.5	$12.8	$11.0
Total Assets ($USD Billions)	$0.863	$1.537	$1.476

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Hashrate target	FY2024 year‑end	32 EH/s target	32 EH/s; path: exceed 28 EH/s after fleet upgrades; add ~4 EH/s via ~65 MW, incl. 50 MW Sandersville in Sept.	Maintained; timeline clarified
Hashrate target	FY2025	50 EH/s	50 EH/s reiterated; Tennessee target 200 MW in 2025 and >400 MW by 2026; Wyoming expansion to several hundred MW in 2025–26	Maintained; expanded roadmap
Fleet efficiency policy	Ongoing	—	Remove all units less efficient than 22 J/TH; move to immersion‑cooled S21 XP (13.5 J/TH)	New detail
Sandersville substation transformer	2H 2024	Delay disclosed in Q1	City expects final 50 MW of power in September	Timeline updated
Liquidity tool	Ongoing	—	$50M BTC‑backed revolver with Coinbase; expected cost of capital below ~10% near‑term	New facility

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2)	Current Period (Q3)	Trend
Bitcoin halving impact	Preparing for halving; expected 15–30% network hashrate drop; margin resilience focus	Halving cut rewards 50%; revenue down only ~7% QoQ; BTC production down ~22% vs ~50% rewards reduction	Resilience confirmed
Efficiency & upgrades	Option for 100k S21; aggressive upgrade path; hash cost goals	Accelerated upgrades; remove >22 J/TH units; fleet efficiency ~22.3 J/TH; S21 XP immersion plan	Increasing emphasis
Power strategy	Low wholesale costs; fixed PPAs in MS; active power management	Portfolio mix of fixed vs wholesale pricing; curtailment flexibility; multi‑state derisking	Broader, more dynamic
M&A and expansion	MS acquisitions; WY sites 75 MW; path to 32 EH/s & 50 EH/s	WY to several hundred MW; TN targets; GRIID pipeline rationale; Sandersville 50 MW Sept.	Scaling faster
HODL & financing	Grew BTC by >2,000 in Q2; fair value accounting adopted	~$413M BTC holdings; $50M revolver to avoid selling BTC; cost of capital tool	Balance sheet optionality
Industry landscape	Consolidation likely; scale benefits; escape velocity	Peers shifting to AI/HPC; CleanSpark focusing on BTC to increase share of 450 BTC/day	Narrative reinforced
Regulatory/geography	GA/MS utilities; community engagement	TN Valley Authority mention; WY political support; multi‑jurisdiction hedge	Expanding footprint

Management Commentary

“We… determined to replace a substantial portion of our fleet… Although that decision has generated a non‑cash expense that negatively affects our reported operating results… We believe this is the most prudent step for the long‑term success of the company.” — CEO Zach Bradford .
“We managed to recognize only 7% less revenue by mining 1,583 bitcoin… We recognized a net loss primarily due to… fair value… and an impairment on older, less‑efficient miners.” — CFO Gary Vecchiarelli .
“Our current fleet efficiency across the entire portfolio stands at an industry‑leading 22.3 joules per terahash… more than doubling our total hash rate since January.” — CEO Zach Bradford .
“We continue to have one of the strongest balance sheets… a $50 million line of credit collateralized by a portion of our Bitcoin HODL balance.” — CFO Gary Vecchiarelli .

Q&A Highlights

GRIID acquisition timeline depends on SEC review of S‑4; management emphasized GRIID’s pipeline and state relationships as strategic rationale beyond immediate MWs .
Coinbase revolver: viewed as an optional tool; expected cost of capital “below 10%” near‑term; potential uses include machine purchases and tuck‑ins .
Wyoming expansion: 75 MW under contract; “several hundred megawatts” targeted over 2025–26; relationships and pro‑bitcoin policy cited .
Fleet refresh cadence: indicative ~3‑year cycle but market‑dependent; plan to upgrade in bear cycles when hardware pricing is attractive; leaning into immersion for next‑gen efficiency .
Supply chain/transformers: Proactive procurement (50+ MW transformers/switchgear on hand) to mitigate timing risks; Sandersville’s final 50 MW expected in September .

Estimates Context

S&P Global consensus data for Q3 FY2024 and forward periods was unavailable due to provider limits at the time of this analysis; therefore, we cannot assess beats/misses vs Wall Street estimates for Q3. Values retrieved from S&P Global were unavailable at query time.
Management previously stated Q1 FY2024 “beat all consensus estimates across the board, including revenue, EPS, and profitability” (company assertion) . Given Q3’s significant non‑cash impairment and BTC fair value losses, we expect estimate revisions to focus on non‑GAAP operating metrics and forward hashrate/efficiency rather than GAAP EPS .

Key Takeaways for Investors

Non‑cash GAAP loss masks durable unit economics: Q3 gross margins ~57% and cost per BTC < $44k (incl. depreciation/financing) demonstrate post‑halving resilience; focus on adjusted operations for valuation frameworks .
Efficiency is the core moat: Fleet at ~22.3 J/TH with plan to retire >22 J/TH units; immersion deployments and S21 XP orders aim to compress hash cost further through 2025 .
Scale and multi‑jurisdiction strategy reduce risk: Diverse power contracts (fixed vs wholesale), curtailment flexibility, and expansion in TN/WY underpin sustained uptime and margin stability .
Liquidity optionality > dilution: $129.2M cash, ~$413.0M BTC, plus $50M revolver enable opportunistic growth (machines/M&A) while preserving HODL leverage to BTC appreciation .
Near‑term catalysts: Energization of Sandersville’s final 50 MW (Sept), continued fleet upgrades, incremental EH/s from Dalton and new sites; monitor execution to 32 EH/s by year‑end .
Medium‑term thesis: Path to 50 EH/s in 2025 via tuck‑ins and greenfield builds (TN/WY), leveraging procurement scale and community/utility relationships; consolidation tailwinds likely favor lowest‑cost operators .
Trading setup: Expect volatility around GAAP prints given fair value accounting and impairment timing; focus on operational KPIs (BTC mined, hash cost, EH/s ramp) and liquidity actions (draws, machine orders) as stock drivers .

CLEANSPARK, INC. (CLSK)·Q3 2024 Earnings Summary