Executive Summary

Q2 2024 mining revenue was $5.52M, up 11% year over year but down sequentially vs Q1; net loss was $4.01M with diluted EPS of $(0.10), reflecting elevated operating costs and non-cash items .
Management emphasized record operational efficiency (28.5 J/T in June), quarterly hashrate of 899 PH/s (+20% YoY), and breakeven cost per bitcoin of ~$45,452; focus remains on securing ultra-low-cost power to improve unit economics .
No numeric quarterly guidance was issued; prior Q1 commentary projected FY2024 gross profit of ~$16.6M under bitcoin/network assumptions—no update provided in Q2, while strategy shifted to power acquisition and efficiency gains .
Catalysts include Russell Microcap inclusion, a $5M buyback authorization, and an August acquisition of ~2.9MW operations at ~$0.01/kWh—positioning for lower-cost mining and potential HPC/hosting optionality .

What Went Well and What Went Wrong

What Went Well

Record operational metrics: quarterly hashrate of 899 PH/s (+20% YoY) and June energy efficiency of 28.5 J/T; fleet uptime of 99.4% in June .
Strategic pivot to low-cost power: acquisition of ~2.9MW Louisiana operations at ~$0.01/kWh, expected to be immediately accretive and to broaden optionality (HPC, hosting) .
Capital markets and shareholder actions: Russell Microcap inclusion and authorization of a $5M stock repurchase program .

What Went Wrong

Bitcoin production fell to ~84 BTC in Q2 vs 187 BTC in Q2 2023; breakeven cost per BTC rose to ~$45,452 vs ~$34,063 in Q2 2023, reflecting tougher post-halving economics and higher operating expenses .
Sequential revenue decline vs Q1 (from $7.49M to $5.52M) and continued net losses as total operating expenses rose to $11.38M in Q2 (vs $7.97M in Q2 2023); adjusted EBITDA loss of $3.0M with elevated marketing spend post-Nasdaq listing .
Wall Street consensus estimates were unavailable via S&P Global for Q2 (CIQ mapping not found), limiting beat/miss analysis relative to Street expectations.

Financial Results

Metric	Q2 2023	Q1 2024	Q2 2024
Revenue ($USD Millions)	$5.28	$7.49	$5.52
Net Income ($USD Millions)	$(2.62)	$(11.74)	$(4.01)
Diluted EPS ($USD)	$(0.18)	$(0.36)	$(0.10)
Cost of Revenues ($USD Millions)	$2.82	$4.84	$3.80
Total Operating Expenses ($USD Millions)	$7.97	$9.05	$11.38
Adjusted EBITDA ($USD Millions)	$(4.20)	$1.90	$(3.00)

Segment revenue breakdown:

Segment	Q2 2023 ($M)	Q1 2024 ($M)	Q2 2024 ($M)
Mining Activities	$4.96	$7.49	$5.52
Management Services	$0.32	$0.24	$0.00
Total Revenue	$5.28	$7.49	$5.52

KPIs and operational metrics:

KPI	Q2 2023	Q1 2024	Q2 2024
BTC Mined (Units)	187	142	84
Breakeven Cost per BTC ($)	$34,063	$34,063	$45,452
Quarterly Hashrate (PH/s)	749 (implied base, +20% → 899)	~940 (capacity)	899 (record)
Energy Efficiency (J/T)	N/A	28.5	28.5 (June)
BTC Efficiency (BTC/EH, June)	N/A	N/A	25
Fleet Uptime (June)	N/A	N/A	99.4%
Treasury BTC (End of June)	N/A	N/A	16

Balance sheet highlights (point-in-time):

Metric	Mar 31, 2024	Jun 30, 2024
Cash and Cash Equivalents ($M)	$1.74	$1.22
Bitcoin ($M)	$4.17	$0.97
Total Current Assets ($M)	$7.10	$3.24
Total Assets ($M)	$17.78	$11.45
Total Liabilities ($M)	$30.19	$25.44

Note: Wall Street consensus estimates via S&P Global were unavailable due to CIQ mapping error; therefore, no beat/miss vs estimates analysis could be performed this quarter.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Gross Profit (from current mining ops)	FY 2024	~$16.6M, assuming ~$70k BTC price and 550 EH network	No numeric update provided; focus shifted to acquiring low-cost power and maintaining efficiency	Maintained (no update provided)
Operational Focus	Ongoing	Accretive hash rate growth; efficiency improvements	Emphasis on securing ultra-low-cost power (~$0.01/kWh) and evaluating HPC/hosting optionality	Raised focus on power economics

No explicit guidance on revenue, margins, OpEx, OI&E, tax rate, or dividends in Q2 materials .

Earnings Call Themes & Trends

Transcript was not available in the document system. Themes are inferred from press releases.

Topic	Previous Mentions (Q4 2023 and Q1 2024)	Current Period (Q2 2024)	Trend
Efficiency and Hashrate	Targeting accretive growth; fleet efficiency to 28.5 J/T; capacity ~0.94 EH/s	Record 899 PH/s; June 28.5 J/T; top-tier BTC/EH efficiency	Improving efficiency; consistent high uptime
Capital Allocation	Authorized $5M buyback	Buyback reiterated; Russell Microcap inclusion	Shareholder-friendly actions sustained
Low-Cost Power Strategy	Evaluating opportunities post-halving	Acquired ~2.9MW operations at ~$0.01/kWh; pipeline >500MW	Strategic pivot intensifies toward power economics
Expansion Optionality	Accretive hash rate growth	Considering HPC and hosting leveraging low-cost power	Broadened scope beyond pure mining
ESG/Environmental	100% renewable/carbon-neutral operations	Flare gas operations reduce emissions; hydro power maintained	Strong ESG narrative enhanced

Management Commentary

“Gryphon reached milestones in both hashrate and energy efficiency during the second quarter of 2024… record quarterly hashrate of 899 PH/s… record monthly performance in energy efficiency at 28.5 J/T in June… breakeven cost per bitcoin of approximately $45,452.” — CEO Rob Chang .
“Looking ahead, our goal is to expand our control of low-cost power… securing low-cost electricity… vital for long-term success in bitcoin mining and high-performance computing.” — CEO Rob Chang .
“We expect to have earned bitcoin valued at approximately $5.5 million for the second quarter… Gryphon continues to improve its efficiency levels… BTC/EH 25 in June.” — CEO Rob Chang (Operational Update) .
“With the acquisition of this ~1 cent power asset… we believe Gryphon will enhance its position as a leading low-cost operator… possibilities include hosting services or providing high performance computing operations.” — CEO Rob Chang (Acquisition release) .

Q&A Highlights

A conference call was held on August 15, 2024 (10:00 AM ET), but a transcript was not available in the document system; no Q&A themes can be confirmed from primary call materials .

Estimates Context

Wall Street consensus estimates (Revenue, EPS, EBITDA, Target Price, Recommendation) via S&P Global were unavailable due to CIQ mapping issues for KERN in SPGI/Capital IQ; as a result, beats/misses vs Street cannot be assessed this quarter.

Key Takeaways for Investors

Unit economics tightened post-halving (higher breakeven per BTC, lower BTC mined), but Gryphon’s efficiency leadership and uptime buffer profitability risk relative to peers .
The ultra-low-cost power acquisition (~$0.01/kWh) is strategically significant, likely improving margins and enabling flexible deployment (newer ASICs, hosting, HPC), with a pipeline targeted at >500MW .
Sequential revenue decline vs Q1 and continued net loss underline the importance of cost control and power strategy; near-term trading may hinge on execution at the Louisiana site and additional low-cost power deals .
Capital actions (Russell inclusion, buyback authorization) support shareholder value while balance sheet indicates pressure—monitor liquidity and the pace of accretive growth .
ESG differentiation (hydro-powered, flare gas utilization) could attract incremental capital flows amid investor focus on environmentally responsible mining operations .
Without Street estimates, focus on internally disclosed KPIs (hashrate, BTC/EH, J/T, breakeven cost) to track trajectory; expect narrative to center on power costs and efficiency rather than headline revenue growth until broader scale is secured .

Appendix: Document References

Q2 2024 8-K and Press Release (full financials, KPIs, call details):
Q2 2024 Operational Update (June metrics, BTC/EH, uptime, ESG):
August 20, 2024 Acquisition (low-cost power, optionality):
Q1 2024 8-K and Press Release (sequential/YoY context, prior guidance):

Gryphon Digital Mining, Inc. (KERN)·Q2 2024 Earnings Summary