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H8

Hut 8 Corp. (HUT)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered YoY top-line growth but headline profitability was dominated by fair value gains on digital assets; revenue was $41.3M, diluted EPS was $1.18, and Adjusted EBITDA was $221.2M .
  • Versus S&P Global consensus, revenue missed ($49.8M estimate vs $41.3M actual*) while EPS was a significant beat (−$0.15 estimate vs $1.34 actual diluted*) due to $217.6M gains on digital assets recorded under new FASB fair value accounting .
  • Strategic shift toward contracted capacity accelerated: nearly 90% of energy capacity under management is now under agreements ≥1 year, up from <30% a year ago, reducing merchant exposure .
  • Operational catalysts include the initial energization and commercialization of the 205 MW Vega site (BITMAIN colocation; purchase option) and five-year IESO contracts for 310 MW commencing May 1, 2026, supporting visibility and stability .

What Went Well and What Went Wrong

  • What Went Well

    • “We delivered strong revenue and margin performance while advancing a fundamental shift in our asset commercialization profile,” with ~90% of managed capacity under ≥1-year contracts, from <30% a year ago .
    • Initial energization and commercialization of Vega with a proprietary direct-to-chip liquid cooling architecture; expected to host up to 205 MW for BITMAIN and, via purchase option, American Bitcoin .
    • Capital strategy enhancements: doubled Coinbase Bitcoin-backed facility to up to $130M and fixed the rate at 9.0% (from 10.5–11.5% prior periods) and secured a DIFC license to expand structured derivatives on reserve Bitcoin .

  • What Went Wrong

    • Revenue missed consensus and segment mix reflected prior contract terminations: Power ($5.5M) and Digital Infrastructure ($1.5M) declined YoY due to the IONIQ terminations; intercompany revenue from American Bitcoin is eliminated in consolidation .
    • Compute cost of revenue rose ($14.7M vs $8.7M YoY) while Power and DI revenues fell YoY; revenue elimination and mix shift complicate comparability .
    • KPI volatility: Energy cost per MWh was $39.82 in Q2, better than Q1 but still elevated vs Q4 2024 ($31.63), highlighting sensitivity to grid dynamics and uptime .

Financial Results

MetricQ2 2024Q1 2025Q2 2025
Revenue ($USD Millions)$35.2 $21.8 $41.3
Diluted EPS ($)$(0.78) $(1.30) $1.18
Net Income ($USD Millions)$(72.2) $(134.3) $137.5
Adjusted EBITDA ($USD Millions)$(57.5) $(117.7) $221.2
Segment Revenue ($USD Millions)Q2 2024Q1 2025Q2 2025
Power$10.5 $4.4 $5.5
Digital Infrastructure$5.3 $1.3 $1.5
Compute$15.8 $16.1 $34.3
Other$3.6 $0.0 $0.0
KPIsQ4 2024Q1 2025Q2 2025
Energy capacity under management (MW)1,020 1,020 1,020
Energy cost per MWh ($)$31.63 $51.71 $39.82
Strategic Bitcoin reserve (BTC)10,171 10,264 10,667

Estimates vs Actuals (S&P Global)

MetricQ2 2024 Estimate*Q2 2024 ActualQ1 2025 Estimate*Q1 2025 ActualQ2 2025 Estimate*Q2 2025 Actual
Revenue ($USD)$46,878,800*$35,215,000 $30,047,110*$21,815,000 $49,833,850*$41,299,000
Primary EPS ($)$0.12*$(0.78) $(0.8643)*$(1.30) $(0.1491)*$1.18
EBITDA ($USD)$16,934,750*$(57,530,000) $7,596,000*$(117,696,000) $15,234,730*$221,205,000

Values retrieved from S&P Global.*

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Vega ASIC Colocation Annualized RevenueUpon full energization~$125M expected annualized revenue ~$110–$120M expected annualized revenue (ERCOT pricing/uptime dependent) Lowered
Coinbase Bitcoin-Backed Credit FacilityFacility termsFloating 10.5–11.5% effective rate in prior periods Fixed 9.0% interest rate; expanded to up to $130M Lowered cost; expanded size
Ontario IESO Capacity Contracts (Far North JV)Start May 1, 2026N/AWeighted avg capacity payment ~CAD $530 per MW-business day, partial inflation indexation New long-term contracted cash flows

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024)Previous Mentions (Q1 2025)Current Period (Q2 2025)Trend
AI/data center developmentRiver Bend campus secured; pipeline 12.3 GW, ~2.8 GW exclusivity River Bend sitework underway; two additional AI projects totaling 230 MW; no LOIs disclosed Vega energized/commercialized; River Bend progressing; 430 MW AI opportunities across three sites Execution progressing; disciplined partner model
Asset commercialization (contracts)Re-aligned segments; strategy to shift to contracted revenues Set commercial framework with American Bitcoin (colocation, managed services, shared services) ~90% of capacity under ≥1-year agreements; anchor tenant American Bitcoin; BITMAIN hosting Material shift to contracted fees
Power origination pipeline12.3 GW under diligence; 2.8 GW exclusivity ~10.8 GW pipeline; ~2.6 GW exclusivity; focus on near-term power ~10.8 GW pipeline; ~3.1 GW exclusivity Stable high-velocity origination
Capex frameworks (AI builds)Discussed Tier III scale; capital discipline Yield-on-cost or fixed $/kW-month structures; invest de minimis before definitive Powered shell ≈ $2M/MW; build-to-suit ≈ $6M/MW Cost clarity improving
Financing strategyATM, institutionalization, project finance toolkit Coinbase facility expansion; structured Bitmain pledge; preference for non-dilutive/project financing Fixed 9% Coinbase facility; DIFC license to expand derivatives; covered call proceeds history Lower cost, diversified tools
Bitcoin mining strategyHalving/difficulty impact; Vega purchase option Fleet upgrades to 9.3 EH/s; launch of American Bitcoin American Bitcoin optionality: step to ~25 EH/s, potential to ~50 EH/s Scale, efficiency focus

Management Commentary

  • CEO on commercialization shift: “Strategic wins across our Power and Digital Infrastructure segments increased [contracted capacity] to nearly 90% at quarter-end, up from less than 30% a year ago, driving a meaningful shift from merchant exposure to long-term, contracted fees.”
  • CFO on intercompany economics: “Revenue from our [American Bitcoin] managed services and ASIC colocation…is eliminated in consolidation… [so] what appears in Compute today reflects only the surface layer of a robust commercial engine fueled by our power and digital infrastructure businesses.”
  • On Vega’s design: “The 205 MW facility features…a proprietary, rack-based, direct-to-chip liquid cooling system… designed in-house by Hut 8.”
  • On AI development posture: “We maintain a disciplined posture as we pursue what we believe to be the right partnership under the right terms.”

Q&A Highlights

  • Pipeline composition and dual-purpose sites: management highlighted a mix of AI-only and dual-purpose sites (Bitcoin + AI), with ~3.1 GW under exclusivity and emphasis on near-term power availability .
  • American Bitcoin scale path: contributed 10.2 EH/s via merger; Vega provides optionality to ~25 EH/s with potential phase-up to ~50 EH/s; focus on efficient growth, not growth-at-any-cost .
  • Cost frameworks: powered shell ≈ $2M/MW; build-to-suit ≈ $6M/MW, aiming for yield-on-cost structures and pass-throughs to mitigate risk .
  • Vega revenue calibration: annualized colocation revenue expectation adjusted to ~$110–$120M at full ramp based on ERCOT pricing and curtailment assumptions .
  • Financing readiness and capital allocation: active lender engagement, preference for non-dilutive project financing; DIFC license strengthens treasury and derivatives execution .

Estimates Context

  • Revenue missed consensus: $41.3M vs $49.8M estimate*, driven by elimination of intercompany revenue from American Bitcoin and prior contract terminations (IONIQ) in Power/DI .
  • EPS beat was non-operational: diluted EPS $1.18 vs −$0.15 estimate*, driven by $217.6M gains on digital assets under fair value accounting; prior year saw $71.8M losses .
  • Adjusted EBITDA far exceeded estimates: $221.2M vs $15.2M estimate*, reflecting large digital asset gains and non-GAAP adjustments per the reconciliation .

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Core operating trajectory: YoY revenue growth and significant Compute segment uplift (~$34.3M) reflect fleet upgrades and higher Bitcoin price, while Power/DI softness stems from contract transitions and intercompany eliminations .
  • Contracted capacity reduces volatility: ~90% of capacity under ≥1-year agreements improves visibility and supports re-rating toward infrastructure-like cash flows .
  • Vega and purchase option are pivotal: energized/commercialized architecture with BITMAIN colocation plus option for American Bitcoin provides near-term revenue and scalable self-mining optionality .
  • Stable cash flow layer maturing: five-year IESO contracts (310 MW) start May 2026, with indexed capacity payments; strengthens Power segment stability and bankability .
  • Capital strategy lowers cost: fixed 9% Coinbase facility and DIFC derivatives license enhance balance sheet flexibility and potential yield on reserve Bitcoin .
  • Estimate models need recalibration: given fair value accounting effects and elimination of intercompany revenue, Street models should separate core operating performance (segment revenues/costs) from digital asset mark-to-market impacts .
  • Medium-term thesis: dual exposure to contracted infrastructure and scalable Bitcoin accumulation (via American Bitcoin) creates sum-of-the-parts valuation pathways; watch Vega ramp, River Bend commercialization, and ABTC listing milestones .