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H8

Hut 8 Corp. (HUT)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 headline results were dominated by fair value accounting gains on digital assets: revenue was $31.7M (−27.5% QoQ; −18.5% YoY), net income was $152.0M (driven by a $308.2M gain on digital assets), and Adjusted EBITDA was $310.6M . Energy cost per MWh fell ~30% YoY to $31.63, underscoring operational optimization .
  • Segment mix shifted: Power revenue rose YoY, while Compute and Digital Infrastructure declined versus Q4 2023; QoQ revenue decline largely reflected the termination of the Ionic/IONIQ managed services contract in November and lower Compute revenue versus Q3 .
  • Strategic growth setup improved: Vega (205 MW) remains on track to energize in Q2 2025; BITMAIN colocation expected to generate ~$125M annualized revenue at full ramp (down from prior ~$135M on curtailment assumptions); purchase option could lift self-mining to ~25.1 EH/s; Riverbend (LA) campus secured with 200 MW IT load and path to >1 GW .
  • Balance sheet and capital strategy catalysts: $150M Coatue strategic investment; Anchorage loan conversion to equity; launch of a $500M ATM and a $250M buyback program; strategic Bitcoin reserve surpassed 10,000 BTC (10,171 BTC, $949.5M YE value) .
  • Estimates context: S&P Global consensus for Q4 2024 revenue and EPS was unavailable at time of analysis (access limit reached); results are presented without consensus comparisons to avoid misrepresentation.

What Went Well and What Went Wrong

  • What Went Well

    • Material reduction in energy costs and operational improvements: energy cost per MWh down ~30% YoY to $31.63; management cited a ~30% reduction in average energy cost/MWh and ~8-point increase in gross margin per BTC mined YoY as outcomes of restructuring and optimization .
    • Strategic pipeline and platform positioning: 12.3 GW development pipeline with 2.8 GW under exclusivity; Riverbend acquisition (200 MW IT load; path to >1 GW) reflects a “power-first” advantage for hyperscale AI/HPC demand .
    • Capital strategy flexibility: $150M Coatue funding; Anchorage loan equitized; ATM and buyback provide optionality for growth and shareholder returns; >10,000 BTC strategic reserve adds liquidity and treasury flexibility .
      • Quote: “We have fortified our capital strategy and balance sheet—converting our Anchorage loan to equity, launching ATM and stock repurchase programs, and expanding our strategic Bitcoin reserve.” – Asher Genoot, CEO .

  • What Went Wrong

    • Revenue declined QoQ and YoY despite BTC strength: $31.7M vs $43.7M in Q3 (−27.5% QoQ) and $38.9M in Q4 2023 (−18.5% YoY); Compute and Digital Infrastructure revenue fell YoY in the quarter .
    • Managed services headwinds: The IONIQ/Ionic Digital agreement was terminated in November, impacting segment mix and revenue run-rate into Q4, with management pivoting focus toward higher-value opportunities .
    • Colocation revenue expectation moderated: BITMAIN colocation at Vega revised from ~$135M to ~$125M annualized at full ramp to reflect curtailment and energy dynamics, tempering earlier revenue expectations .

Financial Results

Results vs Prior Periods and (Unavailable) Estimates

MetricQ2 2024Q3 2024Q4 2024QoQYoYvs Estimates
Revenue ($M)$35.2 $43.7 $31.7 −27.5% (31.7 vs 43.7) −18.5% (31.7 vs 38.9) N/A (S&P Global consensus unavailable)
Net Income ($M)$(72.2) $0.9 $152.0 Large increase (152.0 vs 0.9) Large increase (152.0 vs 10.6) N/A (S&P Global consensus unavailable)
Adjusted EBITDA ($M)$(57.5) $5.6 $310.6 Large increase (310.6 vs 5.6) Large increase (310.6 vs 48.6) N/A (S&P Global consensus unavailable)
Basic EPS (Continuing Ops)$(0.78) $0.01 N/A (not disclosed in PR) ——N/A (S&P Global consensus unavailable)

Notes:

  • Q4 net income includes a $308.2M gain on digital assets; Adjusted EBITDA reflects large add-backs and the impact of digital asset accounting under new FASB rules .
  • Prior-year Q4 revenue reference: $38.9M .

Segment Revenue – Q4 2024 vs Q4 2023

Segment ($M)Q4 2023Q4 2024YoY Change
Power$7.8 $9.9 +27% (9.9 vs 7.8)
Digital Infrastructure$4.5 $2.5 −43% (2.5 vs 4.5)
Compute$26.5 $19.2 −28% (19.2 vs 26.5)
Other$0.11 $0.07 −40% (0.07 vs 0.11)
Total Revenue$38.9 $31.7 −18.5% (31.7 vs 38.9)

KPIs and Operating Metrics

KPIQ4 2023Q3 2024Q4 2024
Energy cost per MWh ($)$45.47 $28.83 $31.63
Bitcoin mined (units)852 234 236
Weighted avg revenue per BTC ($)$37,313 $61,025 $82,412
Cost to mine per BTC ($)$20,051 $31,482 $37,958
Energy capacity under management (mining)839 MW 967 MW 665 MW
Total energy capacity under management842 MW 1,322 MW 1,020 MW
Strategic BTC reserve (units)9,195 —10,171

Commentary:

  • YoY energy cost per MWh declined ~30% (company-cited), reflecting restructuring and site optimization; BTC mined decreased YoY due to network dynamics and portfolio changes; revenue per BTC rose markedly into year-end reflecting BTC price .

Results vs Estimates

MetricActual (Q4 2024)Consensus (S&P Global)Delta
Revenue ($M)$31.7 N/AN/A
EPSN/A (not disclosed in PR) N/AN/A

Note: S&P Global consensus for Q4 2024 was unavailable at time of analysis due to data access limits; we attempted retrieval but could not obtain values.

Guidance Changes

Metric/ItemPeriodPrevious Guidance/CommentaryCurrent Guidance/CommentaryChange
Vega energizationQ2 2025On track to energize in Q2 2025 Reaffirmed on track for Q2 2025 Maintained
BITMAIN colocation revenue (annualized, full ramp)Post-energization~$135M at full ramp (Q3 commentary) ~$125M at full ramp; revised for curtailment/energy rates Lowered
Self-mining hashrate target (fleet upgrade)Q1–Q2 2025~9.3 EH/s in Q1 2025; path to ~24 EH/s (with option) ~10.3 EH/s expected; option implies ~25.1 EH/s potential Raised near-term target
Fleet efficiencyPost-upgrade19.9 J/TH planned ~20.5 J/TH expected; ~16.0 J/TH if option exercised Slightly higher current target; lower with option
Riverbend campus (LA)2025+—200 MW IT load; path to >1 GW; working with Entergy; pursuing hyperscale tenant(s) New project disclosure
Capital programs2024–2025—$500M ATM; $250M buyback launched (Dec 2024) New programs

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q4 2024)Trend
AI/HPC data centersPipeline >5 GW; three projects >430 MW; exploring structures 12.3 GW pipeline; 2.8 GW exclusivity; Riverbend secured (200 MW IT load; >1 GW path); active hyperscale dialogues Accelerating scale and conversion readiness
BITMAIN partnership/VegaU3S21EXPH at Vega; ~$135M colocation; Q2’25 energization Reaffirm energization timing; colocation revenue revised to ~$125M (curtailment-adjusted); option could lift self-mining to ~25.1 EH/s Execution continues; revenue recalibrated
Capital strategy (ATM/buyback/Coatue)$150M Coatue investment; Anchorage equitization in Q3 ATM ($500M) and buyback ($250M) launched; treasury anchored by >10k BTC reserve Increased flexibility and liquidity
Operational optimizationEnergy cost/kWh down in Q2; Salt Creek energized; restructuring benefits Energy cost/MWh down ~30% YoY; margin per BTC mined +~8 points YoY; disciplined fleet relocation/curtailment strategy Benefits sustained
Managed ServicesMaterial MS revenue in Q2/Q3 (Ionic); termination fee from MARA Ionic/IONIQ agreement terminated (Nov 8); MS to focus on financial sponsors; priority on higher-value platform growth Pivot away from MS reliance
Regulatory/marketGrowth in institutional ownership; inclusion in Russell 3000 (Q4 call ref) Continued institutionalization; utility-level collaboration in LA Institutional momentum

Management Commentary

  • Strategic positioning: “We have built a high velocity utility scale origination pipeline spanning 12,000 megawatts…setting the foundation for disciplined long term value creation.” – Asher Genoot, CEO .
  • Capital allocation: “We will continue to focus on optimizing our capital structure, exploring non‑dilutive sources of funding whenever possible.” – Asher Genoot .
  • AI/HPC strategy: “Most of the customers we're speaking to want large scale campuses…with the path towards a gigawatt.” – Asher Genoot .
  • Vega economics: “Colocation [revenue]…adjusting for potential curtailment…maybe $135M again if energy rates adjust, but [currently] ~$125M.” – Asher Genoot .
  • Development cost benchmark: “Rough range is around $10 million a megawatt [for AI/HPC capex],” subject to tenant specifics and lease structure .

Q&A Highlights

  • Capital deployment priorities: Focus on power layer origination, project-level financing (70–80% construction loan potential with IG tenants), and balanced funding across platform layers; treasury may opportunistically add BTC .
  • Pipeline conversion pace and use cases: 12.3 GW pipeline, 2.8 GW exclusivity across multiple U.S. regions; preference for dual-purpose sites (AI/HPC and transitional BTC mining) to optimize returns .
  • Managed Services outlook: Post-IONIQ, MS will target financial sponsors where Hut 8 operates assets; primary value creation expected from power and digital infrastructure layers .
  • Vega/Bitmain update: Energization targeted for Q2 2025; colocation revenue expectation revised to ~$125M annualized; six-month window to decide purchase option for hosted machines .
  • Riverbend readiness: Site prep underway (switchyard/substation with Entergy); limited upfront capital until tenant definitive agreements; potential for tenant advance payments to maintain timelines .

Estimates Context

  • Consensus estimates for Q4 2024 revenue/EPS via S&P Global could not be retrieved at time of analysis due to access limits; therefore, no beat/miss assessment is provided. We attempted to fetch “Primary EPS Consensus Mean,” “Revenue Consensus Mean,” and estimate counts for Q4 2024 but were unable to obtain values in time.

Key Takeaways for Investors

  • Reported profitability was driven by fair value gains on digital assets under new FASB rules; underlying revenue declined QoQ and YoY, partly due to the IONIQ managed services termination and lower Compute revenue versus Q3 .
  • Operational efficiency improvements (energy costs down ~30% YoY; higher margin per BTC mined) provide a durable cost base ahead of fleet upgrades and Vega energization in Q2 2025 .
  • Colocation revenue expectations at Vega normalized to ~$125M annualized reflecting curtailment-aware assumptions; despite the haircut, the monetization path and optionality to self-mine remain strong catalysts .
  • Strategic power-first development pipeline (12.3 GW; 2.8 GW under exclusivity) and Riverbend’s hyperscale profile create multiple ways to win in AI/HPC; definitive tenant announcements would be stock-moving events .
  • Balance sheet flexibility (Coatue funding, ATM, buyback, >10k BTC reserve) positions Hut 8 to pursue growth while managing volatility; continued institutionalization supports market access .
  • Near-term trading setup: Watch for Vega energization, BITMAIN ramp timing, and any Riverbend lease disclosures; given revenue normalization and segment mix shifts, price action may key off AI/HPC conversion milestones and BTC price beta .
  • Medium-term thesis: Platform optionality across Power, Digital Infrastructure, and Compute, with rapid greenfield development capabilities (e.g., Salt Creek) and a disciplined capital framework, can compound value if tenant conversion and financing terms meet thresholds .

Sources:

  • Q4 2024 press release: revenue, segment mix, KPIs, net income, Adjusted EBITDA, pipeline, and strategy .
  • Form 8‑K (Item 2.02 and Exhibit 99.1) reiterating Q4/FY results and KPI tables .
  • Earnings call transcript: strategy, pipeline, Riverbend, Vega/Bitmain updates, capital allocation, and Q&A detail .
  • Prior quarters for trend analysis: Q3 2024 press release (revenue, MS revenue, BITMAIN partnership, KPIs) ; Q2 2024 press release (revenue, optimization, KPIs) .
  • Capital programs press release (ATM and buyback) .