Executive Summary

Q1 2024 delivered a sharp inflection to profitability on higher BTC prices and larger fleet: revenue rose 105% YoY to $4.75M, operating income was $0.56M, and net income reached $1.90M (EPS $0.61); Core EBITDA improved to $4.42M from a ($0.31)M loss a year ago .
Mix driven by digital mining revenue ($4.60M) as the company mined 86.4 BTC in the quarter; BTC holdings increased to 163.4 by quarter-end, then 155.1 by April 30 as some BTC was sold to fund operations .
Non-GAAP tailwind: adoption of ASU 2023-08 (mark-to-market for Bitcoin) produced a ~$4.3M gain (recorded in operating expenses), offset by higher depreciation and ~$1.2M impairment on mining equipment .
Management reiterated “infrastructure light” mining focus but is pursuing more control near the meter and evaluating selective infrastructure steps; S21 deployment and hosting renegotiations post-halving are focal points and potential stock catalysts .
Consensus estimates from S&P Global were unavailable for Q1 2024 at time of analysis; beat/miss vs Street cannot be assessed (we attempted retrieval but did not obtain values).

What Went Well and What Went Wrong

What Went Well
- Returned to profitability: net income $1.90M vs loss ($7.16)M YoY; Core EBITDA positive $4.42M vs ($0.31)M prior-year, supported by higher BTC price and expanded operations .
- Strong BTC production and balance sheet: 86.4 BTC mined in Q1; 163.4 BTC held at 3/31/24 (~$11.7M at ~$71.3k), with working capital of $12.7M and LMFA stockholders’ equity of $38.5M .
- Management tone upbeat with clear strategic emphasis: “We continue to make tremendous strides in growing our Bitcoin mining operations… achieved a record $1.9 million of net income and $4.4 million of Core EBITDA” – CEO Bruce Rodgers .
What Went Wrong
- Accounting/optics complexity: non-GAAP tailwind from new BTC fair-value accounting (~$4.26M gain) is partially offset by non-cash factors (e.g., $1.2M impairment, higher D&A by ~$1.6M YoY), complicating underlying profitability reads .
- Continued cost pressures: digital mining cost of revenues rose to $2.65M (from $1.67M) amid higher scale; management flagged evolving post-halving hosting economics as a key negotiation area .
- KPI confusion: press references to 673 PH post-S21 contrasted with call clarification that 639 PH is the “right number” for forecasts, highlighting near-term data variability in fleet metrics .

Financial Results

Income statement summary vs prior periods and estimates

Metric	Q1 2023	Q4 2023	Q1 2024	Vs. Estimates
Revenue ($USD Millions)	$2.314	$4.055	$4.748	n/a (S&P Global consensus unavailable)
Operating Income ($USD Millions)	$(1.969)	$(1.766)	$0.563	n/a
Net Income Attributable to LMFA ($USD Millions)	$(5.386)	$(1.592)	$1.490	n/a
Basic EPS ($)	$(2.41)	$(0.67)	$0.61	n/a
Diluted EPS ($)	$(2.41)	$(0.67)	$0.61	n/a
Core EBITDA (Non-GAAP, $USD Millions)	$(0.307)	$0.345	$4.420	n/a
Operating Margin %	(85.1%)	(43.6%)	11.9%	n/a

Segment revenue breakdown

Revenue Component ($USD Millions)	Q1 2023	Q4 2023	Q1 2024
Digital Mining Revenues	$2.091	$3.946	$4.598
Specialty Finance Revenue	$0.183	$0.076	$0.117
Rental Revenue	$0.040	$0.033	$0.033
Total Revenues	$2.314	$4.055	$4.748

Key performance indicators

KPI	Q3 2023	Q4 2023	Q1 2024
BTC Mined in Quarter (units)	117.1	n/a	86.4
Hash Rate End of Period (PH/s)	~614	~614	~614 (3/31); 639 by 4/30
BTC Holdings End of Period (units)	90.1	95.1	163.4
Approx. Miners Deployed (units)	5,549	~5,900	~5,900
Working Capital ($USD Millions)	$4.5	$7.4	$12.7
LMFA Stockholders’ Equity ($USD Millions)	$35.9	$36.2	$38.5

Notes: Operating margin % shown is calculated from cited revenue and operating income. Core EBITDA is non-GAAP as defined and reconciled by the company .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	2024	Not provided	Not provided (no quantitative guidance)	n/a
Margins/OpEx	2024	Not provided	Not provided (no quantitative guidance)	n/a
Hash Rate/Capacity	2024	Qualitative only	Entering new hosting agreements post-halving; S21s deployed; management clarified ~639 PH post-installation for planning	Qualitative update
Capital Allocation	2024	Infrastructure-light	Evaluating more control near the meter; selective infra steps; reinvesting mining proceeds in efficient machines	Qualitative shift toward greater control

No formal numerical guidance was issued; management provided qualitative outlook on hosting renegotiations post-halving, equipment upgrades (S21), and capital deployment.

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2023, Q4 2023)	Current Period (Q1 2024)	Trend
Infrastructure strategy	“Infrastructure light” approach; focus on BTC and miners; exploring low-cost power/slots; potential selective infra ownership if attractive	Still infrastructure-light but seeking more control up to the meter; evaluating selective infra JV/steps; $1.5M debt for strategic initiatives	Moving from pure asset-light to selective control
Fleet upgrades (S21, Braiins)	Braiins OS+ on ~1,000 machines; planned S21 purchase to navigate halving	300 S21 installed; capacity clarified at ~639 PH for forecasts; replacing older <100TH units	Efficiency-first fleet mix
Halving & BTC price	Pre-halving positioning; historical pattern of price strength post-halving discussed	Well-positioned post-April halving; optimistic BTC outlook; host terms to reflect post-halving economics	Continued optimism; renegotiation focus
Accounting updates	n/a	Adopted ASU 2023-08 (mark-to-market), recognized ~$4.3M gain within operating line; equity pick-up at 1/1/24 ~$0.6M	New non-GAAP/GAAP optics
Legacy specialty finance	Stable; potential future growth from reserve funding rules	Still secondary; 2025 legislative effects may spur activity	Remains non-core near term
Capital markets/book value gap	Highlighted large discount to book	Equity $38.5M ($15.43/sh) emphasized; management frustrated with valuation gap	Ongoing message to investors

Management Commentary

“We continue to make tremendous strides in growing our Bitcoin mining operations… I am pleased to report we achieved a record $1.9 million of net income and $4.4 million of Core EBITDA for the first quarter of 2024.” – Bruce Rodgers, CEO .
“As of March 31, 2024, the company held approximately 163.4 Bitcoin… Our working capital stood at $12.7 million… equity… was $38.5 million, or $15.43 per share.” – Richard Russell, CFO .
“The company was well-positioned for the Bitcoin halving… we anticipate entering into new hosting agreements that reflect the economic conditions post-2024 halving.” – Bruce Rodgers .
“We are now poised to scale and grow… remain committed to reinvesting the proceeds from our Bitcoin mining operations into acquiring the most efficient Bitcoin mining equipment available.” – Bruce Rodgers .

Q&A Highlights

Capacity clarification: Press cited 673 PH post-S21, but management said “639 is the right number” for forecasts; ~5,900 machines remain after cycling out older units .
Strategy: “We’re Bitcoin miners primarily and foremost right now… legacy business… is a 2025 event,” emphasizing resource focus on mining .
Hosting economics post-halving: Multiple hosting partners and contracts; pursuing deposits/arrangements to gain more control “up to where the electric meter is” while staying infrastructure-light in principle .
Accounting: Adopted mark-to-market for digital assets in 2024; ~$4.3M gain in operating line reflects BTC priced ~$72–73k at quarter-end .
Potential separation of legacy business: Management open to options “when things are right,” but nothing immediate .

Estimates Context

Wall Street consensus estimates (S&P Global) for Q1 2024 revenue and EPS were not retrievable at time of analysis; therefore, we cannot assess beat/miss relative to Street. This likely reflects limited formal coverage for the micro-cap and/or access constraints at time of query.

Key Takeaways for Investors

Q1 marked a clean inflection to profitability with operating income positive and Core EBITDA scaling, aided by BTC price strength and fleet efficiency upgrades; sustainability post-halving hinges on renegotiated hosting economics and continued efficiency mix shift .
Non-GAAP/GAAP optics matter: the new BTC fair-value accounting produced a large operating line gain; investors should normalize for non-cash swings and monitor D&A and impairment cadence to gauge underlying cash generation .
Capacity metrics stabilized around ~614 PH at quarter-end and ~639 PH by April; management plans to reinvest cash to expand hash rate while rotating out sub-scale rigs—execution here is central to offset rising difficulty .
Balance sheet optionality improved: working capital to $12.7M; BTC holdings provide leverage to price; however, periodic BTC sales are funding operations—watch cash/BTC cadence and capital deployment returns .
Narrative moving from purely asset-light to selective control near the meter could lower all-in costs and de-risk hosting dependence; track forthcoming announcements tied to the $1.5M strategic debt and any infrastructure steps .
Valuation gap vs book remains a core management focus; catalysts include hosting renegotiations, incremental S21 deployments/efficiency gains, and BTC price trajectory post-halving .
With no formal guidance and limited Street coverage, near-term stock moves are likely to track monthly production/operational updates, BTC prices, and any tangible cost-per-BTC improvements disclosed in updates/calls .

Citations: All data and quotations are sourced from the company’s Q1 2024 earnings 8-K press release and exhibits, Q1 2024 earnings call transcript, and related company 8-K press releases for monthly operational updates, as well as prior quarter releases and calls for trend context .

LM FUNDING AMERICA, INC. (LMFA)·Q1 2024 Earnings Summary